Good day, everyone, and welcome to the Entravision First Quarter of 2019 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] And please note that today’s event is being recorded. And I would now like to turn the conference over to Mr. Walter Ulloa, Chief Executive Officer. Please go ahead.

Thank you, William. Good afternoon everyone and welcome to Entravision First Quarter 2019 Earnings Conference Call. Joining me on the call today is Jeff Liberman, our President and COO; and 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 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 it was filed with the SEC on Form 8-K. Our first quarter results were in line with our expectations with increased revenue in our television segment, partially offset by decrease revenues at both our digital and radio segments. Looking beyond the general business environment, our balance sheet continues to be solid with approximately $175 million in cash and marketable securities on the books versus the total debt of $245 million. During the quarter, we are also active in buying back our stock with approximately 2.1 million shares repurchased at an average price of $3.65 per share. We also continue to return capital to our shareholders to our quarterly dividend. Now turning into our financial performance. Revenues decreased 3% to $64.7 million in the first quarter. Consolidated operating expenses were down 4% and consolidated adjusted EBITDA was $8.1 million compared to $6.9…

Thank you, Walter. And good afternoon everyone. As Walter has discussed net revenue for the quarter was down 3% to $64.7 million, compared to $66.9 million in the same quarter of last year. Operating expenses decreased 4% to $42.7 million and consolidated adjusted EBITDA increased 16% to $8.1 million. For the quarter revenues and our television segment were up 11% to $38.3 million, compared to $34.5 million in the same quarter of last year. The increase was primarily attributable to revenue generated from spectrum usage rights, which totaled $5.1 million during the first quarter, rising primarily from non advertising revenue related to a service agreement with a local telecom operator. In addition to the spectrum leasing initiatives and an increase in national advertising revenue partially offset by decreases in local advertising revenue, and political revenue and a 1% decrease in retransmission consent revenue. We generated retransmission consent revenue of $8.8 million for the three-month period ended March 31, compared to $8.9 million in the same quarter of last year. Radio net revenue for the quarter was down 15% to $12 million compared to $14.1 million in the same quarter of last year. The decrease was primarily due to decreases in local and national advertising revenue. Digital net revenue for the quarter was down 21% to $14.5 million, compared to $18.2 million in the same quarter of last year. The decrease was primarily attributable to growing trend of digital advertising moving over to programmatic platforms, both domestically and more recently in our international markets. Operating expenses decreased 4% to $42.7 million for the three-month period ended March 31 from $44.3 million in the prior three-month period. The decrease was primarily due to certain expense control measures the company undertook in April of last year. Corporate expenses for the quarter, we're up…

Thank you, sir. And we will now begin the question-and-answer session. [Operator Instructions] And today's first question or will be Michael Kupinski with Nobel Capital Markets. Please go ahead.

Thank you. Thanks for taking the questions. And good evening, good afternoon. A couple of questions here. In terms of the corporate expenses I know that the audit fees were probably in there. Could you remind me what was the total of those audit fees that were in that number?

The incremental audit expense for first quarter was approximately $1.2 million Michael.

Got you. And why – I've gotten this question from some investors, why wouldn't you have viewed that as a onetime item so that we – so that obviously from continuing operations the numbers would have been even stronger?

Well, there's a case to be made for that. I guess if you just err on the side of being conservative, we booked the expense and decided not to treat it as a onetime item. Going forward, the audit expense will be less than half of that on an annualized basis. We had encountered certain issues the end of the year last year during the close. That's what caused our K to go past the filing deadline. But that's a good point Michael that you could look at that as a onetime expense.

Got you.

But the accounting, how we spend it and how it gets booked, I guess, thought that through a bit differently, but it still goes on the books as an expense.

Okay, thanks. And in the latest quarter the company had, as you mentioned, significant cost controls and costs were lower than I would have expected. You mentioned that the company will cycle through those cost cuts in April. Were there further cost cuts in the balance of the year, or into the first quarter, or are you cycled against all of the cost cuts in April?

We've been making cuts throughout the year. We made cuts throughout the year that didn't necessarily get publicized. I mean, if you're modeling this thing out, I would look for total company operating expenses in the second quarter to be down in the low single digits, then will start to flatten out around Q3 and then maybe Q4 you're in kind of the positive low single-digit expense increase range.

Got you. And then in retransmission revenues, they were down in the first quarter. That should start to show an increase in coming quarters, right?

That's exactly right. So dish was not yet on in first quarter, came on in April. So you will see approximately $700,000 in incremental. If you are just looking at sequentially between Q1 and Q1, you should see in additional around $700,000 in incremental retransmission revenue in Q2, as well as Q3 and Q4.

Got you. And then in terms of digital can you give a little more color on Smadex? It seems like it did it not participate in the shift in programmatic. Or are you saying that in future quarters it should? I'm just trying to understand what you were trying to say.

Michael it's Walter. No, we did participate in the shift in programmatic. The acquisition of Smadex was certainly to be ready for the changing environment. But I will say that the shift from traditional to programmatic has moved at a faster pace than we anticipated. You also have – it takes a while to integrate this product or these products into our overall sales strategy. We didn't close on the acquisition until June of 2018, so we certainly worked through 2000 and the rest of 2018 to integrate Smadex, and we're starting to really gain traction with this programmatic offering. But again, it takes time. But we were well positioned. We will see an improvement in the coming quarters.

And given your shift in strategy in terms of going after more profitable business in digital and the shift that you're seeing towards programmatic, and so forth, does this change your view of the digital media segment, your thoughts in terms of growth, maybe your thoughts in terms of expansion of headway into the U.S., or your thoughts in terms of digital media as a percent of the total company revenue?

Well, I'll just say that to all of the questions you asked, we are feeling very positive about the potential for digital growth. And also how we're going to use all of our experiences, particularly in Latin America and transfer these experiences, and tools, and products to the U.S. and address or deliver services to our core Latino consumer. So, overall I think, we're pleased with the steps that we've taken to improve our digital performance. We did see again a decline in the first quarter, but we're working hard to turn this around and get back to growth here soon.

And I know that you indicated the pacing is down for the second quarter, but do you think that digital will by the end of this year reflect growth year-over-year by let's say the fourth quarter?

Well I'll say we've budgeted to reflect growth. Growth was certainly less than last year which had plus 40% growth. But we made – we all got together in November and made decisions around how do we continue to grow the business, but be more selective about the transactions that we are on. And therefore not only produce better results for our clients and their advertising needs, but also better margins for our business.

Yes, I mean growth and revenue to be seen, but certainly we do expect growth in cash flow year-over-year from the digital business.

Got you. Alright, that's all I have. Thank you.

Thank you, Michael.

[Operator Instructions] And the next question or will be Gordon Hodge with Tracker Research. Please go ahead.

Good afternoon. Thanks for letting me through. Just had a couple of questions. One, I just wanted to clarify, Walter, on the second quarter pacings on TV. Was that strictly advertising or does that include the pickup in retrans as well from DISH and so forth?

That's all in Gordon.

That's all in. Okay, any sense for what the ad facings are roughly under that?

I believe advertising is down low single digits for TV, just purely on the advertising basis.

Got you. Okay, very good. And then on the spectrum usage obviously it sounds like you had kind of an opportunistic situation there, but you do have ongoing spectrum usage fees too.

That’s right.

Maybe you can highlight sort of breakout, is it – how much of that revenue might be recurring in future quarters?

You'll have throughout the year about $1.2 million to $1.3 million in recurring multicast revenue that'll show up on that line. Then anything on top of that quarter-by-quarter will be that opportunistic place that should we still have to play out for the next couple of quarters. Not necessarily at the same level we saw in the first quarter.

But is it – so there is opportunity for more like that in terms of…

Yes there will be more – they're already kind of in the works as we satisfy the obligations on our side, the revenue will be recognized.

Got you. Okay, very good. And then I guess the last question I had was just that you had an operating gain in the quarter of about almost $2 million. Is that FCC repack reimbursement or is that, [indiscernible]?

Yes, so as we spend the CapEx we filed the paperwork with the FCC and then it's usually a three to six months lag, but then they'll send us a check and then that'll be that same line item going forward. You'll see it.

Got you. Okay, very good. That's all I had. Thanks.

Thank you, Gordon.

Thank you, Gordon. End of Q&A

And this will conclude our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

Thank you, William and everyone for joining us on our first quarter 2019 earnings call. We look forward to speaking to all of you in early August when we will announce our second quarter results.

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