MIAMI--(BUSINESS WIRE)--
Hemisphere Media Group, Inc. (NASDAQ:HMTV) ("Hemisphere" or the
"Company"), 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 fourth quarter and full year ended
December 31, 2013.
Alan Sokol, CEO of Hemisphere, stated, "We are very pleased with our
full year results, our first as a public company. Our results underscore
both the strength and unique position of our platform, which will be
significantly bolstered following the closing of our acquisition of
three major Spanish-language cable television networks from Media World,
LLC. Further, we have continued to demonstrate robust growth of our
retransmission and subscriber fees.
WAPA-TV delivered its highest ratings of the year in the fourth quarter,
and its dominant market position ensures its continued strong revenue
performance, even in a challenging environment. Cinelatino continued to
demonstrate ratings leadership across key demographics while
simultaneously expanding its subscriber growth by 10% from the prior
year. Further, the Company plans on subscribing to Nielsen ratings for
WAPA America in 2014, which the Company believes will be attractive to
national advertisers and will help to build on its strong performance in
2013."
On April 4, 2013, Hemisphere completed a series of mergers pursuant to
which WAPA 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 was the accounting acquirer and predecessor, whose
historical results became the historical results of Hemisphere. The
operating results presented in this release reflect the operating
results of all the businesses acquired in the Transaction since April 4,
2013.
Net revenues for the three months ended December 31, 2013 was $25.9
million, an increase of 12%, compared to net revenues of $23.1 million
for the same period in 2012. Net revenues for the full year ended
December 31, 2013 was $86.0 million, an increase of 21%, compared to net
revenues of $71.4 million for the same period in 2012. This increase is
primarily a result of the inclusion of the net revenues of Cinelatino
since the consummation of the Transaction in 2013, offset in part by
loss of political advertising revenue.
Pro forma for the Transaction occurring on January 1, 2012, and
excluding political advertising revenue in the 2012 period, net revenues
for the year ended December 31, 2013, increased by $2.3 million, or 3%.
This increase was driven by growth in subscriber fees, offset in part by
the loss of advertising revenue resulting from the cancellation of one
of WAPA-TV's television programs, SuperXclusivo.
Operating expenses were $20.9 million for the three months ended
December 31, 2013, an increase of 48% from operating expenses of $14.1
million in the year ago quarter. Operating expenses were $78.3 million
for the full year ended December 31, 2013, an increase of 55% from
operating expenses of $50.5 million in the year ago period. This
increase in operating expenses was due to the inclusion of Cinelatino's
operating expenses and corporate overhead, offset in part by lower
programming costs at WAPA due primarily to the cancellation of
SuperXclusivo. We also incurred in the 2013 periods, non-cash charges
comprised primarily of stock compensation expense, and one-time charges
comprised primarily of fees and expenses related to the Transaction and
the expected acquisition of the Media World networks.
Net income was $2.6 million for the three months ended December 31,
2013, a decrease of $3.9 million compared to net income of $6.6 million
for the same period in 2012, and net loss was $4.3 million for the full
year ended December 31, 2013, a decrease of $15.3 million compared to
net income of $11.0 million for the same period.
Adjusted EBITDA decreased $0.2 million, or 2%, to $10.3 million for the
three months ended December 31, 2013, and increased $7.7 million, or
30%, to $33.8 million for the full year ended December 31, 2013. Pro
forma for the acquisition of Cinelatino occurring on January 1, 2012 and
excluding political revenue in 2012, the Company's Adjusted EBITDA
increased approximately $4 million, or 12%, to $38.1 million.
The Company is forecasting 2014 full year Adjusted EBITDA of $49 to $51
million, assuming the inclusion of the operating results of the Media
World networks as of April 1, 2014.
The Company believes that WAPA-TV's overall percentage share of upfront
buys in 2014 will increase from the prior year. Additionally, the
Company believes that WAPA-TV's strong ratings will enhance the
network's ability to capture significant retransmission fee growth.
As of December 31, 2013, the Company had $172.5 million in debt and
$176.6 million of cash. The Company's leverage ratio was approximately
4.5 times. As previously announced, the $102.2 million purchase price,
subject to adjustments, for the acquisition of the Media World networks
will be funded with cash on hand and is expected to lower the Company's
leverage ratio on a pro forma basis as of December 31, 2013, to
approximately 3.3 times.
The following tables set forth the Company's financial performance for
the three months and year ended December 31, 2013 and 2012 and selected
balance sheet data for the year ended December 31, 2013 and 2012 ($ in
thousands):
|
|
Three Months Ended December 31,
|
|
|
Year Ended December 31,
|
|
|
2013
|
|
2012
|
|
|
2013
|
|
2012
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
|
|
|
|
|
|
|
|
Net Revenues
|
|
$25,876 |
|
|
$23,091 |
|
|
|
$86,005 |
|
|
$71,367 |
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
10,133
|
|
|
9,151
|
|
|
|
33,950
|
|
|
32,409
|
|
Selling, general and administrative
|
|
7,107
|
|
|
3,752
|
|
|
|
29,678
|
|
|
13,667
|
|
Depreciation and amortization
|
|
2,585
|
|
|
981
|
|
|
|
8,762
|
|
|
3,723
|
|
Other expenses
|
|
900
|
|
|
188
|
|
|
|
5,694
|
|
|
703
|
|
Loss (gain) on disposition of assets
|
|
132
|
|
|
49
|
|
|
|
199
|
|
|
(1
|
)
|
Total operating expenses
|
|
20,857
|
|
|
14,120
|
|
|
|
78,284
|
|
|
50,501
|
|
Operating income
|
|
5,019
|
|
|
8,971
|
|
|
|
7,720
|
|
|
20,866
|
|
|
|
|
|
|
|
|
|
|
|
Other Expenses:
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
(2,967
|
)
|
|
(775
|
)
|
|
|
(7,177
|
)
|
|
(3,501
|
)
|
Loss on early extinguishment of debt
|
|
-
|
|
|
-
|
|
|
|
(1,649
|
)
|
|
-
|
|
Other expense, net
|
|
|
|
(13
|
)
|
|
|
(63
|
)
|
|
(50
|
)
|
|
|
(2,967
|
)
|
|
(787
|
)
|
|
|
(8,888
|
)
|
|
(3,551
|
)
|
Income (loss) before income taxes
|
|
2,052
|
|
|
8,183
|
|
|
|
(1,167
|
)
|
|
17,315
|
|
Income tax benefit (expense)
|
|
587
|
|
|
(1,634
|
)
|
|
|
(3,130
|
)
|
|
(6,285
|
)
|
Net income (loss)
|
|
$2,639 |
|
|
$6,550 |
|
|
|
($4,297 |
)
|
|
$11,030 |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net income (loss) to Adjusted EBITDA:
|
|
|
|
|
|
Net income (loss)
|
|
$2,639 |
|
|
$6,550 |
|
|
|
($4,297 |
)
|
|
$11,030 |
|
Add (deduct):
|
|
|
|
|
|
|
|
|
|
Income tax (benefit) expense
|
|
(587
|
)
|
|
1,634
|
|
|
|
3,130
|
|
|
6,285
|
|
Other expenses, net
|
|
2,967
|
|
|
787
|
|
|
|
8,888
|
|
|
3,551
|
|
Loss (gain) on disposition of assets
|
|
132
|
|
|
49
|
|
|
|
199
|
|
|
(1
|
)
|
Depreciation and amortization
|
|
2,585
|
|
|
981
|
|
|
|
8,762
|
|
|
3,723
|
|
Stock-based compensation
|
|
1,574
|
|
|
-
|
|
|
|
7,192
|
|
|
-
|
|
EBITDA
|
|
9,310
|
|
|
10,001
|
|
|
|
23,874
|
|
|
24,589
|
|
Transaction expenses
|
|
900
|
|
|
188
|
|
|
|
5,694
|
|
|
703
|
|
Non-recurring expenses
|
|
74
|
|
|
152
|
|
|
|
4,206
|
|
|
152
|
|
Management fees
|
|
-
|
|
|
156
|
|
|
|
-
|
|
|
625
|
|
Adjusted EBITDA
|
|
$10,284
|
|
|
$10,497
|
|
|
|
$33,774
|
|
|
$26,069
|
|
|
Selected Balance Sheet Data
|
|
|
|
|
|
|
|
Year Ended
December 31,
|
|
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
|
|
|
|
(Audited)
|
Cash
|
|
|
|
|
|
$176,622 |
|
|
|
|
$10,084 |
Debt
|
|
|
|
|
|
$172,481 |
|
|
|
|
$57,012 |
|
Non-GAAP Reconciliations
Within Hemisphere's fourth quarter and full year 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 fourth quarter
and full year 2013 financial results at 10:00AM ET on Monday, March 10,
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 (866) 515-2908, or from outside the United States at (617)
399-5122, at least five minutes prior to the start time. The conference
ID for the call is 20351823.
A replay of the call will be available beginning at approximately 2:00PM
ETMarch 10 by dialing (888) 286-8010, or from outside the United States
by dialing (617) 801-6888. The conference ID for the replay is 58593238.
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. Such risks, uncertainties and assumptions include: (1) risks
relating to any unforeseen liabilities of Hemisphere and the acquired
assets in the Media World acquisition, (2) future capital expenditures,
expenses, revenues, earnings, synergies, economic performance,
indebtedness, financial condition, losses and future prospects,
businesses and management strategies and the expansion and growth of the
operations of Hemisphere; (3) Hemisphere's ability to successfully
integrate the acquired assets in the Media World acquisition and achieve
anticipated synergies; (4) the risk that disruptions from the Media
World transaction will harm Hemisphere's business; and (5) Hemisphere's,
plans, objectives, expectations and intentions generally. Additionally,
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 Reports on
Form 10-Q, 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 13 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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