Entravision Communications Corporation Reports Fourth Quarter and Year-End 2005 Results

Entravision Communications Corporation Reports Fourth Quarter and Year-End 2005 Results

- Fourth Quarter 2005 Net Revenue and EBITDA as Adjusted Increase 8% and 12% Respectively, Exceeding High End of Guidance -

- Full Year 2005 Pro Forma Net Revenue and EBITDA as Adjusted Increase 9% and 16% Respectively -

SANTA MONICA, Calif., Feb. 23 /PRNewswire-FirstCall/ -- Entravision Communications Corporation (NYSE:EVC) today reported financial results for the three- and twelve-month periods ended December 31, 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
December 31,

2005 2004 % Change
Net revenue $73,164 $68,034 8%
Operating expenses (1) 44,124 41,589 6%
Broadcast cash flow (2) 29,040 26,445 10%
EBITDA as adjusted (2) 24,876 22,240 12%

Free cash flow (3) $11,601 $10,742 8%
Free cash flow per share,
basic and diluted (4) $0.09 $0.09 0%

Net income (loss) (5) $3,421 $2,609 31%
Net income (loss) per
share applicable to
common stockholders,
basic and diluted (5) $0.03 $0.02 50%
Basic weighted average
common shares outstanding 124,367,530 124,171,202
Diluted weighted average
common shares outstanding 124,511,705 124,403,461

Twelve Months Ended
December 31,

2005 2004 % Change

Net revenue $280,964 $259,053 8%
Operating expenses (1) 171,811 162,344 6%
Broadcast cash flow (2) 109,153 96,709 13%
EBITDA as adjusted (2) 92,408 79,930 16%

Free cash flow (3) $40,064 $38,930 3%
Free cash flow per share,
basic and diluted (4) $0.32 $0.31 3%

Net income (loss) (5) $(9,657) $6,164 NM
Net income (loss) per
share applicable to
common stockholders,
basic and diluted (5) $(0.08) $(0.09) (11)%
Basic weighted average
common shares outstanding 124,293,792 105,758,136
Diluted weighted average
common shares outstanding 124,293,792 105,758,136

(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 and gain (loss) on sale
of assets. 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.
Beginning in 2006, broadcast cash flow and EBITDA as adjusted will
include non-cash stock-based compensation to comply with Statement of
Financial Accounting Standards ("SFAS") No. 123 (Revised 2004),
"Share-Based Payment" ("SFAS 123R").

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 less the change in the fair value of our interest
rate swaps. 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 diluted weighted average common shares
outstanding. Since EBITDA as adjusted will include non-cash
compensation in 2006 per SFAS 123R, we will add back non-cash
compensation in our calculation of free cash flow starting in 2006.

(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 124,120,544 for the year ended December 31, 2004.
This calculation of common stock shares was used for the free cash
flow calculation for the year ended December 31, 2004.

(5) Net loss and net loss per share for the year ended December 31, 2005
includes 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 fourth quarter and full-year earnings results, Walter Ulloa, Chairman and Chief Executive Officer, said, "All three of our businesses recorded impressive top-line growth in 2005, outperforming their respective industries. During the year, we took steps to further strengthen our operating management, our content and our sales and marketing resources. We are benefiting from a vibrant Hispanic market that continues to expand in terms of population, purchasing power and importance to advertisers. While these trends are fueling our growth, we have continued to convert our revenues into improving cash flows and margins through an efficient operating structure and commitment to cost discipline. Looking ahead, we are focused on maximizing our assets and allocating our capital to those opportunities that offer the highest potential for generating returns for our shareholders."

Financial Results

Three Months Ended December 31, 2005 Compared to Three Months Ended
December 31, 2004 (Unaudited)

Three Months Ended
December 31,
2005 2004 % Change
Net revenue $73,164 $68,034 8%
Operating expenses (1) 44,124 41,589 6%

Broadcast cash flow (1) 29,040 26,445 10%
Corporate expenses 4,164 4,205 (1)%

EBITDA as adjusted (1) 24,876 22,240 12%
Gain on sale of assets - (331) NM
Non-cash stock-based compensation 604 96 NM
Depreciation and amortization 11,589 10,374 12%

Operating income 12,683 12,101 5%
Interest expense, net (4,932) (7,747) (36)%

Income before income taxes 7,751 4,354 78%

Income tax expense (4,485) (1,752) 156%
Net income before equity in net
earnings of nonconsolidated affiliates 3,266 2,602 26%
Equity in net earnings of
nonconsolidated affiliates 155 7 NM

Net income $3,421 $2,609 31%

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

Net revenue increased to $73.2 million for the three-month period ended December 31, 2005 from $68.0 million for the three-month period ended December 31, 2004, an increase of $5.2 million, or 8%. The overall increase came mainly from our television segment, which accounted for an increase of $3.0 million. The increase from this segment was primarily attributable to an increase in local and national advertising sales, primarily due to an increase in advertising rates. Additionally, $1.4 million of the overall increase came from our radio segment. The increase from this segment was primarily attributable to an increase in local advertising rates, as well as revenue associated with radio station KDLD-FM/KDLE-FM. The remaining $0.8 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 the expansion of our outdoor division in Sacramento.

Company operating expenses increased to $44.1 million for the three-month period ended December 31, 2005 from $41.6 million for the three-month period ended December 31, 2004, an increase of $2.5 million, or 6%. Of the overall increase, $1.1 million came from our television 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. Additionally, $0.7 million of the overall increase came from our radio segment. The increase from this segment was primarily attributable to expenses associated with radio station KDLD-FM/KDLE-FM, as well an increase in sales related expenses and talent fees. The remaining $0.7 million of the overall increase came from our outdoor segment and was primarily attributable to increased leasing expense and expenses associated with the expansion of our outdoor division in Sacramento.

Broadcast cash flow increased to $29.0 million for the three-month period ended December 31, 2005 from $26.4 million for the three-month period ended December 31, 2004, an increase of $2.6 million, or 10%.

Corporate expenses were $4.2 million for each of the three-month periods ended December 31, 2005 and 2004. We experienced increased expenses, primarily attributable to higher wages and expenses associated with our compliance with the Sarbanes-Oxley Act of 2002 that were offset by lower legal and insurance expense.

EBITDA as adjusted increased to $24.9 million for the three-month period ended December 31, 2005 from $22.2 million for the three-month period ended December 31, 2004, an increase of $2.7 million, or 12%.

Twelve Months Ended December 31, 2005 Compared to Twelve Months Ended
December 31, 2004 (Unaudited)

Twelve Months Ended
December 31,
2005 2004 % Change
Net revenue $280,964 $259,053 8%
Operating expenses (1) 171,811 162,344 (2) 6%

Broadcast cash flow (1) 109,153 96,709 13%
Corporate expenses 16,745 16,779 (0)%

EBITDA as adjusted (1) 92,408 79,930 16%
Gain on sale of assets - (3,487) NM
Non-cash stock-based compensation 1,221 133 NM
Depreciation and amortization 46,411 42,795 8%

Operating income 44,776 40,489 11%
Interest expense, net (28,882) (27,826) 4%
Loss on debt extinguishment (27,969) - NM

Income (loss) before income taxes (12,075) 12,663 NM

Income tax (expense) benefit 2,338 (7,044) NM
Net income (loss) before equity in net
earnings of nonconsolidated affiliates (9,737) 5,619 NM
Equity in net earnings of
nonconsolidated affiliates 80 24 233%

Net income (loss) before discontinued
operations (9,657) 5,643 NM
Gain on disposal of discontinued
operations - 521 NM

Net income (loss) $(9,657) $6,164 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 TeleFutura
marketing and sales agreement with Univision.

Net revenue increased to $281.0 million for the year ended December 31, 2005 from $259.1 million for the year ended December 31, 2004, an increase of $21.9 million, or 8%. Of the overall increase, $10.3 million came from our television segment. The increase from this segment was primarily attributable to an increase in local and national advertising sales, primarily attributable to increased advertising sold (referred to as "inventory" in our industry). Additionally, $8.3 million of the overall increase came from our radio segment. 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 from radio station KDLD-FM/KDLE-FM. The remaining $3.3 million of the increase came from our outdoor segment and was primarily attributable to an increase in both local and national advertising rates, as well as revenue associated with the expansion of our outdoor division in Sacramento.

Company operating expenses increased to $171.8 million for the twelve-month period ended December 31, 2005 from $162.3 million for the twelve-month period ended December 31, 2004, an increase of $9.5 million, or 6%. Of the overall increase, $4.0 million came from our television segment. The increase from this segment was primarily attributable to a one-time recovery of expenses of $1.0 million in the prior year in accordance with the terms of an amendment to our TeleFutura 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 salaries due to the addition or expansion of our newscast operations in the San Diego, Santa Barbara and Boston markets, partially offset by a decrease in bad debt expense. Additionally, $3.3 million of the overall increase came from our radio segment. The increase from this segment was primarily attributable to expenses associated with radio station KBMB-FM acquired in the second half of 2004 and radio station KDLD-FM/KDLE-FM. The remaining $2.2 million of the increase came from our outdoor segment and was primarily attributable to increased leasing expense and expenses associated with the expansion of our outdoor division in Sacramento.

Broadcast cash flow increased to $109.2 million for the twelve-month period ended December 31, 2005 from $96.7 million for the twelve-month period ended December 31, 2004, an increase of $12.5 million, or 13%.

Corporate expenses decreased to $16.7 million for the year ended December 31, 2005 from $16.8 million for the year ended December 31, 2004, a decrease of $0.1 million. We experienced increased expenses, primarily attributable to higher wages and expenses associated with our compliance with the Sarbanes-Oxley Act of 2002, including internal controls, that were offset by expenses related to financing the repurchase of our Series A preferred stock in the prior year.

EBITDA as adjusted increased to $92.4 million for the twelve-month period ended December 31, 2005 from $79.9 million for the twelve-month period ended December 31, 2004, an increase of $12.5 million, or 16%.

Segment Results

The following represents selected unaudited segment information:

Three Months Ended
December 31,
2005 2004 % Change
Net Revenue
Television $38,833 $35,814 8%
Radio 25,232 23,905 6%
Outdoor 9,099 8,315 9%
Total $73,164 $68,034 8%

Operating Expenses (1)
Television $21,008 $19,857 6%
Radio 15,593 14,922 4%
Outdoor 7,523 6,810 10%
Total $44,124 $41,589 6%

Broadcast Cash Flow (1)
Television $17,825 $15,957 12%
Radio 9,639 8,983 7%
Outdoor 1,576 1,505 5%
Total $29,040 $26,445 10%

EBITDA as adjusted (1)
Corporate expenses $4,164 $4,205 (1)%
Total $24,876 $22,240 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 first quarter of 2006. Guidance constitutes a "forward-looking statement." Please see below regarding statements that are forward-looking.

With the sale of the Company's radio assets in San Francisco, California in the first quarter of 2006, the Company no longer has any remaining broadcasting operations in that market. As a result, in accordance with Company policy, the Company has elected to present its guidance on a pro forma basis by eliminating its broadcasting results from that market for the prior period so that the comparison between the periods will be meaningful. The amounts excluded from net revenue and operating expenses for the first quarter of 2005 were $1,217,000 and $1,057,000, respectively.

Beginning in 2006, operating expenses and corporate expenses will include non-cash stock-based compensation to comply with Statement of Financial Accounting Standards ("SFAS") No. 123 (Revised 2004), "Share-Based Payment" ("SFAS 123R"). The Company expects approximately $150,000 in operating expenses and $250,000 in corporate expenses related to stock option compensation in the first quarter of 2006.

For the first quarter of 2006, the Company expects net revenues to increase by mid single digit percentages and operating expenses to increase by low to mid single digit percentages as compared to the first quarter of 2005. Excluding the non-cash stock-based compensation, corporate expenses are expected to be flat compared to the first quarter of 2005.

Entravision Communications Corporation will hold a conference call to discuss its 2005 fourth quarter results on February 23, 2006 at 5 p.m. Eastern Standard Time. To access the conference call, please dial 212-346-6600 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 52 owned and operated radio stations. The company's outdoor operations consist of approximately 10,600 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 Twelve Months Ended
December 31, December 31,
2005 2004 2005 2004

Net revenue (including
related parties of $155,
$518, $605 and $1,301) $73,164 $68,034 $280,964 $259,053

Expenses:
Direct operating expenses
(including related parties
of $3,151, $3,369, $11,222
and $11,961) 31,160 29,084 120,285 112,574

Selling, general and
administrative expenses 12,964 12,505 51,526 49,770

Corporate expenses 4,164 4,205 16,745 16,779

Gain on sale of assets - (331) - (3,487)
Non-cash stock-based
compensation 604 96 1,221 133

Depreciation and amortization 11,589 10,374 46,411 42,795
Total operating expenses 60,481 55,933 236,188 218,564

Operating income 12,683 12,101 44,776 40,489

Interest expense (5,336) (7,886) (29,848) (28,282)
Interest income 404 139 966 456
Loss on debt extinguishment - - (27,969) -

Income (loss) before
income taxes 7,751 4,354 (12,075) 12,663
Income tax (expense) benefit (4,485) (1,752) 2,338 (7,044)

Income (loss) before equity
in net earnings of
nonconsolidated affiliates 3,266 2,602 (9,737) 5,619

Equity in net earnings of
nonconsolidated affiliates 155 7 80 24

Income (loss) before
discontinued operations 3,421 2,609 (9,657) 5,643

Gain on disposal of
discontinued operations
net of tax $0, $0, $0
and $350 - - - 521
Net income (loss) 3,421 2,609 (9,657) 6,164

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

Net income (loss) applicable to
common stockholders $3,421 $2,609 $(9,657) $(9,749)

Basic and Diluted Earnings Per
Share:
Net income (loss) per share from
continuing operations applicable
to common stockholders $0.03 $0.02 $(0.08) $(0.10)
Net income per share from
discontinued operations $- $- $- $0.00

Net income (loss) per share
applicable to common
stockholders, basic and
diluted $0.03 $0.02 $(0.08) $(0.09)

Basic weighted average common
shares outstanding 124,367,530 124,171,202 124,293,792 105,758,136

Diluted weighted average
common shares outstanding 124,511,705 124,403,461 124,293,792 105,758,136

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 Twelve Months Ended
December 31, December 31,
2005 2004 2005 2004
Broadcast cash flow (1) $29,040 $26,445 $109,153 $96,709
Corporate expenses 4,164 4,205 16,745 16,779

EBITDA as adjusted (1) 24,876 22,240 92,408 79,930
Gain from sale of assets - (331) - (3,487)
Non-cash stock-based compensation 604 96 1,221 133
Depreciation and amortization 11,589 10,374 46,411 42,795

Operating income 12,683 12,101 44,776 40,489

Interest expense (5,336) (7,886) (29,848) (28,282)
Interest income 404 139 966 456
Loss on debt extinguishment - - (27,969) -

Income (loss) before income taxes 7,751 4,354 (12,075) 12,663
Income tax (expense) benefit (4,485) (1,752) 2,338 (7,044)

Net income (loss) before equity in
net earnings of nonconsolidated
affiliates 3,266 2,602 (9,737) 5,619

Equity in net earnings of
nonconsolidated affiliates 155 7 80 24

Net income (loss) before discontinued
operations 3,421 2,609 (9,657) 5,643
Gain on disposal of discontinued
operations - - - 521

Net income (loss) $3,421 $2,609 $(9,657) $6,164

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

Three Months Ended Twelve Months Ended
December 31, December 31,
2005 2004 2005 2004
EBITDA as adjusted (1) $24,876 $22,240 $92,408 $79,930
Net interest expense (1) 7,581 6,965 30,744 24,728
Cash paid for income taxes 253 270 1,410 1,398
Capital expenditures (2) 5,441 4,263 20,190 14,874

Free cash flow (1) 11,601 10,742 40,064 38,930

Capital expenditures (2) 5,441 4,263 20,190 14,874
Non-cash interest expense relating to
amortization of debt finance costs
and interest rate swap agreements 2,649 (782) 1,862 (3,098)
Non-cash income tax (expense) benefit (4,232) (1,482) 3,748 (5,646)
Gain from sale of assets - 331 - 3,487
Non-cash stock-based compensation (604) (96) (1,221) (133)
Loss on debt extinguishment - - (27,969) -
Depreciation and amortization (11,589) (10,374) (46,411) (42,795)
Net income (loss) before equity in
net earnings of
nonconsolidated affiliates 3,266 2,602 (9,737) 5,619
Equity in net earnings of
nonconsolidated affiliates 155 7 80 24

Net income (loss) before discontinued
operations 3,421 2,609 (9,657) 5,643
Gain on disposal of discontinued
operations - - - 521

Net income (loss) $3,421 $2,609 $(9,657) $6,164

(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 Net Revenue to Net Revenue
(In thousands)
(Unaudited)

The following table reconciles the pro forma net revenue measure used in this press release to net revenue, its respective GAAP financial measure.

Twelve Months Ended
December 31,
2005 2004 % Change
Net revenue $280,964 $259,053 8%
Less: Fresno and Chicago markets - (628) NM

Pro Forma net revenue $280,964 $258,425 9%

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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