- Q2 2016 Net Revenues Increased 7% Year-over-Year -
- Q2 2016 Adjusted EBITDA Increased 5% Year-over-Year -
- Continued Strong Subscriber Growth -
- Affirms Full-Year Adjusted EBITDA Guidance -
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 Spanish-language television and cable networks
business in the U.S. and Latin America, today announced financial
results for the second quarter ended June 30, 2016.
Alan Sokol, CEO of Hemisphere, stated, "We are pleased with our
performance in the second quarter, as we posted a healthy 7% increase in
Net Revenues and 5% increase in Adjusted EBITDA, in line with our
expectations. Our results clearly validate that our strategy to deliver
compelling and differentiated content to the growing U.S. Hispanic and
Latin American markets is working. We once again saw strong growth in
retransmission and subscriber fees across all of our networks, as well
as solid advertising revenue growth. Our networks all continue to see
strong organic subscriber growth, which sharply differentiates us from
the environment surrounding general market cable networks. We also
continue to make strategic investments in key programming for our
networks which we believe will build viewership and revenue. Based on
our performance in the quarter and outlook for the second half of the
year, we are reaffirming our full year Adjusted EBITDA guidance of low
double digit growth, driven by strong growth in subscriber and
retransmission fees and advertising revenue.
"Finally, we are encouraged by the enactment into law of the Puerto Rico
Oversight, Management and Economic Stability Act, or PROMESA. We are
hopeful that this will serve as a positive catalyst towards long-term
fiscal and economic stability in Puerto Rico."
Net revenues were $35.0 million for the three months ended June 30,
2016, an increase of 7%, as compared to net revenues of $32.6 million
for the comparable period in 2015. Net revenues were $66.0 million for
the six months ended June 30, 2016, an increase of 6%, as compared to
net revenues of $62.1 million for the comparable period in 2015. These
increases, for both the three and six month periods, were due to higher
retransmission and subscriber fees, driven by growth in subscribers and
rate increases, as well as growth in advertising revenues, primarily as
a result of political advertising revenue. Excluding political
advertising revenue, net revenues increased $1.7 million, or 5%, for the
three months ended June 30, 2016, and increased $3.2 million, or 5%, for
the six months ended June 30, 2016.
Operating expenses were $24.4 million for the three months ended June
30, 2016, an increase of 2%, as compared to operating expenses of $23.8
million for the comparable period in 2015. Operating expenses were $48.2
million for the six months ended June 30, 2016, an increase of 4%, as
compared to operating expenses of $46.3 million for the comparable
period in 2015. These increases, for both the three and six month
periods, were driven primarily by increased investment in programming
and higher costs related to advertising sales and marketing, consistent
with the Company's efforts to upgrade the content on its networks and
drive advertising sales across its networks, including the launch of
advertising on Cinelatino.
Net income was $5.0 million for the three months ended June 30, 2016, an
increase of $1.6 million, as compared to net income of $3.4 million for
the comparable period in 2015. Net income for the six months ended June
30, 2016 was $7.7 million, an increase of $1.8 million, as compared to
net income of $5.9 million for the comparable period in 2015.
Adjusted EBITDA was $15.5 million for the three months ended June 30,
2016, an increase of 5%, as compared to Adjusted EBITDA of $14.7 million
for the comparable period in 2015. Adjusted EBITDA was $28.8 million for
the six months ended June 30, 2016, an increase of 5%, as compared to
Adjusted EBITDA of $27.5 million for the comparable period in 2015.
The Company affirms its forecast of a low double-digit percentage
increase in Adjusted EBITDA for 2016 driven by strong growth in
subscriber and retransmission fees and advertising revenue.
As of June 30, 2016, the Company had $211.8 million in debt and $147.2
million of cash. The Company's leverage ratio was approximately 3.6
times, and net leverage ratio was approximately 1.1 times. Additionally,
the Company repurchased 2.8 million shares of Hemisphere's Class A
common stock at $10.50 per share for $29.4 million in the quarter.
The following tables set forth the Company's financial performance for
the three and six months ended June 30, 2016 as well as select balance
sheet data as of June 30, 2016:
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HEMISPHERE MEDIA GROUP, INC.
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Comparison of Consolidated Operating Results for the Three
and Six Months Ended June 30
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(amounts in thousands)
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Three Months Ended June 30,
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Six Months Ended June 30,
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2016
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2015
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2016
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2015
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(Unaudited)
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(Unaudited)
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Net revenues
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$
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35,031
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$
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32,618
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$
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66,002
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$
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62,089
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Operating Expenses:
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Cost of revenues
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10,638
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9,908
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20,821
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19,360
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Selling, general and administrative
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9,520
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9,325
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18,776
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17,909
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Depreciation and amortization
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4,061
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4,265
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8,417
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8,646
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Other expenses
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119
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306
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132
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306
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Loss on disposition of assets
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16
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34
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15
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31
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Total operating expenses
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24,354
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23,838
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48,161
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46,252
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Operating income
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10,677
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8,780
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17,841
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15,837
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Other Expenses:
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Interest expense, net
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(2,869)
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(3,008)
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(5,825)
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(5,991)
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Income before income taxes
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7,808
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5,772
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12,016
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9,846
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Income tax expense
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(2,779)
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(2,341)
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(4,287)
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(3,952)
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Net income
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$
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5,029
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$
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3,431
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$
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7,729
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$
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5,894
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Reconciliation of net income to Adjusted EBITDA:
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Net income
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$
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5,029
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$
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3,431
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$
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7,729
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$
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5,894
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Add:
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Income tax expense
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2,779
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2,341
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4,287
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3,952
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Interest expense, net
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2,869
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3,008
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5,825
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5,991
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Loss on disposition of assets
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16
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34
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15
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31
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Depreciation and amortization
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4,061
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4,265
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8,417
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8,646
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Stock-based compensation
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589
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1,361
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1,989
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2,687
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Transaction & non-recurring expenses
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119
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306
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522
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306
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Adjusted EBITDA
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$
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15,462
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$
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14,746
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$
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28,784
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$
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27,507
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Selected Balance Sheet Data:
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As of
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As of
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June 30, 2016
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December 31, 2015
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(Unaudited)
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(Audited)
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Cash
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$
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147,168
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$
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179,532
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Debt
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$
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211,834
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$
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219,923
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Leverage ratio (a):
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3.6x
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3.8x
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Net leverage ratio (b):
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1.1x
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0.7x
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(a) Represents the sum of gross debt and the unamortized balance of
original issue discount of $1.5 million as of June 30, 2016, divided by
Adjusted EBITDA for the last twelve months. This ratio differs from the
calculation contained in the Company's amended term loan.
(b)
Represents the sum of net debt and the unamortized balance of original
issue discount of $1.5 million as of June 30, 2016, divided by Adjusted
EBITDA for the last twelve months. This ratio differs from the
calculation contained in the Company's amended term loan.
The following table presents estimated subscriber information
(unaudited):
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Subscribers (a)
(amounts in thousands)
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June 30, 2016
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December 31, 2015
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U.S. Cable Networks:
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WAPA America (b)
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5,234
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5,158
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Cinelatino
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4,535
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4,443
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Pasiones
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4,483
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4,374
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Centroamerica TV
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4,022
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3,967
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Television Dominicana
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3,106
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2,991
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Total
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21,380
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20,933
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Latin America Cable Networks:
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Cinelatino
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12,987
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11,891
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Pasiones
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10,820
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10,198
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Total
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23,807
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22,089
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(a) Amounts presented are based on most recent remittances received from
the Company's distributors as of the respective dates shown above.
(b)
Excluding digital basic subscribers, subscribers to WAPA America on
Hispanic programming tiers increased by 1.8% from December 31, 2015 to
June 30, 2016.
Non-GAAP Reconciliations
Within Hemisphere's second quarter 2016 press release, Hemisphere makes
reference to the non-GAAP financial measure, "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 this non-GAAP financial measure provides useful
information to investors regarding Hemisphere's financial condition,
results of its 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
results at 10:00 AM ET on Friday, August 5, 2016. 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) 497-1436, or from outside the United States at (262)
558-6292, at least five minutes prior to the start time. The conference
ID for the call is 56385056.
A replay of the call will be available beginning at approximately 1:00
PM ET on Friday, August 5, 2016 by dialing (855) 859-2056, or from
outside the United States by dialing (404) 537-3406. The conference ID
for the replay is 56385056.
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 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, Inc. (NASDAQ:HMTV) is the only publicly traded
pure-play U.S. media company targeting the high growth Spanish-language
television and cable networks business in the U.S. and Latin America.
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:
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Cinelatino, the leading Spanish-language movie channel with over 17
million subscribers across the U.S., Latin America and Canada,
including 4.5 million subscribers in the U.S. and 13.0 million
subscribers in Latin America, featuring the largest selection of
contemporary Spanish-language blockbusters and critically-acclaimed
titles from Mexico, Latin America, Spain and the Caribbean.
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WAPA, Puerto Rico's leading broadcast television network with the
highest primetime and full day ratings in Puerto Rico. Founded in
1954, WAPA produces more than 75 hours per week of top-rated news and
entertainment programming.
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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. WAPA
America is distributed in the U.S. to 5.2 million subscribers.
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Pasiones, dedicated to showcasing the most popular telenovelas and
drama series, distributed in the U.S. and Latin America. Pasiones has
4.5 million subscribers in the U.S. and 10.8 million subscribers in
Latin America.
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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. Centroamerica TV is distributed in the U.S. to 4.0
million subscribers.
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Television Dominicana, the leading network targeting Dominicans living
in the U.S., featuring the most popular news, entertainment and
baseball programming from the Dominican Republic. Television
Dominicana is distributed in the U.S. to 3.1 million subscribers.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160805005157/en/
Sloane & Company
Erica Bartsch, 212-446-1875
ebartsch@sloanepr.com
Source: Hemisphere Media Group, Inc.
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