Entravision Communications Corporation Reports Third Quarter 2005 Results

Entravision Communications Corporation Reports Third Quarter 2005 Results

- Third Quarter 2005 Net Revenue and EBITDA as Adjusted Increase 8% and 14%, Respectively, In Line with Guidance -

SANTA MONICA, Calif., Nov. 3 /PRNewswire-FirstCall/ -- Entravision Communications Corporation (NYSE:EVC) today reported financial results for the three- and nine-month periods ended September 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 Nine Months Ended
September 30, % September 30, %
2005 2004 Change 2005 2004 Change

Net revenue $75,537 $70,024 8% $207,800 $191,019 9%
Operating
expenses(1) 44,562 42,028 6% 127,687 120,755 6%
Broadcast cash
flow(2) 30,975 27,996 11% 80,113 70,264 14%
EBITDA as
adjusted(2) 26,738 23,554 14% 67,532 57,690 17%

Free cash
flow(3) $12,859 $12,739 1% $28,462 $27,655 3%
Free cash flow
per share,
basic and
diluted $0.10 $0.10 0% $0.23 $0.22(4) 5%

Net income
(loss)(5) $(12,820) $3,689 NM $(13,078) $3,555 NM
Net loss per
share
applicable to
common
stockholders,
basic and
diluted(5) $(0.10) $(0.05) 100% $(0.11) $(0.12) (8%)
Weighted
average
common shares
outstanding,
basic and
diluted 124,323,711 124,138,087 124,268,943 99,575,647

(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
(loss) 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 made bond interest payments
twice a year. Free cash flow per share is defined as free cash flow
divided by the 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 124,103,535 for the nine-month period ended September
30, 2004. This calculation of common stock shares was used for the
free cash flow calculation for the nine-month period ended September
30, 2004.

(5) Net loss and net loss per share for the three- and nine-month periods
ended September 30, 2005 include a loss on debt extinguishment of $28
million as a result of the refinancing of our former bank credit
facility and the completion of a tender offer for all of our
previously outstanding $225 million senior subordinated notes.

Commenting on the Company's third quarter earnings results, Walter Ulloa, Chairman and Chief Executive Officer, said, "We continue to post results that are among the strongest in the media industry, highlighting the strength of our business model, the momentum of all three of our divisions and the dramatic growth of our audience. During the quarter, we recorded impressive revenue growth with our radio and outdoor assets delivering double digit gains. As a result of the superior positioning of our assets and the investments we have made in our sales and marketing resources, we are making significant progress in introducing new clients to Spanish language advertising. Looking ahead, our value proposition remains compelling. We connect advertisers with Hispanic America, driving brand awareness in the nation's most densely populated and fastest growing Hispanic markets. As we seek to drive our business, we remain committed to controlling costs, improving our bottom line and reviewing our asset base to ensure we are optimally positioned to capitalize on future growth opportunities."

Financial Results

Three Months Ended September 30, 2005 Compared to Three Months Ended
September 30, 2004 (Unaudited)

Three Months Ended
September 30,
2005 2004 % Change
Net revenue $75,537 $70,024 8%
Operating expenses(1) 44,562 42,028 6%

Broadcast cash flow(1) 30,975 27,996 11%
Corporate expenses 4,237 4,442 (5%)

EBITDA as adjusted(1) 26,738 23,554 14%
Loss on sale of assets - 240 NM
Non-cash stock-based compensation 182 79 130%
Depreciation and amortization 11,770 10,388 13%

Operating income 14,786 12,847 15%
Interest expense, net (7,595) (6,732) 13%
Loss on debt extinguishment (27,969) - NM

Income (loss) before income
taxes (20,778) 6,115 NM

Income tax benefit (expense) 7,915 (3,006) NM
Income (loss) before
equity in net earnings of
nonconsolidated affiliates (12,863) 3,109 NM
Equity in net earnings of
nonconsolidated affiliates 43 59 (27%)
Income (loss) before
discontinued operations (12,820) 3,168 NM
Gain on disposal of
discontinued operations - 521 NM
Net income (loss) $(12,820) $3,689 NM

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

Net revenue increased to $75.5 million for the three-month period ended September 30, 2005 from $70.0 million for the three-month period ended September 30, 2004, an increase of $5.5 million, or 8%. The overall increase came mainly from our radio segment, which accounted for an increase of $3.1 million. The increase from this segment was primarily attributable to an increase in local advertising rates, as well as revenue associated with radio station KBMB-FM acquired in the second half of 2004 and radio station KDLD- FM/KDLE-FM. Additionally, $1.4 million of the overall increase came from our television segment. The increase from this segment was primarily attributable to an increase in local advertising sales, primarily due to an increase in inventory sold. The remaining $1.0 million of the increase came from our outdoor segment and was primarily attributable to an increase in advertising rates and higher occupancy, as well as revenue associated with our new Sacramento bus advertising contract.

Company operating expenses increased to $44.6 million for the three-month period ended September 30, 2005 from $42.0 million for the three-month period ended September 30, 2004, an increase of $2.6 million, or 6%. Of the overall increase, $1.3 million came from our radio segment. The increase from this segment was primarily attributable to an increase in commissions and other sales-related expenses associated with the increase in net revenue 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. Additionally, $0.9 million of the overall increase came from our outdoor segment. The increase from this segment was primarily attributable to increased leasing expense and expenses associated with the addition of our new Sacramento bus advertising contract. The remaining $0.4 million of the overall increase came from our television segment and was primarily attributable to an increase in salaries and license fees, partially offset by a decrease in bad debt expense.

Broadcast cash flow increased to $31.0 million for the three-month period ended September 30, 2005 from $28.0 million for the three-month period ended September 30, 2004, an increase of $3.0 million, or 11%.

Corporate expenses decreased to $4.2 million for the three-month period ended September 30, 2005 from $4.4 million for the three-month period ended September 30, 2004, a decrease of $0.2 million, or 5%. The decrease was mainly attributable to higher legal expenses related to financing the repurchase of our Series A preferred stock in the prior year, partially offset by higher wages and expenses associated with our compliance with the Sarbanes-Oxley Act of 2002, including internal controls, in the current year.

EBITDA as adjusted increased to $26.7 million for the three-month period ended September 30, 2005 from $23.6 million for the three-month period ended September 30, 2004, an increase of $3.1 million, or 14%.

Nine Months Ended September 30, 2005 Compared to Nine Months Ended
September 30, 2004
(Unaudited)

Nine Months Ended
September 30,
2005 2004 % Change
Net revenue $207,800 $191,019 9%
Operating expenses(1) 127,687 120,755(2) 6%

Broadcast cash flow(1) 80,113 70,264 14%
Corporate expenses 12,581 12,574 0%

EBITDA as adjusted(1) 67,532 57,690 17%
Gain on sale of assets - (3,156) NM
Non-cash stock-based
compensation 617 37 NM
Depreciation and amortization 34,822 32,421 7%

Operating income 32,093 28,388 13%
Interest expense, net (23,950) (20,079) 19%
Loss on debt extinguishment (27,969) - NM

Income (loss) before income
taxes (19,826) 8,309 NM

Income tax benefit (expense) 6,823 (5,292) NM
Income (loss) before
equity in net earnings (loss)
of nonconsolidated affiliates (13,003) 3,017 NM
Equity in net earnings (loss)
of nonconsolidated affiliates (75) 17 NM
Income (loss) before
discontinued operations (13,078) 3,034 NM
Gain on disposal of
discontinued operations - 521 NM
Net income (loss) $(13,078) $3,555 NM

(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 $207.8 million for the nine-month period ended September 30, 2005 from $191.0 million for the nine-month period ended September 30, 2004, an increase of $16.8 million, or 9%. Excluding the net revenue contributed during the nine-month period ended September 30, 2004 by our radio stations in Chicago and Fresno that we sold in the first half of 2004, net revenue would have increased by $17.4 million. The overall increase came mainly from our television and radio segments, which together accounted for an increase of $14.3 million. The increase from these segments was primarily attributable to an increase in advertising rates and increased advertising sold, as well as revenue associated with radio station KBMB-FM acquired in the second half of 2004 and radio station KDLD-FM/KDLE-FM. The remaining $2.5 million of the increase came from our outdoor segment and was primarily attributable to an increase in advertising rates.

Company operating expenses increased to $127.7 million for the nine-month period ended September 30, 2005 from $120.8 million for the nine-month period ended September 30, 2004, an increase of $6.9 million, or 6%. Excluding the operating expenses incurred during the nine-month period ended September 30, 2004 by our radio stations in Chicago and Fresno that we sold in the first half of 2004, operating expenses would have increased by $7.5 million. The overall increase came mainly from our television and radio segments, which together accounted for an increase of $5.5 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 other sales-related expenses associated with the increase in net revenue, an increase in news production costs due to the expansion of our newscast operations in the San Diego market 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 a decrease in bad debt expense. The overall increase in operating expenses was also partially attributable to our outdoor segment, which accounted for approximately $1.4 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 $80.1 million for the nine-month period ended September 30, 2005 from $70.3 million for the nine-month period ended September 30, 2004, an increase of $9.8 million, or 14%.

Corporate expenses were flat at $12.6 million for each of the nine-month periods ended September 30, 2005 and 2004. We experienced increased expenses in the current year, primarily attributable to higher wages and expenses associated with our compliance with the Sarbanes-Oxley Act of 2002, including internal controls, which were offset by higher legal expenses related to financing the repurchase of our Series A preferred stock in the prior year.

EBITDA as adjusted increased to $67.5 million for the nine-month period ended September 30, 2005 from $57.7 million for the nine-month period ended September 30, 2004, an increase of $9.8 million, or 17%.

Segment Results
The following represents selected unaudited segment information:

Three Months Ended
September 30,
2005 2004 % Change
Net Revenue
Television $37,836 $36,428 4%
Radio 28,364 25,303 12%
Outdoor 9,337 8,293 13%
Total $75,537 $70,024 8%

Operating Expenses(1)
Television $20,619 $20,216 2%
Radio 16,492 15,187 9%
Outdoor 7,451 6,625 12%
Total $44,562 $42,028 6%

Broadcast Cash Flow(1)
Television $17,217 $16,212 6%
Radio 11,872 10,116 17%
Outdoor 1,886 1,668 13%
Total $30,975 $27,996 11%

EBITDA as adjusted(1)
Corporate expenses $4,237 $4,442 (5%)
Total $26,738 $23,554 14%

(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 fourth quarter of 2005. Guidance constitutes a "forward-looking statement." Please see below regarding statements that are forward-looking (unaudited; in thousands):

Q4 2005 Q4 2004 % Change
Net Revenue:
Television $37,700 - $37,900 $35,814 5% - 6%
Radio 24,150 - 24,450 23,905 1% - 2%
Outdoor 8,900 - 9,000 8,315 7% - 8%
Total net revenue 70,750 - 71,350 $68,034 4% - 5%

Operating
expenses 43,725 - 43,850 41,589 5%
Corporate
expenses 4,200 - 4,250 4,205 0% - 1%

Entravision Communications Corporation will hold a conference call to discuss its 2005 third quarter results on November 3, 2005 at 5:00 p.m. Eastern Standard Time. To access the conference call, please dial 212-676- 4919 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 Nine Months Ended
September 30, September 30,
2005 2004 2005 2004

Net revenue
(including related
parties of $150,
$232, $450 and $783) $75,537 $70,024 $207,800 $191,019

Expenses:
Direct operating
expenses (including
related parties of
$3,100, $3,192,
$8,493 and $8,593) 31,244 28,755 89,125 83,490
Selling, general and
administrative
expenses 13,318 13,273 38,562 37,265
Corporate expenses 4,237 4,442 12,581 12,574
Loss (gain) on sale
of assets - 240 - (3,156)
Non-cash stock-based
compensation 182 79 617 37
Depreciation and
amortization 11,770 10,388 34,822 32,421
Total operating
expenses 60,751 57,177 175,707 162,631

Operating income 14,786 12,847 32,093 28,388

Interest expense (8,796) (6,893) (25,512) (20,396)
Interest income 1,201 161 1,562 317
Loss on debt
extinguishment (27,969) - (27,969) -
Income (loss) before
income taxes (20,778) 6,115 (19,826) 8,309

Income tax benefit
(expense) 7,915 (3,006) 6,823 (5,292)

Income (loss)
before equity in
net earnings (loss)
of nonconsolidated
affiliates (12,863) 3,109 (13,003) 3,017

Equity in net
earnings (loss) of
nonconsolidated
affiliates 43 59 (75) 17
Income (loss)
before discontinued
operations (12,820) 3,168 (13,078) 3,034

Gain on disposal
of discontinued
operations, net
of tax of
$0, $350, $0
and $350 - 521 - 521

Net income (loss) (12,820) 3,689 (13,078) 3,555

Accretion of
preferred stock
redemption value - (9,769) - (15,913)

Net loss applicable
to common stock $(12,820) $(6,080) $(13,078) $(12,358)

Net loss per share
from continuing
operations applicable
to common
stockholders $(0.10) $(0.05) $(0.11) $(0.13)
Net income per share
from discontinued
operations - $0.00 - $0.01
Net loss per share
applicable to common
stockholders,
basic and diluted $(0.10) $(0.05) $(0.11) $(0.12)

Basic and diluted
weighted average
common shares
outstanding 124,323,711 124,138,087 124,268,943 99,575,647

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 Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
Broadcast cash
flow(1) $30,975 $27,996 $80,113 $70,264
Corporate expenses 4,237 4,442 12,581 12,574
EBITDA as adjusted(1) 26,738 23,554 67,532 57,690
Loss (gain) from sale
of assets - 240 - (3,156)
Non-cash stock-based
compensation 182 79 617 37
Depreciation and
amortization 11,770 10,388 34,822 32,421

Operating income 14,786 12,847 32,093 28,388

Interest expense (8,796) (6,893) (25,512) (20,396)
Interest income 1,201 161 1,562 317
Loss on debt
extinguishment (27,969) - (27,969) -
Income (loss)
before income taxes (20,778) 6,115 (19,826) 8,309

Income tax benefit
(expense) 7,915 (3,006) 6,823 (5,292)
Income (loss) before
equity in net
earnings (loss) of
nonconsolidated
affiliates (12,863) 3,109 (13,003) 3,017

Equity in net
earnings (loss)
of nonconsolidated
affiliates 43 59 (75) 17
Income (loss)
before discontinued
operations (12,820) 3,168 (13,078) 3,034
Gain on disposal of
discontinued
operations - 521 - 521
Net income (loss) $(12,820) $3,689 $(13,078) $3,555

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

Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004

EBITDA as adjusted(1) $26,738 $23,554 $67,532 $57,690
Net interest expense(1) (8,004) (6,027) (23,163) (17,763)
Cash paid for income
taxes (286) (457) (1,158) (1,128)
Capital expenditures(2) (5,589) (4,331) (14,749) (11,144)
Free cash flow(1) 12,859 12,739 28,462 27,655

Capital expenditures(2) 5,589 4,331 14,749 11,144
Non-cash interest
benefit (expense)
relating to
amortization of
debt finance
costs and swap 409 (705) (787) (2,316)
Non-cash income tax
benefit (expense) 8,201 (2,549) 7,981 (4,164)
Gain (loss) on sale
of assets - (240) - 3,156
Non-cash stock-based
compensation (182) (79) (617) (37)
Loss on debt
extinguishment (27,969) - (27,969) -
Depreciation and
amortization (11,770) (10,388) (34,822) (32,421)
Income (loss) before
equity in net
earnings (loss)
of nonconsolidated
affiliates (12,863) 3,109 (13,003) 3,017

Equity in net
earnings (loss)
of nonconsolidated
affiliates 43 59 (75) 17
Income (loss)
before discontinued
operations (12,820) 3,168 (13,078) 3,034
Gain on disposal of
discontinued
operations - 521 - 521
Net income (loss) $(12,820) $3,689 $(13,078) $3,555

(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.

Source: Entravision Communications Corporation

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

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

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