Entravision Communications Corporation Reports Second Quarter 2014 Results

Entravision Communications Corporation Reports Second Quarter 2014 Results

- Second Quarter 2014 Net Revenue and Consolidated Adjusted EBITDA Increase 9% and 11% Respectively -

- Free Cash Flow Increases 63% -

- Announces Quarterly Cash Dividend of $0.025 Per Share -

SANTA MONICA, Calif., Aug. 6, 2014 /PRNewswire/ -- Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three- and six-month periods ended June 30, 2014.

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 9. Unaudited financial highlights are as follows:




Three-Month Period Six-Month Period

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

2014 2013 % Change 2014 2013 % Change
---- ---- -------- ---- ---- --------

Net revenue $61,846 $56,950 9% $114,502 $106,037 8%

Operating expenses (1) 35,001 33,412 5% 68,508 65,320 5%

Corporate expenses (2) 5,261 4,736 11% 10,097 9,233 9%


Consolidated adjusted EBITDA (3) 22,147 19,996 11% 37,132 33,376 11%


Free cash flow (4) $16,667 $10,194 63% $26,020 $13,632 91%

Free cash flow per share, basic (4) $0.19 $0.12 58% $0.29 $0.16 81%

Free cash flow per share, diluted (4) $0.18 $0.11 64% $0.29 $0.15 93%


Net income (loss) $8,735 $5,073 72% $13,123 $4,116 219%


Net income (loss) per share, basic $0.10 $0.06 67% $0.15 $0.05 200%

Net income (loss) per share, diluted $0.10 $0.06 67% $0.14 $0.05 180%


Weighted average common shares outstanding, 89,276,794 87,074,952 88,982,009 86,768,686
basic

Weighted average common shares outstanding, 91,202,732 89,228,790 91,074,937 88,147,914
diluted


(1) Operating expenses include direct
operating, selling, general and
administrative expenses. Included in
operating expenses are $0.1 million
and $0.3 million of non-cash stock-
based compensation for the three-
month periods ended June 30, 2014 and
2013, respectively, and $0.2 million
and $0.5 million of non-cash stock-
based compensation for the six-month
periods ended June 30, 2014 and 2013,
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 $0.5 million
and $1.1 million of non-cash stock-
based compensation for the three-
month periods ended June 30, 2014 and
2013, respectively, and $1.1 million
and $1.8 million of non-cash stock-
based compensation for the six-month
periods ended June 30, 2014 and 2013,
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 (the "Notes"), which were
fully redeemed on August 2, 2013, 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 continued growth in core advertising revenue (excluding retransmission consent revenue and political advertising revenue) as our television segment again outperformed the television broadcast industry, reflecting the contributions from our broadcast of the World Cup. Our radio operations also produced revenue growth that we believe will be among the best in the industry. Continuing the trend of the last several years, we also experienced an increase in retransmission consent revenue. We also improved our free cash flow and net income over the second quarter of 2013 as we benefited from the successful refinancing of our debt last August. We have continued to build our digital footprint and marketing solutions capabilities, which provide us with an integrated platform to allow advertisers and marketers to connect with Latino audiences. Looking ahead, we remain well positioned to build on our success in attracting Latino audiences, expanding our advertiser base and monetizing our reach to the benefit of our shareholders."

Announces Quarterly Cash Dividend

The Company announced today that its Board of Directors has approved a quarterly cash dividend to shareholders of $0.025 per share of the Company's Class A, Class B and Class U common stock, in an aggregate amount of approximately $2.2 million. The quarterly dividend will be payable on September 30, 2014 to shareholders of record as of the close of business on September 15, 2014, and the common stock will trade ex-dividend on September 11, 2014. As previously announced, the Company currently anticipates that future cash dividends will be paid on a quarterly basis. Any decision to pay future cash dividends will be subject to further approval by the Board.

Acquisition of Pulpo Media, Inc.

On June 18, 2014, we completed the acquisition of 100% of the common shares of Pulpo Media, Inc., a leading provider of digital advertising services and solutions focused on Hispanics in the U.S. and Latin America. The transaction was funded from our cash on hand, for an aggregate cash consideration of $15.0 million, net of cash acquired of $0.7 million, and contingent consideration with a fair value of $1.4 million as of the acquisition date.




Financial Results



Three-Month Period Ended June 30, 2014 Compared to Three-Month Period Ended

June 30, 2013

(Unaudited)


Three-Month Period

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

2014 2013 % Change
---- ---- --------

Net revenue $61,846 $56,950 9%

Operating expenses (1) 35,001 33,412 5%

Corporate expenses (1) 5,261 4,736 11%

Depreciation and amortization 3,503 3,820 (8)%
----- -----


Operating income (loss) 18,081 14,982 21%

Interest expense, net (3,456) (7,872) (56)%

Gain (loss) on debt extinguishment - (130) (100)%
--- ----


Income (loss) before income taxes 14,625 6,980 110%


Income tax (expense) benefit (5,890) (1,907) 209%
------ ------

Net income (loss) $8,735 $5,073 72%
====== ======


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


Net revenue increased to $61.8 million for the three-month period ended June 30, 2014 from $57.0 million for the three-month period ended June 30, 2013, an increase of $4.8 million. Of the overall increase, approximately $3.5 million was generated by our television segment and was primarily attributable to advertising revenue from the World Cup, and an increase in retransmission consent revenue. Additionally, $1.3 million of the overall increase was generated by our radio segment and was primarily attributable to advertising revenue from the World Cup.

Operating expenses increased to $35.0 million for the three-month period ended June 30, 2014 from $33.4 million for the three-month period ended June 30, 2013, an increase of $1.6 million. The increase was primarily attributable to an increase in salary expense and an increase in employee benefits costs and payroll taxes associated with the increase in salary expense.

Corporate expenses increased to $5.3 million for the three-month period ended June 30, 2014 from $4.7 million for the three-month period ended June 30, 2013, an increase of $0.6 million. The increase was primarily attributable to fees associated with the acquisition of Pulpo Media, an increase in salary expense and digital media-related expenses, partially offset by a decrease in non-cash stock-based compensation.




Six-Month Period Ended June 30, 2014 Compared to Six-Month Period Ended

June 30, 2013

(Unaudited)


Six-Month Period

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

2014 2013 % Change
---- ---- --------

Net revenue $114,502 $106,037 8%

Operating expenses (1) 68,508 65,320 5%

Corporate expenses (1) 10,097 9,233 9%

Depreciation and amortization 7,018 7,775 (10)%
----- -----


Operating income (loss) 28,879 23,709 22%

Interest expense, net (6,882) (15,649) (56)%

Gain (loss) on debt extinguishment - (130) (100)%
--- ----


Income (loss) before income taxes 21,997 7,930 177%


Income tax (expense) benefit (8,874) (3,814) 133%
------ ------

Net income (loss) $13,123 $4,116 219%
======= ======


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


Net revenue increased to $114.5 million for the six-month period ended June 30, 2014 from $106.0 million for the six-month period ended June 30, 2013, an increase of $8.5 million. Of the overall increase, approximately $6.4 million was generated by our television segment and was primarily attributable to advertising revenue from the World Cup, and an increase in retransmission consent revenue. Additionally, $2.1 million of the overall increase was generated by our radio segment and was primarily attributable to advertising revenue from the World Cup and an increase in national advertising revenue.

Operating expenses increased to $68.5 million for the six-month period ended June 30, 2014 from $65.3 million for the six-month period ended June 30, 2013, an increase of $3.2 million. The increase was primarily attributable to an increase in salary expense and an increase in employee benefits costs and payroll taxes associated with the increase in salary expense.

Corporate expenses increased to $10.1 million for the six-month period ended June 30, 2014 from $9.2 million for the six-month period ended June 30, 2013, an increase of $0.9 million. The increase was primarily attributable to fees associated with the acquisition of Pulpo Media, an increase in salary expense and digital media-related expenses, partially offset by a decrease in non-cash stock-based compensation.

Segment Results

The following represents selected unaudited segment information:




Three-Month Period Six-Month Period

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

2014 2013 % Change 2014 2013 % Change
---- ---- -------- ---- ---- --------

Net Revenue

Television $43,151 $39,590 9% $80,892 $74,542 9%

Radio 18,695 17,360 8% 33,610 31,495 7%
------ ------ ------ ------

Total $61,846 $56,950 9% $114,502 $106,037 8%


Operating Expenses (1)

Television $20,186 $19,573 3% $39,637 $38,487 3%

Radio 14,815 13,839 7% 28,871 26,833 8%
------ ------ ------ ------

Total $35,001 $33,412 5% $68,508 $65,320 5%


Corporate Expenses (1) $5,261 $4,736 11% $10,097 $9,233 9%


Consolidated adjusted EBITDA (1) $22,147 $19,996 11% $37,132 $33,376 11%


(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 2014 second quarter results on August 6, 2014 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 with an integrated platform of solutions and services that includes television, radio, digital media and data analytics to reach Latino audiences across the United States and Latin America. Entravision has 58 primary television stations, including in 20 of the nation's top 50 Latino markets, and is the largest affiliate group of both the top-ranked Univision television network and Univision's UniMas network. Entravision also operates one of the nation's largest groups of primarily Spanish-language radio stations, consisting of 49 owned and operated radio stations, and Entravision Solutions, a national sales representation and marketing organization specializing in Spanish-language media platforms and radio networks. Entravision also offers a variety of digital media platforms and services, including digital content, digital advertising platforms, including the #1-ranked online advertising platform in Hispanic reach, and data analytics solutions designed to maximize the opportunity for advertisers and marketers to connect with the growing Latino consumer market. 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; unaudited)


June 30, December 31,

2014 2013
---- ----


ASSETS

Current assets

Cash and cash equivalents $39,817 $43,822

Trade receivables, net of allowance for doubtful
accounts 62,581 57,043

Deferred income taxes 6,100 6,100

Prepaid expenses and other current assets 5,079 4,087
----- -----

Total current assets 113,577 111,052

Property and equipment, net 57,877 58,765

Intangible assets subject to amortization, net 22,161 19,812

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

Goodwill 50,631 36,647

Deferred income taxes 75,472 83,856

Other assets 6,533 7,404
----- -----

Total assets $546,952 $538,237
======== ========


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

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

Advances payable, related parties 118 118

Accounts payable and accrued expenses 28,950 31,246
------ ------

Total current liabilities 32,818 35,114

Long-term debt, less current maturities 358,438 360,313

Other long-term liabilities 9,741 6,786
----- -----

Total liabilities 400,997 402,213
------- -------


Stockholders' equity (deficit)

Class A common stock 6 6

Class B common stock 2 2

Class U common stock 1 1

Additional paid-in capital 925,955 927,377

Accumulated deficit (778,473) (791,596)

Accumulated other comprehensive income (loss) (1,536) 234
------ ---

Total stockholders' equity (deficit) 145,955 136,024
------- -------

Total liabilities and stockholders' equity
(deficit) $546,952 $538,237
======== ========





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

2014 2013 2014 2013
---- ---- ----

Net revenue $61,846 $56,950 $114,502 $106,037
------- ------- -------- --------


Expenses:

Direct operating expenses 26,753 25,988 51,629 50,213

Selling, general and administrative expenses 8,248 7,424 16,879 15,107

Corporate expenses 5,261 4,736 10,097 9,233

Depreciation and amortization 3,503 3,820 7,018 7,775
----- ----- ----- -----

43,765 41,968 85,623 82,328
------ ------ ------ ------

Operating income (loss) 18,081 14,982 28,879 23,709

Interest expense (3,469) (7,881) (6,907) (15,665)

Interest income 13 9 25 16

Gain (loss) on debt extinguishment - (130) - (130)
--- ---- --- ----

Income (loss) before income taxes 14,625 6,980 21,997 7,930

Income tax (expense) benefit (5,890) (1,907) (8,874) (3,814)
------ ------ ------ ------

Net income (loss) $8,735 $5,073 $13,123 $4,116
====== ====== ======= ======


Basic and diluted earnings per share:

Net income (loss) per share, basic $0.10 $0.06 $0.15 $0.05
===== ===== ===== =====

Net income (loss) per share, diluted $0.10 $0.06 $0.14 $0.05
===== ===== ===== =====


Cash dividends declared per common share $0.03 - $0.05 -
===== === ===== ===


Weighted average common shares outstanding, basic 89,276,794 87,074,952 88,982,009 86,768,686
========== ========== ========== ==========

Weighted average common shares outstanding, diluted 91,202,732 89,228,790 91,074,937 88,147,914
========== ========== ========== ==========





Entravision Communications Corporation

Consolidated Statements of Cash Flows

(In thousands; unaudited)


Three-Month Period Six-Month Period

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

2014 2013 2014 2013
---- ---- ---- ----


Cash flows from operating activities:

Net income (loss) $8,735 $5,073 $13,123 $4,116

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

Depreciation and amortization 3,503 3,820 7,018 7,775

Deferred income taxes 5,796 1,452 8,291 3,294

Amortization of debt issue costs 203 575 404 1,030

Amortization of syndication contracts 122 151 244 302

Payments on syndication contracts (154) (326) (312) (651)

Non-cash stock-based compensation 595 1,369 1,303 2,241

(Gain) loss on debt extinguishment - 130 - 130

Changes in assets and liabilities:

(Increase) decrease in accounts receivable (7,142) (6,243) (3,632) (4,327)

(Increase) decrease in prepaid expenses and other assets (268) 374 (1,261) (454)

Increase (decrease) in accounts payable, accrued expenses 1,557 8,055 (5,484) (637)
and other liabilities


Net cash provided by (used in) operating 12,947 14,430 19,694 12,819
activities


Cash flows from investing activities:

Purchases of property and equipment and intangibles (2,133) (2,050) (4,051) (4,605)

Purchase of a business, net of cash acquired (15,048) - (15,048) -
------- --- ------- ---

Net cash provided by (used in) investing (17,181) (2,050) (19,099) (4,605)
activities


Cash flows from financing activities:

Proceeds from stock option exercises 103 2,041 1,739 2,392

Payments on long-term debt (937) (50) (1,875) (50)

Dividends paid (2,240) - (4,464) -

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

Net cash provided by (used in) financing (3,074) (3,629) (4,600) (3,278)
activities


Net increase (decrease) in cash and cash (7,308) 8,751 (4,005) 4,936
equivalents

Cash and cash equivalents:

Beginning 47,125 32,315 43,822 36,130
------ ------ ------ ------

Ending $39,817 $41,066 $39,817 $41,066
======= ======= ======= =======







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

2014 2013 2014 2013
---- ---- ---- ----


Consolidated adjusted EBITDA (1) $22,147 $19,996 $37,132 $33,376


Interest expense (3,469) (7,881) (6,907) (15,665)

Interest income 13 9 25 16

Income tax (expense) benefit (5,890) (1,907) (8,874) (3,814)

Amortization of syndication contracts (122) (151) (244) (302)

Payments on syndication contracts 154 326 312 651

Non-cash stock-based compensation included in direct operating expenses (127) (295) (217) (479)

Non-cash stock-based compensation included in corporate expenses (468) (1,074) (1,086) (1,762)

Depreciation and amortization (3,503) (3,820) (7,018) (7,775)

Gain (loss) on debt extinguishment - (130) - (130)
--- ---- --- ----

Net income (loss) 8,735 5,073 13,123 4,116


Depreciation and amortization 3,503 3,820 7,018 7,775

Deferred income taxes 5,796 1,452 8,291 3,294

Amortization of debt issue costs 203 575 404 1,030

Amortization of syndication contracts 122 151 244 302

Payments on syndication contracts (154) (326) (312) (651)

Non-cash stock-based compensation 595 1,369 1,303 2,241

(Gain) loss on debt extinguishment - 130 - 130

Changes in assets and liabilities:

(Increase) decrease in accounts receivable (7,142) (6,243) (3,632) (4,327)

(Increase) decrease in prepaid expenses and other assets (268) 374 (1,261) (454)

Increase (decrease) in accounts payable, accrued expenses and other 1,557 8,055 (5,484) (637)
liabilities


Cash flows from operating activities $12,947 $14,430 $19,694 $12,819
======= ======= ======= =======


(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,
-------------- --------------

2014 2013 2014 2013
---- ---- ---- ----

Consolidated adjusted EBITDA (1) $22,147 $19,996 $37,132 $33,376

Net interest expense (1) 3,253 7,297 6,478 14,619

Cash paid for income taxes 94 455 583 520

Capital expenditures (2) 2,133 2,050 4,051 4,605
----- ----- ----- -----

Free cash flow (1) 16,667 10,194 26,020 13,632


Capital expenditures (2) 2,133 2,050 4,051 4,605

Amortization of debt issue costs (203) (575) (404) (1,030)

Non-cash income tax expense (5,796) (1,452) (8,291) (3,294)

Amortization of syndication contracts (122) (151) (244) (302)

Payments on syndication contracts 154 326 312 651

Non-cash stock-based compensation included in direct operating expenses (127) (295) (217) (479)

Non-cash stock-based compensation included in corporate expenses (468) (1,074) (1,086) (1,762)

Depreciation and amortization (3,503) (3,820) (7,018) (7,775)

Gain (loss) on debt extinguishment - (130) - (130)
--- ---- --- ----

Net income (loss) $8,735 $5,073 $13,123 $4,116
====== ====== ======= ======


(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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