Entravision Communications Corporation Reports Second Quarter 2009 Results

Entravision Communications Corporation Reports Second Quarter 2009 Results

SANTA MONICA, Calif., Aug. 5 /PRNewswire-FirstCall/ -- Entravision Communications Corporation (NYSE:EVC) today reported financial results for the three- and six-month periods ended June 30, 2009.

Historical results, which are attached, are in thousands of U.S. dollars (except share and per share data). The results of our outdoor operations are presented in discontinued operations within the statements of operations in accordance with SFAS 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". This press release contains certain non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measure most directly comparable to each of these non-GAAP financial measures, and a table reconciling each of these non-GAAP financial measures to its most directly comparable GAAP financial measure, is included below. Unaudited financial highlights are as follows:

Three-Month Period Six-Month Period
Ended June 30, Ended June 30,
-------------- --------------
2009 2008 % Change 2009 2008 % Change
---- ---- -------- ---- ---- --------

Net revenue $48,696 $62,932 (23)% $90,411 $118,585 (24)%
Operating
expenses (1) 29,646 36,898 (20)% 61,459 72,307 (15)%
Corporate
expenses (2) 3,378 4,477 (25)% 7,251 8,931 (19)%

Consolidated
adjusted
EBITDA (3) 16,323 22,371 (27)% 23,039 39,034 (41)%

Free cash flow (4) $5,217 $9,871 (47)% $4,118 $14,289 (71)%
Free cash flow
per share, basic
and diluted (4) $0.06 $0.11 (45)% $0.05 $0.15 (67)%

Net income (loss)
from continuing
operations $(1,827) $11,661 NM $(16,321) $4,611 NM
Net income (loss)
applicable to
common
stockholders $(1,827) $10,742 NM $(16,321) $3,038 NM

Net income (loss)
per share from
continuing operations
applicable to
common
stockholders,
basic and
diluted $(0.02) $0.13 NM $(0.19) $0.05 NM
Net income (loss)
per share applicable
to common
stockholders,
basic and
diluted $(0.02) $0.12 NM $(0.19) $0.03 NM

Weighted average
common shares
outstanding,
basic 84,187,128 91,573,187 84,235,509 93,495,230
Weighted average
common shares
outstanding,
diluted 84,187,128 91,835,027 84,235,509 93,811,980

(1) Operating expenses include direct operating, selling, general and
administrative expenses. Included in operating expenses are
$0.4 million and $0.4 million of non-cash stock-based compensation
for the three-month periods ended June 30, 2009 and 2008,
respectively and $0.7 million and $0.7 million of non-cash
stock-based compensation for the six-month periods ended
June 30, 2009 and 2008, respectively. Operating expenses do not
include corporate expenses, depreciation and amortization, impairment
charge, gain (loss) on sale of assets and loss on debt
extinguishment.

(2) Corporate expenses include $0.4 million and $0.5 million of non-cash
stock-based compensation for the three-month periods ended
June 30, 2009 and 2008, respectively and $0.8 million and $0.9 million
of non-cash stock-based compensation for the six-month periods ended
June 30, 2009 and 2008, respectively.

(3) Consolidated adjusted EBITDA means net income (loss) plus loss (gain)
on sale of assets, depreciation and amortization, non-cash impairment
charge, non-cash stock-based compensation included in operating and
corporate expenses, net interest expense, loss on debt
extinguishment, loss from discontinued operations, income tax
expense (benefit), equity in net income (loss) of nonconsolidated
affiliate and syndication programming amortization less syndication
programming payments. We use the term consolidated adjusted EBITDA
because that measure is defined in our syndicated bank credit
facility and does not include non-cash stock-based compensation,
loss (gain) on sale of assets, depreciation and amortization,
non-cash impairment charge, net interest expense, loss on debt
extinguishment, loss from discontinued operations, income tax
expense (benefit), equity in net income (loss) of nonconsolidated
affiliate and syndication programming amortization and does include
syndication programming payments. While many in the financial
community and we consider consolidated adjusted EBITDA to be
important, it should be considered in addition to, but not as a
substitute for or superior to, other measures of liquidity and
financial performance prepared in accordance with accounting
principles generally accepted in the United States of America, such
as cash flows from operating activities, operating income and net
income. As consolidated adjusted EBITDA excludes non-cash (gain)
loss on sale of assets, non-cash depreciation and amortization,
non-cash impairment charge, non-cash stock-based compensation
expense, net interest expense, loss on debt extinguishment, loss
from discontinued operations, income tax expense (benefit), equity in
net income (loss) of nonconsolidated affiliate and syndication
programming amortization and includes syndication programming
payments, consolidated adjusted EBITDA has certain limitations
because it excludes and includes several important non-cash
financial line items. Therefore, we consider both non-GAAP and GAAP
measures when evaluating our business. Consolidated adjusted EBITDA
is also used to make executive compensation decisions.

(4) Free cash flow is defined as consolidated adjusted EBITDA less cash
paid for income taxes, net interest expense and capital expenditures.
Net interest expense is defined as interest expense, less non-cash
interest expense relating to amortization of debt finance costs, less
interest income less the change in the fair value of our interest
rate swaps. Free cash flow per share is defined as free cash flow
divided by the diluted weighted average common shares outstanding.

Commenting on the Company's earnings results, Walter F. Ulloa, Chairman and Chief Executive Officer, said, "Our second quarter financial results reflect the continuing recession and the challenging advertising environment. We are continuing to aggressively manage our costs to maximize our cash flows. Our television and radio operations continue to deliver solid ratings in the nation's most densely-populated Hispanic markets. We believe we are well positioned to benefit when the economy recovers, given the strength of our brands and our ability to deliver the valuable Hispanic audience to advertisers."

The Company also announced that it repurchased from Univision Communications, Inc. 0.9 million shares of Entravision Class A common stock for approximately $0.5 million in the second quarter of 2009.

Financial Results

Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008 (Unaudited)

Three-Month Period
Ended June 30,
--------------
2009 2008 % Change
---- ---- --------
Net revenue $48,696 $62,932 (23)%
Operating expenses (1) 29,646 36,898 (20)%
Corporate expenses (1) 3,378 4,477 (25)%
Depreciation and amortization 5,191 5,642 (8)%
Impairment charge 2,720 - NM
----- ---

Operating income 7,761 15,915 (51)%
Interest expense, net (8,404) 3,458 NM
------ -----

Income (loss) before income taxes (643) 19,373 NM

Income tax expense (1,099) (7,674) (86)%
------ ------
Net income (loss) before
equity in net loss of
nonconsolidated affiliates
and discontinued operations (1,742) 11,699 NM
Equity in net loss of
nonconsolidated affiliates,
net of tax (85) (38) 124%
------- -------

Income (loss) from
continuing operations (1,827) 11,661 NM
Loss from discontinued
operations, net of tax - (919) NM
------- -------

Net income (loss) $(1,827) $10,742 NM
======= =======

(1) Operating expenses and corporate expenses as defined above.

Net revenue decreased to $48.7 million for the three-month period ended June 30, 2009 from $62.9 million for the three-month period ended June 30, 2008, a decrease of $14.2 million. Of the overall decrease, $7.2 million came from our television segment and was primarily attributable to a decrease in local and national advertising rates, which in turn was primarily due to the continuing weak economy, partially offset by the increase in retransmission consent revenue of $2.9 million. Additionally, $7.0 million of the overall decrease was from our radio segment and was primarily attributable to a decrease in local and national advertising rates, which in turn was primarily due to the continuing weak economy.

Operating expenses decreased to $29.6 million for the three-month period ended June 30, 2009 from $36.9 million for the three-month period ended June 30, 2008, a decrease of $7.3 million. The decrease was primarily attributable to decreases in expenses associated with the decrease in net revenue and salary expense due to reductions of personnel and salary reductions.

Corporate expenses decreased to $3.4 million for the three-month period ended June 30, 2009 from $4.5 million for the three-month period ended June 30, 2008, a decrease of $1.1 million. The decrease was primarily attributable to the elimination of bonuses paid to executive officers and a decrease in salary expense due to salary reductions.

Six Months Ended June 30, 2009 Compared to Six Months Ended June 30, 2008
(Unaudited)

Six-Month Period
Ended June 30,
--------------
2009 2008 % Change
---- ---- --------
Net revenue $90,411 $118,585 (24)%
Operating expenses (1) 61,459 72,307 (15)%
Corporate expenses (1) 7,251 8,931 (19)%
Depreciation and amortization 10,621 11,187 (5)%
Impairment charge 2,720 - NM
-------- --------

Operating income 8,360 26,160 (68)%
Interest expense, net (13,217) (18,706) (29)%
Loss on debt extinguishment (4,716) - NM
-------- --------

Income (loss) before
income taxes (9,573) 7,454 NM

Income tax expense (6,509) (2,679) 143%
-------- --------
Net income (loss) before equity
in net loss of nonconsolidated
affiliates and discontinued
operations (16,082) 4,775 NM
Equity in net loss
of nonconsolidated
affiliates, net of tax (239) (164) 46%
-------- --------

Income (loss) from
continuing operations (16,321) 4,611 NM
Loss from discontinued
operations, net of tax - (1,573) NM
-------- --------

Net income (loss) $(16,321) $3,038 NM
======== ======

Net revenue decreased to $90.4 million for the six-month period ended June 30, 2009 from $118.6 million for the six-month period ended June 30, 2008, a decrease of $28.2 million. Of the overall decrease, $15.0 million came from our television segment and was primarily attributable to a decrease in local and national advertising rates, which in turn was primarily due to the continuing weak economy, partially offset by the increase in retransmission consent revenue of $4.8 million. Additionally, $13.2 million of the overall decrease was from our radio segment and was primarily attributable to a decrease in local and national advertising sales and advertising rates, which in turn was primarily due to the continuing weak economy.

Operating expenses decreased to $61.5 million for the six-month period ended June 30, 2009 from $72.3 million for the six-month period ended June 30, 2008, a decrease of $10.8 million. The decrease was primarily attributable to decreases in expenses associated with the decrease in net revenue and salary expense due to reductions of personnel and salary reductions.

Corporate expenses decreased to $7.3 million for the six-month period ended June 30, 2009 from $8.9 million for the six-month period ended June 30, 2008, a decrease of $1.6 million. The decrease was primarily attributable to the elimination of bonuses paid to executive officers, a decrease in salary expense due to salary reductions and a decrease in employee benefits.

Segment Results

The following represents selected unaudited segment information:

Three-Month Period
Ended June 30,
--------------
2009 2008 % Change
---- ---- --------
Net Revenue
Television $31,746 $38,944 (18)%
Radio 16,950 23,988 (29)%
------ ------
Total $48,696 $62,932 (23)%

Operating Expenses (1)
Television $18,107 $21,712 (17)%
Radio 11,539 15,186 (24)%
------ ------
Total $29,646 $36,898 (20)%

Corporate Expenses (1) $3,378 $4,477 (25)%

Consolidated adjusted EBITDA (1) $16,323 $22,371 (27)%

(1) Operating expenses, Corporate expenses, and Consolidated adjusted
EBITDA as defined above.

Entravision Communications Corporation will hold a conference call to discuss its 2009 second quarter results on August 5, 2009 at 5 p.m. Eastern Time. To access the conference call, please dial 412-858-4600 ten minutes prior to the start time. The call will be webcast live and archived for replay at www.entravision.com.

Entravision Communications Corporation is a diversified Spanish-language media company utilizing a combination of television and radio operations to reach Hispanic consumers across the United States, as well as the border markets of Mexico. Entravision is the largest affiliate group of both the top-ranked Univision television network and Univision's TeleFutura network, with television stations in 20 of the nation's top 50 Hispanic markets. The Company also operates one of the nation's largest groups of primarily Spanish-language radio stations, consisting of 48 owned and operated radio stations. Entravision shares of Class A Common Stock are traded on The New York Stock Exchange under the symbol: EVC.

This press release contains certain forward-looking statements. These forward-looking statements, which are included in accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, may involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results and performance in future periods to be materially different from any future results or performance suggested by the forward-looking statements in this press release. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that actual results will not differ materially from these expectations, and the Company disclaims any duty to update any forward-looking statements made by the Company. From time to time, these risks, uncertainties and other factors are discussed in the Company's filings with the Securities and Exchange Commission.

Entravision Communications Corporation
Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)

Three-Month Period Six-Month Period
Ended June 30, Ended June 30,
-------------- --------------
2009 2008 2009 2008
---- ---- ---- ----
Net revenue (including
related parties of $0,
$32, $0 and $182) $ 48,696 $ 62,932 $ 90,411 $ 118,585

Expenses:
Direct operating expenses
(including related parties
of $2,004, $3,079, $3,731
and $5,572) (including
non-cash stock-based
compensation of $164,
$165, $330 and $289) 20,799 25,942 42,660 50,676

Selling, general and
administrative expenses
(including non-cash
stock-based compensation
of $207, $207, $414 and
$362) 8,847 10,956 18,799 21,631

Corporate expenses (including
non-cash stock-based
compensation of $353, $468,
$759 and $903) 3,378 4,477 7,251 8,931

Depreciation and amortization
(includes direct operating
of $3,843, $4,382, $7,918
and $8,726; selling, general
and administrative of $1,068,
$983, $2,089 and $1,985;
and corporate of $280, $277,
$614 and $476) (including
related parties of $580, $580,
$1,160 and $1,160) 5,191 5,642 10,621 11,187
Impairment charge 2,720 - 2,720 -
40,935 47,017 82,051 92,425
Operating income 7,761 15,915 8,360 26,160
Interest expense (including
related parties of $29, $54,
$60 and $112) (8,474) 3,172 (13,535) (19,423)
Interest income 70 286 318 717
Loss on debt extinguishment - - (4,716) -
Income (loss) before
income taxes (643) 19,373 (9,573) 7,454
Income tax expense (1,099) (7,674) (6,509) (2,679)
Income (loss) before
equity in net loss
of nonconsolidated
affiliate and
discontinued
operations (1,742) 11,699 (16,082) 4,775
Equity in net loss of
nonconsolidated affiliate,
net of tax (85) (38) (239) (164)
Income (loss) from continuing
operations (1,827) 11,661 (16,321) 4,611
Loss from discontinued
operations, net of tax
(expense) benefit of $0,
($369), $0 and $604 - (919) - (1,573)
Net income (loss) applicable
to common stockholders $ (1,827) $ 10,742 $ (16,321) $ 3,038

Basic and diluted earnings
per share:
Net income (loss) per share
from continuing operations
applicable to common
stockholders, basic and
diluted $ (0.02) $ 0.13 $ (0.19) $ 0.05
Net loss per share from
discontinued operations,
basic and diluted $ - $ (0.01) $ - $ (0.02)
Net income (loss) per share
applicable to common
stockholders, basic and
diluted $ (0.02) $ 0.12 $ (0.19) $ 0.03

Weighted average common
shares outstanding, basic 84,187,128 91,573,187 84,235,509 93,495,230
Weighted average common
shares outstanding,
diluted 84,187,128 91,835,027 84,235,509 93,811,980

Entravision Communications Corporation
Consolidated Statements of Cash Flows
(Unaudited; in thousands)

Three-Month Period Six-Month Period
Ended June 30, Ended June 30,
-------------- --------------
2009 2008 2009 2008
---- ---- ---- ----
Cash flows from operating
activities:
Net income (loss) $(1,827) $10,742 $(16,321) $3,038
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities:
Depreciation and
amortization 5,191 5,642 10,621 11,187
Impairment charge 2,720 - 2,720 -
Deferred income taxes 486 6,877 5,986 1,660
Amortization of debt
issue costs 105 101 194 202
Amortization of
syndication contracts 627 689 1,248 1,555
Payments on syndication
contracts (700) (715) (1,413) (1,422)
Equity in net loss of
nonconsolidated affiliate 85 38 239 164
Non-cash stock-based
compensation 724 840 1,503 1,554
Gain on sale of media
properties and other assets (2) - (102) -
Non-cash expenses
related to debt
extinguishment - - 945 -
Change in fair value of
interest rate swap
agreements (855) (10,832) (2,536) 3,211
Changes in assets and
liabilities, net of effect
of acquisitions and
dispositions:
(Increase) decrease
in accounts
receivable (5,591) (6,317) (1,272) 158
Decrease in prepaid
expenses and other
assets 51 733 189 78
Increase (decrease)
in accounts payable,
accrued expenses and
other liabilities 2,905 (659) 2,102 (1,760)
Effect of discontinued
operations - (1,569) - (2,230)
----- ----- ----- ------
Net cash provided
by operating
activities 3,919 5,570 4,103 17,395
----- ----- ----- ------
Cash flows from investing
activities:
Proceeds from sale of
property and equipment
and intangibles 14 101,407 114 101,498
Purchases of property and
equipment and intangibles (1,339) (4,404) (6,618) (8,408)
Purchase of a business - - - (22,885)
Effect of discontinued
operations - (64) - (194)
----- ----- ----- ------
Net cash provided
by (used in) investing
activities (1,325) 96,939 (6,504) 70,011
------ ------ ------ ------
Cash flows from financing
activities:
Proceeds from issuance of
common stock - - 202 486
Payments on long-term debt - (1,007) (41,000) (11,034)
Repurchase of Class U
common stock - - - (10,380)
Repurchase of Class A
common stock (532) (13,793) (1,075) (36,293)
Excess tax benefits from
exercise of stock options - (25) - (25)
Payments of deferred debt
and offering costs - - (1,182) -
----- ----- ----- ------
Net cash used in
financing activities (532) (14,825) (43,055) (57,246)
---- ------- ------- -------
Net increase
(decrease) in cash
and cash equivalents 2,062 87,684 (45,456) 30,160
Cash and cash equivalents:
Beginning 16,776 29,421 64,294 86,945
------ ------ ------ ------
Ending $18,838 $117,105 $18,838 $117,105
======= ======== ======= ========

Entravision Communications Corporation

Reconciliation of Consolidated Adjusted EBITDA to Cash Flows From Operating

Activities
(Unaudited; in thousands)

The most directly comparable GAAP financial measure is operating cash flow. A reconciliation of this non-GAAP measure to cash flows from operating activities for each of the periods presented is as follows:

Three-Month Period Six-Month Period
Ended June 30, Ended June 30,
-------------- --------------
2009 2008 2009 2008
---- ---- ---- ----

Consolidated adjusted
EBITDA (1) $16,323 $22,371 $23,039 $39,034

Interest expense (8,474) 3,172 (13,535) (19,423)
Interest income 70 286 318 717
Loss on debt
extinguishment - - (4,716) -
Income tax expense (1,099) (7,674) (6,509) (2,679)
Amortization of
syndication contracts (627) (689) (1,248) (1,555)
Payments on
syndication
contracts 700 715 1,413 1,422
Non-cash stock-based
compensation included in
direct operating expenses (164) (165) (330) (289)
Non-cash stock-based compensation
included in selling,
general and administrative
expenses (207) (207) (414) (362)
Non-cash stock-based
compensation included in
corporate expenses (353) (468) (759) (903)
Depreciation and amortization (5,191) (5,642) (10,621) (11,187)
Impairment charge (2,720) - (2,720) -
Equity in net loss
of nonconsolidated affiliates (85) (38) (239) (164)
Loss from discontinued
operations - (919) - (1,573)
--- ---- --- ------
Net income (loss) (1,827) 10,742 (16,321) 3,038

Depreciation and amortization 5,191 5,642 10,621 11,187
Impairment charge 2,720 - 2,720 -
Deferred income taxes 486 6,877 5,986 1,660
Amortization of debt
issue costs 105 101 194 202
Amortization of syndication
contracts 627 689 1,248 1,555
Payments on syndication
contracts (700) (715) (1,413) (1,422)
Equity in net loss
of nonconsolidated affiliate 85 38 239 164
Non-cash stock-based
compensation 724 840 1,503 1,554
Gain on sale of
media properties and
other assets (2) - (102) -
Non-cash expenses
related to debt extinguishment - - 945 -
Change in fair value
of interest rate swap
agreements (855) (10,832) (2,536) 3,211
Changes in assets and liabilities,
net of effect of
acquisitions and dispositions:
(Increase) decrease in
accounts receivable (5,591) (6,317) (1,272) 158
Decrease in
prepaid expenses
and other assets 51 733 189 78
Increase (decrease) in
accounts payable,
accrued expenses
and other liabilities 2,905 (659) 2,102 (1,760)
Effect of discontinued
operations - (1,569) - (2,230)
--- ------ --- ------
Cash flows from
operating activities $3,919 $5,570 $4,103 $17,395
====== ====== ====== =======

(1) Consolidated adjusted EBITDA as defined above.

Entravision Communications Corporation
Reconciliation of Free Cash Flow to Net Income (Loss)
(Unaudited; in thousands)

The most directly comparable GAAP financial measure is net income (loss). A reconciliation of this non-GAAP measure to net income (loss) for each of the periods presented is as follows:

Three-Month Period Six-Month Period
Ended June 30, Ended June 30,
-------------- --------------
2009 2008 2009 2008
---- ---- ---- ----
Consolidated
adjusted EBITDA (1) $16,323 $22,371 $23,039 $39,034
Net interest expense (1) 9,154 7,274 15,559 15,293
Cash paid for income taxes 613 822 523 1,044
Capital expenditures (2) 1,339 4,404 2,839 8,408
----- ----- ----- -----
Free cash flow (1) 5,217 9,871 4,118 14,289

Capital expenditures (2) 1,339 4,404 2,839 8,408
Non-cash interest expense
relating to amortization
of debt finance costs
and interest rate swap
agreements 750 10,732 2,342 (3,413)
Loss on debt extinguishment - - (4,716) -
Non-cash income tax expense (486) (6,852) (5,986) (1,635)
Amortization of syndication
contracts (627) (689) (1,248) (1,555)
Payments on syndication
contracts 700 715 1,413 1,422
Non-cash stock-based
compensation included in
direct operating expenses (164) (165) (330) (289)
Non-cash stock-based
compensation included in
selling, general and
administrative expenses (207) (207) (414) (362)
Non-cash stock-based
compensation included in
corporate expenses (353) (468) (759) (903)
Depreciation and amortization (5,191) (5,642) (10,621) (11,187)
Impairment charge (2,720) - (2,720) -
Equity in net loss
of nonconsolidated
affiliates (85) (38) (239) (164)
Loss from discontinued
operations - (919) - (1,573)
--- ---- --- ------
Net income (loss) $(1,827) $10,742 $(16,321) $3,038
======= ======= ======== ======

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

Source: Entravision Communications Corporation

CONTACT: Christopher T. Young, Chief Financial Officer of Entravision
Communications Corporation, +1-310-447-3870; or Mike Smargiassi, or Christian
Nery, both of Brainerd Communicators, Inc., +1-212-986-6667

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

-------
Profile: intent