President and Chief Executive Officer of Hemisphere,
Overall, the pace of economic recovery in
Our strategic investments, Canal 1 and Pantaya, continue to deliver highly encouraging results. We remain focused on delivering unique and compelling content and we are optimistic about our growth strategy and shareholder value enhancement opportunities."
Financial Results for the Three and Nine Months Ended
Net revenues were
Net revenues were
Affiliate fees increased due to subscriber fee increases, both contractual and upon renewal, and overall subscriber growth, offset in part by the interruption caused by Hurricane Maria on subscriptions to pay television in
Operating expenses were
Net loss was
Adjusted EBITDA was
The Company affirms its forecast of mid-teen percentage growth in Adjusted EBITDA for the full year 2018, as compared to 2017.
As of
During the three months ended
During the three months ended
The following tables set forth the Company's financial performance for the three and nine months ended
HEMISPHERE MEDIA GROUP, INC. |
|||||||
(amounts in thousands) |
|||||||
Three Months Ended |
Nine Months Ended September 30, |
||||||
2018 |
2017 |
2018 |
2017 |
||||
(Unaudited) |
(Unaudited) |
||||||
Net revenues |
$ 37,239 |
$ 32,173 |
$ 101,065 |
$ 100,512 |
|||
Operating Expenses: |
|||||||
Cost of revenues |
11,039 |
9,883 |
31,300 |
30,426 |
|||
Selling, general and administrative |
11,095 |
9,510 |
32,787 |
28,845 |
|||
Depreciation and amortization |
4,023 |
4,041 |
12,040 |
12,223 |
|||
Other expenses |
193 |
332 |
967 |
3,056 |
|||
(Gain) from FCC repack and other (gain) loss |
(936) |
- |
(974) |
2 |
|||
Total operating expenses |
25,414 |
23,766 |
76,120 |
74,552 |
|||
Operating income |
11,825 |
8,407 |
24,945 |
25,960 |
|||
Other (expense) income: |
|||||||
Interest expense, net |
(3,073) |
(2,863) |
(8,976) |
(8,089) |
|||
Loss on equity method investments |
(8,657) |
(2,571) |
(27,278) |
(2,450) |
|||
Gain from insurance proceeds |
2,080 |
- |
2,080 |
- |
|||
Loss on impairment of assets |
- |
(533) |
- |
(533) |
|||
Total other expense |
(9,650) |
(5,967) |
(34,174) |
(11,072) |
|||
Income (loss) before income taxes |
2,175 |
2,440 |
(9,229) |
14,888 |
|||
Income tax expense |
(3,229) |
(1,758) |
(4,490) |
(6,280) |
|||
Net (loss) income |
$ (1,054) |
$ 682 |
$ (13,719) |
$ 8,608 |
|||
Reconciliation of net (loss) income to Adjusted EBITDA: |
|||||||
Net (loss) income |
$ (1,054) |
$ 682 |
$ (13,719) |
$ 8,608 |
|||
Add (Deduct): |
|||||||
Income tax expense |
3,229 |
1,758 |
4,490 |
6,280 |
|||
Other expense |
9,650 |
5,967 |
34,174 |
11,072 |
|||
(Gain) from FCC repack and other (gain) loss |
(936) |
- |
(974) |
2 |
|||
Transaction and non-recurring expenses |
220 |
334 |
1,479 |
3,114 |
|||
Hurricane related expenses |
- |
- |
1,048 |
- |
|||
Depreciation and amortization |
4,023 |
4,041 |
12,040 |
12,223 |
|||
Stock-based compensation |
969 |
981 |
2,967 |
3,104 |
|||
Adjusted EBITDA |
$ 16,101 |
$ 13,763 |
$ 41,505 |
$ 44,403 |
Selected Financial Data:
(amounts in thousands)
As of |
As of |
||||
September 30, 2018 |
December 31, 2017 |
||||
(Unaudited) |
(Audited) |
||||
Cash |
$95,933 |
$124,299 |
|||
Debt (a) |
$209,081 |
$211,214 |
|||
Leverage ratio (b): |
4.3x |
4.1x |
|||
Net leverage ratio (c): |
2.3x |
1.7x |
|||
(a) Represents the aggregate principal amount of the debt. |
|||||
(b) Represents gross debt divided by Adjusted EBITDA for the last twelve months. This ratio differs from the calculation contained in the Company's amended term loan. |
|||||
(c) Represents gross debt less cash 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):
Subscribers (a) |
||||||||
September 30, 2018 |
December 31, 2017 |
September 30, 2017 |
||||||
U.S. Cable Networks: |
||||||||
WAPA America (b) |
4,508 |
4,362 |
4,330 |
|||||
Cinelatino |
4,745 |
4,424 |
4,563 |
|||||
Pasiones |
4,573 |
4,450 |
4,602 |
|||||
Centroamerica TV |
4,358 |
4,127 |
4,125 |
|||||
Television Dominicana |
2,229 |
1,876 |
3,468 |
|||||
Total |
20,413 |
19,239 |
21,088 |
|||||
Latin America Cable Networks: |
||||||||
Cinelatino |
16,365 |
16,087 |
16,139 |
|||||
Pasiones |
16,004 |
14,776 |
13,504 |
|||||
Total |
32,369 |
30,863 |
29,643 |
|||||
(a) |
Amounts presented are based on most recent remittances received from the Company's distributors as of the respective dates shown above, which are typically two months prior to the dates shown above. |
|
(b) |
Excludes digital basic subscribers. |
Non-GAAP Reconciliations
Within Hemisphere's third quarter 2018 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. When presenting Adjusted EBITDA, Hemisphere's management adds back (deducts) from net income or net loss, if any, depreciation expense, amortization of intangibles, (gain) from FCC repack and other (gain) loss, transaction and non-recurring expenses, hurricane related expenses, income tax expense, stock-based compensation, and other expense items. 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. A reconciliation of net income to Adjusted EBITDA can be found above in the table that sets forth Hemisphere's financial performance for the three months ended
Conference Call
Hemisphere will conduct a conference call to discuss its third quarter 2018 results at
A replay of the call will be available beginning at approximately
Forward-Looking Statements
Statements in this press release and oral statements made from time to time by representatives of Hemisphere may contain certain statements about Hemisphere and its consolidated subsidiaries 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, the effects of Hurricane Maria in the short and long-term on Hemisphere's business and the advertising market in
About
1 See the Non-GAAP Reconciliations section of this earnings release for a discussion of non-GAAP financial measures used in this release.
Contact:
Edelman Financial Communications for
(646) 277-1289
Danielle.obrien@edelman.com
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