HMTV - Earnings call transcript Q3 2020 | Hemisphere Media Group Inc

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Operator

Good day, ladies and gentlemen and welcome to the Hemisphere Media Group, Incorporate Third Quarter 2020 Financial Results Conference Call. My name is John and I will be your operator today. A replay of the call will be available beginning at approximately 1 o'clock P.M. Eastern Time today, Monday, Movement 9, 2020 by dialing 877-497-1436 or from outside of the United States by dialing in 262-558-6292. The conference ID for the replay is 9365609. the to turn O'Brien. now will call Danielle over I

You may begin.

Danielle O'Brien

I'm Act and operator meaning call. the I'd the and and Communications the of our good statements Today's like the contain Hemisphere of Relations Securities you, outside U.S. Reform XXXX. on subject of statements. I'm Litigation are Edelman Investor may cause are Hemisphere's to changes O'Brien current statements and comments conference differ actual everyone. expectations and results within announcement or expressed such today's that in morning Thank management implied those which are These of Hemisphere firm. forward-looking statements based uncertainty Financial to welcome to Danielle certain may Private to from with about in everyone materially circumstance forward-looking

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

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

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

Alan Sokol

revenue everyone. I by pandemic. by results the colleagues grew EBITDA third advertising in and and face and Danielle, net growth healthy and families the X%. quarter revenues hope XX% Overall, and you X% outstanding safe. for you, driven by delivered our our of We adjusted increased Thank the good in are staying your morning,

and proposition. the solid Our strong in XXXX we fueled driving advertising this growth with quarter the a recovery as to In demographics of political. in TV highest and advertising outpaced value in The of growth was a spending, by ad as environment economic XX. performance, XX% significantly overall the spending the ratings, achieve activity its Rico result stimulus. our and and business up third advertising bulk in continued direct adults the XX higher growing the healthier and compelling ratings and its viewership, Puerto a and Rico, market both WAPA activities consumer the of year-over-year a advertising saw U.S. in this the market growth. of Puerto markets key delivering excluding with resumption coincided robust Puerto and of history share rebound its spending strong ratings received to versus advertising the to WAPA Rico consumer government increasing its XX advertiser dominant XX result of able

combined. Telemundo consecutive quarter were ratings For higher and Univision the fourth WAPA's than

in The level this ratings first commenced Nielsen dominance since sustained measurement Puerto time of occurred has Rico.

history. month note to retransmission make WAPA's able retransmission the its highest This month into did ad reflects to ad represented wish tremendous. XXXX. to a I'm revenue all-time entered to-date quarter, was the MVPD revenues. Javier's renewal a in million increase best. final and original great announce children of resign Even with expectation. will second of QX, to noting WAPA and spend for President happy in highest third on rescheduling result them. the that WAPA WAPA year. Javier the subscribers our Puerto to to largest we in from time unique our he WAPA's Rico renewal in quarter market January increase third the end was substantial spending in the to building revenue, cable we've in With him Puerto different of over and as and helped a Hemisphere's we in has proposition. secured our wife of in it the October when excluding history on been the Rico's also WAPA. with will our from worth August, momentum consistent relocate fees are saw gubernatorial month primaries political and Javier Rico highest revenue agreement Puerto ad effective back October X quarter. political political Maynulet performance that live June In in decided and QX. of fourth spending Miami with more Florida at work value slight has and It's be One the among strength

Executive the Jorge Fortunately, Telemundo in Jorge very Spanish including Sports Javier have we terrific for a and in has Vice News recent closely successful News the charge in Production long divisions with signature relaunch in in our President and Hidalgo. replacement of TV, worked has track record at teams and a and WAPA's newscast.

ratings Cinelatino its ninth of a five of through its and audiences been XXth consecutive growth. XXXX uniquely increased cable Turning an we WAPA and viewership XX% Rico quarter growth at of and year-over-year audiences Centroamerica year-over-year ad COVID-XX a the ratings call, Spanish impressive delivering differentiated in networks, cable coverage meaningful I XX%, quarter continued by third Pasiones noted increased XX% have large as all our its in in higher we quarter and pricing to America of challenging second ratings crisis. began versus as in increase quarter. strong sales ratings QX, elections by continued environment. to Overall, driven TV's over third strong July, growth. by channel, the top of growth which a even sell Puerto grew earnings sales with quarter able rated loyal in channels, to its its unmatched have and ad invaluable the XXXX, rebound by consecutive saw continued see our our out

sequential seen months, to in particularly distributors. largest a of U.S. quarter, our in declined While one our relates two losses have improvement numbers subscriber it as past we subscriber third the in

to is encouraged if a trend, these soon are results. this too Although know by long-term we

discussions continue In various -- about VMVPDs be to addition, language we in MVPD watching Spanish package.

platforms, With revenue that we deep the numerous library generate proliferation licensing of of will we meaningful [Indiscernible] our able believe be content. to from

America, already noted, and previously I with in the we've and As and Tubi Amazon Latin Latin U.S. partnerships in Pluto into entered America.

its by month dominant our Uno, subscriber language the now negotiating Canal Columbia while Vix the and continues in agreements we with year rebound currently Zumo movies platforms optimistic has have to to SVOD normalize dedicated while with Spanish addition, investment the impacted as levels. May however, TV of end, offering to [ph], challenged subscribers. offset been Uno Canal productions activity and outperform continues grow to improving. remains The spending are Camilla pandemic. pandemic, will restrictions language premium has business sequentially concurrently the most since are Turn economic the to and market market [ph] were metrics declines. XXX,XXX Certain Pantaya's overall the into costs revenue Pantaya on reducing grown that and first Spanish by market base have and and the paying by series. Pantaya In Roku, lifted every we others. and advertising

El de Derbez of the including llaves two season very Vacation, two next seasons Family juego of excited has blockbuster Eugenio production Pantaya's largely las However, in starring Derbez. and about Pantaya. and growth resumed superstar confident series, We're of the

markets. content In leveraging challenging Pantaya, production In potential of Latin our American extremely various are with ownership, exploring we're performance created U.S. opportunities, intriguing unique wheelhouse. a also addition which pleased direct-to-consumer we're to a our pandemic M&A the The opportunities, closing, our has in understanding of Hispanic under conditions. and directly number capabilities,

are our ad I'll ability over leadership of market We turn overall the Craig. costs. everyone. call you, the closely outperform and market now significantly proud Thank managing to while our to our

Craig Fischer

offset of revenue, networks, well revenue. revenue in Thank as in to the million, as in an growth revenues increase and good revenue. increase political the decreases revenue in everyone. XX%, to of increased for you, affiliate an $XX.X to revenues compared Alan, our advertising million quarter the advertising as X% by all year and across ago $XX.X primarily of due morning net Advertising period, due were third other Net revenue

$XXX.X content driven as increase were political, revenue decline cable revenue, of the the and COVID-XX to and was for by XX%, Operating for ad Affiliate third-parties. Rico very in to as revenue. experienced total revenue by as favorably X% decrease growth due $XX.X than a This a a cable revenue offset revenue. third-parties. million, licensing XX% impact non-U.S. we ago the Puerto expenses timing the Other quarter revenue subscribers due and non-U.S. decreased and unfavorable networks revenue decline subscriber our of Other Excluding in for in compared third revenue decrease result of the the ago compares during of U.S. the the advertising due revenue third in by the a to currency to revenue X% to Advertising offset up affiliate foreign XX% then quarter. XXXX. a to year which year third to The decline increase $XXX.X pandemic, subscribers negative the X% to in due driven over part decreased other the in million Affiliate due and comparable movements. to January declining compared were revenues period advertising revenue a of part licensing decrease in feed more quarter second a in increased earthquakes in of million $XX.X the of the decrease was Net XX% U.S. network decline month X% the period. to decline decreased timing period. nine in decreased period to in of quarter. declines in content X% the in million, the

production due personnel by decline to marketing operated and reserve. higher in an stock-based produced at reduced decrease in fact, in This quarter, due programming to primarily was increase in capacity news expenses compensation and political full extensive offset expenses The research, operating bad and the a debt in coverage. and more we part

for increase also to of content period million higher The $XX.X compared ago programming was million expenses The production production show licensed Operating million, the and in period a in gain same as was $XXX,XXX a WAPA, amortization the result Guerreros, third repack FCC an to third-parties to benefited of May $XX.X higher in XXXX. of reality for from expenses higher related as compared to X% which XXXX. month as due the nine commenced and professional quarter as gain connection from advisory fees cost a $X The daily an to period. to the year year compared a spectrum measures year increase and at spectrum for the from COVID-XX implemented earlier reduced also offset as transactions was expenses, and year. period, EBITDA smaller in Adjusted well reflected the FCC by savings repack $XX.X as strategic to including of period costs. period. this the as in response the well ago research pursuit marketing as in incurred This $XX.X pandemic, partially nine-month with million, as the other to X% third quarter million ago of increase compared was personnel increased

to September in the had cash as represents million of million in year. XXth, $XX million Turning balance $XXX the and This sheet, since debt of of an nearly of the start increase $XXX cash. we

of to back $X.X end of certain quarter, of X.X were The due million decrease $X.X XXXX. leverage gross same which to XXXX. net period the XXXX compared leverage to of moved the year-to-date improved and was million improved CapEx bringing projects, ratio times. to deferral expenditures times in the to $X as and million X.X capital Our ratio the Capital in to into

to million Canal $XX.X invested from of $X.X investment results our down nine-month decrease in Turning Uno to year-to-date the strategic quarter, $X.X due improved third period investments, the to million to during XXXX. total The bringing million, in operating we primarily is Uno. the Canal

from will has momentum proud head call the we open our company advertising which questions. revenue the Wells into set as for this remainder into year execution. We In of Fargo. Instructions] underscores XXXX. your a strong October, question of a our coming Cahall I [Operator record are performance, the have from third now optimistic Steven and line quarter the we and to We positive of monthly

Steven Cahall

the is the of off just a quarter, lot media a kind peers, on Because Maybe driving basis, start Thanks. to you if of positive on don't and up a you actually both now. momentum? of so while cable U.S in advertising, I core your probably the how could you of Puerto in in QX like lot the seen sequential are we've up on you is improvement think do who's U.S. sounds anybody just talk I've right and think it think so like it basis nets? year-on-year Rico talked outperformed lot of pacing, on And does strength in that what else a seem I lot market a to a

Alan Sokol

Steve. Hi

I we sort quality think point unique to that our of the our that of results unique and have leadership assets.

are in fourth Puerto We in quarter. Rico growth strong core seeing

for As I good the month mentioned, have we That in the into Rico performance Puerto visibility October revenue has and both advertising November was and on our continued best November history. really U.S. to-date

continued in the had very into U.S., fourth So, markets. in feel momentum we has quarter strong growth we've confident that in quarter. both third and

better. similar the see potentially So, growth kinds quarter in very third positive we expect quarter to of to fourth what not saw we if feel about and

Steven Cahall

Great. about are potential what in could it the in distributed? were improvement over front, mean or there talked the driving And sub-decline I the ahead. little there your deals pretty VMVPDs But way still maybe a on new I the and to sub-decline QX, networks mean, changes level you then big be bit any your improvement was be a for

Alan Sokol

It's -- continue. a there heard distributor. in haven't significant the in discussions We distributors, improved And talk calls, -- that results. it our And breaking that's all this in media largely there really of they've by But that a really other about our I've as and decline have expressed their of companies down trend improvement optimism that mentioned distributors we've with numbers and results. two will distributors impacted with the losses. to one large adversely the organic. velocity accountable for past their are With seen terms significant our distributor, of that in I it's

months. in velocity see and over next hopefully, So, and the they results are if correct better to they they that losses, few continue are turnaround will a of lower not

Steven Cahall

And you Can are now you ones. or at mentioned subs think the comment of Sling to ones or and and million VMVPDs, I of with conversation whether least not those? all in almost big like, XX the you're mean, major Hulu, YouTube that's three leave we the as

Alan Sokol

And they of think I Yes, recognize given platforms. I we're none it put matter their conversations it's been in with -- ones. to that launched it a digital packages, a particularly done. -- of them significant major are prioritization. indicated the it's the putting think, of launch of take language honestly, inexplicable on it's that Spanish major just have that, inclination up we Hispanics the have getting -- will is question intention And to pressure Spanish they But so to ones have language packages and do they and just

Steven Cahall

do of the And or then Or expect you you Great. Thanks. like wondering just flat XXXX? Uno to it's lastly, year-on-year? to in Do Canal else a that anything investment have lot whether down commitment portfolio? be for cash

Alan Sokol

we'll which future ongoing obviously it the improvements. expecting but se, recovers to depends and is per levels the how year, capital last be the market considerably commitments were from requirements, where similar year, we still from sequential lot we're have A this of don't at upon We pandemic. down we think

Steven Cahall

you. Thank Great.

Operator

[Operator question Guggenheim. of from coming Instructions] the Next is from Curry line Baker

Curry Baker

quarter? fourth questions. in at are Hey, good for us are some for political the Can guys the morning, guys. where give you you insight Thanks maybe

Alan Sokol

all say share a Rico it Yes, pack we are in A we quarter significant I in that money. moderately of of Puerto -- expectations. to money fourth secured and lot political, good we had our a came would exceeded

Curry Baker

is that? about third I -- of for in said quarter, can million $X number around kind you a there there put you the think you Is came

Alan Sokol

Craig. ahead go can't-- We

Craig Fischer

It in will the quarter. be fourth higher

the more slightly the an up XX. here higher tracks XXXX, expect sort and third seen in was quarter you primaries in spend in November, The over were we which versus is elections be to general around year increase of of we political level where a QX, this have would

Alan Sokol

exceeded I expectation us. of guided to to for think the before all and pandemic on million million we've the everything, the we somewhat beginning at that. year political And we $X $X guided

Curry Baker

helpful. where maybe say think you just you is more do XXX,XXX in next And can business that over can can terms there? Pantaya, that's paid of you're said at think couple market the there go you Okay. maybe in No, about I already, the addressable kind where you On profitability? talk of terms of years? are anything subs they

Alan Sokol

unique given we service, continued opportunity today. and it not market performance, kind terms In is is of that its We a haven't in multiples in where has of U.S., the growth really the this is sub first for opportunity, of Hispanic And given there. it's a that there opportunity the is think think its getting we We that homes space, specifics significant. We're there's XX the in the tremendous it Pantaya rivals in that business. think Pantaya for that financial given to a XXX,XXX million growth think this we close given U.S. no breakeven. on but is

Curry Baker

new just kind investments? this on from this your there? the last And reported investments equity method Okay. items of is is reflecting just Or part in question, line operations any quarter, financial there one-time that various run is of of better with improved dramatically rate, kind loss improve in the this

Alan Sokol

operating quarter. this one-time you to currency a in last of impact results contribute negative And to little market. impact of continue it's quarter factors. loss a Curry, refer of to pandemic. at that grow which the we of is as the as the the bit One of Yes, sense is flipped the foreign gain two share really our Canal from the certainly that this improved expected -- There movements is to we items despite Uno, sort

a two. combination of those it's So,

Curry Baker

good priority you cash? be the of? sheet guys What's that's of the And terms the take opportunities advantage in to seeing a seems Okay, in you in terms balance that position. M&A And are lastly helpful. then can market of in

Alan Sokol

We now has Yes, are pressures. that open were financial not the are and to there Companies they before. of to pandemic to that their not reprioritization core their disposing assets think we opportunities businesses that that sell because of are. have given rise or of business,

interesting seeing hadn't didn't we opportunities are and intriguing and actively some that we are seen -- So, that pursuing those. before

Curry Baker

Okay. it. Thanks, appreciate guys. I

Operator

further We Instructions] have no [Operator questions.

You may continue presenters.

Alan Sokol

we'll and stay Thank will it Appreciate and all you. That today. for well soon. talk everybody

Operator

call. today's Thank This conference concludes all participating. you for

may You disconnect. now

Hemisphere Media (HMTV) 9 Nov 202020 Q3 Earnings call transcript