EVC
$2.90
Entravision Communications
($.05)
(1.69%)
Earnings Details
3rd Quarter September 2020
Thursday, November 05, 2020 4:10:00 PM
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Summary

Entravision Communications (EVC) Recent Earnings

Entravision Communications (EVC) reported 3rd Quarter September 2020 earnings of $0.11 per share on revenue of $63.0 million. The consensus earnings estimate was $0.06 per share on revenue of $56.9 million. Revenue fell 8.5% compared to the same quarter a year ago.

Entravision Communications Corp is a diversified media company serving Hispanic audiences throughout the United States and the border markets of Mexico with a combination of television, radio and digital media properties.

Results
Reported Earnings
$0.11
Earnings Whisper
-
Consensus Estimate
$0.06
Reported Revenue
$63.0 Mil
Revenue Estimate
$56.9 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Entravision Communications Corporation Reports Third Quarter 2020 Results

– Announces Quarterly Cash Dividend of $0.025 Per Share –

SANTA MONICA, Calif.--(BUSINESS WIRE)--Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three- and nine-month periods ended September 30, 2020.

“Entravision had a strong third quarter compared to the second quarter with revenues improving across all three of our operating segments,” said Walter F. Ulloa, Chairman and Chief Executive Officer. “A key driver of our progress in the third quarter was our television and radio political advertising sales, which outpaced our expectations and have continued strong during the election cycle. We also continued to execute on our cost-cutting measures to ensure that our Company remains well positioned to weather the impacts of COVID-19. Operating expenses declined 21% for the quarter compared to the prior year period.”

Mr. Ulloa continued, “Subsequent to quarter end, we announced a strategic majority investment in Cisneros Interactive, a digital advertising company serving over 2,000 brands and agencies each month across the United States and Latin America. We believe this investment will further advance our digital service offerings for our global client base, while positioning our combined platforms to become one of the largest premier digital advertising companies serving the U.S. Hispanic and Latin American markets. Our balance sheet remains strong, and overall we are pleased with our third quarter results. Our operating segments are making progress in the right direction following the lows experienced in the second quarter, and we are cautiously optimistic about our future prospects.”

Historical results, which are attached, are in thousands of U.S. dollars (except share and per share data). This press release contains certain non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measure most directly comparable to each of these non-GAAP financial measures, and a table reconciling each of these non-GAAP financial measures to its most directly comparable GAAP financial measure is included beginning on page 12. Unaudited financial highlights are as follows:

 

Three-Month Period

 

Nine-Month Period

 

Ended September 30,

 

Ended September 30,

 

2020

 

2019

 

%
Change

 

2020

 

2019

 

%
Change

Net revenue

$

62,978

 

 

$

68,816

 

 

 

(8

)%

 

$

172,343

 

 

$

202,737

 

 

 

(15

)%

Cost of revenue - digital media (1)

 

7,808

 

 

 

9,942

 

 

 

(21

)%

 

 

21,602

 

 

 

26,443

 

 

 

(18

)%

Operating expenses (2)

 

34,061

 

 

 

43,264

 

 

 

(21

)%

 

 

107,368

 

 

 

129,208

 

 

 

(17

)%

Corporate expenses (3)

 

6,287

 

 

 

6,785

 

 

 

(7

)%

 

 

18,511

 

 

 

20,180

 

 

 

(8

)%

Foreign currency (gain) loss

 

(680

)

 

 

927

 

 

*

 

 

673

 

 

 

977

 

 

 

(31

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated adjusted EBITDA (4)

 

16,371

 

 

 

9,142

 

 

 

79

%

 

 

27,773

 

 

 

29,778

 

 

 

(7

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Free cash flow (5)

$

10,567

 

 

$

326

 

 

*

 

$

14,388

 

 

$

3,479

 

 

 

314

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

9,016

 

 

$

(12,217

)

 

*

 

$

(24,238

)

 

$

(27,072

)

 

 

(10

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share, basic and diluted

$

0.11

 

 

$

(0.14

)

 

*

 

$

(0.29

)

 

$

(0.32

)

 

 

(9

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, basic

 

84,185,728

 

 

 

84,765,694

 

 

 

 

 

 

84,208,924

 

 

 

85,404,250

 

 

 

 

Weighted average common shares outstanding, diluted

 

84,863,020

 

 

 

84,765,694

 

 

 

 

 

 

84,208,924

 

 

 

85,404,250

 

 

 

 

(1)

Cost of revenue – digital media consists primarily of the costs of online media acquired from third-party publishers. Media cost is classified as cost of revenue in the period in which the corresponding revenue is recognized.

(2)

For purposes of presentation in this table, the operating expenses line item includes direct operating and selling, general and administrative expenses. Included in operating expenses are $0.1 million of non-cash stock-based compensation for each of the three-month periods ended September 30, 2020 and 2019, and $0.4 million and $0.3 million of non-cash stock-based compensation for the nine-month periods ended September 30, 2020 and 2019, respectively. Also for purposes of presentation in this table, the operating expenses line item does not include corporate expenses, foreign currency (gain) loss, depreciation and amortization, impairment charge, gain (loss) on sale of assets, gain (loss) on debt extinguishment, other income (loss) and change in fair value of contingent consideration.

(3)

Corporate expenses include $0.7 million of non-cash stock-based compensation for each of the three-month periods ended September 30, 2020 and 2019, and $2.0 million and $2.1 million of non-cash stock-based compensation for the nine-month periods ended September 30, 2020 and 2019, respectively.

(4)

Consolidated adjusted EBITDA means net income (loss) plus gain (loss) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation included in operating and corporate expenses, net interest expense, other operating gain (loss), gain (loss) on debt extinguishment, income tax (expense) benefit, equity in net income (loss) of nonconsolidated affiliate, non-cash losses, syndication programming amortization less syndication programming payments, revenue from the Federal Communications Commission, or FCC, spectrum incentive auction less related expenses, expenses associated with investments, acquisitions and dispositions and certain pro-forma cost savings. We use the term consolidated adjusted EBITDA because that measure is defined in the agreement governing our current credit facility (“the 2017 Credit Facility”) and does not include gain (loss) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation, net interest expense, other income (loss), gain (loss) on debt extinguishment, income tax (expense) benefit, equity in net income (loss) of nonconsolidated affiliate, non-cash losses, syndication programming amortization less syndication programming payments, revenue from FCC spectrum incentive auction less related expenses, expenses associated with investments, acquisitions and dispositions and certain pro-forma cost savings.

(5)

Free cash flow is defined as consolidated adjusted EBITDA less cash paid for income taxes, net interest expense, capital expenditures and non-recurring cash expenses plus dividend income, and other operating gain (loss). Net interest expense is defined as interest expense, less non-cash interest expense relating to amortization of debt finance costs, and less interest income.

Quarterly Cash Dividend

The Company announced today that its Board of Directors approved a quarterly cash dividend to shareholders of $0.025 per share on the Company's Class A, Class B and Class U common stock, in an aggregate amount of approximately $2.1 million. The quarterly dividend will be payable on December 31, 2020 to shareholders of record as of the close of business on December 16, 2020, and the common stock will trade ex-dividend on December 15, 2020. The Company currently anticipates that future cash dividends will be paid on a quarterly basis; however, any decision to pay future cash dividends will be subject to approval by the Board.

Acquisition of Majority Interest in Cisneros Interactive

On October 13, 2020, the Company completed the acquisition of 51% of the issued and outstanding shares of a company engaged in the sale and marketing of digital advertising that, together with its subsidiaries, does business under the name Cisneros Interactive. The transaction, funded from the Company’s cash on hand, includes a purchase price of approximately $29 million in cash.

Financial Results

Three-Month period ended September 30, 2020 Compared to Three-Month Period Ended

September 30, 2019

(Unaudited)

 

 

Three-Month Period

 

Ended September 30,

 

2020

 

2019

 

% Change

Net revenue

$

62,978

 

 

$

68,816

 

 

 

(8

)%

Cost of revenue - digital media (1)

 

7,808

 

 

 

9,942

 

 

 

(21

)%

Operating expenses (1)

 

34,061

 

 

 

43,264

 

 

 

(21

)%

Corporate expenses (1)

 

6,287

 

 

 

6,785

 

 

 

(7

)%

Depreciation and amortization

 

3,934

 

 

 

4,190

 

 

 

(6

)%

Impairment charge

 

-

 

 

 

9,075

 

 

 

(100

)%

Foreign currency (gain) loss

 

(680

)

 

 

927

 

 

*

Other operating (gain) loss

 

(2,683

)

 

 

(1,572

)

 

 

71

%

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

14,251

 

 

 

(3,795

)

 

*

Interest expense, net

 

(1,502

)

 

 

(2,712

)

 

 

(45

)%

Dividend income

 

3

 

 

 

241

 

 

 

(99

)%

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

12,752

 

 

 

(6,266

)

 

*

 

 

 

 

 

 

 

 

 

Income tax benefit (expense)

 

(3,736

)

 

 

(5,920

)

 

 

(37

)%

Net income (loss) before equity in net income (loss) of nonconsolidated affiliates

 

9,016

 

 

 

(12,186

)

 

*

Equity in net income (loss) of nonconsolidated affiliates, net of tax

 

-

 

 

 

(31

)

 

 

(100

)%

Net income (loss)

$

9,016

 

 

$

(12,217

)

 

*

(1)

Cost of revenue, operating expenses and corporate expenses are defined on page 1.

Net revenue decreased to $63.0 million for the three-month period ended September 30, 2020 from $68.8 million for the three-month period ended September 30, 2019, a decrease of $5.8 million. Of the overall decrease, approximately $3.9 million was attributable to our digital segment and was primarily due to declines in international revenue and the continuing economic crisis resulting from the COVID-19 pandemic. This decline in digital revenue is being driven by a trend whereby revenue is shifting more to programmatic revenue. In addition, approximately $3.3 million of the overall decrease was attributable to our radio segment and was primarily due to decreases in local and national advertising revenue, partially offset by an increase in political advertising revenue. The decrease in local and national advertising revenue was primarily a result of the continuing economic crisis resulting from the COVID-19 pandemic, ratings declines and competitive factors with other Spanish-language broadcasters, and changing demographic preferences of audiences. We have previously noted a trend for advertising to move increasingly from traditional media, such as radio, to new media, such as digital media, and we expect this trend to continue. The overall decrease was partially offset by an increase of approximately $1.4 million attributable to our television segment and was primarily due to increases in political advertising revenue and retransmission consent revenue, partially offset by decreases in revenue from spectrum usage rights and local and national advertising revenue. The decrease in local and national advertising revenue was primarily a result of the continuing economic crisis resulting from the COVID-19 pandemic, ratings declines, competitive factors with other Spanish-language broadcasters, and changing demographic preferences of audiences. We have previously noted a trend for advertising to move increasingly from traditional media, such as television, to new media, such as digital media, and we expect this trend to continue.

Cost of revenue in our digital segment decreased to $7.8 million for the three-month period ended September 30, 2020 from $9.9 million for the three-month period ended September 30, 2019, a decrease of $2.1 million, primarily due to a decrease in expenses associated with the decrease in revenue in our digital segment.

Operating expenses decreased to $34.1 million for the three-month period ended September 30, 2020 from $43.3 million for the three-month period ended September 30, 2019, a decrease of $9.2 million. The decrease was primarily due to decreases in salary expense, as a result of the company-wide reduction in salaries implemented effective April 16, 2020, and expenses associated with the decrease in advertising revenue.

Corporate expenses decreased to $6.3 million for the three-month period ended September 30, 2020 from $6.8 million for the three-month period ended September 30, 2019, a decrease of $0.5 million. The decrease was primarily due to decreases in salary expense, as a result of the company-wide reduction in salaries implemented effective April 16, 2020, and audit fees. These decreases were partially offset by expenses for legal and financial due diligence related to the acquisition of Cisneros Interactive.

Our historical revenues have primarily been denominated in U.S. dollars, and the majority of our current revenues continue to be, and are expected to remain, denominated in U.S. dollars. However, our operating expenses are generally denominated in the currencies of the countries in which our operations are located, and we have operations in countries other than the United States, primarily those operations related to our Headway business. As a result, we have operating expense, attributable to foreign currency, that is primarily related to the operations related to our Headway business. We had a foreign currency gain of $0.7 million for the three-month period ended September 30, 2020 compared to a foreign currency loss of $0.9 million for the three-month period ended September 30, 2019. Foreign currency gain was primarily due to currency fluctuations that affected our digital segment operations located outside the United States, primarily related to the Headway business.

Nine-Month period ended September 30, 2020 Compared to Nine-Month Period Ended

September 30, 2019

(Unaudited)

 

 

Nine-Month Period

 

Ended September 30,

 

2020

 

2019

 

% Change

Net revenue

$

172,343

 

 

$

202,737

 

 

 

(15

)%

Cost of revenue - digital media (1)

 

21,602

 

 

 

26,443

 

 

 

(18

)%

Operating expenses (1)

 

107,368

 

 

 

129,208

 

 

 

(17

)%

Corporate expenses (1)

 

18,511

 

 

 

20,180

 

 

 

(8

)%

Depreciation and amortization

 

12,319

 

 

 

12,412

 

 

 

(1

)%

Change in fair value contingent consideration

 

-

 

 

 

(2,376

)

 

 

(100

)%

Impairment charge

 

39,835

 

 

 

31,443

 

 

 

27

%

Foreign currency (gain) loss

 

673

 

 

 

977

 

 

 

(31

)%

Other operating (gain) loss

 

(5,549

)

 

 

(5,165

)

 

 

7

%

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

(22,416

)

 

 

(10,385

)

 

 

116

%

Interest expense, net

 

(5,043

)

 

 

(7,980

)

 

 

(37

)%

Dividend income

 

26

 

 

 

747

 

 

 

(97

)%

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

(27,433

)

 

 

(17,618

)

 

 

56

%

 

 

 

 

 

 

 

 

 

Income tax benefit (expense)

 

3,195

 

 

 

(9,265

)

 

*

Net income (loss) before equity in net income (loss) of nonconsolidated affiliates

 

(24,238

)

 

 

(26,883

)

 

 

(10

)%

Equity in net income (loss) of nonconsolidated affiliates, net of tax

 

-

 

 

 

(189

)

 

 

(100

)%

Net income (loss)

$

(24,238

)

 

$

(27,072

)

 

 

(10

)%

(1)

Cost of revenue, operating expenses and corporate expenses are defined on page 1.

Net revenue decreased to $172.3 million for the nine-month period ended September 30, 2020 from $202.7 million for the nine-month period ended September 30, 2019, a decrease of $30.4 million. Of the overall decrease, approximately $8.8 million was attributable to our television segment due to decreases in revenue from spectrum usage rights and local and national advertising revenue, partially offset by increases in political advertising revenue and retransmission consent revenue. The decrease in local and national advertising revenue was primarily a result of the continuing economic crisis resulting from the COVID-19 pandemic, ratings declines, competitive factors with other Spanish-language broadcasters, and changing demographic preferences of audiences. We have previously noted a trend for advertising to move increasingly from traditional media, such as television, to new media, such as digital media, and we expect this trend to continue. In addition, approximately $10.5 million of the overall decrease was attributable to our digital segment and was primarily due to declines in international revenue and the continuing economic crisis resulting from the COVID-19 pandemic. This decline in digital revenue is being driven by a trend whereby revenue is shifting more to programmatic revenue. In addition, approximately $11.1 million of the overall decrease was attributable to our radio segment and was primarily due to decreases in local and national advertising revenue, partially offset by an increase in political advertising revenue. The decrease in local and national advertising revenue was primarily a result of the continuing economic crisis resulting from the COVID-19 pandemic, ratings declines and competitive factors with other Spanish-language broadcasters, and changing demographic preferences of audiences. We have previously noted a trend for advertising to move increasingly from traditional media, such as radio, to new media, such as digital media, and we expect this trend to continue.

Cost of revenue in our digital segment decreased to $21.6 million for the nine-month period ended September 30, 2020 from $26.4 million for the nine-month period ended September 30, 2019, a decrease of $4.8 million, primarily due to a decrease in expenses associated with the decrease in revenue in our digital segment.

Operating expenses decreased to $107.4 million for the nine-month period ended September 30, 2020 from $129.2 million for the nine-month period ended September 30, 2019, a decrease of $21.8 million. The decrease was primarily due to decreases in salary expense, as a result of the company-wide reduction in salaries implemented effective April 16, 2020, and expenses associated with the decrease in advertising revenue.

Corporate expenses decreased to $18.5 million for the nine-month period ended September 30, 2020 from $20.2 million for the nine-month period ended September 30, 2019, a decrease of $1.7 million. The decrease was primarily due to decreases in salary expense, as a result of the company-wide reduction in salaries implemented effective April 16, 2020, and audit fees. These decreases were partially offset by expenses for legal and financial due diligence related to the acquisition of Cisneros Interactive.

Impairment charge related to certain FCC licenses in our television and radio reporting units was $23.5 and $8.8 million, respectively, for the nine-month period ended September 30, 2020. Impairment charge related to goodwill in our digital reporting unit was $0.8 million for the nine-month period ended September 30, 2020. Impairment charges related to intangibles subject to amortization and property and equipment in our digital reporting unit was $5.3 million and $1.5 million, respectively, for the nine-month period ended September 30, 2020.

Our historical revenues have primarily been denominated in U.S. dollars, and the majority of our current revenues continue to be, and are expected to remain, denominated in U.S. dollars. However, our operating expenses are generally denominated in the currencies of the countries in which our operations are located, and we have operations in countries other than the United States, primarily those operations related to our Headway business. As a result, we have operating expense, attributable to foreign currency, which is primarily related to the operations related to our Headway business. We had a foreign currency loss of $0.7 million for the nine-month period ended September 30, 2020 compared to a foreign currency loss of $1.0 million for the nine-month period ended September 30, 2019. Foreign currency loss was primarily due to currency fluctuations that affected our digital segment operations located outside the United States, primarily those related to the Headway business.

Segment Results

The following represents selected unaudited segment information:

 

Three-Month Period

 

Nine-Month Period

 

Ended September 30,

 

Ended September 30,

 

2020

 

2019

 

% Change

 

2020

 

2019

 

% Change

Net Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Television

$

37,786

 

$

36,421

 

 

4

%

 

$

103,940

 

$

112,745

 

 

(8

)%

Digital

 

13,655

 

 

17,612

 

 

(22

)%

 

 

38,359

 

 

48,888

 

 

(22

)%

Radio

 

11,537

 

 

14,783

 

 

(22

)%

 

 

30,044

 

 

41,104

 

 

(27

)%

Total

$

62,978

 

$

68,816

 

 

(8

)%

 

$

172,343

 

$

202,737

 

 

(15

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Revenue - digital media (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Digital

$

7,808

 

$

9,942

 

 

(21

)%

 

$

21,602

 

$

26,443

 

 

(18

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Television

 

18,978

 

 

21,158

 

 

(10

)%

 

 

58,471

 

 

62,690

 

 

(7

)%

Digital

 

5,383

 

 

7,965

 

 

(32

)%

 

 

18,403

 

 

24,170

 

 

(24

)%

Radio

 

9,700

 

 

14,141

 

 

(31

)%

 

 

30,494

 

 

42,348

 

 

(28

)%

Total

$

34,061

 

$

43,264

 

 

(21

)%

 

$

107,368

 

$

129,208

 

 

(17

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Expenses (1)

$

6,287

 

$

6,785

 

 

(7

)%

 

$

18,511

 

$

20,180

 

 

(8

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated adjusted EBITDA (1)

$

16,371

 

$

9,142

 

 

79

%

 

$

27,773

 

$

29,778

 

 

(7

)%

(1)

Cost of revenue, operating expenses, corporate expenses, and consolidated adjusted EBITDA are defined on page 1.

Notice of Conference Call

Entravision Communications Corporation will hold a conference call to discuss its 2020 third quarter results on November 5, 2020 at 5 p.m. Eastern Time. To access the conference call, please dial (877) 407-9716 (U.S.) or (201) 493-6779 (Int’l) ten minutes prior to the start time and reference Conference ID number 13711551. The call will also be available via live webcast on the investor relations portion of the Company's website located at www.entravision.com.

About Entravision Communications Corporation

Entravision is a diversified global marketing, technology, and media company serving clients throughout the United States and in more than 20 countries across Latin America, Europe, and Asia. Our dynamic portfolio of services includes cutting-edge, proprietary marketing technologies and platforms, along with leading media and marketing audience-centric assets in the U.S., including 54 television stations and 48 Spanish-language radio stations that feature nationally recognized, award-winning talent. Entravision is the largest affiliate group of the Univision and UniMás television networks. In addition to broadcast, we offer mobile programmatic solutions and demand-side platforms, which allow advertisers to execute performance campaigns using machine-learned bidding algorithms to identify the ideal combination of creative assets, audience targeting, and pricing. Shares of Entravision Class A Common Stock trade on The New York Stock Exchange under the ticker symbol: EVC. Learn more about all of our marketing, media, and technology offerings at entravision.com or connect with us on LinkedIn and Facebook.

Forward Looking Statements

This press release contains certain forward-looking statements. These forward-looking statements, which are included in accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, may involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results and performance in future periods to be materially different from any future results or performance suggested by the forward-looking statements in this press release. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that actual results will not differ materially from these expectations, and the Company disclaims any duty to update any forward-looking statements made by the Company. From time to time, these risks, uncertainties and other factors are discussed in the Company’s filings with the Securities and Exchange Commission.

(Financial Table Follows)

Entravision Communications Corporation

Consolidated Balance Sheets

(In thousands; unaudited)

 

 

 

September 30,

 

December 31,

 

 

2020

 

2019

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

83,284

 

 

$

33,123

 

Marketable securities

 

 

53,208

 

 

 

91,662

 

Restricted cash

 

 

735

 

 

 

734

 

Trade receivables, net of allowance for doubtful accounts

 

 

58,865

 

 

 

71,406

 

Assets held for sale

 

 

2,141

 

 

 

950

 

Prepaid expenses and other current assets

 

 

13,881

 

 

 

11,557

 

Total current assets

 

 

212,114

 

 

 

209,432

 

Property and equipment, net

 

 

73,215

 

 

 

79,642

 

Intangible assets subject to amortization, net

 

 

9,307

 

 

 

16,772

 

Intangible assets not subject to amortization

 

 

216,853

 

 

 

252,544

 

Goodwill

 

 

45,711

 

 

 

46,511

 

Operating leases right of use asset

 

 

34,394

 

 

 

43,837

 

Other assets

 

 

7,784

 

 

 

7,462

 

Total assets

 

$

599,378

 

 

$

656,200

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Current maturities of long-term debt

 

$

3,000

 

 

$

3,000

 

Accounts payable and accrued expenses

 

 

40,711

 

 

 

53,931

 

Operating lease liabilities

 

 

7,563

 

 

 

9,056

 

Total current liabilities

 

 

51,274

 

 

 

65,987

 

Long-term debt, less current maturities, net of unamortized debt issuance costs

 

 

211,095

 

 

 

213,024

 

Long-term operating lease liabilities

 

 

32,378

 

 

 

41,387

 

Other long-term liabilities

 

 

3,862

 

 

 

3,371

 

Deferred income taxes

 

 

43,229

 

 

 

44,259

 

Total liabilities

 

 

341,838

 

 

 

368,028

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

Class A common stock

 

 

6

 

 

 

6

 

Class B common stock

 

 

2

 

 

 

2

 

Class U common stock

 

 

1

 

 

 

1

 

Additional paid-in capital

 

 

829,610

 

 

 

836,170

 

Accumulated deficit

 

 

(572,114

)

 

 

(547,876

)

Accumulated other comprehensive income (loss)

 

 

35

 

 

 

(131

)

Total stockholders' equity

 

 

257,540

 

 

 

288,172

 

Total liabilities and stockholders' equity

 

$

599,378

 

 

$

656,200

 

Entravision Communications Corporation

Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)

 

 

 

Three-Month Period

 

Nine-Month Period

 

 

Ended September 30,

 

Ended September 30,

 

 

2020

 

2019

 

2020

 

2019

Net revenue

 

$

62,978

 

 

$

68,816

 

 

$

172,343

 

 

$

202,737

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue - digital media

 

 

7,808

 

 

 

9,942

 

 

 

21,602

 

 

 

26,443

 

Direct operating expenses

 

 

24,178

 

 

 

30,807

 

 

 

72,997

 

 

 

89,392

 

Selling, general and administrative expenses

 

 

9,883

 

 

 

12,457

 

 

 

34,371

 

 

 

39,816

 

Corporate expenses

 

 

6,287

 

 

 

6,785

 

 

 

18,511

 

 

 

20,180

 

Depreciation and amortization

 

 

3,934

 

 

 

4,190

 

 

 

12,319

 

 

 

12,412

 

Change in fair value contingent consideration

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,376

)

Impairment charge

 

 

-

 

 

 

9,075

 

 

 

39,835

 

 

 

31,443

 

Foreign currency (gain) loss

 

 

(680

)

 

 

927

 

 

 

673

 

 

 

977

 

Other operating (gain) loss

 

 

(2,683

)

 

 

(1,572

)

 

 

(5,549

)

 

 

(5,165

)

 

 

 

48,727

 

 

 

72,611

 

 

 

194,759

 

 

 

213,122

 

Operating income (loss)

 

 

14,251

 

 

 

(3,795

)

 

 

(22,416

)

 

 

(10,385

)

Interest expense

 

 

(1,969

)

 

 

(3,537

)

 

 

(6,673

)

 

 

(10,581

)

Interest income

 

 

467

 

 

 

825

 

 

 

1,630

 

 

 

2,601

 

Dividend income

 

 

3

 

 

 

241

 

 

 

26

 

 

 

747

 

Income (loss) before income taxes

 

 

12,752

 

 

 

(6,266

)

 

 

(27,433

)

 

 

(17,618

)

Income tax benefit (expense)

 

 

(3,736

)

 

 

(5,920

)

 

 

3,195

 

 

 

(9,265

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before equity in net income (loss) of nonconsolidated affiliate

 

 

9,016

 

 

 

(12,186

)

 

 

(24,238

)

 

 

(26,883

)

Equity in net income (loss) of nonconsolidated affiliate, net of tax

 

 

-

 

 

 

(31

)

 

 

-

 

 

 

(189

)

Net income (loss)

 

$

9,016

 

 

$

(12,217

)

 

$

(24,238

)

 

$

(27,072

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share, basic and diluted

 

$

0.11

 

 

$

(0.14

)

 

$

(0.29

)

 

$

(0.32

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share

 

$

0.03

 

 

$

0.05

 

 

$

0.10

 

 

$

0.15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, basic

 

 

84,185,728

 

 

 

84,765,694

 

 

 

84,208,924

 

 

 

85,404,250

 

Weighted average common shares outstanding, diluted

 

 

84,863,020

 

 

 

84,765,694

 

 

 

84,208,924

 

 

 

85,404,250

 

Entravision Communications Corporation

Consolidated Statements of Cash Flows

(In thousands; unaudited)

 

 

 

Three-Month Period

 

Nine-Month Period

 

 

Ended September 30,

 

Ended September 30,

 

 

2020

 

2019

 

2020

 

2019

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

9,016

 

 

$

(12,217

)

 

$

(24,238

)

 

$

(27,072

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

3,934

 

 

 

4,190

 

 

 

12,319

 

 

 

12,412

 

Impairment charge

 

 

 

 

 

9,075

 

 

 

39,835

 

 

 

31,443

 

Deferred income taxes

 

 

(1,346

)

 

 

5,469

 

 

 

(8,744

)

 

 

6,941

 

Non-cash interest

 

 

159

 

 

 

226

 

 

 

491

 

 

 

715

 

Amortization of syndication contracts

 

 

125

 

 

 

125

 

 

 

383

 

 

 

374

 

Payments on syndication contracts

 

 

(72

)

 

 

(192

)

 

 

(325

)

 

 

(419

)

Equity in net (income) loss of nonconsolidated affiliate

 

 

 

 

 

31

 

 

 

 

 

 

189

 

Non-cash stock-based compensation

 

 

816

 

 

 

819

 

 

 

2,408

 

 

 

2,454

 

(Gain) loss on disposal of property and equipment

 

 

(140

)

 

 

(3

)

 

 

(767

)

 

 

158

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

(Increase) decrease in accounts receivable

 

 

(5,228

)

 

 

1,084

 

 

 

14,285

 

 

 

10,703

 

(Increase) decrease in prepaid expenses and other assets

 

 

1,623

 

 

 

(3,524

)

 

 

6,713

 

 

 

(844

)

Increase (decrease) in accounts payable, accrued expenses and other liabilities

 

 

(2,633

)

 

 

(1,267

)

 

 

(16,643

)

 

 

(13,568

)

Net cash provided by operating activities

 

 

6,254

 

 

 

3,816

 

 

 

25,717

 

 

 

23,486

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from sale of property and equipment and intangibles

 

 

1,100

 

 

 

 

 

 

5,089

 

 

 

 

Purchases of property and equipment

 

 

(2,065

)

 

 

(7,200

)

 

 

(7,741

)

 

 

(21,182

)

Purchases of intangible assets

 

 

 

 

 

 

 

 

(158

)

 

 

-

 

Purchases of marketable securities

 

 

 

 

 

(240

)

 

 

 

 

 

(1,400

)

Proceeds from marketable securities

 

 

11,620

 

 

 

6,200

 

 

 

38,480

 

 

 

27,881

 

Purchases of investments

 

 

 

 

 

 

 

 

 

 

 

(300

)

Deposits on acquisition

 

 

 

 

 

(147

)

 

 

 

 

 

(147

)

Net cash provided by (used in) investing activities

 

 

10,655

 

 

 

(1,387

)

 

 

35,670

 

 

 

4,852

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Tax payments related to shares withheld for share-based compensation plans

 

 

 

 

 

(22

)

 

 

(15

)

 

 

(773

)

Payments on long-term debt

 

 

(750

)

 

 

(750

)

 

 

(2,250

)

 

 

(2,250

)

Dividends paid

 

 

(2,106

)

 

 

(4,227

)

 

 

(8,428

)

 

 

(12,767

)

Repurchase of Class A common stock

 

 

 

 

 

(1,349

)

 

 

(525

)

 

 

(10,357

)

Payments of capitalized debt costs

 

 

 

 

 

 

 

 

 

 

 

(225

)

Net cash used in financing activities

 

 

(2,856

)

 

 

(6,348

)

 

 

(11,218

)

 

 

(26,372

)

Effect of exchange rates on cash, cash equivalents and restricted cash

 

 

(39

)

 

 

(5

)

 

 

(7

)

 

 

8

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

14,014

 

 

 

(3,924

)

 

 

50,162

 

 

 

1,974

 

Cash, cash equivalents and restricted cash:

 

 

 

 

 

 

 

 

 

 

 

 

Beginning

 

 

70,005

 

 

 

53,363

 

 

 

33,857

 

 

 

47,465

 

Ending

 

$

84,019

 

 

$

49,439

 

 

$

84,019

 

 

$

49,439

 

Entravision Communications Corporation

Reconciliation of Consolidated Adjusted EBITDA to Cash Flows From Operating Activities

(In thousands; unaudited)

 

The most directly comparable GAAP financial measure is operating cash flow. A reconciliation of this non-GAAP measure to cash flows from operating activities for each of the periods presented is as follows:

 

 

 

Three-Month Period

 

Nine-Month Period

 

 

Ended September 30,

 

Ended September 30,

 

 

2020

 

2019

 

2020

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated adjusted EBITDA (1)

 

$

16,371

 

 

$

9,142

 

 

$

27,773

 

 

$

29,778

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(1,969

)

 

 

(3,537

)

 

 

(6,673

)

 

 

(10,581

)

Interest income

 

 

467

 

 

 

825

 

 

 

1,630

 

 

 

2,601

 

Dividend income

 

 

3

 

 

 

241

 

 

 

26

 

 

 

747

 

Income tax expense

 

 

(3,736

)

 

 

(5,920

)

 

 

3,195

 

 

 

(9,265

)

Equity in net loss of nonconsolidated affiliates

 

 

-

 

 

 

(31

)

 

 

-

 

 

 

(189

)

Amortization of syndication contracts

 

 

(125

)

 

 

(125

)

 

 

(383

)

 

 

(374

)

Payments on syndication contracts

 

 

72

 

 

 

192

 

 

 

325

 

 

 

419

 

Non-cash stock-based compensation included in direct operating expenses

 

 

(148

)

 

 

(74

)

 

 

(383

)

 

 

(324

)

Non-cash stock-based compensation included in corporate expenses

 

 

(668

)

 

 

(745

)

 

 

(2,025

)

 

 

(2,130

)

Depreciation and amortization

 

 

(3,934

)

 

 

(4,190

)

 

 

(12,319

)

 

 

(12,412

)

Change in fair value contingent consideration

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,376

 

Impairment charge

 

 

-

 

 

 

(9,075

)

 

 

(39,835

)

 

 

(31,443

)

Non-recurring cash severance charge

 

 

-

 

 

 

(492

)

 

 

(1,118

)

 

 

(1,440

)

Other operating gain (loss)

 

 

2,683

 

 

 

1,572

 

 

 

5,549

 

 

 

5,165

 

Net income (loss)

 

 

9,016

 

 

 

(12,217

)

 

 

(24,238

)

 

 

(27,072

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

3,934

 

 

 

4,190

 

 

 

12,319

 

 

 

12,412

 

Impairment charge

 

 

-

 

 

 

9,075

 

 

 

39,835

 

 

 

31,443

 

Deferred income taxes

 

 

(1,346

)

 

 

5,469

 

 

 

(8,744

)

 

 

6,941

 

Non-cash interest

 

 

159

 

 

 

226

 

 

 

491

 

 

 

715

 

Amortization of syndication contracts

 

 

125

 

 

 

125

 

 

 

383

 

 

 

374

 

Payments on syndication contracts

 

 

(72

)

 

 

(192

)

 

 

(325

)

 

 

(419

)

Equity in net (income) loss of nonconsolidated affiliate

 

 

-

 

 

 

31

 

 

 

-

 

 

 

189

 

Non-cash stock-based compensation

 

 

816

 

 

 

819

 

 

 

2,408

 

 

 

2,454

 

(Gain) loss on disposal of property and equipment

 

 

(140

)

 

 

(3

)

 

 

(767

)

 

 

158

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

(Increase) decrease in accounts receivable

 

 

(5,228

)

 

 

1,084

 

 

 

14,285

 

 

 

10,703

 

(Increase) decrease in prepaid expenses and other assets

 

 

1,623

 

 

 

(3,524

)

 

 

6,713

 

 

 

(844

)

Increase (decrease) in accounts payable, accrued expenses and other liabilities

 

 

(2,633

)

 

 

(1,267

)

 

 

(16,643

)

 

 

(13,568

)

Cash flows from operating activities

 

 

6,254

 

 

 

3,816

 

 

 

25,717

 

 

 

23,486

 

(1)

Consolidated adjusted EBITDA is defined on page 1.

Entravision Communications Corporation

Reconciliation of Free Cash Flow to Cash Flows From Operating Activities

(In thousands; unaudited)

 

The most directly comparable GAAP financial measure is operating cash flow. A reconciliation of this non-GAAP measure to cash flows from operating activities for each of the periods presented is as follows:

 

 

 

Three-Month Period

 

Nine-Month Period

 

 

Ended September 30,

 

Ended September 30,

 

 

2020

 

2019

 

2020

 

2019

Consolidated adjusted EBITDA (1)

 

$

16,371

 

 

$

9,142

 

 

$

27,773

 

 

$

29,778

 

Net interest expense (1)

 

 

(1,343

)

 

 

(2,486

)

 

 

(4,552

)

 

 

(7,265

)

Dividend income

 

 

3

 

 

 

241

 

 

 

26

 

 

 

747

 

Cash paid for income taxes

 

 

(5,082

)

 

 

(451

)

 

 

(5,549

)

 

 

(2,324

)

Capital expenditures (2)

 

 

(2,065

)

 

 

(7,200

)

 

 

(7,741

)

 

 

(21,182

)

Non-recurring cash severance charge

 

 

-

 

 

 

(492

)

 

 

(1,118

)

 

 

(1,440

)

Other operating gain (loss)

 

 

2,683

 

 

 

1,572

 

 

 

5,549

 

 

 

5,165

 

Free cash flow (1)

 

 

10,567

 

 

 

326

 

 

 

14,388

 

 

 

3,479

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures (2)

 

 

2,065

 

 

 

7,200

 

 

 

7,741

 

 

 

21,182

 

Change in fair value of contingent consideration

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,376

 

(Gain) loss on disposal of property and equipment

 

 

(140

)

 

 

(3

)

 

 

(767

)

 

 

158

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

(Increase) decrease in accounts receivable

 

 

(5,228

)

 

 

1,084

 

 

 

14,285

 

 

 

10,703

 

(Increase) decrease in prepaid expenses and other assets

 

 

1,623

 

 

 

(3,524

)

 

 

6,713

 

 

 

(844

)

Increase (decrease) in accounts payable, accrued expenses and other liabilities

 

 

(2,633

)

 

 

(1,267

)

 

 

(16,643

)

 

 

(13,568

)

Cash Flows From Operating Activities

 

$

6,254

 

 

$

3,816

 

 

$

25,717

 

 

$

23,486

 

(1)

Consolidated adjusted EBITDA, net interest expense, and free cash flow are defined on page 1.

(2)

Capital expenditures are not part of the consolidated statement of operations.

 

Christopher T. Young
Chief Financial Officer
Entravision Communications Corporation
310-447-3870

Kimberly Esterkin
ADDO Investor Relations
310-829-5400
evc@addoir.com

Source: Entravision Communications Corporation