Form 8-K SPANISH BROADCASTING For: Apr 13

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 13, 2016

 

SPANISH BROADCASTING SYSTEM, INC.

(Exact name of registrant as specified in its charter)

 

 

 

(305) 441-6901

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

 

 

 

 

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Item 2.02-Results of Operations and Financial Condition.

On April 13, 2016, Spanish Broadcasting System, Inc. (the “Company”) issued a press release announcing its financial results for the quarter- and year-ended December 31, 2015. A copy of the press release is attached hereto as Exhibit 99.1.

This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

 

 

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

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Exhibit Index

 

 

Exhibit 99.1

 

SPANISH BROADCASTING SYSTEM, INC. REPORTS

RESULTS FOR THE FOURTH QUARTER AND YEAR END 2015

MIAMI, FLORIDA, April 13, 2016 – Spanish Broadcasting System, Inc. (the “Company” or “SBS”)

(NASDAQ: SBSA) today reported financial results for the quarter- and year-ended December 31, 2015.

Financial Highlights

 

 

* Please refer to the Non-GAAP Financial Measures section for a definition of OIBDA and a reconciliation from OIBDA to the most directly comparable GAAP financial measure.

Discussion and Results

“During the fourth quarter, we made continued progress in executing our multi-platform strategy and growing our total audience shares,” commented Raúl Alarcón, Jr., Chairman and CEO. “Our AIRE radio network gained traction with listeners, advertisers and our station partners and is progressing in line with our plan. Our radio stations continue to increase their audience shares across the nation’s largest Hispanic media markets and we further strengthened our digital platform and reach, most notably through the highly successful launch of our new La Musica app.  Moving forward, we are focused on continuing to build on our strong multi-platform audience shares and digital capabilities to connect brands with the rapidly expanding Latino population on-air, online, and via mobile.”

Quarter End Results

For the quarter-ended December 31, 2015, consolidated net revenues totaled $40.3 million compared to $36.3 million for the same prior year period, resulting in an increase of $4.0 million or 11%.  Our radio segment net revenues increased $4.1 million or 13%, due to increases in local, network, digital and barter sales, and special events revenue. Our local sales increased in our Los Angeles, Miami and New York markets.  Our television segment net revenues decreased $0.2 million or 4%, due to the decreases in local and paid-programming sales offset by an increase in national sales.

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Consolidated OIBDA, a non-GAAP measure, totaled $9.9 million compared to $12.1 million for the same prior year period, representing a decrease of $2.2 million or 18%. Our radio segment OIBDA decreased $0.8 million or 6%, primarily due to an increase in operating expenses of $4.9 million, partially offset by the increase in net revenues of $4.1 million.  Radio station operating expenses increased mainly due to increases in special event related expenses, advertising, promotion and prize expenses, commissions, legal fees and settlements, affiliate compensation audience ratings and research, music license fees, taxes and licenses, and compensation & benefits.  Our television segment OIBDA decreased $0.5 million, due to the increase in operating expenses of $0.3 million and the decrease in net revenues of $0.2 million.  Television station operating expenses increased primarily due to increases in legal fees, trade, and special event related expenses.  Our corporate expenses increased $0.8 million or 39%, mostly due to an increase in legal and security expenses.

Operating income totaled $8.8 million compared to $10.8 million for the same prior year period, representing a decrease of $2.0 million or 18%.  This decrease in operating income was primarily due to increases in operating and corporate expenses, which were partially offset by an increase in net revenues.

Year End Results

For the year ended December 31, 2015, consolidated net revenues totaled $146.9 million compared to $146.3 million for the same prior year period, resulting in an increase of $0.6 million or less than 1%.  Our television segment net revenues decreased $2.5 million or 16%, due to the decreases in special events revenue, paid-programming and local spot sales.  Our radio segment net revenues increased $3.1 million or 2%, due to the increases in national, network, local, digital and barter sales, which was offset by a decrease in special events revenue.  Our radio sales increases occurred primarily in our Chicago New York, and Miami markets.  

Consolidated OIBDA, a non-GAAP measure, totaled $39.1 million compared to $39.1 million for the same prior year period, remaining flat for the year.  Our radio segment OIBDA increased $0.4 million or 1%, primarily due to the increase in net revenues of $3.1 million and the increase in operating expenses of $2.7 million.  Radio station operating expenses increased mainly due to talent costs, advertising, promotion and prize expenses, affiliate compensation, commissions, programming and sales bonuses, security, music license fees, and ratings services, offset by decreases in special event expenses and professional fees.  Our television segment OIBDA increased $0.3 million, due to the decrease in station operating expenses of $2.8 million, which were partially offset by the decrease in net revenues of $2.5 million.  Television station operating expenses decreased primarily due to decreases in programming production costs, special events, trade, legal fees, and bad debt expense.  Our corporate expenses increased by $0.7 million or 8%, mostly due to an increase in legal and security expenses.

Operating income totaled $33.9 million compared to $35.3 million for the same prior year period, representing a decrease of $1.5 million or 4%.  This decrease in operating income was primarily due to the impairment of a FCC broadcast license combined with the prior year recognition of a gain on the sale of assets.

Fourth Quarter 2015 Conference Call

We will host a conference call to discuss our fourth quarter 2015 financial results on Monday, April 18, 2016 at 11:00 a.m. Eastern Time.  To access the teleconference, please dial 412-858-4600 ten minutes prior to the start time.

If you cannot listen to the teleconference at its scheduled time, there will be a replay available through Monday, May 2, 2016, which can be accessed by dialing 877-344-7529 (U.S.) or 412-317-0088 (Int’l), passcode: 10082684.

There will also be a live webcast of the teleconference, located on the investor portion of our corporate Web site, at www.spanishbroadcasting.com/webcasts.shtml . A seven day archived replay of the webcast will also be available at that link. 

About Spanish Broadcasting System, Inc.

Spanish Broadcasting System, Inc. owns and operates 17 radio stations located in the top U.S. Hispanic markets of New York, Los Angeles, Miami, Chicago, San Francisco and Puerto Rico, airing the Spanish Tropical, Regional Mexican, Spanish Adult Contemporary, Top 40 and Latin Rhythmic format genres. SBS also operates AIRE Radio Networks, a national radio platform which creates, distributes and markets leading Spanish-language radio programming to over 100 affiliated stations reaching 90% of the U.S. Hispanic audience.  SBS also owns MegaTV, a television operation with over-the-air, cable and satellite distribution and affiliates throughout the U.S. and Puerto Rico. SBS also produces live concerts and events and owns multiple bilingual websites, including www.LaMusica.com, an online destination and mobile app providing content related to Latin music, entertainment, news and culture. For more information, visit us online at www.spanishbroadcasting.com.

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This press release contains certain forward-looking statements.  These forward-looking statements, which are included in accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, may involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results and performance in future periods to be materially different from any future results or performance suggested by the forward-looking statements in this press release.  Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that actual results will not differ materially from these expectations.  Forward-looking statements, which are based upon certain assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” “might,” or “continue” or the negative or other variations thereof or comparable terminology.  Factors that could cause actual results, events and developments to differ are included from time to time in the Company’s public reports filed with the Securities and Exchange Commission.  All forward-looking statements made herein are qualified by these cautionary statements and there can be no assurance that the actual results, events or developments referenced herein will occur or be realized. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.

(Financial Table Follows)

 

 

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Below are the Unaudited Condensed Consolidated Statements of Operations for the quarter- and year-ended December 31, 2015 and 2014.

 

 

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Non-GAAP Financial Measures

Operating Income (Loss) before Depreciation and Amortization, (Gain) Loss on the Disposal of Assets, net, and Impairment Charges and Restructuring Costs (“OIBDA”) is not a measure of performance or liquidity determined in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States.  However, we believe that this measure is useful in evaluating our performance because it reflects a measure of performance for our stations before considering costs and expenses related to our capital structure and dispositions.  This measure is widely used in the broadcast industry to evaluate a company’s operating performance and is used by us for internal budgeting purposes and to evaluate the performance of our stations, segments, management and consolidated operations.  However, this measure should not be considered in isolation or as a substitute for Operating Income, Net Income, Cash Flows from Operating Activities or any other measure used in determining our operating performance or liquidity that is calculated in accordance with GAAP. In addition, because OIBDA is not calculated in accordance with GAAP, it is not necessarily comparable to similarly titled measures used by other companies.  

Included below are tables that reconcile OIBDA to operating income (loss) for each segment and consolidated operating income (loss), which is the most directly comparable GAAP financial measure.

 

 

 

 

 

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Non-GAAP Reporting Requirement under our Senior Secured Notes Indenture

Under our Senior Secured Notes Indenture, we are to provide our Senior Secured Noteholders a statement of our “Station Operating Income for the Television Segment,” as defined by the Indenture, for the twelve-month period ended December 31, 2015 and 2014, and a reconciliation of “Station Operating Income for the Television Segment” to the most directly comparable financial measure calculated in accordance with GAAP.  In addition, we are to provide our “Secured Leverage Ratio,” as defined by the Indenture, as of December 31, 2015.

Included below is the table that reconciles “Station Operating Income for the Television Segment” to the most directly comparable GAAP financial measure. Also included is our “Secured Leverage Ratio” as of December 31, 2015.

 

 

 

 

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Unaudited Segment Data

We have two reportable segments: radio and television.  The following summary table presents separate financial data for each of our operating segments:

 

 

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Selected Unaudited Balance Sheet Information and Other Data:

 

 

 

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