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 third quarter ended September 30, 2013.
On April 4, 2013, Hemisphere completed a series of mergers pursuant to
which InterMedia Español Holdings, LLC, ("WAPA"), which includes WAPA
America and WAPA TV, Cine Latino, Inc. ("Cinelatino") and Azteca
Acquisition Corporation ("Azteca"), a special purpose acquisition
company, each became indirect, wholly owned subsidiaries of Hemisphere
(the "Transaction"). WAPA is the accounting acquirer and predecessor,
whose historical results have become the historical results of
Hemisphere. The operating results presented reflect the operating
results of all the businesses acquired in the Transaction since the
merger date.
Net revenue for the three months ended September 30, 2013 was $23.7
million, an increase of 35%, compared to net revenue of $17.5 million
for the same period in 2012. Net revenue for the nine months ended
September 30, 2013 was $60.1 million, an increase of 25%, compared to
net revenue of $48.3 million for the same period in 2012. This increase
in revenue is primarily a result of the inclusion of the net revenue of
Cinelatino since the date of the merger. Excluding the acquisition in
the 2013 periods and political advertising revenue in the 2012 periods,
for the three and nine months ended September 30, 2013, net revenues
increased by $0.5 million, or 3%, and $0.3 million, or 1%, respectively.
The increase in revenue for the current quarter was due to a 15%
increase in retransmission and subscriber fees, and a 1% increase in
advertising revenue, despite the cancellation earlier this year of one
of Puerto Rico's top-rated television programs, SuperXclusivo. The
increase in revenue for the nine month period was due to a 15% increase
in retransmission and subscriber fees offset in part by a 3% decline in
advertising revenue as a result of the cancellation of SuperXclusivo.
Operating expenses were $19.6 million for the three months ended
September 30, 2013, an increase of 41% from operating expenses of $13.9
million in the year ago quarter. Operating expenses were $56.5 million
for the nine months ended September 30, 2013, an increase of 55% from
operating expenses of $36.4 million in the year ago period. The increase
in operating expenses were due to the inclusion in the current quarter
of Cinelatino in the operating results since the consummation of the
Transaction, offset in part by lower programming costs at WAPA due
primarily to the cancellation of SuperXclusivo.
Net loss was $4.0 million for the three months ended September 30, 2013,
a decrease of $4.9 million compared to net income of $0.9 million for
the same period in 2012, and net loss was $6.4 million for the nine
months ended September 30, 2013, a decrease of $10.9 million compared to
net income of $4.5 million for the same period.
Adjusted EBITDA increased $4.0 million, or 85%, to $8.8 million for the
three months ended September 30, 2013, and increased $7.9 million, or
51%, to $23.5 million for the nine months ended September 30, 2013. We
have previously disclosed Adjusted EBITDA for each of WAPA and
Cinelatino for the nine months ended September 30, 2012, which when
aggregated, total $25.5 million. Assuming Cinelatino was acquired on
January 1, 2013, Adjusted EBITDA for the nine months ended September 30,
2013 was $27.8 million, an increase of $2.3 million, or 9.1%, as
compared to the same period in 2012.
Alan Sokol, CEO of Hemisphere, stated, "We are very pleased with our
third quarter performance. Our cable television networks, Cinelatino and
WAPA America, continue to be leaders in U.S. Hispanic television with
strong subscriber revenue growth. WAPA-TV remains the top-rated
television network in Puerto Rico and our ratings showed
quarter-over-quarter growth, increasing the size of our ratings lead
over our competitors. Our ratings success and growth in retransmission
and subscriber fees among all of our networks have largely offset the
impact on the advertising market of the well-publicized economic
challenges faced by Puerto Rico. However, given the seasonally higher
advertising dollars in the fourth quarter, and a Puerto Rican television
advertising market that we now believe will be flat with last year, full
year EBITDA performance could be impacted by approximately 5%-7%. We
believe that the Puerto Rican government has taken steps to stabilize
the economy, which combined with growth from retransmission and
subscriber fees and advertising in our other networks, should moderate
the impact of any future economic volatility. We also continue to
aggressively pursue acquisitions which will further expand our revenue
base and take advantage of our unique position as the leading Hispanic
network platform."
The following tables set forth the Company's financial performance for
the three and nine months ended September 30, 2013 and 2012 ($ in
thousands):
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
2013
|
|
2012
|
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$23,705
|
|
|
$17,544
|
|
|
|
$60,129
|
|
|
$48,277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
10,290
|
|
|
9,234
|
|
|
|
23,818
|
|
|
23,258
|
|
|
Selling, general and administrative
|
|
6,597
|
|
|
3,309
|
|
|
|
21,670
|
|
|
9,915
|
|
|
Depreciation and amortization
|
|
2,586
|
|
|
920
|
|
|
|
6,177
|
|
|
2,742
|
|
|
Other expenses
|
|
122
|
|
|
430
|
|
|
|
4,794
|
|
|
516
|
|
|
Loss (gain) on disposition of assets
|
|
-
|
|
|
-
|
|
|
|
68
|
|
|
(50
|
)
|
|
Total operating expenses
|
|
19,595
|
|
|
13,893
|
|
|
|
56,527
|
|
|
36,381
|
|
|
Operating income
|
|
4,110
|
|
|
3,651
|
|
|
|
3,602
|
|
|
11,896
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Expenses:
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
(2,339
|
)
|
|
(853
|
)
|
|
|
(4,210
|
)
|
|
(2,727
|
)
|
|
Loss on early extinguishment of debt
|
|
(1,649
|
)
|
|
-
|
|
|
|
(1,649
|
)
|
|
-
|
|
|
Other expense, net
|
|
(37
|
)
|
|
(13
|
)
|
|
|
(63
|
)
|
|
(37
|
)
|
|
|
|
(4,025
|
)
|
|
(866
|
)
|
|
|
(5,922
|
)
|
|
(2,764
|
)
|
|
Income (loss) before income taxes
|
|
$85
|
|
|
$2,785
|
|
|
|
$(2,320
|
)
|
|
$9,132
|
|
|
Income tax expense
|
|
(4,070
|
)
|
|
(1,829
|
)
|
|
|
(4,064
|
)
|
|
(4,652
|
)
|
|
Net (loss) income
|
|
$(3,985
|
)
|
|
$956
|
|
|
|
$(6,384
|
)
|
|
$4,480
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net (loss) income to EBITDA:
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$(3,985
|
)
|
|
$956 |
|
|
|
$(6,384
|
)
|
|
$4,480 |
|
|
Add (deduct):
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
4,070
|
|
|
1,829
|
|
|
|
4,064
|
|
|
4,652
|
|
|
Other expense, net
|
|
2,376
|
|
|
866
|
|
|
|
4,273
|
|
|
2,764
|
|
|
Loss (gain) on disposition of assets
|
|
-
|
|
|
-
|
|
|
|
68
|
|
|
(50
|
)
|
|
Loss on early extinguishment of debt
|
|
1,649
|
|
|
-
|
|
|
|
1,649
|
|
|
-
|
|
|
Depreciation and amortization
|
|
2,586
|
|
|
920
|
|
|
|
6,177
|
|
|
2,742
|
|
|
Stock-based compensation
|
|
1,611
|
|
|
-
|
|
|
|
4,717
|
|
|
-
|
|
|
EBITDA
|
|
8,307
|
|
|
4,571
|
|
|
|
14,564
|
|
|
14,588
|
|
|
Transaction expenses
|
|
122
|
|
|
13
|
|
|
|
4,794
|
|
|
516
|
|
|
Non-recurring expenses
|
|
332
|
|
|
-
|
|
|
|
4,132
|
|
|
-
|
|
|
Management fees
|
|
-
|
|
|
156
|
|
|
|
-
|
|
|
468
|
|
|
Adjusted EBITDA
|
|
$8,761
|
|
|
$4,740
|
|
|
|
$23,490
|
|
|
$15,572
|
|
|
|
Non-GAAP Reconciliations
Within Hemisphere's third quarter 2013 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 third quarter
financial results at 10:00AM ET on Wednesday, November 13, 2013. 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 (866) 700-5192, or from outside the United States at (617)
213-8833, at least five minutes prior to the start time. The conference
ID for the call is 77402930.
A replay of the call will be available beginning at approximately 2:00PM
ETNovember 13 by dialing (888) 286-8010, or from outside the United
States by dialing (617) 801-6888. The conference ID for the replay is
61398608.
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 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 registration statement on Form
S-4 (File No. 333-186210) (the "Registration Statement"), post-effective
amendment No. 1 on Form S-1 to the Registration Statement and Quarterly
Report on Form 10-Q for the quarter ended June 30, 2013, each 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 Cinelatino, WAPA Television and WAPA
America. Cinelatino is the leading Spanish-language movie channel with
more than 12 million subscribers 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 Television is Puerto Rico's leading
broadcast station with the highest primetime and full day ratings in
Puerto Rico. Founded in 1954, WAPA Television produces more than 65
hours per week of top-rated news and entertainment programming. WAPA
America is 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-TV. WAPA America has more
than five million U.S. subscribers.
For Hemisphere Media Group, Inc.:
Robin Weinberg/Patrick Scanlan,
212-687-8080
Source: Hemisphere Media Group, Inc.
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