Spanish Broadcasting Reports Second Quarter Fiscal Year 2001 Results

Apr 27, 2001, 01:00 ET from Spanish Broadcasting System, Inc.

    MIAMI, April 27 /PRNewswire/ --
 Spanish Broadcasting System, Inc. (Nasdaq: SBSA) today reported financial
 results for the three- and six-month periods ended March 25, 2001.
 
     Financial highlights are as follows:
 
     Amounts in millions (except per share data)
 
              Three Months Ended March      %    Six Months Ended March      %
              25, 2001       26, 2000  Change     25, 2001    26, 2000  Change
 
     Net
      revenues  $ 25.1       $   24.9     0.8%     $  62.4    $   53.9   15.8%
     BCF (1)       6.6           12.7   (48.0%)       21.7        29.1  (25.4%)
     BCF
      margin (2)  26.3%          51.0%                34.8%       54.0%
 
     EBITDA (3)    4.0           10.3   (61.2%)       16.5        13.7   20.4%
     EBITDA
      margin (4)  15.9%          41.4%                26.4%       25.4%
     ATCF (5)      0.3            4.7   (93.6%)        5.2         5.8  (10.4%)
     ATCF -
      cash
      taxes
      (5)(6)      (2.5)           5.8        --        2.9         5.4  (46.3%)
 
     Earnings
      (loss)
      per share:
       Basic
        and
        diluted
        (before
        extraordinary
        item)
                 (0.06)          0.03                (0.06)      (0.51)
 
     Basic
      and
      diluted    (0.06)          0.03                (0.06)      (0.81)
 
     Weighted
      average
      shares
      outstanding:
       Basic    64.658         60.217               63.511      56.109
       Diluted  64.658         60.611               63.511      56.109
 
     Same Station
      Results:(7)
       Net
       revenues  $21.3       $  24.8    (14.1%)     $ 51.7    $   53.7   (3.7%)
       BCF (1)     8.4          13.1    (35.9%)       24.1        30.0  (19.7%)
        BCF
        margin(2) 39.4%         52.8%                 46.6%       55.9%
 
     (1) Broadcast cash flow ("BCF") is defined as operating income before
         depreciation, amortization and corporate expenses.
     (2) Broadcast cash flow margin ("BCF margin") is defined as broadcast cash
         flow as a percentage of net revenues.
     (3) EBITDA is defined as earnings before interest, taxes, depreciation and
         amortization.
     (4) EBITDA margin is defined as EBITDA as a percentage of net revenues.
     (5) After-tax cash flow ("ATCF") is defined as income before income tax
         expense and extraordinary items, minus the current income tax
         provision, plus depreciation and amortization.
     (6) After-tax cash flow - cash taxes ("ATCF - cash taxes") is defined as
         income before income tax benefit (expense) and extraordinary items,
         minus cash taxes paid, plus depreciation and amortization.  Cash taxes
         paid were $0.1 million in the second quarter of fiscal year 2001 and
         were insignificant in the second quarter of fiscal year 2000.  Cash
         taxes paid were $0.1 million for the six months ended March 25, 2001
         and were $0.4 million for the six months ended March 26, 2000.
     (7) Reflects results of stations operated during the periods on a
         comparable monthly basis, excluding the AOL barter agreement and
         Internet results.
 
     Spanish Broadcasting's current fiscal quarterly and year-to-date results
 reflect the inclusion of revenues generated and operating expenses incurred by
 the stations purchased in Puerto Rico in the second quarter of fiscal year
 2000, and in Dallas, San Antonio, San Francisco, and Los Angeles in the first
 quarter of fiscal year 2001.  Operating expenses at these start-up stations
 outpaced revenues as the Company incurred additional expenses in order to
 establish and promote its presence in these markets.  The current results also
 reflect the inclusion of the barter agreement entered into in August 2000 with
 America Online, Inc.  These factors, combined with a decline in same station
 operating results, all contributed to the decrease in the Company's broadcast
 cash flow and operating margins.
     On a same station basis, Spanish Broadcasting experienced a decline in
 operating results due mainly to a weakening demand for advertising in its New
 York and Los Angeles stations, compounded by higher compensation expenses
 related to improvements in its programming department and the hiring of
 additional programming and sales management personnel.  The Company also
 increased its allowance for doubtful accounts as a result of the overall
 softening in the general economy, and in the advertising sector in particular.
     "Our second quarter results were generally in line with previous
 guidance," said Raul Alarcon, Jr., Chairman, President and CEO.  "However, the
 continued weakness in the advertising market due to the economic slowdown has
 prompted us to revise our outlook for the remainder of the year. Given this
 environment, we have refocused our efforts on controlling costs, while seeking
 to strengthen revenue share across our station group. We have implemented
 personnel reductions at some of our markets that should result in savings in
 compensation for the remainder of the fiscal year as well as future years.  We
 have also reorganized our advertising and promotional functions to operate
 more efficiently, and we are leveraging barter agreements to further reduce
 cash advertising costs.  While we have taken a prudent approach to operating
 our stations, we have not sacrificed the level of promotion and marketing that
 is necessary to compete aggressively in our key markets."
     Mr. Alarcon continued, "While our expectations have been tempered, we are
 cautiously optimistic that the advertising environment will begin to improve
 in the second half of the year.  Furthermore, we were able to establish a time
 brokerage agreement with the International Church of the Foursquare Gospel,
 which will allow us to launch KFSG-FM, our second full-signal facility in Los
 Angeles, the nation's largest Hispanic radio revenue market, during the fiscal
 third quarter.  We remain confident that we will be able to weather this
 difficult period with effective cost controls and efficient operations. The
 2000 Census has confirmed the explosive growth of the nation's Hispanic
 population.   Advertisers will ultimately have to increase their spending
 targeted at this viable and under-served market.  Given our top-ten market
 portfolio of radio stations, we believe we are in a strong position to benefit
 as the advertising market begins to rebound."
 
     Fiscal Third Quarter and Full Fiscal 2001 Outlook
     For the three months ending June 24, 2001, Spanish Broadcasting expects
 net revenues to decrease by approximately 2%-4%. The ongoing slowdown in
 advertising demand continues to hamper the Company's results. Broadcast cash
 flow for the three months ending June 24, 2001 is expected to be in the range
 of approximately $9.5 million to $11.0 million.  The Company anticipates a
 more gradual economic recovery in the fourth quarter of fiscal 2001 but
 believes visibility remains low.  Therefore, the Company now expects full
 fiscal year revenue to increase by approximately 5%-7%. Broadcast cash flow
 for fiscal 2001 is expected to be in the range of $44.0 million to $47.0
 million.
 
     About Spanish Broadcasting
     Spanish Broadcasting System, Inc. is the largest Hispanic-owned radio
 broadcasting company in the United States.  Spanish Broadcasting currently
 owns and operates 24 stations in eight of the top-ten U.S. Hispanic markets,
 including Los Angeles, Puerto Rico, New York, Miami, San Francisco, Chicago,
 San Antonio and Dallas.  Upon the completion of previously announced
 acquisitions, the Company will own and operate a total of 26 stations in these
 markets.  The Company also operates LaMusica.com, a bilingual Spanish-English
 Internet Web site providing content related to Latin music, entertainment,
 news and culture.
     Spanish Broadcasting will host a teleconference to discuss today's
 announcement, as well as the Company's outlook for 2001 at 10:30 AM ET.  Those
 wishing to listen to the call can visit
 http://www.videonewswire.com/SBSA/042701. A replay will be available until
 midnight, May 4, 2001, by dialing 800-839-2871 or by visiting
 http://www.videonewswire.com/SBSA/042701.
 
     The information contained in this news release, other than historical
 information, consists of forward-looking statements within the meaning of
 Section 27A of the Securities Act and Section 21E of the Exchange Act.  These
 statements may involve risks and uncertainties that could cause actual results
 to differ materially from those described in such statements.  Although the
 Company believes that the expectations reflected in such forward-looking
 statements are reasonable, it can give no assurance that such expectations
 will prove to have been correct.  Important factors, including general
 economic conditions, consumer spending levels, adverse weather conditions and
 other factors could cause actual results to differ materially from the
 Company's expectations.
 
                Condensed Consolidated Statements of Operations
                                  (unaudited)
 
 
     Amounts in thousands (except per share data)
 
                    Three Months Ended March         Six Months Ended March
                   25, 2001          26, 2000       25, 2001          26, 2000
 
     Net revenues  $ 25,052          $ 24,928       $ 62,366          $ 53,862
     Station
      operating
      expenses       18,455            12,252         40,666            24,756
     Corporate
      expenses (1)    2,645             2,391          5,156            15,455
     Depreciation
      and
      amortization    4,433             3,224          8,797             5,848
        Income
        (loss)
        from
        operations     (481)            7,061          7,747             7,803
     Interest
      expense, net   (6,586)           (4,528)       (14,023)           (7,495)
     Other income
      (expense), net    280                48            517              (356)
     Income (loss)
      before income
      taxes
      and
      extraordinary
      loss           (6,787)            2,581         (5,759)              (48)
     Income tax
      expense
     (benefit)       (2,626)            1,057         (2,194)              (20)
     Income (loss)
      before
      extraordinary
      loss           (4,161)            1,524         (3,565)              (28)
     Extraordinary
      loss, net of
      income tax
      benefit            --                --             --           (16,865)
 
       Net
        income
        (loss)     $ (4,161)          $ 1,524       $ (3,565)        $ (16,893)
 
     Dividends
      on
      preferred
      stock              --                --             --           (28,372)
 
       Net income
       (loss)
       applicable
       to common
       stock       $ (4,161)          $ 1,524       $ (3,565)        $ (45,265)
 
     Net income
      (loss)
      per common
      share: (2)
       Basic
        and diluted
        (before
        extraordinary
        item)       $ (0.06)           $ 0.03        $ (0.06)          $ (0.51)
       Basic
        and
        diluted       (0.06)             0.03          (0.06)            (0.81)
 
     Weighted
      average
      common
      shares
      outstanding:
       Basic         64,658            60,217         63,511            56,109
       Diluted       64,658            60,611         63,511            56,109
 
     (1) Includes $10.2 million non-recurring severance payment in the first
         quarter of fiscal year 2000.
 
     (2) Includes $5.9 million ($10.2 million, net of income tax benefit of
         $4.3 million) non-recurring severance payment in the first quarter of
         fiscal year 2000.
 
 

SOURCE Spanish Broadcasting System, Inc.
    MIAMI, April 27 /PRNewswire/ --
 Spanish Broadcasting System, Inc. (Nasdaq: SBSA) today reported financial
 results for the three- and six-month periods ended March 25, 2001.
 
     Financial highlights are as follows:
 
     Amounts in millions (except per share data)
 
              Three Months Ended March      %    Six Months Ended March      %
              25, 2001       26, 2000  Change     25, 2001    26, 2000  Change
 
     Net
      revenues  $ 25.1       $   24.9     0.8%     $  62.4    $   53.9   15.8%
     BCF (1)       6.6           12.7   (48.0%)       21.7        29.1  (25.4%)
     BCF
      margin (2)  26.3%          51.0%                34.8%       54.0%
 
     EBITDA (3)    4.0           10.3   (61.2%)       16.5        13.7   20.4%
     EBITDA
      margin (4)  15.9%          41.4%                26.4%       25.4%
     ATCF (5)      0.3            4.7   (93.6%)        5.2         5.8  (10.4%)
     ATCF -
      cash
      taxes
      (5)(6)      (2.5)           5.8        --        2.9         5.4  (46.3%)
 
     Earnings
      (loss)
      per share:
       Basic
        and
        diluted
        (before
        extraordinary
        item)
                 (0.06)          0.03                (0.06)      (0.51)
 
     Basic
      and
      diluted    (0.06)          0.03                (0.06)      (0.81)
 
     Weighted
      average
      shares
      outstanding:
       Basic    64.658         60.217               63.511      56.109
       Diluted  64.658         60.611               63.511      56.109
 
     Same Station
      Results:(7)
       Net
       revenues  $21.3       $  24.8    (14.1%)     $ 51.7    $   53.7   (3.7%)
       BCF (1)     8.4          13.1    (35.9%)       24.1        30.0  (19.7%)
        BCF
        margin(2) 39.4%         52.8%                 46.6%       55.9%
 
     (1) Broadcast cash flow ("BCF") is defined as operating income before
         depreciation, amortization and corporate expenses.
     (2) Broadcast cash flow margin ("BCF margin") is defined as broadcast cash
         flow as a percentage of net revenues.
     (3) EBITDA is defined as earnings before interest, taxes, depreciation and
         amortization.
     (4) EBITDA margin is defined as EBITDA as a percentage of net revenues.
     (5) After-tax cash flow ("ATCF") is defined as income before income tax
         expense and extraordinary items, minus the current income tax
         provision, plus depreciation and amortization.
     (6) After-tax cash flow - cash taxes ("ATCF - cash taxes") is defined as
         income before income tax benefit (expense) and extraordinary items,
         minus cash taxes paid, plus depreciation and amortization.  Cash taxes
         paid were $0.1 million in the second quarter of fiscal year 2001 and
         were insignificant in the second quarter of fiscal year 2000.  Cash
         taxes paid were $0.1 million for the six months ended March 25, 2001
         and were $0.4 million for the six months ended March 26, 2000.
     (7) Reflects results of stations operated during the periods on a
         comparable monthly basis, excluding the AOL barter agreement and
         Internet results.
 
     Spanish Broadcasting's current fiscal quarterly and year-to-date results
 reflect the inclusion of revenues generated and operating expenses incurred by
 the stations purchased in Puerto Rico in the second quarter of fiscal year
 2000, and in Dallas, San Antonio, San Francisco, and Los Angeles in the first
 quarter of fiscal year 2001.  Operating expenses at these start-up stations
 outpaced revenues as the Company incurred additional expenses in order to
 establish and promote its presence in these markets.  The current results also
 reflect the inclusion of the barter agreement entered into in August 2000 with
 America Online, Inc.  These factors, combined with a decline in same station
 operating results, all contributed to the decrease in the Company's broadcast
 cash flow and operating margins.
     On a same station basis, Spanish Broadcasting experienced a decline in
 operating results due mainly to a weakening demand for advertising in its New
 York and Los Angeles stations, compounded by higher compensation expenses
 related to improvements in its programming department and the hiring of
 additional programming and sales management personnel.  The Company also
 increased its allowance for doubtful accounts as a result of the overall
 softening in the general economy, and in the advertising sector in particular.
     "Our second quarter results were generally in line with previous
 guidance," said Raul Alarcon, Jr., Chairman, President and CEO.  "However, the
 continued weakness in the advertising market due to the economic slowdown has
 prompted us to revise our outlook for the remainder of the year. Given this
 environment, we have refocused our efforts on controlling costs, while seeking
 to strengthen revenue share across our station group. We have implemented
 personnel reductions at some of our markets that should result in savings in
 compensation for the remainder of the fiscal year as well as future years.  We
 have also reorganized our advertising and promotional functions to operate
 more efficiently, and we are leveraging barter agreements to further reduce
 cash advertising costs.  While we have taken a prudent approach to operating
 our stations, we have not sacrificed the level of promotion and marketing that
 is necessary to compete aggressively in our key markets."
     Mr. Alarcon continued, "While our expectations have been tempered, we are
 cautiously optimistic that the advertising environment will begin to improve
 in the second half of the year.  Furthermore, we were able to establish a time
 brokerage agreement with the International Church of the Foursquare Gospel,
 which will allow us to launch KFSG-FM, our second full-signal facility in Los
 Angeles, the nation's largest Hispanic radio revenue market, during the fiscal
 third quarter.  We remain confident that we will be able to weather this
 difficult period with effective cost controls and efficient operations. The
 2000 Census has confirmed the explosive growth of the nation's Hispanic
 population.   Advertisers will ultimately have to increase their spending
 targeted at this viable and under-served market.  Given our top-ten market
 portfolio of radio stations, we believe we are in a strong position to benefit
 as the advertising market begins to rebound."
 
     Fiscal Third Quarter and Full Fiscal 2001 Outlook
     For the three months ending June 24, 2001, Spanish Broadcasting expects
 net revenues to decrease by approximately 2%-4%. The ongoing slowdown in
 advertising demand continues to hamper the Company's results. Broadcast cash
 flow for the three months ending June 24, 2001 is expected to be in the range
 of approximately $9.5 million to $11.0 million.  The Company anticipates a
 more gradual economic recovery in the fourth quarter of fiscal 2001 but
 believes visibility remains low.  Therefore, the Company now expects full
 fiscal year revenue to increase by approximately 5%-7%. Broadcast cash flow
 for fiscal 2001 is expected to be in the range of $44.0 million to $47.0
 million.
 
     About Spanish Broadcasting
     Spanish Broadcasting System, Inc. is the largest Hispanic-owned radio
 broadcasting company in the United States.  Spanish Broadcasting currently
 owns and operates 24 stations in eight of the top-ten U.S. Hispanic markets,
 including Los Angeles, Puerto Rico, New York, Miami, San Francisco, Chicago,
 San Antonio and Dallas.  Upon the completion of previously announced
 acquisitions, the Company will own and operate a total of 26 stations in these
 markets.  The Company also operates LaMusica.com, a bilingual Spanish-English
 Internet Web site providing content related to Latin music, entertainment,
 news and culture.
     Spanish Broadcasting will host a teleconference to discuss today's
 announcement, as well as the Company's outlook for 2001 at 10:30 AM ET.  Those
 wishing to listen to the call can visit
 http://www.videonewswire.com/SBSA/042701. A replay will be available until
 midnight, May 4, 2001, by dialing 800-839-2871 or by visiting
 http://www.videonewswire.com/SBSA/042701.
 
     The information contained in this news release, other than historical
 information, consists of forward-looking statements within the meaning of
 Section 27A of the Securities Act and Section 21E of the Exchange Act.  These
 statements may involve risks and uncertainties that could cause actual results
 to differ materially from those described in such statements.  Although the
 Company believes that the expectations reflected in such forward-looking
 statements are reasonable, it can give no assurance that such expectations
 will prove to have been correct.  Important factors, including general
 economic conditions, consumer spending levels, adverse weather conditions and
 other factors could cause actual results to differ materially from the
 Company's expectations.
 
                Condensed Consolidated Statements of Operations
                                  (unaudited)
 
 
     Amounts in thousands (except per share data)
 
                    Three Months Ended March         Six Months Ended March
                   25, 2001          26, 2000       25, 2001          26, 2000
 
     Net revenues  $ 25,052          $ 24,928       $ 62,366          $ 53,862
     Station
      operating
      expenses       18,455            12,252         40,666            24,756
     Corporate
      expenses (1)    2,645             2,391          5,156            15,455
     Depreciation
      and
      amortization    4,433             3,224          8,797             5,848
        Income
        (loss)
        from
        operations     (481)            7,061          7,747             7,803
     Interest
      expense, net   (6,586)           (4,528)       (14,023)           (7,495)
     Other income
      (expense), net    280                48            517              (356)
     Income (loss)
      before income
      taxes
      and
      extraordinary
      loss           (6,787)            2,581         (5,759)              (48)
     Income tax
      expense
     (benefit)       (2,626)            1,057         (2,194)              (20)
     Income (loss)
      before
      extraordinary
      loss           (4,161)            1,524         (3,565)              (28)
     Extraordinary
      loss, net of
      income tax
      benefit            --                --             --           (16,865)
 
       Net
        income
        (loss)     $ (4,161)          $ 1,524       $ (3,565)        $ (16,893)
 
     Dividends
      on
      preferred
      stock              --                --             --           (28,372)
 
       Net income
       (loss)
       applicable
       to common
       stock       $ (4,161)          $ 1,524       $ (3,565)        $ (45,265)
 
     Net income
      (loss)
      per common
      share: (2)
       Basic
        and diluted
        (before
        extraordinary
        item)       $ (0.06)           $ 0.03        $ (0.06)          $ (0.51)
       Basic
        and
        diluted       (0.06)             0.03          (0.06)            (0.81)
 
     Weighted
      average
      common
      shares
      outstanding:
       Basic         64,658            60,217         63,511            56,109
       Diluted       64,658            60,611         63,511            56,109
 
     (1) Includes $10.2 million non-recurring severance payment in the first
         quarter of fiscal year 2000.
 
     (2) Includes $5.9 million ($10.2 million, net of income tax benefit of
         $4.3 million) non-recurring severance payment in the first quarter of
         fiscal year 2000.
 
 SOURCE  Spanish Broadcasting System, Inc.