Entravision Communications Corporation Reports Fourth Quarter and Full Year 2011 Results

Entravision Communications Corporation Reports Fourth Quarter and Full Year 2011 Results

SANTA MONICA, Calif., March 7, 2012 /PRNewswire/ -- Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three- and twelve-month periods ended December 31, 2011.

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 Twelve Months Ended
December 31, December 31,
------------ ------------
2011 2010 % Change 2011 2010 % Change
---- ---- -------- ---- ---- --------
Net revenue $49,972 $50,647 (1)% $194,396 $200,476 (3)%
Operating expenses (1) 32,061 30,703 4% 125,101 122,848 2%
Corporate expenses (2) 4,267 7,368 (42)% 15,669 18,416 (15)%

Consolidated adjusted
EBITDA (3) 14,343 16,697 (14)% 55,475 63,635 (13)%

Free cash flow (4) $(1,817) $6,215 NM $5,862 $18,878 (69)%
Free cash flow per share,
basic and diluted (4) $(0.02) $0.07 NM $0.07 $0.22 (68)%

Net income (loss)
applicable to common
stockholders $(2,032) $(29,273) (93)% $(8,200) $(18,086) (55)%

Net income (loss) per
share applicable
to common stockholders,
basic and diluted $(0.02) $(0.35) (94)% $(0.10) $(0.21) (52)%

Weighted average common
shares outstanding, basic
and diluted 85,055,659 84,517,508 85,051,066 84,488,930

(1) Operating expenses include direct operating, selling, general and administrative expenses. Included in operating expenses are $0.4 million and $0.6 million of non-cash stock-based compensation for the three-month periods ended December 31, 2011 and 2010, respectively and $1.0 million and $1.4 million of non-cash stock-based compensation for the twelve-month periods ended December 31, 2011 and 2010, respectively. Operating expenses do not include corporate expenses, depreciation and amortization, impairment charge, gain (loss) on sale of assets and gain (loss) on debt extinguishment.

(2) Corporate expenses include $0.6 million and $0.8 million of non-cash stock-based compensation for the three-month periods ended December 31, 2011 and 2010, respectively and $1.3 million and $1.6 million of non-cash stock-based compensation for the twelve-month periods ended December 31, 2011 and 2010, respectively.

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

(4) Free cash flow is defined as consolidated adjusted EBITDA less cash paid for income taxes, net interest expense, capital expenditures and dividend payments. Net interest expense is defined as interest expense, less non-cash interest expense relating to amortization of debt finance costs, less non-cash interest expense relating to discount amortization on our $384 million aggregate principal amount of 8.750% senior secured first lien notes due 2017 (the "Notes"), less interest income and 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 basic or diluted weighted average common shares outstanding.

Commenting on the Company's earnings results, Walter F. Ulloa, Chairman and Chief Executive Officer, said, "During 2011, we faced challenging comparisons to 2010, when we benefited from World Cup and political advertising revenue. We also continued to face a challenging advertising environment generally, as our advertising customers continue to make difficult choices in the current uncertain economic environment. Nonetheless, core advertising showed modest improvement during 2011. Our audience shares remain strong in the nation's most densely populated Hispanic markets, and we believe we are well positioned to benefit as the U.S. Hispanic market continues to expand and advertisers increasingly recognize the importance of reaching our target audience."

Repurchase of Outstanding Debt and Cash Dividend

The Company repurchased $16.2 million in aggregate principal amount of its 8.750% senior secured first lien notes due 2017 in open market transactions during the fourth quarter of 2011. The Company also declared and paid a special cash dividend of $0.06 per share to shareholders of the Company's Class A, Class B and Class U common stock during the fourth quarter of 2011. The total amount of cash disbursed for the special dividend was $5.1 million.

Financial Results

Three Months Ended December 31, 2011 Compared to Three
Months Ended December 31, 2010
(Unaudited)

Three Months Ended
December 31,
------------
2011 2010 % Change
---- ---- --------
Net revenue $49,972 $50,647 (1)%
Operating expenses (1) 32,061 30,703 4%
Corporate expenses (1) 4,267 7,368 (42)%
Depreciation and
amortization 4,481 4,765 (6)%
Impairment charge - 36,109 (100)%
--- ------

Operating income
(loss) 9,163 (28,298) NM
Interest expense, net (9,303) (9,257) 0%
Gain (loss) on debt
extinguishment (423) - NM
---- ---

Income (loss) before
income taxes (563) (37,555) (99)%

Income tax (expense)
benefit (1,469) 8,478 NM
------ -----
Net income (loss)
before equity in net
income (loss) of
nonconsolidated
affiliates (2,032) (29,077) (93)%
Equity in net income
(loss) of
nonconsolidated
affiliates - (196) (100)%
--- ----

Net income (loss) $(2,032) $(29,273) (93)%
======= ========

(1) Operating expenses and corporate expenses are defined on page 1.

Net revenue decreased to $50.0 million for the three-month period ended December 31, 2011 from $50.6 million for the three-month period ended December 31, 2010, a decrease of $0.6 million. Net revenue from our radio segment decreased $1.0 million and was primarily attributable to a decrease in political advertising revenue, which was not material in 2011. The decrease from our radio segment was partially offset by a $0.4 million increase from our television segment that was primarily attributable to an increase in local advertising and an increase in retransmission consent revenue, partially offset by a decrease in political advertising revenue, which was not material in 2011.

Operating expenses increased to $32.1 million for the three-month period ended December 31, 2011 from $30.7 million for the three-month period ended December 31, 2010, an increase of $1.4 million. The increase was primarily attributable to an increase in salary expense as a result of the partial restoration of employee salaries in 2011 and expenses associated with Lotus/Entravision Reps LLC, partially offset by a decrease in bad debt expense.

Corporate expenses decreased to $4.3 million for the three-month period ended December 31, 2011 from $7.4 million for the three-month period ended December 31, 2010, a decrease of $3.1 million. The decrease was primarily attributable to higher expenses in 2010 due to the creation of a reserve for a $3.0 million note receivable and accrued interest relating to the sale of our publishing segment in 2003, partially offset by the increase in interactive expenses and partial restoration of employee salaries in 2011.

Twelve Months Ended December 31, 2011 Compared to
Twelve Months Ended December 31, 2010
(Unaudited)

Twelve Months Ended
December 31,
------------
2011 2010 % Change
---- ---- --------
Net revenue $194,396 $200,476 (3)%
Operating
expenses (1) 125,101 122,848 2%
Corporate
expenses (1) 15,669 18,416 (15)%
Depreciation
and
amortization 18,653 19,229 (3)%
Impairment
charge - 36,109 (100)%
--- ------

Operating
income (loss) 34,973 3,874 NM
Interest
expense, net (37,647) (24,169) 56%
Other income
(loss) 687 - NM
Gain (loss) on
debt
extinguishment (423) (987) (57)%
---- ----

Income (loss)
before income
taxes (2,410) (21,282) (89)%

Income tax
(expense)
benefit (5,790) 3,376 NM
------ -----
Net income
(loss) before
equity in net
income (loss)
of
nonconsolidated
affiliates (8,200) (17,906) (54)%
Equity in net
income (loss)
of
nonconsolidated
affiliates - (180) (100)%
--- ----

Net income
(loss) $(8,200) $(18,086) (55)%
======= ========

(1) Operating expenses and corporate expenses are defined on page 1.

Net revenue decreased to $194.4 million for the year ended December 31, 2011 from $200.5 million for the year ended December 31, 2010, a decrease of $6.1 million. Of the overall decrease, $5.0 million came from our radio segment and was primarily attributable to the non-occurrence of advertising revenue from the World Cup in 2011 compared to 2010 and a decrease in political advertising revenue, which is not material in 2011. Additionally, $1.1 million of the overall decrease came from our television segment and was primarily attributable to a decrease in national advertising, the non-occurrence of advertising revenue from the World Cup in 2011 compared to 2010 and a decrease in political advertising revenue, which was not material in 2011, partially offset by an increase in retransmission consent revenue.

Operating expenses increased to $125.1 million for the twelve-month period ended December 31, 2011 from $122.8 million for the twelve-month period ended December 31, 2010, an increase of $2.3 million. The increase was primarily attributable to an increase in salary expense as a result of the partial restoration of employee salaries in 2011 and expenses associated with Lotus/Entravision Reps LLC, partially offset by a decrease in sales expenses associated with the decrease in net revenue.

Corporate expenses decreased to $15.7 million for the year ended December 31, 2011 from $18.4 million for the year ended December 31, 2010, a decrease of $2.7 million. The decrease was primarily attributable to higher expenses in 2010 due to the creation of a reserve for a $3.0 million note receivable and accrued interest relating to the sale of our publishing segment in 2003, partially offset by the increase in interactive expenses and partial restoration of employee salaries in 2011.

Segment Results

The following represents selected unaudited segment
information:

Three Months Ended
December 31,
------------
2011 2010 % Change
---- ---- --------
Net Revenue
Television $34,140 $33,775 1%
Radio 15,832 16,872 (6)%
------ ------
Total $49,972 $50,647 (1)%

Operating Expenses (1)
Television $18,706 $18,229 3%
Radio 13,355 12,474 7%
------ ------
Total $32,061 $30,703 4%

Corporate Expenses (1) $4,267 $7,368 (42)%

Consolidated adjusted
EBITDA (1) $14,343 $16,697 (14)%

(1) Operating expenses, Corporate expenses, and Consolidated adjusted EBITDA are defined on page 1.

Entravision Communications Corporation will hold a conference call to discuss its 2011 fourth quarter and full year results on March 7, 2012 at 5 p.m. Eastern Time. To access the conference call, please dial 412-858-4600 ten minutes prior to the start time. The call will be webcast live and archived for replay on the investor relations portion of the Company's Web site located at www.entravision.com.

Entravision Communications Corporation is a diversified Spanish-language media company utilizing a combination of television, radio and digital 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 19 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. Additionally, Entravision has a variety of cross-platform digital content and sales offerings designed to capitalize on the company's leadership position within the Hispanic broadcasting community. Entravision shares of Class A Common Stock are traded on The New York Stock Exchange under the symbol: EVC.

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

(Financial Table Follows)

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

Three-Month Period Twelve-Month Period
Ended December 31, Ended December 31,
------------------ ------------------
2011 2010 2011 2010
---- ---- ---- ----

Net revenue $49,972 $50,647 $194,396 $200,476
------- ------- -------- --------

Expenses:
Direct operating expenses 22,700 20,861 88,590 84,802
Selling, general and
administrative expenses 9,361 9,842 36,511 38,046
Corporate expenses 4,267 7,368 15,669 18,416
Depreciation and
amortization 4,481 4,765 18,653 19,229
Impairment charge - 36,109 - 36,109
--- ------ --- ------
40,809 78,945 159,423 196,602
------ ------ ------- -------
Operating income (loss) 9,163 (28,298) 34,973 3,874
Interest expense (9,304) (9,258) (37,650) (24,429)
Interest income 1 1 3 260
Other income (loss) - - 687 -
Gain (loss) on debt
extinguishment (423) - (423) (987)
---- --- ---- ----
Income (loss) before
income taxes (563) (37,555) (2,410) (21,282)
Income tax (expense)
benefit (1,469) 8,478 (5,790) 3,376
------ ----- ------ -----
Income (loss) before
equity in net income
(loss) of
nonconsolidated affiliate (2,032) (29,077) (8,200) (17,906)
Equity in net income
(loss) of nonconsolidated
affiliate - (196) - (180)
--- ---- --- ----
Net income (loss)
applicable to common
stockholders $(2,032) $(29,273) $(8,200) $(18,086)
======= ======== ======= ========

Basic and diluted earnings
per share:
Net income (loss) per
share applicable to
common stockholders,
basic and diluted $(0.02) $(0.35) $(0.10) $(0.21)
====== ====== ====== ======

Weighted average common
shares outstanding, basic
and diluted 85,055,659 84,517,508 85,051,066 84,488,930
========== ========== ========== ==========

Entravision Communications Corporation
Consolidated Statements of Cash Flows
(In thousands; unaudited)

Three-Month Period Twelve-Month Period
Ended December 31, Ended December 31,
------------------ ------------------
2011 2010 2011 2010
---- ---- ---- ----

Cash flows from operating activities:
Net income (loss) $(2,032) $(29,273) $(8,200) $(18,086)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities:
Depreciation and amortization 4,481 4,765 18,653 19,229
Impairment charge - 36,109 - 36,109
Deferred income taxes 1,121 (8,556) 4,565 (4,342)
Amortization of debt issue costs 565 445 2,207 1,140
Amortization of syndication contracts 185 319 1,482 1,159
Payments on syndication contracts (470) (583) (1,976) (2,724)
Equity in net (income) loss of nonconsolidated
affiliate - 196 - 180
Non-cash stock-based compensation 984 1,367 2,343 2,970
Other (income) loss - - (687) -
(Gain) loss on debt extinguishment 423 - 423 934
Reserve for note receivable - 3,018 - 3,018
Change in fair value of interest rate swap
agreements - - - (12,188)
Changes in assets and liabilities, net of
effect of acquisitions and dispositions:
(Increase) decrease in restricted cash - 214 809 (809)
(Increase) decrease in accounts receivable (2,229) 3,951 (574) 2,091
(Increase) decrease in prepaid expenses and
other assets 597 736 336 310
Increase (decrease) in accounts payable,
accrued expenses and other liabilities 9,280 7,374 (1,770) 8,134
----- ----- ------ -----
Net cash provided by (used in) operating
activities 12,905 20,082 17,611 37,125
------ ------ ------ ------
Cash flows from investing activities:
Purchases of property and equipment and
intangibles (1,982) (1,572) (8,524) (8,650)
Purchase of a business (10) - (598) -
--- --- ---- ---
Net cash provided by (used in) investing
activities (1,992) (1,572) (9,122) (8,650)
------ ------ ------ ------
Cash flows from financing activities:
Proceeds from issuance of common stock - 6 42 239
Payments on long-term debt (16,071) - (17,071) (362,949)
Termination of swap agreements - - - (4,039)
Dividend paid (5,102) - (5,102) -
Proceeds from borrowings on long-term debt - - - 394,888
Payments of deferred debt and offering costs - (1,336) (29) (11,890)
--- ------ --- -------
Net cash provided by (used in) financing
activities (21,173) (1,330) (22,160) 16,249
------- ------ ------- ------
Net increase (decrease) in cash and cash
equivalents (10,260) 17,180 (13,671) 44,724
Cash and cash equivalents:
Beginning 68,979 55,210 72,390 27,666
------ ------ ------ ------
Ending $58,719 $72,390 $58,719 $72,390
======= ======= ======= =======

Entravision Communications Corporation
Reconciliation of Consolidated Adjusted EBITDA to Cash Flows From Operating Activities
(In thousands; unaudited)

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

Three-Month Period Twelve-Month Period
Ended December 31, Ended December 31,
------------------ ------------------
2011 2010 2011 2010
---- ---- ---- ----
Consolidated adjusted EBITDA (1) $14,343 $16,697 $55,475 $63,635

Interest expense (9,304) (9,258) (37,650) (24,429)
Interest income 1 1 3 260
Gain (loss) on debt extinguishment (423) - (423) (987)
Income tax (expense) benefit (1,469) 8,478 (5,790) 3,376
Amortization of syndication contracts (185) (319) (1,482) (1,159)
Payments on syndication contracts 470 583 1,976 2,724
Non-cash stock-based compensation
included in direct operating
expenses (74) (142) (229) (454)
Non-cash stock-based compensation
included in selling, general
and administrative expenses (340) (455) (812) (897)
Non-cash stock-based compensation
included in corporate expenses (570) (770) (1,302) (1,619)
Depreciation and amortization (4,481) (4,765) (18,653) (19,229)
Impairment charge - (36,109) - (36,109)
Other income (loss) - - 687 -
Reserve for note receivable - (3,018) - (3,018)
Equity in net income (loss) of
nonconsolidated affiliates - (196) - (180)
Net income (loss) (2,032) (29,273) (8,200) (18,086)

Depreciation and amortization 4,481 4,765 18,653 19,229
Impairment charge - 36,109 - 36,109
Deferred income taxes 1,121 (8,556) 4,565 (4,342)
Amortization of debt issue costs 565 445 2,207 1,140
Amortization of syndication contracts 185 319 1,482 1,159
Payments on syndication contracts (470) (583) (1,976) (2,724)
Equity in net (income) loss of
nonconsolidated affiliate - 196 - 180
Non-cash stock-based compensation 984 1,367 2,343 2,970
Other (income) loss - - (687) -
(Gain) loss on debt extinguishment 423 - 423 934
Reserve for note receivable - 3,018 - 3,018
Change in fair value of interest rate
swap agreements - - - (12,188)
Changes in assets and liabilities, net
of effect of acquisitions and
dispositions:
(Increase) decrease in restricted cash - 214 809 (809)
(Increase) decrease in accounts
receivable (2,229) 3,951 (574) 2,091
(Increase) decrease in prepaid
expenses and other assets 597 736 336 310
Increase (decrease) in accounts
payable, accrued expenses and other
liabilities 9,280 7,374 (1,770) 8,134
----- -----
Net cash provided by (used in )
operating activities $12,905 $20,082 $17,611 $37,125

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

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

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

Three-Month Period Twelve-Month Period
Ended December 31, Ended December 31,
------------------ ------------------
2011 2010 2011 2010
---- ---- ---- ----
Consolidated adjusted
EBITDA (1) $14,343 $16,697 $55,475 $63,635
Net interest expense (1) 8,738 8,812 35,440 36,391
Cash paid for income taxes 348 78 1,225 966
Capital expenditures (2) 1,972 1,592 7,846 7,400
Cash dividend 5,102 - 5,102 -
Free cash flow (1) (1,817) 6,215 5,862 18,878

Capital expenditures (2) 1,972 1,592 7,846 7,400
Cash dividend 5,102 - 5,102 -
Non-cash interest (expense)
income relating to
amortization of debt
finance costs and interest
rate swap agreements (565) (445) (2,207) 12,222
Non-cash income tax (expense)
benefit (1,121) 8,556 (4,565) 4,342
Gain (loss) on debt
extinguishment (423) - (423) (987)
Amortization of syndication
contracts (185) (319) (1,482) (1,159)
Payments on syndication
contracts 470 583 1,976 2,724
Other income (loss) - - 687 -
Non-cash stock-based
compensation included in
direct operating
expenses (74) (142) (229) (454)
Non-cash stock-based
compensation included in
selling, general
and administrative expenses (340) (455) (812) (897)
Non-cash stock-based
compensation included in
corporate expenses (570) (770) (1,302) (1,619)
Depreciation and amortization (4,481) (4,765) (18,653) (19,229)
Impairment charge - (36,109) - (36,109)
Reserve for note receivable - (3,018) - (3,018)
Equity in net income (loss) of
nonconsolidated affiliates - (196) - (180)
Net income (loss) $(2,032) $(29,273) $(8,200) $(18,086)

(1) Consolidated adjusted EBITDA, net interest expense and free cash flow are defined on page 1.

(2) Capital expenditures is not part of the consolidated statement of operations.

SOURCE Entravision Communications Corporation

Entravision Communications Corporation

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

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

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