MIAMI, Nov. 14, 2013 (GLOBE NEWSWIRE) -- Spanish Broadcasting System, Inc. (the "Company" or "SBS") (Nasdaq:SBSA) today reported financial results for the three- and nine-months ended September 30, 2013.
Financial Highlights
| (in thousands) |
Quarter Ended September 30, |
Nine-Months Ended September 30, |
|||||
| 2013 | 2012 |
% Change |
2013 | 2012 |
% Change |
||
| Net revenue: | |||||||
| Radio | $ 35,428 | 31,192 | 14% | $ 100,634 | 89,258 | 13% | |
| Television | 5,654 | 4,689 | 21% | 15,618 | 13,328 | 17% | |
| Consolidated | $ 41,082 | 35,881 | 14% | $ 116,252 | 102,586 | 13% | |
| OIBDA, a non-GAAP measure*: | |||||||
| Radio | $ 13,571 | 13,179 | 3% | $ 41,029 | 36,986 | 11% | |
| Television | 117 | 129 | (9%) | 68 | (1,892) | 104% | |
| Corporate | (2,371) | (1,564) | 52% | (7,413) | (5,552) | 34% | |
| Consolidated | $ 11,317 | 11,744 | (4%) | $ 33,684 | 29,542 | 14% | |
* Please refer to the Non-GAAP Financial Measures section for a definition and a reconciliation from a non-GAAP to GAAP financial measure.
Discussion and Results
"We reported robust top-line results during the third quarter, supported by strong revenue gains across our operations," commented Raul Alarcón, Jr., Chairman and CEO. "Our radio revenue growth was well ahead of our industry, as we effectively converted our leading audience shares into increased advertising dollars. The investments we have made in our station brands, content offering and sales force are leading to a considerable improvement in our financial results. We are also continuing to demonstrate our ability to leverage live events to promote our assets to our target audiences, while driving increased sponsorship dollars. Looking ahead, we remain focused on leveraging our diversified media platform to garner a greater share of advertising budgets across our markets."
Quarter Results
For the quarter-ended September 30, 2013, consolidated net revenues totaled $41.1 million compared to $35.9 million for the same prior year period, resulting in an increase of $5.2 million or 14%. Our radio segment net revenues increased $4.2 million or 14%, primarily due to special events revenue, national sales, local sales and interactive sales. The special events revenue increase took place in our Miami, Puerto Rico, New York and Los Angeles markets. The increase in national sales was mainly in our Los Angeles, San Francisco and New York markets. The increase in local sales was primarily in our New York, Miami and Los Angeles markets. The increase in interactive sales occurred throughout most of our markets. Our television segment net revenues increased $1.0 million or 21%, largely due to the increase in special events revenue, offset by the decreases in national and local spot sales.
OIBDA, a non-GAAP measure, totaled $11.3 million compared to $11.7 million for the same prior year period, representing a decrease of $0.4 million or 4%. Our radio segment OIBDA increased $0.4 million or 3%, primarily due to the increase in net revenues of $4.2 million, offset by the increase of station operating expenses of $3.8 million. Radio station operating expenses increased mainly due to compensation and benefits, special events expenses, legal settlements and professional fees, which were offset by a decrease in local commissions. Our television segment OIBDA totaled $0.1 million for the current and same prior year period, respectively. During the quarter, both of television's net revenue and station operating expenses increased by $1.0 million compared to the same prior year period. The increase in television station operating expenses was primarily due to special events expenses. Our corporate expenses increased $0.8 million or 52%, mostly due to increases in professional fees and travel and entertainment expenses. Please refer to the Non-GAAP Financial Measures section for a definition of OIBDA and a reconciliation from a non-GAAP to GAAP financial measure.
Operating income totaled $10.2 million for the current and same prior year period, respectively.
Nine-Months Ended Results
For the nine-months ended September 30, 2013, consolidated net revenues totaled $116.3 million compared to $102.6 million for the same prior year period, resulting in an increase of $13.7 million or 13%. Our radio segment net revenues increased $11.4 million or 13%, primarily due to special events revenue, national, barter, local and interactive sales. The increases in special events revenue, barter and interactive sales occurred throughout most of our markets. The increase in national sales took place in our Los Angeles, New York and San Francisco markets. The increase in local sales was primarily in our New York, Los Angeles, Miami and Puerto Rico markets. Our television segment net revenues increased $2.3 million or 17%, largely due to the increase in special events revenue, offset by the decreases in national and local spot sales and integrated sales.
OIBDA, a non-GAAP measure, totaled $33.7 million compared to $29.5 million for the same prior year period, representing an increase of $4.1 million or 14%. Our radio segment OIBDA increased $4.0 million or 11%, primarily due to the increase in net revenues of $11.4 million, offset by the increase of station operating expenses of $7.3 million. Radio station operating expenses increased mainly due to increases in special events expenses, barter expense, legal settlements and professional fees, which were offset by decreases in local commissions and music license fees. Our television segment OIBDA (loss) decreased $2.0 million, due to the increase in net revenues of $2.3 million, which was partially offset by an increase in station operating expenses of $0.3 million. Television station operating expenses increased primarily due to the increase in special events expenses, offset by decreases in compensation and benefits, originally produced programming costs, facilities expenses and the elimination of broadcasting rights fees related to our former Chicago and Puerto Rico outlets. Our corporate expenses increased by $1.9 million or 34%, mostly due to an increase in professional fees. Please refer to the Non-GAAP Financial Measures section for a definition of OIBDA and a reconciliation from a non-GAAP to GAAP financial measure.
Operating income totaled $28.9 million compared to $24.8 million for the same prior year period, representing an increase of $4.1 million or 16%. This increase in operating income was primarily due to the increase in revenue.
Third Quarter 2013 Conference Call
We will host a conference call to discuss our third quarter 2013 financial results on Friday, November 15, 2013 at 11:00 a.m. Eastern Time. To access the teleconference, please dial 412-317-6789 ten minutes prior to the start time.
If you cannot listen to the teleconference at its scheduled time, there will be a replay available through Friday, November 29, 2013 which can be accessed by dialing 877-344-7529 (U.S.) or 412-317-0088 (Int'l), passcode: 10036476.
There will also be a live webcast of the teleconference, located on the investor portion of our corporate Web site, at www.spanishbroadcasting.com/webcasts.shtml . A seven day archived replay of the webcast will also be available at that link.
About Spanish Broadcasting System, Inc.
Spanish Broadcasting System, Inc. is the largest publicly traded Hispanic-controlled media and entertainment company in the United States. SBS owns and operates 20 radio stations located in the top U.S. Hispanic markets of New York, Los Angeles, Miami, Chicago, San Francisco and Puerto Rico, airing the Tropical, Mexican Regional, Spanish Adult Contemporary and Hurban format genres. The Company also owns and operates MegaTV, a television operation with over-the-air, cable and satellite distribution and affiliates throughout the U.S. and Puerto Rico. SBS also produces live concerts and events and owns 21 bilingual websites, including www.LaMusica.com, a bilingual Spanish-English online site providing content related to Latin music, entertainment, news and culture. The Company's corporate Web site can be accessed at www.spanishbroadcasting.com.
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. Forward-looking statements, which are based upon certain assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words "may," "will," "expect," "believe," "anticipate," "intend," "could," "estimate," "might," or "continue" or the negative or other variations thereof or comparable terminology. Factors that could cause actual results, events and developments to differ are included from time to time in the Company's public reports filed with the Securities and Exchange Commission. All forward-looking statements made herein are qualified by these cautionary statements and there can be no assurance that the actual results, events or developments referenced herein will occur or be realized. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.
(Financial Table Follows)
Below are the Unaudited Condensed Consolidated Statements of Operations for the three- and nine-months ended September 30, 2013 and 2012.
|
Three-Months Ended September 30, |
Nine-Months Ended September 30, |
|||
| Amounts in thousands, except per share amounts | 2013 | 2012 | 2013 | 2012 |
| (Unaudited) | (Unaudited) | |||
| Net revenue | $ 41,082 | 35,881 | $ 116,252 | 102,586 |
| Station operating expenses | 27,394 | 22,573 | 75,155 | 67,492 |
| Corporate expenses | 2,371 | 1,564 | 7,413 | 5,552 |
| Depreciation and amortization | 1,237 | 1,365 | 3,911 | 4,122 |
| (Gain) loss on the disposal of assets, net | (3) | (3) | (25) | (8) |
| Impairment charges and restructuring costs | (136) | 148 | 889 | 572 |
| Operating income | 10,219 | 10,234 | 28,909 | 24,856 |
| Interest expense, net | (9,924) | (9,931) | (29,794) | (26,613) |
| Loss on early extinguishment of debt | -- | -- | -- | (391) |
| Income (loss) before income taxes | 295 | 303 | (885) | (2,148) |
| Income tax expense | 189 | 248 | 512 | 1,761 |
| Net income (loss) | 106 | 55 | (1,397) | (3,909) |
| Dividends on Series B preferred stock | (2,482) | (2,482) | (7,446) | (7,446) |
| Net loss applicable to common stockholders | $ (2,376) | (2,427) | $ (8,843) | (11,355) |
| Net loss per common share: | ||||
| Basic & Diluted | $ (0.33) | (0.33) | $ (1.22) | (1.56) |
| Weighted average common shares outstanding: | ||||
| Basic & Diluted | 7,267 | 7,267 | 7,267 | 7,267 |
Non-GAAP Financial Measures
Operating Income (Loss) before Depreciation and Amortization, (Gain) Loss on the Disposal of Assets, net, and Impairment Charges and Restructuring Costs ("OIBDA") is not a measure of performance or liquidity determined in accordance with Generally Accepted Accounting Principles ("GAAP") in the United States. However, we believe that this measure is useful in evaluating our performance because it reflects a measure of performance for our stations before considering costs and expenses related to our capital structure and dispositions. This measure is widely used in the broadcast industry to evaluate a company's operating performance and is used by us for internal budgeting purposes and to evaluate the performance of our stations, segments, management and consolidated operations. However, this measure should not be considered in isolation or as a substitute for Operating Income, Net Income, Cash Flows from Operating Activities or any other measure used in determining our operating performance or liquidity that is calculated in accordance with GAAP. In addition, because OIBDA is not calculated in accordance with GAAP, it is not necessarily comparable to similarly titled measures used by other companies.
Included below are tables that reconcile OIBDA to operating income (loss) for each segment and consolidated net income (loss), which is the most directly comparable GAAP financial measure.
| Quarter Ended September 30, 2013 | ||||
| (Unaudited and in thousands) | Consolidated | Radio | Television | Corporate |
| OIBDA | $ 11,317 | 13,571 | 117 | (2,371) |
| Less expenses excluded from OIBDA but included in operating income (loss): | ||||
| Depreciation and amortization | 1,237 | 470 | 692 | 75 |
| (Gain) loss on the disposal of assets, net | (3) | (3) | -- | -- |
| Impairment charges and restructuring costs | (136) | -- | -- | (136) |
| Operating Income (Loss) | $ 10,219 | 13,104 | (575) | (2,310) |
| Quarter Ended September 30, 2012 | ||||
| (Unaudited and in thousands) | Consolidated | Radio | Television | Corporate |
| OIBDA | $ 11,744 | 13,179 | 129 | (1,564) |
| Less expenses excluded from OIBDA but included in operating income (loss): | ||||
| Depreciation and amortization | 1,365 | 495 | 776 | 94 |
| (Gain) loss on the disposal of assets, net | (3) | (3) | -- | -- |
| Impairment charges and restructuring costs | 148 | (23) | -- | 171 |
| Operating Income (Loss) | $ 10,234 | 12,710 | (647) | (1,829) |
| Quarter Ended September 30, | ||||
| (Unaudited and in thousands) | 2013 | 2012 | ||
| Operating Income | $ 10,219 | 10,234 | ||
| Other (expense) income: | ||||
| Interest expense, net | (9,924) | (9,931) | ||
| Income before income taxes | 295 | 303 | ||
| Income tax expense | 189 | 248 | ||
| Net income | $ 106 | 55 | ||
| Nine-Months Ended September 30, 2013 | ||||
| (Unaudited and in thousands) | Consolidated | Radio | Television | Corporate |
| OIBDA | $ 33,684 | 41,029 | 68 | (7,413) |
| Less expenses excluded from OIBDA but included in operating income (loss): | ||||
| Depreciation and amortization | 3,911 | 1,462 | 2,227 | 222 |
| (Gain) loss on the disposal of assets, net | (25) | (12) | -- | (13) |
| Impairment charges and restructuring costs | 889 | 86 | 1,000 | (197) |
| Operating Income (Loss) | $ 28,909 | 39,493 | (3,159) | (7,425) |
| Nine-Months Ended September 30, 2012 | ||||
| (Unaudited and in thousands) | Consolidated | Radio | Television | Corporate |
| OIBDA | $ 29,542 | 36,986 | (1,892) | (5,552) |
| Less expenses excluded from OIBDA but included in operating income (loss): | ||||
| Depreciation and amortization | 4,122 | 1,572 | 2,222 | 328 |
| (Gain) loss on the disposal of assets, net | (8) | (8) | -- | -- |
| Impairment charges and restructuring costs | 572 | 48 | 11 | 513 |
| Operating Income (Loss) | $ 24,856 | 35,374 | (4,125) | (6,393) |
| Nine-Months Ended September 30, | ||||
| (Unaudited and in thousands) | 2013 | 2012 | ||
| Operating Income | $ 28,909 | 24,856 | ||
| Other (expense) income: | ||||
| Interest expense, net | (29,794) | (26,613) | ||
| Loss on early extinguishment of debt | -- | (391) | ||
| Loss before income taxes | (885) | (2,148) | ||
| Income tax expense | 512 | 1,761 | ||
| Net loss | $ (1,397) | (3,909) | ||
Unaudited Segment Data
We have two reportable segments: radio and television. The following summary table presents separate financial data for each of our operating segments:
|
Quarter Ended September 30, |
Nine-Months Ended September 30, |
|||
| 2013 | 2012 | 2013 | 2012 | |
| (In thousands) | (In thousands) | |||
| Net revenue: | ||||
| Radio | $ 35,428 | 31,192 | 100,634 | 89,258 |
| Television | 5,654 | 4,689 | 15,618 | 13,328 |
| Consolidated | $ 41,082 | 35,881 | 116,252 | 102,586 |
| Engineering and programming expenses: | ||||
| Radio | $ 6,086 | 5,470 | 15,795 | 15,199 |
| Television | 2,355 | 2,714 | 6,393 | 9,004 |
| Consolidated | $ 8,441 | 8,184 | 22,188 | 24,203 |
| Selling, general and administrative expenses: | ||||
| Radio | $ 15,771 | 12,543 | 43,810 | 37,073 |
| Television | 3,182 | 1,846 | 9,157 | 6,216 |
| Consolidated | $ 18,953 | 14,389 | 52,967 | 43,289 |
| Corporate expenses: | $ 2,371 | 1,564 | 7,413 | 5,552 |
| Depreciation and amortization: | ||||
| Radio | $ 470 | 495 | 1,462 | 1,572 |
| Television | 692 | 776 | 2,227 | 2,222 |
| Corporate | 75 | 94 | 222 | 328 |
| Consolidated | $ 1,237 | 1,365 | 3,911 | 4,122 |
| (Gain) loss on the disposal of assets, net: | ||||
| Radio | $ (3) | (3) | (12) | (8) |
| Television | -- | -- | -- | -- |
| Corporate | -- | -- | (13) | -- |
| Consolidated | $ (3) | (3) | (25) | (8) |
| Impairment charges and restructuring costs: | ||||
| Radio | $ -- | (23) | 86 | 48 |
| Television | -- | -- | 1,000 | 11 |
| Corporate | (136) | 171 | (197) | 513 |
| Consolidated | $ (136) | 148 | 889 | 572 |
| Operating income (loss): | ||||
| Radio | $ 13,104 | 12,710 | 39,493 | 35,374 |
| Television | (575) | (647) | (3,159) | (4,125) |
| Corporate | (2,310) | (1,829) | (7,425) | (6,393) |
| Consolidated | $ 10,219 | 10,234 | 28,909 | 24,856 |
Selected Unaudited Balance Sheet Information and Other Data:
| (Amounts in thousands) |
As of September 30, 2013 |
|
| Cash and cash equivalents | $ 33,737 | |
| Total assets | $ 473,790 | |
| 12.5% Senior Secured Notes due 2017, net | $ 268,788 | |
| Other debt | 8,348 | |
| Total debt | $ 277,136 | |
| Series B preferred stock | $ 92,349 | |
| Accrued Series B preferred stock dividends payable | 34,332 | |
| Total | $ 126,681 | |
| Total stockholders' deficit | $ (54,500) | |
| Total capitalization | $ 349,317 | |
| For the Fiscal Year Ended September 30, | ||
| 2013 | 2012 | |
| Capital expenditures | $ 1,469 | 1,408 |
| Cash paid for income taxes | $ -- | 23 |