Entravision Communications Corporation Reports Fourth Quarter And Full Year 2012 Results
SANTA MONICA, Calif., Feb. 27, 2013 /PRNewswire/ — Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three- and twelve-month periods ended December 31, 2012.
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 7. Unaudited financial highlights are as follows:
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 % Change 2012 2011 % Change
---- ---- -------- ---- ---- --------
Net revenue $63,752 $49,972 28% $223,253 $194,396 15%
Operating expenses (1) 33,671 32,061 5% 130,074 125,101 4%
Corporate expenses (2) 5,449 4,267 28% 17,976 15,669 15%
Consolidated adjusted EBITDA (3) 25,342 14,343 77% 76,863 55,475 39%
Free cash flow (4) $15,626 $3,285 376% $34,835 $10,964 218%
Free cash flow per share, basic (4) $0.18 $0.04 350% $0.41 $0.13 215%
Free cash flow per share, diluted (4) $0.18 $0.04 350% $0.40 $0.13 208%
Net income (loss) applicable to common stockholders $7,697 $(2,032) NM $13,601 $(8,200) NM
Net income (loss) per share applicable
to common stockholders, basic and
diluted $0.09 $(0.02) NM $0.16 $(0.10) NM
Weighted average common shares outstanding, basic 85,945,116 85,055,659 85,882,646 85,051,066
Weighted average common shares outstanding, diluted 86,593,768 85,055,659 86,314,206 85,051,066
(1) 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 December 31, 2012
and 2011, respectively and $0.9 and
$1.0 million of non-cash stock-based
compensation for the twelve-month
periods ended December 31, 2012 and
2011, 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 $0.6 million
of non-cash stock-based compensation
for each of the three-month periods
ended December 31, 2012 and 2011 and
$1.7 million and $1.3 million of non-
cash stock-based compensation for the
twelve-month periods ended December
31, 2012 and 2011, 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. Free cash flow has been
presented herein for both 2012 and
2011 to exclude dividend payments.
Commenting on the Company’s earnings results, Walter F. Ulloa, Chairman and Chief Executive Officer, said, “During 2012, we achieved double-digit revenue growth primarily driven by increases in political advertising, core advertising, and retransmission consent revenue. Core revenue (excluding retransmission consent revenue and political advertising revenue) from our television and radio segments outperformed their respective industry averages, and we significantly improved our free cash flow over 2011. Our television and radio platforms have become an increasingly important channel for reaching Hispanic voters, resulting in significant increases in political advertising revenue. 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.”
New Credit Facility, Repurchase of Outstanding Debt and Cash Dividend
On December 20, 2012, the Company entered into a new credit facility consisting of a four year $20 million term loan facility and a four year $30 million revolving credit facility. The new credit facility replaces the Company’s existing $50 million revolving credit facility. Proceeds from the term loan facility and cash on hand were used to repurchase $40.0 million in aggregate principal amount of the Company’s 8.750% senior secured first lien notes due 2017 pursuant to the optional redemption provisions in the indenture governing the Notes. The redemption price for the redeemed Notes was 103% of the principal amount plus all accrued and unpaid interest. Approximately $324 million in principal amount of the Notes remains outstanding.
Also during the fourth quarter of 2012, the Company declared and paid a special cash dividend of $0.12 per share to shareholders of the Company’s Class A, Class B and Class U common stock. The total amount of cash disbursed for the special dividend was $10.3 million.
Financial Results
Three Months Ended December 31, 2012 Compared to Three Months Ended December 31, 2011(Unaudited)
Three Months Ended
December 31,
2012 2011 % Change
---- ---- --------
Net revenue $63,752 $49,972 28%
Operating expenses (1) 33,671 32,061 5%
Corporate expenses (1) 5,449 4,267 28%
Depreciation and amortization 3,990 4,481 (11)%
Operating income (loss) 20,642 9,163 125%
Interest expense, net (8,614) (9,303) (7)%
Gain (loss) on debt extinguishment (2,513) (423) 494%
Income (loss) before income taxes 9,515 (563) NM
Income tax (expense) benefit (1,818) (1,469) 24%
------ ------
Net income (loss) $7,697 $(2,032) NM
====== =======
(1) Operating expenses
and corporate expenses
are defined on page 1.
Net revenue increased to $63.8 million for the three-month period ended December 31, 2012 from $50.0 million for the three-month period ended December 31, 2011, an increase of $13.8 million. Of the overall increase, $11.2 million came from our television segment and was primarily attributable to increases in political advertising revenue, which was not material in 2011, core advertising revenue and retransmission consent revenue. Additionally, $2.6 million of the overall increase came from our radio segment and was primarily attributable to increases in political advertising revenue, which was not material in 2011, and core advertising revenue.
Operating expenses increased to $33.7 million for the three-month period ended December 31, 2012 from $32.1 million for the three-month period ended December 31, 2011, an increase of $1.6 million. The increase was primarily attributable to an increase in expenses associated with the increase in net revenue and an increase in salary expense.
Corporate expenses increased to $5.4 million for the three-month period ended December 31, 2012 from $4.3 million for the three-month period ended December 31, 2011, an increase of $1.1 million. The increase was primarily attributable to an increase in bonuses, non-cash stock-based compensation, salary expense and interactive media-related expenses.
Twelve Months Ended December 31, 2012 Compared to Twelve Months Ended December 31, 2011(Unaudited)
Twelve Months Ended
December 31,
2012 2011 % Change
---- ---- --------
Net revenue $223,253 $194,396 15%
Operating expenses (1) 130,074 125,101 4%
Corporate expenses (1) 17,976 15,669 15%
Depreciation and amortization 16,426 18,653 (12)%
Operating income (loss) 58,777 34,973 68%
Interest expense, net (35,321) (37,647) (6)%
Other income (loss) - 687 NM
Gain (loss) on debt extinguishment (3,743) (423) NM
Income (loss) before income taxes 19,713 (2,410) NM
Income tax (expense) benefit (6,112) (5,790) 6%
------ ------
Net income (loss) $13,601 $(8,200) NM
======= =======
(1) Operating expenses
and corporate expenses
are defined on page 1.
Net revenue increased to $223.3 million for the year ended December 31, 2012 from $194.4 million for the year ended December 31, 2011, an increase of $28.9 million. Of the overall increase, $25.4 million came from our television segment and was primarily attributable to increases in political advertising revenue, which was not material in 2011, core advertising revenue and retransmission consent revenue. Additionally, $3.5 million of the overall increase came from our radio segment and was primarily attributable to increases in political advertising revenue, which was not material in 2011, and core advertising revenue.
Operating expenses increased to $130.1 million for the year ended December 31, 2012 from $125.1 million for the year ended December 31, 2011, an increase of $5.0 million. The increase was primarily attributable to an increase in expenses associated with the increase in net revenue and an increase in salary expense.
Corporate expenses increased to $18.0 million for the year ended December 31, 2012 from $15.7 million for the year ended December 31, 2011, an increase of $2.3 million. The increase was primarily attributable to an increase in bonuses, non-cash stock-based compensation, salary expense and interactive media-related expenses.
Segment Results
The following represents selected unaudited segment information:
Three Months Ended
December 31,
2012 2011 % Change
---- ---- --------
Net Revenue
Television $45,373 $34,140 33%
Radio 18,379 15,832 16%
Total $63,752 $49,972 28%
Operating Expenses (1)
Television $19,921 $18,706 6%
Radio 13,750 13,355 3%
Total $33,671 $32,061 5%
Corporate Expenses (1) $5,449 $4,267 28%
Consolidated adjusted EBITDA (1) $25,342 $14,343 77%
(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 2012 fourth quarter and full year results on February 27, 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 Hispanic consumers across the United States, as well as the border markets of Mexico. Entravision is the largest affiliate group of both the top-ranked Univision television network and Univision’s UniMas network, with television stations in 19 of the nation’s top 50 Hispanic markets. The company also operates one of the nation’s largest groups of primarily Spanish-language radio stations, consisting of 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 Hispanic broadcasting community. Entravision shares of Class A Common Stock are traded on The New York Stock Exchange under the symbol: EVC.
This press release contains certain forward-looking statements. These forward-looking statements, which are included in accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, may involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results and performance in future periods to be materially different from any future results or performance suggested by the forward-looking statements in this press release. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that actual results will not differ materially from these expectations, and the Company disclaims any duty to update any forward-looking statements made by the Company. From time to time, these risks, uncertainties and other factors are discussed in the Company’s filings with the Securities and Exchange Commission.
(Financial Table Follows)
Entravision Communications Corporation
Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
Three-Month Period Twelve-Month Period
Ended December 31, Ended December 31,
------------------ ------------------
2012 2011 2012 2011
---- ---- ---- ----
Net revenue $63,752 $49,972 $223,253 $194,396
------- ------- -------- --------
Expenses:
Direct operating expenses 24,453 22,700 92,256 88,590
Selling, general and administrative
expenses 9,218 9,361 37,818 36,511
Corporate expenses 5,449 4,267 17,976 15,669
Depreciation and amortization 3,990 4,481 16,426 18,653
43,110 40,809 164,476 159,423
------ ------ ------- -------
20,642 9,163 58,777 34,973
Operating income (loss)
Interest expense (8,677) (9,304) (35,407) (37,650)
Interest income 63 1 86 3
Other income (loss) - - - 687
Gain (loss) on debt extinguishment (2,513) (423) (3,743) (423)
9,515 (563) 19,713 (2,410)
Income (loss) before income taxes
Income tax (expense) benefit (1,818) (1,469) (6,112) (5,790)
------ ------ ------ ------
Net income (loss) applicable to common stockholders $7,697 $(2,032) $13,601 $(8,200)
====== ======= ======= =======
Basic and diluted earnings per share:
Net income (loss) per share applicable to common stockholders,
basic and diluted $0.09 $(0.02) $0.16 $(0.10)
Weighted average common shares outstanding, basic 85,945,116 85,055,659 85,882,646 85,051,066
========== ========== ========== ==========
Weighted average common shares outstanding, diluted 86,593,768 85,055,659 86,314,206 85,051,066
========== ========== ========== ==========
Entravision Communications Corporation
Consolidated Statements of Cash Flows
(In thousands; unaudited)
Three-Month Period Twelve-Month Period
Ended December 31, Ended December 31,
------------------ ------------------
2012 2011 2012 2011
---- ---- ---- ----
Cash flows from operating activities:
Net income (loss) $7,697 $(2,032) $13,601 $(8,200)
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:
Depreciation and amortization 3,990 4,481 16,426 18,653
Deferred income taxes 2,992 1,121 6,477 4,565
Amortization of debt issue costs 578 565 2,284 2,207
Amortization of syndication contracts 151 185 707 1,482
Payments on syndication contracts (329) (470) (1,698) (1,976)
Non-cash stock-based compensation 888 984 2,651 2,343
Other (income) loss - - - (687)
(Gain) loss on debt extinguishment 2,513 423 3,743 423
Changes in assets and liabilities, net of effect of acquisitions and
dispositions:
- - - 809
(Increase) decrease in restricted cash
(165) (2,229) (3,676) (574)
(Increase) decrease in accounts receivable
1,377 597 321 336
(Increase) decrease in prepaid expenses and other assets
6,662 9,280 (804) (1,770)
Increase (decrease) in accounts payable, accrued expenses and other
liabilities
26,354 12,905 40,032 17,611
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Purchases of property and equipment and intangibles (3,354) (1,982) (9,856) (8,524)
Purchase of a business - (10) - (598)
(3,354) (1,992) (9,856) (9,122)
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Proceeds from issuance of common stock - - 23 42
Payments on long-term debt (41,200) (16,071) (61,800) (17,071)
Dividend paid (10,313) (5,102) (10,313) (5,102)
Proceeds from borrowings on long-term debt 20,000 - 20,000 -
Payments of debt issuance and offering costs (595) - (675) (29)
(32,108) (21,173) (52,765) (22,160)
Net cash provided by (used in) financing activities
(9,108) (10,260) (22,589) (13,671)
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents:
Beginning 45,238 68,979 58,719 72,390
Ending $36,130 $58,719 $36,130 $58,719
Entravision Communications Corporation
Reconciliation of Consolidated Adjusted EBITDA to Cash Flows From Operating Activities
(In thousands; unaudited)
The most directly comparable GAAP financial measure is operating cash flow. A reconciliation of this non-GAAP measure to cash flows from operating activities for each of the periods presented is as follows:
Three-Month Period Twelve-Month Period
Ended December 31, Ended December 31,
2012 2011 2012 2011
---- ---- ---- ----
Consolidated adjusted EBITDA (1) $25,342 $14,343 $76,863 $55,475
Interest expense (8,677) (9,304) (35,407) (37,650)
Interest income 63 1 86 3
Gain (loss) on debt extinguishment (2,513) (423) (3,743) (423)
Income tax (expense) benefit (1,818) (1,469) (6,112) (5,790)
Amortization of syndication contracts (151) (185) (707) (1,482)
Payments on syndication contracts 329 470 1,698 1,976
Non-cash stock-based compensation included in direct operating
expenses (45) (74) (146) (229)
Non-cash stock-based compensation included in selling, general
and administrative expenses (221) (340) (767) (812)
Non-cash stock-based compensation included in corporate expenses (622) (570) (1,738) (1,302)
Depreciation and amortization (3,990) (4,481) (16,426) (18,653)
Other income (loss) - - - 687
Net income (loss) 7,697 (2,032) 13,601 (8,200)
Depreciation and amortization 3,990 4,481 16,426 18,653
Deferred income taxes 2,992 1,121 6,477 4,565
Amortization of debt issuance costs 578 565 2,284 2,207
Amortization of syndication contracts 151 185 707 1,482
Payments on syndication contracts (329) (470) (1,698) (1,976)
Non-cash stock-based compensation 888 984 2,651 2,343
Other (income) loss - - - (687)
(Gain) loss on debt extinguishment 2,513 423 3,743 423
Changes in assets and liabilities, net of effect of acquisitions and dispositions:
(Increase) decrease in restricted cash - - - 809
(Increase) decrease in accounts receivable (165) (2,229) (3,676) (574)
(Increase) decrease in prepaid expenses and other assets 1,377 597 321 336
Increase (decrease) in accounts payable, accrued expenses and other
liabilities 6,662 9,280 (804) (1,770)
Net cash provided by (used in ) operating activities $26,354 $12,905 $40,032 $17,611
======= ======= ======= =======
(1) Consolidated adjusted
EBITDA is defined on page 1.
Entravision Communications Corporation
Reconciliation of Free Cash Flow to Net Income (Loss)
(In thousands; unaudited)
The most directly comparable GAAP financial measure is net income (loss). A reconciliation of this non-GAAP measure to net income (loss) for each of the periods presented is as follows:
Three-Month Period Twelve-Month Period
Ended December 31, Ended December 31,
2012 2011 2012 2011
---- ---- ---- ----
Consolidated adjusted EBITDA (1) $25,342 $14,343 $76,863 $55,475
Net interest expense (1) 8,036 8,738 33,037 35,440
Cash paid for income taxes (1,174) 348 (365) 1,225
Capital expenditures (2) 2,854 1,972 9,356 7,846
Free cash flow (1) 15,626 3,285 34,835 10,964
Capital expenditures (2) 2,854 1,972 9,356 7,846
Non-cash interest (expense) income relating to amortization of debt
finance costs (578) (565) (2,284) (2,207)
Non-cash income tax (expense) benefit (2,992) (1,121) (6,477) (4,565)
Gain (loss) on debt extinguishment (2,513) (423) (3,743) (423)
Amortization of syndication contracts (151) (185) (707) (1,482)
Payments on syndication contracts 329 470 1,698 1,976
Other income (loss) - - - 687
Non-cash stock-based compensation included in direct operating
expenses (45) (74) (146) (229)
Non-cash stock-based compensation included in selling, general
and administrative expenses (221) (340) (767) (812)
Non-cash stock-based compensation included in corporate expenses (622) (570) (1,738) (1,302)
Depreciation and amortization (3,990) (4,481) (16,426) (18,653)
Net income (loss) $7,697 $(2,032) $13,601 $(8,200)
====== ======= ======= =======
(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
