Entravision Communications Corporation Reports Fourth Quarter and Year End 2009 Results
SANTA MONICA, Calif., March 4 /PRNewswire-FirstCall/ -- Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three- and twelve-month periods ended December 31, 2009.
Historical results, which are attached, are in thousands of U.S. dollars (except share and per share data). The results of our outdoor operations are presented in discontinued operations within the statements of operations in accordance with FASB Accounting Standards Codification (ASC) 360, "Impairment or Disposal of Long-Lived Assets". 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 below. Unaudited financial highlights are as follows:
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------ -------- -------------------- --------
2009 2008 % Change 2009 2008 % Change
------- ------- -------- -------- -------- --------
Net revenue $48,066 $52,762 (9)% $189,231 $232,335 (19)%
Operating
expenses (1) 30,149 35,226 (14)% 122,180 144,510 (15)%
Corporate
expenses (2) 4,316 4,414 (2)% 14,918 17,117 (13)%
Consolidated
adjusted
EBITDA (3) 15,005 13,948 8% 55,312 74,104 (25)%
Free cash
flow (4) $4,780 $3,532 35% $13,956 $26,572 (47)%
Free cash
flow per
share, basic
and
diluted (4) $0.06 $0.04 50% $0.17 $0.29 (41)%
Loss from
continuing
operations $(52,023) $(134,126) (61)% $(67,671) $(484,007) (86)%
Net loss
applicable
to common
stock-
holders $(52,023) $(136,483) (62)% $(67,671) $(487,937) (86)%
Net loss per
share from
continuing
operations
applicable
to common
stockholders,
basic and
diluted $(0.62) $(1.56) (60)% $(0.81) $(5.34) (85)%
Net loss per
share
applicable
to common
stockholders,
basic and
diluted $(0.62) $(1.58) (61)% $(0.81) $(5.39) (85)%
Weighted
average
common
shares
out-
standing,
basic 83,745,069 86,185,661 83,972,709 90,560,685
Weighted
average
common
shares
out-
standing,
diluted 83,745,069 86,185,661 83,972,709 90,560,685
(1) Operating expenses include direct operating, selling, general and
administrative expenses. Included in operating expenses are $0.9
million and $0.4 million of non-cash stock-based compensation for the
three-month periods ended December 31, 2009 and 2008, respectively
and $2.0 million and $1.4 million of non-cash stock-based
compensation for the twelve-month periods ended December 31, 2009 and
2008, 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 $0.9 million and $0.5 million of non-cash
stock-based compensation for the three-month periods ended December
31, 2009 and 2008, respectively and $2.0 million and $1.9 million of
non-cash stock-based compensation for the twelve-month periods ended
December 31, 2009 and 2008, 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, gain (loss) on debt
extinguishment, loss from discontinued operations, income tax
(expense) benefit, equity in net income (loss) of nonconsolidated
affiliate and syndication programming amortization less syndication
programming payments. We use the term consolidated adjusted EBITDA
because that measure is defined in our syndicated bank 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, gain (loss) on debt
extinguishment, loss from discontinued operations, income tax
(expense) benefit, equity in net income (loss) of nonconsolidated
affiliate 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, gain (loss) on debt extinguishment,
loss from discontinued operations, income tax (expense) benefit,
equity in net income (loss) of nonconsolidated affiliate 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 and capital expenditures.
Net interest expense is defined as interest expense, less non-cash
interest expense relating to amortization of debt finance costs, less
interest income 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 2009, we were confronted with a significant advertising downturn, both in television and radio, primarily as a result of the global financial crisis and recession. Nevertheless, our audience shares remained strong in the nation's most densely populated Hispanic markets. Although EBITDA declined for the full year 2009 compared to 2008, our focus on managing costs and maximizing cash flows were factors in increasing our EBITDA for the fourth quarter of 2009. Additionally, we anticipate that retransmission consent revenue will continue to be a growing source of revenue, along with advertising revenue from World Cup and political activity during 2010."
Impairment of Radio Segment Intangibles
The Company recorded an impairment charge of $48 million related to radio FCC broadcasting licenses. The write-down was pursuant to ASC 350, which requires that goodwill and certain intangible assets be tested for impairment at least annually, or more frequently if events or changes in circumstances indicate the assets might be impaired.
Financial Results
Cautionary Note Regarding Preliminary Quarterly Results
In connection with the preparation of our financial statements for the three- and twelve-month periods ended December 31, 2009, we are currently in the process of finalizing the provision for income taxes, which we intend to complete in time to permit a timely filing of our annual report for the period ended December 31, 2009.
Three Months Ended December 31, 2009 Compared to Three Months Ended
December 31, 2008 (Unaudited)
Three Months Ended
December 31,
-------------------------------
2009 2008 % Change
------- ------- --------
Net revenue $48,066 $52,762 (9)%
Operating expenses (1) 30,149 35,226 (14)%
Corporate expenses (1) 4,316 4,414 (2)%
Depreciation and amortization 5,140 6,227 (17)%
Impairment charge 47,928 170,436 (72)%
------ -------
Operating loss (39,467) (163,541) (76)%
Interest expense, net (6,115) (14,943) (59)%
Gain on debt extinguishment - 9,813 NM
--- -----
Loss before income taxes (45,582) (168,671) (73)%
Income tax (expense) benefit (6,371) 34,538 NM
------ ------
Net loss before equity in net
income (loss) of
nonconsolidated affiliates
and discontinued operations
(51,953) (134,133) (61)%
Equity in net income (loss) of
nonconsolidated affiliates (70) 7 NM
--- ---
Net loss before discontinued operations (52,023) (134,126) (61)%
Loss from discontinued
operations, net of tax - (2,357) NM
--- ------
Net loss $(52,023) $(136,483) (62)%
======== =========
(1) Operating expenses and corporate expenses are defined above.
Net revenue decreased to $48.1 million for the three-month period ended December 31, 2009 from $52.8 million for the three-month period ended December 31, 2008, a decrease of $4.7 million. Of the overall decrease, $3.7 million came from our radio segment and was primarily attributable to a decrease in local and national advertising rates, which in turn was primarily due to the weak economy. Additionally, $1.0 million of the overall decrease came from our television segment and was primarily attributable to a decrease in local and national advertising rates, which in turn was primarily due to the weak economy, partially offset by an increase in retransmission consent revenue in the amount of $2.2 million.
Operating expenses decreased to $30.1 million for the three-month period ended December 31, 2009 from $35.2 million for the three-month period ended December 31, 2008, a decrease of $5.1 million. The decrease was primarily attributable to decreases in expenses associated with the decrease in net revenue and salary expense due to reductions of personnel and salary reductions.
Corporate expenses decreased to $4.3 million for the three-month period ended December 31, 2009 from $4.4 million for the three-month period ended December 31, 2008, a decrease of $0.1 million. The decrease was primarily attributable to the decrease in professional fees and salary expense due to salary reductions, partially offset by an increase in non-cash stock based compensation of $0.4 million.
Twelve Months Ended December 31, 2009 Compared to Twelve Months
Ended December 31, 2008
(Unaudited)
Twelve Months Ended
December 31,
-------------------------------
2009 2008 % Change
-------- -------- --------
Net revenue $189,231 $232,335 (19)%
Operating expenses (1) 122,180 144,510 (15)%
Corporate expenses (1) 14,918 17,117 (13)%
Depreciation and amortization 21,033 23,412 (10)%
Impairment charge 50,648 610,456 (92)%
------ -------
Operating loss (19,548) (563,160) (97)%
Interest expense, net (27,489) (41,199) (33)%
Gain (loss) on debt extinguishment (4,716) 9,813 NM
------ -----
Loss before income taxes (51,753) (594,546) (91)%
Income tax (expense) benefit (15,682) 110,705 NM
------- -------
Net loss before equity in net
loss of nonconsolidated
affiliates and discontinued
operations
(67,435) (483,841) (86)%
Equity in net loss of
nonconsolidated affiliates (236) (166) 42%
---- ----
Net loss before
discontinued operations (67,671) (484,007) (86)%
Loss from discontinued
operations, net of tax - (3,930) NM
--- ------
Net loss $(67,671) $(487,937) (86)%
======== =========
(1) Operating expenses and corporate expenses are defined above.
Net revenue decreased to $189.2 million for the twelve-month period ended December 31, 2009 from $232.3 million for the twelve-month period ended December 31, 2008, a decrease of $43.1 million. Of the overall decrease, $21.6 million came from our radio segment and was primarily attributable to a decrease in local and national advertising sales and advertising rates, which in turn was primarily due to the weak economy. Additionally, $21.5 million of the overall decrease came from our television segment and was primarily attributable to a decrease in local and national advertising rates, which in turn was primarily due to the weak economy, partially offset by an increase in retransmission consent revenue in the amount of $9.5 million.
Operating expenses decreased to $122.2 million for the twelve-month period ended December 31, 2009 from $144.5 million for the twelve-month period ended December 31, 2008, a decrease of $22.3 million. The decrease was primarily attributable to decreases in expenses associated with the decrease in net revenue and salary expense due to reductions of personnel and salary reductions.
Corporate expenses decreased to $14.9 million for the twelve-month period ended December 31, 2009 from $17.1 million for the twelve-month period ended December 31, 2008, a decrease of $2.2 million. The decrease was primarily attributable to a decrease in professional fees and salary expense due to salary reductions.
Segment Results
The following represents selected unaudited segment information:
Three Months Ended
December 31,
--------------------------
2009 2008 % Change
------- ------- --------
Net Revenue
Television $32,400 $33,410 (3)%
Radio 15,666 19,352 (19)%
------ ------
Total $48,066 $52,762 (9)%
Operating Expenses (1)
Television $17,640 $21,082 (16)%
Radio 12,509 14,144 (12)%
------ ------
Total $30,149 $35,226 (14)%
Corporate Expenses (1) $4,316 $4,414 (2)%
Consolidated adjusted
EBITDA (1) $15,005 $13,948 8%
(1) Operating expenses, Corporate expenses, and
Consolidated adjusted EBITDA are defined above.
Entravision Communications Corporation will hold a conference call to discuss its 2009 fourth quarter results on March 4, 2010 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 at www.entravision.com.
Entravision Communications Corporation is a diversified Spanish-language media company utilizing a combination of television and radio operations to reach Hispanic consumers across the United States, as well as the border markets of Mexico. Entravision owns and/or operates 53 primary television stations and is the largest affiliate group of both the top-ranked Univision television network and Univision's TeleFutura network, with television stations in 20 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. 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.
Entravision Communications Corporation
Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
Three-Month Period Twelve-Month Period
Ended December 31, Ended December 31,
-------------------- --------------------
2009 2008 2009 2008
-------- ------- -------- --------
Net revenue $48,066 $52,762 $189,231 $232,335
------- ------- -------- --------
Expenses:
Direct operating expenses 20,212 24,543 83,902 100,801
Selling, general
and administrative
expenses 9,937 10,683 38,278 43,709
Corporate expenses 4,316 4,414 14,918 17,117
Depreciation and
amortization 5,140 6,227 21,033 23,412
Impairment charge 47,928 170,436 50,648 610,456
------ ------- ------ -------
87,533 216,303 208,779 795,495
------ ------- ------- -------
Operating loss (39,467) (163,541) (19,548) (563,160)
Interest expense (6,186) (15,498) (27,948) (43,093)
Interest income 71 555 459 1,894
Gain (loss) on debt
extinguishment - 9,813 (4,716) 9,813
--- ----- ------ -----
Loss before
income taxes (45,582) (168,671) (51,753) (594,546)
Income tax (expense)
benefit (6,371) 34,538 (15,682) 110,705
------ ------ ------- -------
Loss before
equity in net
income (loss)
of nonconsolidated
affiliate and
discontinued
operations (51,953) (134,133) (67,435) (483,841)
Equity in net income
(loss) of
nonconsolidated
affiliate (70) 7 (236) (166)
--- --- ---- ----
Loss from continuing
operations (52,023) (134,126) (67,671) (484,007)
Loss from discontinued
operations, net of tax - (2,357) - (3,930)
--- ------ --- ------
Net loss applicable to
common stockholders $(52,023) $(136,483) $(67,671) $(487,937)
======== ========= ======== =========
Basic and diluted
earnings per share:
Loss per share from
continuing operations
applicable to
common stockholders,
basic and diluted $(0.62) $(1.56) $(0.81) $(5.34)
====== ====== ====== ======
Loss per share from
discontinued operations,
basic and diluted $- $(0.03) $- $(0.04)
== ====== == ======
Net loss per share
applicable to common
stockholders,
basic and diluted $(0.62) $(1.58) $(0.81) $(5.39)
====== ====== ====== ======
Weighted average common
shares outstanding,
basic 83,745,069 86,185,661 83,972,709 90,560,685
========== ========== ========== ==========
Weighted average common
shares outstanding,
diluted 83,745,069 86,185,661 83,972,709 90,560,685
========== ========== ========== ==========
Entravision Communications Corporation
Consolidated Statements of Cash Flows
(Unaudited; in thousands)
Three-Month Period Twelve-Month Period
Ended December 31, Ended December 31,
------------------ -------------------
2009 2008 2009 2008
-------- -------- -------- --------
Cash flows from operating
activities:
Net loss $(52,023) $(136,483) $(67,671) $(487,937)
Adjustments to reconcile
net loss to net cash
provided by operating
activities:
Depreciation and
amortization 5,140 6,227 21,033 23,412
Impairment charge 47,928 170,436 50,648 610,456
Deferred income taxes 6,714 (34,653) 15,248 (112,190)
Amortization of debt
issue costs 104 157 402 459
Amortization of
syndication contracts 292 628 1,981 2,883
Payments on syndication
contracts (717) (705) (2,836) (2,840)
Equity in net (income)
loss of nonconsolidated
affiliate 70 (7) 236 166
Non-cash stock-based
compensation 1,829 903 4,034 3,353
Gain on sale of media
properties and other
assets (6) - (108) -
(Gain) loss on debt
extinguishment - (9,813) 945 (9,813)
Change in fair value of
interest rate swap
agreements (3,129) 8,001 (6,979) 11,648
Changes in assets and
liabilities, net of
effect of acquisitions
and dispositions:
Decrease in accounts
receivable 3,670 7,508 570 11,156
(Increase) decrease
in prepaid expenses
and other assets 137 903 (484) 803
Increase (decrease)
in accounts payable,
accrued expenses and
other liabilities (1,417) (2,860) 1,770 (6,065)
Effect of discontinued
operations - 957 - (1,273)
--- --- --- ------
Net cash provided
by operating
activities 8,592 11,199 18,789 44,218
----- ------ ------ ------
Cash flows from investing
activities:
Proceeds from sale of
property and equipment
and intangibles 8 - 122 101,498
Purchases of property and
equipment and intangibles (1,758) (3,458) (10,965) (16,873)
Purchase of a business - - - (22,885)
Deposits on acquisitions - - - (200)
Effect of discontinued
operations - - - (194)
--- --- --- ----
Net cash provided
by (used in)
investing
activities (1,750) (3,458) (10,843) 61,346
------ ------ ------- ------
Cash flows from financing
activities:
Proceeds from issuance of
common stock - - 255 785
Payments on long-term debt - (56,666) (42,572) (67,702)
Repurchase of Class U
common stock - - - (10,380)
Repurchase of Class A
common stock - (4,299) (1,075) (50,837)
Excess tax benefits from
exercise of stock options - (56) - (81)
Payments of deferred debt
and offering costs - - (1,182) -
--- --- ------ -
Net cash used in
financing
activities - (61,021) (44,574) (128,215)
--- ------- ------- --------
Net increase
(decrease) in cash
and cash
equivalents 6,842 (53,280) (36,628) (22,651)
Cash and cash equivalents:
Beginning 20,824 117,574 64,294 86,945
------ ------- ------ ------
Ending $27,666 $64,294 $27,666 $64,294
======= ======= ======= =======
Entravision Communications Corporation
Reconciliation of Consolidated Adjusted EBITDA to Cash Flows From
Operating Activities
(Unaudited; in thousands)
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 Twelve-Month Period
Ended December 31, Ended December 31,
------------------ -------------------
2009 2008 2009 2008
------- -------- -------- ---------
Consolidated adjusted EBITDA (1) $15,005 $13,948 $55,312 $74,104
Interest expense (6,186) (15,498) (27,948) (43,093)
Interest income 71 555 459 1,894
Gain (loss) on debt
extinguishment - 9,813 (4,716) 9,813
Income tax (expense) benefit (6,371) 34,538 (15,682) 110,705
Amortization of syndication
contracts (292) (628) (1,981) (2,883)
Payments on syndication contracts 717 705 2,836 2,840
Non-cash stock-based compensation
included in direct operating
expenses (365) (171) (854) (633)
Non-cash stock-based compensation
included in selling, general
and administrative expenses (524) (215) (1,142) (794)
Non-cash stock-based
compensation included in
corporate expenses (940) (517) (2,038) (1,926)
Depreciation and amortization (5,140) (6,227) (21,033) (23,412)
Impairment charge (47,928) (170,436) (50,648) (610,456)
Equity in net income (loss) of
nonconsolidated affiliates (70) 7 (236) (166)
Loss from discontinued operations - (2,357) - (3,930)
--- ------ --- ------
Net loss (52,023) (136,483) (67,671) (487,937)
Depreciation and amortization 5,140 6,227 21,033 23,412
Impairment charge 47,928 170,436 50,648 610,456
Deferred income taxes 6,714 (34,653) 15,248 (112,190)
Amortization of debt issue costs 104 157 402 459
Amortization of syndication
contracts 292 628 1,981 2,883
Payments on syndication contracts (717) (705) (2,836) (2,840)
Equity in net (income) loss of
nonconsolidated affiliate 70 (7) 236 166
Non-cash stock-based compensation 1,829 903 4,034 3,353
Gain on sale of media properties
and other assets (6) - (108) -
(Gain) loss on debt
extinguishment - (9,813) 945 (9,813)
Change in fair value of interest
rate swap agreements (3,129) 8,001 (6,979) 11,648
Changes in assets and liabilities,
net of effect of acquisitions and
dispositions:
Decrease in accounts receivable 3,670 7,508 570 11,156
(Increase) decrease in prepaid
expenses and other assets 137 903 (484) 803
Increase (decrease) in
accounts payable, accrued
expenses and other liabilities (1,417) (2,860) 1,770 (6,065)
Effect of discontinued operations - 957 - (1,273)
--- --- --- ------
Cash flows from operating
activities $8,592 $11,199 $18,789 $44,218
====== ======= ======= =======
(1) Consolidated adjusted EBITDA is defined above.
Entravision Communications Corporation
Reconciliation of Free Cash Flow to Net Loss
(Unaudited; in thousands)
The most directly comparable GAAP financial measure is net loss.
A reconciliation of this non-GAAP measure to net loss for each of
the periods presented is as follows:
Three-Month Period Twelve-Month Period
Ended December 31, Ended December 31,
------------------ ------------------
2009 2008 2009 2008
------- ------- ------- -------
Consolidated
adjusted EBITDA (1) $15,005 $13,948 $55,312 $74,104
Net interest expense (1) 9,140 6,787 34,066 29,093
Cash paid for income
taxes (343) 171 434 1,566
Capital expenditures (2) 1,428 3,458 6,856 16,873
----- ----- ----- ------
Free cash flow (1) 4,780 3,532 13,956 26,572
Capital expenditures (2) 1,428 3,458 6,856 16,873
Non-cash interest
(expense) income
relating to amortization
of debt finance costs
and interest rate swap
agreements 3,025 (8,156) 6,577 (12,106)
Non-cash income tax
(expense) benefit (6,714) 34,709 (15,248) 112,271
Gain (loss) on debt
extinguishment - 9,813 (4,716) 9,813
Amortization of
syndication contracts (292) (628) (1,981) (2,883)
Payments on syndication
contracts 717 705 2,836 2,840
Non-cash stock-based
compensation included
in direct operating
expenses (365) (171) (854) (633)
Non-cash stock-based
compensation included
in selling, general
and administrative
expenses (524) (215) (1,142) (794)
Non-cash stock-based
compensation
included in
corporate expenses (940) (517) (2,038) (1,926)
Depreciation and
amortization (5,140) (6,227) (21,033) (23,412)
Impairment charge (47,928) (170,436) (50,648) (610,456)
Equity in net income
(loss) of nonconsolidated
affiliates (70) 7 (236) (166)
Loss from discontinued
operations - (2,357) - (3,930)
--- ------ --- ------
Net loss $(52,023) $(136,483) $(67,671) $(487,937)
======== ========= ======== =========
(1) Consolidated adjusted EBITDA, net interest expense and free cash
flow are defined above.
(2) Capital expenditures is not part of the consolidated statement
of operations.
SOURCE Entravision Communications Corporation
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