Hemisphere Media Group, Inc.

Good day, ladies and gentlemen, and welcome to the Hemisphere Media Group Incorporated's fourth quarter and full year 2020 Financial Results Conference call. My name is Jason, and I will be your operator today. A replay of the call will be available beginning at approximately 1 p.m. Eastern time today, Tuesday, March 2nd, 2021, by dialing 1-800-CALL. or from outside the United States at 416-621-4642. The conference ID for the call is 1563675. I will now turn the call over to Danielle O'Brien. You may begin. Thank you, Operator, and good morning, everyone.

I'd like to welcome everyone to today's conference call. I'm Danielle O'Brien and I'm with Edelman Financial Communications, Hemisphere's outside investor relations firm. Today's announcement and our comments may contain certain statements about Hemisphere that are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on the current expectations of the management of Hemisphere and are subject to uncertainty and changes in circumstance which may cause actual results to differ materially from those expressed or implied in such forward-looking statements. In addition, these statements are based on a number of assumptions that are subject to change. Please refer to our company's most recent annual report on Form 10-K and our other public filings for a more complete discussion of forward-looking statements and the risk factors applicable to our company. Forward-looking statements included herein are made as of the date hereof, and Hemisphere undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances. During today's call, in addition to discussing results that are calculated in accordance with generally accepted accounting principles, we will refer to adjusted EBITDA, which is a non-GAAP financial measure. A reconciliation of GAAP and non-GAAP information is included in our earnings press release, which was issued earlier this morning. Management believes that this non-GAAP information is important to investors' understanding of our business. I will now turn the call over to Alan.

Thank you, Danielle, and good morning, everyone. I hope you and your families and colleagues are staying healthy and safe. I'm incredibly proud of the results we delivered for the fourth quarter and the full year. Our business performance was truly extraordinary in the face of the pandemic and macroeconomic headwinds. For the second consecutive quarter, we delivered industry-leading revenue growth. At a time when other media companies are reporting advertising and rating declines, our business has resolutely defied these trends. Our fourth quarter was the highest quarter of TV advertising revenue in our company's history, even when excluding politicals. Overall in the fourth quarter, we grew net revenues by 19%, driven by an extraordinary 54% increase in advertising revenue. This outstanding top-line growth drove a 20% increase in adjusted EBITDA in the quarter. As a result of our strong second-half performance, we were able to largely mitigate the impact of the pandemic on our results. In Puerto Rico, economic activity, business trends, and consumer spending built upon the momentum seen in the third quarter. as many of the pandemic-related restrictions were gradually loosened. As a result of improving consumer behavior, the overall TV ad market grew by a remarkable 44%, excluding political, versus 2019. And WAPA's fourth quarter ad revenue was the highest in the history of Puerto Rico television, even when excluding political. Assuming additional federal stimulus, as well as the release of billions of previously allocated federal relief funds relating to Hurricane Maria, the market should be well positioned for continued growth in 2021. 2020 marked WAPA's 11th consecutive year as the number one station in Puerto Rico. In light of the pandemic, we made the decision to reduce spending in the second quarter, but as the market recovered in the third quarter, we committed to bring our viewers continuous fresh programming, and it paid off. For the full year, WAPA delivered the highest average total day rating of any TV station in Puerto Rico since Nielsen began measuring ratings in 2010. We also renewed retransmission agreements with the two largest MVPDs in Puerto Rico, which became effective on January 1st. These renewals will result in a substantial increase in our retransmission fees and reflect WAPA's singular strength and value. WAPA's extraordinary lineup of news, entertainment, and sports programming, leading market position, and unparalleled ratings make WAPA indispensable to distributors in Puerto Rico. Turning to our cable channels, we experienced meaningful ratings growth across all of our comp score-related U.S. cable networks as they continued to defy overall viewing trends. A reflection of the unique and relevant content offering our audiences continue to seek out. This ratings performance helped drive double-digit percentage ad revenue growth in Q4, a very strong result in the face of a challenging advertising environment. Pasionis delivered its 16th consecutive quarter of year-over-year audience growth, growing ratings by 7% as compared to the fourth quarter of 2019. And for the fourth consecutive year, Pasionis grew its full-year ratings, this year increasing by 18% over 2019. Looking ahead, we have a fantastic content lineup for 2021, including the U.S. premiere of blockbuster Turkish drama Mother, which previously set record ratings for WAP in Puerto Rico. Centro Latino marked its third consecutive year of audience growth, increasing its ratings by 8% over the fourth quarter of 2019. Centro America Tevez ratings increased by an impressive 40% over the fourth quarter of 2019, marking its ninth consecutive quarter of year-over-year growth. We are pleased to announce that Central America TV has recently launched a Fanatis, a growing over-the-top U.S. distributor focused on sports from Latin America and Spain. Our launch speaks to the value of the channel's soccer programming from El Salvador, Costa Rica, and Honduras. WAP America continues to rank among the top five rated Spanish cable networks, growing ratings by 10% in the fourth quarter and bringing its large and loyal audience unmatched coverage of the Puerto Rico elections and the COVID-19 crisis. The channel had an outstanding year and neared its all-time record ratings, posting a robot 14% increase in total day viewership in 2020. On March 1st, Televisión Dominicana launched on DirecTV in Puerto Rico, giving the channel meaningful incremental distribution. TV Dominicana is now available on all major distributors in Puerto Rico. A quick note on our subscriber numbers. We are encouraged that our subscriber losses decelerated sequentially in the fourth quarter. In addition, we are in continuous discussions with all major over-the-top distributors about launching a Spanish language package. Pantaya is a key strategic initiative for us. As the leading Spanish language subscription streaming service in the US, Pantaya is ideally positioned as the destination for Hispanics to enjoy blockbuster movies and premium original series that they can't find anywhere else. In 2020, Pantaya grew its subscriber base by approximately 40% and now has over 900,000 paying subscribers. Pantaya is focused on significantly growing and scaling its business and expanding its content offerings. We're confident that Pantaya can drive dynamic and sizable growth by providing the 60 million US Hispanics with a service that uniquely speaks to them. Turning to Colombia and our investment in Canal Uno, the market continues to remain challenged by the pandemic. While restrictions on business activity were lifted near the end of the year, further lockdowns were implemented in January, putting pressure on the economy. Canal Uno outperformed the overall TV market throughout 2020 and was able to successfully mitigate market decline by prudently managing and reducing costs. We believe as 2021 progresses and Colombia's COVID cases lessen, the market will be able to return to normalized advertising spending levels, and consequently, Canal Uno's market share and revenue should continue to grow. Canal Uno recently entered into a key strategic partnership with Televisa, the most important content producer in Latin America. This agreement provides Canal Uno with access to hit primetime dramas, including Televisa's number one show around the world, La Rosa de Guadalupe. On the M&A front, we continue to pursue various exciting potential strategic transactions, including opportunities that have arisen by virtue of the impact of the pandemic. In closing, we are extremely pleased with our performance this year despite operating under terribly challenging circumstances. Our extraordinary results during the second half of the year give us tremendous momentum, and our 2021 early results have continued this impressive growth trajectory. While the environment and the world are continuously changing, our mission remains the same, to drive value across our entire platform and deliver fresh and compelling content to our unique and valuable audience. Thank you, everyone. I'll now turn the call over to Craig.