HMTV - Earnings call transcript Q4 2020 | Hemisphere Media Group Inc

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Operator

Good day, ladies and gentlemen and welcome to the Hemisphere Media Group, Incorporate Fourth Quarter and Full Year 2020 Financial Results Conference Call. My name is Jason and I will be your operator today. A replay of the call will be available beginning at approximately 1:00 PM Eastern Time today, Tuesday, March 2, 2021 by dialing 1-800-585-8367 or from outside of the United States at 416-621-4642. The conference ID for the call is 1563675. I will now turn the call over to Danielle O'Brien.

begin. may You

Danielle O'Brien

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

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

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

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

Alan Sokol

and for good staying and your fourth Danielle, colleagues delivered quarter and of the we I'm the morning, you safe. the hope year. everyone. I and proud incredibly are and full you, results healthy Thank families

extraordinary face pandemic in performance of and Our headwinds. the truly the business was macroeconomic

companies media At defied revenue second has other time rating declines, our and For business a delivered when are we consecutive trends. reporting industry-leading quarter, resolutely growth. advertising the these

highest history political. of grew advertising quarter. outstanding line fourth an XX% increase the the Our XX%, company's quarter, fourth growth TV in when revenue. in excluding was increase by revenues This XX% advertising our adjusted by revenue top quarter driven net in quarter extraordinary EBITDA Overall drove in we a the even in

As a spending economic the third the able many Rico, of quarter, restrictions to second impact were our performance, the the on loosened. of result the and trends pandemic our strong built largely as in gradually business seen we mitigate of results. consumer pandemic In related momentum upon half Puerto activity, were

television a political. behavior, Rico versus As quarter ad when a Puerto TV XX% in market XXXX. result the revenue of highest political history improving grew ad of And by WAPA's remarkable overall the consumer fourth the was excluding excluding even

federal stimulus in the as consecutive Hurricane Assuming should release funds as market growth relief XXXX XXth additional of continued of be number relating to year the Maria, positioned for billions well to decision recovered well viewers Rico. fresh In the third continuous programming the it the committed of station pandemic, the spending we made quarter; reduce our and market bring as but off. in quarter, Puerto to light WAPA's one federal as previously marked XXXX. the paid in we allocated the second in

Rico, rating XXXX. For since any of station in delivered highest Nielsen total the year, WAPA ratings day began full average measuring the TV Puerto in

of and in substantial market programming, news, indispensable sports in became and value. Puerto largest also X. two distributors WAPA January and agreements with in WAPA's unparalleled reflect renewed WAPA's on our entertainment strength renewals Rico. will make extraordinary to a which Puerto increase result the MVPDs position leading singular fees retransmission retransmission Rico, and We These in ratings effective lineup

the related comScore meaningful our audiences experienced We quarter of of strong full ratings, year, very as offering, by double-digit the delivered fourth XX% out. unique overall grew our Pasiones growth as compared they content increasing in in cable helped advertising viewing year a consecutive And relevant audience XXXX. US XXXX. trends, percentage challenging ratings X% drive result continue channels. year-over-year cable our year seek growing the reflection to to XXth QX, and its over of to by a of this growth ad revenue all of networks, to Turning environment. quarter face a fourth defy ratings continue Pasiones ratings the This growth, consecutive its across performance for

of in by over line Puerto ratings consecutive premier blockbuster ahead, its the TV marked XXXX, Rico. Turkish XX% year-over-year for content which X% XXXX, including have Looking XXXX. set year Mother, growth. its Cinelatino fourth impressive of by increased a drama US fourth previously record audience we growth, quarter Xth ratings the the Centroamerica of fantastic its over of WAPA quarter for tradings increasing consecutive of marking quarter third an

launched to recently pleased a distributor, and focused are Latin sports Fanatiz, US has Centroamerica TV over-the-top that announce on We America from growing Spain.

elections El in rank X, unmatched ratings, major on had total crisis. year have our launched Our in programming five outstanding A distribution. and of a record the channel the DIRECTV in the COVID-XX channel numbers. note on TV Rico, large Puerto March Puerto Salvador, neared among Dominicana giving launch On from increase on value viewership of Honduras. subscriber meaningful top its Rica and now day Rico. and all-time XX% coverage Television quarter channel posting incremental bringing The the its is rated and robust cable in Spanish loyal Dominicana WAPA and XXXX. fourth Puerto quick by all the distributors in to growing speaks America Costa ratings the an stock Rico networks, the audience XX% continues to available

subscriber that quarter. fourth encouraged are We decelerated the our in sequentially losses

addition, are major a Pantaya continuous strategic about In us. with all language in key package. is distributors we for Spanish launching over-the-top discussions a initiative

movies for Pantaya scaling focused In as ideally base US, find Pantaya and its growing anywhere original destination approximately can't in streaming premium grew on service they significantly offering. and the else. series its is positioned XX% subscribers. that blockbuster expanding over leading XXXX, Spanish is by and the its the content As enjoy to XXX,XXX language is subscription business now and Pantaya subscriber paying Hispanics

dynamic by We them. can are million Hispanics drive that providing XX to sizable confident with that growth, US speaks and Pantaya a service uniquely

to in Turning remain pandemic. Canal to investment by our The and Colombia the market continues Uno. challenged

continue near implemented economy. end outperformed restrictions activity January, the XXXX level were consequently levels the entered on to key advertising year, advertising lockdowns overall the business further -- and lifted normalized dramas, Canal provides strategic While the market pressure in around America. putting on grow. with prime throughout TV were of Uno Televisa, decline partnership the able market La and Uno cases XXXX to to agreement and share Colombia's Canal to normalized into time lessen, Guadalupe. Uno's will market able managing and market one the COVID recently important content show was Latin Uno access to believe return spending reducing as producer a with Televisa's revenue the spending world, be mitigate most should Canal in successfully by hit prudently and including number costs. This progresses Rosa We de Canal

impact opportunities year, despite including of performance challenging we closing, front are In pleased strategic under pursue circumstances. of the extremely we On various have operating terribly the transactions, continue this the that by arisen pandemic. to with potential exciting M&A, virtue our

second tremendous the and this growth give during results extraordinary results have XXXX our momentum trajectory. of early impressive half the us year, continued Our

our the content While continuously deliver to world value to our fresh the Craig. remains audience. are you drive compelling and mission over the same platform call environment and across turn valuable everyone. Thank and unique now entire changing, to the I'll our and

Craig Fischer

Thank you, morning and Alan, good everyone.

$X.X to full excited revenues given business, quarter, revenues the increases by the were included successful which for to by for headwinds We XXXX. significant Net driven at achievement, advertising year-ago fourth advertising revenue networks, respectively. million, advertising the were million million $XX.X the both compared to of for were in for as the XXXX. continued to for the $X.X XX%, were same as X%, million, decreased acceleration X%, million compared for as XXXX. period record year XX%, other in revenue periods of or to have was in same The both with as our in in increase revenue affiliate for an we which $XXX.X XX-month fourth offset lower faced. advertising are half full during fourth growth and $X.X the as year record million periods a as the an period. for periods grew quarter at of completed The increase revenue. year. significant $XXX.X cable and quarter million the revenue XX% a $XX.X compared year fourth part period growth in quarter and in well of full our Net year the increased revenue second revenue to $X.X due Advertising the the for compared Advertising the three revenue or Affiliate the WAPA political million increase and

the million, releases million fourth The For US to as amounts in periods the which varies to currency quarter due were from foreign and the for to Latin period increase to expenses for $X.X $X.X year million and CARES the and the benefits million content as under revenue XX% also charge to at pandemic. were the million due million, lower in $XX.X year for subscribers a for for revenue $XX.X and impairment $XXX.X a amortization the the Adjusted lack increase both XXXX. fourth in marketing period, as XX% periods XX-month expense. programming EBITDA to higher X% and of decrease record Operating of our Without decline $X costs the intangibles networks to related of the ad increase to Higher to including increased charges the affiliate in sales these American XXXX. of news the costs theatrical and expenses due the and or compared personnel X% $XX.X compared both decreased due in of $XX.X Operating ago were X% period. of ago The XXXX. elections the a by offset same the costs, by cable $XX.X licensing as of the $XX X% full year timing was XXXX depreciation in year respectively, These part million period. related of quarter $XXX.X of full year. level to to revenue. parties, write-downs. period-to-period Adjusted million, for included expenses for the and same related the $XXX,XXX year by lower of increases was compared fourth compared million Act quarter higher to expenses to year commissions due compared research the impacted as the and were EBITDA goodwill Other and full million an primarily period of movements. coverage premieres as full driven third full X% costs an and million, an timing staff were advertising $XXX,XXX increased in provided to operating content decrease the was unfavorable quarter compared decreased in acquisition in our to for and

the balance Turning to sheet.

As of last year. in nearly of had of of we an cash. December cash since million This $XX million in $XXX debt end and XX, million increase $XXX represents the

X.X Our leverage to improved to ratio times and improved gross net X.X leverage times. ratio

bringing stock we of As in to an weighted Board of of expenditures authorized during plan for price full aggregate average million quarter and common shares $XXX,XXX a the the $XXX,XXX. approximately were million. fourth announced, XX,XXX $X.X the repurchased Capital share year a quarter, CapEx we previously $XX.XX repurchase the $XX at

was guided projects pandemic. will be to and due the XXXX delays capital a the deferral completed Our projects of lower in certain of result previously These than CapEx as XXXX.

FCC to of million. $X approximately expect We net reimbursements CapEx be XXXX

the strategic our down to million during million our quarter invested The to Turning $XX.X full We Uno. full operating improved year XXXX. to investments. results was fourth from $X.X due decrease at Canal in joint year bringing ventures investments in $X.X the million

$X towards $X We expect fund as to progress breakeven. we approximately to to Canal into XXXX million million continue Uno in

of model and quarter a to fourth resiliency performance year track of which record our are our execution. strong and of business the is We proud full testament

continuing the for momentum first a off The strong quarter. quarter start our is to fourth

stimulus are and the pandemic we for performance around package but While and the Puerto our timing unreleased Rico. uncertainty optimistic aid and of federal XXXX approved, for given amount

not questions. to We'll are time. the guidance at call open We this now your providing

Operator

Cahall Instructions] [Operator Steven first of from line the question Fargo. Wells Your from comes

is line open. Your

Steven Cahall

Thanks.

yes, first maybe So help Rico really was and in great off, the guess, between some that break Puerto what your in results down was I delivery us you could growth quarter. get both your maybe what impact? pricing guess sense trying was growth? how the a But pricing to of, just relative it strong much was My kind versus is on of fronts. delivery

Alan Sokol

for been clutter. But quarter inventory. would Steve. our of from of high much we little not a as could we accommodate a all solid have completely demand of There commercial of there It amount also out. sold for growth of displacement political. fourth -- the on try was bit were a The to even some result displacement of without We the combination was demand minimize -- really or pricing results having air We better. advertising the excessive was both

Steven Cahall

And then Great. I side, on the guess, sub-declines. on subscription maybe first

than I those less X% think were in down sequentially QX.

know of deals part that then And cable networks? in that continue Rico. the trend couple QX over retrans done got for With of sense the the is better I Puerto can US you a

or an growth? XXXX affiliate for outlook So if on I company was just retrans us could give total for either wondering you

Alan Sokol

I We the of into make vast the Rico. next dollar two said did for us retrans will as Puerto in growth year. Rico, deals up subscribers with dollar meaningful majority And translate next for growth for largest a enter distributors very which -- revenue into year that in Puerto

optimistic decreased of In into the velocity conclusion. us too terms that but year and to a losses, jump any the for through the little subscriber continue quarter will first early really of to of velocity we're losses

see we lag. on two-month know, you results As a generally

them than in see XX-day on we've we in doing to hard So delay. know are the don't distributors seen real-time and real-time a how what other

Steven Cahall

there. hot the one market a maybe off white me a And is There's out last SPAC for which bit wall.

market to than typically clearly SPAC sheet time balance as you understand or as raises probably all more the do. a cash mergers at see as either anybody. particularly look this you well opportunistic capital you on got Do the You and

that you to putting some with buyback that do of So authorization work? also how think about

Craig Fischer

Yes.

policy allocation disciplined continues capital M&A. strategic prioritize Our to

in ample along a pipeline. built borrowing liquidity year. with balance we to transactions are think our have And have pursue We the capacity cash this significant we that

we'll share the As November. you believe of to capital We And the we noted, to with shareholder given our evaluate the continue cheap use our performance in implemented is stock buyback create Board best business. plan value. particularly the of our

Steven Cahall

Thank Great. you.

Operator

question comes Securities. from the Baker line Guggenheim from Curry next of Your

line Your is open.

Curry Baker

guys questions. Or talk Good Maybe two, you guys three with see there have there there morning the to what the Hey. guys. color over Thanks business start the any Any can opportunity funding expected as you this Pantaya? the Do growth speak in any can we next there? a funding great. TAM saw year? is maybe commitments for nice Obviously Can one, XXXX. would breakeven you you or that commitments you years? And profitable? be to, whether there

Alan Sokol

in or years It's morning, the been big that And of some big Alan. in to Pantaya Pantaya. launch, fans Good to and launched market have believers Curry. We're about services three for general contrast around has now.

have growth. of So data track a And track have lot of have strong we for record three years. we -- and a of and proof record strong we really a performance

we is of think providing. following, for returns the believers nobody that we about it's COVID. and Hispanics We accelerate of we're forward, terms service of and and very singular those can that type substantial good else production leading being big going unique the provide a really market the the we really forward. million US to audience, drive And -- for content very trajectory we that being feel of can in in as the with the normalcy quality think that growth a sort that that going service in end frankly, growth trajectory. growth XX So, And

Craig Fischer

And se. we per funding have contractual don't obligations

and funding dialogue Lionsgate management the our team constant funding. that with with their and timing of needs partner on are We the at in

Curry Baker

you on guys just profitability? you the where are guys Can at? Or comment Okay.

Alan Sokol

drive commented We specifically have profitability, worthy of to not growth. additional that on believe is Pantaya the but we investment

And on now on more profitability. opportunity right so the than we're focused growth

question I is is Pantaya growth. profitable, invest that think that think And our further I to it we drive I the think wanted today. be But profitable be now. right could perspective to you to that continue if

Curry Baker

were Puerto Okay. year two should on that on throughout of side. cable be guys in spoke Are you of? year, end Rico other just the renewals or that this Rico I the any the there renewals or in we side up completed to know Puerto aware retrans this

Alan Sokol

terms we existing them renewals. But guys. deals Listen, to staggered. are very renewals we of in on our feel typically terms there's renewals, the and comment our announce and certainly we don't any now and right to sit -- upcoming there and will that disclose are individual them deals But already about where significant good you extent we

Curry Baker

Okay.

guys. all that's guys. I Thanks think, have I

Alan Sokol

Thank you.

Operator

That call Sokol remarks. to for I the turn Alan closing over concludes Q&A. would now back

Alan Sokol

Nothing good everybody health everybody thank for more to the you on phone. my from joining side, and and continued

Operator

That concludes today's conference call.

may disconnect. You now

Hemisphere Media (HMTV) 2 Mar 212020 Q4 Earnings call transcript