MIAMI--(BUSINESS WIRE)--Hemisphere Media Group, Inc. (NASDAQ:HMTV), the only publicly traded pure-play U.S. media company targeting the high growth Spanish-language television and cable networks business in the U.S. and Latin America, today announced financial results for the first quarter ended March 31, 2016.
Alan Sokol, CEO of Hemisphere, stated, “Our business performed very well in the first quarter. Our results delivered on our expectations, and we are on track to achieve our 2016 financial objectives. We continued to experience meaningful organic subscriber growth, in contrast to the overall U.S. pay-TV ecosystem. Our retransmission and subscriber fees also continued to drive strong growth. Importantly, despite anticipated declines in the Puerto Rican advertising market due to continued macroeconomic headwinds, WAPA delivered record ratings in the first quarter and continued to outperform the market through gains in advertising market share. In addition, the launch of advertising on Cinelatino, while early, is progressing nicely. With a strong slate of new and innovative programming and the positive impact from the investments we have made in our channels, we are pleased with where our business stands and the opportunity for robust growth.”
Net revenues were $31.0 million for the three months ended March 31, 2016, an increase of $1.5 million, or 5.1%, as compared to net revenues of $29.5 million for the same period in 2015. This increase was primarily driven by growth in subscriber and retransmission fees, due to subscriber growth and rate increases, as well as increases in advertising revenue at the Company’s U.S. cable networks. Net revenues were negatively impacted by the high single-digit contraction in the Puerto Rico television advertising market in the first quarter of 2016, consistent with the year-over-year declines in the first quarter of 2015. The effect of the decline in the advertising market was offset in part by growth in WAPA’s share of the market.
Operating expenses were $23.8 million for the three months ended March 31, 2016, an increase of 6.2%, as compared to operating expenses of $22.4 million for the same period in 2015. The increase was driven primarily by increased investment in programming and higher sales and marketing costs, consistent with the Company’s efforts to drive advertising sales across its networks, including the launch of advertising on Cinelatino.
Net income was $2.7 million for the three months ended March 31, 2016, an increase of $0.2 million, as compared to net income of $2.5 million for the same period in 2015.
Adjusted EBITDA was $13.3 million for the three months ended March 31, 2016, an increase of 4.4%, as compared to Adjusted EBITDA of $12.8 million for the same period in 2015.
The Company affirms its forecast of a low double-digit percentage increase in Adjusted EBITDA for 2016 driven by strong growth in subscriber and retransmission fees and advertising revenue.
As of March 31, 2016, the Company had $211.7 million in debt and $170.1 million of cash. The Company’s leverage ratio was approximately 3.6 times, and net leverage ratio was approximately 0.7 times. During the three months ended March 31, 2016, the Company made a mandatory principal payment of $8.3 million on its term loan pursuant to the excess cash flow provision. Additionally, the Company repurchased 975,000 warrants for a total cost of $1.0 million and 100,000 shares of Class A common stock for a total cost of $1.3 million. The following tables set forth the Company’s financial performance for the three months ended March 31, 2016 and 2015 as well as select balance sheet data as of March 31, 2016 and December 31, 2015:
About Hemisphere Media Group, Inc.
Hemisphere Media Group (NASDAQ:HMTV) is the only publicly traded pure-play U.S. media company targeting the high growth Spanish-language television and cable networks business in the U.S. and Latin America. Headquartered in Miami, Florida, Hemisphere owns and operates five leading U.S. Hispanic cable networks, two Latin American cable networks, and the leading broadcast television network in Puerto Rico. Hemisphere’s networks consist of:
- Cinelatino, the leading Spanish-language movie channel with over 16 million subscribers across the U.S., Latin America and Canada, including 4.5 million subscribers in the U.S. and 12.3 million subscribers in Latin America, featuring the largest selection of contemporary Spanish-language blockbusters and critically-acclaimed titles from Mexico, Latin America, Spain and the Caribbean.
- WAPA, Puerto Rico’s leading broadcast television network with the highest primetime and full day ratings in Puerto Rico. Founded in 1954, WAPA produces more than 75 hours per week of top-rated news and entertainment programming.
- WAPA America, the leading cable network targeting Puerto Ricans and other Caribbean Hispanics living in the U.S., featuring the highly-rated news and entertainment programming produced by WAPA. WAPA America is distributed in the U.S. to 5.2 million subscribers.
- Pasiones, dedicated to showcasing the most popular telenovelas and drama series, distributed in the U.S. and Latin America. Pasiones has 4.4 million subscribers in the U.S. and 10.6 million subscribers in Latin America.
- Centroamerica TV, the leading network targeting Central Americans living in the U.S., the third-largest U.S. Hispanic group, featuring the most popular news, entertainment and soccer programming from Central America. Centroamerica TV is distributed in the U.S. to 4.0 million subscribers.
- Television Dominicana, the leading network targeting Dominicans living in the U.S., featuring the most popular news, entertainment and baseball programming from the Dominican Republic. Television Dominicana is distributed in the U.S. to 3.0 million subscribers.