MIAMI--(BUSINESS WIRE)--
Hemisphere Media Group, Inc. (NASDAQ:HMTV) ("Hemisphere"), the only
publicly traded pure-play U.S. media company targeting the high growth
Hispanic TV/cable networks business, today announced financial results
for the second quarter ended June 30, 2014.
Alan Sokol, CEO of Hemisphere, stated, "Our second quarter performance
reflected the sound execution of our strategic plan to drive growth in
our networks. We continued to leverage our world-class portfolio,
uniquely positioned in the rapidly expanding U.S. Hispanic market. We
are very encouraged by the initial performance of our recently acquired
networks and are confident that we will grow their distribution and
reach. Furthermore, our recently amended term loan facility will provide
additional funding resources for strategic acquisitions of complementary
assets. We are confident that we can continue to identify assets in our
space that we are uniquely-suited to grow and that will create
significant shareholder value. We remain on track to achieve our
full-year earnings guidance."
On April 4, 2013, Hemisphere completed a series of mergers pursuant to
which InterMedia Español Holdings, LLC, ("WAPA"), and Cine Latino, Inc.
("Cinelatino") became indirect, wholly owned subsidiaries of Hemisphere
(the "Transaction"). Results for Cinelatino are included in our
consolidated income statement from the acquisition date, April 4, 2013,
which affects the comparability of our results.
On April 1, 2014, Hemisphere closed on the acquisition of the assets of
the Spanish-language television network business of Media World, LLC
(the "Cable Networks Acquisition"), which is comprised of Pasiones,
Centroamerica TV and TV Dominicana (the "Acquired Cable Networks").
Results for the Acquired Cable Networks are included in our consolidated
income statement from the acquisition date, April 1, 2014, which affects
the comparability of our results.
Net revenues for the three months ended June 30, 2014 were $29.1
million, an increase of 27%, compared to net revenues of $22.9 million
for the same period in 2013. Net revenues for the six months ended June
30, 2014 were $50.0 million, an increase of 37%, compared to net
revenues of $36.4 million for the same period in 2013. These increases
are primarily a result of the inclusion of the Acquired Cable Networks
in the current quarter, and Cinelatino for a full six months, as well as
growth in retransmission and subscriber fees.
Operating expenses were $22.4 million for the three months ended June
30, 2014, a decrease of 7% from operating expenses of $24.2 million for
the same period in 2013. Operating expenses were $39.7 million for the
six months ended June 30, 2014, an increase of 5% from operating
expenses of $37.8 million in the year ago period. The decrease in the
three months ended June 30, 2014 was primarily due to a one-time $3.8
million charge in connection with the termination of a related party
agreement in the prior year's quarter and declines in stock compensation
expense and transaction related fees and expenses. This was offset in
part by the inclusion of the Acquired Cable Networks and amortization
expense as a result of intangibles identified in the Cable Networks
Acquisition. The increase in operating expenses for the six months ended
June 30, 2014 was primarily due to the inclusion of the Acquired Cable
Networks, and the inclusion of Cinelatino, corporate overhead and public
company charges, which were not included in the prior year's first
calendar quarter, as well as an increase in amortization expense as a
result of intangibles identified in connection with our acquisitions.
This was offset in part by a one-time $3.8 million charge in prior
year's period, and declines in stock compensation expense and
transaction related fees and expenses.
Net income was $5.3 million for the three months ended June 30, 2014, an
increase of $7.7 million compared to a net loss of $2.4 million for the
same period in 2013, and net income was $5.6 million for the six months
ended June 30, 2014, an increase of $8.5 million compared to a net loss
of $3.0 million for the same period in 2013.
Adjusted EBITDA increased $2.7 million, or 26%, to $13.2 million for the
three months ended June 30, 2014, and increased $6.5 million, or 44%, to
$21.2 million for the six months ended June 30, 2014. These increases
were due to the inclusion of the operating results of the Acquired Cable
Networks and Cinelatino and growth at our combined networks, offset in
part by a full six months of corporate overhead, which has grown as we
expand our infrastructure to support the expansion in our business.
The following tables set forth Hemisphere's financial performance for
the three and six months ended June 30, 2014 and 2013 (in thousands):
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
2014
|
|
2013
|
|
|
|
2014
|
|
2013
|
Net revenues
|
|
$
|
29,055
|
|
|
$
|
22,929
|
|
|
|
|
$
|
50,006
|
|
|
$
|
36,424
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
9,292
|
|
|
|
7,672
|
|
|
|
|
|
16,890
|
|
|
|
13,528
|
|
Selling, general and administrative
|
|
|
8,241
|
|
|
|
12,544
|
|
|
|
|
|
15,122
|
|
|
|
15,973
|
|
Depreciation and amortization
|
|
|
4,832
|
|
|
|
2,582
|
|
|
|
|
|
7,410
|
|
|
|
3,592
|
|
Other expenses
|
|
|
62
|
|
|
|
1,380
|
|
|
|
|
|
311
|
|
|
|
4,672
|
|
Loss on disposition of assets
|
|
|
16
|
|
|
|
43
|
|
|
|
|
|
14
|
|
|
|
68
|
|
Total operating expenses
|
|
|
22,443
|
|
|
|
24,221
|
|
|
|
|
|
39,747
|
|
|
|
37,833
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
6,612
|
|
|
|
(1,292
|
)
|
|
|
|
|
10,259
|
|
|
|
(1,409
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Other Expenses:
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
(2,936
|
)
|
|
|
(1,155
|
)
|
|
|
|
|
(5,843
|
)
|
|
|
(1,914
|
)
|
Other expense, net
|
|
|
-
|
|
|
|
(13
|
)
|
|
|
|
|
-
|
|
|
|
(25
|
)
|
|
|
|
(2,936
|
)
|
|
|
(1,168
|
)
|
|
|
|
|
(5,843
|
)
|
|
|
(1,939
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
3,676
|
|
|
|
(2,460
|
)
|
|
|
|
|
4,416
|
|
|
|
(3,348
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
|
|
|
1,642
|
|
|
|
34
|
|
|
|
|
|
1,150
|
|
|
|
397
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
5,318
|
|
|
$
|
(2,426
|
)
|
|
|
|
$
|
5,566
|
|
|
$
|
(2,951
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net income (loss) to EBITDA:
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
5,318
|
|
|
$
|
(2,426
|
)
|
|
|
|
$
|
5,566
|
|
|
$
|
(2,951
|
)
|
Add (deduct):
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
|
|
|
(1,642
|
)
|
|
|
(34
|
)
|
|
|
|
|
(1,150
|
)
|
|
|
(397
|
)
|
Other expenses, net
|
|
|
2,936
|
|
|
|
1,168
|
|
|
|
|
|
5,843
|
|
|
|
1,939
|
|
Loss on disposition of assets
|
|
|
16
|
|
|
|
43
|
|
|
|
|
|
14
|
|
|
|
68
|
|
Depreciation and amortization
|
|
|
4,832
|
|
|
|
2,582
|
|
|
|
|
|
7,410
|
|
|
|
3,592
|
|
Stock-based compensation
|
|
|
1,702
|
|
|
|
4,007
|
|
|
|
|
|
3,216
|
|
|
|
4,007
|
|
EBITDA
|
|
|
13,162
|
|
|
|
5,340
|
|
|
|
|
|
20,899
|
|
|
|
6,258
|
|
Transaction expenses
|
|
|
62
|
|
|
|
1,380
|
|
|
|
|
|
311
|
|
|
|
4,672
|
|
Non-recurring expenses
|
|
|
-
|
|
|
|
3,800
|
|
|
|
|
|
-
|
|
|
|
3,800
|
|
Adjusted EBITDA
|
|
$
|
13,224
|
|
|
$
|
10,520
|
|
|
|
|
$
|
21,210
|
|
|
$
|
14,730
|
|
|
Non-GAAP Reconciliations
Within Hemisphere's second quarter 2014 press release, Hemisphere makes
reference to certain non-GAAP financial measures such as "EBITDA" and
"Adjusted EBITDA." Whenever such information is presented, Hemisphere
has complied with the provisions of the rules under Regulation G and
Item 2.02 of Form 8-K. The specific reasons why Hemisphere's management
believes that the presentation of these non-GAAP financial measures
provides useful information to investors regarding Hemisphere's
financial condition, results of operations and cash flows has been
provided in the Form 8-K filed in connection with this press release.
Conference Call
Hemisphere will conduct a conference call to discuss its second quarter
financial results at 10:00AM Eastern Time on Tuesday, August 12, 2014. A
live broadcast of the conference call will be available online via the
company's Investor Relations website located at http://ir.hemispheretv.com/.
Alternatively, interested parties can access the conference call by
dialing (877) 280-4954, or from outside the United States at (857)
244-7311, at least five minutes prior to the start time. The conference
ID for the call is 19673815.
A replay of the call will be available beginning at approximately 2:00PM
Eastern TimeAugust 12 by dialing (888) 286-8010, or from outside the
United States by dialing (617) 801-6888. The conference ID for the
replay is 72610933. The replay will be archived for 30 days on the
investor relations section of www.hemispheretv.com.
Forward-Looking Statements
This press release may contain certain statements about Hemisphere that
are "forward-looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. These include, but are not
limited to, statements relating to the synergies and the benefits that
Hemisphere expects to achieve in the acquisition of the Acquired Cable
Networks, Hemisphere's future financial and operating results (including
growth and earnings), plans, objectives, expectations and intentions and
other statements that are not historical facts. These statements are
based on the current expectations of the management of Hemisphere and
are subject to uncertainty and changes in circumstance, which may cause
actual results to differ materially from those expressed or implied in
such forward-looking statements. Without limitation, any statements
preceded or followed by or that include the words "targets," "plans,"
"believes," "expects," "intends," "will," "likely," "may,"
"anticipates," "estimates," "projects," "should," "would," "expect,"
"positioned," "strategy," "future," or words, phrases or terms of
similar substance or the negative thereof, are forward-looking
statements. In addition, these statements are based on a number of
assumptions that are subject to change. Factors that could cause actual
results to differ materially from those expressed or implied by the
forward-looking statements are discussed under the heading "Risk
Factors" and "Forward-Looking Statements" in Hemisphere's most recent
Annual Report on Form 10-K, filed with the Securities and Exchange
Commission ("SEC"), as they may be updated in any future reports filed
with the SEC. If one or more of these factors materialize, or if any
underlying assumptions prove incorrect, Hemisphere's actual results,
performance, or achievements may vary materially from any future
results, performance or achievements expressed or implied by these
forward-looking statements. Forward-looking statements included herein
are made as of the date hereof, and Hemisphere undertakes no obligation
to update publicly such statements to reflect subsequent events or
circumstances.
About Hemisphere Media Group, Inc.
Hemisphere Media Group (NASDAQ:HMTV) is the only publicly-traded
pure-play U.S. Spanish-language TV/cable network business serving the
high-growth U.S. Hispanic population. Headquartered in Miami, Florida,
Hemisphere owns and operates five leading U.S. Hispanic cable networks,
two Latin American cable networks, and the leading broadcast television
network in Puerto Rico. Hemisphere's networks consist of:
-
Cinelatino, the leading Spanish-language movie channel distributed in
the U.S., Latin America and Canada, featuring the largest selection of
contemporary Spanish-language blockbusters and critically-acclaimed
titles from Mexico, Latin America, Spain and the Caribbean.
-
WAPA PR, Puerto Rico's leading broadcast station with the highest
primetime and full day ratings in Puerto Rico. Founded in 1954, WAPA
PR produces more than 65 hours per week of top-rated news and
entertainment programming.
-
WAPA America, the leading cable network targeting Puerto Ricans and
other Caribbean Hispanics living in the U.S., featuring the
highly-rated news and entertainment programming produced by WAPA PR.
-
Pasiones, dedicated to showcasing the most popular telenovelas and
drama series, distributed in the U.S. and Latin America.
-
Centroamerica TV, the leading network targeting Central Americans
living in the U.S., the third largest U.S. Hispanic group, featuring
the most popular news, entertainment and soccer programming from
Central America.
-
TV Dominicana, the leading network targeting Dominicans living in the
U.S., featuring the most popular news, entertainment and baseball
programming from the Dominican Republic.

Hemisphere Media Group, Inc.
Robin Weinberg, 212-687-8080
or
Patrick
Scanlan, 212-687-8080
Source: Hemisphere Media Group, Inc.
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