Entravision Communications Corporation Reports Second Quarter 2009 Results
Entravision Communications Corporation Reports Second Quarter 2009 Results
SANTA MONICA, Calif., Aug. 5 /PRNewswire-FirstCall/ -- Entravision Communications Corporation (NYSE:EVC) today reported financial results for the three- and six-month periods ended June 30, 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 SFAS 144, "Accounting for the 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-Month Period Six-Month Period Ended June 30, Ended June 30, -------------- -------------- 2009 2008 % Change 2009 2008 % Change ---- ---- -------- ---- ---- -------- Net revenue $48,696 $62,932 (23)% $90,411 $118,585 (24)% Operating expenses (1) 29,646 36,898 (20)% 61,459 72,307 (15)% Corporate expenses (2) 3,378 4,477 (25)% 7,251 8,931 (19)% Consolidated adjusted EBITDA (3) 16,323 22,371 (27)% 23,039 39,034 (41)% Free cash flow (4) $5,217 $9,871 (47)% $4,118 $14,289 (71)% Free cash flow per share, basic and diluted (4) $0.06 $0.11 (45)% $0.05 $0.15 (67)% Net income (loss) from continuing operations $(1,827) $11,661 NM $(16,321) $4,611 NM Net income (loss) applicable to common stockholders $(1,827) $10,742 NM $(16,321) $3,038 NM Net income (loss) per share from continuing operations applicable to common stockholders, basic and diluted $(0.02) $0.13 NM $(0.19) $0.05 NM Net income (loss) per share applicable to common stockholders, basic and diluted $(0.02) $0.12 NM $(0.19) $0.03 NM Weighted average common shares outstanding, basic 84,187,128 91,573,187 84,235,509 93,495,230 Weighted average common shares outstanding, diluted 84,187,128 91,835,027 84,235,509 93,811,980 (1) Operating expenses include direct operating, selling, general and administrative expenses. Included in operating expenses are $0.4 million and $0.4 million of non-cash stock-based compensation for the three-month periods ended June 30, 2009 and 2008, respectively and $0.7 million and $0.7 million of non-cash stock-based compensation for the six-month periods ended June 30, 2009 and 2008, respectively. Operating expenses do not include corporate expenses, depreciation and amortization, impairment charge, gain (loss) on sale of assets and loss on debt extinguishment. (2) Corporate expenses include $0.4 million and $0.5 million of non-cash stock-based compensation for the three-month periods ended June 30, 2009 and 2008, respectively and $0.8 million and $0.9 million of non-cash stock-based compensation for the six-month periods ended June 30, 2009 and 2008, respectively. (3) Consolidated adjusted EBITDA means net income (loss) plus loss (gain) 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, 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 non-cash stock-based compensation, loss (gain) on sale of assets, depreciation and amortization, non-cash impairment charge, net interest expense, 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, 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 diluted weighted average common shares outstanding.
Commenting on the Company's earnings results, Walter F. Ulloa, Chairman and Chief Executive Officer, said, "Our second quarter financial results reflect the continuing recession and the challenging advertising environment. We are continuing to aggressively manage our costs to maximize our cash flows. Our television and radio operations continue to deliver solid ratings in the nation's most densely-populated Hispanic markets. We believe we are well positioned to benefit when the economy recovers, given the strength of our brands and our ability to deliver the valuable Hispanic audience to advertisers."
The Company also announced that it repurchased from Univision Communications, Inc. 0.9 million shares of Entravision Class A common stock for approximately $0.5 million in the second quarter of 2009.
Financial Results
Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008 (Unaudited)
Three-Month Period Ended June 30, -------------- 2009 2008 % Change ---- ---- -------- Net revenue $48,696 $62,932 (23)% Operating expenses (1) 29,646 36,898 (20)% Corporate expenses (1) 3,378 4,477 (25)% Depreciation and amortization 5,191 5,642 (8)% Impairment charge 2,720 - NM ----- --- Operating income 7,761 15,915 (51)% Interest expense, net (8,404) 3,458 NM ------ ----- Income (loss) before income taxes (643) 19,373 NM Income tax expense (1,099) (7,674) (86)% ------ ------ Net income (loss) before equity in net loss of nonconsolidated affiliates and discontinued operations (1,742) 11,699 NM Equity in net loss of nonconsolidated affiliates, net of tax (85) (38) 124% ------- ------- Income (loss) from continuing operations (1,827) 11,661 NM Loss from discontinued operations, net of tax - (919) NM ------- ------- Net income (loss) $(1,827) $10,742 NM ======= ======= (1) Operating expenses and corporate expenses as defined above.
Net revenue decreased to $48.7 million for the three-month period ended June 30, 2009 from $62.9 million for the three-month period ended June 30, 2008, a decrease of $14.2 million. Of the overall decrease, $7.2 million 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 continuing weak economy, partially offset by the increase in retransmission consent revenue of $2.9 million. Additionally, $7.0 million of the overall decrease was 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 continuing weak economy.
Operating expenses decreased to $29.6 million for the three-month period ended June 30, 2009 from $36.9 million for the three-month period ended June 30, 2008, a decrease of $7.3 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 $3.4 million for the three-month period ended June 30, 2009 from $4.5 million for the three-month period ended June 30, 2008, a decrease of $1.1 million. The decrease was primarily attributable to the elimination of bonuses paid to executive officers and a decrease in salary expense due to salary reductions.
Six Months Ended June 30, 2009 Compared to Six Months Ended June 30, 2008 (Unaudited) Six-Month Period Ended June 30, -------------- 2009 2008 % Change ---- ---- -------- Net revenue $90,411 $118,585 (24)% Operating expenses (1) 61,459 72,307 (15)% Corporate expenses (1) 7,251 8,931 (19)% Depreciation and amortization 10,621 11,187 (5)% Impairment charge 2,720 - NM -------- -------- Operating income 8,360 26,160 (68)% Interest expense, net (13,217) (18,706) (29)% Loss on debt extinguishment (4,716) - NM -------- -------- Income (loss) before income taxes (9,573) 7,454 NM Income tax expense (6,509) (2,679) 143% -------- -------- Net income (loss) before equity in net loss of nonconsolidated affiliates and discontinued operations (16,082) 4,775 NM Equity in net loss of nonconsolidated affiliates, net of tax (239) (164) 46% -------- -------- Income (loss) from continuing operations (16,321) 4,611 NM Loss from discontinued operations, net of tax - (1,573) NM -------- -------- Net income (loss) $(16,321) $3,038 NM ======== ======
Net revenue decreased to $90.4 million for the six-month period ended June 30, 2009 from $118.6 million for the six-month period ended June 30, 2008, a decrease of $28.2 million. Of the overall decrease, $15.0 million 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 continuing weak economy, partially offset by the increase in retransmission consent revenue of $4.8 million. Additionally, $13.2 million of the overall decrease was 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 continuing weak economy.
Operating expenses decreased to $61.5 million for the six-month period ended June 30, 2009 from $72.3 million for the six-month period ended June 30, 2008, a decrease of $10.8 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 $7.3 million for the six-month period ended June 30, 2009 from $8.9 million for the six-month period ended June 30, 2008, a decrease of $1.6 million. The decrease was primarily attributable to the elimination of bonuses paid to executive officers, a decrease in salary expense due to salary reductions and a decrease in employee benefits.
Segment Results The following represents selected unaudited segment information: Three-Month Period Ended June 30, -------------- 2009 2008 % Change ---- ---- -------- Net Revenue Television $31,746 $38,944 (18)% Radio 16,950 23,988 (29)% ------ ------ Total $48,696 $62,932 (23)% Operating Expenses (1) Television $18,107 $21,712 (17)% Radio 11,539 15,186 (24)% ------ ------ Total $29,646 $36,898 (20)% Corporate Expenses (1) $3,378 $4,477 (25)% Consolidated adjusted EBITDA (1) $16,323 $22,371 (27)% (1) Operating expenses, Corporate expenses, and Consolidated adjusted EBITDA as defined above.
Entravision Communications Corporation will hold a conference call to discuss its 2009 second quarter results on August 5, 2009 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 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 Six-Month Period Ended June 30, Ended June 30, -------------- -------------- 2009 2008 2009 2008 ---- ---- ---- ---- Net revenue (including related parties of $0, $32, $0 and $182) $ 48,696 $ 62,932 $ 90,411 $ 118,585 Expenses: Direct operating expenses (including related parties of $2,004, $3,079, $3,731 and $5,572) (including non-cash stock-based compensation of $164, $165, $330 and $289) 20,799 25,942 42,660 50,676 Selling, general and administrative expenses (including non-cash stock-based compensation of $207, $207, $414 and $362) 8,847 10,956 18,799 21,631 Corporate expenses (including non-cash stock-based compensation of $353, $468, $759 and $903) 3,378 4,477 7,251 8,931 Depreciation and amortization (includes direct operating of $3,843, $4,382, $7,918 and $8,726; selling, general and administrative of $1,068, $983, $2,089 and $1,985; and corporate of $280, $277, $614 and $476) (including related parties of $580, $580, $1,160 and $1,160) 5,191 5,642 10,621 11,187 Impairment charge 2,720 - 2,720 - 40,935 47,017 82,051 92,425 Operating income 7,761 15,915 8,360 26,160 Interest expense (including related parties of $29, $54, $60 and $112) (8,474) 3,172 (13,535) (19,423) Interest income 70 286 318 717 Loss on debt extinguishment - - (4,716) - Income (loss) before income taxes (643) 19,373 (9,573) 7,454 Income tax expense (1,099) (7,674) (6,509) (2,679) Income (loss) before equity in net loss of nonconsolidated affiliate and discontinued operations (1,742) 11,699 (16,082) 4,775 Equity in net loss of nonconsolidated affiliate, net of tax (85) (38) (239) (164) Income (loss) from continuing operations (1,827) 11,661 (16,321) 4,611 Loss from discontinued operations, net of tax (expense) benefit of $0, ($369), $0 and $604 - (919) - (1,573) Net income (loss) applicable to common stockholders $ (1,827) $ 10,742 $ (16,321) $ 3,038 Basic and diluted earnings per share: Net income (loss) per share from continuing operations applicable to common stockholders, basic and diluted $ (0.02) $ 0.13 $ (0.19) $ 0.05 Net loss per share from discontinued operations, basic and diluted $ - $ (0.01) $ - $ (0.02) Net income (loss) per share applicable to common stockholders, basic and diluted $ (0.02) $ 0.12 $ (0.19) $ 0.03 Weighted average common shares outstanding, basic 84,187,128 91,573,187 84,235,509 93,495,230 Weighted average common shares outstanding, diluted 84,187,128 91,835,027 84,235,509 93,811,980 Entravision Communications Corporation Consolidated Statements of Cash Flows (Unaudited; in thousands) Three-Month Period Six-Month Period Ended June 30, Ended June 30, -------------- -------------- 2009 2008 2009 2008 ---- ---- ---- ---- Cash flows from operating activities: Net income (loss) $(1,827) $10,742 $(16,321) $3,038 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 5,191 5,642 10,621 11,187 Impairment charge 2,720 - 2,720 - Deferred income taxes 486 6,877 5,986 1,660 Amortization of debt issue costs 105 101 194 202 Amortization of syndication contracts 627 689 1,248 1,555 Payments on syndication contracts (700) (715) (1,413) (1,422) Equity in net loss of nonconsolidated affiliate 85 38 239 164 Non-cash stock-based compensation 724 840 1,503 1,554 Gain on sale of media properties and other assets (2) - (102) - Non-cash expenses related to debt extinguishment - - 945 - Change in fair value of interest rate swap agreements (855) (10,832) (2,536) 3,211 Changes in assets and liabilities, net of effect of acquisitions and dispositions: (Increase) decrease in accounts receivable (5,591) (6,317) (1,272) 158 Decrease in prepaid expenses and other assets 51 733 189 78 Increase (decrease) in accounts payable, accrued expenses and other liabilities 2,905 (659) 2,102 (1,760) Effect of discontinued operations - (1,569) - (2,230) ----- ----- ----- ------ Net cash provided by operating activities 3,919 5,570 4,103 17,395 ----- ----- ----- ------ Cash flows from investing activities: Proceeds from sale of property and equipment and intangibles 14 101,407 114 101,498 Purchases of property and equipment and intangibles (1,339) (4,404) (6,618) (8,408) Purchase of a business - - - (22,885) Effect of discontinued operations - (64) - (194) ----- ----- ----- ------ Net cash provided by (used in) investing activities (1,325) 96,939 (6,504) 70,011 ------ ------ ------ ------ Cash flows from financing activities: Proceeds from issuance of common stock - - 202 486 Payments on long-term debt - (1,007) (41,000) (11,034) Repurchase of Class U common stock - - - (10,380) Repurchase of Class A common stock (532) (13,793) (1,075) (36,293) Excess tax benefits from exercise of stock options - (25) - (25) Payments of deferred debt and offering costs - - (1,182) - ----- ----- ----- ------ Net cash used in financing activities (532) (14,825) (43,055) (57,246) ---- ------- ------- ------- Net increase (decrease) in cash and cash equivalents 2,062 87,684 (45,456) 30,160 Cash and cash equivalents: Beginning 16,776 29,421 64,294 86,945 ------ ------ ------ ------ Ending $18,838 $117,105 $18,838 $117,105 ======= ======== ======= ======== 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 Six-Month Period Ended June 30, Ended June 30, -------------- -------------- 2009 2008 2009 2008 ---- ---- ---- ---- Consolidated adjusted EBITDA (1) $16,323 $22,371 $23,039 $39,034 Interest expense (8,474) 3,172 (13,535) (19,423) Interest income 70 286 318 717 Loss on debt extinguishment - - (4,716) - Income tax expense (1,099) (7,674) (6,509) (2,679) Amortization of syndication contracts (627) (689) (1,248) (1,555) Payments on syndication contracts 700 715 1,413 1,422 Non-cash stock-based compensation included in direct operating expenses (164) (165) (330) (289) Non-cash stock-based compensation included in selling, general and administrative expenses (207) (207) (414) (362) Non-cash stock-based compensation included in corporate expenses (353) (468) (759) (903) Depreciation and amortization (5,191) (5,642) (10,621) (11,187) Impairment charge (2,720) - (2,720) - Equity in net loss of nonconsolidated affiliates (85) (38) (239) (164) Loss from discontinued operations - (919) - (1,573) --- ---- --- ------ Net income (loss) (1,827) 10,742 (16,321) 3,038 Depreciation and amortization 5,191 5,642 10,621 11,187 Impairment charge 2,720 - 2,720 - Deferred income taxes 486 6,877 5,986 1,660 Amortization of debt issue costs 105 101 194 202 Amortization of syndication contracts 627 689 1,248 1,555 Payments on syndication contracts (700) (715) (1,413) (1,422) Equity in net loss of nonconsolidated affiliate 85 38 239 164 Non-cash stock-based compensation 724 840 1,503 1,554 Gain on sale of media properties and other assets (2) - (102) - Non-cash expenses related to debt extinguishment - - 945 - Change in fair value of interest rate swap agreements (855) (10,832) (2,536) 3,211 Changes in assets and liabilities, net of effect of acquisitions and dispositions: (Increase) decrease in accounts receivable (5,591) (6,317) (1,272) 158 Decrease in prepaid expenses and other assets 51 733 189 78 Increase (decrease) in accounts payable, accrued expenses and other liabilities 2,905 (659) 2,102 (1,760) Effect of discontinued operations - (1,569) - (2,230) --- ------ --- ------ Cash flows from operating activities $3,919 $5,570 $4,103 $17,395 ====== ====== ====== ======= (1) Consolidated adjusted EBITDA as defined above. Entravision Communications Corporation Reconciliation of Free Cash Flow to Net Income (Loss) (Unaudited; in thousands)
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 Six-Month Period Ended June 30, Ended June 30, -------------- -------------- 2009 2008 2009 2008 ---- ---- ---- ---- Consolidated adjusted EBITDA (1) $16,323 $22,371 $23,039 $39,034 Net interest expense (1) 9,154 7,274 15,559 15,293 Cash paid for income taxes 613 822 523 1,044 Capital expenditures (2) 1,339 4,404 2,839 8,408 ----- ----- ----- ----- Free cash flow (1) 5,217 9,871 4,118 14,289 Capital expenditures (2) 1,339 4,404 2,839 8,408 Non-cash interest expense relating to amortization of debt finance costs and interest rate swap agreements 750 10,732 2,342 (3,413) Loss on debt extinguishment - - (4,716) - Non-cash income tax expense (486) (6,852) (5,986) (1,635) Amortization of syndication contracts (627) (689) (1,248) (1,555) Payments on syndication contracts 700 715 1,413 1,422 Non-cash stock-based compensation included in direct operating expenses (164) (165) (330) (289) Non-cash stock-based compensation included in selling, general and administrative expenses (207) (207) (414) (362) Non-cash stock-based compensation included in corporate expenses (353) (468) (759) (903) Depreciation and amortization (5,191) (5,642) (10,621) (11,187) Impairment charge (2,720) - (2,720) - Equity in net loss of nonconsolidated affiliates (85) (38) (239) (164) Loss from discontinued operations - (919) - (1,573) --- ---- --- ------ Net income (loss) $(1,827) $10,742 $(16,321) $3,038 ======= ======= ======== ====== (1) Consolidated adjusted EBITDA, net interest expense and free cash flow as defined above. (2) Capital expenditures is not part of the consolidated statement of operations.
First Call Analyst:
FCMN Contact:
Source: Entravision Communications Corporation
CONTACT: Christopher T. Young, Chief Financial Officer of Entravision
Communications Corporation, +1-310-447-3870; or Mike Smargiassi, or Christian
Nery, both of Brainerd Communicators, Inc., +1-212-986-6667
Web Site: http://www.entravision.com/
Profile: International Entertainment
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