Entravision Communications Corporation (NYSE: EVC) today reported unaudited financial results for the three- and twelve-month periods ended December 31, 2020.

“Entravision capped off a very challenging year with an exceptionally strong fourth quarter,” said Walter F. Ulloa, Chairman and Chief Executive Officer. “In addition to achieving record political revenues in the fourth quarter of 2020, our digital business expanded significantly and was up 424% over the prior-year period due in large part to our acquisition of a majority interest in Cisneros Interactive. Importantly, all three of our business segments grew in the fourth quarter of 2020 compared to the prior year, positioning us well for 2021.”

Mr. Ulloa continued, “This past quarter, as we focused on streamlining our cost structure to maintain the stability of our business, we also made great progress in strengthening our digital segment. In November, we appointed industry veteran and member of our Board of Directors Juan Saldívar as our new Chief Digital, Strategy and Accountability Officer. Juan’s appointment followed a number of strategic moves in 2020 to strengthen our portfolio of digital assets, including both the formation of Entravision Digital and our majority investment in Cisneros Interactive. We will continue to build upon our digital offerings, while also maintaining and strengthening our television and radio segments.”

Unaudited 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 Months Ended

 

Twelve Months Ended

 

December 31,

 

December 31,

 

2020

 

2019

 

% Change

 

2020

 

2019

 

% Change

Net revenue

$

171,683

 

$

70,838

 

142

%

$

344,026

 

$

273,575

 

26

%

Cost of revenue - digital (1)

 

85,326

 

 

10,314

 

727

%

 

106,928

 

 

36,757

 

191

%

Operating expenses (2)

 

45,945

 

 

44,169

 

4

%

 

153,313

 

 

173,377

 

(12

)%

Corporate expenses (3)

 

9,296

 

 

7,887

 

18

%

 

27,807

 

 

28,067

 

(1

)%

Foreign currency (gain) loss

 

(1,725

)

 

(223

)

674

%

 

(1,052

)

 

754

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated adjusted EBITDA (4)

 

32,646

 

 

11,056

 

195

%

 

60,419

 

 

41,209

 

47

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Free cash flow (5)

$

28,641

 

$

4,813

 

495

%

$

43,029

 

$

8,292

 

419

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

22,851

 

$

7,360

 

210

%

$

(1,387

)

$

(19,712

)

(93

)%

Net (income) loss attributable to redeemable noncontrolling interest

$

(2,523

)

$

-

 

*

 

$

(2,523

)

$

-

 

*

 

Net income (loss) attributable to common stockholders

$

20,328

 

$

7,360

 

176

%

$

(3,910

)

$

(19,712

)

(80

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

$

0.24

 

$

0.09

 

167

%

$

(0.05

)

$

(0.23

)

(78

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, basic

 

84,297,592

 

 

84,226,135

 

 

 

 

84,231,212

 

 

85,107,301

 

 

 

Weighted average common shares outstanding, diluted

 

85,985,630

 

 

85,449,374

 

 

 

 

84,231,212

 

 

85,107,301

 

 

 

(1)

Cost of revenue – digital 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 $0.9 million and $0.4 million of non-cash stock-based compensation for the three-month periods ended December 31, 2020 and 2019, respectively, and $1.2 million and $0.7 million of non-cash stock-based compensation for the twelve-month periods ended December 31, 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 $1.9 million and $1.5 million of non-cash stock-based compensation for the three-month periods ended December 31, 2020 and 2019, respectively, and $3.9 million and $3.6 million of non-cash stock-based compensation for the twelve-month periods ended December 31, 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, EBITDA attributable to redeemable noncontrolling interest, 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, EBITDA attributable to redeemable noncontrolling interest, 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

As previously announced by the Company on March 3, 2021, the Company’s 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 March 31, 2021 to shareholders of record as of the close of business on March 16, 2021, and the common stock will trade ex-dividend on March 15, 2021. 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.

Expects to File Form 12b-25 for Extension of Filing Deadline for 2020 Form 10-K

The Company also announced today that it expects to file a notification of late filing on Form 12b-25 with the Securities and Exchange Commission, which provides an automatic 15-day extension of the filing deadline for its Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (the “2020 Form 10-K”), to March 31, 2021. The Company expects to file the 2020 Form 10-K as soon as practicable within the extension period.

Unaudited Financial Results

The financial results included in this press release are unaudited and represent the most current information available to management. The Company’s independent registered public accounting firm has informed the Company that they have not completed their audit procedures as of the date of this press release. During the course of the completion of these audit procedures, items may be identified that would require the Company to make adjustments which could result in material changes to the Company’s unaudited financial results included in this press release. Consequently, the unaudited financial results included in this press release should not be viewed as substitutes for the Company’s audited results that will be included in the Company’s Annual Report on Form 10-K. Unaudited financial results are as follows:

Three-Month Period Ended December 31, 2020 Compared to Three-Month Period Ended December 31, 2019

(Unaudited)

 

 

 

Three Months Ended

 

 

December 31,

 

 

2020

 

2019

 

% Change

Net revenue

 

171,683

 

 

70,838

 

142

%

Cost of revenue - digital (1)

 

85,326

 

 

10,314

 

727

%

Operating expenses (1)

 

45,945

 

 

44,169

 

4

%

Corporate expenses (1)

 

9,296

 

 

7,887

 

18

%

Depreciation and amortization

 

4,963

 

 

4,236

 

17

%

Change in fair value of contingent consideration

 

—

 

 

(4,102

)

(100

)%

Impairment charge

 

200

 

 

654

 

(69

)%

Foreign currency (gain) loss

 

(1,725

)

 

(223

)

674

%

Other operating (gain) loss

 

(1,346

)

 

(829

)

62

%

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

29,024

 

 

8,732

 

232

%

Interest expense, net

 

(1,474

)

 

(2,350

)

(37

)%

Dividend income

 

2

 

 

171

 

(99

)%

Gain (loss) on debt extinguishment

 

—

 

 

(255

)

(100

)%

 

 

 

 

 

 

 

 

 

Income before income taxes

 

27,552

 

 

6,298

 

337

%

 

 

 

 

 

 

 

 

 

Income tax (expense) benefit

 

(4,701

)

 

1,107

 

*

 

 

 

 

 

 

 

 

 

 

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

 

22,851

 

 

7,405

 

209

%

Equity in net income (loss) of nonconsolidated affiliates

 

—

 

 

(45

)

(100

)%

 

 

 

 

 

 

 

 

 

Net income (loss)

 

22,851

 

 

7,360

 

210

%

Net (income) loss attributable to redeemable noncontrolling interest

 

(2,523

)

 

—

 

*

 

Net income (loss) attributable to common stockholders

$

20,328

 

$

7,360

 

176

%

(1)

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

 

Net revenue increased to $171.7 million for the three-month period ended December 31, 2020 from $70.8 million for the three-month period ended December 31, 2019, an increase of approximately $100.9 million. Of the overall increase, approximately $13.6 million was attributable to our television segment and was primarily due to increases in political advertising revenue and an increase in national advertising revenue, partially offset by a decrease in local advertising revenue. The decrease in local advertising revenue was primarily a result of the continuing economic crisis resulting from the COVID-19 pandemic, ratings declines, competitive factors with another Spanish-language broadcaster, 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. Additionally, approximately $84.9 million of the overall increase was attributable to our digital segment and was primarily due to the acquisition of a majority interest in Cisneros Interactive during the fourth quarter of 2020, which did not contribute to net revenue in prior periods, partially offset by a decrease in advertising revenue as a result of declines in pre-acquisition digital revenue, and the continuing economic crisis resulting from the COVID-19 pandemic. We have previously noted a trend in our domestic digital operations whereby revenue is shifting more to programmatic revenue, and this trend is now growing in markets outside the United States. As a result, advertisers are demanding more efficiency and lower cost from intermediaries like us. In response to this trend, we are offering programmatic alternatives to advertisers, which is putting pressure on margins. We expect this trend will continue in future periods, likely resulting in a permanent higher volume, lower margin business in our digital segment. The digital advertising industry remains dynamic and is continuing to undergo rapid changes in technology and competition. We expect this trend to continue and possibly accelerate. We must continue to remain vigilant to meet these dynamic and rapid changes including the need to further adjust our business strategies accordingly. No assurances can be given that such adjustments will be successful. Additionally, approximately $2.3 million of the overall increase was attributable to our radio segment and was primarily due to an increase in political advertising revenue and an increase in national advertising revenue, partially offset by decreases in local advertising revenue. The decrease in local 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. This trend has had a more significant impact on our radio revenue as compared to television revenue, and we expect that this trend will also continue.

Cost of revenue in our digital segment increased to $85.3 million for the three-month period ended December 31, 2020 from $10.3 million for the three-month period ended December 31, 2019, an increase of $75.0 million, primarily due to increased costs of revenue associated with Cisneros Interactive during the fourth quarter of 2020, following its acquisition during the fourth quarter of 2020, which did not incur cost of revenue for us in prior periods.

Operating expenses increased to $45.9 million for the three-month period ended December 31, 2020 from $44.2 million for the three-month period ended December 31, 2019, an increase of $1.7 million. Of the overall increase, approximately $0.7 million was attributable to our television segment and was primarily due to expenses associated with the increase in political and national advertising revenue, partially offset by decreases in salary expense associated with furloughs and layoffs. Additionally, approximately $4.1 million of the overall increase was attributable to our digital segment primarily due to the acquisition of a majority interest in Cisneros Interactive during the fourth quarter of 2020, which did not incur direct operating expenses for us in prior periods, partially offset by decreases in salary expense associated with furloughs and layoffs, and expenses associated with the decrease in advertising revenue as a result of declines in pre-acquisition digital revenue. The overall increase was partially offset by a decrease of approximately $3.1 million attributable to our radio segment and was primarily due to decreases in salary expense associated with furloughs and layoffs, and payroll tax expense.

Corporate expenses increased to $9.3 million for the three-month period ended December 31, 2020 from $7.9 million for the three-month period ended December 31, 2019, an increase of $1.4 million. The increase was primarily due to retroactive restoration and payments of previously reduced salaries to the levels prior to the reduction in salaries due to the COVID-19 pandemic.

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 digital business. As a result, we have operating expense, attributable to foreign currency, that is primarily related to the operations related to our digital business. We had a foreign currency gain of $1.7 million for the three-month period ended December 31, 2020 compared to a foreign currency gain of $0.2 million for the three-month period ended December 31, 2019. Foreign currency gain was primarily due to currency fluctuations that affected our digital segment operations located outside the United States.

Impairment charge related to certain FCC licenses in our radio reporting unit was $0.2 million for the three-month period ended December 31, 2020. Impairment charge related to indefinite life intangible assets in our television and radio reporting units was $0.7 million for the three-month period ended December 31, 2019.

Twelve-Month Period Ended December 31, 2020 Compared to Twelve-Month Period Ended December 31, 2019

(Unaudited)

 

 

 

Twelve Months Ended

 

 

December 31,

 

 

2020

 

2019

 

% Change

Net revenue

 

344,026

 

 

273,575

 

26

%

Cost of revenue - digital (1)

 

106,928

 

 

36,757

 

191

%

Operating expenses (1)

 

153,313

 

 

173,377

 

(12

)%

Corporate expenses (1)

 

27,807

 

 

28,067

 

(1

)%

Depreciation and amortization

 

17,282

 

 

16,648

 

4

%

Change in fair value of contingent consideration

 

—

 

 

(6,478

)

(100

)%

Impairment charge

 

40,035

 

 

32,097

 

25

%

Foreign currency (gain) loss

 

(1,052

)

 

754

 

*

 

Other operating (gain) loss

 

(6,895

)

 

(5,994

)

15

%

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

6,608

 

 

(1,653

)

(500

)%

Interest expense, net

 

(6,517

)

 

(10,330

)

(37

)%

Dividend income

 

28

 

 

918

 

(97

)%

Gain (loss) on debt extinguishment

 

—

 

 

(255

)

(100

)%

 

 

 

 

 

 

 

 

 

Income before income taxes

 

119

 

 

(11,320

)

*

 

Income tax (expense) benefit

 

(1,506

)

 

(8,158

)

(82

)%

 

 

 

 

 

 

 

 

 

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

 

(1,387

)

 

(19,478

)

(93

)%

Equity in net income (loss) of nonconsolidated affiliates

 

—

 

 

(234

)

(100

)%

 

 

 

 

 

 

 

 

 

Net income (loss)

 

(1,387

)

 

(19,712

)

(93

)%

Net (income) loss attributable to redeemable noncontrolling interest

 

(2,523

)

 

—

 

*

 

Net income (loss) attributable to common stockholders

$

(3,910

)

$

(19,712

)

(80

)%

(1)

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

 

Net revenue increased to $344.0 million for the year ended December 31, 2020 from $273.6 million for the year ended December 31, 2019, an increase of approximately $70.4 million. Of the overall increase, approximately $4.8 million was attributable to our television segment and was primarily due to increases in political advertising revenue and retransmission consent revenue, partially offset by decreases in local and national advertising revenue and revenue from spectrum usage rights. 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 another Spanish-language broadcaster, 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. Additionally, approximately $74.4 million of the overall increase was attributable to our digital segment and was primarily due to the acquisition of a majority interest in Cisneros Interactive during the fourth quarter of 2020, which did not contribute to net revenue in prior periods, partially offset by a decrease in advertising revenue as a result of declines in pre-acquisition digital revenue, and the continuing economic crisis resulting from the COVID-19 pandemic. We have previously noted a trend in our domestic digital operations whereby revenue is shifting more to programmatic revenue, and this trend is now growing in markets outside the United States. As a result, advertisers are demanding more efficiency and lower cost from intermediaries like us. In response to this trend, we are offering programmatic alternatives to advertisers, which is putting pressure on margins. We expect this trend will continue in future periods, likely resulting in a permanent higher volume, lower margin business in our digital segment. The digital advertising industry remains dynamic and is continuing to undergo rapid changes in technology and competition. We expect this trend to continue and possibly accelerate. We must continue to remain vigilant to meet these dynamic and rapid changes including the need to further adjust our business strategies accordingly. No assurances can be given that such adjustments will be successful. The overall increase in net revenue was partially offset by a decrease of approximately $8.7 million 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. This trend has had a more significant impact on our radio revenue as compared to television revenue, and we expect that this trend will also continue.

Cost of revenue in our digital segment increased to $106.9 million for the year ended December 31, 2020 from $36.8 million for the year ended December 31, 2019, an increase of $70.1 million, primarily due to increased costs of revenue associated with Cisneros Interactive during the fourth quarter of 2020, following its acquisition during the fourth quarter of 2020, which did not incur cost of revenue for us in prior periods.

Operating expenses decreased to $153.3 million for the year ended December 31, 2020 from $173.4 million for the year ended December 31, 2019, a decrease of approximately $20.1 million. Of the overall decrease, approximately $3.5 million was attributable to our television segment and was primarily due to decreases in salary expense associated with furloughs and layoffs, payroll tax expense and expenses associated with the decrease in local and national advertising revenue. Additionally, approximately $1.7 million of the overall decrease was attributable to our digital segment primarily due to decreases in salary expense associated with furloughs and layoffs, and expenses associated with the decrease in advertising revenue as a result of declines in pre-acquisition digital revenue, partially offset by an increase associated with the acquisition of a majority interest in Cisneros Interactive during the fourth quarter of 2020, which did not incur direct operating expenses for us in prior periods. Additionally, approximately $14.9 million of the overall decrease was attributable to our radio segment and was primarily due to decreases in salary expense associated with furloughs and layoffs, payroll tax expense and expenses associated with the decrease in advertising revenue.

Corporate expenses decreased to $27.8 million for the year ended December 31, 2020 from $28.1 million for the year ended December 31, 2019, a decrease of $0.3 million. The decrease was primarily due to decreases in audit fees, travel and rent expense. These decreases were partially offset by expenses for legal and financial due diligence related to the acquisition of a majority interest in 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 digital business. As a result, we have operating expense, attributable to foreign currency, that is primarily related to the operations related to our digital business. Foreign currency gain was $1.1 million for the year ended December 31, 2020, compared to foreign currency loss of $0.8 million for the year ended December 31, 2019, primarily due to currency fluctuations that affected our digital segment operations located outside the United States.

Impairment charge related to certain FCC licenses in our television and radio reporting units was $23.5 million and $9.0 million, respectively, for the year ended December 31, 2020. Impairment charge related to goodwill in our digital reporting unit was $0.8 million for the year ended December 31, 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 year ended December 31, 2020.

Impairment charge related to goodwill in our digital reporting unit was $27.7 million for the year ended December 31, 2019. Impairment charge related to indefinite life intangible assets in our television and radio reporting units was $4.2 million for the year ended December 31, 2019. We also recorded an impairment charge of $0.2 million for the year ended December 31, 2019 to reflect the fair market value of our assets held for sale.

Segment Results

The following represents selected unaudited segment information:

 

Three Months Ended

 

Twelve Months Ended

 

December 31,

 

December 31,

 

2020

 

2019

 

% Change

 

2020

 

2019

 

% Change

Net Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Television

$

50,516

 

$

36,909

 

37

%

$

154,456

 

$

149,654

3

%

Digital

 

104,950

 

 

20,020

 

424

%

 

143,309

 

 

68,908

108

%

Radio

 

16,217

 

 

13,909

 

17

%

 

46,261

 

 

55,013

(16

)%

Total

$

171,683

 

$

70,838

 

142

%

$

344,026

 

$

273,575

26

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Revenue - Digital (1)

$

85,326

 

$

10,314

 

727

%

$

106,928

 

$

36,757

191

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Television

 

22,422

 

 

21,726

 

3

%

 

80,893

 

 

84,416

(4

)%

Digital

 

12,228

 

 

8,091

 

51

%

 

30,631

 

 

32,261

(5

)%

Radio

 

11,295

 

 

14,352

 

(21

)%

 

41,789

 

 

56,700

(26

)%

Total

$

45,945

 

$

44,169

 

4

%

$

153,313

 

$

173,377

(12

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Expenses (1)

$

9,296

 

$

7,887

 

18

%

$

27,807

 

$

28,067

(1

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency (gain) loss

$

(1,725

)

$

(223

)

674

%

$

(1,052

)

$

754

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated adjusted EBITDA (1)

$

32,646

 

$

11,056

 

195

%

$

60,419

 

$

41,209

47

%

(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 fourth quarter results on March 11, 2021 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 13716833. 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 media, marketing and technology company serving clients throughout the United States and in more than 20 countries across Latin America, Europe, and Asia. Entravision has 54 television stations and is the largest affiliate group of the Univision and UniMás television networks, and 48 Spanish-language radio stations that feature nationally recognized, award-winning talent. Our dynamic digital portfolio includes Entravision Digital, which serves SMBs in high-density U.S. Latino markets and provides cutting-edge mobile programmatic solutions and demand-side platforms that allow advertisers to execute performance campaigns using machine-learned bidding algorithms, along with Cisneros Interactive, a leader in digital advertising solutions in the Latin American and U.S. Hispanic markets representing major technology platforms. 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 media, marketing 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.

Entravision Communications Corporation

Consolidated Balance Sheets

(In thousands; unaudited)

 

 

 

December 31,

 

December 31,

 

 

2020

 

2019

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

$

119,162

 

$

33,123

 

Marketable securities

 

27,988

 

 

91,662

 

Restricted Cash

 

749

 

 

734

 

Trade receivables, net of allowance for doubtful accounts

 

141,963

 

 

71,406

 

Assets held for sale

 

2,141

 

 

950

 

Prepaid expenses and other current assets

 

15,557

 

 

11,557

 

Total current assets

 

307,560

 

 

209,432

 

Property and equipment, net

 

72,004

 

 

79,642

 

Intangible assets subject to amortization, net

 

49,412

 

 

16,772

 

Intangible assets not subject to amortization

 

216,653

 

 

252,544

 

Goodwill

 

57,849

 

 

46,511

 

Operating leases right of use asset

 

33,525

 

 

43,837

 

Other assets

 

7,643

 

 

7,462

 

Total assets

$

744,646

 

$

656,200

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Current maturities of long-term debt

$

3,000

 

$

3,000

 

Accounts payable and accrued expenses

 

124,150

 

 

53,931

 

Operating lease liabilities

 

7,290

 

 

9,056

 

Total current liabilities

 

134,440

 

 

65,987

 

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

 

210,454

 

 

213,024

 

Long-term operating lease liabilities

 

31,775

 

 

41,387

 

Other long-term liabilities

 

3,732

 

 

3,371

 

Deferred income taxes

 

54,980

 

 

44,259

 

Total liabilities

 

435,381

 

 

368,028

 

 

 

 

 

 

 

 

Redeemable noncontrolling interest

 

33,285

 

 

—

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

Class A common stock

 

6

 

 

6

 

Class B common stock

 

2

 

 

2

 

Class U common stock

 

1

 

 

1

 

Additional paid-in capital

 

828,813

 

 

836,170

 

Accumulated deficit

 

(551,786

)

 

(547,876

)

Accumulated other comprehensive income (loss)

 

(1,056

)

 

(131

)

Total stockholders' equity

 

275,980

 

 

288,172

 

Total liabilities and stockholders' equity

$

744,646

 

$

656,200

 

 

Entravision Communications Corporation

Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)

 

 

 

Three-Month Period

 

Twelve-Month Period

 

 

Ended December 31,

 

Ended December 31,

 

 

2020

 

2019

 

2020

 

2019

Net revenue

$

171,683

 

$

70,838

 

$

344,026

 

$

273,575

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue - digital

 

85,326

 

 

10,314

 

 

106,928

 

 

36,757

 

Direct operating expenses

 

31,912

 

 

30,020

 

 

104,909

 

 

119,412

 

Selling, general and administrative expenses

 

14,033

 

 

14,149

 

 

48,404

 

 

53,965

 

Corporate expenses

 

9,296

 

 

7,887

 

 

27,807

 

 

28,067

 

Depreciation and amortization

 

4,963

 

 

4,236

 

 

17,282

 

 

16,648

 

Change in fair value of contingent consideration

 

—

 

 

(4,102

)

 

—

 

 

(6,478

)

Impairment charge

 

200

 

 

654

 

 

40,035

 

 

32,097

 

Foreign currency (gain) loss

 

(1,725

)

 

(223

)

 

(1,052

)

 

754

 

Other operating (gain) loss

 

(1,346

)

 

(829

)

 

(6,895

)

 

(5,994

)

 

 

142,659

 

 

62,106

 

 

337,418

 

 

275,228

 

Operating income (loss)

 

29,024

 

 

8,732

 

 

6,608

 

 

(1,653

)

Interest expense

 

(1,592

)

 

(3,102

)

 

(8,265

)

 

(13,683

)

Interest income

 

118

 

 

752

 

 

1,748

 

 

3,353

 

Dividend income

 

2

 

 

171

 

 

28

 

 

918

 

Gain (loss) on debt extinguishment

 

—

 

 

(255

)

 

—

 

 

(255

)

Income before income taxes

 

27,552

 

 

6,298

 

 

119

 

 

(11,320

)

Income tax (expense) benefit

 

(4,701

)

 

1,107

 

 

(1,506

)

 

(8,158

)

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

22,851

 

 

7,405

 

 

(1,387

)

 

(19,478

)

Equity in net income (loss) of nonconsolidated affiliate

 

—

 

 

(45

)

 

—

 

 

(234

)

Net income (loss)

 

22,851

 

 

7,360

 

 

(1,387

)

 

(19,712

)

Net (income) loss attributable to redeemable noncontrolling interest

 

(2,523

)

 

—

 

 

(2,523

)

 

—

 

Net income (loss) attributable to common stockholders

$

20,328

 

$

7,360

 

$

(3,910

)

$

(19,712

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

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

$

0.24

 

$

0.09

 

$

(0.05

)

$

(0.23

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share, basic and diluted

$

0.03

 

$

0.05

 

$

0.13

 

$

0.20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, basic

 

84,297,592

 

 

84,226,135

 

 

84,231,212

 

 

85,107,301

 

Weighted average common shares outstanding, diluted

 

85,985,630

 

 

85,449,374

 

 

84,231,212

 

 

85,107,301

 

 

Entravision Communications Corporation

Consolidated Statements of Cash Flows

(In thousands; unaudited)

 

 

 

Three-Month Period

 

Twelve-Month Period

 

 

Ended December 31,

 

Ended December 31,

 

 

2020

 

2019

 

2020

 

2019

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

22,851

 

$

7,360

 

$

(1,387

)

$

(19,712

)

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

4,963

 

 

4,236

 

 

17,282

 

 

16,648

 

Impairment charge

 

200

 

 

654

 

 

40,035

 

 

32,097

 

Deferred income taxes

 

2,519

 

 

(1,630

)

 

(6,225

)

 

5,311

 

Non-cash interest

 

158

 

 

166

 

 

649

 

 

881

 

Amortization of syndication contracts

 

121

 

 

131

 

 

504

 

 

505

 

Payments on syndication contracts

 

(133

)

 

(124

)

 

(458

)

 

(543

)

Equity in net (income) loss of nonconsolidated affiliate

 

—

 

 

45

 

 

—

 

 

234

 

Non-cash stock-based compensation

 

2,717

 

 

1,923

 

 

5,125

 

 

4,377

 

(Gain) loss on disposal of property and equipment

 

36

 

 

—

 

 

(731

)

 

158

 

(Gain) loss on debt extinguishment

 

—

 

 

255

 

 

—

 

 

255

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

(Increase) decrease in trade receivables, net

 

(41,424

)

 

(2,093

)

 

(27,139

)

 

8,610

 

(Increase) decrease in prepaid expenses and other current assets

 

6,110

 

 

2,946

 

 

12,823

 

 

2,102

 

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

 

39,614

 

 

(5,816

)

 

22,971

 

 

(19,384

)

Net cash provided by operating activities

 

37,732

 

 

8,053

 

 

63,449

 

 

31,539

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from sale of property and equipment and intangibles

 

—

 

 

—

 

 

5,089

 

 

—

 

Purchases of property and equipment

 

(1,319

)

 

(4,101

)

 

(9,060

)

 

(25,283

)

Purchases of intangibles

 

—

 

 

(2,300

)

 

(158

)

 

(2,300

)

Purchase of a businesses, net of cash acquired

 

(21,261

)

 

—

 

 

(21,261

)

 

—

 

Purchases of marketable securities

 

—

 

 

—

 

 

—

 

 

(1,400

)

Proceeds from marketable securities

 

25,000

 

 

15,766

 

 

63,480

 

 

43,647

 

Purchases of investments

 

—

 

 

—

 

 

—

 

 

(300

)

Deposits on acquisition

 

—

 

 

147

 

 

—

 

 

—

 

Net cash provided by (used in) investing activities

 

2,420

 

 

9,512

 

 

38,090

 

 

14,364

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

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

 

(1,411

)

 

(915

)

 

(1,426

)

 

(1,688

)

Payments on long-term debt

 

(750

)

 

(25,750

)

 

(3,000

)

 

(28,000

)

Dividends paid

 

(2,103

)

 

(4,195

)

 

(10,531

)

 

(16,962

)

Repurchase of Class A common stock

 

—

 

 

(2,208

)

 

(525

)

 

(12,565

)

Payments of capitalized debt offering and issuance costs

 

—

 

 

—

 

 

—

 

 

(225

)

Net cash used in financing activities

 

(4,264

)

 

(33,068

)

 

(15,482

)

 

(59,440

)

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

 

4

 

 

(79

)

 

(3

)

 

(71

)

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

 

35,892

 

 

(15,582

)

 

86,054

 

 

(13,608

)

Cash, cash equivalents and restricted cash:

 

 

 

 

 

 

 

 

 

 

 

 

Beginning

 

84,019

 

 

49,439

 

 

33,857

 

 

47,465

 

Ending

$

119,911

 

$

33,857

 

$

119,911

 

$

33,857

 

 

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

 

Twelve-Month Period

 

Ended December 31,

 

Ended December 31,

 

2020

 

2019

 

2020

 

2019

Consolidated adjusted EBITDA (1)

$

32,646

 

$

11,056

 

$

60,419

 

$

41,209

 

EBITDA attributable to redeemable noncontrolling interest

 

3,436

 

 

—

 

 

3,436

 

 

—

 

Interest expense

 

(1,592

)

 

(3,102

)

 

(8,265

)

 

(13,683

)

Interest income

 

118

 

 

752

 

 

1,748

 

 

3,353

 

Gain (loss) on debt extinguishment

 

—

 

 

(255

)

 

—

 

 

(255

)

Income tax (expense) benefit

 

(4,701

)

 

1,107

 

 

(1,506

)

 

(8,158

)

Amortization of syndication contracts

 

(121

)

 

(131

)

 

(504

)

 

(505

)

Payments on syndication contracts

 

133

 

 

124

 

 

458

 

 

543

 

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

 

(865

)

 

(408

)

 

(1,247

)

 

(732

)

Non-cash stock-based compensation included in corporate expenses

 

(1,852

)

 

(1,515

)

 

(3,878

)

 

(3,645

)

Depreciation and amortization

 

(4,963

)

 

(4,236

)

 

(17,282

)

 

(16,648

)

Change in fair value of contingent consideration

 

—

 

 

4,102

 

 

—

 

 

6,478

 

Non-recurring severance charge

 

(536

)

 

(435

)

 

(1,654

)

 

(2,250

)

Dividend income

 

2

 

 

171

 

 

28

 

 

918

 

Other income (loss)

 

1,346

 

 

829

 

 

6,895

 

 

5,994

 

Impairment charge

 

(200

)

 

(654

)

 

(40,035

)

 

(32,097

)

Equity in net income (loss) of nonconsolidated affiliates

 

—

 

 

(45

)

 

—

 

 

(234

)

Net (income) loss attributable to redeemable noncontrolling interest

 

(2,523

)

 

—

 

 

(2,523

)

 

—

 

Net income (loss) attributable to common stockholders

 

20,328

 

 

7,360

 

 

(3,910

)

 

(19,712

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

4,963

 

 

4,236

 

 

17,282

 

 

16,648

 

Impairment charge

 

200

 

 

654

 

 

40,035

 

 

32,097

 

Deferred income taxes

 

2,519

 

 

(1,630

)

 

(6,225

)

 

5,311

 

Amortization of debt issuance costs

 

158

 

 

166

 

 

649

 

 

881

 

Amortization of syndication contracts

 

121

 

 

131

 

 

504

 

 

505

 

Payments on syndication contracts

 

(133

)

 

(124

)

 

(458

)

 

(543

)

Equity in net (income) loss of nonconsolidated affiliate

 

—

 

 

45

 

 

—

 

 

234

 

Non-cash stock-based compensation

 

2,717

 

 

1,923

 

 

5,125

 

 

4,377

 

(Gain) loss on disposal of property and equipment

 

36

 

 

—

 

 

(731

)

 

158

 

(Gain) loss on debt extinguishment

 

—

 

 

255

 

 

—

 

 

255

 

Net (income) loss attributable to redeemable noncontrolling interest

 

2,523

 

 

—

 

 

2,523

 

 

—

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

(Increase) decrease in accounts receivable

 

(41,424

)

 

(2,093

)

 

(27,139

)

 

8,610

 

(Increase) decrease in prepaid expenses and other assets

 

6,110

 

 

2,946

 

 

12,823

 

 

2,102

 

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

 

39,614

 

 

(5,816

)

 

22,971

 

 

(19,384

)

Net cash provided by (used in) operating activities

$

37,732

 

$

8,053

 

$

63,449

 

$

31,539

 

(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

 

Twelve-Month Period

 

Ended December 31,

 

Ended December 31,

 

2020

 

2019

 

2020

 

2019

Consolidated adjusted EBITDA (1)

$

32,646

 

$

11,056

 

$

60,419

 

$

41,209

 

Net, cash interest expense (1)

 

(1,316

)

 

(2,184

)

 

(5,868

)

 

(9,449

)

Dividend income

 

2

 

 

171

 

 

28

 

 

918

 

Cash paid for income taxes

 

(2,182

)

 

(523

)

 

(7,731

)

 

(2,847

)

Capital expenditures (2)

 

(1,319

)

 

(4,101

)

 

(9,060

)

 

(25,283

)

FCC reimbursement

 

1,346

 

 

829

 

 

6,895

 

 

5,994

 

Non-recurring cash severance charge

 

(536

)

 

(435

)

 

(1,654

)

 

(2,250

)

Free cash flow (1)

 

28,641

 

 

4,813

 

 

43,029

 

 

8,292

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures (2)

 

1,319

 

 

4,101

 

 

9,060

 

 

25,283

 

EBITDA attributable to redeemable noncontrolling interest

 

3,436

 

 

—

 

 

3,436

 

 

—

 

Change in fair value of contingent consideration

 

—

 

 

4,102

 

 

—

 

 

6,478

 

(Gain) loss on disposal of property and equipment

 

36

 

 

—

 

 

(731

)

 

158

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

(Increase) decrease in accounts receivable

 

(41,424

)

 

(2,093

)

 

(27,139

)

 

8,610

 

(Increase) decrease in prepaid expenses and other assets

 

6,110

 

 

2,946

 

 

12,823

 

 

2,102

 

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

 

39,614

 

 

(5,816

)

 

22,971

 

 

(19,384

)

Cash Flows From Operating Activities

$

37,732

 

$

8,053

 

$

63,449

 

$

31,539

 

(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.