Good day, and welcome to the Entravision Communications First Quarter 2017 Earnings Conference Call and Webcast. [Operator Instructions] And please note, this event is being recorded. I would now like to turn the conference over to Mr. Walter Ulloa, Chairman and Chief Executive Officer. Please go ahead.

Thank you, Nicole. Good afternoon, everyone, and welcome to Entravision's First Quarter 2017 Earnings Conference Call. Joining me on the call 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 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. Our first quarter results were largely in line with our expectations with increased revenues at our television segment offset by lower revenues at our radio and digital segments. At the same time, we closely managed our cost, which allowed us to deliver flat EBITDA against last year's first quarter, which benefited from about $1 million in political advertising. Overall, we continue to execute on our strategy during the quarter, and we remain well positioned to deliver our goals in the year ahead. Our television and radio stations delivered very healthy audience shares, and we're expanding our collective digital audience, giving us an attractive and growing multimedia platform for advertisers who wish to target and interact with Latino audiences at both the local and national level. We also remain on track on our acquisition of Headway, which we closed in April.…

Thank you, Walter, and good afternoon, everyone. As Walter has discussed, net revenue for the quarter was down 1% at 57.5 million compared to 58.1 million in the same quarter of last year. Operating expenses decreased 2% to 38.3 million. And consolidated adjusted EBITDA was 12.6 million. During the first quarter of 2017, the company paid a cash dividend of $0.03125 per share to shareholders of the company's Class A and Class B and Class U common stock. The total amount of cash dispersed for the dividend was 2.8 million. The company also announced today that the Board of Directors has declared a quarterly cash dividend of $0.03125 per share to shareholders of the company's common stock payable on June 30, 2017. The total amount of cash to be disbursed through this quarterly dividend will be approximately 2.8 million. As previously announced, we currently anticipate making cash dividends on a quarterly basis in future periods. For the quarter, TV net revenue was up 3% to 37.7 million compared to 36.6 million in the same quarter of last year. The increase in our TV segment revenue was primarily due to increases in national and local advertising revenue and an increase in retransmission consent revenue, partially offset by a decrease in political advertising revenue, which was not material in 2017. Excluding political, core TV advertising revenue was up 5% over the prior year. Retransmission consent revenue for the quarter was 8.0 million compared to 7.4 million in the same quarter of last year. Radio net revenue for the quarter was down 7% to 15.7 million compared to 16.9 million in the same quarter of last year. The decrease in our radio segment was primarily attributable to a decrease in political advertising revenue, which was not material in 2017, and decreases in local…

[Operator Instructions] Our first question comes from Michael Kupinski with NOBLE Capital Markets.

In terms of the audio division, I'm going to start there first, did another competitor launch a competing national syndicated show, or is the weakness in national just reflective of generally weak national audio market?

Michael, we believe that the softness is just due to, in national is due to generally soft national market. Everything we've seen and read and people we've talked to, other companies in the industry, seem to confirm what we believe. That is just national radio soft.

I got you. And in your guidance for the, in terms, well, not guidance, but in terms of pacing down 10, that's against political, because I recall you had some political in the second quarter of last year, is that right?

Correct. We did last year, for our second quarter, radio had about $250,000.

Okay. And then in terms of your digital business, I have, looks like a pretty tough quarter. But you seems pretty confident about it coming rebounding. The digital up 30%. If you excluded Headway out of that, what kind of pacing would you be looking at without the acquisition in there?

The pacing for Pulpo on a stand-alone basis right now is negative low double digits.

Okay. And what's actually driving that, Chris, in terms of the weakness there? Obviously, the business grew pretty nicely last year. And now it seems like it hit a little bit of a wall. What's going on there?

You know what, Michael, really it's the tale of 2 different business lines. Our local business for Pulpo is actually doing really well. It's pacing in the positive double digits. The problem is on the national front. The national demand is such that they are increasing their demand for video. And video is a product that we've been scrambling to produce and to meet that demand. But quite frankly, we're not meeting that demand efficiently. So on the national side of the business, we're not as able, we're not able to execute as we had been in prior quarters because of the lack of inventory. And that's something that we're working to address right now.

Okay, got you. And then on the TV -- I'm sorry.

Michael, but we're actively in the process of acquiring more video for our digital business. And I also want to add that we believe that Headway is going to be a huge complement to our existing Pulpo business and it's going to significantly help drive growth here in the future quarters.

Got you. And in terms of your TV pacings [indiscernible] at this point. I know auto is such a big category for you. It's at historic highs. What is audio as a category still performing well? Can you just kind of give us some thoughts on maybe some of the key categories that you're seeing into the quarter?

So auto right now for Q1 in television is pacing at, we'll call it, minus 7. One of the reasons for that auto softness, it's really last year, we had a Copa soccer tournament in the month of June. This year, it's being put into the month of July. So we're going to be missing that soccer tournament, which is a heavy auto spend. So that's part of the reason for the auto softness.

[Operator Instructions] Our next question comes from Gordon Hodge of Tracker Research. Please go ahead.

First question is just on digital. I noticed you made another acquisition, I think announced this week. I'm just curious what the sort of the scope of that is and the scale of that? And then, if you could just comment, I think they're all based in Argentina, and my guess it's not too far away from each other. What sort of integration and how do they all fit together? Maybe you can just comment on that, and then I had another question after that.

Well, Gordon, we announced the Headway acquisition in early April. And we have two businesses in digital, and the value propositions are different for both national and local. However, the infrastructure and the technology, that is primarily the same for both segments. We do have a number of people working in Argentina. That's kind of the backbone of our digital business. At the national level, for Pulpo, we offer Latino digital targeting and segmentation to Fortune 1000 brands, display, mobile, audio streaming and content integration. And within our display and mobile, we also offer direct programmatic private deal environment, while we also enrich our cookie data with transactional off-line data to increase the value of the audience and it has proven to generate better results for our clients. On the national business, not for national, excuse me. At the local markets, we offer comprehensive suite of digital products to small businesses, such as display, mobile, geofencing, email, social media through Facebook, integrated content and paid search. And some -- with some large accounts, with local digital, we also serve as the digital media agency for these clients, where we strategize, plan and execute the entire campaign. Headway, I think the acquisition you're referring to, brings a suite of mobile solutions that immediately increases our product line in the areas of app acquisitions, retention and programmatic. And these solutions will be first offered to national brands and then subsequently introduced to local clients, but we want to bring particularly the Mobrain, the mobile performance product to our U.S. national clients and we'll be working on that here in the coming weeks.

Gordon, are you talking about the Headway acquisition? Because we announced a partnership.

Yes.

Is that what you're talking about?

The data expanded, as you said, is that the partnership?

Right. That's a partnership. That was the data partnership with those, okay. It wasn't an acquisition per se. They work with our Headway.

Okay. I think it was characterized in the press somewhere as an acquisition. Okay, so that's a partnership. Okay, very good. And then I think you clarified it earlier as it relates to audio, but the pacings, the minus 5 for TV, the minus 10 for audio, those are not core. Those are just pacings, irrespective of whether you had a soccer tournament or you had a political...

Correct. That's right.

Okay. So if we...

If you want to fraction TV core pace, excluding political, is around minus 4. If you want to account for the soccer tournament as well, core pace is -- it's at minus 2. So there is some offsets there. As far as radio is concerned, instead of minus 10, it would be a minus 9 right now, so it's not really material.

Got you. Okay, very good. And then last question, the channel sharing agreement, putting WJAL in D.C. So, I gather the way that works is, if we think about the spectrum proceeds, the $264 million you're getting, we should think about, in terms of the net proceeds from the entirety of the spectrum auction, we should be thinking of $264 million minus the $32 million you are paying to your partner to channel share there?

You could think about it that way, but we think about it slightly differently.

That's not how you...

This is a [indiscernible] back in April. What we're effectively doing is moving JAL in from Hagerstown in to Washington, D.C. JAL was reaching a total population of approximately 900,000, ahead pops of 900,000. They have, obviously, in Washington, D.C. you've got a population of over 8 million, and so to have a full power station with cable rights in a #7 market just seemed, when we looked at the numbers, it seemed to be more material to us. That's the way we are looking at.

Okay. I did not realize that was the magnitude. That's terrific. Okay, good. And then I think you had alluded to some channel sharing opportunities on the last call. I'm curious, are there more the works? In other words, could we see a situation that kind of is the reverse of the WJL-AL situation, where you might share your channel with somebody, say in Boston or some other market, who sold in an auction and receive some proceeds. Is that something that could happen down the road?

Yes. We are still having conversations with numerous operators on that front, but we don't anything to announce here today.

Our next question comes from [John Jung] Of Trailhead Asset Management.

I wonder if you might give a little information more about what plans you have for bringing some profitability to the radio segment?

What plans we have to bring to the radio segment? Well, the issue with the radio right now is nationally-driven. It's a tough market nationally. We saw in the first quarter. We're still seeing in the second quarter. By accounts of everybody that we speak to in the industry, we're not alone as far as this national business is concerned. We've got top talent. We've got great sales force in place and we're continuing to work against those headwinds. Now I think we'd be fools to not say that there are obviously secular pressures in hand. That's something bit out of our control, but that's something we're combating and working against. So we're just focused right now, John, on the basic blocking and tackling in this business. We continue to cultivate new talents, and we're just burrowing down and facing the facts and combating this on a day-to-day basis.

Is that an asset that's valuable to continue to keep, if there's no future profitability?

Well, the radio assets as far as we're concerned, in 11 markets, we've got radio married up with television, and that provide synergies and cash flow enhancement opportunities that we think are valuable to us. So for now, yes, radio still a valuable asset. Which still we consider to be a core asset, and that's the way we're running it right now.

But, John. The first quarter for radio always a soft quarter. So that wasn't a surprise. And we expect to, as you describe it, returning to positive cash flow here in the coming quarters.

Our next question comes from Michael Kupinski of NOBLE Capital Markets. Please go ahead.

Sorry, just 1 follow-up here. In your press release, you announced that our corporate expenses were higher because of pending acquisition cost. Was that due to Headway? Or is there an unannounced acquisition that you're contemplating and, kind of, are looking at right now?

No. That was due to Headway. That was the work that we did on the Headway acquisition. These folks are based in Buenos Aires, and it involves some international due diligence that was perhaps a bit higher on a cost basis than what you'd normally see. So that was the first quarter corporate bump was the Headway acquisition.

Got you. And in terms of deploying the 264 million at this point, Chris, it seems like to take advantage of the tax benefits that you have by putting that in escrow. It seems like maybe you need to kind of announce something soon. How is the acquisition environment looking like at this point?

Well, it's busy, and what we're going to do initially, as the proceeds come in, proceeds will be funneled into a qualified intermediary, and that's to qualify for 1031 status. And then we'll have six months. We'll have 45 days after that to come up with 4 targets per asset that we sold. And then we'll have six months to execute on those. So we are working on several opportunities, and when we've crossed the finish line with some of those opportunities, obviously, we'll make them public.

This concludes our question-and-answer session. I would like to turn the conference back over to Walter Ulloa for closing remarks.

Thank you, everyone, for participating on our first quarter 2017 earnings conference call. We look forward to reporting to all of you on our second quarter 2017 earnings results in early August. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.