Entravision Communications Corporation Reports First Quarter 2015 Results

Entravision Communications Corporation Reports First Quarter 2015 Results

- First Quarter 2015 Net Revenue and Consolidated Adjusted EBITDA Increases 13% and 12% Respectively -

- Free Cash Flow Increases 10% -

- Announces Quarterly Cash Dividend of $0.025 Per Share -

SANTA MONICA, Calif., May 7, 2015 /PRNewswire/ -- Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three-month period ended March 31, 2015.

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 9. Unaudited financial highlights are as follows:


Three-Month Period

Ended March 31,
---------------

2015 2014 % Change
---- ---- --------

Net
revenue $59,550 $52,656 13%

Cost of
revenue
-
digital
media
(1) 1,360 - 100%

Operating
expenses
(2) 37,186 33,507 11%

Corporate
expenses
(3) 4,993 4,836 3%


Consolidated
adjusted
EBITDA
(4) 16,842 14,985 12%


Free
cash
flow
(5) $10,258 $9,353 10%

Free
cash
flow
per
share,
basic
(5) $0.12 $0.11 9%

Free
cash
flow
per
share,
diluted
(5) $0.11 $0.10 10%


Net
income
(loss) $5,284 $4,388 20%


Net
income
(loss)
per
share,
basic
and
diluted $0.06 $0.05 20%


Weighted
average
common
shares
outstanding,
basic 87,531,375 88,683,948

Weighted
average
common
shares
outstanding,
diluted 90,085,961 90,943,866



(1) Cost of revenue consists primarily of
the costs of online media acquired
from third-party publishers. Media
cost is classified as cost of
revenue in the period in which the
corresponding revenue is recognized.

(2) Operating expenses include direct
operating, selling, general and
administrative expenses. Included in
operating expenses are $0.4 million
and $0.1 million of non-cash stock-
based compensation for the three-
month periods ended March 31, 2015
and 2014, respectively. Operating
expenses do not include corporate
expenses, depreciation and
amortization, impairment charge,
gain (loss) on sale of assets, gain
(loss) on debt extinguishment and
other income (loss).

(3) Corporate expenses include $0.5
million and $0.6 million of non-
cash stock-based compensation for
the three-month periods ended March
31, 2015 and 2014, respectively.

(4) 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 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.

(5) 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, and less interest income.
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 the first quarter, we achieved revenue growth driven by increases in our television, radio and digital media segments. We also improved our free cash flow and net income over the first quarter of 2014. We continued to build our digital footprint through the acquisition of Pulpo Media in June 2014, which provides us with an integrated platform to allow advertisers and marketers to connect with Latino audiences. Looking ahead, we remain well positioned to build on our success in attracting Latino audiences, expanding our advertiser base and monetizing our reach to the benefit of our shareholders."

Quarterly Cash Dividend

The Company announced today that its Board of Directors has approved a quarterly cash dividend to shareholders of $0.025 per share of the Company's Class A, Class B and Class U common stock, in an aggregate amount of approximately $2.2 million. The quarterly dividend will be payable on June 30, 2015 to shareholders of record as of the close of business on June 15, 2015, and the common stock will trade ex-dividend on June 11, 2015. As previously announced, the Company currently anticipates that future cash dividends will be paid on a quarterly basis. However any decision to pay future cash dividends will be subject to approval by the Board.

Financial Results


Three-Month Period Ended March 31, 2015 Compared to Three-Month Period Ended

March 31, 2014

(Unaudited)


Three-Month Period

Ended March 31,
---------------

2015 2014 % Change
---- ---- --------

Net revenue $59,550 $52,656 13%

Cost of revenue -digital
media (1) 1,360 - 100%

Operating expenses (1) 37,186 33,507 11%

Corporate expenses (1) 4,993 4,836 3%

Depreciation and
amortization 3,962 3,515 13%


Operating income (loss) 12,049 10,798 12%

Interest expense, net (3,219) (3,426) (6)%


Income (loss) before
income taxes 8,830 7,372 20%


Income tax (expense)
benefit (3,546) (2,984) 19%
------ ------

Net income
(loss) $5,284 $4,388 20%
====== ======



(1) Cost of revenue,
operating expenses and
corporate expenses are
defined on page 1.
Net revenue increased to $59.6 million for the three-month period ended March 31, 2015 from $52.7 million for the three-month period ended March 31, 2014, an increase of $6.9 million. Of the overall increase, approximately $1.8 million was generated by our television segment and was primarily attributable to approximately $5.0 million of revenue associated with television station channel modifications made by the Company in order to accommodate the operations of a telecommunications operator. This increase was partially offset by decreases in local and national advertising revenue, a decrease in political advertising revenue, which was not material in 2015, and a decrease in retransmission consent revenue. Additionally, $1.4 million of the overall increase was generated by our radio segment and was primarily attributable to increases in local and national advertising. The remaining $3.7 million of the overall increase was generated by our digital segment, resulting from our acquisition of Pulpo Media ("Pulpo") in June 2014 and which did not contribute to revenues in prior periods.

Operating expenses increased to $37.2 million for the three-month period ended March 31, 2015 from $33.5 million for the three-month period ended March 31, 2014, an increase of $3.7 million. The increase was primarily attributable to our acquisition of Pulpo in June 2014, and increases in rent expense, salary expense and employee benefits costs.

Corporate expenses increased to $5.0 million for the three-month period ended March 31, 2015 from $4.8 million for the three-month period ended March 31, 2014, an increase of $0.2 million. The increase was primarily attributable to an increase in salary expense.

Cost of revenue was $1.4 million for the three-month period ended March 31, 2015 due to the acquisition of Pulpo in June 2014.




Segment Results

The following represents selected unaudited segment information:


Three-Month Period

Ended March 31,
---------------

2015 2014 % Change
---- ---- --------

Net Revenue

Television $39,502 $37,741 5%

Radio 16,345 14,915 10%

Digital 3,703 - 100%
----- ---

Total $59,550 $52,656 13%


Cost of Revenue -digital
media (1)

Digital $1,360 $ - 100%


Operating Expenses (1)

Television $19,734 $19,451 1%

Radio 14,712 14,056 5%

Digital 2,740 - 100%
----- ---

Total $37,186 $33,507 11%


Corporate Expenses (1) $4,993 $4,836 3%


Consolidated adjusted
EBITDA (1) $16,842 $14,985 12%



(1) Cost of revenue, operating
expenses, corporate expenses,
and consolidated adjusted
EBITDA are defined on page 1.
Entravision Communications Corporation will hold a conference call to discuss its 2015 first quarter results on May 7, 2015 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 media company serving Latino audiences and communities with an integrated platform of solutions and services that includes television, radio, digital media and data analytics to reach Latino audiences across the United States and Latin America. Entravision has 58 primary television stations, including in 20 of the nation's top 50 Latino markets, and is the largest affiliate group of both the top-ranked Univision television network and Univision's UniMas network. Entravision also operates one of the nation's largest groups of primarily Spanish-language radio stations, consisting of 49 owned and operated radio stations, and Entravision Solutions, a national sales representation and marketing organization specializing in Spanish-language media platforms and radio networks. Entravision also offers a variety of digital media platforms and services, including digital content, digital advertising platforms, including the #1-ranked online advertising platform in Hispanic reach according to comScore Media Metrix®, and data analytics solutions designed to maximize the opportunity for advertisers and marketers to connect with the growing Latino consumer market. 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)


Entravision Communications Corporation

Consolidated Balance Sheets

(In thousands; unaudited)


March 31, December 31,

2015 2014
---- ----



ASSETS

Current assets

Cash and cash equivalents $49,864 $31,260

Trade receivables, net of allowance for
doubtful accounts 48,947 64,956

Deferred income taxes 5,900 5,900

Prepaid expenses and other current assets 5,776 5,295
----- -----

Total current assets 110,487 107,411

Property and equipment, net 56,948 56,784

Intangible assets subject to amortization,
net 19,309 20,193

Intangible assets not subject to
amortization 220,701 220,701

Goodwill 50,081 50,081

Deferred income taxes 64,328 66,558

Other assets 5,770 6,039
----- -----

Total assets $527,624 $527,767
======== ========



LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Current maturities of long-term
debt $3,750 $3,750

Advances payable, related parties 118 118

Accounts payable and accrued expenses 27,432 32,195
------ ------

Total current liabilities 31,300 36,063

Long-term debt, less current maturities 335,625 336,563

Other long-term liabilities 11,451 9,583

Total liabilities 378,376 382,209
------- -------


Stockholders' equity

Class A common stock 6 6

Class B common stock 2 2

Class U common stock 1 1

Additional paid-in capital 911,737 912,161

Accumulated deficit (759,190) (764,474)

Accumulated other comprehensive income
(loss) (3,308) (2,138)
------ ------

Total stockholders' equity 149,248 145,558
------- -------

Total liabilities and
stockholders' equity $527,624 $527,767
======== ========





Entravision Communications Corporation

Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)


Three-Month Period

Ended March 31,
---------------

2015 2014
---- ----


Net
revenue $59,550 $52,656
------- -------


Expenses:

Cost of revenue -
digital media 1,360 -

Direct operating
expenses 26,685 24,876

Selling, general
and administrative
expenses 10,501 8,631

Corporate expenses 4,993 4,836

Depreciation and
amortization 3,962 3,515

47,501 41,858
------ ------

Operating income
(loss) 12,049 10,798

Interest expense (3,227) (3,438)

Interest income 8 12

Income (loss)
before income
taxes 8,830 7,372

Income tax
(expense) benefit (3,546) (2,984)
------ ------

Net
income
(loss) $5,284 $4,388
====== ======


Basic and diluted
earnings per
share:

Net
income
(loss)
per
share,
basic
and
diluted $0.06 $0.05
===== =====


Cash
dividends
declared
per
common
share $0.03 $0.03
===== =====


Weighted average
common shares
outstanding, basic 87,531,375 88,683,948
========== ==========

Weighted average
common shares
outstanding,
diluted 90,085,961 90,943,866
========== ==========





Entravision Communications Corporation

Consolidated Statements of Cash Flows

(In thousands; unaudited)


Three-Month Period

Ended March 31,
---------------

2015 2014
---- ----


Cash flows from operating activities:

Net income (loss) $5,284 $4,388

Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:

Depreciation and amortization 3,962 3,515

Deferred income taxes 2,959 2,495

Amortization of debt issue costs 194 201

Amortization of syndication contracts 86 122

Payments on syndication contracts (122) (158)

Non-cash stock-based compensation 867 708

Changes in assets and liabilities:

(Increase) decrease in accounts receivable 15,976 3,510

(Increase) decrease in prepaid expenses and other assets (561) (993)

Increase (decrease) in accounts payable, accrued expenses and other liabilities (3,840) (7,041)

Net cash provided by (used in) operating activities 24,805 6,747
------ -----

Cash flows from investing activities:

Purchases of property and equipment and intangibles (2,972) (1,918)

Net cash provided by (used in) investing activities (2,972) (1,918)
------ ------

Cash flows from financing activities:

Proceeds from stock option exercises 900 1,636

Payments on long-term debt (938) (938)

Dividends paid (2,191) (2,224)

Payment of contingent consideration (1,000) -
------ ---

Net cash provided by (used in) financing activities (3,229) (1,526)
------ ------

Net increase (decrease) in cash and cash equivalents 18,604 3,303

Cash and cash equivalents:

Beginning 31,260 43,822
------ ------

Ending $49,864 $47,125
======= =======





Entravision Communications Corporation

Reconciliation of Consolidated Adjusted EBITDA to Cash Flows From Operating Activities

(In thousands; unaudited)


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

Ended March 31,
---------------

2015 2014
---- ----


Consolidated adjusted EBITDA (1) $16,842 $14,985

Interest expense (3,227) (3,438)

Interest income 8 12

Income tax (expense) benefit (3,546) (2,984)

Amortization of syndication contracts (86) (122)

Payments on syndication contracts 122 158

Non-cash stock-based compensation included in direct operating (358) (90)

expenses

Non-cash stock-based compensation included in corporate expenses (509) (618)

Depreciation and amortization (3,962) (3,515)

Net income (loss) 5,284 4,388

Depreciation and amortization 3,962 3,515

Deferred income taxes 2,959 2,495

Amortization of debt issue costs 194 201

Amortization of syndication contracts 86 122

Payments on syndication contracts (122) (158)

Non-cash stock-based compensation 867 708

Changes in assets and liabilities:

(Increase) decrease in accounts receivable 15,976 3,510

(Increase) decrease in prepaid expenses and other assets (561) (993)

Increase (decrease) in accounts payable, accrued expenses and other liabilities (3,840) (7,041)

Cash flows from operating activities $24,805 $6,747
======= ======



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



Entravision Communications Corporation

Reconciliation of Free Cash Flow to Net Income (Loss)

(In thousands; unaudited)


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

Ended March 31,
---------------

2015 2014
---- ----

Consolidated adjusted EBITDA (1) $16,842 $14,985

Net interest expense (1) 3,025 3,225

Cash paid for income taxes 587 489

Capital expenditures (2) 2,972 1,918
----- -----

Free cash flow (1) 10,258 9,353


Capital expenditures (2) 2,972 1,918

Amortization of debt issue costs (194) (201)

Non-cash income tax expense (2,959) (2,495)

Amortization of syndication contracts (86) (122)

Payments on syndication contracts 122 158

Non-cash stock-based compensation included in direct operating (358) (90)

expenses

Non-cash stock-based compensation included in corporate expenses (509) (618)

Depreciation and amortization (3,962) (3,515)

Net income (loss) $5,284 $4,388
====== ======



(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

Entravision Communications Corporation

CONTACT: Christopher T. Young, Chief Financial Officer, Entravision Communications Corporation, 310-447-3870; Mike Smargiassi/Brad Edwards, Brainerd Communicators, Inc., 212-986-6667


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