HMTV - Earnings call transcript Q2 2018 | Hemisphere Media Group Inc

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen, and welcome to the Hemisphere Media Group, Inc.

Second Quarter 2018 Financial Results Conference Call. My name is Shelby, and I will be your operator today. A replay of the call will be available beginning at approximately 1 p.m. Eastern time on Friday, August 3, 2018, by dialing (855) 859-2056 or from outside the United States by dialing (404) 537-3406. the XXXXXXX. for ID conference replay is The I to Ms. like to call over turn the would now Danielle O'brien.

Danielle O'Brien

I'm I'm Thank I'd outside everyone call. like Operator, Investor to O'Brien, you, and welcome to good Relations firm. today's Communications, Edelman Financial with morning, everyone. Danielle Hemisphere's and conference

or These within Joining Litigation the certain of are statements. are are Act and changes announcement current our from cause is may contain Reform call meaning Alan implied the uncertainty Executive that to Hemisphere's expressed Chief the expectations Today's me to and management XXXX. Financial Craig U.S. in in and statements statements, Hemisphere such results Officer. based about the on may which materially statements forward-looking Hemisphere Officer; actual Fischer, today Private of Sokol, Hemisphere's forward-looking of on Chief comments circumstance, and of differ subject those Securities

on subject recent refer of statements for these number the assumptions discussion a a addition, on more report to annual our are that other to statements applicable company. XX-K complete our Form are public In risk and forward-looking and filings Please change. company's based of to factors most

as no Forward-looking or such are date herein made Hemisphere undertakes the circumstances. statements to and reflect obligation included hereof, publicly update events to of statements subsequent

measure. investors our I the principles, to financial in will was this information non-GAAP Management Alan. refer that turn included in discussing non-GAAP of today's in EBITDA, reconciliation call issued release, our business. results to accounting is to earlier important is earnings today. generally to addition now non-GAAP over a which accepted we information press will is believes During accordance to call, that of are with calculated which GAAP adjusted A understanding

Alan Sokol

Thank you, everyone. and Danielle, morning, good

our Our and results execution paradigm. our quality tremendous continued unique of second all our and portfolio across businesses reflect affirm assets further growth the strong quarter

so call, see At market how recovery quarter, quarter quarter. in the recovery And towards the dramatic Our which will the the the discussed normalized levels I normalization of last we more ad of business, Rico a economy. even strong progress in Puerto course and improvement the the performance also market saw earnings island's benefited second pace of in Puerto second over from Rico. approached meaningful accelerated a

fact, absolute decades, its In number Rico X.X%. in Puerto registered highest employment is lowest its in June, percentage now employed losses, population since rate at XXXX. the of level X Despite at

the April, population than encouraging airline number since Puerto returned XXX,XXX seeing have net Based front a XXX,XXX, storm, and migration through to data, equating people passenger also are Rico to Rico, Puerto lower We approximately fewer on much XX,XXX after data. estimated. left than of previously a

billion the In in reported Rico of billion and the of $X addition, $X island billion started insurance proceeds insurance PROMESA of to out benefit flow see that $X federal funds. has been federal dispersed. and Puerto funds been have expected an have proceeds the to in delivered

with $X another funds X has While been the island months, anticipated to next next the in the than of in PROMESA reach billion years. $XX additional funding anticipates an the pace recovery XX expected, billion over slower

these metrics of Puerto All and future promising Rico. a of point to recovery

island's Board Of the critical disagreements sustain a rebuilding the solution the reforms. the is permanent structural to need power is to and However, grid. that necessary find it be Puerto of Rico order between the address to implementation government growth, in crucial facilitate Oversight importance to the of resolved

ad in in step bondholders, strong by path the an TV Electric sequential Authority the are the important toward and market recent to its and between normalization second We agreement growth reducing cost utility accelerated privatizing settlement customers. towards in the quarter. encouraged The resulted

a with the was heading ad TV the half strong recovery, dynamic saw of reflects improvement the second which with the into provides confidence us year-ago marked momentum in numbers, and QX, market quarter year. commercial second restored approaching XX% down the ad While market

include second as the trends. of Puerto did The was terrific in X-year ad The ad which quarter of as we augmented are Cup-specific encouraged TV ratings very return story some WAPA, ratings market spending May Nielsen provide continues World its advertising, by nonetheless, XX. for streak ratings by Rico. a these leader but uninterrupted the

In show is share in XX% XX. delivering XX Turkish of the link on in retransmission six channel fact, with In dark novella, the #X resulted prime rate Rico, the time, DIRECTV performance which blockbuster in Among going service highlights the to reached adult rated a of for in multiyear June, new Mother. the weeks. dispute, a is Puerto WAPA's WAPA resulting WAPA a

are hopeful of make clear were that blackout, we terms position WAPA's substantial agreement, Puerto we fee with The market our very results and which unparalleled to avoid is represent reflect the of a increase. pleased to ratings leading distributors Rico. a indispensable new Although WAPA

channels. U.S. our cable to now Turning

quarter. All significant this benefited from of networks cable launches our

by TV of pleased WAPA America, and launch We of and Pasiones are the these Centroamerica affirming Now, DirecTV networks. the and appeal Cinelatino, value

to of important has U-verse as reaches addition, are X, AT&T been some key July announce that on Television Hispanic an also Dominicana pleased U.S. relaunched We U-verse markets. as

our sustained cable Our growth. overall once U.S. trends, again, continued, organic to channels subscriber defy with

of only be ratings growth. cable two channel prime Nielsen-rated XXXX, by in fact, Spanish continues facing its Cinelatino a in a and quarter robust this language ad advertisers. delivered our Cinelatino Spanish viewing, and, language cutting total both the quarter, major show versus national our driven ratings Nielsen-rated be nonsports of cord growth. growth time number first English again networks, number once day As total-day new exceeded grew language in continues to growth the fact, to organic X% challenge by QX

once quarter in delivered QX growth, growing QX We had strong its continue and highest consistent continued and ad will also terrific, the ratings to its confident XX% to are drive of by XXXX the in tremendous ratings America revenue coverage unparalleled over movies a its this WAPA a channel's comScore, pipeline compelling news programming. and advertising. for have that entertainment huge QX and driven deliveries and unique ratings to by history. again, experience and Pasiones audience according

driven by novellas World blockbuster audience Centroamerica Our strong and our from full-day TV QX comScore in the growth has nontraditional experienced competition dramas, India. XXXX diverse, despite including from versus according XX% Turkey growth Cup. been to

audience growth drove strong the Our ad in revenue increases quarter.

As previously U-verse Television to lineup. added the was AT&T noted, Dominicana

In addition, sport a for agreement rights the U.S. popular the we most Professional Baseball have the reached League, DR. multiyear Dominican in to

strategic our investment. now Turning ratings in continues our network trajectory. recent its growth Uno, broadcast television Columbia, Canal strong to

program. and Monday We are now share audience are reaching share a full-day an Friday at XX% to regularly for X% certain

pipeline, we believe, in further drive the Lionsgate, well have venture will a continues with growth Pantaya, perform our share significant growth. differentiated projects We which, with some offering. at OTT exciting to

response in leading by the the is Latin of to Snap to believe very this a product encouraged platforms acquire upside content We a and We TV, pay-TV announced strong. XX% to that America. agreement are very independent our ownership in last audience's broadcast, quarter, OTT distributor and

are of to business. We new well revenue pipeline its in for potential by leverage as strength our realize Hemisphere's America existing streams Latin ability the of Snap's to excited content as

will strong, in actively now our Our and opportunities Craig. pipeline look I Thank over attractive evaluate to remains everyone. you, turn space. to at the call continue we M&A

Craig Fischer

$XX.X for the the revenues everyone. morning, $XX.X compared good period. Net were and Alan, year-ago you, quarter second million in as million to Thank of revenues

$XX.X for $XX.X million period. due $XX.X current-period advertising increase essentially expenses Though due million Conversely, net XXXX, of in year-ago The delivery period impact Operating revenue as revenues, and the first in during decreases These comparable increased of in the flat which of for negative on termination decline driven were months Classic and June blackout impacted to of were XXXX. are three-month was DIRECTV in quarter of period the to in For X-month blackout on flat blackout this our revenues revenue variances compared by million XX, the respectively, the the DIRECTV second adoption the increase retransmission by compared million impact from $XX.X of television our year-ago ended renewal, Maria period. in revenue Baseball in down the primarily the The as timing and the expenses million, subscriptions of benefited period. parties, on year-ago DIRECTV titles. Operating offset $XX.X and the in were to six XXXX, the six-month compared by to Hurricane in we DIRECTV, three-month at for at quarter due expense that periods WAPA six-month million Maria. negatively and transmission growth tower rental Hurricane the which by in replace the Television over impact was result licensing This period. $XXX,XXX forward. the AT&T, Subscriber of the for primarily Dominicana at content the a $X the standard. Hurricane September the to WAPA. to decreased the will rate Maria on networks Rico, the growth period cable was third continued related Maria-related caused of going fees by the with the a Television an World offset $XXX,XXX Dominicana of current Puerto our impact of the advertising as negative were Hurricane WAPA, to of are XXXX. of to were in of period and relaunch Other our primarily expenses revenue quarter, new the as the recognition of the approximately well consist impact incremental paid the quarter results WAPA's $XXX,XXX, DIRECTV along on and subscribers increases, tower by positively to X- our damaged

severance following Additionally, result the offset, was hurricane. production of recognition insurance as the programming and These higher part, adoption of the lower to by standard. cost were as as revenue increases expense new and the cost reduction implemented cost WAPA at in a measures increase current-period well due

compared to adjusted was for On adjusted the the charge. realized X-month incur million of a of sequential as Maria. you was a a another covered associated cost-efficient long-term tower, rental Juan metropolitan that with equivalent As to result area our policies. by I coverage. no serving which we a have this three-month rental year-ago EBITDA XXXX, of Puerto for Adjusted solution $XX.X approaches be the expect period. as $XX.X million to broadcaster's $XX.X know, longer San for this suffered period, X% a the co-locate as Rico EBITDA we compared quarter $XX.X to normalization. period. provides tower, Hurricane our basis, in million XXXX, After decrease will million period pleased signal insurance Adjusted the we fully on of we to the tower year-ago come total report EBITDA Through first of a and to loss am for increase over we XX% as EBITDA adjusted the EBITDA expense

$XXX.X cash. Turning had the and $XX balance to million sheet. We of in million debt

gross ratio approximately leverage net approximately X.X and X.X Our was was times. times ratio leverage

impact We year-end expect ratios roll the leverage we to by as hurricane. the of tighten off

share previously discussed, plan we XXXX. a As repurchase implemented in

During quarter, $X.X approximately $XX.XX million. of repurchased the second shares purchase aggregate a common stock weighted of at we for an price of price average XXX,XXX

in we original by expenditures by Hurricane plan. prefunded received As CapEx of insurance reimbursement which This Maria. for FCC. purchases fourth remaining our $X.X in was from $X.X required June the quarter, XX, the $X.X the purchase in the equipment including repack carriers. Also had million XXXX million expect $XX were million million by damaged the million was Capital to million for $X.X FCC quarter included spend $X.X on cash equipment of from we we in the the

damaged equipment will proceeds cover most We FCC required hurricanes repack. incur to and by We continue of equipment to by to these the insurance FCC purchase CapEx anticipate expect reimbursements expenditures. and

million now progress made; now mid-teen being which be of growth our to that over investments forecasting we percentage $XX.X We'll the strength Uno. the approaching in primarily, ventures, highlighting is strategic for for the we portfolio. our performing our XXXX. are the EBITDA still During there the the made remain funded in to market XXXX Rico questions. the in quarter, adjusted full-year while and in Canal entire businesses well, We your position recovery related guidance Puerto towards by to open we encouraged believe with normalization, And call are full-year are provide to

Operator

comes Thank from Royal you. of Bank your Canada. [Operator question first from Cahall Instructions]. Steven And

now is line Your open.

Steven Cahall

tone more So stabilization with It few sounds me a like morning. some much recovery. the positive for a in this

about I WAPA off revenue. of estimate I'd of So maybe the you just Puerto to start did that back on to $XX in wanted Rico. million half just million, in XXXX $XX ad that we know if still of the kind not towards that you historical Or be run back to think of that quite of you'll rate? rate getting back year? sort this half in

Alan Sokol

Steve, Alan. it's

think, think, little have political the that optimistic I perspective, to but soon. not it's know, was into because it's little that numbers a to market political get excluding our some think, approach But visibility I I political, will we still I starting to hard cautiously here, mean, XXXX excluding we're we're XXXX from levels. --

Steven Cahall

I of they see. where TV are that that know they sequentially, the level is have the were like to on they had you ago, a Based but back were down And year then, or Dominicana they on subs, number? add there, recent nice reflect your that from is an average does been which that U-verse up

Alan Sokol

[Indiscernible].

Steven Cahall

Okay.

see will there. pickup we big So

Alan Sokol

are lag on Big these pickup and because launch was the reflected on numbers in U-verse late June, based remittances.

it's in numbers So the not yet.

Steven Cahall

was, number of, to-date? that give a Just sense. us to kind what us tell you Can

Alan Sokol

six-figure from low number. remittance is the We -- a them. It have actually it's six-figure not received

Steven Cahall

housekeeping And us Okay. as a in helpful. Maybe back nonrecurring expect moving That's the in out can you'll be EBITDA few of year EBITDA? items. of you expenses give very to adjusting of sense you for first, the parts? that What couple adjusted the kind adjusted guidance, a just the then, half

Craig Fischer

see which is the you'll the which what rental. hurricane-related about only that point the power gone cost go has rental, current now forward you this around largely largely in and time adjustments going at really that the have the expenses that been in the have had year is we we quarter, tower tower earlier But is through. restored, Yes, the hurricane-related the in think, away see I think $XXX,XXX, I to -- continue in

Steven Cahall

give repurchase about Got last share you're you then any thinking on sense us or you. of program? opportunistic maybe just buyback. Can the cadence the being how for And just your there

Craig Fischer

as that our do, we a plan Yes. board I $X.X board. in The mean, year. to June authorized place with the a had million last plan. regularly four-month was extension on will a allocation plan We in And evaluate put the of remaining It expire as July. set we've plan. to we capital

Operator

And next Guggenheim Baker your question Curry Securities. from

now line open. is Your

Curry Baker

Rico Rico, in With Did was know for Puerto ultimately, a main I I get get growth the from you regards think you have to consistent the that Puerto price the point with DTV can't price. in you WAPA? retransmission that's to specifics, other baked and but in in the renewal guys sticking into expectations deals growth

Alan Sokol

-- about length, our we of were to the for very we And ability channels would very good the on gone pleased our gone really our and to can't you both But feel give strongly Curry, have language I happy price. the not about get we're think, that as can you the weeks, settled wanted. six not deprived fairness to we into where Obviously, out. as really we to our we -- details. tell that said, you body our I the And we get wound where very had can't viewers the and words a off. with and roadmap are price we by not as well we that secure

Curry Baker

the were you in is dark weeks? payments lost? there in guys Okay. Or Was a six Puerto six for weeks, Rico. true-up those revenue that And for just

Alan Sokol

in and of revenue also there as the a well. on in revenue numbers. that modest ad was lost That was impact it's second result reflected the quarter second a as quarter And

Curry Baker

year. on your Okay. And then That investment the funding makes for sense.

for funding in in through the have to And of I to your number million think full the as you be XXXX? $XX number? are any guys do that will the up sense what half year. What's you expectations year first

Craig Fischer

incremental the The not Canal been of investments. around bulk giving We're has on Uno. for funding investment the guidance the

is the X payable installments. know, over quarterly concession payment you As

of We have as June XX. remaining three

There audience. into reach business into the working reach ad starts year. the next of share is we and funding as still falls level our capital of So one scale of of the our those pie to share

So with in to going is the forward we're we'll happy performing, year. continue have opportunity. invest to the into But continue investment some how next we'll and asset

Curry Baker

Is growing longer the there. inning know, what lastly I the double-digit in growth like? break ad U.S. at like what you do of, want of maybe guys share you still maybe an just just sort then And sort you aggregate? in? rate? networks, Okay. the networks, advertising U.S. individual growth the on out I What probably left don't And it Can term, trends looks kind guess, as the at see cable ad a we of, opportunity are networks? to

Alan Sokol

Yes.

all still by I has there's think, left driven for and been We their WAPA extremely are them, feel feel networks to of we relative CPMs that to largely viewership, if America. and ad our Cinelatino double-digit we rates low a And relative grow. you think of lot growth the aggregate and us revenue under are market. in still to been index feel like and runway our our

know, continued distribution, feel to So to propel should get grow should that the in networks. only as growth new as And growth. continue that continue our we continue be to that there launches, we you grow our audience, we

Operator

that today's to Mr. And turn I would back for like session. Alan call remarks. the over Q&A now to concludes closing Sokol

Alan Sokol

Have further. everybody. a Nothing weekend, good

Operator

gentleman, and today's conference. in for today's you concludes thank program. This Ladies participating

You a disconnect. may all Everyone, day. great have

Hemisphere Media (HMTV) 4 Aug 182018 Q2 Earnings call transcript