Entravision Communications Corporation Reports Second Quarter 2005 Results

Entravision Communications Corporation Reports Second Quarter 2005 Results

-Second Quarter 2005 Net Revenue and EBITDA as Adjusted Increase 9% and 12% Respectively, Exceeding High End of Guidance-

SANTA MONICA, Calif., Aug. 3 /PRNewswire-FirstCall/ -- Entravision Communications Corporation (NYSE:EVC) today reported financial results for the three- and six-month periods ended June 30, 2005.

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 8. Unaudited financial highlights are as follows:

Three Months Ended Six Months Ended
June 30, % June 30, %
2005 2004 Change 2005 2004 Change

Net revenue $75,109 $68,945 9% $132,263 $120,995 9%
Operating
expenses (1) 43,152 40,068 8% 83,125 78,727 6%
Broadcast cash
flow (2) 31,957 28,877 11% 49,138 42,268 16%
EBITDA as
adjusted (2) 27,761 24,757 12% 40,793 34,135 20%

Free cash flow (3) $13,809 $15,176 (9%) $15,602 $14,915 5%
Free cash flow
per share, basic
and diluted $0.11 $0.12 (8%) $0.13 $0.12(4) 8%

Net income (loss) $4,231 $5,091 (17%) $(257) $(132) 95%
Net income (loss)
per share
applicable to
common stockholders:
Basic and diluted $0.03 $0.02 50% $(0.00) $(0.07) (100%)
Basic weighted
average common
shares
outstanding 124,268,627 87,178,430 124,241,105 87,159,468
Diluted weighted
average common
shares
outstanding 124,454,771 124,454,254 124,241,105 87,159,468

(1) Operating expenses include direct operating, selling, general and
administrative expenses. It does not include corporate expenses,
depreciation, amortization, non-cash stock-based compensation and gain
on sale of assets.
(2) Broadcast cash flow means operating income (loss) before corporate
expenses, gain (loss) on sale of assets, depreciation and amortization
and non-cash stock-based compensation. EBITDA as adjusted means
broadcast cash flow less corporate expenses. The Company uses the
term EBITDA as adjusted because that measure does not include non-cash
stock-based compensation. The Company evaluates and projects the
liquidity and cash flows of its business using several measures,
including broadcast cash flow and EBITDA as adjusted. The Company
considers these measures as important indicators of liquidity relating
to its operations, as they eliminate the effects of non-cash gain
(loss) on sale of assets, non-cash depreciation and amortization, and
non-cash stock-based compensation awards. The Company uses these
measures to evaluate liquidity and cash flow improvement from year to
year as they eliminate non-cash expense items. The Company believes
its investors should use these measures because they may provide a
better comparability of the Company's liquidity to that of its
competitors.

While the Company and many in the financial community consider
broadcast cash flow and EBITDA as adjusted to be important, they
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. In addition, the
Company's definitions of broadcast cash flow and EBITDA as adjusted
differ from those of many companies reporting similarly named
measures.

(3) Free cash flow is defined as EBITDA as adjusted 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. The Company uses net interest expense instead of actual cash
paid for interest in the free cash flow calculation so that quarterly
results are comparable as the Company makes bond interest payments
twice a year. Free cash flow per share is defined as free cash flow
divided by weighted average common shares outstanding.

(4) The Series U preferred stock held by Univision was converted into
shares of the Company's new Class U common stock on July 1, 2004. If
the Series U preferred stock had been treated as common stock
outstanding, the basic weighted average common shares outstanding
would have been 124,086,068 for the six-month period ended June 30,
2004. This calculation of common stock shares was used for the free
cash flow calculation for the six-month period ended June 30, 2004.

Commenting on the Company's results, Walter Ulloa, Chairman and Chief Executive Officer, said, "Our results for the second quarter once again outperformed the industry, as all three of our business segments exceeded our guidance and recorded solid top and bottom line growth. Operating fundamentals across our asset base remain strong as more advertisers see the value of Spanish-language media, and, as we continue to generate ratings increases, we are effectively converting these gains into additional advertising revenues."

Mr. Ulloa continued, "Our diversified asset base and strategic focus on the fastest growing and highest density U.S. Hispanic markets provides us with a unique growth engine. We will continue to evaluate our footprint as we seek to enter new markets, strengthen existing clusters and improve operating leverage. We are executing on our business plan and remain in a strong position to capitalize on the robust growth of the Hispanic marketplace."

Financial Results

Three Months Ended June 30, 2005 Compared to Three Months Ended June 30, 2004

(Unaudited)

Three Months Ended
June 30,
2005 2004 % Change
Net revenue $75,109 $68,945 9 %
Operating expenses (1) 43,152 40,068 (2) 8 %

Broadcast cash flow (1) 31,957 28,877 11 %
Corporate expenses 4,196 4,120 2 %

EBITDA as adjusted (1) 27,761 24,757 12 %
Gain on sale of assets - (2,392) NM
Non-cash stock-based compensation 143 (2) NM
Depreciation and amortization 11,620 11,247 3 %

Operating income 15,998 15,904 1 %
Interest expense, net (8,322) (6,563) 27 %

Income before income taxes 7,676 9,341 (18%)

Income tax expense (3,453) (4,320) (20%)
Net income before equity in net
earnings of nonconsolidated affiliates 4,223 5,021 (16%)
Equity in net earnings of
nonconsolidated affiliates 8 70 (89%)
Net income $4,231 $5,091 (17%)

(1) Operating expenses, broadcast cash flow and EBITDA as adjusted are
defined on page 1.
(2) Includes a one-time recovery of $961 thousand of operating expenses
in accordance with the terms of an amendment to our marketing and
sales agreement with Univision.

Net revenue increased to $75.1 million for the three-month period ended June 30, 2005 from $68.9 million for the three-month period ended June 30, 2004, an increase of $6.2 million, or 9%. Our television and radio segments together accounted for $5.2 million of the increase, which was primarily attributable to an increase in advertising rates. The remaining $1.0 million of the increase came from our outdoor segment and was primarily attributable to an increase in advertising rates.

Company operating expenses increased to $43.2 million for the three-month period ended June 30, 2005 from $40.1 million for the three-month period ended June 30, 2004, an increase of $3.1 million, or 8%. The overall increase came mainly from our television and radio segments, which together accounted for an increase of $2.5 million. The increase from these segments was primarily attributable to a one-time recovery of prior year expenses of $1.0 million in accordance with the terms of an amendment to our marketing and sales agreement with Univision, an increase in commissions and national representation fees associated with the increase in net revenue, an increase in news production costs due to the expansion of our newscast operations and an increase in salaries, as well as expenses associated with radio station KBMB-FM acquired in the second half of 2004 and radio station KDLD-FM/KDLE-FM, partially offset by lower bad debt expense. The increase in operating expenses also came from an increase from our outdoor segment, which accounted for $0.6 million of the overall increase. The increase from this segment was primarily attributable to increased leasing expense and expenses associated with the addition of the new Sacramento bus advertising contract.

Broadcast cash flow increased to $32.0 million for the three-month period ended June 30, 2005 from $28.9 million for the three-month period ended June 30, 2004, an increase of $3.1 million, or 11%.

Corporate expenses increased to $4.2 million for the three-month period ended June 30, 2005 from $4.1 million for the three-month period ended June 30, 2004, an increase of $0.1 million, or 2%. The increase was mainly attributable to higher expenses associated with our compliance with the Sarbanes-Oxley Act of 2002, partially offset by lower insurance expenses.

EBITDA as adjusted increased to $27.8 million for the three-month period ended June 30, 2005 from $24.8 million for the three-month period ended June 30, 2004, an increase of $3.0 million, or 12%.

Six Months Ended June 30, 2005 Compared to Six Months Ended June 30, 2004
(Unaudited)

Six Months Ended
June 30,
2005 2004 % Change
Net revenue $132,263 $120,995 9 %
Operating expenses (1) 83,125 78,727 (2) 6 %

Broadcast cash flow (1) 49,138 42,268 16 %
Corporate expenses 8,345 8,133 3 %

EBITDA as adjusted (1) 40,793 34,135 20 %
Gain on sale of assets - (3,396) NM
Non-cash stock-based compensation 435 (42) NM
Depreciation and amortization 23,052 22,034 5 %

Operating income 17,306 15,539 11 %
Interest expense, net (16,355) (13,346) 23 %

Income before income taxes 951 2,193 (57%)

Income tax expense (1,091) (2,284) (52%)
Net loss before equity in net loss of
nonconsolidated affiliates (140) (91) 54 %
Equity in net loss of nonconsolidated
affiliates (117) (41) 185 %
Net loss $(257) $(132) 95 %

(1) Operating expenses, broadcast cash flow and EBITDA as adjusted are
defined on page 1.
(2) Includes a one-time recovery of $961 thousand of operating expenses
in accordance with the terms of an amendment to our marketing and
sales agreement with Univision.

Net revenue increased to $132.3 million for the six-month period ended June 30, 2005 from $121.0 million for the six-month period ended June 30, 2004, an increase of $11.3 million, or 9%. Excluding the net revenue contributed during the first half of 2004 by the radio stations in Chicago and Fresno that we sold in the first half of 2004, net revenue would have increased by $11.9 million. The overall increase came mainly from our television and radio segments, which together accounted for an increase of $9.9 million. The increase from these segments was attributable to increased inventory sold, increased rates for that inventory and increased revenue due to a full six-month period of operations of our 2004 acquisitions. The remaining $1.4 million of the overall increase in net revenue came from our outdoor segment and was attributable to an increase in advertising rates.

Company operating expenses increased to $83.1 million for the six-month period ended June 30, 2005 from $78.7 million for the six-month period ended June 30, 2004, an increase of $4.4 million, or 6%. Excluding the operating expenses incurred during the first half of 2004 by the radio stations in Chicago and Fresno that we sold in the first half of 2004, operating expenses would have increased $5.0 million. Our television and radio segments accounted for $3.8 million of the increase. The increase from these segments was attributable to a one-time recovery of prior year expenses of $1.0 million in accordance with the terms of an amendment to our marketing and sales agreement with Univision, an increase in commissions and national representation fees associated with the increase in net revenue, an increase in news production costs due to the expansion of our newscast operations and an increase in salaries, as well as expenses associated with radio station KBMB-FM acquired in the second half of 2004 and radio station KDLD-FM/KDLE-FM, partially offset by lower bad debt expense. The overall increase in operating expenses was also partially attributable to our outdoor segment, which accounted for approximately $0.6 million of the overall increase. The increase from this segment was primarily attributable to increased leasing expense.

Broadcast cash flow increased to $49.1 million for the six-month period ended June 30, 2005 from $42.3 million for the six-month period ended June 30, 2004, an increase of $6.8 million, or 16%.

Corporate expenses increased to $8.3 million for the six-month period ended June 30, 2005 from $8.1 million for the six-month period ended June 30, 2004, an increase of $0.2 million, or 3%. The increase was mainly attributable to higher expenses associated with our compliance with the Sarbanes-Oxley Act of 2002, partially offset by lower insurance expenses.

EBITDA as adjusted increased to $40.8 million for the six-month period ended June 30, 2005 from $34.1 million for the six-month period ended June 30, 2004, an increase of $6.7 million, or 20%.

Pro Forma Segment Results

With the sale of the Company's radio assets in Chicago, Illinois in the second quarter of 2004, the Company no longer has any remaining broadcasting operations in that market. As a result, the Company has elected to present its segment information on a pro forma basis by eliminating its broadcasting results from that market in both of the periods presented so that the comparisons between the periods will be meaningful. The Company believes that pro forma presentation is appropriate and useful to investors when the Company exits an entire market or enters a new market. A table reconciling each pro forma financial measure to its most directly comparable GAAP financial measure is included beginning on page 9.

The following is the Company's selected unaudited pro forma segment information for the second quarter of 2005 and 2004:

Three Months Ended
June 30,
2005 2004 % Change
Net Revenue
Television $38,756 $36,046 8 %
Radio 27,212 24,571 11 %
Outdoor 9,141 8,188 12 %
Total $75,109 $68,805 9 %

Operating Expenses (1)
Television $20,005 $18,465 8 %
Radio 15,896 14,767 8 %
Outdoor 7,251 6,662 9 %
Total $43,152 $39,894 8 %

Broadcast Cash Flow (1)
Television $18,751 $17,581 7 %
Radio 11,316 9,804 15 %
Outdoor 1,890 1,526 24 %
Total $31,957 $28,911 11 %

EBITDA as adjusted (1)
Corporate expenses $4,196 $4,120 2 %
Total $27,761 $24,791 12 %

(1) Operating expenses, broadcast cash flow and EBITDA as adjusted are
defined on page 1.

Segment Results
The following represents selected unaudited segment information:

Three Months Ended
June 30,
2005 2004 % Change
Net Revenue
Television $38,756 $36,046 8 %
Radio 27,212 24,711 10 %
Outdoor 9,141 8,188 12 %
Total $75,109 $68,945 9 %

Operating Expenses (1)
Television $20,005 $18,465 8 %
Radio 15,896 14,941 6 %
Outdoor 7,251 6,662 9 %
Total $43,152 $40,068 8 %

Broadcast Cash Flow (1)
Television $18,751 $17,581 7 %
Radio 11,316 9,770 16 %
Outdoor 1,890 1,526 24 %
Total $31,957 $28,877 11 %

EBITDA as adjusted (1)
Corporate expenses $4,196 $4,120 2 %
Total $27,761 $24,757 12 %

(1) Operating expenses, broadcast cash flow and EBITDA as adjusted are
defined on page 1.

Guidance

The following is the Company's guidance for the third quarter of 2005. Guidance constitutes a "forward-looking statement." Please see below regarding statements that are forward-looking (unaudited; in thousands):

Q3 2005 Q3 2004 % Change
(unaudited)
Net Revenue:
Television $38,100 - $38,300 $36,428 5%
Radio 28,100 - 28,400 25,303 11% - 12%
Outdoor 9,250 - 9,350 8,293 12% - 13%
Total net revenue 75,450 - 76,050 70,024 8% - 9%

Operating expenses 44,900 - 45,100 42,028 7%

Corporate expenses 4,250 - 4,300 4,442 (4%) - (3%)

Entravision Communications Corporation will hold a conference call to discuss its 2005 second quarter results on August 3, 2005 at 5:00 PM Eastern Daylight Time. To access the conference call, please dial 212-676-5378 ten minutes prior to the start time. The call will be webcast live and archived for replay at http://www.entravision.com/.

Entravision Communications Corporation is a diversified Spanish-language media company utilizing a combination of television, radio and outdoor operations to reach approximately 75% of 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 54 owned and operated radio stations. The company's outdoor operations consist of approximately 11,100 advertising faces concentrated primarily in Los Angeles and New York. 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. 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 Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004

Net revenue (including
related parties of
$150, $289, $300
and $551) $75,109 $68,945 $132,263 $120,995

Expenses:
Direct operating
expenses (including
related parties of
$3,038, $3,141, $5,393
and $5,401) 30,577 28,733 57,882 54,735
Selling, general and
administrative
expenses 12,575 11,335 25,243 23,992
Corporate expenses 4,196 4,120 8,345 8,133
Gain on sale of assets - (2,392) - (3,396)
Non-cash stock-based
compensation 143 (2) 435 (42)
Depreciation and
amortization 11,620 11,247 23,052 22,034
Total operating
expenses 59,111 53,041 114,957 105,456

Operating income 15,998 15,904 17,306 15,539

Interest expense (8,535) (6,630) (16,716) (13,502)
Interest income 213 67 361 156
Income before
income taxes 7,676 9,341 951 2,193

Income tax expense (3,453) (4,320) (1,091) (2,284)

Net income (loss)
before equity in
net earnings (loss)
of nonconsolidated
affiliates 4,223 5,021 (140) (91)

Equity in net earnings
(loss) of
nonconsolidated
affiliates 8 70 (117) (41)
Net income (loss) 4,231 5,091 (257) (132)

Accretion of
preferred stock
redemption value - (3,113) - (6,144)

Net income (loss)
applicable to
common stock $4,231 $1,978 $(257) $(6,276)

Net income (loss)
per share applicable
to common stockholders $0.03 $0.02 $(0.00) $(0.07)
Net income (loss)
per share, basic
and diluted $0.03 $0.02 $(0.00) $(0.07)

Basic weighted
average
common shares
outstanding 124,268,627 87,178,430 124,241,105 87,159,468
Diluted weighted
average
common shares
outstanding 124,454,771 124,454,254 124,241,105 87,159,468

Entravision Communications Corporation
Reconciliation of Broadcast Cash Flow, EBITDA as Adjusted and
Free Cash Flow to Net Income (loss)
(In thousands) (Unaudited)

The most directly comparable GAAP financial measure to each of broadcast cash flow, EBITDA as adjusted and free cash flow is net income (loss). A reconciliation of these non-GAAP measures to net income (loss) for each of the periods presented is as follows:

Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004

Broadcast cash flow (1) $31,957 $28,877 $49,138 $42,268
Corporate expenses 4,196 4,120 8,345 8,133
EBITDA as adjusted (1) 27,761 24,757 40,793 34,135
Gain from sale of assets - (2,392) - (3,396)
Non-cash stock-based
compensation 143 (2) 435 (42)
Depreciation and
amortization 11,620 11,247 23,052 22,034

Operating income 15,998 15,904 17,306 15,539

Interest expense (8,535) (6,630) (16,716) (13,502)
Interest income 213 67 361 156
Income before income
taxes 7,676 9,341 951 2,193

Income tax expense (3,453) (4,320) (1,091) (2,284)
Income (loss) before
equity in net earnings
(loss) of nonconsolidated
affiliates 4,223 5,021 (140) (91)

Equity in net earnings
(loss) of nonconsolidated
affiliates 8 70 (117) (41)
Net income (loss) $4,231 $5,091 $(257) $(132)

(1) Broadcast cash flow and EBITDA as adjusted are defined on page 1.

Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004

EBITDA as adjusted (1) $27,761 $24,757 $40,793 $34,135
Net interest expense (1) (7,724) (5,769) (15,159) (11,736)
Cash paid for income taxes (382) (396) (872) (671)
Capital expenditures (2) (5,846) (3,416) (9,160) (6,813)
Free cash flow (1) 13,809 15,176 15,602 14,915

Capital expenditures (2) 5,846 3,416 9,160 6,813
Non-cash interest expense
relating to amortization
of debt finance costs (598) (794) (1,196) (1,610)
Non-cash income
tax expense (3,071) (3,924) (219) (1,613)
Gain on sale of assets - 2,392 - 3,396
Non-cash stock-based
compensation (143) 2 (435) 42
Depreciation and
amortization (11,620) (11,247) (23,052) (22,034)
Income (loss) before
equity in net earnings
(loss) of nonconsolidated
affiliates 4,223 5,021 (140) (91)

Equity in net earnings
(loss) of nonconsolidated
affiliates 8 70 (117) (41)
Net income (loss) $4,231 $5,091 $(257) $(132)

(1) EBITDA as adjusted, net interest expense and free cash flow are
defined on page 1.
(2) Capital expenditures is not part of the consolidated statement of
operations.

Entravision Communications Corporation
Reconciliation of Pro Forma Measures to GAAP Measures
(In thousands)
(Unaudited)

The following table reconciles each of the pro forma measures used in this press release - radio net revenue, total net revenue, radio operating expenses, total operating expenses, radio broadcast cash flow, total broadcast cash flow and EBITDA as adjusted - to its respective GAAP financial measure. The reconciliation of each of broadcast cash flow and EBITDA as adjusted to net income (loss) is set forth above.

Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
Radio net revenue $27,212 $24,711 $46,987 $43,031
Less Fresno and
Chicago markets - (140) - (628)
Pro forma radio
net revenue $27,212 $24,571 $46,987 $42,403

Total net revenue $75,109 $68,945 $132,263 $120,995
Less Fresno and
Chicago markets - (140) - (628)
Pro forma total
net revenue $75,109 $68,805 $132,263 $120,367

Radio operating
expenses (1) $15,896 $14,941 $30,000 $28,689
Less Fresno and
Chicago markets - (174) - (608)
Pro forma radio
operating
expenses (1) $15,896 $14,767 $30,000 $28,081

Total operating
expenses (1) $43,152 $40,068 $83,125 $78,727
Less Fresno and
Chicago markets - (174) - (608)
Pro forma total
operating
expenses (1) $43,152 $39,894 $83,125 $78,119

Radio broadcast cash
flow (1) $11,316 $9,770 $16,987 $14,342
Less Fresno and
Chicago markets - 34 - (20)
Pro forma radio
broadcast cash
flow (1) $11,316 $9,804 $16,987 $14,322

Total broadcast
cash flow (1) $31,957 $28,877 $49,138 $42,268
Less Fresno and
Chicago markets - 34 - (20)
Pro forma total
broadcast cash
flow (1) $31,957 $28,911 $49,138 $42,248

EBITDA as adjusted (1) $27,761 $24,757 $40,793 $34,135
Less Fresno and
Chicago markets - 34 - (20)
Pro forma EBITDA as
adjusted (1) $27,761 $24,791 $40,793 $34,115

(1) Operating expenses, broadcast cash flow and EBITDA as adjusted are
defined on page 1.

Source: Entravision Communications Corporation

CONTACT: John DeLorenzo, Chief Financial Officer, Entravision
Communications Corporation, +1-310-447-3870; Mike Smargiassi or Jonathan
Lesko, Brainerd Communicators, Inc., +1-212-986-6667

Web site: http://www.entravision.com/

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