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Entravision Communications (EVC)
Q1 2014 Earnings Call
May 08, 2014 5:00 pm ET
Walter F. Ulloa - Co-Founder, Executive Chairman and Chief Executive Officer
Christopher T. Young - Chief Financial Officer, Principal Accounting Officer, Executive Vice President and Treasurer
Michael A. Kupinski - Noble Financial Group, Inc., Research Division
Andrew DeGasperi - Macquarie Research
Tracy B. Young - Evercore Partners Inc., Research Division
James G. Dix - Wedbush Securities Inc., Research Division
Previous Statements by EVC
» Entravision Communications Management Discusses Q4 2013 Results - Earnings Call Transcript
» Entravision Communications Management Discusses Q3 2013 Results - Earnings Call Transcript
» Entravision Communications Management Discusses Q2 2013 Results - Earnings Call Transcript
I would now like to turn the conference over to Mr. Walter Ulloa. Mr. Ulloa, the floor is yours, sir.
Walter F. Ulloa
Thank you, Mike. Good afternoon, everyone, welcome to Entravision's First Quarter 2014 Earnings Conference Call. Joining me today is Chris Young, our Executive Vice President and Chief Financial 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. 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 on Form 8-K.
We generated strong financial results during the first quarter, and we are off to a solid start in 2014. Our core television and radio properties outperformed the broader market once again. And we made additional progress strengthening our digital offerings and marketing and sales capabilities. Our strong position in key Latino markets nationwide and the expansion of our multimedia offerings gives us the unique ability to deliver robust, multi-platform campaigns to reach the rapidly expanding Latino population.
Consolidated first quarter revenue was $52.7 million, up 7% compared to the first quarter of 2013. We generated consolidated adjusted EBITDA growth of 12% and year-over-year free cash flow growth of 172%. Operating expenses were up 5% for the quarter. EPS for the quarter was $0.05 per share compared to negative $0.01 per share in the first quarter of 2013.
Free cash flow, as defined in our earnings release, increased 172% to $9.4 million or $0.11 per share for the quarter, compared to the $3.4 million or $0.04 per share for the same quarter last year. Cash interest expense was 30 -- $3.2 million compared to $7.3 million in the same quarter last year, due to the successful refinancing of our debt during the third quarter of 2013.
Now moving on to our operating highlights for the first quarter. Our television revenue increased 8% during the first quarter. Local television revenues increased 8% in the quarter, while national TV revenues were flat. On a core basis, excluding political revenues and retransmission fees, first quarter TV revenues increased 3% in the first quarter of 2013.
Core local television revenue grew 6%, while core national revenue decreased 2% during the quarter. This growth demonstrates our ability to consistently outperform the broader television industry. The Television Advertising Bureau estimated that core television industry revenue increased 1% in the first quarter compared to our core television growth of 3%. We have now significantly exceeded the industry's core growth projections for 10 consecutive quarters.
We also continue to see strong growth in the automotive category, which was up 16% during the first quarter. Automotive spending growth at our television stations has now posted double-digit increases in 17 consecutive quarters. We believe it is worth noting that once again, the growth in automotive spending was broad as we generated sales growth in all 3 automotive tiers. Tier 1 was up 20%, Tier 2 plus 12% and Tier 3 plus 12%.
In the first quarter, we generated growth with 7 of our top-10 automotive brands, led by Nissan, Hyundai and Toyota. We expect continued momentum in the automotive category during 2014, given the anticipated robust product cycle, strong demand, low borrowing rates, as well as the automotive category's historical investment in the World Cup.
Beyond automotive, we experienced growth in 4 of our top-10 categories during the first quarter, including health care, groceries and services. The health care category was up 86% during the quarter, while groceries finished up 14%. The health care category continued its momentum with a combination of Affordable Care Act campaigns, including Covered California and Nevada Health Link, as well as several branding campaigns from WellPoint, Molina Healthcare, Kaiser Permanente and Blue Cross Blue Shield. The grocery category was boosted by significant increases from H-E-B and Mariana's during the quarter.
During the first quarter, we added 57 new television advertisers who invested $10,000 or more across our television properties. New clients include Lexus, Southwest Airlines and Hyundai Dealers.
Turning to our ratings performance. Our Univision affiliates extended their ratings leadership position in the February 2014 sweeps. Among all adults 18 to 49, regardless of language, 4 Entravision Univision affiliates ranked #1 or 2, sign on to sign off. Additionally, 6 Entravision Univision affiliates are either #1 or 2 among all adults 18 to 34. Three of our UniMás affiliates are the #2-ranked Spanish-language television stations in their markets in adults 18 to 49. Four were also ranked #2 among adults 18 to 34.