by [Sean Schupak]

Key Executives:

Walter F. Ulloa – Chairman and CEO
Christopher T. Young – Executive VP, Treasurer and CFO
Jeffery A. Liberman – Chief Operating Officer
Mario M. Carrera – Chief Revenue Officer
Mark A. Boelke – General Counsel, VP of Legal Affairs and Secretary

Total Assets Net Income ($000; 2012 through Q3) [1]

2008 – 592,983 – 528,556
2009 – 487,927 – 50,072
2010 – 490,810 – 18,086
2011 – 467,321 – 8,200
2012 – 451,507 – 5,904

Financial Overview:

The third period of 2012 was a period of growth for Entravision, highlighted by an increase of $8.4 million–17%–net revenue. Television net revenue increased by $7.3 million–22%–which is by far the bulk of the company’s overall net revenue increase. [1]

Company Overview:

Entravision Communication Corporations is a Spanish-language media company with holdings in television, radio, and digital formats. The company’s head quarters is located in Santa Monica, CA, where the company was first started in 1996.

Entravision holds 53 television stations in the United States, operating in 19 of the top 50 Hispanic markets. Entravision’s television holdings are, for the most part, affiliates of the networks Univision and TeleFutura–the two networks owned by Univision Communications Inc. [2]

The company’s primary source of revenue is “sales of national and local advertising time on television and radio stations, and from retransmission consent agreements.” The company’s profits peak in the 3rd quarters of off years i.e. during years when there is either a presidential election of the FIFA World cup.

Relationship with Univision

Some of Entravision’s channes have exclusive rights deals with Univision to broadcast the corporation’s Univision and TeleFutura programming. These are “long-term affiliation agreements” that expire in 2021, at which point they can be renewed. Until that point, though, Entravision is entitled “to sell approximately six minutes per hour of available advertising time on Univision’s primary network, and approximately four and a half minutes per hour of available advertising time on the TeleFutura network.”

Univision also acts as Entravision’s “exclusive sales rep for the sale of national advertising on [Entravision’s] Univision–and TeleFutura–affilate television stations.” During the third quarters of the past two years–2011 and 2012–Entravision has paid Univision “$2.8 million and $2.4 million, respectively.”

Official Logo of Univision Communications, Inc.
-corporate.univision.com

Entravision also has “marketing and sales agreements with Univision which give Entravision rights to manage marketing and sales operations of Univision owned TeleFutura and Univision affiliates in nine markets–Albuquerque, Boston, Denver, Orlando, Tampa, and Washington, D.C.” [1]

Increasing Revenue and Impact of Political Advertising:

On November 1st, Entravision reported a television revenue of $40.9 million for the its third quarter this year. This represented a 22% increase from its third quarter revenue in 2011.

The company attributed the increased revenue, in large part, to political advertisements. 2012, being an election year, saw a large number of advertisements for various campaigns [3]. The opportunity to broadcast such advertisements was not available the previous year. This leap in revenue due to the election period is reflective of Entravision’s increasing role in the Latino political world, and the increasing population and activity of this particular market in the United States.

2012 Presidential Election:

Entravision covered the 2012 Presidential election extensively, providing a platform with which the Latitino population in the U.S. could stay informed. They provided the most expansive coverage of the Democratic and Republican Conventions in September.

On Labor Day, Entravision aired an exclusive interview with President Barack Obama. Entravision was also the only Spanish-language television company that was allowed an interview with the President in the contentious, battleground state of Colorado. [4]

In October, Entravision partnered with national non-profit Mi Familia Vota Education Fund. The two came together to provide free rides for to polls in Denver, CO; Orlando, FL; Tampa, FL; Reno, NV; Las Vegas, NV; Palm Springs, CA; Stockton, CA; and Modesto, CA in an effort to help turn our Latino voters. [5]

New Management Structure:

On November 1, Entravision announced a new management structure. The overhaul included promoting Jeffrey A. Liberman–who had previously been President of Entravision’s radio branch–to Chief Operating Officer of the company. Mario M. Carrera–previously Senior Vice President of Spanish-Language Television–became Entravision’s Chief Revenue Officer. Esteban Lopez Blanco–previously Entravision’s Executive Director of Interactive–was made Chief Strategy Officer, Corporate Development and Innovation.

The restructuring was a step in Entravision’s growing interest in digital, mobile, multi-media platforming. [6]

With television, radio and interactive assets serving the fastest-growing Latino markets in the nation, Entravision is uniquely positioned to meet the integrated multi-platform marketing needs of advertisers. Our diverse asset base provides a comprehensive offering of media solutions targeting the Spanish-language community. This new management structure will allow us to strengthen our ability to serve our advertisers and consumer audiences, drive operating efficiencies and capitalize on a range of growth opportunities.

-Walter F. Ulloa, Chairman and Chief Executive Officer

Wells Fargo Debt:

On November 29 Entravision’s Board of Directors declared that it would pay back $40 million worth of 8.750% notes due to Wells Fargo Bank, N.A. The payment is an early payment of a part of a larger debt outstanding due in 2017. That debt will total at $324 million after the $40 million is payed. The payment will be payed with $20 million cash-in-hand along with another $20 million from a separate, senior banking contribution.

Official Logo of Wells Fargo Bank, N.A.
-upi.com-

In addition, the Board of Directors declared that it would offer up a one-time-only $0.12 a share cash dividend to stock holders. [7]

Today’s announcements demonstrate our confidence in the health of our business and its ability to deliver solid cash flows, as well as our commitment to rewarding our shareholders. We continue to review the strategic use of our capital and are pleased to further reduce our outstanding debt and return capital to shareholders through this special dividend.”

-Walter F. Ulloa, Chairman and Chief Executive Officer

Stock Upgrade:

On December 4th, the investment website thestreet.com upgraded Entravision’s stock from a “sell” status to a “hold,” implying that the stocks have overall become more valuable and will, at least as projected, continue to improve in value.

The ratings site cites a number of reasons for the upgrade. Entravision has slightly exceeded the average growth rate–15.8%–by achieving 16.7% growth in the last year. As a result, the average earnings-per-share has increased considerable over the last year, an improvement that is considered indicative of overall improvement.

However, the website also cites a number of issues with Entravision stock. Despite a high gross profit margin, Entravision’s net profit margin is an umimpressive 12.36%, which lags behind the industry average. And despite maintaining a “very strong quick ratio of 2.87, which shows the ability to cover short-term cash needs, “debt-to-equity ratio is very high at 50.55 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.” Additionally, Entravision’s closing prices in the market have remained fairly consistent–neither increasing nor decreasing dramatically. [8]

Luminar:

In early August Entravision launched Luminar, an analytics company specifically geared towards the United States’ Hispanic market. Luminar is a partership of Entravision and Impetus Technologies. The project aims to create “a data driven organization, creating a cloud based data services platform, and creating new revenue streams focused on Hispanic consumers.”

Entravision presented the company at the Strata.Hadoop World Conference October 24. The new division was unveiled as “the first Big Data analytics and modeling provider connecting marketeers with US Latino consumers. Luminar helps clients identify predictability models of consumer behavior to allow companies to reach, up-sell and retain Latino consumers more effectively.” [9]