Entravision Communications Corporation Reports Fourth Quarter and Full Year 2011 Results

SANTA MONICA, Calif., March 7, 2012 /PRNewswire/ -- Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three- and twelve-month periods ended December 31, 2011.

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 8.  Unaudited financial highlights are as follows:

(1) Operating expenses include direct operating, selling, general and administrative expenses. Included in operating expenses are $0.4 million and $0.6 million of non-cash stock-based compensation for the three-month periods ended December 31, 2011 and 2010, respectively and $1.0 million and $1.4 million of non-cash stock-based compensation for the twelve-month periods ended December 31, 2011 and 2010, respectively. Operating expenses do not include corporate expenses, depreciation and amortization, impairment charge, gain (loss) on sale of assets and gain (loss) on debt extinguishment.

(2) Corporate expenses include $0.6 million and $0.8 million of non-cash stock-based compensation for the three-month periods ended December 31, 2011 and 2010, respectively and $1.3 million and $1.6 million of non-cash stock-based compensation for the twelve-month periods ended December 31, 2011 and 2010, respectively.

(3) 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 revolving 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.  

(4) Free cash flow is defined as consolidated adjusted EBITDA less cash paid for income taxes, net interest expense, capital expenditures and dividend payments. Net interest expense is defined as interest expense, less non-cash interest expense relating to amortization of debt finance costs, less non-cash interest expense relating to discount amortization on our $384 million aggregate principal amount of 8.750% senior secured first lien notes due 2017 (the "Notes"), less interest income and less the change in the fair value of our interest rate swaps. 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 2011, we faced challenging comparisons to 2010, when we benefited from World Cup and political advertising revenue.  We also continued to face a challenging advertising environment generally, as our advertising customers continue to make difficult choices in the current uncertain economic environment. Nonetheless, core advertising showed modest improvement during 2011. Our audience shares remain strong in the nation's most densely populated Hispanic markets, and we believe we are well positioned to benefit as the U.S. Hispanic market continues to expand and advertisers increasingly recognize the importance of reaching our target audience."

Repurchase of Outstanding Debt and Cash Dividend

The Company repurchased $16.2 million in aggregate principal amount of its 8.750% senior secured first lien notes due 2017 in open market transactions during the fourth quarter of 2011. The Company also declared and paid a special cash dividend of $0.06 per share to shareholders of the Company's Class A, Class B and Class U common stock during the fourth quarter of 2011.  The total amount of cash disbursed for the special dividend was $5.1 million.

(1)  Operating expenses and corporate expenses are defined on page 1.

Net revenue decreased to $50.0 million for the three-month period ended December 31, 2011 from $50.6 million for the three-month period ended December 31, 2010, a decrease of $0.6 million. Net revenue from our radio segment decreased $1.0 million and was primarily attributable to a decrease in political advertising revenue, which was not material in 2011.  The decrease from our radio segment was partially offset by a $0.4 million increase from our television segment that was primarily attributable to an increase in local advertising and an increase in retransmission consent revenue, partially offset by a decrease in political advertising revenue, which was not material in 2011.

Operating expenses increased to $32.1 million for the three-month period ended December 31, 2011 from $30.7 million for the three-month period ended December 31, 2010, an increase of $1.4 million. The increase was primarily attributable to an increase in salary expense as a result of the partial restoration of employee salaries in 2011 and expenses associated with Lotus/Entravision Reps LLC, partially offset by a decrease in bad debt expense.

Corporate expenses decreased to $4.3 million for the three-month period ended December 31, 2011 from $7.4 million for the three-month period ended December 31, 2010, a decrease of $3.1 million. The decrease was primarily attributable to higher expenses in 2010 due to the creation of a reserve for a $3.0 million note receivable and accrued interest relating to the sale of our publishing segment in 2003, partially offset by the increase in interactive expenses and partial restoration of employee salaries in 2011.

(1)  Operating expenses and corporate expenses are defined on page 1.

Net revenue decreased to $194.4 million for the year ended December 31, 2011 from $200.5 million for the year ended December 31, 2010, a decrease of $6.1 million. Of the overall decrease, $5.0 million came from our radio segment and was primarily attributable to the non-occurrence of advertising revenue from the World Cup in 2011 compared to 2010 and a decrease in political advertising revenue, which is not material in 2011. Additionally, $1.1 million of the overall decrease came from our television segment and was primarily attributable to a decrease in national advertising, the non-occurrence of advertising revenue from the World Cup in 2011 compared to 2010 and a decrease in political advertising revenue, which was not material in 2011, partially offset by an increase in retransmission consent revenue.

Operating expenses increased to $125.1 million for the twelve-month period ended December 31, 2011 from $122.8 million for the twelve-month period ended December 31, 2010, an increase of $2.3 million. The increase was primarily attributable to an increase in salary expense as a result of the partial restoration of employee salaries in 2011 and expenses associated with Lotus/Entravision Reps LLC, partially offset by a decrease in sales expenses associated with the decrease in net revenue.

Corporate expenses decreased to $15.7 million for the year ended December 31, 2011 from $18.4 million for the year ended December 31, 2010, a decrease of $2.7 million. The decrease was primarily attributable to higher expenses in 2010 due to the creation of a reserve for a $3.0 million note receivable and accrued interest relating to the sale of our publishing segment in 2003, partially offset by the increase in interactive expenses and partial restoration of employee salaries in 2011.  

(1) Operating expenses, Corporate expenses, and Consolidated adjusted EBITDA are defined on page 1.

Entravision Communications Corporation will hold a conference call to discuss its 2011 fourth quarter and full year results on March 7, 2012 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 Spanish-language media company utilizing a combination of television, radio and digital operations to reach Hispanic consumers across the United States, as well as the border markets of Mexico. Entravision is the largest affiliate group of both the top-ranked Univision television network and Univision's TeleFutura network, with television stations in 19 of the nation's top 50 Hispanic markets. The company also operates one of the nation's largest groups of primarily Spanish-language radio stations, consisting of 48 owned and operated radio stations. Additionally, Entravision has a variety of cross-platform digital content and sales offerings designed to capitalize on the company's leadership position within the Hispanic broadcasting community. 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)

(1)  Consolidated adjusted EBITDA is defined on page 1.

(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