Spanish Broadcasting System, Inc. (the “Company” or “SBS”)
(NASDAQ:SBSA) today reported financial results for the first
quarter ended March 31, 2016.
Financial Highlights
|
|
Three Months Ended |
|
|
|
|
|
(in
thousands) |
|
March 31, |
|
|
% |
|
|
|
2016 |
|
|
2015 |
|
|
Change |
|
Net
revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Radio |
|
$ |
28,525 |
|
|
|
29,227 |
|
|
|
(2 |
%) |
Television |
|
|
3,088 |
|
|
|
2,915 |
|
|
|
6 |
% |
Consolidated |
|
$ |
31,613 |
|
|
$ |
32,142 |
|
|
|
(2 |
%) |
OIBDA, a
non-GAAP measure*: |
|
|
|
|
|
|
|
|
|
|
|
|
Radio |
|
$ |
9,017 |
|
|
|
10,180 |
|
|
|
(11 |
%) |
Television |
|
|
(1,021 |
) |
|
|
(964 |
) |
|
|
6 |
% |
Corporate |
|
|
(2,993 |
) |
|
|
(2,148 |
) |
|
|
39 |
% |
Consolidated |
|
$ |
5,003 |
|
|
$ |
7,068 |
|
|
|
(29 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
* Please refer to the
Non-GAAP Financial Measures section for a definition of OIBDA and a
reconciliation from OIBDA to the most directly comparable GAAP
financial measure.
Discussion and Results
“During the first quarter, we continued to execute against our
strategic plan including expanding our multi-platform audience and
reach while also further strengthening our mobile capabilities,”
commented Raúl Alarcón, Chairman and CEO. “Our radio stations are
well positioned across the nation’s top-ten media markets and we
continue to benefit from our industry leading content offerings.
Looking ahead, we remain focused on leveraging our strong audience
shares and expanded digital capabilities to connect advertisers
with the rapidly expanding Latino population across all media
platforms.”
Quarter End Results
For the quarter-ended March 31, 2016,
consolidated net revenues totaled $31.6 million compared to $32.1
million for the same prior year period, resulting in a decrease of
2%. Our radio segment net revenues decreased $0.7 million or
2%, due to decreases in network sales and lower concert activity
offset by increases in national, local, digital and barter sales.
Our national sales increased in our Los Angeles, New York, and
Puerto Rico markets. Our local sales increased in our Miami,
New York and Los Angeles markets. Our television segment net
revenues increased $0.2 million or 6%, due to the increases in
local and national sales offset by decreased concert activity.
Consolidated OIBDA, a non-GAAP measure, totaled
$5.0 million compared to $7.1 million for the same prior year
period, representing a decrease of 29%. Our radio segment OIBDA
decreased $1.2 million or 11%, primarily due to the decrease in net
revenues of $0.7 million and increases in operating expenses of
$0.5 million. Radio station operating expenses decreased due
to reduce concert activity, which was offset by increases in
professional fees, employee compensation and benefits, and audience
research fees. Our television segment OIBDA decreased
$0.1 million or 6%, due to the increase in net revenues being
partially offset by an increase in operating expenses of $0.2
million. Television station operating expenses increased primarily
due to increased professional fees and barter expenses, which were
offset by decreases in special events expenses. Our
corporate expenses increased $0.8 million or 39%, primarily due to
increases in stock-based compensation, compensation and benefits,
and professional fees.
Operating income totaled $3.8 million compared
to $5.8 million for the same prior year period, representing a
decrease of $2.0 million or 35%. This decrease in operating
income was primarily due to the decrease in net revenue and
increases in operating and corporate expenses.
First Quarter 2016 Conference
Call
We will host a conference call to discuss our
first quarter 2016 financial results on Wednesday, May 18, 2016 at
11:00 a.m. Eastern Time. To access the teleconference, please
dial 412-317-5441 ten minutes prior to the start time.
If you cannot listen to the teleconference at
its scheduled time, there will be a replay available through
Wednesday, June 1, 2016, which can be accessed by dialing
877-344-7529 (U.S.) or 412-317-0088 (Int’l), passcode:
10086238.
There will also be a live webcast of the
teleconference, located on the investor portion of our corporate
Web site, at www.spanishbroadcasting.com/webcasts.shtml. A seven
day archived replay of the webcast will also be available at that
link.
About Spanish Broadcasting System,
Inc.
Spanish Broadcasting System, Inc. owns and
operates 17 radio stations located in the top U.S. Hispanic markets
of New York, Los Angeles, Miami, Chicago, San Francisco and Puerto
Rico, airing the Spanish Tropical, Regional Mexican, Spanish Adult
Contemporary, Top 40 and Latin Rhythmic format genres. SBS also
operates AIRE Radio Networks, a national radio platform which
creates, distributes and markets leading Spanish-language radio
programming to over 100 affiliated stations reaching 90% of the
U.S. Hispanic audience. SBS also owns MegaTV, a television
operation with over-the-air, cable and satellite distribution and
affiliates throughout the U.S. and Puerto Rico. SBS also produces
live concerts and events and owns multiple bilingual websites,
including www.LaMusica.com, an online destination and mobile app
providing content related to Latin music, entertainment, news and
culture. For more information, visit us online at
www.spanishbroadcasting.com.
This press release contains certain
forward-looking statements. These forward-looking statements,
which are included in accordance with the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995, may involve
known and unknown risks, uncertainties and other factors that may
cause the Company’s actual results and performance in future
periods to be materially different from any future results or
performance suggested by the forward-looking statements in this
press release. Although the Company believes the expectations
reflected in such forward-looking statements are based upon
reasonable assumptions, it can give no assurance that actual
results will not differ materially from these expectations.
Forward-looking statements, which are based upon certain
assumptions and describe future plans, strategies and expectations
of the Company, are generally identifiable by use of the words
“may,” “will,” “expect,” “believe,” “anticipate,” “intend,”
“could,” “estimate,” “might,” or “continue” or the negative or
other variations thereof or comparable terminology. Factors
that could cause actual results, events and developments to differ
are included from time to time in the Company’s public reports
filed with the Securities and Exchange Commission. All
forward-looking statements made herein are qualified by these
cautionary statements and there can be no assurance that the actual
results, events or developments referenced herein will occur or be
realized. The Company undertakes no obligation to update or revise
forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes to future operating
results.
(Financial Table Follows)
Below are the Unaudited Condensed Consolidated
Statements of Operations for the three-months ended March 31, 2016
and 2015.
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
Amounts in thousands,
except per share amounts |
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
Net revenue |
|
$ |
31,613 |
|
|
|
32,142 |
|
Station operating
expenses |
|
|
23,617 |
|
|
|
22,926 |
|
Corporate expenses |
|
|
2,993 |
|
|
|
2,148 |
|
Depreciation and
amortization |
|
|
1,250 |
|
|
|
1,287 |
|
(Gain) loss on the
disposal of assets, net |
|
|
(3 |
) |
|
|
(6 |
) |
Operating income |
|
|
3,756 |
|
|
|
5,787 |
|
Interest expense,
net |
|
|
(10,036 |
) |
|
|
(9,933 |
) |
Dividends on Series B
preferred stock classified as interest expense |
|
|
(2,433 |
) |
|
|
(2,433 |
) |
Loss before income
taxes |
|
|
(8,713 |
) |
|
|
(6,579 |
) |
Income tax expense |
|
|
2,603 |
|
|
|
2,036 |
|
Net loss |
|
$ |
(11,316 |
) |
|
|
(8,615 |
) |
Net loss per common
share: |
|
|
|
|
|
|
|
|
Basic & Diluted |
|
$ |
(1.56 |
) |
|
|
(1.19 |
) |
Weighted average common
shares outstanding: |
|
|
|
|
|
|
|
|
Basic & Diluted |
|
|
7,267 |
|
|
|
7,267 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
Operating Income (Loss) before Depreciation and
Amortization, (Gain) Loss on the Disposal of Assets, net, and
Impairment Charges and Restructuring Costs (“OIBDA”) is not a
measure of performance or liquidity determined in accordance with
Generally Accepted Accounting Principles (“GAAP”) in the United
States. However, we believe that this measure is useful in
evaluating our performance because it reflects a measure of
performance for our stations before considering costs and expenses
related to our capital structure and dispositions. This
measure is widely used in the broadcast industry to evaluate a
company’s operating performance and is used by us for internal
budgeting purposes and to evaluate the performance of our stations,
segments, management and consolidated operations. However,
this measure should not be considered in isolation or as a
substitute for Operating Income, Net Income, Cash Flows from
Operating Activities or any other measure used in determining our
operating performance or liquidity that is calculated in accordance
with GAAP. In addition, because OIBDA is not calculated in
accordance with GAAP, it is not necessarily comparable to similarly
titled measures used by other companies.
Included below are tables that reconcile OIBDA
to operating income (loss) for each segment and consolidated
operating income (loss), which is the most directly comparable GAAP
financial measure.
|
|
For the Three Months Ended March 31,
2016 |
|
(Unaudited and in
thousands) |
|
Consolidated |
|
|
Radio |
|
|
Television |
|
|
Corporate |
|
OIBDA |
|
$ |
5,003 |
|
|
|
9,017 |
|
|
|
(1,021 |
) |
|
|
(2,993 |
) |
Less expenses excluded
from OIBDA but included in operating income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
1,250 |
|
|
|
488 |
|
|
|
663 |
|
|
|
99 |
|
(Gain) loss on the disposal of
assets, net |
|
|
(3 |
) |
|
|
(3 |
) |
|
|
— |
|
|
|
— |
|
Operating
Income (Loss) |
|
$ |
3,756 |
|
|
|
8,532 |
|
|
|
(1,684 |
) |
|
|
(3,092 |
) |
|
|
For the Three Months Ended March 31,
2015 |
|
(Unaudited and in
thousands) |
|
Consolidated |
|
|
Radio |
|
|
Television |
|
|
Corporate |
|
OIBDA |
|
$ |
7,068 |
|
|
|
10,180 |
|
|
|
(964 |
) |
|
|
(2,148 |
) |
Less expenses excluded
from OIBDA but included in operating income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
1,287 |
|
|
|
507 |
|
|
|
684 |
|
|
|
96 |
|
(Gain) loss on the disposal of
assets, net |
|
|
(6 |
) |
|
|
(6 |
) |
|
|
- |
|
|
|
- |
|
Operating
Income (Loss) |
|
$ |
5,787 |
|
|
|
9,679 |
|
|
|
(1,648 |
) |
|
|
(2,244 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited Segment Data
We have two reportable segments: radio and television. The
following summary table presents separate financial data for each
of our operating segments:
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
|
Net
revenue: |
|
|
|
|
|
|
|
|
Radio |
|
$ |
28,525 |
|
|
|
29,227 |
|
Television |
|
|
3,088 |
|
|
|
2,915 |
|
Consolidated |
|
$ |
31,613 |
|
|
|
32,142 |
|
Engineering and
programming expenses: |
|
|
|
|
|
|
|
|
Radio |
|
$ |
6,032 |
|
|
|
5,399 |
|
Television |
|
|
2,130 |
|
|
|
2,265 |
|
|
|
$ |
8,162 |
|
|
|
7,664 |
|
Selling,
general and administrative expenses: |
|
|
|
|
|
|
|
|
Radio |
|
$ |
13,476 |
|
|
|
13,648 |
|
Television |
|
|
1,979 |
|
|
|
1,614 |
|
Consolidated |
|
$ |
15,455 |
|
|
|
15,262 |
|
Corporate
expenses: |
|
$ |
2,993 |
|
|
|
2,148 |
|
Depreciation
and amortization: |
|
|
|
|
|
|
|
|
Radio |
|
$ |
488 |
|
|
|
507 |
|
Television |
|
|
663 |
|
|
|
684 |
|
Corporate |
|
|
99 |
|
|
|
96 |
|
Consolidated |
|
$ |
1,250 |
|
|
|
1,287 |
|
(Gain) loss on
the disposal of assets, net: |
|
|
|
|
|
|
|
|
Radio |
|
$ |
(3 |
) |
|
|
(6 |
) |
Television |
|
|
— |
|
|
|
— |
|
Corporate |
|
|
— |
|
|
|
— |
|
Consolidated |
|
$ |
(3 |
) |
|
|
(6 |
) |
Operating
income (loss): |
|
|
|
|
|
|
|
|
Radio |
|
$ |
8,532 |
|
|
$ |
9,679 |
|
Television |
|
$ |
(1,684 |
) |
|
$ |
(1,648 |
) |
Corporate |
|
|
(3,092 |
) |
|
|
(2,244 |
) |
Consolidated |
|
$ |
3,756 |
|
|
|
5,787 |
|
|
|
|
|
|
|
|
|
|
Selected Unaudited Balance Sheet Information and Other
Data:
|
|
As of |
|
(Amounts in
thousands) |
|
March 31, 2016 |
|
Cash and cash
equivalents |
|
$ |
27,405 |
|
Total assets |
|
$ |
451,522 |
|
12.5% Senior Secured
Notes due 2017, net |
|
$ |
269,174 |
|
Other debt |
|
|
4,845 |
|
Total debt |
|
$ |
274,019 |
|
Series B preferred
stock |
|
$ |
90,549 |
|
Accrued Series B
preferred stock dividends payable |
|
|
57,998 |
|
Total |
|
$ |
148,547 |
|
Total stockholders'
deficit |
|
$ |
(109,436 |
) |
Total
capitalization |
|
$ |
313,130 |
|
|
|
For the Three Months Ended
March 31, |
|
|
|
2016 |
|
|
2015 |
|
Capital
expenditures |
|
$ |
577 |
|
|
|
285 |
|
Cash paid for income
taxes |
|
$ |
- |
|
|
|
34 |
|
|
|
|
|
|
|
|
|
|
Contacts:
Analysts and Investors
Joseph A. Garcia
Chief Financial Officer
(305) 441-6901
Analysts, Investors or Media
Brad Edwards
Brainerd Communicators, Inc.
(212) 986-6667
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