Entravision Communications Corporation (EVC)
Q1 2009 Earnings Call
May 6, 2009 5:00 pm ET
Walter F. Ulloa - Chairman & Chief Executive Officer
Christopher T. Young - Chief Financial Officer & Executive Vice President
Philip C. Wilkinson – President, Chief Operating Officer & Director
James Dix – Wedbush Morgan Securities
[Mark Presley – Health and Safety Group]
[Abbey Steiner – JP Morgan]
Previous Statements by EVC
» Entravision Communications Corporation Q2 2009 Earnings Call Transcript
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» Entravision Communications Corporation Q3 2008 Earnings Call Transcript
Walter F. Ulloa
Welcome to Entravision’s first quarter 2009 earnings conference call. Joining me today is Chris Young, our Executive Vice President and Chief Financial Officer and Philip Wilkinson, our President and Chief Operating Officer.
Before we begin I must inform you that this conference call will contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ. Please refer to our SEC filings for a list of risks and uncertainties that could impact actual results. In addition this call is the property of Entravision Communications Corporation.
Any redistribution, retransmission or rebroadcast of this call in any form without the express written consent of Entravision Communications Corporation is strictly prohibited. Also this call will include certain non-GAAP financial measures. The company has provided a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures in today’s press release.
The press release is available on the company’s website and was filed with the SEC in a Form 8-K. In addition with the announced sale of the company’s Outdoor Division at March 31, 2008 Outdoor was classified as a discontinued operation and the results of operations are separately reported for all periods presented.
Our results in the quarter reflect the continued economic recession and the challenging environment for advertising supported businesses. Our focus remains on the factors within our control and we are aggressively managing our costs to ensure we are maximizing our cash flows and reducing debt.
We continue to take a prudent approach to managing our expenses. We have implemented a number of cost initiatives which are expected to generate approximately $20 million in savings in 2009 versus 2008. These cost savings include an additional $9 million of expense reduction that we have made since our investor conference call in February and we will continue to review additional measures that will lead to increased efficiencies across our operations.
At the same time we are ensuring our assets have the proper support with regard to delivering quality content and driving audience shares. Our television and radio properties remain well positioned with strong ratings in the Nation’s most dynamic Latino markets. We are aggressively pursuing new business and nontraditional opportunities such as distribution and interactive platform revenues both of which are expected to show growth this year.
Turning to our financial results for the quarter our consolidated first quarter revenue fell 25% versus the same period in 2008 to $41.7 million. Consolidated adjusted EBITDA decreased 60% to $6.7 million versus last year while free cash flow per share decreased 120%. The first quarter of 2008 benefited from $1.7 million of political revenue versus $10,000 of political revenue in the first quarter of 2009.
Turning to our television division excluding retransmission fees revenue decreased 27% in the first quarter versus the prior year period. The local and national revenue fell 24% and 30% respectively. The decrease is primarily due to continued softness in the automotive and retail categories as well as $1.5 million in non-returning political television revenue. Auto was off 64% in the first quarter with weaknesses from all major brands.
Partially offsetting these were increases in the services, telecommunications and healthcare categories which grew by 4%, 2% and 18% respectively. Top advertisers for Entravision television in the quarter were McDonald’s, Verizon, Cricket Communications, Ford and AT&T Mobility. On a positive note the auto category stabilized in the second half of the quarter and that trend continued through April.
One important factor for Entravision is that Nissan Regional has added our Univision affiliate in Denver to its list of priority markets in its new fiscal plans which started April 1. In addition Ford and General Motors have extended their Advantage and Total Confidence campaign in several key Entravision markets.
Finally several manufacturers are offering generous new coop advertising incentives to their local deals to promote their parts and service departments which our Entravision’s sales force is actively pursuing. Our sales and marketing teams have adapted to selling in a new environment where creativity and results determine success.
Our coordinated sales efforts are focused on today’s fastest growing advertising categories including trade schools, recruitment, loan modification, attorney groups and insurance. These focused efforts resulted in the addition of 37 new advertisers within our TV division investing over $10,000 in the quarter.
On another positive note our television division generated about $1.8 million in retransmission revenue in the first quarter as a result of our alliance with Univision in the pursuit of retransmission revenue from the cable and satellite providers. Univision and Entravision have now executed multi-year retransmission agreements with Comcast, DIRECTV, Time Warner, Dish, Verizon, AT&T and several other video distributors in Entravision markets.