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Entravision Communications Corporation Reports Third Quarter 2023 Results

Entravision Communications Corporation (NYSE: EVC), a leading global advertising solutions, media and technology company, today announced financial results for the three- and nine-month periods ended September 30, 2023.

Third Quarter 2023 Highlights

  • Record quarterly advertising revenue
  • Net revenue up 14% over the prior-year quarter
  • Net income attributable to common stockholders down 71% compared to the prior-year quarter
  • Consolidated EBITDA down 45% compared to the prior-year quarter
  • Operating cash flow up 45% over the prior-year quarter
  • Free cash flow down 74% compared to the prior-year quarter
  • Quarterly cash dividend of $0.05 per share

“We achieved a record quarterly advertising revenue of $274.4 million, up 14% year-over-year, led by strength in our Digital segment, which now comprises 84% of total revenue,” said Chris Young, Chief Financial Officer. “We continued to execute on our Digital transformation strategy during the quarter with the signing of two new partnerships with Match and Pinterest to further diversify our portfolio of digital solutions. While non-returning political revenue and sales mix contributed to the year-over-year decline in our Consolidated EBITDA, we anticipate increased political spending ahead of the 2024 elections will benefit our Television and Audio segments and Consolidated EBITDA in the quarters to come."

Quarterly Cash Dividend

The Company announced today that its Board of Directors approved a quarterly cash dividend to shareholders of $0.05 per share on the Company's Class A and Class U common stock, in an aggregate amount of $4.4 million. The quarterly dividend will be payable on December 29, 2023 to shareholders of record as of the close of business on December 15, 2023, and the common stock will trade ex-dividend on December 14, 2023. 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.

Non-GAAP Financial Measures

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 10.

Unaudited Financial Highlights (In thousands, except share and per share data)

 

 

Three-Month Period

 

Nine-Month Period

 

Ended September 30,

 

Ended September 30,

 

2023

 

2022

 

% Change

 

2023

 

2022

 

% Change

Net revenue

$

274,417

 

 

$

241,014

 

 

14

%

 

$

786,804

 

 

$

659,881

 

 

19

%

Cost of revenue - digital (1)

 

199,289

 

 

 

157,095

 

 

 

27

%

 

 

562,881

 

 

 

431,951

 

 

 

30

%

Operating expenses (2)

 

53,809

 

 

 

49,294

 

 

 

9

%

 

 

163,069

 

 

 

140,527

 

 

 

16

%

Corporate expenses (3)

 

13,292

 

 

 

9,525

 

 

 

40

%

 

 

35,836

 

 

 

26,769

 

 

 

34

%

Foreign currency (gain) loss

 

548

 

 

 

1,966

 

 

 

(72

)%

 

 

289

 

 

 

2,112

 

 

 

(86

)%

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated EBITDA (4)

 

14,185

 

 

 

25,972

 

 

 

(45

)%

 

 

41,420

 

 

 

66,566

 

 

 

(38

)%

 

 

 

 

 

 

 

 

 

 

 

 

Free cash flow (5)

$

4,004

 

 

$

15,443

 

 

 

(74

)%

 

$

9,470

 

 

$

44,026

 

 

 

(78

)%

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

2,732

 

 

$

9,090

 

 

 

(70

)%

 

$

2,430

 

 

$

19,444

 

 

 

(88

)%

Net (income) loss attributable to redeemable noncontrolling interest

$

(13

)

 

$

-

 

 

*

 

$

(1

)

 

$

-

 

 

*

Net (income) loss attributable to noncontrolling interest

$

-

 

 

$

303

 

 

 

(100

)%

 

$

342

 

 

$

303

 

 

 

13

%

Net income (loss) attributable to common stockholders

$

2,719

 

 

$

9,393

 

 

 

(71

)%

 

$

2,771

 

 

$

19,747

 

 

 

(86

)%

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share attributable to common stockholders, basic and diluted

$

0.03

 

 

$

0.11

 

 

 

(73

)%

 

$

0.03

 

 

$

0.23

 

 

 

(87

)%

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, basic

 

87,995,567

 

 

 

84,945,873

 

 

 

 

 

87,803,770

 

 

 

85,469,675

 

 

 

Weighted average common shares outstanding, diluted

 

89,888,721

 

 

 

87,417,501

 

 

 

 

 

89,835,363

 

 

 

87,671,726

 

 

 

(1)

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)

Operating expenses include direct operating and selling, general and administrative expenses. Included in operating expenses are $2.6 million and $1.0 million of non-cash stock-based compensation for the three-month periods ended September 30, 2023 and 2022, respectively, and $7.2 million and $2.9 million of non-cash stock-based compensation for the nine-month periods ended September 30, 2023 and 2022, respectively.

(3)

Corporate expenses include $4.4 million and $1.8 million of non-cash stock-based compensation for the three-month periods ended September 30, 2023 and 2022, respectively, and $9.8 million and $5.1 million of non-cash stock-based compensation for the nine-month periods ended September 30, 2023 and 2022, respectively.

(4)

Consolidated 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, EBITDA attributable to redeemable noncontrolling interest, acquisitions and dispositions and certain pro-forma cost savings. We use the term consolidated EBITDA because that measure is defined in our 2017 Credit Agreement and 2023 Credit Agreement, 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, EBITDA attributable to redeemable noncontrolling interest, acquisitions and dispositions and certain pro-forma cost savings.

(5)

Free cash flow is defined as consolidated EBITDA less cash paid for income taxes, net interest expense, capital expenditures (less amounts reimbursed by landlord) 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.

Unaudited Financial Results (In thousands)

 

 

Three-Month Period

 

Ended September 30,

 

2023

 

2022

 

% Change

Net revenue

$

274,417

 

 

$

241,014

 

 

 

14

%

Cost of revenue - digital (1)

 

199,289

 

 

 

157,095

 

 

 

27

%

Operating expenses (1)

 

53,809

 

 

 

49,294

 

 

 

9

%

Corporate expenses (1)

 

13,292

 

 

 

9,525

 

 

 

40

%

Depreciation and amortization

 

7,356

 

 

 

6,554

 

 

 

12

%

Change in fair value of contingent consideration

 

(5,997

)

 

 

734

 

 

*

Impairment charge

 

989

 

 

 

 

 

*

Foreign currency (gain) loss

 

548

 

 

 

1,966

 

 

 

(72

)%

Other operating (gain) loss

 

 

 

 

(58

)

 

 

(100

)%

 

 

 

 

 

 

Operating income (loss)

 

5,131

 

 

 

15,904

 

 

 

(68

)%

Interest expense, net

 

(2,896

)

 

 

(2,267

)

 

 

28

%

Dividend income

 

 

 

 

6

 

 

 

(100

)%

Realized gain (loss) on marketable securities

 

(33

)

 

 

(473

)

 

 

(93

)%

 

 

 

 

 

 

Income (loss) before income taxes

 

2,202

 

 

 

13,170

 

 

 

(83

)%

Income tax benefit (expense)

 

530

 

 

 

(4,080

)

 

*

 

 

 

 

 

 

Net income (loss)

 

2,732

 

 

 

9,090

 

 

 

(70

)%

Net (income) loss attributable to redeemable noncontrolling interest

 

(13

)

 

 

 

 

*

Net (income) loss attributable to noncontrolling interest

 

 

 

 

303

 

 

 

(100

)%

Net income (loss) attributable to common stockholders

$

2,719

 

 

$

9,393

 

 

 

(71

)%

(1) Cost of revenue, operating expenses and corporate expenses are defined on page 2.

Net revenue in the third quarter of 2023 totaled $274.4 million, up 14% from $241.0 million in the prior-year period. Of the overall increase, $42.6 million was attributable to our digital segment and was primarily due to advertising revenue growth from our digital commercial partnerships business, and due to various acquisitions, which did not fully contribute to our financial results in our digital segment in the comparable period. The overall increase was partially offset by a decrease of $6.1 million attributable to our television segment, primarily due to decreases in political advertising revenue and national advertising revenue, partially offset by increases in local advertising revenue and spectrum usage rights revenue. In addition, the overall increase was partially offset by a decrease of $3.1 million attributable to our audio segment, primarily due to a decrease in political advertising revenue, and decreases in local and national advertising revenue.

Cost of revenue in the third quarter of 2023 totaled $199.3 million, up 27% from $157.1 million in the prior-year period. The increase was primarily due to increased cost of revenue related to advertising revenue growth from our digital commercial partnerships business, and due to various acquisitions, which did not fully contribute to our financial results in our digital segment in the comparable period.

Operating expenses in the third quarter of 2023 totaled $53.8 million, up 9% from $49.3 million in the prior-year period. Of the overall increase, $4.1 million was attributable to our digital segment and was primarily due to an increase in non-cash stock-based compensation, which is mainly a result of the timing of the 2023 annual restricted stock unit ("RSU") grant to certain employees, which was made in February 2023 compared to the 2022 annual grant, which was made in December 2022, and due to an increase in expenses associated with the increase in digital advertising revenue, an increase in salary expense, and due to various acquisitions, which did not fully contribute to our financial results in our digital segment in the comparable period. In addition, of the overall increase in operating expenses, $0.5 million was attributable to our audio segment primarily due to an increase in non-cash stock-based compensation, which is mainly a result of the 2023 annual RSU grant timing mentioned above, and due to an increase in salaries. The overall increase was partially offset by a decrease of $0.1 million attributable to our television segment.

Corporate expenses in the third quarter of 2023 totaled $13.3 million, up 40% from $9.5 million in the prior-year period. The increase was primarily due to an increase in non-cash stock-based compensation, which is mainly a result of the 2023 annual RSU grant timing mentioned above and RSU grant to our new CEO, and increases in professional service fees.

 

Nine-Month Period

 

Ended September 30,

 

2023

 

2022

 

% Change

Net revenue

$

786,804

 

 

$

659,881

 

 

 

19

%

Cost of revenue - digital (1)

 

562,881

 

 

 

431,951

 

 

 

30

%

Operating expenses (1)

 

163,069

 

 

 

140,527

 

 

 

16

%

Corporate expenses (1)

 

35,836

 

 

 

26,769

 

 

 

34

%

Depreciation and amortization

 

20,336

 

 

 

19,212

 

 

 

6

%

Change in fair value of contingent consideration

 

(8,939

)

 

 

6,810

 

 

*

Impairment charge

 

989

 

 

 

 

 

*

Foreign currency (gain) loss

 

289

 

 

 

2,112

 

 

 

(86

)%

Other operating (gain) loss

 

 

 

 

(1,011

)

 

 

(100

)%

 

 

 

 

 

 

Operating income (loss)

 

12,343

 

 

 

33,511

 

 

 

(63

)%

Interest expense, net

 

(9,333

)

 

 

(5,309

)

 

 

76

%

Dividend income

 

32

 

 

 

20

 

 

 

60

%

Realized gain (loss) on marketable securities

 

(94

)

 

 

(473

)

 

 

(80

)%

Gain (loss) on debt extinguishment

 

(1,556

)

 

 

 

 

*

 

 

 

 

 

 

Income (loss) before income taxes

 

1,392

 

 

 

27,749

 

 

 

(95

)%

Income tax benefit (expense)

 

1,038

 

 

 

(8,305

)

 

*

 

 

 

 

 

 

Net income (loss)

 

2,430

 

 

 

19,444

 

 

 

(88

)%

Net (income) loss attributable to redeemable noncontrolling interest

 

(1

)

 

 

 

 

*

Net (income) loss attributable to noncontrolling interest

 

342

 

 

 

303

 

 

 

13

%

Net income (loss) attributable to common stockholders

$

2,771

 

 

$

19,747

 

 

 

(86

)%

Net revenue for the nine-month period of 2023 totaled $786.8 million, up 19% from $659.9 million in the prior-year period. Of the overall increase, $140.9 million was attributable to our digital segment and was primarily due to advertising revenue growth from our digital commercial partnerships business, and due to various acquisitions, which did not fully contribute to our financial results in our digital segment in the comparable period. The overall increase was partially offset by a decrease of $9.1 million attributable to our television segment, primarily due to decreases in political advertising revenue and national advertising revenue, partially offset by increases in local advertising revenue, spectrum usage rights revenue and retransmission consent revenue. In addition, the overall increase was partially offset by a decrease of $4.9 million attributable to our audio segment, primarily due to a decrease in political advertising revenue, and decreases in local and national advertising revenue.

Cost of revenue for the nine-month period of 2023 totaled $562.9 million, up 30% from $432.0 million in the prior-year period. The increase was due to increased cost of revenue related to advertising revenue growth from our digital commercial partnerships business, and due to various acquisitions, which did not fully contribute to our financial results in our digital segment in the comparable period.

Operating expenses for the nine-month period of 2023 totaled $163.1 million, up 16% from $140.5 million in the prior-year period. Of the overall increase, $18.2 million was attributable to our digital segment and was primarily due to an increase in non-cash stock-based compensation, which is mainly a result of the 2023 annual RSU grant timing mentioned above, and due to an increase in expenses associated with the increase in digital advertising revenue, an increase in salary expense, and due to various acquisitions, which did not fully contribute to our financial results in our digital segment in the comparable period. Additionally, of the overall increase in operating expenses, $0.9 million was attributable to our television segment primarily due to an increase in non-cash stock-based compensation, which is mainly a result of the 2023 annual RSU grant timing mentioned above, partially offset by a decrease in bad debt expense. In addition, of the overall increase in operating expenses, $3.5 million was attributable to our audio segment primarily due to an increase in non-cash stock-based compensation, which is mainly a result of the 2023 annual RSU grant timing mentioned above, and due to an increase in salaries and increased rent expense in the temporary office space until the move to our new permanent offices, which was completed in June 2023.

Corporate expenses for the nine-month period of 2023 totaled $35.8 million, up 34% from $26.8 million in the prior-year period. The increase was primarily due to an increase in non-cash stock-based compensation, which is mainly a result of the 2023 annual RSU grant timing mentioned above and RSU grant to our new CEO, and increases in professional service fees, audit fees and rent expense.

Balance Sheet and Related Metrics

Cash and marketable securities as of September 30, 2023 totaled $128.7 million. Total debt as defined in the Company’s credit agreement was $211.1 million. Net of $50 million of cash and marketable securities, total leverage as defined in the Company’s credit agreement was 2.1 times as of September 30, 2023. Net of total cash and marketable securities, total leverage was 1.1 times.

Unaudited Segment Results (In thousands)

 

 

Three-Month Period

 

Nine-Month Period

 

Ended September 30,

 

Ended September 30,

 

2023

 

2022

 

% Change

 

2023

 

2022

 

% Change

Net Revenue

 

 

 

 

 

 

 

 

 

 

 

Digital

$

231,487

 

$

188,877

 

 

23

%

 

$

657,865

 

$

516,966

 

 

27

%

Television

 

29,552

 

 

 

35,678

 

 

 

(17

)%

 

 

89,807

 

 

 

98,918

 

 

 

(9

)%

Audio

 

13,378

 

 

 

16,459

 

 

 

(19

)%

 

 

39,132

 

 

 

43,997

 

 

 

(11

)%

Total

$

274,417

 

 

$

241,014

 

 

 

14

%

 

$

786,804

 

 

$

659,881

 

 

 

19

%

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Revenue - digital (1)

 

 

 

 

 

 

 

 

 

 

 

Digital

$

199,289

 

 

$

157,095

 

 

 

27

%

 

$

562,881

 

 

$

431,951

 

 

 

30

%

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses (1)

 

 

 

 

 

 

 

 

 

 

 

Digital

 

23,173

 

 

 

19,080

 

 

 

21

%

 

 

69,755

 

 

 

51,577

 

 

 

35

%

Television

 

19,892

 

 

 

20,003

 

 

 

(1

)%

 

 

59,859

 

 

 

58,969

 

 

 

2

%

Audio

 

10,744

 

 

 

10,211

 

 

 

5

%

 

 

33,455

 

 

 

29,981

 

 

 

12

%

Total

$

53,809

 

 

$

49,294

 

 

 

9

%

 

$

163,069

 

 

$

140,527

 

 

 

16

%

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Expenses (1)

$

13,292

 

 

$

9,525

 

 

 

40

%

 

$

35,836

 

 

$

26,769

 

 

 

34

%

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated EBITDA (1)

$

14,185

 

 

$

25,972

 

 

 

(45

)%

 

$

41,420

 

 

$

66,566

 

 

 

(38

)%

(1) Cost of revenue, operating expenses, corporate expenses, and consolidated EBITDA are defined on page 2.

Notice of Conference Call

Entravision Communications Corporation will hold a conference call to discuss its third quarter 2023 results on Thursday, November 2, 2023 at 5:00 p.m. Eastern Time. To access the conference call, please dial (844) 836-8739 (U.S.) or (412) 317-5440 (Int’l) ten minutes prior to the start time and reference Conference ID number 10182461. 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 global advertising solutions, media and technology company. Over the past three decades, we have strategically evolved into a digital powerhouse, expertly connecting brands to consumers in the U.S., Latin America, Europe, Asia and Africa. Our digital segment, the company’s largest by revenue, offers a full suite of end-to-end advertising services in 40 countries. We have commercial partnerships with Meta, X Corp. (formerly known as Twitter), TikTok, and Spotify, and marketers can use our Smadex and other platforms to deliver targeted advertising to audiences around the globe. In the U.S., we maintain a diversified portfolio of television and radio stations that target Hispanic audiences and complement our global digital services. Entravision remains the largest affiliate group of the Univision and UniMás television networks. Shares of Entravision Class A Common Stock trade on the NYSE under ticker: EVC. Learn more about our 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 Statements of Operations

(In thousands, except share and per share data)

(Unaudited)

 

 

 

Three-Month Period

 

Nine-Month Period

 

 

Ended September 30,

 

Ended September 30,

 

 

2023

 

2022

 

2023

 

2022

Net revenue

 

$

274,417

 

 

$

241,014

 

 

$

786,804

 

 

$

659,881

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

Cost of revenue - digital

 

 

199,289

 

 

 

157,095

 

 

 

562,881

 

 

 

431,951

 

Direct operating expenses

 

 

31,855

 

 

 

30,086

 

 

 

94,782

 

 

 

87,505

 

Selling, general and administrative expenses

 

 

21,954

 

 

 

19,208

 

 

 

68,287

 

 

 

53,022

 

Corporate expenses

 

 

13,292

 

 

 

9,525

 

 

 

35,836

 

 

 

26,769

 

Depreciation and amortization

 

 

7,356

 

 

 

6,554

 

 

 

20,336

 

 

 

19,212

 

Change in fair value of contingent consideration

 

 

(5,997

)

 

 

734

 

 

 

(8,939

)

 

 

6,810

 

Impairment charge

 

 

989

 

 

 

 

 

 

989

 

 

 

 

Foreign currency (gain) loss

 

 

548

 

 

 

1,966

 

 

 

289

 

 

 

2,112

 

Other operating (gain) loss

 

 

 

 

 

(58

)

 

 

 

 

 

(1,011

)

 

 

 

269,286

 

 

 

225,110

 

 

 

774,461

 

 

 

626,370

 

Operating income (loss)

 

 

5,131

 

 

 

15,904

 

 

 

12,343

 

 

 

33,511

 

Interest expense

 

 

(4,454

)

 

 

(3,055

)

 

 

(12,788

)

 

 

(7,225

)

Interest income

 

 

1,558

 

 

 

788

 

 

 

3,455

 

 

 

1,916

 

Dividend income

 

 

 

 

 

6

 

 

 

32

 

 

 

20

 

Realized gain (loss) on marketable securities

 

 

(33

)

 

 

(473

)

 

 

(94

)

 

 

(473

)

Gain (loss) on debt extinguishment

 

 

 

 

 

 

 

 

(1,556

)

 

 

 

Income (loss) before income taxes

 

 

2,202

 

 

 

13,170

 

 

 

1,392

 

 

 

27,749

 

Income tax benefit (expense)

 

 

530

 

 

 

(4,080

)

 

 

1,038

 

 

 

(8,305

)

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

2,732

 

 

 

9,090

 

 

 

2,430

 

 

 

19,444

 

Net (income) loss attributable to redeemable noncontrolling interest

 

 

(13

)

 

 

 

 

 

(1

)

 

 

 

Net (income) loss attributable to noncontrolling interest

 

 

 

 

 

303

 

 

 

342

 

 

 

303

 

Net income (loss) attributable to common stockholders

 

$

2,719

 

 

$

9,393

 

 

$

2,771

 

 

$

19,747

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per share:

 

 

 

 

 

 

 

 

Net income (loss) per share attributable to common stockholders, basic and diluted

 

$

0.03

 

 

$

0.11

 

 

$

0.03

 

 

$

0.23

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share, basic and diluted

 

$

0.05

 

 

$

0.03

 

 

$

0.15

 

 

$

0.08

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, basic

 

 

87,995,567

 

 

 

84,945,873

 

 

 

87,803,770

 

 

 

85,469,675

 

Weighted average common shares outstanding, diluted

 

 

89,888,721

 

 

 

87,417,501

 

 

 

89,835,363

 

 

 

87,671,726

 

Entravision Communications Corporation

Consolidated Balance Sheets

(In thousands; unaudited)

 

 

 

September 30,

 

December 31,

 

 

2023

 

2022

ASSETS

 

 

 

 

Current assets

 

 

 

 

Cash and cash equivalents

 

$

110,624

 

 

$

110,691

 

Marketable securities

 

 

18,063

 

 

 

44,528

 

Restricted cash

 

 

765

 

 

 

753

 

Trade receivables, net of allowance for doubtful accounts

 

 

211,175

 

 

 

224,713

 

Assets held for sale

 

 

1,223

 

 

 

 

Prepaid expenses and other current assets

 

 

43,404

 

 

 

27,238

 

Total current assets

 

 

385,254

 

 

 

407,923

 

Property and equipment, net

 

 

67,750

 

 

 

61,362

 

Intangible assets subject to amortization, net

 

 

55,706

 

 

 

61,811

 

Intangible assets not subject to amortization

 

 

207,453

 

 

 

207,453

 

Goodwill

 

 

90,672

 

 

 

86,991

 

Deferred income taxes

 

 

2,591

 

 

 

2,591

 

Operating leases right of use asset

 

 

45,159

 

 

 

44,413

 

Other assets

 

 

21,550

 

 

 

8,297

 

Total assets

 

$

876,135

 

 

$

880,841

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

Current liabilities

 

 

 

 

Current maturities of long-term debt

 

$

8,643

 

 

$

5,256

 

Accounts payable and accrued expenses

 

 

240,417

 

 

 

237,415

 

Operating lease liabilities

 

 

7,150

 

 

 

5,570

 

Total current liabilities

 

 

256,210

 

 

 

248,241

 

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

 

 

201,301

 

 

 

207,292

 

Long-term operating lease liabilities

 

 

46,849

 

 

 

42,151

 

Other long-term liabilities

 

 

17,294

 

 

 

30,198

 

Deferred income taxes

 

 

68,464

 

 

 

67,590

 

Total liabilities

 

 

590,118

 

 

 

595,472

 

 

 

 

 

 

Redeemable noncontrolling interest

 

 

47,301

 

 

 

 

Stockholders' equity

 

 

 

 

Class A common stock

 

 

8

 

 

 

8

 

Class U common stock

 

 

1

 

 

 

1

 

Additional paid-in capital

 

 

742,040

 

 

 

776,298

 

Accumulated deficit

 

 

(501,604

)

 

 

(504,375

)

Accumulated other comprehensive income (loss)

 

 

(1,729

)

 

 

(1,510

)

Total stockholders' equity

 

 

238,716

 

 

 

270,422

 

Noncontrolling interest

 

 

-

 

 

 

14,947

 

Total equity

 

 

238,716

 

 

 

285,369

 

Total liabilities and equity

 

$

876,135

 

 

$

880,841

 

Entravision Communications Corporation

Consolidated Statements of Cash Flows

(In thousands; unaudited)

 

 

 

Three-Month Period

 

Nine-Month Period

 

 

Ended September 30,

 

Ended September 30,

 

 

2023

 

2022

 

2023

 

2022

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income (loss)

 

$

2,732

 

 

$

9,090

 

 

$

2,430

 

 

$

19,444

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

7,356

 

 

 

6,554

 

 

 

20,336

 

 

 

19,212

 

Impairment charge

 

 

989

 

 

 

 

 

 

989

 

 

 

 

Deferred income taxes

 

 

(40

)

 

 

62

 

 

 

(169

)

 

 

(3,151

)

Non-cash interest

 

 

85

 

 

 

365

 

 

 

264

 

 

 

1,076

 

Amortization of syndication contracts

 

 

118

 

 

 

117

 

 

 

358

 

 

 

348

 

Payments on syndication contracts

 

 

(125

)

 

 

(70

)

 

 

(366

)

 

 

(304

)

Non-cash stock-based compensation

 

 

7,032

 

 

 

2,786

 

 

 

17,053

 

 

 

7,995

 

(Gain) loss on marketable securities

 

 

33

 

 

 

473

 

 

 

94

 

 

 

473

 

(Gain) loss on disposal of property and equipment

 

 

(29

)

 

 

39

 

 

 

(11

)

 

 

(599

)

(Gain) loss on debt extinguishment

 

 

 

 

 

 

 

 

1,556

 

 

 

 

Change in fair value of contingent consideration

 

 

(5,997

)

 

 

734

 

 

 

(8,939

)

 

 

6,810

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

(Increase) decrease in accounts receivable

 

 

(1,219

)

 

 

4,708

 

 

 

16,261

 

 

 

22,296

 

(Increase) decrease in prepaid expenses and other current assets, operating leases right of use asset and other assets

 

 

(3,902

)

 

 

1,069

 

 

 

(7,199

)

 

 

(183

)

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

 

 

14,993

 

 

 

(10,691

)

 

 

26,460

 

 

 

4,725

 

Net cash provided by operating activities

 

 

22,026

 

 

 

15,236

 

 

 

69,117

 

 

 

78,142

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Proceeds from sale of property and equipment and intangibles

 

 

33

 

 

 

 

 

 

83

 

 

 

2,671

 

Purchases of property and equipment

 

 

(5,023

)

 

 

(4,673

)

 

 

(19,881

)

 

 

(7,882

)

Purchase of a business, net of cash acquired

 

 

 

 

 

 

 

 

(6,930

)

 

 

 

Investment in variable interest entities, net of cash consolidated

 

 

 

 

 

(5,164

)

 

 

 

 

 

(5,164

)

Purchases of marketable securities

 

 

(1,183

)

 

 

(5,241

)

 

 

(11,355

)

 

 

(92,480

)

Proceeds from sale of marketable securities

 

 

10,000

 

 

 

36,369

 

 

 

38,093

 

 

 

46,868

 

Purchases of investments

 

 

(100

)

 

 

 

 

 

(300

)

 

 

 

Issuance of loan receivable

 

 

(5,550

)

 

 

 

 

 

(13,636

)

 

 

 

Net cash provided by (used in) investing activities

 

 

(1,823

)

 

 

21,291

 

 

 

(13,926

)

 

 

(55,987

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from stock option exercises

 

 

 

 

 

 

 

 

554

 

 

 

218

 

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

 

 

(63

)

 

 

 

 

 

(158

)

 

 

(267

)

Payments on debt

 

 

(1,250

)

 

 

(1,001

)

 

 

(214,495

)

 

 

(2,501

)

Dividends paid

 

 

(4,400

)

 

 

(2,124

)

 

 

(13,182

)

 

 

(6,415

)

Distributions to noncontrolling interest

 

 

 

 

 

 

 

 

(3,380

)

 

 

 

Repurchase of Class A common stock

 

 

 

 

 

 

 

 

 

 

 

(11,280

)

Payment of contingent consideration

 

 

(3,403

)

 

 

(21,734

)

 

 

(35,113

)

 

 

(65,340

)

Principal payments under finance lease obligation

 

 

(37

)

 

 

(33

)

 

 

(113

)

 

 

(72

)

Proceeds from borrowings on debt

 

 

1

 

 

 

 

 

 

212,420

 

 

 

 

Payments for debt issuance costs

 

 

 

 

 

 

 

 

(1,777

)

 

 

 

Net cash used in financing activities

 

 

(9,152

)

 

 

(24,892

)

 

 

(55,244

)

 

 

(85,657

)

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

 

 

(3

)

 

 

5

 

 

 

(2

)

 

 

(1

)

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

 

 

11,048

 

 

 

11,640

 

 

 

(55

)

 

 

(63,503

)

Cash, cash equivalents and restricted cash:

 

 

 

 

 

 

 

 

Beginning

 

 

100,341

 

 

 

110,700

 

 

 

111,444

 

 

 

185,843

 

Ending

 

$

111,389

 

 

$

122,340

 

 

$

111,389

 

 

$

122,340

 

Entravision Communications Corporation

Reconciliation of Consolidated 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,

 

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

 

Consolidated EBITDA (1)

 

$

14,185

 

 

$

25,972

 

 

$

41,420

 

 

$

66,566

 

EBITDA attributable to redeemable noncontrolling interest

 

 

319

 

 

 

 

 

 

736

 

 

 

 

EBITDA attributable to noncontrolling interest

 

 

 

 

 

(5

)

 

 

230

 

 

 

(5

)

Interest expense

 

 

(4,454

)

 

 

(3,055

)

 

 

(12,788

)

 

 

(7,225

)

Interest income

 

 

1,558

 

 

 

788

 

 

 

3,455

 

 

 

1,916

 

Dividend income

 

 

-

 

 

 

6

 

 

 

32

 

 

 

20

 

Realized gain (loss) on marketable securities

 

 

(33

)

 

 

(473

)

 

 

(94

)

 

 

(473

)

Income tax expense

 

 

530

 

 

 

(4,080

)

 

 

1,038

 

 

 

(8,305

)

Amortization of syndication contracts

 

 

(118

)

 

 

(117

)

 

 

(358

)

 

 

(348

)

Payments on syndication contracts

 

 

125

 

 

 

70

 

 

 

366

 

 

 

304

 

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

 

 

(2,637

)

 

 

(981

)

 

 

(7,218

)

 

 

(2,878

)

Non-cash stock-based compensation included in corporate expenses

 

 

(4,395

)

 

 

(1,805

)

 

 

(9,835

)

 

 

(5,117

)

Depreciation and amortization

 

 

(7,356

)

 

 

(6,554

)

 

 

(20,336

)

 

 

(19,212

)

Change in fair value of contingent consideration

 

 

5,997

 

 

 

(734

)

 

 

8,939

 

 

 

(6,810

)

Impairment charge

 

 

(989

)

 

 

 

 

 

(989

)

 

 

 

Non-recurring cash severance charge

 

 

 

 

 

 

 

 

(612

)

 

 

 

Other operating gain (loss)

 

 

 

 

 

58

 

 

 

 

 

 

1,011

 

Gain (loss) on debt extinguishment

 

 

 

 

 

 

 

 

(1,556

)

 

 

 

Net (income) loss attributable to redeemable noncontrolling interest

 

 

(13

)

 

 

 

 

 

(1

)

 

 

 

Net (income) loss attributable to noncontrolling interest

 

 

 

 

 

303

 

 

 

342

 

 

 

303

 

Net income (loss) attributable to common stockholders

 

 

2,719

 

 

 

9,393

 

 

 

2,771

 

 

 

19,747

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

7,356

 

 

 

6,554

 

 

 

20,336

 

 

 

19,212

 

Impairment charge

 

 

989

 

 

 

 

 

 

989

 

 

 

 

Deferred income taxes

 

 

(40

)

 

 

62

 

 

 

(169

)

 

 

(3,151

)

Non-cash interest

 

 

85

 

 

 

365

 

 

 

264

 

 

 

1,076

 

Amortization of syndication contracts

 

 

118

 

 

 

117

 

 

 

358

 

 

 

348

 

Payments on syndication contracts

 

 

(125

)

 

 

(70

)

 

 

(366

)

 

 

(304

)

Non-cash stock-based compensation

 

 

7,032

 

 

 

2,786

 

 

 

17,053

 

 

 

7,995

 

Realized (gain) loss on marketable securities

 

 

33

 

 

 

473

 

 

 

94

 

 

 

473

 

(Gain) loss on debt extinguishment

 

 

 

 

 

 

 

 

1,556

 

 

 

 

(Gain) loss on disposal of property and equipment

 

 

(29

)

 

 

39

 

 

 

(11

)

 

 

(599

)

Change in fair value of contingent consideration

 

 

(5,997

)

 

 

734

 

 

 

(8,939

)

 

 

6,810

 

Net income (loss) attributable to redeemable noncontrolling interest

 

 

13

 

 

 

 

 

 

1

 

 

 

 

Net income (loss) attributable to noncontrolling interest

 

 

 

 

 

(303

)

 

 

(342

)

 

 

(303

)

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

(Increase) decrease in accounts receivable

 

 

(1,219

)

 

 

4,708

 

 

 

16,261

 

 

 

22,296

 

(Increase) decrease in prepaid expenses and other current assets, operating leases right of use asset and other assets

 

 

(3,902

)

 

 

1,069

 

 

 

(7,199

)

 

 

(183

)

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

 

 

14,993

 

 

 

(10,691

)

 

 

26,460

 

 

 

4,725

 

Cash flows from operating activities

 

 

22,026

 

 

 

15,236

 

 

 

69,117

 

 

 

78,142

 

(1)

Consolidated EBITDA is defined on page 2.

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,

 

 

2023

 

2022

 

2023

 

2022

Consolidated EBITDA (1)

 

$

14,185

 

 

$

25,972

 

 

$

41,420

 

 

$

66,566

 

Net interest expense (1)

 

 

(2,811

)

 

 

(1,902

)

 

 

(9,069

)

 

 

(4,233

)

Dividend income

 

 

 

 

 

6

 

 

 

32

 

 

 

20

 

Cash paid for income taxes

 

 

(2,347

)

 

 

(4,018

)

 

 

(5,929

)

 

 

(11,456

)

Capital expenditures (2)

 

 

(5,023

)

 

 

(4,673

)

 

 

(19,881

)

 

 

(7,882

)

Landlord incentive reimbursement

 

 

 

 

 

 

 

 

3,509

 

 

 

 

Non-recurring cash severance charge

 

 

 

 

 

 

 

 

(612

)

 

 

 

Other operating gain (loss)

 

 

 

 

 

58

 

 

 

 

 

 

1,011

 

Free cash flow (1)

 

 

4,004

 

 

 

15,443

 

 

 

9,470

 

 

 

44,026

 

 

 

 

 

 

 

 

 

 

Capital expenditures (2)

 

 

5,023

 

 

 

4,673

 

 

 

19,881

 

 

 

7,882

 

Landlord incentive reimbursement

 

 

 

 

 

 

 

 

(3,509

)

 

 

 

EBITDA attributable to redeemable noncontrolling interest

 

 

319

 

 

 

 

 

 

736

 

 

 

 

EBITDA attributable to noncontrolling interest

 

 

 

 

 

(5

)

 

 

230

 

 

 

(5

)

(Gain) loss on disposal of property and equipment

 

 

(29

)

 

 

39

 

 

 

(11

)

 

 

(599

)

Cash paid for income taxes

 

 

2,347

 

 

 

4,018

 

 

 

5,929

 

 

 

11,456

 

Deferred income taxes

 

 

(40

)

 

 

62

 

 

 

(169

)

 

 

(3,151

)

Income tax (expense) benefit

 

 

530

 

 

 

(4,080

)

 

 

1,038

 

 

 

(8,305

)

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

(Increase) decrease in accounts receivable

 

 

(1,219

)

 

 

4,708

 

 

 

16,261

 

 

 

22,296

 

(Increase) decrease in prepaid expenses and other current assets, operating leases right of use asset and other assets

 

 

(3,902

)

 

 

1,069

 

 

 

(7,199

)

 

 

(183

)

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

 

 

14,993

 

 

 

(10,691

)

 

 

26,460

 

 

 

4,725

 

Cash Flows From Operating Activities

 

$

22,026

 

 

$

15,236

 

 

$

69,117

 

 

$

78,142

 

(1)

Consolidated EBITDA, net interest expense, and free cash flow are defined on page 2.

(2)

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

 

Contacts

Christopher T. Young

Chief Financial Officer and Treasurer

Entravision Communications Corporation

310-447-3870

Kimberly Orlando

ADDO Investor Relations

310-829-5400

evc@addo.com

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