Entravision Communications Corporation (EVC) Q1 2014 Earnings Report, Transcript and Summary

Good day, and welcome to the Entravision Communications First Quarter 2014 Earnings Conference Call and Webcast. [Operator Instructions] Please note, this event is being recorded. I would 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 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 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 the expansion of our multimedia 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 the $3.4 million or $0.04 per share for the same quarter last year. Cash interest expense was 30 -- $3.2 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 3 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 health care, groceries and services. The health care category was up 86% during the quarter, while groceries finished up 14%. The health care category continued its momentum with a combination of Affordable Care Act campaigns, including Covered California and Nevada Health Link, as well as several branding campaigns from WellPoint, Molina Healthcare, Kaiser Permanente and Blue Cross Blue Shield. The grocery category was boosted by significant increases from H-E-B and Mariana's during the quarter. During the first quarter, we added 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, 4 Entravision Univision affiliates ranked #1 or 2, sign on to sign off. Additionally, 6 Entravision Univision affiliates are either #1 or 2 among all adults 18 to 34. Three of our UniMás affiliates are the #2-ranked Spanish-language television stations in their markets in adults 18 to 49. Four were also ranked #2 among adults 18 to 34. During our Prime Time Novela Block, the Entravision Univision television affiliates delivered higher ratings among adults 18 to 49 in 9 markets than at least one of the big 4 English-language television affiliates. In the early Univision Network newscasts, 10 of our affiliates are #1 or #2, regardless of language; 7 Entravision Univision affiliates are #1 or #2 in early local news; and 5 are #1 or #2 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 of 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 U.S. Latino population. We continue to expand our roster of advertisers and we had -- 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 in 6 of our top 10 categories in our radio business in the first quarter, including telecom, travel and leisure, health care, restaurants, media and 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 was a result of increased spending of 462% from MetroPCS, in addition to increased spending from Sprint and Verizon. The health care 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 surfaces -- 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 Studios Hollywood and Advance Auto Parts, just to name a few. During the first quarter, we prepared for the creation and launch of a California superstation -- Southern California superstation, José FM. José FM combines the 2 signals of KLYY, the 97.5, and 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 L.A. 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 José FM combines the best content of these stations, creating a dominant superstation in the #1 Latino radio market in the country, Los Angeles. The first weekly trend for José FM was very positive. In Los Angeles, it has showed that Erazno y La Chokolata debuted impressively in a number of key demos: #1 in Latino adults and males 25 to 54; #1 in Latino males 18 to 49; and #2 in Latino adults 18 to 49. In the Riverside and San Bernardino Metro, it has showed that Erazno y La Chokolata debuted at #1 in every Latino adult and male demo. In addition, this positive news from the first week's trends for José FM include strong prime week performance, Monday to Friday 6:00 a to 7:00 p.m., Los Angeles, with a simulcast debuting as the #4-ranked radio station in Spanish and Latino adults, 25 to 54; #1 ranked Spanish-language radio station in adults 25 to 54; and #3 ranked Spanish-language radio station in Latino males 18 to 49. The L.A. radio cluster has a strategic sales plan in place to take full advantage of José FM's ratings dominance. Our Los Angeles cluster has aggressive new business strategies, targeting national and local advertisers through active account development, intense cold calling, sales training and sales performance initiatives. We also launched a new program drive -- a new morning drive program, En Tricolor Levanton, 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 Levanton are already in the top 10 in their respective markets, regardless of language. Additionally, we launched Pajarete, hosted by 2 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 a to 12 a. In Morning Drive, 5 of our radio stations airing El Show El Genio on José stations are in the top 10, and our cornerstone afternoon drive program, Erazno y La Chokolata is in the top 10 in 6 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 continue 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 at 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 for clients including MetroPCS, T-Mobile, Cricket, AEG, Jiffy Lube, 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. The 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 with the 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 that this aggressive goal is achievable. It is important to note that 80% of total World Cup revenue will be booked in the second quarter and about 20% in 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 progress remains centered on strengthening our multimedia 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 will now 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 $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 quarter -- 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 were $33.5 million, up 5%. Excluding noncash 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 noncash 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 free tax income, although most of this expense will continue to be noncash 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 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 on the books, our total leverage, as defined in our 2013 credit agreement, was 4.6x 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] The first question comes from Michael Kupinski of Noble Financial.

A 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 it looks like World Cup is off to a really strong start. You've got some advance bookings there. Do you -- and that's obviously coming in a 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. Q1, we had a moderate amount of -- or modest amount of political. Q2, probably be the same. But 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 continuing to be pretty strong. I was just wondering, where is auto in terms of as a percent of revenues versus its peak cycle?

Auto rate 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?

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.

The next question we have comes from Amy Yong of Macquarie Capital.

This is Andrew for Amy. Just had 2 questions, 1 follow-up on the M&A question. 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 SEC retrans limits on the joint station negotiations?

Well, I'll take the latter part -- 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 9 JSAs, 6 with Univision, and those are already attributable. And the 3, the other 3, we believe will seek some relief through an exclusionary provision that the FCC has included in their report and order. So we don't see any or very -- 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 that you're referring to broadcast acquisitions. And I'll just say that there's nothing -- 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 has been in English language. And -- but we'll 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'll 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 be clearly be our preference if we're 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 has gone there?

Well, I wouldn't say it's gone. But there doesn't appear to be any opportunity right now. I mean, 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.

The next question we have comes from Larry Haverty of GAMCO.

I'm just curious, what is your average weighted cost of -- that interest rate seems awfully low and -- or the interest expense seems awfully low in the first quarter. And 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 on that LIBOR at 1%. And last I checked, LIBOR was in the 20-, 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 2014 -- to the end of 2015, I should say. And then we...

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 is -- goes into a fixed-rate agreement, where 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%, we'll 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 was, last year, was $22 million? Is that right?

Retrans revenue for the year?

For the year, for 2013.

It was $22.2 million.

The next question we have comes from Tracy Young of Evercore.

A couple 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 health care -- did it drop off in 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 revenue, excluding retrans. Health care was a strong category for us, in Q1 was even stronger in March than it was in January. And the window now is closed, so the health care industry has pulled back its advertising. We expect to see it come back in a strong way here in the fourth quarter of 2000 -- of this year, when the window reopens.

But right now, the category in Q2 is pacing flat.

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

Okay. And then it sounds like you're 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 investors should expect. I mean, we've been building this content unit here for a while and got some terrific and talented people working in it. And we're just starting to see the results of all of our work and that we're -- we now have become the #1 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-upped Erazno's contract, who's 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. He did get a hefty increase, but largely based on performance.

[Operator Instructions] Next, we have James Dix of Wedbush Securities.

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've booked there are to your underlying revenue on the TV and then the radio side? And then second -- secondly, there's 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's any big implication for you directly, at least, for example, the joint sales agreement side. But do you think there's 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?

Well, let me just -- I'll respond to the second part of the question, first. I mean, we don't expect, and again, any impact from -- 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 along the U.S.-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, it's not -- I don't think -- 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. I mean, 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're an important company.

Next, we have Michael Kupinski, Noble Financial.

Just more of a theoretical or just kind of a longer-term view type question. Historically, Spanish television and radio has always been viewed as a discretionary buy. 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's 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's 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 carmakers and so forth, which seems kind of a unique to me. And I was just wondering if you can give us your 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 U.S. across every level of society. Certainly, spending is an important metric for our economy. It's approaching a $2 trillion market in consumer spending more -- 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's less of this -- if budgets are cut, there's less of a tendency 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 the Latino media and population to increase their market share or case lot sales.

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

We have, we have seen them. 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 yes, they went out and identified that -- or said publicly that their growth, they expect it to come from the multiethnic, multicultural segments of the U.S. population. So they're looking and spending in -- with multiethnic media.

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 $100,000 in advertising, brand-new advertiser for us. That's a sign of just a product expansion to the higher end of the product offerings that I think is attributable to exactly what you're talking about. We're becoming much more of a core part of budget.

Tracy Young, Evercore.

Just 2 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 about or contracts that are coming up?

Sure. For the retrans balance of the year, you put in about $6.1 million per quarter, it gets you to that $25 million -- should be pretty straight through. And as far as new deals are concerned, everything on the retrans front, it's essentially locked up through 2017. So there's not really any new deal out there that would cause any material pop.

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

And we thank you, sir, for your time and to the rest of the management team. The conference call has 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.