Entravision Communications Corporation Reports Third Quarter 2013 Results

Entravision Communications Corporation Reports Third Quarter 2013 Results

SANTA MONICA, Calif., Nov. 6, 2013 /PRNewswire/ -- Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three- and nine-month periods ended September 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 Nine-Month Period

Ended September 30, Ended September 30,

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

Net revenue $57,786 $58,486 (1)% $163,823 $159,501 3%

Operating expenses (1) 33,991 32,886 3% 99,311 96,403 3%

Corporate expenses (2) 5,011 4,465 12% 14,244 12,527 14%


Consolidated adjusted EBITDA (3) 19,864 21,640 (8)% 53,241 51,521 3%


Free cash flow (4) $11,919 $10,545 13% $25,552 $19,209 33%

Free cash flow per share, basic and
diluted (4) $0.14 $0.12 17% $0.29 $0.22 32%


Net income (loss) applicable to common
stockholders $(21,384) $7,233 NM $(17,268) $5,904 NM


Net income (loss) per share applicable

to common
stockholders,
basic and
diluted $(0.24) $0.08 NM $(0.20) $0.07 NM


Weighted average common shares
outstanding, basic 87,959,856 85,940,225 87,170,106 85,861,671

Weighted average common shares
outstanding, diluted 87,959,856 86,386,655 87,170,106 86,220,868


(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 September 30, 2013 and 2012, and $0.8 million and $0.6 million of non-cash stock-based compensation for the nine-
month periods ended September 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 $1.0 million and $0.5 million of non-cash stock-based compensation for the three-month periods ended September 30, 2013 and 2012,
respectively, and $2.7 million and $1.1 million of non-cash stock-based compensation for the nine-month periods ended September 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


(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 (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 third quarter, we recorded continued growth in core advertising revenue (excluding retransmission consent revenue and political advertising revenue) as both our television and radio segments outperformed their respective industry averages. Our improved core revenue performance was offset by decreased political revenue, which benefited from the presidential election last year, and was not material in 2013. As a result, net revenue was off modestly in the quarter; however, we improved our free cash flow over the third quarter of 2012 as we benefited from the successful refinancing of our debt. 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 September 30, 2013 Compared to Three-Month Period Ended
September 30, 2012
(Unaudited)


Three-Month Period

Ended September 30,

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

Net revenue $57,786 $58,486 (1)%

Operating
expenses (1) 33,991 32,886 3%

Corporate
expenses (1) 5,011 4,465 12%

Depreciation
and
amortization 3,613 4,013 (10)%


Operating
income (loss) 15,171 17,122 (11)%

Interest
expense, net (5,340) (8,661) (38)%

Gain (loss) on
debt
extinguishment (29,404) - NM


Income (loss)
before income
taxes (19,573) 8,461 NM


Income tax
(expense)
benefit (1,811) (1,228) 47%
------ ------

Net income
(loss) $(21,384) $7,233 NM
======== ======


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


Net revenue decreased to $57.8 million for the three-month period ended September 30, 2013 from $58.5 million for the three-month period ended September 30, 2012, a decrease of $0.7 million. Of the overall decrease, $1.2 million was generated by our television segment and was primarily attributable to a decrease in political advertising revenue, which was not material in 2013, partially offset by increases in local advertising revenue and retransmission consent revenue. This decrease was partially offset by a $0.5 million increase that was generated by our radio segment and was primarily attributable to an increase in local advertising revenue, partially offset by a decrease in political advertising revenue, which was not material in 2013.

Operating expenses increased to $34.0 million for the three-month period ended September 30, 2013 from $32.9 million for the three-month period ended September 30, 2012, an increase of $1.1 million. The increase was primarily attributable to an increase in salary expense and an increase in expenses associated with the increase in local advertising revenue.

Corporate expenses increased to $5.0 million for the three-month period ended September 30, 2013 from $4.5 million for the three-month period ended September 30, 2012, an increase of $0.5 million. The increase was primarily attributable to an increase in non-cash stock-based compensation expense.

During the three-month period ended September 30, 2013, we recorded a loss on debt extinguishment of $29.4 million related to the premium associated with the redemption of our Notes, the unamortized bond discount, and finance costs.




Nine-Month Period Ended September 30, 2013 Compared to Nine-Month
Period Ended
September 30, 2012
(Unaudited)


Nine-Month Period

Ended September 30,

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

Net revenue $163,823 $159,501 3%

Operating
expenses (1) 99,311 96,403 3%

Corporate
expenses (1) 14,244 12,527 14%

Depreciation
and
amortization 11,388 12,436 (8)%


Operating
income (loss) 38,880 38,135 2%

Interest
expense, net (20,989) (26,707) (21)%

Gain (loss) on
debt
extinguishment (29,534) (1,230) NM


Income (loss)
before income
taxes (11,643) 10,198 NM


Income tax
(expense)
benefit (5,625) (4,294) 31%
------ ------

Net income
(loss) $(17,268) $5,904 NM
======== ======


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


Net revenue increased to $163.8 million for the nine-month period ended September 30, 2013 from $159.5 million for the nine-month period ended September 30, 2012, an increase of $4.3 million. Of the overall increase, $2.8 million was generated by 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, $1.5 million of the overall increase was generated by 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 $99.3 million for the nine-month period ended September 30, 2013 from $96.4 million for the nine-month period ended September 30, 2012, an increase of $2.9 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 $14.2 million for the nine-month period ended September 30, 2013 from $12.5 million for the nine-month period ended September 30, 2012, an increase of $1.7 million. The increase was primarily attributable to an increase in non-cash stock-based compensation expense.

Loss on debt extinguishment increased to $29.5 million for the nine-month period ended September 30, 2013 from $1.2 million for the nine-month period ended September 30, 2012, an increase of $28.3 million. The increase was primarily attributable to the premium associated with the redemption of our Notes, the unamortized bond discount, and finance costs.


Segment Results


The following represents selected unaudited segment information:


Three-Month Period Nine-Month Period

Ended September 30, Ended September 30,

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

Net Revenue

Television $39,747 $40,903 (3)% $114,289 $111,466 3%

Radio 18,039 17,583 3% 49,534 48,035 3%

Total $57,786 $58,486 (1)% $163,823 $159,501 3%


Operating Expenses (1)

Television $20,032 $19,573 2% $58,519 $57,314 2%

Radio 13,959 13,313 5% 40,792 39,089 4%

Total $33,991 $32,886 3% $99,311 $96,403 3%


Corporate Expenses (1) $5,011 $4,465 12% $14,244 $12,527 14%


Consolidated adjusted EBITDA
(1) $19,864 $21,640 (8)% $53,241 $51,521 3%


(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 third quarter results on November 6, 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)


September 30, December 31,

2013 2012
---- ----

(Unaudited)


ASSETS

Current assets

Cash and cash
equivalents $53,546 $36,130

Trade
receivables,
net of
allowance for
doubtful
accounts 52,017 48,030

Prepaid expenses
and other
current assets 5,434 4,245
-------------

Total
current
assets 110,997 88,405

Property and equipment, net 59,589 61,435

Intangible assets subject to amortization,
net 20,446 22,349

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

Goodwill 36,647 36,647

Other assets 7,284 8,514
----- -----

Total
assets $455,664 $438,051
======== ========



LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Current
maturities of
long-term debt $3,750 $150

Advances
payable,
related parties 118 118

Accounts payable
and accrued
expenses 29,025 39,158

Total
current
liabilities 32,893 39,426

Long-term debt, less current maturities (net
of bond discount of $0 and $2,982) 371,250 340,664

Other long-term liabilities 6,874 7,359

Deferred income taxes 50,256 45,201
------

Total
liabilities 461,273 432,650
------- -------


Stockholders' equity (deficit)

Class A common
stock 6 5

Class B common
stock 2 2

Class U common
stock 1 1

Additional paid-
in capital 937,071 930,814

Accumulated
deficit (942,689) (925,421)


Total
stockholders'
equity
(deficit) (5,609) 5,401
------ -----

Total
liabilities
and
stockholders'
equity
(deficit) $455,664 $438,051
======== ========




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


Three-Month Period Nine-Month Period

Ended September 30, Ended September 30,
------------------- -------------------

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





Net revenue $57,786 $58,486 $163,823 $159,501
------- ------- -------- --------


Expenses:

Direct
operating
expenses 25,860 23,293 76,073 67,803

Selling,
general and
administrative
expenses 8,131 9,593 23,238 28,600

Corporate
expenses 5,011 4,465 14,244 12,527

Depreciation
and
amortization 3,613 4,013 11,388 12,436

42,615 41,364 124,943 121,366
------ ------ ------- -------

Operating
income
(loss) 15,171 17,122 38,880 38,135

Interest expense (5,352) (8,671) (21,017) (26,730)

Interest income 12 10 28 23

Gain (loss) on debt extinguishment (29,404) - (29,534) (1,230)

Income
(loss)
before
income
taxes (19,573) 8,461 (11,643) 10,198

Income tax (expense) benefit (1,811) (1,228) (5,625) (4,294)
------ ------ ------ ------

Net income (loss) applicable to common
stockholders $(21,384) $7,233 $(17,268) $5,904
======== ====== ======== ======


Basic and diluted earnings per share:

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

basic and
diluted $(0.24) $0.08 $(0.20) $0.07
==========


Weighted average common shares outstanding,
basic 87,959,856 85,940,225 87,170,106 85,861,671
========== ========== ========== ==========

Weighted average common shares outstanding,
diluted 87,959,856 86,386,655 87,170,106 86,220,868
========== ========== ========== ==========







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


Three-Month Period Nine-Month Period

Ended September 30, Ended September 30,
------------------- -------------------

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



Cash flows from operating activities:

Net income (loss) $(21,384) $7,233 $(17,268) $5,904

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

Depreciation and
amortization 3,613 4,013 11,388 12,436

Deferred income taxes 1,761 1,080 5,055 3,485

Amortization of debt issue
costs 408 569 1,438 1,706

Amortization of
syndication contracts 148 175 450 556

Payments on syndication
contracts (344) (435) (995) (1,369)

Non-cash stock-based
compensation 1,276 765 3,518 1,763

(Gain) loss on debt
extinguishment 29,404 - 29,534 1,230

Changes in assets and
liabilities:

(Increase)
decrease in
accounts
receivable 626 260 (3,701) (3,511)

(Increase)
decrease in
prepaid
expenses and
other assets (869) (879) (1,323) (1,056)

Increase
(decrease) in
accounts
payable,
accrued
expenses and
other
liabilities (9,473) (5,468) (10,111) (7,466)
-------------

Net cash
provided
by (used
in)
operating
activities 5,166 7,313 17,985 13,678
----- ----- ------ ------

Cash flows from investing activities:

Purchases of property
and equipment and
intangibles (2,963) (2,855) (7,568) (6,502)

Net cash
provided
by (used
in)
investing
activities (2,963) (2,855) (7,568) (6,502)
------ ------ ------ ------

Cash flows from financing activities:

Proceeds from issuance
of common stock 348 23 2,740 23

Payments on long-term debt (364,997) - (365,047) (20,600)

Proceeds from
borrowings on long-
term debt 375,000 - 375,000 -

Payments of
capitalized debt
offering and issuance
costs (74) - (5,694) (80)

Net cash
provided
by (used
in)
financing
activities 10,277 23 6,999 (20,657)
------ --- ----- -------

Net
increase
(decrease)
in cash
and cash
equivalents 12,480 4,481 17,416 (13,481)

Cash and cash equivalents:

Beginning 41,066 40,757 36,130 58,719
------ ------ ------ ------

Ending $53,546 $45,238 $53,546 $45,238





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 Nine-Month Period

Ended September 30, Ended September 30,

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




Consolidated adjusted EBITDA (1) $19,864 $21,640 $53,241 $51,521


Interest expense (5,352) (8,671) (21,017) (26,730)

Interest income 12 10 28 23

Income tax (expense) benefit (1,811) (1,228) (5,625) (4,294)

Amortization of syndication contracts (148) (175) (450) (556)

Payments on syndication contracts 344 435 995 1,369

Non-cash stock-based compensation
included in direct operating

expenses (297) (45) (776) (101)

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

and
administrative
expenses - (222) - (546)

Non-cash stock-based compensation
included in corporate expenses (979) (498) (2,742) (1,116)

Depreciation and amortization (3,613) (4,013) (11,388) (12,436)

Gain (loss) on debt extinguishment (29,404) - (29,534) (1,230)

Net income (loss) (21,384) 7,233 (17,268) 5,904



Depreciation and amortization 3,613 4,013 11,388 12,436

Deferred income taxes 1,761 1,080 5,055 3,485

Amortization of debt issue costs 408 569 1,438 1,706

Amortization of syndication contracts 148 175 450 556

Payments on syndication contracts (344) (435) (995) (1,369)

Non-cash stock-based compensation 1,276 765 3,518 1,763

(Gain) loss on debt extinguishment 29,404 - 29,534 1,230

Changes in assets and liabilities:

(Increase)
decrease in
accounts
receivable 626 260 (3,701) (3,511)

(Increase)
decrease in
prepaid
expenses and
other assets (869) (879) (1,323) (1,056)

Increase
(decrease)
in accounts
payable,
accrued
expenses and
other
liabilities (9,473) (5,468) (10,111) (7,466)

Cash flows from operating activities $5,166 $7,313 $17,985 $13,678
====== ====== ======= =======


(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 Nine-Month Period

Ended September 30, Ended September 30,

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

Consolidated adjusted EBITDA (1) $19,864 $21,640 $53,241 $51,521

Net interest expense (1) 4,932 8,092 19,551 25,001

Cash paid for income taxes 50 148 570 809

Capital expenditures (2) 2,963 2,855 7,568 6,502

Free cash flow (1) 11,919 10,545 25,552 19,209


Capital expenditures (2) 2,963 2,855 7,568 6,502

Amortization of debt issue costs (408) (569) (1,438) (1,706)

Non-cash income tax expense (1,761) (1,080) (5,055) (3,485)

Amortization of syndication contracts (148) (175) (450) (556)

Payments on syndication contracts 344 435 995 1,369

Non-cash stock-based compensation included in direct operating

expenses (297) (45) (776) (101)

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

and administrative
expenses - (222) - (546)

Non-cash stock-based compensation included in corporate expenses (979) (498) (2,742) (1,116)

Depreciation and amortization (3,613) (4,013) (11,388) (12,436)

Gain (loss) on debt extinguishment (29,404) - (29,534) (1,230)

Net income (loss) $(21,384) $7,233 $(17,268) $5,904
======== ====== ======== ======


(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; Mike Smargiassi/Brad Edwards, Brainerd Communicators, Inc., 212-986-6667

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


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