Entravision Communications Corp (EVC) 2014 Q1 法說會逐字稿

Good day and welcome to the Entravision Communications' First Quarter 2014 Earnings Conference Call and Webcast. All participants will be in listen-only mode. (Operator Instructions) Please note, this event is being recorded.

I will now like to turn the conference over to Mr. Walter Ulloa. Mr. Ulloa, the floor is yours, sir.

Thank you, Mike. Good afternoon, everyone. Welcome to Entravision's first quarter 2014 earnings conference call. Joining me today is Chris Young, our Executive Vice President and Chief Financial Officer. Before we begin, I must inform you that this conference call will contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ. Please refer to our SEC filings for a list of risks and uncertainties that could impact actual results. This call is the property of Entravision Communications Corporation. Any redistribution, retransmission or rebroadcast of this call in any form, without the expressed written consent of Entravision Communications Corporation is strictly prohibited.

Also, this call will include certain non-GAAP financial measures. The Company has provided a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures in today's press release. The press release is available on the Company's website and was filed with the SEC on Form 8-K.

We generated strong financial results during the first quarter and we are off to a solid start in 2014. Our core television and radio properties outperformed the broader market once again and we made additional progress strengthening our digital offerings and marketing and sales capabilities. Our strong position in key Latino markets nationwide and expansion of our multi-media offerings gives us the unique ability to deliver robust, multi-platform campaigns to reach the rapidly expanding Latino population.

Consolidated first-quarter revenue was $52.7 million, up 7% compared to the first quarter of 2013. We generated consolidated adjusted EBITDA growth of 12% and year-over-year free cash flow growth of 172%. Operating expenses were up 5% for the quarter. EPS for the quarter was $0.05 per share compared to negative $0.01 per share in the first quarter of 2013.

Free cash flow, as defined in our earnings release, increased 172% to $9.4 million or $0.11 per share for the quarter compared to $3.4 million or $0.04 per share for the same quarter last year. Cashed interest expense was $33.2 million compared to $7.3 million in the same quarter last year, due to the successful refinancing of our debt during the third quarter of 2013.

Now, moving on to our operating highlights for the first quarter. Our television revenue increased 8% during the first quarter. Local television revenues increased 8% in the quarter, while national TV revenues were flat. On a core basis, excluding political revenues and retransmission fees, first-quarter TV revenues increased 3% in the first quarter of [2013]. Core local television revenue grew 6%, while core national revenue decreased 2% during the quarter.

This growth demonstrates our ability to consistently outperform the broader television industry. The Television Advertising Bureau estimated that core television industry revenue increased 1% in the first quarter compared to our core television growth of 3%. We have now significantly exceeded the industry's core growth projections for 10 consecutive quarters.

We also continue to see strong growth in the automotive category, which was up 16% during the first quarter. Automotive spending growth at our television stations has now posted double-digit increases in 17 consecutive quarters. We believe it is worth noting that once again the growth in automotive spending was broad, as we generated sales growth in all three automotive tiers. Tier 1 was up 20%, Tier 2 plus 12% and Tier 3 plus 12%.

In the first quarter, we generated growth with 7 of our top 10 automotive brands, led by Nissan, Hyundai and Toyota. We expect continued momentum in the automotive category during 2014, given the anticipated robust product cycle, strong demand, low borrowing rates, as well as the automotive category's historical investment in the World Cup.

Beyond automotive, we experienced growth in 4 of our top 10 categories during the first quarter, including healthcare, groceries and services. The healthcare category was up 86% during the quarter, while groceries finished up 14%. The healthcare category continues momentum with the combination of Affordable Care Act campaigns, including Covered California and Nevada help link, as well as several branding campaigns from WellPoint, Molina Healthcare, Kaiser, Permanente and Blue Cross, Blue Shield. The grocery category is boosted by significant increases from [AGB and Marianas] during the quarter.

During the first quarter, we added up 57 new television advertisers who invested $10,000 or more across our television properties. New clients include Lexus, Southwest Airlines and Hyundai dealers.

Turning to our ratings performance, our Univision affiliates extended their ratings leadership position in the February 2014 sweeps among all adults 18 to 49, regardless of language. For Entravision, Univision affiliates ranked number one or two sign on to sign up. Additionally, six Entravision Univision affiliates either number one or two, among all adults 18 to 34. Three of our UniMas affiliates are the number two ranked Spanish language television stations in their markets in adults 18 to 49. Four also ranked Number two among adults 18 to 34.

During our prime time Novella block, the Entravision Univision television affiliates delivered higher ratings among adults 18 to 49 in nine markets and at least one of the big four English language television affiliates. In the early Univision network newscasts, 10 of our affiliates are number one or two regardless of language, seven Entravision Univision affiliates are number one or two in early local news and five are number one or two in late local news, again regardless of language.

At our radio division, revenues increased 6% in the first quarter. Our station group exceeded the revenue growth for the broader radio industry, which Miller Kaplan estimates at 3% during the first quarter in the 12 markets in which we subscribe. Local revenue, which represents 66% of our total revenue, came in flat for the quarter and National revenue, which represents 34% of our total radio revenue, saw an increase of 15% compared to the first quarter of 2013. National revenue grew in each month of the quarter.

Excluding political revenue, on a core basis, our radio revenues finished up 5.4% in the quarter. Core national revenues during the quarter were positively impacted by the strong performance of our Entravision Solutions audio network, which allows advertisers to reach 95% of the total US Latino population. We continue to expand our roster of advertisers as we had a total of 28 Entravision Solutions Network advertisers during the first quarter. Top network advertisers during the first quarter included O'Reilly Auto Parts, Lowe's, Telemundo, Sears and JCPenney.

The growth of network revenue was driven by the top ranked afternoon show Erazno y La Chokolata. We saw an increase in network spending of 762%, because of the absence of [Piolin] and the increase in ratings and coverage, which has made this program the leading Spanish language syndicated audio show in the nation. We recorded revenue growth and 6 of our top 10 categories in our Radio business in the first quarter, including telecom, travel and leisure, healthcare, restaurants, media & automotive repair and services.

The automotive category, which is the second highest revenue generating category for our audio unit, was down 2% for the quarter. The telecom category increased 114% in the quarter. This increase is a result of increased spending of 462% for MetroPCS, in addition to increased spending from Sprint and Verizon. The healthcare category experienced 54% increase in revenue in the quarter, propelled by Covered California, Connect Colorado, New Mexico Health Insurance and Kaiser Permanente. Travel and leisure, restaurants and media had modest revenue increases in the quarter. Revenue from the services and retail categories decreased in the quarter.

The targeted reach of our radio stations and our strong sales force have continued to attract new advertisers. During the first quarter, we added 34 new radio advertisers who spent more than $10,000 and which generated approximately $580,000 in advertising revenues. These new advertisers include Rapido Express, Inland Empire Health Plan, H&R Block, Universal Studio Hollywood and Advance Auto Parts, just to name a few.

During the first quarter, we prepared for the creation and launch of Southern California Superstation, Jose FM. Jose FM combines the two signals of KLYY, the 97.5, in KDLE and KDLD, 103.1. The signal provides strategic and complementary coverage in key high-density Latino areas throughout Los Angeles County, Orange County and the San Fernando Valley. Prior to the creation of this LA superstation, KDLD, KDLE and KLYY successfully simulcasted a top-rated morning show in Los Angeles, Alex El Genio Lucas, which began in 2013.

The new Jose FM combines the best content of these stations, creating the dominant superstation in the number one Latino radio market in the country, Los Angeles. The first weekly trend for Jose FM was very positive. In Los Angeles, El Show de Erazno y La Chokolata, they viewed impressively in a number of key demos. Number one in Latino adults in males 25 to 54, number one in Latino males 18 to 49 and number two in Latino adults 18 to 49.

In the Riverside and San Bernardino metro, the Erazno y La Chokolata debuted at number one in every Latino adult in male demo. In addition, this positive news from the first week's transfer of Jose FM includes strong prime week performance, Monday to Friday [6 PM] to 7 PM Los Angeles with a simulcast debuting as a number four ranked radio station in Spanish in Latino adults 25 to 54, number one ranked Spanish language radio station in adults 25 to 54 and number three ranked Spanish language radio station in Latino males 18 to 49.

The LA radio cluster has a strategic sales plan in place to take full advantage of Jose FM's ratings dominance. Our Los Angeles cluster has aggressive new business strategies, targeting national and local advertisers through active account development, intense co-calling, sales training and sales performance initiatives. We also launched a new morning drive program (inaudible) in February. This fast-paced music intense program has already made an impact in the markets in which it airs.

Four of our radio stations airing (inaudible) are already in the Top 10 in their respective markets, regardless of language. Additionally, we launched Pajarete, hosted by two young, enormously talented women, Armida y La Flaka in mid-day on all of our Tricolor Mexican regional stations.

Entravision has now become the leading syndicator of Spanish language audio content in the United States. For the Winter 2014 radio ratings, our radio stations continue to be ranked among the leaders in adults 18 to 49 against all competitors, regardless of language. In the 10 Entravision markets measured in the Winter book, 10 of our radio stations are in the Top 10, full week Monday through Sunday, 6 AM to 12 AM.

In morning drive, five of our radio stations airing El Show de Genio on Jose stations are in the Top 10 and our cornerstone afternoon drive program, Erazno y la Chokolata, is in the Top 10 in six of our markets regardless of language.

Let me now turn to our digital business, where we advanced our online, mobile and social media platforms and further integrated our digital and traditional advertising offerings. We continued to strengthen our digital assets and today offer robust integrated advertising opportunities that connect brands with Latino consumers across all major media platforms.

First quarter interactive revenue increased 11% compared to the first quarter of last year. This marked our 23rd straight quarter of year-over-year double-digit digital revenue growth. Our digital revenues continue to account for over 5% of our total local revenues. Digital is a key area of strategic investment for Entravision as we look to broaden our capabilities and deepen our connection with Latinos across all new media platforms.

It is increasingly important for us to deliver engaging content and grow our connected audience. We published over 11,000 local new news video stories online across our markets in the first quarter. We streamed 6.4 million hours of audio content during the quarter, up 35% from last quarter and up 64% over last year's comparable quarter. During the first quarter, we had 833,000 unique audio streamers with an average session length of 31 minutes.

In the first quarter, we relaunched Todobebe. Todobebe is a digital destination in premium brand, targeting Latino mothers in the United States and Latin America. This property acquired in early 2013 seeks to fully leverage online TV and radio for brand promotion and to provide new omnichannel solutions for advertisers, targeting Latino mothers. Quickly Todobebe accumulated more than 300,000 followers on Facebook and is growing its online traffic in high-double digits every month. Todobebe fits within Entravision's new enhanced premium content, Big Data and audience knowledge strategy.

Mobile revenues increased 8% during the first quarter year-over-year and mobile usage remains at all time highs. During the quarter, we sent over 600,000 text messages to our mobile audience of our clients, including MetroPCS, T-Mobile, [Cricket], AEG, [JP Loop], Heineken and others.

Another area of focus is driving increasing social media engagement. At the end of the first quarter, we had over 890,000 followers across our social media channels, which is up 116% over last year. Our Luminar business continues to add clients to its roster, as well as build out its capabilities. Luminar data store now contains consumer data from 17 million Latino adults, including transactional records from grocery, retail, catalog and online. We are transforming the offline buy transactions data into cookies to segment and target audiences to Luminar audience platform with online display, video, social and mobile. Overall, we are pleased how far we've advanced, as we continue our transformation of Entravision from a pure-play broadcasting company into a global integrated media and technology company, targeting Latino consumers and audiences.

Entravision's total second quarter revenue, including retransmission fees, is pacing mid-single digits for both our television and radio businesses. Total revenue for the third quarter is pacing in the mid-teens over last year's comparable quarter. We continue to remain bullish about our prospects for the 2014 World Cup soccer games. Currently we have about $8.4 million of committed investment in the upcoming World Cup games. It's important to note that only about 65% of this $8.4 million of World Cup committed dollars has been entered into our traffic system and is therefore reflected in our pacings. This amount of committed revenue is significantly higher than the $7.4 million we generated in the 2010 World Cup games and almost at par with our record 2006 World Cup revenue of $8.9 million.

Our goal for this year's World Cup games is $12.5 million and we continue to believe this aggressive goal is achievable. It's important to note that 80% of total World Cup revenue will be booked in the second quarter and about 20% in the third quarter.

In summary, our first quarter results highlight our solid start to 2014 as we continue to execute our multi-platform strategy, generate core advertising growth across our radio and television assets, and deliver strong free cash flow growth. Our strategic focus remains centered on strengthening our multi-media assets and investing in the ongoing transformation of Entravision. We believe our expanding sales and research capabilities and ability to connect brands with expanding and increasingly important Latino audience places us on solid ground to continue driving growth and deliver returns to our shareholders.

I'll now turn the call over to Chris Young, our Chief Financial Officer for review of our financial information.

Thank you, Walter, and good afternoon everyone. As Walter has discussed, net revenue for the quarter was $52.7 million, up 7%. Operating expenses increased 5% to $33.5 million and consolidated adjusted EBITDA increased 12% to $15 million.

During the first quarter of 2014, the Company declared and paid a cash dividend of $0.025 per share to shareholders of the Company's Class A, B, and U shares of common stock. The total amount of cash disbursed for the dividend was $2.2 million.

The Company also announced today that the Board of Directors has declared a quarterly cash dividend of $0.025 per share to shareholders of the Company's common stock payable on June 30, 2014. The total amount of cash to be disbursed for this quarterly dividend will be approximately $2.2 million.

For the quarter, television net revenue was up 8% to $37.7 million compared to $35 million in the same quarter of last year. The increase in our TV segment was primarily attributable to increases in local advertising revenue and retransmission consent revenue. Radio net revenue for the quarter was up 6% to $14.9 million compared to $14.1 million in the same quarter of last year. The increase for radio was attributable to an increase in national advertising revenue.

Excluding retransmission consent revenue and political advertising revenue, core TV advertising revenue was up 3% for the quarter versus TV industry core spot revenue of 1%. This is the 10th consecutive quarter where our core TV revenue has outperformed that of the industry.

Core radio advertising revenue was up 5%. Retransmission consent revenue for the quarter was $6.7 million compared to $5.3 million in the same quarter of last year. Retransmission consent revenue for the year 2014 is now estimated to be approximately $25 million.

Operating expense for the quarter was $33.5 million, up 5%. Excluding non-cash compensation expense of $0.1 million, operating expenses for the quarter were $33.4 million, up 5%. The increase was attributable to an increase in salary expense, employee benefit costs and payroll taxes associated with the increase in salary expense.

Corporate expenses for the quarter were up 8% to $4.8 million compared to $4.5 million in the same quarter of last year. Excluding non-cash compensation expense of $0.6 million, corporate expenses for the quarter were $4.2 million, up 11%. The increase was primarily attributable to increases in salary expense and digital related expenses.

Income tax expense was for the quarter $3 million, while cash taxes actually paid was $500,000. Given the elimination of our full valuation allowance in the fourth quarter of 2013, future income tax expense will run at approximately 40% of pre-tax income, although most of this expense will continue to be non-cash, given our NOL offsets. We currently estimate our cash tax outlay for the year to be approximately $1 million.

Earnings per share for the quarter were $0.05 per share compared to a negative $0.01 per share in the first quarter of last year. Free cash flow, as defined in our earnings release, increased 172% to $9.4 million or $0.11 per share for the quarter compared to $3.4 million or $0.04 per share for the same quarter of last year.

Cash interest expense for the quarter was $3.2 million compared to $7.3 million in the same quarter of last year, due to the successful refinancing of our debt during the third quarter of 2013. Cash capital expenditures for the quarter was $1.9 million. Capital expenditures for the year is estimated to be approximately $10 million.

Turning to our balance sheet, as of March 31, 2014, our total debt was $363.1 million and our trailing 12 month consolidated adjusted EBITDA was $74.6 million. Cash on the books was $47.1 million at March 31, 2013. Net of $20 million of unrestricted cash in the books, our total leverage, as defined in our 2013 credit agreement, was 4.6 times at the end of the quarter.

This concludes our formal remarks. Walter and I now would be happy to take your questions. Mike, I'll turn it over to you.

(Operator Instructions) Michael Kupinski, Noble Financial.

Thank you, and thanks for taking the questions. Congratulations on a good quarter. Couple of questions. I was wondering if you can just talk a little bit about what was political in the quarter? I guess it was about $400,000, $500,000 or can you quantify that?

Political in this quarter and in the first quarter was about $605,000.

Okay. And then it looks like World Cup is off to a really strong start, you got some advanced bookings there. And that's obviously coming at little bit better than expected. Any thoughts on what political could be for the year at this point?

Well, what we've told the market and all of our investors is that in 2010 total political was about $7.1 million and we are looking to grow that by 20% in 2014. You know, Q1, we had a modest amount of political, Q2 probably would be the same. Then the bulk of political will hit in -- late in Q3 and then of course heavy in Q4.

And then auto category seems to be -- continue to be pretty strong. I was just wondering where is auto in terms of -- as a percent of revenues versus its peak cycle?

Auto, right now for TV, Michael, is about 26% of our TV revenue and it's about 14% of our radio revenue, but you still have some room to grow compared to our peak back in, call it the 2006 range where auto was close to 30% of our total revenue.

And I know that you guys are looking at kind of tuck-in type acquisitions and things like that. Can you talk a little bit about the M&A environment, particularly for digital, any thoughts there, or does it look like you might try to build out further investments in that space, or do you think that there's more acquisition opportunities, any thoughts on that?

You know, Mike, we continue to monitor and look at acquisitions, media acquisitions that will enhance our entire media platform. Digital is a place where we spend a lot of time and work and identifying digital opportunities that would enhance the digital platform that we continue to build and strengthen.

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

Thanks, Mike.

Amy Young, Macquarie Capital.

Hi, this is [Andrew] for Amy. Just had two questions, one follow-up on the M&A question. I'm just interested to know if you have any markets that you'd like to participate in or expand in and what's your strategy to expand your portfolio? And secondly, was there any impact at all from the FCC retrans limits on joint station negotiations? Thanks.

Well, I will take the latter part of the -- or the second part of that question first. We have not seen any or do not expect any impact on our -- any JSAs that we have. I believe we have nine JSAs, six with Univision and those are already attributable and the other three, we believe we'll seek some relief through an exclusionary provision at the FCC, as included in their report and order. So we don't see any impact on our business as a result of the FCC's latest rule making.

As far as acquisitions, I mean, in other markets -- I assume you're referring to broadcast acquisitions and I'll just say that there's nothing -- there does not appear to be anything right now that we're interested in. There's been a lot of consolidation that's taken place over the last 12 to 18 months, but most of that -- all of that's been in English language. But we will continue to look around and see what's out there and if there's something that comes our way, that either strengthens our broadcast platform or maybe allows us to enter a new market, certainly we will take a look.

But our strong preference would be to strengthen our existing platforms, our coverage in existing markets. That's kind of a lower risk higher return opportunity for us and that would clearly be our preference looking at the M&A environment overall.

And on radio, is there anything -- potential consolidation that you see there or do you think the market is pretty much -- the opportunity is gone there?

Well, I wouldn't say it's gone, but there doesn't appear to be any opportunity right now and that could change. Who knows what will happen over the next couple of years, but right now the opportunities are just one offs here and there and not much else.

Got it. Thank you.

Larry Haverty, GAMCO.

I'm just curious, what is your average weighted cost of debt? That interest rate seems awfully low -- the interest expense seems awfully low in the first quarter. And then secondarily, how much was retrans last year?

The cost of the debt is pretty straightforward, it's a LIBOR plus 2.5% instrument and we have a floor in that LIBOR at 1%. And last I checked LIBOR was in the 20 basis points, 25 basis point range. So we're at that 1%. So 3.5% is our cost of debt. It will be at that level through the end of 2015, I should say. And then we should --

You should get more of it.

We should get more of it. So noted. And then in 2016, we do have $186 million of that debt, which goes into a fixed rate agreement. So that rate will be 5.23% for that $186 million and then the balance of our debt will be -- continue to be at that floating rate. If LIBOR continues to be under 1%, will be at that 3.5% number from then on. So you'll have to figure out what you think LIBOR is going to do to figure out what our interest expense is going to be beyond 2016.

And retransmission revenue last year was $22 million, is that right?

Retrans revenue for the year?

For the year, for 2013?

Was $22.2 million.

Great. Thanks a lot.

Thank you.

Tracy Young, Evercore.

Hi, a couple of questions if I could. First question, I may have missed this, but the 2Q pacing numbers for radio and for television and then if you could give us some sense of healthcare, did it drop off from the end of March or are you still seeing some growth there?

The pacing numbers for Q2, Tracy, are mid-single digits for television and radio or said differently, consolidated revenues excluding retrans.

Healthcare was a strong category for us in Q1, was even stronger in March than it was in January and the window now has closed. So the healthcare industry has pulled back its advertising. We expect to see it come back in a strong way here in the fourth quarter of this year when the window reopens.

But right now the category in Q2 is pacing flat.

But it was up -- the total category across all of our media was up 77% in the first quarter versus Q1 2013.

Okay, thank you. And then it sounds like you are making some interesting changes on the radio side. Is there more investment that we should be expecting this quarter?

I don't think there's more investment that our investors should expect. We've been building this content unit here for a while and we got some terrifically talented people working in it and we're just starting to see the results of all of our work and we now have become the number one syndicator of Spanish language content -- audio content in the country. And so that provides us with a number of opportunities for advertisers and sponsors.

We did -- I should add, Tracy, we re-authorized those contract who is the biggest personality in the space now here in the country and that represents about 2 percentage points of our radio OE increase in the quarter and you could expect to see that for the balance of the year. You could have the increase, but largely based on performance.

Okay, thank you very much.

Thanks, Tracy.

(Operator Instructions) James Dix, Wedbush Securities.

Thanks very much. Good afternoon guys. A couple of things. I guess just first as you look at kind of the second and third quarter and the impact of the World Cup, I know this has been kind of a parlor game in the past, but any sense as to how incremental you think that the sales that you booked there are to your underlying revenue on the TV and in the radio side? And then secondly, there has obviously been on the TV side of things a lot of interest in the FCC's new rules. It doesn't seem to me as though there is any big implication for you directly at least on the -- for example, the joint sales agreement side, but do you think there is any potential restrictions or maybe potential opportunities that might get opened up for you as these rules play out and they affect potentially stations that come on the market or do you think there's maybe not all that much that's going to change there? Thanks.

Well, let me just -- I'll respond to the second part of the question first. We don't expect, again, any impact on our company as a result of the latest rule making by the FCC as it relates to the JSAs. We see little if any impact on our business. As for any divestitures that may take place in the future, certainly there's possibility. If there was something that would enhance our current media clusters, particularly on the US Mexican border, that would be interesting. But other than that we'll just wait and see.

As for incremental revenue, it's still too early to tell. The business is building every week. But as to what's going to be incremental, I'm not comfortable putting a percentage on it yet.

Okay, great. And then just one longer-term thing. How do you think of Telemundo as a competitor to Univision. They've made some traction in recent years in terms of their share of prime time and then obviously, Comcast continues to make some investment in them. How do you think people should be thinking about kind of the long-term competitive balance or where we are in terms of where the shares are between Univision and Telemundo right now on the television side?

Well, I mean Telemundo has made progress with its programming slate and continues to improve. I mean they're owned by a massive telecom media company, which is only going to get bigger as a result of this merger that they're working on. So sure, they are a contender, they are an important company.

Okay, great. Thank you.

Thanks, James.

Michael Kupinski, Noble Financial.

Thank you. Just more of a theoretical or just kind of a longer-term view type question. You know, historically the Spanish television and radio has always been viewed as a discretionary by, I think, advertisers viewed advertising in core radio or core television in more English language and then discretionarily would buy Spanish language stations, I think, if the economy was good. Do you have a sense that that is still the case or do you think that there is a shift going on among advertisers that are now viewing Spanish as a must-have? And I ask that question predominantly, because obviously you are outperforming the English language peers right now again, but I'm just wondering if there is a shift, especially given the fact that I believe you picked up some really unique advertisers that I don't think you've had in the past, including Jaguar and maybe a few others that are more luxury car makers and so forth, which seems kind of a unique to me. And I was just wondering if you can give us the overall thoughts about that.

Well, just briefly, Mike, I mean the Latino market continues to grow significantly year-after-year. It's only going to become more important to the US across every level of society. Certainly spending is an important metric for our economy. It's approaching a $2 trillion market in consumer spending. Year-after-year or cycle-after-cycle we're seeing more investment in our markets in political and I believe, based upon what we've seen in the last few years that there is less of this. If budgets are cut, there is less of a tenancy to cut the Latino budgets or Latino media spend and that's because number -- most advertisers now are looking to the Latino community for growth. It is a population of larger families, growing at a rate unlike any other ethnic group in the country. So it's natural that more advertisers would be looking to Latino media and population to increase their market share or case lot sales.

And then with the likes of Walmart, it indicated that they believe that the growth is going to come from more non-Caucasian type of customers. Have you seen the likes of Walmart, for instance, increasing their budgets with you at this point?

We have. We have seen. I'm not sure about this quarter, but I know that in the fourth quarter they were strong, but I'm not sure about this quarter as I speak to you. But yeah, they went on an identified that -- or said publicly that their growth they expected to come from the multi-ethnic multi-cultural segments of the US population. So they are looking and spending in -- with multi-ethnic media.

Okay, alright thank you.

Walmart was relatively -- was essentially flat for the quarter. But just look at the new advertisers, I'm looking at our new advertiser list, to your point, Lexus put on about an additional 100 grand in advertising, brand new advertiser for us. That's a sign of, you know, just a product expansion to the higher end of the profit offerings that I think is attributable to exactly what you're talking about, for becoming much more of a core part of a budget.

That's terrific. All right, thanks guys. Appreciate it.

Thanks, Mike.

Tracy Young, Evercore.

Hi, just two follow-ups on retrans. Should we assume that the $25 million is basically spread out evenly by quarter? And then are there any other deals that we should know -- contracts that are coming up?

You know what, for the retrans, the balance of the year, you put in about $6.1 million per quarter to get to that $25 million, should be pretty straight through. And as far as new deals are concerned, you know, everything on the retrans front is essentially locked up till 2017. So there's not really any new deal out there that would cause any material bump.

Okay, perfect. Thank you.

Thanks, Tracy.

This concludes our question-and-answer session. I would now like to turn the conference back over to management for any closing remarks. Gentlemen?

Thank you, Mike, and thanks everyone for participating in our first quarter earnings call. We look forward to speaking to all of you later this year in August, when we will announce our second quarter results. Thank you.

And we thank you, sir, for your comment to the rest of the management team. The conference call is now concluded. We thank you all for attending today's presentation. At this time you may disconnect your lines. Thank you and take care everyone.