Entravision Communications Corporation Reports First Quarter 2015 Results

- First Quarter 2015 Net Revenue and Consolidated Adjusted EBITDA Increases 13% and 12% Respectively -

- Free Cash Flow Increases 10% -

- Announces Quarterly Cash Dividend of $0.025 Per Share -

News provided by

Entravision Communications Corporation

May 07, 2015, 04:05 ET

SANTA MONICA, Calif., May 7, 2015 /PRNewswire/ -- Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three-month period ended March 31, 2015.

Historical results, which are attached, are in thousands of U.S. dollars (except share and per share data). This press release contains certain non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measure most directly comparable to each of these non-GAAP financial measures, and a table reconciling each of these non-GAAP financial measures to its most directly comparable GAAP financial measure is included beginning on page 9. Unaudited financial highlights are as follows:


Three-Month Period

Ended March 31,

2015

2014

% Change

Net revenue

$

59,550

$

52,656


13

%

Cost of revenue - digital media (1)

1,360


-


100

%

Operating expenses (2)

37,186


33,507


11

%

Corporate expenses (3)

4,993


4,836


3

%










Consolidated adjusted EBITDA (4)

16,842


14,985


12

%










Free cash flow (5)

$

10,258

$

9,353


10

%

Free cash flow per share, basic (5)

$

0.12

$

0.11


9

%

Free cash flow per share, diluted (5)

$

0.11

$

0.10


10

%










Net income (loss)

$

5,284

$

4,388


20

%










Net income (loss) per share, basic and diluted

$

0.06

$

0.05


20

%










Weighted average common shares outstanding, basic

87,531,375


88,683,948




Weighted average common shares outstanding, diluted

90,085,961


90,943,866




(1)

Cost of revenue consists primarily of the costs of online media acquired from third-party publishers. Media cost is classified as cost of revenue in the period in which the corresponding revenue is recognized.

(2)

Operating expenses include direct operating, selling, general and administrative expenses. Included in operating expenses are $0.4 million and $0.1 million of non-cash stock-based compensation for the three-month periods ended March 31, 2015 and 2014, respectively. Operating expenses do not include corporate expenses, depreciation and amortization, impairment charge, gain (loss) on sale of assets, gain (loss) on debt extinguishment and other income (loss).

(3)

Corporate expenses include $0.5 million and $0.6 million of non-cash stock-based compensation for the three-month periods ended March 31, 2015 and 2014, respectively.

(4)

Consolidated adjusted EBITDA means net income (loss) plus gain (loss) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation included in operating and corporate expenses, net interest expense, other income (loss), gain (loss) on debt extinguishment, income tax (expense) benefit, equity in net income (loss) of nonconsolidated affiliate, non-cash losses and syndication programming amortization less syndication programming payments. We use the term consolidated adjusted EBITDA because that measure is defined in our credit facility and does not include gain (loss) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation, net interest expense, other income (loss), gain (loss) on debt extinguishment, income tax (expense) benefit, equity in net income (loss) of nonconsolidated affiliate, non-cash losses and syndication programming amortization and does include syndication programming payments. While many in the financial community and we consider consolidated adjusted EBITDA to be important, it should be considered in addition to, but not as a substitute for or superior to, other measures of liquidity and financial performance prepared in accordance with accounting principles generally accepted in the United States of America, such as cash flows from operating activities, operating income and net income. As consolidated adjusted EBITDA excludes non-cash gain (loss) on sale of assets, non-cash depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation expense, net interest expense, other income (loss), gain (loss) on debt extinguishment, income tax (expense) benefit, equity in net income (loss) of nonconsolidated affiliate, non-cash losses and syndication programming amortization and includes syndication programming payments, consolidated adjusted EBITDA has certain limitations because it excludes and includes several important non-cash financial line items. Therefore, we consider both non-GAAP and GAAP measures when evaluating our business. Consolidated adjusted EBITDA is also used to make executive compensation decisions.

(5)

Free cash flow is defined as consolidated adjusted EBITDA less cash paid for income taxes, net interest expense, and capital expenditures. Net interest expense is defined as interest expense, less non-cash interest expense relating to amortization of debt finance costs, and less interest income. Free cash flow per share is defined as free cash flow divided by the basic or diluted weighted average common shares outstanding.

Commenting on the Company's earnings results, Walter F. Ulloa, Chairman and Chief Executive Officer, said, "During the first quarter, we achieved revenue growth driven by increases in our television, radio and digital media segments. We also improved our free cash flow and net income over the first quarter of 2014.  We continued to build our digital footprint through the acquisition of Pulpo Media in June 2014, which provides us with an integrated platform to allow advertisers and marketers to connect with Latino audiences.  Looking ahead, we remain well positioned to build on our success in attracting Latino audiences, expanding our advertiser base and monetizing our reach to the benefit of our shareholders."

Quarterly Cash Dividend

The Company announced today that its Board of Directors has approved a quarterly cash dividend to shareholders of $0.025 per share of the Company's Class A, Class B and Class U common stock, in an aggregate amount of approximately $2.2 million. The quarterly dividend will be payable on June 30, 2015 to shareholders of record as of the close of business on June 15, 2015, and the common stock will trade ex-dividend on June 11, 2015. As previously announced, the Company currently anticipates that future cash dividends will be paid on a quarterly basis. However any decision to pay future cash dividends will be subject to approval by the Board.

Financial Results

Three-Month Period Ended March 31, 2015 Compared to Three-Month Period Ended

March 31, 2014

(Unaudited)



Three-Month Period

Ended March 31,

2015

2014

% Change

Net revenue

$

59,550

$

52,656


13

%

Cost of revenue - digital media (1)

1,360


-


100

%

Operating expenses (1)

37,186


33,507


11

%

Corporate expenses (1)

4,993


4,836


3

%

Depreciation and amortization

3,962


3,515


13

%










Operating income (loss)

12,049


10,798


12

%

Interest expense, net

(3,219)


(3,426)


(6)

%










Income (loss) before income taxes

8,830


7,372


20

%










Income tax (expense) benefit

(3,546)


(2,984)


19

%

Net income (loss)

$

5,284

$

4,388


20

%

(1)

  Cost of revenue, operating expenses and corporate expenses are defined on page 1.

Net revenue increased to $59.6 million for the three-month period ended March 31, 2015 from $52.7 million for the three-month period ended March 31, 2014, an increase of $6.9 million. Of the overall increase, approximately $1.8 million was generated by our television segment and was primarily attributable to approximately $5.0 million of revenue associated with television station channel modifications made by the Company in order to accommodate the operations of a telecommunications operator. This increase was partially offset by decreases in local and national advertising revenue, a decrease in political advertising revenue, which was not material in 2015, and a decrease in retransmission consent revenue. Additionally, $1.4 million of the overall increase was generated by our radio segment and was primarily attributable to increases in local and national advertising. The remaining $3.7 million of the overall increase was generated by our digital segment, resulting from our acquisition of Pulpo Media ("Pulpo") in June 2014 and which did not contribute to revenues in prior periods.

Operating expenses increased to $37.2 million for the three-month period ended March 31, 2015 from $33.5 million for the three-month period ended March 31, 2014, an increase of $3.7 million. The increase was primarily attributable to our acquisition of Pulpo in June 2014, and increases in rent expense, salary expense and employee benefits costs.

Corporate expenses increased to $5.0 million for the three-month period ended March 31, 2015 from $4.8 million for the three-month period ended March 31, 2014, an increase of $0.2 million. The increase was primarily attributable to an increase in salary expense.

Cost of revenue was $1.4 million for the three-month period ended March 31, 2015 due to the acquisition of Pulpo in June 2014.


Segment Results

The following represents selected unaudited segment information:


Three-Month Period

Ended March 31,


2015


2014

% Change

Net Revenue










Television

$

39,502

$

37,741


5

%

Radio

16,345


14,915


10

%

Digital

3,703


-


100

%

Total

$

59,550

$

52,656


13

%










Cost of Revenue - digital media (1)










Digital

$

1,360

$

-


100

%










Operating Expenses (1)










Television

$

19,734

$

19,451


1

%

Radio

14,712


14,056


5

%

Digital

2,740


-


100

%

Total

$

37,186

$

33,507


11

%










Corporate Expenses (1)

$

4,993

$

4,836


3

%










Consolidated adjusted EBITDA (1)

$

16,842

$

14,985


12

%

(1)

Cost of revenue, operating expenses, corporate expenses, and consolidated adjusted EBITDA are defined on page 1.

Entravision Communications Corporation will hold a conference call to discuss its 2015 first quarter results on May 7, 2015 at 5 p.m. Eastern Time. To access the conference call, please dial 412-858-4600 ten minutes prior to the start time. The call will be webcast live and archived for replay on the investor relations portion of the Company's Web site located at www.entravision.com.

Entravision Communications Corporation is a diversified media company serving Latino audiences and communities with an integrated platform of solutions and services that includes television, radio, digital media and data analytics to reach Latino audiences across the United States and Latin America. Entravision has 58 primary television stations, including in 20 of the nation's top 50 Latino markets, and is the largest affiliate group of both the top-ranked Univision television network and Univision's UniMas network. Entravision also operates one of the nation's largest groups of primarily Spanish-language radio stations, consisting of 49 owned and operated radio stations, and Entravision Solutions, a national sales representation and marketing organization specializing in Spanish-language media platforms and radio networks. Entravision also offers a variety of digital media platforms and services, including digital content, digital advertising platforms, including the #1-ranked online advertising platform in Hispanic reach according to comScore Media Metrix®, and data analytics solutions designed to maximize the opportunity for advertisers and marketers to connect with the growing Latino consumer market. Entravision shares of Class A Common Stock are traded on The New York Stock Exchange under the symbol: EVC.  

This press release contains certain forward-looking statements. These forward-looking statements, which are included in accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, may involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results and performance in future periods to be materially different from any future results or performance suggested by the forward-looking statements in this press release. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that actual results will not differ materially from these expectations, and the Company disclaims any duty to update any forward-looking statements made by the Company. From time to time, these risks, uncertainties and other factors are discussed in the Company's filings with the Securities and Exchange Commission.

(Financial Table Follows)

Entravision Communications Corporation

Consolidated Balance Sheets

(In thousands; unaudited)



March 31,

December 31,

2015

2014
















ASSETS






Current assets






Cash and cash equivalents

$

49,864

$

31,260

Trade receivables, net of allowance for doubtful accounts

48,947


64,956

Deferred income taxes

5,900


5,900

Prepaid expenses and other current assets

5,776


5,295

Total current assets

110,487


107,411

Property and equipment, net

56,948


56,784

Intangible assets subject to amortization, net

19,309


20,193

Intangible assets not subject to amortization

220,701


220,701

Goodwill

50,081


50,081

Deferred income taxes

64,328


66,558

Other assets

5,770


6,039

Total assets

$

527,624

$

527,767
















LIABILITIES AND STOCKHOLDERS' EQUITY






Current liabilities






Current maturities of long-term debt

$

3,750

$

3,750

Advances payable, related parties

118


118

Accounts payable and accrued expenses

27,432


32,195

Total current liabilities

31,300


36,063

Long-term debt, less current maturities

335,625


336,563

Other long-term liabilities

11,451


9,583

Total liabilities

378,376


382,209








Stockholders' equity






Class A common stock

6


6

Class B common stock

2


2

Class U common stock

1


1

Additional paid-in capital

911,737


912,161

Accumulated deficit

(759,190)


(764,474)

Accumulated other comprehensive income (loss)

(3,308)


(2,138)

Total stockholders' equity

149,248


145,558

Total liabilities and stockholders' equity

$

527,624

$

527,767

Entravision Communications Corporation

Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)



Three-Month Period

Ended March 31,

2015

2014








Net revenue

$

59,550

$

52,656








Expenses:






Cost of revenue - digital media

1,360


-

Direct operating expenses

26,685


24,876

Selling, general and administrative expenses

10,501


8,631

Corporate expenses

4,993


4,836

Depreciation and amortization

3,962


3,515


47,501


41,858

Operating income (loss)

12,049


10,798

Interest expense

(3,227)


(3,438)

Interest income

8


12

Income (loss) before income taxes

8,830


7,372

Income tax (expense) benefit

(3,546)


(2,984)

Net income (loss)

$

5,284

$

4,388








Basic and diluted earnings per share:






Net income (loss) per share, basic and diluted

$

0.06

$

0.05








Cash dividends declared per common share

$

0.03

$

0.03








Weighted average common shares outstanding, basic

87,531,375


88,683,948

Weighted average common shares outstanding, diluted

90,085,961


90,943,866

Entravision Communications Corporation

Consolidated Statements of Cash Flows

(In thousands; unaudited)



Three-Month Period

Ended March 31,

2015

2014








Cash flows from operating activities:






Net income (loss)

$

5,284

$

4,388

Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:






Depreciation and amortization

3,962


3,515

Deferred income taxes

2,959


2,495

Amortization of debt issue costs

194


201

Amortization of syndication contracts

86


122

Payments on syndication contracts

(122)


(158)

Non-cash stock-based compensation

867


708

Changes in assets and liabilities:






(Increase) decrease in accounts receivable

15,976


3,510

(Increase) decrease in prepaid expenses and other assets

(561)


(993)

Increase (decrease) in accounts payable, accrued expenses and other liabilities

(3,840)


(7,041)

Net cash provided by (used in) operating activities

24,805


6,747

Cash flows from investing activities:






Purchases of property and equipment and intangibles

(2,972)


(1,918)

Net cash provided by (used in) investing activities

(2,972)


(1,918)

Cash flows from financing activities:






Proceeds from stock option exercises

900


1,636

Payments on long-term debt

(938)


(938)

Dividends paid

(2,191)


(2,224)

Payment of contingent consideration

(1,000)


-

Net cash provided by (used in) financing activities

(3,229)


(1,526)

Net increase (decrease) in cash and cash equivalents

18,604


3,303

Cash and cash equivalents:






Beginning

31,260


43,822

Ending

$

49,864

$

47,125

Entravision Communications Corporation

Reconciliation of Consolidated Adjusted EBITDA to Cash Flows From Operating Activities

(In thousands; unaudited)


The most directly comparable GAAP financial measure is operating cash flow. A reconciliation of this non-GAAP measure to
cash flows from operating activities for each of the periods presented is as follows:



Three-Month Period

Ended March 31,


2015


2014








Consolidated adjusted EBITDA (1)

$

16,842

$

14,985

Interest expense

(3,227)


(3,438)

Interest income

8


12

Income tax (expense) benefit

(3,546)


(2,984)

Amortization of syndication contracts

(86)


(122)

Payments on syndication contracts

122


158

Non-cash stock-based compensation included in direct operating

   expenses

(358)


(90)

Non-cash stock-based compensation included in corporate expenses

(509)


(618)

Depreciation and amortization

(3,962)


(3,515)

Net income (loss)

5,284


4,388

Depreciation and amortization

3,962


3,515

Deferred income taxes

2,959


2,495

Amortization of debt issue costs

194


201

Amortization of syndication contracts

86


122

Payments on syndication contracts

(122)


(158)

Non-cash stock-based compensation

867


708

Changes in assets and liabilities:






(Increase) decrease in accounts receivable

15,976


3,510

(Increase) decrease in prepaid expenses and other assets

(561)


(993)

Increase (decrease) in accounts payable, accrued expenses and other liabilities

(3,840)


(7,041)

Cash flows from operating activities

$

24,805

$

6,747

(1)

Consolidated adjusted EBITDA is defined on page 1.

Entravision Communications Corporation

Reconciliation of Free Cash Flow to Net Income (Loss)

(In thousands; unaudited)


The most directly comparable GAAP financial measure is net income (loss). A reconciliation of this non-GAAP measure to net
income (loss) for each of the periods presented is as follows:



Three-Month Period

Ended March 31,


2015


2014

Consolidated adjusted EBITDA (1)

$

16,842

$

14,985

Net interest expense (1)

3,025


3,225

Cash paid for income taxes

587


489

Capital expenditures (2)

2,972


1,918

Free cash flow (1)

10,258


9,353








Capital expenditures (2)

2,972


1,918

Amortization of debt issue costs

(194)


(201)

Non-cash income tax expense

(2,959)


(2,495)

Amortization of syndication contracts

(86)


(122)

Payments on syndication contracts

122


158

Non-cash stock-based compensation included in direct operating

   expenses

(358)


(90)

Non-cash stock-based compensation included in corporate expenses

(509)


(618)

Depreciation and amortization

(3,962)


(3,515)

Net income (loss)

$

5,284

$

4,388

(1)

Consolidated adjusted EBITDA, net interest expense, and free cash flow are defined on page 1.

(2)

Capital expenditures is not part of the consolidated statement of operations.

SOURCE Entravision Communications Corporation