Entravision Communications Corporation Reports Second Quarter 2013 Results

Entravision Communications Corporation Reports Second Quarter 2013 Results

SANTA MONICA, Calif., Aug. 1, 2013 /PRNewswire/ -- Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three- and six-month periods ended June 30, 2013.

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-Month Period Six-Month Period

Ended June 30, Ended June 30,

2013 2012 % Change 2013 2012 % Change
---- ---- -------- ---- ---- --------

Net revenue $56,950 $54,491 5% $106,037 $101,015 5%

Operating expenses (1) 33,412 32,511 3% 65,320 63,517 3%

Corporate expenses (2) 4,736 4,181 13% 9,233 8,062 15%


Consolidated adjusted EBITDA (3) 19,996 18,257 10% 33,376 29,881 12%


Free cash flow (4) $10,194 $7,220 41% $13,632 $8,664 57%

Free cash flow per share, basic (4) $0.12 $0.08 50% $0.16 $0.10 60%

Free cash flow per share, diluted (4) $0.11 $0.08 38% $0.15 $0.10 50%


Net income (loss) applicable to common stockholders $5,073 $2,066 146% $4,116 $(1,329) NM


Net income (loss) per share applicable

to common stockholders, basic
and diluted $0.06 $0.02 200% $0.05 $(0.02) NM


Weighted average common shares outstanding, basic 87,074,952 85,837,846 86,768,686 85,821,963

Weighted average common shares outstanding, diluted 89,228,790 86,178,331 88,147,914 85,821,963



(1) Operating expenses include direct operating, selling, general and administrative expenses. Included in operating expenses are $0.3 million of non-cash stock-based compensation for each of the three-month periods ended June 30, 2013 and 2012, and $0.5 million
and $0.4 million of non-cash stock-based compensation for the six-month periods ended June 30, 2013 and 2012, respectively. Operating expenses do not include corporate expenses, depreciation and amortization, impairment charge, gain (loss) on sale of assets,
gain (loss) on debt extinguishment and other income (loss).

(2) Corporate expenses include $1.1 million and $0.5 million of non-cash stock-based compensation for the three-month periods ended June 30, 2013 and 2012, respectively, and $1.8 million and $0.6 million of non-cash stock-based compensation for the six-month
periods ended June 30, 2013 and 2012, 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 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, and capital expenditures. 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 $324 million aggregate principal amount of 8.750% senior secured first lien notes due 2017 (the "Notes"), and less interest income. 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 the second quarter, we achieved revenue growth driven by increases in both our television and radio segments. Core revenue (excluding retransmission consent revenue and political advertising revenue) from our television and radio segments outperformed their respective industry averages, and we improved our free cash flow over the second quarter of 2012. 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."

Financial Results




Three-Month Period Ended June 30, 2013
Compared to Three-Month Period Ended

June 30, 2012

(Unaudited)


Three-Month Period

Ended June 30,

2013 2012 % Change
---- ---- --------

Net
revenue $56,950 $54,491 5%

Operating
expenses
(1) 33,412 32,511 3%

Corporate
expenses
(1) 4,736 4,181 13%

Depreciation
and
amortization 3,820 4,076 (6)%


Operating
income
(loss) 14,982 13,723 9%

Interest
expense,
net (7,872) (8,950) (12)%

Gain
(loss)
on
debt
extinguishment (130) (1,230) (89)%


Income
(loss)
before
income
taxes 6,980 3,543 97%


Income
tax
(expense)
benefit (1,907) (1,477) 29%
------ ------

Net
income
(loss) $5,073 $2,066 146%
====== ======


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


Net revenue increased to $57.0 million for the three-month period ended June 30, 2013 from $54.5 million for the three-month period ended June 30, 2012, an increase of $2.5 million. Of the overall increase, $2.2 million came from our television segment and was primarily attributable to increases in local and national advertising revenue, and retransmission consent revenue, partially offset by a decrease in political advertising revenue, which was not material in 2013. Additionally, $0.3 million of the overall increase came from our radio segment and was primarily attributable to an increase in local and national advertising revenue, partially offset by a decrease in political advertising revenue, which was not material in 2013.

Operating expenses increased to $33.4 million for the three-month period ended June 30, 2013 from $32.5 million for the three-month period ended June 30, 2012, an increase of $0.9 million. The increase was primarily attributable to an increase in expenses associated with the increase in net revenue and an increase in salary expense, partially offset by a decrease in bad debt expense.

Corporate expenses increased to $4.7 million for the three-month period ended June 30, 2013 from $4.2 million for the three-month period ended June 30, 2012, an increase of $0.5 million. The increase was primarily attributable to an increase in non-cash stock-based compensation expense.




Six-Month Period Ended June 30, 2013 Compared to
Six-Month Period Ended

June 30, 2012

(Unaudited)


Six-Month Period

Ended June 30,

2013 2012 % Change
---- ---- --------

Net
revenue $106,037 $101,015 5%

Operating
expenses
(1) 65,320 63,517 3%

Corporate
expenses
(1) 9,233 8,062 15%

Depreciation
and
amortization 7,775 8,423 (8)%


Operating
income
(loss) 23,709 21,013 13%

Interest
expense,
net (15,649) (18,046) (13)%

Gain
(loss)
on
debt
extinguishment (130) (1,230) (89)%


Income
(loss)
before
income
taxes 7,930 1,737 357%


Income
tax
(expense)
benefit (3,814) (3,066) 24%
------ ------

Net
income
(loss) $4,116 $(1,329) NM
====== =======


(1) Operating expenses and corporate expenses are
defined on page 1.
Net revenue increased to $106.0 million for the six-month period ended June 30, 2013 from $101.0 million for the six-month period ended June 30, 2012, an increase of $5.0 million. Of the overall increase, $4.0 million came from our television segment and was primarily attributable to increases in local and national advertising revenue, and retransmission consent revenue, partially offset by a decrease in political advertising revenue, which was not material in 2013. Additionally, $1.0 million of the overall increase came from our radio segment and was primarily attributable to increases in local and national advertising revenue, partially offset by a decrease in political advertising revenue, which was not material in 2013.

Operating expenses increased to $65.3 million for the six-month period ended June 30, 2013 from $63.5 million for the six-month period ended June 30, 2012, an increase of $1.8 million. The increase was primarily attributable to an increase in expenses associated with the increase in net revenue and an increase in salary expense, partially offset by a decrease in bad debt expense.

Corporate expenses increased to $9.2 million for the six-month period ended June 30, 2013 from $8.1 million for the six-month period ended June 30, 2012, an increase of $1.1 million. The increase was primarily attributable to an increase in non-cash stock-based compensation expense.

Segment Results

The following represents selected unaudited segment information:




Three-Month Period Six-Month Period

Ended June 30, Ended June 30,

2013 2012 % Change 2013 2012 % Change
---- ---- -------- ---- ---- --------

Net Revenue

Television $39,590 $37,399 6% $74,542 $70,563 6%

Radio 17,360 17,092 2% 31,495 30,452 3%

Total $56,950 $54,491 5% $106,037 $101,015 5%


Operating Expenses (1)

Television $19,573 $19,206 2% $38,487 $37,741 2%

Radio 13,839 13,305 4% 26,833 25,776 4%

Total $33,412 $32,511 3% $65,320 $63,517 3%


Corporate Expenses (1) $4,736 $4,181 13% $9,233 $8,062 15%


Consolidated adjusted EBITDA (1) $19,996 $18,257 10% $33,376 $29,881 12%



(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 2013 second quarter results on August 1, 2013 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 Latino 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 UniMas network, with television stations in 19 of the nation's top 50 Latino markets. The company owns and/or operates 56 primary television stations and also operates one of the nation's largest groups of primarily Spanish-language radio stations, consisting of 49 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 Latino 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 Balance Sheets

(In thousands)


June 30, December 31,

2013 2012
---- ----

(Unaudited)


ASSETS

Current assets

Cash and cash equivalents $41,066 $36,130

Trade receivables, net of allowance for doubtful accounts 52,417 48,030

Prepaid expenses and other current assets 4,473 4,245
-----------

Total current assets 97,956 88,405

Property and equipment, net 59,170 61,435

Intangible assets subject to amortization, net 21,080 22,349

Intangible assets not subject to amortization 220,701 220,701

Goodwill 36,647 36,647

Other assets 13,002 8,514
------ -----

Total assets $448,556 $438,051
======== ========



LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Current maturities of long-term debt $200 $150

Advances payable, related parties 118 118

Accounts payable and accrued expenses 37,824 39,158

Total current liabilities 38,142 39,426

Long-term debt, less current maturities (net of bond discount of $2,711 and $2,982) 340,835 340,664

Other long-term liabilities 6,934 7,359

Deferred income taxes 48,495 45,201
------

Total liabilities 434,406 432,650
------- -------


Stockholders' equity

Class A common stock 6 5

Class B common stock 2 2

Class U common stock 1 1

Additional paid-in capital 935,446 930,814

Accumulated deficit (921,305) (925,421)


Total stockholders' equity 14,150 5,401
------ -----

Total liabilities and
stockholders' equity $448,556 $438,051
======== ========





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,
-------------- --------------

2013 2012 2013 2012
---- ---- ---- ----





Net revenue $56,950 $54,491 $106,037 $101,015
------- ------- -------- --------


Expenses:

Direct operating expenses 25,988 22,876 50,213 44,510

Selling, general and administrative expenses 7,424 9,635 15,107 19,007

Corporate expenses 4,736 4,181 9,233 8,062

Depreciation and amortization 3,820 4,076 7,775 8,423

41,968 40,768 82,328 80,002
------ ------ ------ ------

Operating income (loss) 14,982 13,723 23,709 21,013

Interest expense (7,881) (8,959) (15,665) (18,059)

Interest income 9 9 16 13

Gain (loss) on debt extinguishment (130) (1,230) (130) (1,230)

Income (loss) before income
taxes 6,980 3,543 7,930 1,737

Income tax (expense) benefit (1,907) (1,477) (3,814) (3,066)
------ ------ ------ ------

Net income (loss) applicable to common stockholders $5,073 $2,066 $4,116 $(1,329)
====== ====== ====== =======


Basic and diluted earnings per share:

Net income (loss) per share applicable to common stockholders,

basic and diluted $0.06 $0.02 $0.05 $(0.02)
=================


Weighted average common shares outstanding, basic 87,074,952 85,837,846 86,768,686 85,821,963
========== ========== ========== ==========

Weighted average common shares outstanding, diluted 89,228,790 86,178,331 88,147,914 85,821,963
========== ========== ========== ==========






Entravision Communications Corporation

Consolidated Statements of Cash Flows

(In thousands; unaudited)


Three-Month Period Six-Month Period

Ended June 30, Ended June 30,
-------------- --------------

2013 2012 2013 2012
---- ---- ---- ----



Cash flows from operating activities:

Net income (loss) $5,073 $2,066 $4,116 $(1,329)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating
activities:

Depreciation and amortization 3,820 4,076 7,775 8,423

Deferred income taxes 1,452 1,299 3,294 2,405

Amortization of debt issue costs 575 574 1,030 1,137

Amortization of syndication contracts 151 188 302 381

Payments on syndication contracts (326) (467) (651) (934)

Non-cash stock-based compensation 1,369 737 2,241 998

(Gain) loss on debt extinguishment 130 1,230 130 1,230

Changes in assets and liabilities, net of effect of acquisitions and dispositions:

(Increase) decrease in accounts receivable (6,243) (7,040) (4,327) (3,771)

(Increase) decrease in prepaid expenses and other assets 374 467 (454) (177)

Increase (decrease) in accounts payable, accrued expenses and
other liabilities 8,055 9,541 (637) (1,998)

Net cash provided by (used in) operating
activities 14,430 12,671 12,819 6,365
------ ------ ------ -----

Cash flows from investing activities:

Purchases of property and equipment and intangibles (2,050) (2,483) (4,605) (3,647)

Net cash provided by (used in) investing
activities (2,050) (2,483) (4,605) (3,647)
------ ------ ------ ------

Cash flows from financing activities:

Proceeds from issuance of common stock 2,041 - 2,392 -

Payments on long-term debt (50) (20,600) (50) (20,600)

Payments of capitalized debt offering and issuance costs (5,620) - (5,620) (80)

Net cash provided by (used in) financing
activities (3,629) (20,600) (3,278) (20,680)
------ ------- ------ -------

Net increase (decrease) in cash and cash
equivalents 8,751 (10,412) 4,936 (17,962)

Cash and cash equivalents:

Beginning 32,315 51,169 36,130 58,719
------ ------ ------ ------

Ending $41,066 $40,757 $41,066 $40,757






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 Six-Month Period

Ended June 30, Ended June 30,

2013 2012 2013 2012
---- ---- ---- ----




Consolidated adjusted EBITDA (1) $19,996 $18,257 $33,376 $29,881


Interest expense (7,881) (8,959) (15,665) (18,059)

Interest income 9 9 16 13

Income tax (expense) benefit (1,907) (1,477) (3,814) (3,066)

Amortization of syndication contracts (151) (188) (302) (381)

Payments on syndication contracts 326 467 651 934

Non-cash stock-based compensation included in direct operating

expenses (295) (43) (479) (56)

Non-cash stock-based compensation included in selling, general

and administrative expenses - (215) - (324)

Non-cash stock-based compensation included in corporate expenses (1,074) (479) (1,762) (618)

Depreciation and amortization (3,820) (4,076) (7,775) (8,423)

Gain (loss) on debt extinguishment (130) (1,230) (130) (1,230)

Net income (loss) 5,073 2,066 4,116 (1,329)



Depreciation and amortization 3,820 4,076 7,775 8,423

Deferred income taxes 1,452 1,299 3,294 2,405

Amortization of debt issue costs 575 574 1,030 1,137

Amortization of syndication contracts 151 188 302 381

Payments on syndication contracts (326) (467) (651) (934)

Non-cash stock-based compensation 1,369 737 2,241 998

(Gain) loss on debt extinguishment 130 1,230 130 1,230

Changes in assets and liabilities, net of effect of acquisitions and dispositions:

(Increase) decrease in accounts receivable (6,243) (7,040) (4,327) (3,771)

(Increase) decrease in prepaid expenses and other assets 374 467 (454) (177)

Increase (decrease) in accounts payable, accrued expenses and
other liabilities 8,055 9,541 (637) (1,998)

Cash flows from operating activities $14,430 $12,671 $12,819 $6,365
======= ======= ======= ======


(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 Six-Month Period

Ended June 30, Ended June 30,

2013 2012 2013 2012
---- ---- ---- ----

Consolidated adjusted EBITDA (1) $19,996 $18,257 $33,376 $29,881

Net interest expense (1) 7,297 8,376 14,619 16,909

Cash paid for income taxes 455 178 520 661

Capital expenditures (2) 2,050 2,483 4,605 3,647

Free cash flow (1) 10,194 7,220 13,632 8,664


Capital expenditures (2) 2,050 2,483 4,605 3,647

Amortization of debt issue costs (575) (574) (1,030) (1,137)

Non-cash income tax expense (1,452) (1,299) (3,294) (2,405)

Amortization of syndication contracts (151) (188) (302) (381)

Payments on syndication contracts 326 467 651 934

Non-cash stock-based compensation included in direct operating

expenses (295) (43) (479) (56)

Non-cash stock-based compensation included in selling, general

and administrative expenses - (215) - (324)

Non-cash stock-based compensation included in corporate expenses (1,074) (479) (1,762) (618)

Depreciation and amortization (3,820) (4,076) (7,775) (8,423)

Gain (loss) on debt extinguishment (130) (1,230) (130) (1,230)

Net income (loss) $5,073 $2,066 $4,116 $(1,329)
====== ====== ====== =======


(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, 310-447-3870 or Mike Smargiassi/Brad Edwards, Brainerd Communicators, Inc., 212-986-6667

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


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