Entravision Communications Corporation Reports First Quarter 2016 Results

Entravision Communications Corporation Reports First Quarter 2016 Results

- Announces Quarterly Cash Dividend of $0.03125 Per Share -

SANTA MONICA, Calif., May 5, 2016 /PRNewswire/ -- Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three-month period ended March 31, 2016.

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

Ended March 31,
---------------

2016 2015 % Change
---- ---- --------

Net revenue $58,113 $59,550 (2)%

Cost of revenue - digital media (1) 1,839 1,360 35%

Operating expenses (2) 39,000 37,186 5%

Corporate expenses (3) 5,604 4,993 12%


Consolidated adjusted EBITDA (4) 12,611 16,842 (25)%


Free cash flow (5) $6,558 $10,258 (36)%

Free cash flow per share, basic (5) $0.07 $0.12 (42)%

Free cash flow per share, diluted (5) $0.07 $0.11 (36)%


Net income $2,270 $5,284 (57)%


Net income per share, basic $0.03 $0.06 (50)%

Net income per share, diluted $0.02 $0.06 (67)%


Weighted average common shares outstanding, basic 88,897,456 87,531,375

Weighted average common shares outstanding, diluted 90,932,109 90,085,961



(1) Cost of revenue consists primarily of
the costs of online media acquired
from third-party publishers. Media
cost is classified as cost of revenue
in the period in which the
corresponding revenue is recognized.


(2) Operating expenses include direct
operating, selling, general and
administrative expenses. Included in
operating expenses are $0.3 million
and $0.4 million of non-cash stock-
based compensation for the three-
month periods ended March 31, 2016 and
2015, 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).


(3) Corporate expenses include $0.6 million
and $0.5 million of non-cash stock-
based compensation for the three-
month periods ended March 31, 2016 and
2015, respectively.


(4) 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.


(5) 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,
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 first quarter, we achieved revenue growth in our radio and digital media segments, as well as an increase in core television advertising revenue (excluding retransmission consent revenue and political advertising revenue). Nonetheless, our improved core television advertising revenue performance was offset by the loss of non-advertising revenue associated with a telecommunications operator. As a result, net revenue was lower in the quarter. We also continued to build our digital footprint through Pulpo Media, which provides 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."

Quarterly Cash Dividend
The Company announced today that its Board of Directors has approved a quarterly cash dividend to shareholders of $0.03125 per share of the Company's Class A, Class B and Class U common stock, in an aggregate amount of approximately $2.8 million. The quarterly dividend will be payable on June 30, 2016 to shareholders of record as of the close of business on June 15, 2016, and the common stock will trade ex-dividend on June 13, 2016. As previously announced, the Company currently anticipates that future cash dividends will be paid on a quarterly basis. However any decision to pay future cash dividends will be subject to approval by the Board.




Financial Results




Three-Month Period Ended March 31, 2016 Compared to Three-Month Period Ended

March 31, 2015

(Unaudited)




Three-Month Period

Ended March 31,
---------------

2016 2015 % Change
---- ---- --------

Net revenue $58,113 $59,550 (2)%

Cost of revenue - digital media (1) 1,839 1,360 35%

Operating expenses (1) 39,000 37,186 5%

Corporate expenses (1) 5,604 4,993 12%

Depreciation and amortization 4,027 3,962 2%


Operating income 7,643 12,049 (37)%

Interest expense, net (3,859) (3,219) 20%


Income before income taxes 3,784 8,830 (57)%


Income tax (expense) benefit (1,514) (3,546) (57)%
------ ------

Net income $2,270 $5,284 (57)%
====== ======



(1) Cost of revenue, operating
expenses and corporate
expenses are defined on
page 1.
Net revenue decreased to $58.1 million for the three-month period ended March 31, 2016 from $59.6 million for the three-month period ended March 31, 2015, a decrease of $1.5 million. Of the overall decrease, approximately $2.9 million was attributed to our television segment and was primarily attributable to approximately $5.0 million of revenue associated with television station channel modifications made by the Company in order to accommodate the operations of a telecommunications operator included in the first quarter of 2015, and which revenue did not recur in the first quarter of 2016. This decrease was partially offset by an increase in national advertising revenue, an increase in political advertising revenue, which was not material in 2015, and an increase in retransmission consent revenue. The overall decrease in net revenue was partially offset by an increase of approximately $0.6 million that was attributed to our radio segment and was primarily attributable to increases in local and national advertising, and an increase in political advertising revenue, which was not material in 2015. Additionally, the overall decrease in net revenue was partially offset by an increase of approximately $1.0 million that was attributed to our digital segment and was primarily attributable to increases in national and local advertising revenue.

Cost of revenue increased to $1.8 million for the three-month period ended March 31, 2016 from $1.4 million for the three-month period ended March 31, 2015, an increase of $0.4 million, due to increased online media costs associated with the increase in net revenue of our digital segment.

Operating expenses increased to $39.0 million for the three-month period ended March 31, 2016 from $37.2 million for the three-month period ended March 31, 2015, an increase of $1.8 million. The increase was primarily attributable to expenses associated with the increase in advertising revenue, and increases in salary expense, rent expense and promotional expenses.

Corporate expenses increased to $5.6 million for the three-month period ended March 31, 2016 from $5.0 million for the three-month period ended March 31, 2015, an increase of $0.6 million. The increase was primarily attributable to increases in salary expense and non-cash stock-based compensation expense.

Segment Results


The following represents selected unaudited segment information:


Three-Month Period

Ended March 31,
---------------

2016 2015 % Change
---- ---- --------

Net Revenue

Television $36,565 $39,502 (7)%

Radio 16,884 16,345 3%

Digital 4,664 3,703 26%
----- -----

Total $58,113 $59,550 (2)%


Cost of Revenue - digital media (1)

Digital $1,839 $1,360 35%


Operating Expenses (1)

Television $20,480 $19,734 4%

Radio 15,829 14,712 8%

Digital 2,691 2,740 (2)%
----- -----

Total $39,000 $37,186 5%


Corporate Expenses (1) $5,604 $4,993 12%


Consolidated adjusted EBITDA (1) $12,611 $16,842 (25)%



(1) Cost of revenue, operating
expenses, corporate expenses,
and consolidated adjusted
EBITDA are defined on page 1.
Entravision Communications Corporation will hold a conference call to discuss its 2016 first quarter results on May 5, 2016 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 leading media company that reaches and engages U.S. Latinos across acculturation levels and media channels, as well as consumers in Mexico. The company's comprehensive portfolio incorporates integrated media and marketing solutions comprised of acclaimed television, radio, digital properties, events, and data analytics services. Entravision has 56 primary television stations and is the largest affiliate group of both the Univision and UniMás television networks. Entravison also owns and operates 49 primarily Spanish-language radio stations featuring nationally recognized talent, as well as the Entravision Audio Network and Entravision Solutions, a coast-to-coast national spot and network sales and marketing organization representing Entravision's owned and operated, as well as its affiliate partner, radio stations. According to comScore Media Metrix®, Entravision's digital operating group, Pulpo, is the #1-ranked online advertising platform in Hispanic reach, and Pulpo's comprehensive media offering, data, and consumer insights lead the industry. 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)




March 31, December 31,

2016 2015
---- ----



ASSETS

Current assets

Cash and cash equivalents $22,991 $47,924

Short-term investments 30,000 -

Trade receivables, net of allowance for doubtful accounts 60,709 66,399

Prepaid expenses and other current assets 6,000 5,705
----- -----

Total current assets 119,700 120,028

Property and equipment, net 56,963 57,874

Intangible assets subject to amortization, net 15,774 16,656

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

Goodwill 50,081 50,081

Deferred income taxes 57,060 57,929

Other assets 1,611 1,693
----- -----

Total assets $521,890 $524,962
======== ========



LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

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

Accounts payable and accrued expenses 26,271 29,787
------ ------

Total current liabilities 30,021 33,537

Long-term debt, less current maturities, net of unamortized debt issuance costs 308,821 309,587

Other long-term liabilities 15,572 14,565

Total liabilities 354,414 357,689
------- -------


Stockholders' equity

Class A common stock 6 6

Class B common stock 2 2

Class U common stock 1 1

Additional paid-in capital 908,792 910,228

Accumulated deficit (736,579) (738,849)

Accumulated other comprehensive income (loss) (4,746) (4,115)
------ ------

Total stockholders' equity 167,476 167,273
------- -------

Total liabilities and stockholders' equity $521,890 $524,962
======== ========










Entravision Communications Corporation

Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)



Three-Month Period

Ended March 31,
---------------

2016 2015
---- ----


Net
revenue $58,113 $59,550
------- -------


Expenses:

Cost of revenue -
digital media 1,839 1,360

Direct operating
expenses 27,565 26,685

Selling, general and
administrative
expenses 11,435 10,501

Corporate expenses 5,604 4,993

Depreciation and
amortization 4,027 3,962

50,470 47,501
------ ------

Operating income 7,643 12,049

Interest expense (3,866) (3,227)

Interest income 7 8

Income before income
taxes 3,784 8,830

Income tax (expense)
benefit (1,514) (3,546)
------ ------

Net income $2,270 $5,284
====== ======


Basic and diluted
earnings per share:

Net income
per
share,
basic $0.03 $0.06
===== =====

Net income
(loss)
per
share,
diluted $0.02 $0.06
===== =====


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


Weighted average
common shares
outstanding, basic 88,897,456 87,531,375
========== ==========

Weighted average
common shares
outstanding, diluted 90,932,109 90,085,961
========== ==========







Entravision Communications Corporation

Consolidated Statements of Cash Flows

(In thousands; unaudited)



Three-Month Period

Ended March 31,
---------------

2016 2015
---- ----


Cash flows from operating activities:

Net income $2,270 $5,284

Adjustments to reconcile net income to net cash provided
by

operating activities:

Depreciation and amortization 4,027 3,962

Deferred income taxes 1,264 2,959

Amortization of debt issue costs 191 194

Amortization of syndication contracts 89 86

Payments on syndication contracts (94) (122)

Non-cash stock-based compensation 946 867

Changes in assets and liabilities:

(Increase) decrease in accounts receivable 5,800 15,976

(Increase) decrease in prepaid expenses and other assets (378) (561)

Increase (decrease) in accounts payable, accrued expenses
and other liabilities (3,594) (3,840)

Net cash provided by operating activities 10,521 24,805
------ ------

Cash flows from investing activities:

Purchases of short-term investments (30,000) -

Purchases of property and equipment and intangibles (2,135) (2,972)

Net cash used in investing activities (32,135) (2,972)
------- ------

Cash flows from financing activities:

Proceeds from stock option exercises 400 900

Payments on long-term debt (938) (938)

Dividends paid (2,781) (2,191)

Payment of contingent consideration - (1,000)
--- ------

Net cash used in financing activities (3,319) (3,229)
------ ------

Net increase (decrease) in cash and cash equivalents (24,933) 18,604

Cash and cash equivalents:

Beginning 47,924 31,260
------ ------

Ending $22,991 $49,864
======= =======







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

Ended March 31,
---------------

2016 2015
---- ----


Consolidated adjusted EBITDA (1) $12,611 $16,842

Interest expense (3,866) (3,227)

Interest income 7 8

Income tax (expense) benefit (1,514) (3,546)

Amortization of syndication contracts (89) (86)

Payments on syndication contracts 94 122

Non-cash stock-based compensation included in direct operating (321) (358)

expenses

Non-cash stock-based compensation included in corporate expenses (625) (509)

Depreciation and amortization (4,027) (3,962)

Net income 2,270 5,284

Depreciation and amortization 4,027 3,962

Deferred income taxes 1,264 2,959

Amortization of debt issue costs 191 194

Amortization of syndication contracts 89 86

Payments on syndication contracts (94) (122)

Non-cash stock-based compensation 946 867

Changes in assets and liabilities:

(Increase) decrease in accounts receivable 5,800 15,976

(Increase) decrease in prepaid expenses and other assets (378) (561)

Increase (decrease) in accounts payable, accrued expenses and other liabilities (3,594) (3,840)

Cash flows from operating activities $10,521 $24,805
======= =======



(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

Ended March 31,
---------------

2016 2015
---- ----

Consolidated
adjusted EBITDA
(1) $12,611 $16,842

Net interest expense (1) 3,668 3,025

Cash paid for income taxes 250 587

Capital expenditures (2) 2,135 2,972
----- -----

Free cash flow (1) 6,558 10,258


Capital expenditures (2) 2,135 2,972

Amortization of debt issue
costs (191) (194)

Non-cash income tax expense (1,264) (2,959)

Amortization of syndication
contracts (89) (86)

Payments on syndication
contracts 94 122

Non-cash stock-based
compensation included in
direct operating (321) (358)

expenses

Non-cash stock-based
compensation included in
corporate expenses (625) (509)

Depreciation and amortization (4,027) (3,962)

Net income $2,270 $5,284
====== ======



(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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