Spanish Broadcasting System, Inc. Reports Results for the Third Quarter 2007
Spanish Broadcasting System, Inc. Reports Results for the Third Quarter 2007
COCONUT GROVE, Fla., Nov. 7 /PRNewswire-FirstCall/ -- Spanish Broadcasting System, Inc. (the "Company" or "SBS")(NASDAQ:SBSA) today reported financial results for the three- and nine-month periods ended September 30, 2007.
Results and Discussions
For the three-months ended September 30, 2007, consolidated net revenue totaled $46.8 million compared to $45.9 million for the same prior year period, resulting in an increase of $0.9 million or 2%. This increase was attributable to our television segment, which had a net revenue increase of $1.1 million or 82% offset by a slight decrease in our radio segment net revenue of $0.2 million. Our television segment net revenue growth was primarily due to MEGA TV establishing itself within the South Florida advertising community during the past 19 months, which resulted in an ability to increase advertising rates and sell more inventory. Our radio segment had a slight decrease in net revenue primarily due to lower local and barter sales, offset by an increase in national sales. The decrease in local sales occurred primarily in our Los Angeles, Puerto Rico, Chicago, and Miami markets, offset by an increase in our New York market. The decrease in barter sales occurred in our Puerto Rico and Los Angeles markets. The increase in national sales occurred primarily in our New York and Los Angeles markets, offset by our Miami market.
Operating income before loss (gain) on the sale of assets, net, a non-GAAP measure, totaled $11.9 million compared to $11.2 million for the same prior year period, resulting in an increase of 6%. Operating income before depreciation and amortization and loss (gain) on the sale of assets, net, a non-GAAP measure, totaled $13.1 million compared to $12.1 million for the same prior year period, resulting in an increase of 8%. The increase was primarily attributed to the decrease in our television operating loss before depreciation and amortization and loss (gain) on the sale of assets, net, of $1.5 million and an increase in our radio segment's operating income before depreciation and amortization and loss (gain) on the sale of assets, net, of $0.2 million, offset by the increase in our corporate expenses of $0.7 million. Please refer to the Segment Data and Non-GAAP Financial Measures section for a reconciliation of GAAP to non-GAAP financial measures.
Income before income taxes totaled $7.1 million compared to $6.3 million for the same prior year period. The increase resulted from the increase in our operating income.
For the nine-months ended September 30, 2007, our consolidated net revenue totaled $133.6 million compared to $132.5 million for the same prior year period, resulting in an increase of $1.1 million or 1%. This increase was attributable to our television segment, which had a net revenue increase of $4.0 million or 126% offset by our radio segment net revenue decrease of $2.9 million or 2%. Our television segment growth was primarily due to (a) MEGA TV establishing itself within the South Florida advertising community during the past 19 months, which resulted in an ability to increase advertising rates and sell more inventory, and (b) our television results reflecting nine-months of revenue compared to the prior period's results reflecting only seven-months of revenue. Our radio segment had a decrease in net revenue primarily due to lower local and barter sales. The decrease in local sales occurred primarily in our Los Angeles, Miami, and Puerto Rico markets, offset by an increase in our New York and San Francisco markets. The decrease in barter sales occurred in our Los Angeles and Puerto Rico markets.
Operating income before loss (gain) on the sale of assets, net, a non-GAAP measure, totaled $29.0 million compared to $27.5 million for the same prior year period, resulting in growth of 5%. Operating income before depreciation and amortization and loss (gain) on the sale of assets, net, a non-GAAP measure, totaled $32.4 million compared to $30.3 million for the same prior year period, resulting in an increase of 7%. The increase was primarily attributed to the decrease in our television operating loss before depreciation and amortization and loss (gain) on the sale of assets, net, of $6.4 million, offset by a decrease in our radio segment's operating income before depreciation and amortization and (gain) loss on the sale of assets, net, of $4.0 million and an increase in our corporate expenses of $0.3 million. Please refer to the Segment Data and Non-GAAP Financial Measures section for a reconciliation of GAAP to non-GAAP financial measures.
Income before income taxes totaled $16.7 million compared to $60.1 million for the same prior year period. The decrease resulted mainly from the gain on the sale of assets, net, of $50.8 million related to the sale of our radio stations KZAB-FM and KZBA-FM in the prior year.
Raul Alarcon, Jr., Chairman and CEO, commented, "Our overall third quarter revenue increase exceeded our guidance, reflecting substantial growth at Mega TV, offset by flat results at our radio segment. Mega TV continued to convert its fast-growing audience share in the Miami market into robust gains in advertising revenue, a trend that has continued into the current quarter. Mega TV premiered nationally on DIRECTV MAS in October and we are confident this will lead to significant growth in our viewing audience as we capitalize on our top-ten market presence to cross-promote our radio, TV and online properties. While the radio advertising market remains difficult, we are seeing an improvement in revenue trends and we are continuing to deliver consistently strong audience shares across our portfolio. Through the continued development and expansion of our diversified asset base in the nation's largest media markets, we remain well positioned to benefit from the growth of the nation's Hispanic population."
Fourth Quarter 2007 Outlook
Our quarterly guidance will include an estimated range of the following: consolidated net revenue growth, television operating results before depreciation and amortization, and capital expenditures.
For the fourth quarter ending December 31, 2007, we expect our consolidated net revenue to increase in the low-single digit range over the comparable prior year period. Also, our television segment operating loss before depreciation and amortization will continue to decrease compared to the prior year period. We expect this loss to be in the range of $2.8 to $3.7 million. Our total fourth quarter capital expenditures are projected to be in the range of $2.5 to $3.5 million.
Third Quarter 2007 Conference Call
We will host a conference call to discuss our third quarter 2007 financial results on Wednesday, November 7th at 2:00 p.m. Eastern Time. To access the teleconference, please dial 973-935-2407 ten minutes prior to the start time. If you cannot listen to the teleconference at its scheduled time, there will be a replay available through Wednesday, November 14, 2007, which can be accessed by dialing 877-519-4471 (U.S.) or 973-341-3080 (Int'l), passcode: 9308437.
There will also be a live webcast of the teleconference, located on the investor portion of Spanish Broadcasting's corporate website, at www.spanishbroadcasting.com/webcasts.shtml. A seven day archived replay of the webcast will also be available at that link.
About Spanish Broadcasting System, Inc.
Spanish Broadcasting System, Inc. is the largest publicly traded Hispanic- controlled media and entertainment company in the United States. SBS owns and operates 20 radio stations located in the top Hispanic markets of New York, Los Angeles, Miami, Chicago, San Francisco and Puerto Rico, including the #1 Spanish-language radio station in America, WSKQ-FM in New York City, as well as 4 of the Top 7 rated radio stations airing the Tropical, Mexican Regional, Spanish Adult Contemporary and Hurban format genres. SBS also owns and operates Mega TV, a television operation serving the South Florida market with national distribution through DIRECTV. SBS also produces live concerts and events in multiple venues throughout the U.S. and Puerto Rico. In addition, SBS operates www.LaMusica.com, a bilingual Spanish-English online site providing content related to Latin music, entertainment, news and culture. SBS' corporate Website can be accessed at www.spanishbroadcasting.com.
(Financial Table Follows)
Below are the Unaudited Condensed Consolidated Statements of Operations and other information as of and for the three- and nine-month periods ended September 30, 2007 and 2006.
Three-Months Nine-Months Amounts in thousands Ended Sept. 30, Ended Sept. 30, (except per share data) 2007 2006 2007 2006 (Unaudited) (Unaudited) Net revenue $46,772 45,891 $133,580 132,507 Station operating expenses 29,772 30,618 90,547 91,849 Corporate expenses 3,881 3,125 10,596 10,314 Depreciation and amortization 1,194 968 3,436 2,800 Loss (gain) on the sale of assets, net of disposal costs 51 6 50 (50,787) Operating income 11,874 11,174 28,951 78,331 Interest expense, net (4,789) (4,840) (14,213) (15,195) Loss on early extinguishment of debt - - - (2,997) Other income (expense), net 25 16 1,985 (7) Income before income taxes $7,110 6,350 $16,723 60,132 Income tax expense 4,569 5,507 10,778 3,317 Net income $2,541 843 $5,945 56,815 Dividends on Series B preferred stock (2,417) (2,417) (7,251) (7,251) Net income (loss) applicable to common stockholders $124 (1,574) $(1,306) 49,564 Net income (loss) per common share: Basic and Diluted $0.00 (0.02) $(0.02) 0.68 Weighted average common shares outstanding: Basic 72,381 72,381 72,381 72,381 Diluted 72,386 72,381 72,381 72,386 Non-GAAP Financial Measures
Included below are tables that reconcile the three- and nine-month ended reported results in accordance with Generally Accepted Accounting Principles (GAAP) to Non-GAAP results. The tables reconcile Operating Income to Operating Income before Loss (Gain) on the Sale of Assets, net and Operating Income before Depreciation and Amortization and Loss (Gain) on the Sale of Assets, net.
UNAUDITED GAAP REPORTED RESULTS RECONCILED TO NON-GAAP RESULTS Three-Months (Amounts in millions) Ended Sept.30, 2007 2006 % Change Operating Income $11.9 11.2 6% add back: Loss (gain) on the sale of assets, net - - Operating Income before Loss (Gain) on the Sale of Assets, net $11.9 11.2 6% add back: depreciation & amortization 1.2 0.9 Operating Income before Depreciation & Amortization and Loss (Gain) on the Sale of Assets, net (1) $13.1 12.1 8% Nine-Months Ended Sept.30, 2007 2006 % Change Operating Income $29.0 78.3 (63%) add back: Loss (gain) on the sale of assets, net - (50.8) Operating Income before Loss (Gain) on the Sale of Assets, net $29.0 27.5 5% add back: depreciation & amortization 3.4 2.8 Operating Income before Depreciation & Amortization and Loss (Gain) on the Sale of Assets, net (1) $32.4 30.3 7% (1) Operating Income before Depreciation and Amortization and Loss (Gain) on the Sale of Assets, net, replaces Adjusted EBITDA as the metric used by management to assess the performance of our stations, segments and the Company. Although it is calculated in the same manner as Adjusted EBITDA, management believes that using the term "Operating Income before Depreciation and Amortization and Loss (Gain) on the Sale of Assets, net" provides a more accurate description of the performance measure.
Operating Income before Loss (Gain) on the Sale of Assets, net and Operating Income before Depreciation and Amortization and Loss (Gain) on the Sale of Assets, net, are not measures of performance or liquidity determined in accordance with GAAP in the United States. However, we believe that these measures are useful in evaluating our performance because they reflect a measure of performance for our stations before considering costs and expenses related to our capital structure and dispositions. These measures are widely used in the broadcast industry to evaluate a company's operating performance and are used by us for internal budgeting purposes and to evaluate the performance of our stations, segments and consolidated operations. However, these measures should not be considered in isolation or as substitutes for Operating Income, Net Income (Loss), Cash Flows from Operating Activities or any other measure used in determining our operating performance or liquidity that is calculated in accordance with GAAP. In addition, because Operating Income before Loss (Gain) on the Sale of Assets, net, and Operating Income before Depreciation and Amortization and Loss (Gain) on the Sale of Assets, net, are not calculated in accordance with GAAP, they are not necessarily comparable to similarly titled measures used by other companies.
Segment Data
We have two reportable segments: radio and television. The following summary table presents separate financial data for each of our operating segments (in thousands):
Three-Months Ended September 30, Change 2007 2006 $ % Net revenue: Radio $44,333 44,552 (219) (0%) Television 2,439 1,339 1,100 82% Consolidated $46,772 45,891 881 2% Operating income (loss) before depreciation and amortization and loss (gain) on sales of assets, net: Radio $20,025 19,801 224 1% Television (3,025) (4,528) 1,503 (33%) Corporate (3,881) (3,125) (756) 24% Consolidated $13,119 12,148 971 8% Depreciation and amortization: Radio $716 643 73 11% Television 170 76 94 124% Corporate 308 249 59 24% Consolidated $1,194 968 226 23% Loss (gain) on sale of assets, net: Radio $51 6 45 750% Television - - - 0% Corporate - - - 0% Consolidated $51 6 45 750% Operating income (loss): Radio $19,258 19,152 106 1% Television (3,195) (4,604) 1,409 (31%) Corporate (4,189) (3,374) (815) 24% Consolidated $11,874 11,174 700 6% Nine-Months Ended September 30, Change 2007 2006 $ % Net revenue: Radio $126,421 129,339 (2,918) (2%) Television 7,159 3,168 3,991 126% Consolidated $133,580 132,507 1,073 1% Operating income (loss) before depreciation and amortization and loss (gain) on sales of assets, net: Radio $51,486 55,490 (4,004) (7%) Television (8,453) (14,832) 6,379 (43%) Corporate (10,596) (10,314) (282) 3% Consolidated $32,437 30,344 2,093 7% Depreciation and amortization: Radio $2,153 1,866 287 15% Television 440 206 234 114% Corporate 843 728 115 16% Consolidated $3,436 2,800 636 23% Loss (gain) on sale of assets, net: Radio $50 (50,787) 50,837 (100%) Television - - - 0% Corporate - - - 0% Consolidated $50 (50,787) 50,837 (100%) Operating income (loss): Radio $49,283 104,411 (55,128) (53%) Television (8,893) (15,038) 6,145 (41%) Corporate (11,439) (11,042) (397) 4% Consolidated $28,951 78,331 (49,380) (63%) Selected Unaudited Balance Sheet Information and Other Data: As of Sept. 30, (Amounts in thousands) 2007 Cash and cash equivalents $63,810 Total assets $937,672 Senior credit facilities term loan due 2012 $316,875 Non-interest bearing note due 2009 16,755 Miami Broadcast Center mortgage 7,446 Other debt 580 Total debt $341,656 Series B preferred stock $89,932 Total stockholders' equity $317,956 Total capitalization $749,544 Nine-Months Ended Sept. 30, Amounts in thousands 2007 2006 Capital expenditures $6,731 6,670 Cash paid for income taxes, net $ - 313
First Call Analyst:
FCMN Contact:
Source: Spanish Broadcasting System, Inc.
CONTACT: Analysts and Investors: Joseph A. Garcia, Executive Vice
President, Chief Financial Officer and Secretary of Spanish Broadcasting
System, Inc., +1-305-441-6901; Analysts, Investors or Media: Chris Plunkett of
Brainerd Communicators, Inc., +1-212-986-6667, for Spanish Broadcasting
System, Inc.
Web site: http://www.spanishbroadcasting.com/
Profile: International Entertainment
posted by EntertainmentNews @ 5:21 AM
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