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Hemisphere Media Group, Inc. (NASDAQ: HMTV) (“Hemisphere”), the only publicly traded pure-play U.S. media company targeting the high growth Hispanic TV/cable networks business, today announced financial results for the quarter ended June 30, 2013.
On April 4, 2013, Hemisphere completed a series of mergers pursuant to which InterMedia Español Holdings, LLC, (“WAPA”), which includes WAPA America and WAPA TV, Cine Latino, Inc. (“Cinelatino”) and Azteca Acquisition Corporation (“Azteca”), a special purpose acquisition company, each became indirect, wholly owned subsidiaries of Hemisphere (the “Transaction”). WAPA is the accounting acquirer and predecessor, whose historical results have become the historical results of Hemisphere. The operating results presented for the current quarter reflect the operating results of all the businesses acquired in the Transaction.
Net revenue for the three months ended June 30, 2013 was $22.9 million, an increase of 33%, compared to net revenue of $17.2 million for the same period in 2012. Net revenue for the six months ended June 30, 2013 was $36.4 million, an increase of 19%, compared to net revenue of $30.7 million for the same period in 2012. This increase is primarily a result of the inclusion of the net revenue of Cinelatino since the date of the Transaction. Excluding the acquisition in the 2013 periods and political advertising revenue in the 2012 periods, for the three and six months ended June 30, 2013, net revenue decreased by $0.4 million, or 3%, and $0.2 million, or 1%, primarily due to the cancellation of WAPA’s television program SuperXclusivo, offset by growth in retransmission and subscriber fees.
Operating expenses were $22.6 million for the three months ended June 30, 2013, an increase of 92% from operating expenses of $11.8 million in the year ago quarter. Operating expenses were $36.2 million for the six months ended June 30, 2013, an increase of 61% from operating expenses of $22.5 million in the year ago period. This increase is due primarily to the inclusion in the current quarter of Cinelatino in the operating results since the date of the Transaction, and the incurrence of stock-based compensation and corporate overhead, along with one-time fees and expenses related to the Transaction, including a charge of $3.8 million in connection with the termination of a services agreement.