Entravision Communications Corporation Reports Third Quarter 2009 Results
- Press Release
- Source: Entravision Communications Corporation
- On 4:05 pm EST, Wednesday November 4, 2009
SANTA MONICA, Calif., Nov. 4 /PRNewswire-FirstCall/ -- Entravision Communications Corporation (NYSE: EVC - News) today reported financial results for the three- and nine-month periods ended September 30, 2009.
Related Quotes
| Symbol | Price | Change |
|---|---|---|
| EVC | 2.22 | -0.04 |
Historical results, which are attached, are in thousands of U.S. dollars (except share and per share data). The results of our outdoor operations are presented in discontinued operations within the statements of operations in accordance with ASC 360-10-45, "Impairment or Disposal of Long-Lived Assets". 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 below. Unaudited financial highlights are as follows:
Three-Month Period Nine-Month Period
Ended September 30, Ended September 30,
--------------------------- -------------------------
2009 2008 % Change 2009 2008 % Change
------- ------- ------- ------- ------- -------
Net revenue $50,754 $60,988 (17)% $141,165 $179,573 (21)%
Operating
expenses(1) 30,572 36,977 (17)% 92,031 109,284 (16)%
Corporate
expenses(2) 3,351 3,772 (11)% 10,602 12,703 (17)%
Consolidated
adjusted
EBITDA(3) 17,268 21,122 (18)% 40,307 60,156 (33)%
Free cash flow(4) $5,058 $8,756 (42)% $9,176 $23,042 (60)%
Free cash flow per
share, basic and
diluted(4) $0.06 $0.10 (40)% $0.11 $0.25 (56)%
Net income (loss)
from continuing
operations $673 $(354,491) NM $(15,648) $(349,881) (96)%
Net income (loss)
applicable to
common
stockholders $673 $(354,491) NM $(15,648) $(351,454) (96)%
Net income (loss)
per share from
continuing
operations
applicable to
common
stockholders,
basic and
diluted $0.01 $(3.98) NM $(0.19) $(3.80) (95)%
Net income (loss)
per share
applicable
to common
stockholders,
basic and
diluted $0.01 $(3.98) NM $(0.19) $(3.82) (95)%
Weighted average
common shares
outstanding,
basic 83,683,908 89,130,413 84,049,423 92,029,671
Weighted average
common shares
outstanding,
diluted 83,935,319 89,130,413 84,049,423 92,029,671
- Operating expenses include direct operating, selling, general and administrative expenses. Included in operating expenses are $0.4 million and $0.4 million of non-cash stock-based compensation for the three-month periods ended September 30, 2009 and 2008, respectively and $1.1 million and $1.0 million of non-cash stock-based compensation for the nine-month periods ended September 30, 2009 and 2008, respectively. Operating expenses do not include corporate expenses, depreciation and amortization, impairment charge, gain (loss) on sale of assets and loss on debt extinguishment.
- Corporate expenses include $0.3 million and $0.5 million of non-cash stock-based compensation for the three-month periods ended September 30, 2009 and 2008, respectively and $1.1 million and $1.4 million of non-cash stock-based compensation for the nine-month periods ended September 30, 2009 and 2008, respectively.
- Consolidated adjusted EBITDA means net income (loss) plus loss (gain) 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, loss on debt extinguishment, loss from discontinued operations, income tax expense (benefit), equity in net income (loss) of nonconsolidated affiliate and syndication programming amortization less syndication programming payments. We use the term consolidated adjusted EBITDA because that measure is defined in our syndicated bank credit facility and does not include loss (gain) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation, net interest expense, loss on debt extinguishment, loss from discontinued operations, income tax expense (benefit), equity in net income (loss) of nonconsolidated affiliate 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, loss on debt extinguishment, loss from discontinued operations, income tax expense (benefit), equity in net income (loss) of nonconsolidated affiliate 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.
- 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 interest income less the change in the fair value of our interest rate swaps. Free cash flow per share is defined as free cash flow divided by the diluted weighted average common shares outstanding.
Commenting on the Company's earnings results, Walter F. Ulloa, Chairman and Chief Executive Officer, said, "Our third quarter financial results continue to be impacted by the recession and the challenging advertising environment. We remain focused on managing our costs and maximizing our cash flows. Our television and radio operations continue to deliver solid ratings in the nation's most densely-populated Hispanic markets. We believe that we are well positioned to benefit when the economy recovers, given the strength of our brands and our ability to deliver the valuable Hispanic audience to advertisers."
Financial Results
Three Months Ended September 30, 2009 Compared to Three Months Ended
September 30, 2008 (Unaudited)
Three-Month Period
Ended September 30,
------------------------------
2009 2008 % Change
------- ------- -------
Net revenue $50,754 $60,988 (17)%
Operating expenses(1) 30,572 36,977 (17)%
Corporate expenses(1) 3,351 3,772 (11)%
Depreciation and amortization 5,272 5,998 (12)%
Impairment charge - 440,020 NM
------- -------
Operating income (loss) 11,559 (425,779) NM
Interest expense, net (8,157) (7,550) 8%
------- -------
Income (loss) before income taxes 3,402 (433,329) NM
Income tax (expense) benefit (2,802) 78,847 NM
------- -------
Net income (loss) before equity in net
income (loss) of nonconsolidated affiliates
and discontinued operations 600 (354,482) NM
Equity in net income (loss) of
nonconsolidated affiliates, net of tax 73 (9) NM
------- -------
Net income (loss) $673 $(354,491) NM
======= =======
(1) Operating expenses and corporate expenses are defined above.
Net revenue decreased to $50.8 million for the three-month period ended September 30, 2009 from $61.0 million for the three-month period ended September 30, 2008, a decrease of $10.2 million. Of the overall decrease, $5.4 million came from our television segment and was primarily attributable to a decrease in local and national advertising rates, which in turn was primarily due to the continuing weak economy, partially offset by an increase in retransmission consent revenue. Additionally, $4.8 million of the overall decrease came from our radio segment and was primarily attributable to a decrease in local and national advertising rates, which in turn was primarily due to the continuing weak economy.
Operating expenses decreased to $30.6 million for the three-month period ended September 30, 2009 from $37.0 million for the three-month period ended September 30, 2008, a decrease of $6.4 million. The decrease was primarily attributable to decreases in expenses associated with the decrease in net revenue and salary expense due to reductions of personnel and salary reductions.
Corporate expenses decreased to $3.4 million for the three-month period ended September 30, 2009 from $3.8 million for the three-month period ended September 30, 2008, a decrease of $0.4 million. The decrease was primarily attributable to the decrease in salary expense due to salary reductions and a decrease in employee benefits.
Nine Months Ended September 30, 2009 Compared to Nine Months Ended
September 30, 2008
(Unaudited)
Nine-Month Period
Ended September 30,
-------------------------------
2009 2008 % Change
------- ------- -------
Net revenue $141,165 $179,573 (21)%
Operating expenses(1) 92,031 109,284 (16)%
Corporate expenses(1) 10,602 12,703 (17)%
Depreciation and amortization 15,893 17,185 (8)%
Impairment charge 2,720 440,020 (99)%
------- -------
Operating income (loss) 19,919 (399,619) NM
Interest expense, net (21,374) (26,256) (19)%
Loss on debt extinguishment (4,716) - NM
------- -------
Loss before income taxes (6,171) (425,875) (99)%
Income tax (expense) benefit (9,311) 76,167 NM
------- -------
Net loss before equity in net loss
of nonconsolidated affiliates and
discontinued operations (15,482) (349,708) (96)%
Equity in net loss of nonconsolidated
affiliates, net of tax (166) (173) (4)%
------- -------
Loss from continuing operations (15,648) (349,881) (96)%
Loss from discontinued operations,
net of tax - (1,573) NM
------- -------
Net loss $(15,648) $(351,454) (96)%
======= =======
(1) Operating expenses and corporate expenses are defined above.
Net revenue decreased to $141.2 million for the nine-month period ended September 30, 2009 from $179.6 million for the nine-month period ended September 30, 2008, a decrease of $38.4 million. Of the overall decrease, $20.5 million came from our television segment and was primarily attributable to a decrease in local and national advertising rates, which in turn was primarily due to the continuing weak economy, partially offset by an increase in retransmission consent revenue. Additionally, $17.9 million of the overall decrease came from our radio segment and was primarily attributable to a decrease in local and national advertising sales and advertising rates, which in turn was primarily due to the continuing weak economy.
Operating expenses decreased to $92.0 million for the nine-month period ended September 30, 2009 from $109.3 million for the nine-month period ended September 30, 2008, a decrease of $17.3 million. The decrease was primarily attributable to decreases in expenses associated with the decrease in net revenue and salary expense due to reductions of personnel and salary reductions.
Corporate expenses decreased to $10.6 million for the nine-month period ended September 30, 2009 from $12.7 million for the nine-month period ended September 30, 2008, a decrease of $2.1 million. The decrease was primarily attributable to the elimination of bonuses paid to executive officers, a decrease in salary expense due to salary reductions and a decrease in employee benefits.
Segment Results
The following represents selected unaudited segment information:
Three-Month Period
Ended September 30,
--------------------------------
2009 2008 % Change
-------- -------- --------
Net Revenue
Television $32,019 $37,479 (15)%
Radio 18,735 23,509 (20)%
-------- --------
Total $50,754 $60,988 (17)%
Operating Expenses (1)
Television $17,601 $21,908 (20)%
Radio 12,971 15,069 (14)%
-------- --------
Total $30,572 $36,977 (17)%
Corporate Expenses(1) $3,351 $3,772 (11)%
Consolidated adjusted EBITDA(1) $17,268 $21,122 (18)%
(1) Operating expenses, Corporate expenses, and Consolidated adjusted
EBITDA are defined above.
Entravision Communications Corporation will hold a conference call to discuss its 2009 third quarter results on November 4, 2009 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 at www.entravision.com.
Entravision Communications Corporation is a diversified Spanish-language media company utilizing a combination of television and radio 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 TeleFutura network, with television stations in 20 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 48 owned and operated radio stations. 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.
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,
------------------------ -------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Net revenue $50,754 $60,988 $141,165 $179,573
---------- ---------- ---------- ----------
Expenses:
Direct operating expenses 21,030 25,583 63,690 76,258
Selling, general and
administrative expenses 9,542 11,394 28,341 33,026
Corporate expenses 3,351 3,772 10,602 12,703
Depreciation and amortization 5,272 5,998 15,893 17,185
Impairment charge - 440,020 2,720 440,020
---------- ---------- ---------- ----------
39,195 486,767 121,246 579,192
---------- ---------- ---------- ----------
Operating income
(loss) 11,559 (425,779) 19,919 (399,619)
Interest expense (8,227) (8,172) (21,762) (27,595)
Interest income 70 622 388 1,339
Loss on debt extinguishment - - (4,716) -
---------- ---------- ---------- ----------
Income (loss) before
income taxes 3,402 (433,329) (6,171) (425,875)
Income tax (expense) benefit (2,802) 78,847 (9,311) 76,167
---------- ---------- ---------- ----------
Income (loss) before
equity in net income
(loss) of nonconsolidated
affiliate and
discontinued operations 600 (354,482) (15,482) (349,708)
Equity in net income (loss) of
nonconsolidated affiliate, net
of tax 73 (9) (166) (173)
---------- ---------- ---------- ----------
Income (loss) from continuing
operations 673 (354,491) (15,648) (349,881)
Loss from discontinued operations,
net of tax - - - (1,573)
---------- ---------- ---------- ----------
Net income (loss) applicable to
common stockholders $673 $(354,491) $(15,648) $(351,454)
========== ========== ========== ==========
Basic and diluted earnings per
share:
Net income (loss) per share from
continuing operations applicable
to common stockholders, basic and
diluted $0.01 $(3.98) $(0.19) $(3.80)
========== ========== ========== ==========
Net loss per share from discontinued
operations, basic and diluted $- $- $- $(0.02)
========== ========== ========== ==========
Net income (loss) per share
applicable to common stockholders,
basic and diluted $0.01 $(3.98) $(0.19) $(3.82)
========== ========== ========== ==========
Weighted average common shares
outstanding, basic 83,683,908 89,130,413 84,049,423 92,029,671
========== ========== ========== ==========
Weighted average common shares
outstanding, diluted 83,935,319 89,130,413 84,049,423 92,029,671
========== ========== ========== ==========
Entravision Communications Corporation
Consolidated Statements of Cash Flows
(Unaudited; in thousands)
Three-Month Period Nine-Month Period
Ended September 30, Ended September 30,
-------------------------------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Cash flows from operating activities:
Net income (loss) $673 $(354,491) $(15,648) $(351,454)
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities:
Depreciation and
amortization 5,272 5,998 15,893 17,185
Impairment charge - 440,020 2,720 440,020
Deferred income taxes 2,548 (79,198) 8,534 (77,537)
Amortization of debt issue
costs 104 100 298 302
Amortization of syndication
contracts 441 700 1,689 2,255
Payments on syndication
contracts (706) (713) (2,119) (2,135)
Equity in net (income) loss
of nonconsolidated affiliate (73) 9 166 173
Non-cash stock-based
compensation 702 896 2,205 2,450
Gain on sale of media
properties and other assets - - (102) -
Non-cash expenses related to
debt extinguishment - - 945 -
Change in fair value of
interest rate swap
agreements (1,314) 436 (3,850) 3,647
Changes in assets and
liabilities, net of
effect of acquisitions
and dispositions:
(Increase) decrease in
accounts receivable (1,828) 3,490 (3,100) 3,648
Increase in prepaid
expenses and other
assets (810) (178) (621) (100)
Increase (decrease) in
accounts payable, accrued
expenses and other
liabilities 1,085 (1,445) 3,187 (3,205)
Effect of discontinued
operations - - - (2,230)
---------- ---------- ---------- ----------
Net cash provided by
operating activities 6,094 15,624 10,197 33,019
---------- ---------- ---------- ----------
Cash flows from investing
activities:
Proceeds from sale of
property and equipment
and intangibles - - 114 101,498
Purchases of property and
equipment and
intangibles (2,589) (5,007) (9,207) (13,415)
Purchase of a business - - - (22,885)
Deposits on acquisitions - (200) - (200)
Effect of discontinued
operations - - - (194)
---------- ---------- ---------- ----------
Net cash provided by
(used in) investing
activities (2,589) (5,207) (9,093) 64,804
---------- ---------- ---------- ----------
Cash flows from financing
activities:
Proceeds from issuance of
common stock 53 299 255 785
Payments on long-term
debt (1,572) (2) (42,572) (11,036)
Repurchase of Class U
common stock - - - (10,380)
Repurchase of Class A
common stock - (10,245) (1,075) (46,538)
Excess tax benefits from
exercise of stock options - - - (25)
Payments of deferred debt
and offering costs - - (1,182) -
---------- ---------- ---------- ----------
Net cash used in
financing
activities (1,519) (9,948) (44,574) (67,194)
---------- ---------- ---------- ----------
Net increase
(decrease)
in cash and cash
equivalents 1,986 469 (43,470) 30,629
Cash and cash equivalents:
Beginning 18,838 117,105 64,294 86,945
---------- ---------- ---------- ----------
Ending $20,824 $117,574 $20,824 $117,574
========== ========== ========== ==========
Entravision Communications Corporation
Reconciliation of Consolidated Adjusted EBITDA to Cash Flows From
Operating Activities
(Unaudited; in thousands)
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,
--------------------------------------
2009 2008 2009 2008
-------- -------- -------- --------
Consolidated adjusted EBITDA (1) $17,268 $21,122 $40,307 $60,156
Interest expense (8,227) (8,172) (21,762) (27,595)
Interest income 70 622 388 1,339
Loss on debt extinguishment - - (4,716) -
Income tax (expense) benefit (2,802) 78,847 (9,311) 76,167
Amortization of syndication
contracts (441) (700) (1,689) (2,255)
Payments on syndication contracts 706 713 2,119 2,135
Non-cash stock-based compensation
included in direct operating
expenses (159) (173) (489) (462)
Non-cash stock-based compensation
included in selling, general
and administrative expenses (204) (217) (618) (579)
Non-cash stock-based compensation
included in corporate expenses (339) (506) (1,098) (1,409)
Depreciation and amortization (5,272) (5,998) (15,893) (17,185)
Impairment charge - (440,020) (2,720) (440,020)
Equity in net income (loss) of
nonconsolidated affiliates 73 (9) (166) (173)
Loss from discontinued operations - - - (1,573)
-------- -------- -------- --------
Net income (loss) 673 (354,491) (15,648) (351,454)
Depreciation and amortization 5,272 5,998 15,893 17,185
Impairment charge - 440,020 2,720 440,020
Deferred income taxes 2,548 (79,198) 8,534 (77,537)
Amortization of debt issue costs 104 100 298 302
Amortization of syndication
contracts 441 700 1,689 2,255
Payments on syndication contracts (706) (713) (2,119) (2,135)
Equity in net (income) loss of
nonconsolidated affiliate (73) 9 166 173
Non-cash stock-based compensation 702 896 2,205 2,450
Gain on sale of media properties
and other assets - - (102) -
Non-cash expenses related to debt
extinguishment - - 945 -
Change in fair value of interest
rate swap agreements (1,314) 436 (3,850) 3,647
Changes in assets and liabilities,
net of effect of acquisitions
and dispositions:
(Increase) decrease in
accounts receivable (1,828) 3,490 (3,100) 3,648
Increase in prepaid expenses
and other assets (810) (178) (621) (100)
Increase (decrease) in
accounts payable, accrued
expenses and other
liabilities 1,085 (1,445) 3,187 (3,205)
Effect of discontinued operations - - - (2,230)
-------- -------- -------- --------
Cash flows from operating
activities $6,094 $15,624 $10,197 $33,019
======== ======== ======== ========
(1) Consolidated adjusted EBITDA is defined above.
Entravision Communications Corporation
Reconciliation of Free Cash Flow to Net Income (Loss)
(Unaudited; in thousands)
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,
---------------------------------------
2009 2008 2009 2008
-------- -------- -------- --------
Consolidated adjusted EBITDA(1) $17,268 $21,122 $40,307 $60,156
Net interest expense(1) 9,367 7,013 24,926 22,306
Cash paid for income taxes 254 350 777 1,394
Capital expenditures(2) 2,589 5,003 5,428 13,414
-------- -------- -------- --------
Free cash flow(1) 5,058 8,756 9,176 23,042
Capital expenditures(2) 2,589 5,003 5,428 13,414
Non-cash interest expense relating
to amortization of debt finance
costs and interest rate swap
agreements 1,210 (537) 3,552 (3,950)
Loss on debt extinguishment - - (4,716) -
Non-cash income tax (expense)
benefit (2,548) 79,197 (8,534) 77,561
Amortization of syndication
contracts (441) (700) (1,689) (2,255)
Payments on syndication contracts 706 713 2,119 2,135
Non-cash stock-based compensation
included in direct operating
expenses (159) (173) (489) (462)
Non-cash stock-based compensation
included in selling, general
and administrative expenses (204) (217) (618) (579)
Non-cash stock-based compensation
included in corporate expenses (339) (506) (1,098) (1,409)
Depreciation and amortization (5,272) (5,998) (15,893) (17,185)
Impairment charge - (440,020) (2,720) (440,020)
Equity in net income (loss) of
nonconsolidated affiliates 73 (9) (166) (173)
Loss from discontinued operations - - - (1,573)
-------- -------- -------- --------
Net income (loss) $673 $(354,491)$(15,648) $(351,454)
======== ======== ======== ========
(1) Consolidated adjusted EBITDA, net interest expense and free cash flow
are defined above.
(2) Capital expenditures is not part of the consolidated statement of
operations.
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