Entravision Communications Corp (EVC) 2014 Q4 法說會逐字稿

Good day and welcome to the Entravision Communications Fourth 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 would now like to turn the conference over to Walter Ulloa. Mr. Ulloa, the floor is yours sir.

Thank you, Mike. Good afternoon, everyone. Welcome to Entravision's Fourth 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 express 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 fourth quarter results to the market at the end of a highly successful year for Entravision. Our performance in the quarter was driven by strong radio and digital revenue as well as the impact of higher political revenues across our TV station group. Our operating results dropped solid adjusted EBITDA and free cash flow during the quarter.

Looking at 2014, we made steady progress throughout the year transforming Entravision into a multimedia company that delivers highly targeted, highly engaged Latino audiences across all traditional and digital platforms. We extended our digital products and capabilities throughout the year, including acquiring Pulmo Media last summer. We continue our transformation from a pure play broadcasting company to a global integrated media and technology company serving the Latino community in the United States, Mexico and Latin America. We also remained committed to returning capital to shareholders through our dividend and share repurchase programs. At the same time, we continue to strengthen our balance sheet. Most recently with a $20 million pre-payment of term loans under our senior secured term loan credit facility.

Turning to our results, during the fourth quarter consolidated revenue was 65.3 million, up 9% compared to the fourth tquarter of last year. We generated consolidated adjusted EBITDA growth of 8% to $21.2 million, and year-over-year free cash flow growth of 16% to $15.7 million or $0.18 a share. Earnings per share were $0.07 in the fourth quarter. For the full year, consolidated revenue was $242 million, an increase of 8%. Consolidated adjusted EBITDA for the full year was $79.3 million, up 9%. Our free cash flow increased 45% to $56.8 million.

Turning now to our segment operating highlights for the quarter. Television revenues increased 1% during the fourth quarter. Local television revenue was flat during the fourth quarter, while national revenue was up 1%. Television political revenues were $4.7 million in the fourth quarter compared to $2.8 million in political revenues during the fourth quarter of 2010. For the year, total political television revenue was $7.8 million. This represents a 53% increase over the $5.1 million we generated in television political revenue in 2010. Total political revenue for 2014 was $9.3 million, a 32% increase over the mid-term political cycle of 2010. Retransmission consent revenue was up 5% during the fourth quarter. Excluding political and one-time only Affordable Care Act revenue and transmission fees fourth quarter TV revenues decreased 9% compared to last year.

Looking at your automotive category, auto advertising was down 4% in the fourth quarter for our television business due to the Tier 2 regional auto dealer spending declining 13%. However, with the Tier 1 manufacturing advertising remained flat in the quarter and Tier 3 local auto dealer was up 13%. On a consolidated basis for the Company, the automotive category was up 2.3% across all platforms in the fourth quarter. For the year the automotive category was up 11% for our television business. Overall, fourth quarter was a tough quarter for many of the television categories, but we did see growth in restaurants, grocery, auto repair, and alcoholic beverages. During the fourth quarter, we added 46 new television advertisers and spent $10,000 or more, which resulted in approximately $1.1 million in advertising revenue for our television business among fourth quarter's new and core growth advertisers were R.B. Smith and 20th Century Fox with an investment of over $1 million. In our ratings performance our Univision affiliates extended their ratings leadership position in the November 2014 sweeps. Among adults 18 to 49, regardless of language, seven of our Univision affiliates ranked number one or two sign-on to sign-off. Additionally, 6 of our Univision affiliates are either number one or two among all adults 18 to 34. During our primetime novela block, Entravision Univision affiliates delivered higher ratings in at least one of the big four English networks among adults 18 to 49 in 10 markets.

Additionally, among adults 18 to 34, Entravision Univision affiliates primetime ratings are higher than at least one of the big four English networks in eight markets. In the early Univision network news, 11 of our Univision affiliates are number one or two among adults 18 to 49 and 12 of our Univision affiliates are number one or two among all adults 18 to 34, again regardless of language. 12 of our Univision affiliates are number one or two in early local news, and eight are number one or two in late local news, regardless in language.

Moving over to our Radio division. Revenues increased 5% in the fourth quarter compared to last year. Our station group performed well above the broader radio industry, which according to radio advertising bureau finished the fourth the quarter flat compared to the same quarter in 2013. On a core basis, once you exclude a little over $1 million of political advertising political advertising. Our radio division decreased revenue by 1%. For the overall year, the radio division revenues increased 4% compared to the last year, which resulted in a radio station group up performing the industry by over five points according to [RAB]. The market was estimated to be down 1% for the year. On a core basis, once you exclude political and world cup advertising, our radio division increased revenue by 1% for the year. For the quarter local, which represents 65% of our total revenue was down 3% over the same quarter last year. while national revenue, which represents 35% of our total revenue increased 24%. For the year, local remained flat and national increased 15%.

Net political revenue in the fourth quarter for radio was $1 million and for the year political revenue for radio was 1.5 million. Revenues at our Entravision Solutions audio network increased 22% during the fourth quarter and finished up 4% for the full-year. Our audio network platform continues to generate strong interest as we move through 2015, from companies look into effectively and efficiently reached Latino consumers across the country. A major driver of our network revenue growth continues to be Erazno y La Chokolata show, our top-ranked afternoon syndicated program. Yesterday, we entered into another syndication agreement that begins next week that increases the coverage of this extremely popular show in five top US Latino markets.

The addition of these markers will bring the overall coverage of the Erazno y La Chokolata show to 84% of the US Latino market. With the addition of El Show de Piolin to our current talent roster, including Erazno and Alex El Genio Lucas. The Entravision solutions audio network represents a largest and strongest of syndicated programs serving the vast Latino market in the United States.

We have assembled the most powerful roster of Spanish language radio audio talent in the history of the business under the Entravision brand. During the fourth quarter, we had a total of 24 Entravision Solutions network advertisers. Our top network advertisers during the fourth quarter were Sam's Club, Sears, Wells Fargo, Walgreens and JC Penney just name a few.

We recorded revenue growth in 5 of our top 10 categories in the fourth quarter for our Radio division, which included services, telecom, restaurants, auto repair and media. The automotive category, which is the second highest revenue generating category was down 4% for the quarter and down 2% for the year. Our combined radio and TV autospending is off to a strong start in Q1 pacing at a plus 11% in the first quarter.

Our strong radio sales teams continue to attract new advertisers to the division. During the fourth quarter, we added 26 new radio advertisers who spent more than $10,000 and which generated approximately 542,000 in the advertising revenues. These new advertisers include United States Postal service, Kao brands, Praxis and Predatory insurance.

Entravision's LA radio cluster saw a decrease in total revenue of 5% for the quarter, while the LA market according to Miller Kaplan increased 2% for the fourth quarter of 2013. Our Spanish language peers experienced an increase of 3% in the quarter. The fourth quarter was difficult for LA cluster, but with the programing changes that we made in mid 2014 where we combined the Jose format on KLYY, KDLD, and KDLE and with the addition of El Show de Piolin in January, we are well on our way to revenue growth in 2015.

In the fourth quarter of 2014, the KLYY simulcast received its first full ratings survey for the September book. KLYY debude as a number 2 Hispanic adult 25 to 54 stations, and the number one station delivering Hispanic men 18 to 49 and 25 to 54 in Los Angeles. KLYY is local revenue rank position increased each month fourth quarter end by December was the second highest reported Spanish language radio stations in Los Angeles.

Total revenue for the Entravision LA cluster rose by 37% in January. On January 5, 2015 Entravision launched the highly anticipated and very successful morning show El Show de Piolin. On KSSC in the number radio market in the United States, the January Nielsen ratings released in February show KSSC tied to the number two spot among Spanish language radio stations for a Hispanic women 25 to 54. Our radio stations continue to be ranked among the leaders in adults 18 to 49.9 against all competitors regardless of language. In the fall of 2014 Nielsen audio survey, 17 of our radio stations are among the top 10 in the markets, four-week Monday to Sunday 6 AM to 12 AM. In morning drive nine of our radio stations areas show that and you look us on our Jose formatted stations are in the top 10. Our cornerstone afternoon drive program Erazno y La Chokolata is the top 10 in 10 markets. El Show de Piolin initial results from the PPM markets are even better than anticipated in the 14 markets, which it airs. Among Latino adults 18 to 49 KSSC in Los Angeles is up 81% share, 80% an average persons and 132% time spend listening.

Our (inaudible) audience is up 350% with the weekly TSL of 7 hours and 15 minutes. KXPK in Denver up 33% in share, 48% in average persons and 33% in time spend listening. The coaudience is up 65%. KLNZ in Phoenix up 10% a share, 12% average and 22% in audience. The core audience is up 7%. KRCX in Sacramento, up 162% share, 175% average persons and 150% in time spend listening. The core audience is up over 1000%.

Now, let's turn to digital. As a reminder, we began breaking our results for a digital segment during the third quarter of last year. Digital revenues were $3.8 million in the fourth quarter. This represented a pro forma quarter-over-quarter, double-digit percentage increase of 58% over prior year's Q4. This marked the 26th straight quarter up year-over-year double-digit revenue growth for our digital business, which now accounts for approximately 5% of our total revenues and continues to grow. Digital revenue in the quarter was driven by Pulpo Media and the expansion of existing digital content operations. We believe we assembled the true unique portfolio of digital assets and capabilities that deliver multimedia advertising opportunities to advertisers. This includes Pulpo, the number one com score rec digital for US Latino and the fast growing digital content and our fast growing digital content operations. Pulpo allows us to target and reach Latinos nationwide with display, video, social and mobile across all devices and Latino acculturation levels. Entravision is now clearly the leading destination for advertisers that want to connect with the online Latino consumers. Luminar are Big Data unit is now servicing Pulpo advertisers with increased programmatic targeting and yield optimization capabilities to drive campaign efficiency. Together, these assets provide Entravision a Latino data leadership position with the combination of online, offline, and offline transactional data for 75% of U.S. adult Latinos. These capabilities have greatly strengthened our existing digital business and have enhanced the value that can provide brands of all sizes as we look to targeting connect with the rapidly expanding U.S. Latino population.

Content remains key to our efforts to expand our digital revenues and our online, social and mobile audiences. At our station websites, we published over 11,700 local news stories and videos during the fourth quarter, we also streamed over $5.76 million hours of audio. We had an average of 700,000 unique monthly audio streamers during the fourth quarter.

Turning to Mobile, we all know we are in a world gone mobile and Latinos clearly over index in mobile media consumption. Consequentially digital and mobile first is our mantra. This focus on digital and mobile is paying off. We have to report that 1/3 of our digital revenues, is already derived from mobile and it is the fastest growing revenue platform at Entravision. We believe Mobile is a natural complement to our Audio business, we are adding increased mobile products around audio streaming. We are launching the Pulpo audio network, we launched an all in one streaming mobile app that provides access to all our media properties and soon all of our audio affiliates. We're developing individual apps for our monster personalities Erazno, Piolin and Genio Lucas. Media buyers see this way to extend their audio buy to reach our overall listenership. We are seeing strong RFP activity coming in with mobile. We're doing global business with both digital agencies and traditional or audio buy-in-shops. We are looking at, not so much as a mobile add that as a way for local and national basis to do promotions, where the user can interact with the ad unit. This can take the form of a contest entry form, a coupon, the ability to click, to call or other calls to action. We are using users geo-fencing to offer coupons when users are in proximity of a client location at certain times of the day. Mobile also comprises our SMS texting operation. We are happy to report, we sent over 2 million a text messages during the fourth quarter and usage levels continue to hit all time highs.

We're also working to increase our content for mobile and partnered with advertisers, including the American Cancer Society, Metro PCS, Denver Broncos, Anthem Blue Cross, Toyota, Heineken, Rosetta Stone, Coldwell Banker, Bud Light, Wells Fargo, McDonalds, Ford and many more.

During the fourth quarter, we also further expanded our social media presence. We ended the fourth quarter with more than 4.6 million social media followers across all key channels. This represents 692% year-over-year growth. All in all, our digital segment continues to expand its revenue streams and strategic investments in targeted acquisitions we have made over the past years places us in a unique leadership position in the market. We will continue to invest in new digital businesses and talent. Today, we are delivering a highly targeted and engage Latino audiences across all media platforms and key demos at a time when the US Latino population continues to expand in both number and influence.

Turning now to the current quarter, Entravision television revenue in the first quarter is pacing negative high single digits against the prior year as we are up against both political and one-time Affordable Care Act related revenue. Adjusting for these two revenue events, core TV is pacing a negative low-single digits. Radio for the quarter is currently pacing in the positive high single digits as our powerful content lineup continues to get traction. On a combined basis, core radio and TV revenues excluding political at one time Affordable Care Act revenue is pacing in the positive low single digits. Digital is currently pacing in the positive double digits on a pro forma basis.

In summary, we generated strong results in the fourth quarter, while continuing to execute our growth strategy. We made progress this year building our integrated advertising offerings as well as our audience shares across the nation's fastest growing Latino markets. We continue to involve into a global integrated media and technology company, that connects advertisers and brands with a rapidly growing US Latino population to radio, TV, online, mobile and social media channels. We are excited where Entravision is today and the opportunities ahead of us this year.

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

Thank you, Walter, and good afternoon everyone. As Walter has discussed, net revenue for the quarter was 65.3 million, up 9%. Operating expenses increased 6% to 38.2 million and consolidated adjusted EBITDA increased 8% to 21.3 million. Net revenue for the year was 242 million, up 8%. Operating expenses increased 5% to 142.7 million and consolidated adjusted EBITDA increased 9% to 79.3 million.

During the fourth quarter of 2014, the company declared and paid a cash $0.025 a share to shareholders of the Company's class A, class B and class U common stock. The total amount of cash dispered with the dividend was $2.2 million. For the year, the total amount of cash dispersed for dividends declared and paid was $8.9 million. The Company also announced today that the Board of Directors declared a quarterly cash dividend of $0.025 a share to shareholders of the Company's common stock payable on March 31, 2015.

The total amount of cash to be disbursed with this quarterly dividend will be again approximately $2.2 million.

As previously announced, we currently anticipate making cash dividends on a quarterly basis in future periods. Also as part of our previously announced $20 million share repurchase program, the Company repurchased 1.7 million shares of Class A common stock for approximately $9.1 million in the fourth quarter of 2014. As of February 26, 2015, the Company has repurchased a total of 2.5 million shares of Class A common stock for approximately $12.5 million at an average price of $5.08.

In addition, during the fourth quarter of 2014, the Company voluntarily prepaid $20 million of term loans under the Company's senior secured term loan credit facility. During the year the Company made principle term loan payments of $23.8 million. The ending balance of the term loans as of December 31, 2014 is $340.3 million. Lastly, the Company recorded an impairment charge of $700,000 related to radio goodwill. The writedown was pursuant to Accounting Standard

(inaudibkle) 350 intangibles, goodwill and other, which requires that goodwill and certain intangible assets be tested for impairment at least annually or more frequently if events or changes in circumstances indicate the assets might be impaired. This was a one-time non-cash charge. For the quarter, TV net revenue was up 1% to $43.3 million compared to $42.7 million in the same quarter of last year. The increase in our TV segment was primarily attributable to an increase in political advertising revenue, which was not material in 2013. And an increase in retransmission consent revenue, partially offset by decreases in local and national advertising revenue.

Radio net revenue for the quarter was up 5% to $18.2 million compared to $17.4 million in the same quarter of last year. The increase in our Radio segment was primarily attributable to an increase in political advertising revenue, which was not material in 2013 and an increase in national advertising revenue partially offset by a decrease in local advertising revenue.

Our new Digital Media segment generated $3.8 million in revenue for the quarter, resulting from the acquisition of Pulpo in June of 2014, which did not contribute to revenues in prior periods. For the year, TV net revenue was up 5% to $165.5 million compared of $157 million in the prior year. The increase in our TV segment primarily attributable to advertising revenue from the World Cup and increasing retransmission consent revenues and an increase in political advertising revenue, which was not material in 2013, partially offset by decreases in national and local advertising revenue. Radio net revenue for the year was up 4% to $69.9 million compared to $66.9 million in the prior year. The increase in our Radio segment was primarily attributable to advertising revenue from the World Cup and increase in national revenue and an increase in political advertising revenue, which was not material in 2013, partially offset by decrease in local advertising revenue. Our new Digital Media segment generated $6.6 million for the year resulting primarily from the acquisition of Pulpoo, which did not contribute revenues in the prior periods.

Retransmission consent revenue for the quarter was $6.2 million compared to $5.9 million in the same quarter of last year.

Retransmission consent revenues for the year was $26.4 million compared to $22.2 million in the prior year. Operating expenses for the quarter were $38.2 million, up 6%. The increase was primarily attributable to the acquisition of Pulpo in June 2014. Excluding non-cash compensation expense of approximately 800,000 operating expenses for the quarter were $37.4 million, up 5%. Television operating expenses excluding non-cash compensation expenses were flat and Radio expenses excluding non-cash comp were negative 1%. Operating expenses for the year were $142.7 million, up 5%. The increase was attributable to the acquisition of Pulpo in June 2014 along with an increase in salary expense and an increase in employee benefit costs and payroll taxes associated with the increases our expense. Excluding non-cash comp expense of $1.3 million operating expenses for the quarter were $141.4 million, up 5%. TV operating expenses excluding non-cash compensation were up 2% and Radio operating expenses excluding non-cash comp were up 4%.

Corporate expenses for the quarter were up 14% to the $6.3 million compared to $5.5 million in the same quarter of last year. Excluding non-cash compensation expense of $1.4 million corporate expenses for the quarter were $4.9 million versus $4.6 million in the same quarter of last year, an increase of 7%. Excluding non-cash compensation the increase in corporate expense is primarily attributable to an increase in salary expense. Corporate expenses for the year were up 8% to $21.3 million compared to $19.8 million in the prior year. Excluding non-cash compensation expense of $3.1 million, corporate expenses for the quarter were $18.2 million versus $16.1 million in the prior year. Excluding non-cash compensation, the increase in corporate expense is primarily attributable to fees associated with the acquisition of Pulpo and an increase in salary expense. Cost of revenue consisting primarily of the cost of online media acquired from third party publishers with $1.5 million for the quarter. Cost of revenue for the year was $3 million. Income tax expense was $5.0 million for the quarter, while cash taxes actually paid was 145,000. For the year, income tax expense was $18.4 million while cash taxes paid was $859,000.

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. Earnings per share for the quarter was $0.07 per share compared to $1.72 per share in the fourth quarter of 2013. Earnings per share for the year was $0.31 per share compared to $1.53 per share. Excluding the one-time non-cash impairment charge, earnings per share was $0.08 per share for the quarter and $0.31 per share for the year.

Free cash flow as defined in our earnings release, increased 16% to 15.7 million or $0.18 a share for the quarter compared to $13.5 million or $0.15 per share for the same quarter of last year. Cash interest expense for the quarter was $3.3 million compared to 3.4 million in the same quarter of last year due to less outstanding debt. Free cash flow for the year increased 45% to $56.8 million or $0.64 a share, compared to $39.1 million or $0.45 a share in the prior year. Cash interest expense for the year was $13 million, compared to $22.9 million in the prior year due to the successful refinancing of our debt during the third quarter of 2013. Cash capital expenditures for the quarter was $2.2 million. Cash capital expenditures for the year was $8.6 million. Capital expenditures for 2015 are estimated currently to be approximately $13.5 million.

Turning to our balance sheet as of December 31, 2014, our total debt was $340.3 million and our trailing 12 months consolidated adjusted EBITDA was $79.3 million. Cash on the books was $31.3 million as of December 31, 2014. Net of $20 million of unrestricted cash on books total leverage as defined in our 2013 credit agreement was four times as of December 31, 2014.

As Walter mentioned earlier, Entravision's TV revenue is currently pacing the negative high single digits against prior year as we were up against both political and one-time Affordable Care Act related revenue last year. Adjusting for these two revenue events core TV is pacing in the negative low single digits. Radio for the quarter is currently pacing in the positive high single digits. Digital is currently pacing in the positive double digits on a pro forma basis.

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

Thank you, sir. We will now begin the question-and-answer session (Operator Instructions) The first question comes from James Dix of Wedbush Securities. Please go ahead.

Good afternoon guys. Couple of things I guess just in terms of your first quarter pace in TV I mean it sounds like at least on a combined basis, TV and radio are pacing pretty strongly in auto, just wondering within TV, are there are any categories which stand out to you in terms of what's driving that pace like on a core basis down a little bit.

And then secondly, any color you can give just on your operating expense outlook for 2015, I know there's a couple things that you're flowing in for the full year. I guess operating expenses were up to 5% or so for the full year 2014, but just any outlook you could give on that. And then finally just on the digital side of things, when you look at your ad revenue by format such as you know, Walter, you mentioned audio in particular -- but it sounds like you've got a full array of types of formats that you're selling audio, display, video. I'm just wondering like kind of what the mix is there and how you see that mix changing over time across the digital segment. Thanks.

Okay. James, I'll answer the first question. You wanted to know I think get some kind of glimpse of Q1, we indicated to you that our auto pacing or combined gradient TV was plus 11. And the point there was that auto has bounced back here. It appears to be bouncing back in the first quarter, we're pleased with what we're seeing at least so far. And as far as categories that are I'll say hurting us, Telecom is the one stands out the biggest. I'll turn the second question over to Chris and then come back on the digital question.

Hi James. So just to add to that point. Telecom has been a real dare for us so far in the quarter. Last year, we had a sizable campaign primarily from metro PCS that hasn't really come back and that's something that's and a bit problematic. As far as operating expenses are concerned for the year if you look at TV and radio on a combined basis it should be in a low single-digits. That will be accentuated by the fact that we are comping applicants periods in prior year do not have the Pulpo expense. So that's really what's going to be the primary expense driver beyond that low-single digit number.

And as far as your question you asked about our digital revenue, you know what kind of, we could break it out I guess in terms of categories and right now we're looking at display, which represents about 50% of total revenue, [Ariels] about 25% and mobile is 25%, but certainly mobile is the fastest growing of the three (technical difficulty) certainly highly confident and mobile continue to grow at a faster rate than the other two.

We also believe the video mobile and mobile promotions in -- content will be strong growth drivers for us in 2015 in our digital business.

Michael Kupinski of Noble Financial.

Thank you. I have several questions here. One is in terms of the rating figure indicated, Walter, in your Radio group, is that what's driving the favorable pacings in the first quarter or is the book out there to where you're actually selling the ratings and if not because typically I think the ratings book usually takes about six months before you really start to reflect that into the CTMs and so forth. I was just wondering if we could assume then that maybe the second quarter shows similar strong growth.

I believe that's a bill we can all make, Mike. We've put -- we made a number of changes in 2014 in our radio business. We consolidate KLLY and KDLD that's been a huge success. Like you said, it takes about six months to see the results of any change, but we did see in December, we had a big December that has flowed into January, Piolin has had some terrific ratings, Erazno continues to be one of the top talents in our business.

And then of course El Genio Lucas, which is also very strong in the morning on our Jose format. So we think right now we are positioned for radio growth in 2015 is excellent. I don't think it's ever been -- I don't believe that anyone in our businesses as ever assembled the kind of talent we have under the Entravision umbrella and we intend to do everything we can to monetize this opportunity at the highest level I'm sorry. Most of that coming then from the radio network, local revenues probably down, I would assume.

Coming from everywhere, it's coming from our local revenues, it's coming from Entravision solutions, our syndicated programming is White Hot. Right now our Radio business is performing, we never seen it perform like this in the history that we've owned, but of course taking a lot of work to get us where we are.

And once we get a couple of books in which will take a little more time then you should expect to see national revenue really falls. National typically buys ratings were at a local level, but not necessarily depend upon ratings to make a buying and real acceleration that we've seen over the past several weeks or months, I should say is from local. Local pacing is actually picking up double digits and that's not ratings stays once ratings kick in you should expect to see an acceleration.

We just received a $500,000 order yesterday for a fast food client and it's half a million dollars on one of our syndicated networks and this applies it has never been with us before. So syndications that (inaudible).

I'm sorry for the open-ended question, but any update on the discussions with Univision.

No. We have no update. But we do intend to get back to that here probably after probably mid March, reconnect with them and see if we can get whatever issues are out there taken care of, but we don't expect anything they want can be resolved by both of us working together.

In terms of your additional operations, would you expect that this business would be similar to television in that, it would benefit from political advertising 2016. Do you have any indications on that?

Final question, now that your balance sheet is pretty much in order. Are you looking more aggressively at acquisitions these days, and if so, what are you seeing and where are the best opportunities digital, radio, television, in other words, what are you seeing out there?

Well you know, we are open to look at everything right, but we have been involved with for many years, but I think a lot of time, a lot of our time now spent looking at well run post revenue digital companies and we want companies that are not start-ups, but has revenue and prospects of good growth in the component the core digital businesses that we already have built and acquired.

Okay, thank you.

(Operator Instructions) John Kornreich, JK Media.

Yeah, I've three questions on re-trends 26.4 versus 22.2 I think that's a lot more than you had guided to at the beginning of the year with this spend suggest that we're probably looking at a flat year in 2015 that to 26 million level.

But I think John, we this may have mentioned to you and I think it sets up there were some true-up payments for one-time during the course of 2014 that calls that of number to drift up from what we originally guided, we still think there's going to be some modest growth in re-trans for 2015 call it low to mid single digits.

After 26.4 base?

Correct, after 26.4 base

Okay. Remind us, what did you paid for [Powerball].

Its 15 million in cash, plus a $3 million

Okay. And why is it operating at breakeven right now with 14 million over revenue?

We had guided, previously and we're still sticking to that that's going to be a $1.5 million cash flow generator in 2015. If you look-back basis we feel it's going to be creative next year.

Then you say that -- in TV in the fourth quarter I thought I heard you say that quarter in core advertising was down 9%?

That's right.

But you made a comment that local was flat national was up 1%

That's including all in, that's both including that's including Affordable Care excluding political.

Politicals in the national.

That's correct

Which was up 1% I understand. And getting back to re-trans negotiations and if you could to comment the rather abrupt departure of Andy Hobson said those negotiations back?

That's a good question. We're not expecting any issues arising from Andy's departure we've got a dialog with many folks over Univision and that compensation continues to be pretty fluid without any financial loans, so we're continuing on with that.

And lastly, why is CapEx jumping by almost $5 million.

CapEx is jumping up. We previously guided 10 million for the year, we came in at about 8.6 million. We had about a 1.5 million rolled into this year. We've got the -- Pulpo acquisition has got about a million dollars in related CapEx that's a new item. And then we've got our LA studios is going through a refurbishing and that's going to be about a million dollar ticket item. So add that 3.5 million to the traditional 10 million that we typically doing.

I recognized that radio is turning positively and it might turn even dramatically with the help of the way. It's interesting I mean the spread for the year was $12 million on $70 million of radio revenue and if you would allocate like a third of the corporate expense to radio because it is third of the revenues, is that a little profit, why margin is so low in radio in general, granted they'll get better?

Well, our radio division generates margins that are generally around the 20% range. As you know, it's a fixed cost business. We made a lot of cuts to this business back in 2008, 2009, but the reality is the revenue dropped off further than the expense cuts and we have been struggling against sales. The good news is we finally have a content sleep on track to generate some decent ratings that'll help ramp up revenue to what we think is going to create margin opportunities a far and above what we're currently generating now.

Tracy Young, Evercore.

Could you give us a little bit of color on the Health Care category represented as a percentage of revenues in TV and how they did in the quarter.

Health care for television was approximately 11% of our TV business, it was $4 million in the fourth quarter of 2014.

Okay, thank you. In terms of LA, did you give a comparison of how you did in our market versus Miller Kaplan or could you give us some comparision versus the radio market in general?

For the fourth quarter?

Yes.

Scrambling, you're looking for documentation.

And then I guess just following up on John's question on radio, you know you added some great talent further to roster, should we be concerned that expenses?

Well, on the expense front Piolin is really the only addition to our lineup and that's more of a barter deals as far as. As we generated revenues portion of that revenue will go towards Piolin. So I'm not looking at the fixed cost base that's going to be material to our expenses in radio. So in short answer to your question is no. We don't see any material impact revenue this year.

Okay.

So as far as the market information is concerned fourth quarter are Los Angeles cluster was that a plus 2 in the markets, general market with a minus 1, in the Spanish market was a minus 4.4%.

Great, thank you very much.

Well at this time, we are showing no further question. We'll go ahead and conclude today's question and answer session. I'll now like to turn a conference back over to Mr. Ulloa for any closer remarks sir.

Thank you, Mike and thank you everyone for participating on our fourth quarter and 2014, year-end call. We look forward to speaking to all of you in May. We will deliver our first quarter earnings results. Thank you.

And we thank you sir and to Mr. Young, for your time today. The conference call is now concluded. Again, we thank you all for attending today's presentation. At this time, you may disconnect your lines. Thank you and take care everyone.