8-K
Entravision Communications Corp (EVC)
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported): November 04, 2021 |
|---|
ENTRAVISION COMMUNICATIONS CORPORATION
(Exact name of Registrant as Specified in Its Charter)
| Delaware | 001-15997 | 95-4783236 |
|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission File Number) | (IRS Employer<br>Identification No.) |
| 2425 Olympic Boulevard<br><br>Suite 6000 West | ||
| Santa Monica, California | 90404 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
| Registrant’s Telephone Number, Including Area Code: 310 447-3870 | ||
| --- |
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Class A Common Stock | EVC | The New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On November 4, 2021, Entravision Communications Corporation (the “Company”) issued a press release announcing its results of operations for the three-month period ended September 30, 2021. A copy of that press release is furnished herewith as Exhibit 99.1.
The information provided pursuant to Item 2.02 in this Current Report on Form 8-K, including the exhibit thereto, is being furnished under Item 2.02 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed to be incorporated by reference into any future registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, regardless of the general incorporation language of such filing, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| 99.1 | Press release issued by Entravision Communications Corporation on November 4, 2021 announcing its results of operations for the three-month period ended September 30, 2021. |
|---|---|
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
- 2 -
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ENTRAVISION COMMUNICATIONS CORPORATION | ||
|---|---|---|
| Date: November 4, 2021 | By: | /s/ Walter F. Ulloa |
| Walter F. Ulloa | ||
| Chairman and Chief Executive Officer |
3 -
EX-99.1
Entravision Communications
Page 1 of 11
Exhibit 99.1
ENTRAVISION COMMUNICATIONS CORPORATION REPORTS
THIRD QUARTER 2021 RESULTS
SANTA MONICA, CALIFORNIA, November 4, 2021 – Entravision Communications Corporation (NYSE: EVC), a leading global media, marketing and technology company, today announced financial results for the three- and nine-month periods ended September 30, 2021.
Third Quarter 2021 Highlights
Net revenue up 216% over the prior-year period
Net income attributable to common stockholders up 35% over the prior-year period
Consolidated Adjusted EBITDA up 42% over the prior-year period
Operating cash flow up 50% over the prior-year period
Free cash flow up 112% over the prior-year period
Acquisition of Cisneros Interactive's remaining 49% (now wholly-owned)
Acquisition of MediaDonuts, marking entry into Southeast Asia
Quarterly cash dividend of $0.025 per share
Acquisition of 365 Digital, marking entry into Africa
“Entravision reported very strong results for the third quarter, with revenue improving 216% and adjusted EBITDA increasing by 42% over the prior-year period,” said Walter F. Ulloa, Chairman and Chief Executive Officer. “Thanks to the exceptional work of our entire team, we saw growth in core revenue across each of our business segments, with digital, in particular, making a significant contribution to our overall performance and now comprising 73% of total revenue.”
Mr. Ulloa continued, “During the quarter, we continued to strengthen our digital segment, both organically and through acquisitions. At the end of August, we acquired the remaining 49 percent of Cisneros Interactive, which is now wholly-owned by us, expanding our reach in Latin America. Prior to that, in July, we acquired MediaDonuts, marking our entry into Southeast Asia. Finally, just today, we announced the acquisition of 365 Digital, a digital marketing solutions agency in South Africa and marking our entry into Africa. Our digital operations now have a presence on five continents. These acquisitions will serve us favorably as we expand our client base and geographic footprint. We are evolving our business to meet the demands of our clients while generating value for all of our stakeholders as we build a company that is truly a digital media powerhouse."
Acquisition of 365 Digital
The Company announced today in a separate press release that, on November 1, 2021, it acquired 100% of the issued and outstanding shares of stock of 365 Digital Media (Pty) Ltd, a digital marketing solutions agency headquartered in South Africa, marking the Company's entry into Africa, and bringing the Company's digital presence to five continents. The transaction, funded from the Company’s cash on hand, includes a purchase price of approximately $1.9 million in cash, and earn-out payments based upon the achievement of certain EBITDA targets in calendar years 2022, 2023 and 2024, calculated as a pre-determined multiple of EBITDA for each of those years.
Quarterly Cash Dividend
The Company also 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, 2021 to shareholders of record as of the close of business on December 16, 2021, and the common stock will trade ex-dividend on December 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.
Entravision Communications
Page 2 of 11
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
| Three-Month Period | Nine-Month Period | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Ended September 30, | Ended September 30, | |||||||||||||||||
| 2021 | 2020 | % Change | 2021 | 2020 | % Change | |||||||||||||
| Net revenue | $ | 199,008 | $ | 62,978 | 216 | % | $ | 526,298 | $ | 172,343 | 205 | % | ||||||
| Cost of revenue - digital (1) | 124,332 | 7,808 | * | 318,118 | 21,602 | * | ||||||||||||
| Operating expenses (2) | 43,113 | 34,061 | 27 | % | 124,969 | 107,368 | 16 | % | ||||||||||
| Corporate expenses (3) | 7,253 | 6,287 | 15 | % | 21,756 | 18,511 | 18 | % | ||||||||||
| Foreign currency (gain) loss | 177 | (680 | ) | * | 454 | 673 | (33 | )% | ||||||||||
| Consolidated adjusted EBITDA (4) | 23,195 | 16,371 | 42 | % | 55,177 | 27,773 | 99 | % | ||||||||||
| Free cash flow (5) | $ | 22,382 | $ | 10,567 | 112 | % | $ | 47,831 | $ | 14,388 | 232 | % | ||||||
| Net income (loss) | $ | 13,884 | $ | 9,016 | 54 | % | $ | 31,362 | $ | (24,238 | ) | * | ||||||
| Net (income) loss attributable to redeemable noncontrolling interest | $ | (1,753 | ) | $ | - | * | $ | (5,938 | ) | $ | - | * | ||||||
| Net income (loss) attributable to common stockholders | $ | 12,131 | $ | 9,016 | 35 | % | $ | 25,424 | $ | (24,238 | ) | * | ||||||
| Net income (loss) per share attributable to common stockholders, basic | $ | 0.14 | $ | 0.11 | 27 | % | $ | 0.30 | $ | (0.29 | ) | * | ||||||
| Net income (loss) per share attributable to common stockholders, diluted | $ | 0.14 | $ | 0.11 | 27 | % | $ | 0.29 | $ | (0.29 | ) | * | ||||||
| Weighted average common shares outstanding, basic | 85,390,333 | 84,185,728 | 85,207,992 | 84,208,924 | ||||||||||||||
| Weighted average common shares outstanding, diluted | 88,315,732 | 84,863,020 | 87,694,395 | 84,208,924 |
(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 includes direct operating and selling, general and administrative expenses. Included in operating expenses are $0.3 million and $0.1 million of non-cash stock-based compensation for the three-month periods ended September 30, 2021 and 2020, respectively, and $1.0 million and $0.4 million of non-cash stock-based compensation for the nine-month periods ended September 30, 2021 and 2020, respectively.
(3) Corporate expenses include $0.8 million and $0.7 million of non-cash stock-based compensation for the three-month periods ended September 30, 2021 and 2020, respectively, and $2.3 million and $2.0 million of non-cash stock-based compensation for the nine-month periods ended September 30, 2021 and 2020, 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.
Entravision Communications
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Unaudited Financial Results
| Three-Month Period | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Ended September 30, | |||||||||
| 2021 | 2020 | % Change | |||||||
| Net revenue | $ | 199,008 | $ | 62,978 | 216 | % | |||
| Cost of revenue - digital (1) | 124,332 | 7,808 | * | ||||||
| Operating expenses (1) | 43,113 | 34,061 | 27 | % | |||||
| Corporate expenses (1) | 7,253 | 6,287 | 15 | % | |||||
| Depreciation and amortization | 5,901 | 3,934 | 50 | % | |||||
| Impairment charge | 166 | - | * | ||||||
| Foreign currency (gain) loss | 177 | (680 | ) | * | |||||
| Other operating (gain) loss | (2,431 | ) | (2,683 | ) | (9 | )% | |||
| Operating income (loss) | 20,497 | 14,251 | 44 | % | |||||
| Interest expense, net | (1,702 | ) | (1,502 | ) | 13 | % | |||
| Dividend income | 207 | 3 | * | ||||||
| Income (loss) before income taxes | 19,002 | 12,752 | 49 | % | |||||
| Income tax benefit (expense) | (5,118 | ) | (3,736 | ) | 37 | % | |||
| Net income (loss) | 13,884 | 9,016 | 54 | % | |||||
| Net (income) loss attributable to redeemable noncontrolling interest | (1,753 | ) | - | * | |||||
| Net income (loss) attributable to common stockholders | $ | 12,131 | $ | 9,016 | 35 | % |
(1) Cost of revenue, operating expenses and corporate expenses are defined on page 2.
Net revenue in the third quarter of 2021 totaled $199.0 million, up 216% from $63.0 million in the prior-year period. Of the overall increase, approximately $132.4 million was attributable to our digital segment and was primarily due to advertising revenue resulting from our acquisition of a majority interest in Cisneros Interactive during the fourth quarter of 2020, which became fully-owned during the third quarter of 2021, and advertising revenue resulting from our acquisition of MediaDonuts during the third quarter of 2021. In addition, of the overall increase, approximately $4.9 million was attributable to our radio segment, primarily due to increases in local and national advertising revenue, partially offset by a decrease in political revenue. The overall increase was partially offset by a decrease of approximately $1.3 million that was attributable to our television segment primarily due to decreases in political revenue and revenue from spectrum usage rights, partially offset by increases in local and national advertising revenue.
Cost of revenue in the third quarter of 2021 totaled $124.3 million compared to $7.8 million in the prior-year period. The increase was primarily due to increased costs of revenue following our acquisition of a majority interest in Cisneros Interactive during the fourth quarter of 2020, which became wholly-owned during the third quarter of 2021, and our acquisition of MediaDonuts during the third quarter of 2021.
Operating expenses in the third quarter of 2021 totaled $43.1 million, up 27% from $34.1 million in the prior-year period. The increase was primarily due to our acquisition of a majority interest in Cisneros Interactive during the fourth quarter of 2020, which became fully-owned during the third quarter of 2021, and our acquisition of MediaDonuts during the third quarter of 2021, and due to an increase in expenses associated with the increase in advertising revenue, partially offset by a decrease in salary expense associated with furloughs and layoffs that occurred in 2020 because of the COVID-19 pandemic.
Corporate expenses in the third quarter of 2021 totaled $7.3 million, up 15% from $6.3 million in the prior-year period. The increase was primarily due to an increase in salaries and non-cash stock-based compensation expense.
Entravision Communications
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| Nine-Month Period | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Ended September 30, | |||||||||
| 2021 | 2020 | % Change | |||||||
| Net revenue | $ | 526,298 | $ | 172,343 | 205 | % | |||
| Cost of revenue - digital (1) | 318,118 | 21,602 | * | ||||||
| Operating expenses (1) | 124,969 | 107,368 | 16 | % | |||||
| Corporate expenses (1) | 21,756 | 18,511 | 18 | % | |||||
| Depreciation and amortization | 16,159 | 12,319 | 31 | % | |||||
| Impairment charge | 1,604 | 39,835 | (96 | )% | |||||
| Foreign currency (gain) loss | 454 | 673 | (33 | )% | |||||
| Other operating (gain) loss | (4,867 | ) | (5,549 | ) | (12 | )% | |||
| Operating income (loss) | 48,105 | (22,416 | ) | * | |||||
| Interest expense, net | (5,052 | ) | (5,043 | ) | 0 | % | |||
| Dividend income | 211 | 26 | 712 | % | |||||
| Income (loss) before income taxes | 43,264 | (27,433 | ) | * | |||||
| Income tax benefit (expense) | (11,902 | ) | 3,195 | * | |||||
| Net income (loss) | 31,362 | (24,238 | ) | * | |||||
| Net (income) loss attributable to redeemable noncontrolling interest | (5,938 | ) | - | * | |||||
| Net income (loss) attributable to common stockholders | $ | 25,424 | $ | (24,238 | ) | * |
(1) Cost of revenue, operating expenses and corporate expenses are defined on page 2.
Net revenue for the nine-month period of 2021 totaled $526.3 million, up 205% from $172.3 million in the prior-year period. Of the overall increase, approximately $339.4 million was attributable to our digital segment and was primarily due to advertising revenue resulting from our acquisition of a majority interest in Cisneros Interactive during the fourth quarter of 2020, which became fully-owned during the third quarter of 2021, and advertising revenue resulting from our acquisition of MediaDonuts during the third quarter of 2021. In addition, of the overall increase, approximately $2.7 million was attributable to our television segment, primarily due to increases in local and national advertising revenue, and revenue from spectrum usage rights, partially offset by a decrease in political revenue. Additionally, of the overall increase, approximately $11.8 million was attributable to our radio segment primarily due to increases in local and national advertising revenue, partially offset by a decrease in political revenue.
Cost of revenue for the nine-month period of 2021 totaled $318.1 million compared to $21.6 million in the prior-year period. The increase was primarily due to increased costs of revenue following our acquisition of a majority interest in Cisneros Interactive during the fourth quarter of 2020, which became wholly-owned during the third quarter of 2021, and our acquisition of MediaDonuts during the third quarter of 2021.
Operating expenses for the nine-month period of 2021 totaled $125.0 million, up 16% from $107.4 million in the prior-year period. The increase was primarily due to our acquisition of a majority interest in Cisneros Interactive during the fourth quarter of 2020, which became fully-owned during the third quarter of 2021, and our acquisition of MediaDonuts during the third quarter of 2021, and due to an increase in expenses associated with the increase in advertising revenue, partially offset by decreases in bad debt and salary expense associated with furloughs and layoffs that occurred in 2020 because of the COVID-19 pandemic.
Corporate expenses for the nine-month period of 2021 totaled $21.8 million, up 18% from $18.5 million in the prior-year period. The increase was primarily due to an increase in salaries and audit fees.
Balance Sheet and Related Metrics
Cash and marketable securities as of September 30, 2021 totaled approximately $182.9 million. Total debt was $213.0 million. Net of $75 million of cash and marketable securities, total leverage as defined in the Company’s credit agreement was 1.6 times as of September 30, 2021. Net of total accessible cash and marketable securities, total leverage was 0.3 times.
Entravision Communications
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Unaudited Segment Results
| Three-Month Period | Nine-Month Period | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Ended September 30, | Ended September 30, | |||||||||||||
| 2021 | 2020 | % Change | 2021 | 2020 | % Change | |||||||||
| Net Revenue | ||||||||||||||
| Digital | $ | 146,121 | $ | 13,655 | 970 | % | $ | 377,826 | $ | 38,359 | 885 | % | ||
| Television | 36,450 | 37,786 | (4 | )% | 106,598 | 103,940 | 3 | % | ||||||
| Radio | 16,437 | 11,537 | 42 | % | 41,874 | 30,044 | 39 | % | ||||||
| Total | $ | 199,008 | $ | 62,978 | 216 | % | $ | 526,298 | $ | 172,343 | 205 | % | ||
| Cost of Revenue - digital (1) | ||||||||||||||
| Digital | $ | 124,332 | $ | 7,808 | * | $ | 318,118 | $ | 21,602 | * | ||||
| Operating Expenses (1) | ||||||||||||||
| Digital | 13,187 | 5,383 | 145 | % | 36,064 | 18,403 | 96 | % | ||||||
| Television | 20,148 | 18,978 | 6 | % | 59,548 | 58,471 | 2 | % | ||||||
| Radio | 9,778 | 9,700 | 1 | % | 29,357 | 30,494 | (4 | )% | ||||||
| Total | $ | 43,113 | $ | 34,061 | 27 | % | $ | 124,969 | $ | 107,368 | 16 | % | ||
| Corporate Expenses (1) | $ | 7,253 | $ | 6,287 | 15 | % | $ | 21,756 | $ | 18,511 | 18 | % | ||
| Consolidated adjusted EBITDA (1) | $ | 23,195 | $ | 16,371 | 42 | % | $ | 55,177 | $ | 27,773 | 99 | % |
(1) Cost of revenue, operating expenses, corporate expenses, and consolidated adjusted EBITDA are defined on page 2.
Notice of Conference Call
Entravision Communications Corporation will hold a conference call to discuss its third quarter 2021 results on Thursday, November 4, 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 13723009. 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 fast growing population centers in more than 30 countries across Latin America, Europe, Asia and Africa. Our dynamic portfolio of services includes digital, television and radio offerings. Digital, our largest revenue segment, is comprised of five core businesses: Entravision Digital, Smadex, Cisneros Interactive, MediaDonuts, and 365 Digital. Entravision Digital provides branding and performance digital solutions to clients and small- and mid-size businesses throughout the world, including the U.S., Latin America and Europe. Smadex provides cutting-edge mobile programmatic solutions and demand-side platforms which enable advertisers to effectively execute performance campaigns using machine-learned bidding algorithms. Cisneros Interactive provides unique digital marketing solutions representing major global publishers and ad-tech platforms in Latin America, while also managing the leading digital audio network and solutions player Audio.Ad. MediaDonuts provides digital marketing performance and branding services in the Southeast Asia region and maintains unique commercial partnerships with some of the world’s leading digital publishers and social media platforms. 365 Digital is a digital advertising solutions provider that offers exclusive sales representations with major global platforms in South Africa. Beyond digital, Entravision has 53 television stations and is the largest affiliate group of the Univision and UniMás television networks. Entravision also manages 46 primarily Spanish-language radio stations that feature nationally recognized, Emmy award-winning talent. Shares of Entravision Class A Common Stock trade on the NYSE under ticker: EVC. Learn more about all of our innovative 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
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For more information, please contact:
| Christopher T. Young | Kimberly Esterkin |
|---|---|
| Chief Financial Officer | ADDO Investor Relations |
| Entravision Communications Corporation | 310-829-5400 |
| 310-447-3870 | evc@addo.com |
#
(Financial Table Follows)
Entravision Communications
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Entravision Communications Corporation
Consolidated Balance Sheets
(In thousands; unaudited)
| September 30, | December 31, | |||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| ASSETS | ||||||
| Current assets | ||||||
| Cash and cash equivalents | $ | 182,891 | $ | 119,162 | ||
| Marketable securities | - | 27,988 | ||||
| Restricted cash | 749 | 749 | ||||
| Trade receivables, net of allowance for doubtful accounts | 168,165 | 142,004 | ||||
| Assets held for sale | 2,907 | 2,141 | ||||
| Prepaid expenses and other current assets | 24,803 | 18,021 | ||||
| Total current assets | 379,515 | 310,065 | ||||
| Property and equipment, net | 64,600 | 72,004 | ||||
| Intangible assets subject to amortization, net | 65,880 | 49,412 | ||||
| Intangible assets not subject to amortization | 209,153 | 216,653 | ||||
| Goodwill | 68,728 | 58,043 | ||||
| Operating leases right of use asset | 32,053 | 33,525 | ||||
| Other assets | 8,474 | 7,643 | ||||
| Total assets | $ | 828,403 | $ | 747,345 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
| Current liabilities | ||||||
| Current maturities of long-term debt | $ | 4,694 | $ | 3,000 | ||
| Accounts payable and accrued expenses | 179,912 | 126,849 | ||||
| Operating lease liabilities | 7,353 | 7,290 | ||||
| Total current liabilities | 191,959 | 137,139 | ||||
| Long-term debt, less current maturities, net of unamortized debt issuance costs | 208,014 | 210,454 | ||||
| Long-term operating lease liabilities | 29,851 | 31,775 | ||||
| Other long-term liabilities | 80,893 | 3,732 | ||||
| Deferred income taxes | 64,416 | 54,980 | ||||
| Total liabilities | 575,133 | 438,080 | ||||
| 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 | 780,426 | 828,813 | ||||
| Accumulated deficit | (526,362 | ) | (551,786 | ) | ||
| Accumulated other comprehensive income (loss) | (803 | ) | (1,056 | ) | ||
| Total stockholders' equity | 253,270 | 275,980 | ||||
| Total liabilities and stockholders' equity | $ | 828,403 | $ | 747,345 |
Entravision Communications
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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, | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Net revenue | $ | 199,008 | $ | 62,978 | $ | 526,298 | $ | 172,343 | ||||
| Expenses: | ||||||||||||
| Cost of revenue - digital | 124,332 | 7,808 | 318,118 | 21,602 | ||||||||
| Direct operating expenses | 28,583 | 24,178 | 83,480 | 72,997 | ||||||||
| Selling, general and administrative expenses | 14,530 | 9,883 | 41,489 | 34,371 | ||||||||
| Corporate expenses | 7,253 | 6,287 | 21,756 | 18,511 | ||||||||
| Depreciation and amortization | 5,901 | 3,934 | 16,159 | 12,319 | ||||||||
| Impairment charge | 166 | - | 1,604 | 39,835 | ||||||||
| Foreign currency (gain) loss | 177 | (680 | ) | 454 | 673 | |||||||
| Other operating (gain) loss | (2,431 | ) | (2,683 | ) | (4,867 | ) | (5,549 | ) | ||||
| 178,511 | 48,727 | 478,193 | 194,759 | |||||||||
| Operating income (loss) | 20,497 | 14,251 | 48,105 | (22,416 | ) | |||||||
| Interest expense | (1,714 | ) | (1,969 | ) | (5,287 | ) | (6,673 | ) | ||||
| Interest income | 12 | 467 | 235 | 1,630 | ||||||||
| Dividend income | 207 | 3 | 211 | 26 | ||||||||
| Income (loss) before income taxes | 19,002 | 12,752 | 43,264 | (27,433 | ) | |||||||
| Income tax benefit (expense) | (5,118 | ) | (3,736 | ) | (11,902 | ) | 3,195 | |||||
| Net income (loss) | 13,884 | 9,016 | 31,362 | (24,238 | ) | |||||||
| Net (income) loss attributable to redeemable noncontrolling interest | (1,753 | ) | - | (5,938 | ) | - | ||||||
| Net income (loss) attributable to common stockholders | $ | 12,131 | $ | 9,016 | $ | 25,424 | $ | (24,238 | ) | |||
| Basic and diluted earnings per share: | ||||||||||||
| Net income (loss) per share attributable to common stockholders, basic | $ | 0.14 | $ | 0.11 | $ | 0.30 | $ | (0.29 | ) | |||
| Net income (loss) per share attributable to common stockholders, diluted | $ | 0.14 | $ | 0.11 | $ | 0.29 | $ | (0.29 | ) | |||
| Cash dividends declared per common share, basic and diluted | $ | 0.03 | $ | 0.03 | $ | 0.08 | $ | 0.10 | ||||
| Weighted average common shares outstanding, basic | 85,390,333 | 84,185,728 | 85,207,992 | 84,208,924 | ||||||||
| Weighted average common shares outstanding, diluted | 88,315,732 | 84,863,020 | 87,694,395 | 84,208,924 |
Entravision Communications
Page 9 of 11
Entravision Communications Corporation
Consolidated Statements of Cash Flows
(In thousands; unaudited)
| Three-Month Period | Nine-Month Period | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Ended September 30, | Ended September 30, | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income (loss) | $ | 13,884 | $ | 9,016 | $ | 31,362 | $ | (24,238 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||
| Depreciation and amortization | 5,901 | 3,934 | 16,159 | 12,319 | ||||||||
| Impairment charge | 166 | — | 1,604 | 39,835 | ||||||||
| Deferred income taxes | 4,649 | (1,346 | ) | 8,348 | (8,744 | ) | ||||||
| Non-cash interest | 153 | 159 | 451 | 491 | ||||||||
| Amortization of syndication contracts | 119 | 125 | 357 | 383 | ||||||||
| Payments on syndication contracts | (115 | ) | (72 | ) | (354 | ) | (325 | ) | ||||
| Non-cash stock-based compensation | 1,094 | 816 | 3,300 | 2,408 | ||||||||
| (Gain) loss on disposal of property and equipment | (2,622 | ) | (140 | ) | (2,622 | ) | (767 | ) | ||||
| Changes in assets and liabilities: | ||||||||||||
| (Increase) decrease in accounts receivable | (16,361 | ) | (5,228 | ) | (15,894 | ) | 14,285 | |||||
| (Increase) decrease in prepaid expenses and other assets | (642 | ) | 1,623 | 2,267 | 6,713 | |||||||
| Increase (decrease) in accounts payable, accrued expenses and other liabilities | 3,169 | (2,633 | ) | 8,802 | (16,643 | ) | ||||||
| Net cash provided by operating activities | 9,395 | 6,254 | 53,780 | 25,717 | ||||||||
| Cash flows from investing activities: | ||||||||||||
| Proceeds from sale of property and equipment and intangibles | 9,431 | 1,100 | 9,431 | 5,089 | ||||||||
| Purchases of property and equipment | (1,433 | ) | (2,065 | ) | (4,269 | ) | (7,741 | ) | ||||
| Purchases of intangible assets | — | — | — | (158 | ) | |||||||
| Purchase of a businesses, net of cash acquired | (12,847 | ) | — | (12,847 | ) | — | ||||||
| Proceeds from marketable securities | 10,000 | 11,620 | 27,800 | 38,480 | ||||||||
| Purchases of investments | (800 | ) | — | (800 | ) | — | ||||||
| Net cash provided by investing activities | 4,351 | 10,655 | 19,315 | 35,670 | ||||||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from stock option exercises | 242 | — | 414 | — | ||||||||
| Tax payments related to shares withheld for share-based compensation plans | (70 | ) | — | (528 | ) | (15 | ) | |||||
| Payments on long-term debt | (750 | ) | (750 | ) | (2,250 | ) | (2,250 | ) | ||||
| Dividends paid | (2,136 | ) | (2,106 | ) | (6,395 | ) | (8,428 | ) | ||||
| Repurchase of Class A common stock | — | — | — | (525 | ) | |||||||
| Payments of capitalized debt costs | — | — | (604 | ) | — | |||||||
| Net cash used in financing activities | (2,714 | ) | (2,856 | ) | (9,363 | ) | (11,218 | ) | ||||
| Effect of exchange rates on cash, cash equivalents and restricted cash | (3 | ) | (39 | ) | (3 | ) | (7 | ) | ||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 11,029 | 14,014 | 63,729 | 50,162 | ||||||||
| Cash, cash equivalents and restricted cash: | ||||||||||||
| Beginning | 172,611 | 70,005 | 119,911 | 33,857 | ||||||||
| Ending | $ | 183,640 | $ | 84,019 | $ | 183,640 | $ | 84,019 |
Entravision Communications
Page 10 of 11
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, | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Consolidated adjusted EBITDA (1) | $ | 23,195 | $ | 16,371 | $ | 55,177 | $ | 27,773 | ||||
| EBITDA attributable to redeemable noncontrolling interest | 2,036 | - | 9,127 | - | ||||||||
| Interest expense | (1,714 | ) | (1,969 | ) | (5,287 | ) | (6,673 | ) | ||||
| Interest income | 12 | 467 | 235 | 1,630 | ||||||||
| Dividend income | 207 | 3 | 211 | 26 | ||||||||
| Income tax expense | (5,118 | ) | (3,736 | ) | (11,902 | ) | 3,195 | |||||
| Amortization of syndication contracts | (119 | ) | (125 | ) | (357 | ) | (383 | ) | ||||
| Payments on syndication contracts | 115 | 72 | 354 | 325 | ||||||||
| Non-cash stock-based compensation included in direct operating expenses | (321 | ) | (148 | ) | (971 | ) | (383 | ) | ||||
| Non-cash stock-based compensation included in corporate expenses | (773 | ) | (668 | ) | (2,329 | ) | (2,025 | ) | ||||
| Depreciation and amortization | (5,901 | ) | (3,934 | ) | (16,159 | ) | (12,319 | ) | ||||
| Impairment charge | (166 | ) | - | (1,604 | ) | (39,835 | ) | |||||
| Non-recurring cash severance charge | - | - | - | (1,118 | ) | |||||||
| Other operating gain (loss) | 2,431 | 2,683 | 4,867 | 5,549 | ||||||||
| Net (income) loss attributable to redeemable noncontrolling interest | (1,753 | ) | - | (5,938 | ) | - | ||||||
| Net income (loss) attributable to common stockholders | 12,131 | 9,016 | 25,424 | (24,238 | ) | |||||||
| Depreciation and amortization | 5,901 | 3,934 | 16,159 | 12,319 | ||||||||
| Impairment charge | 166 | - | 1,604 | 39,835 | ||||||||
| Deferred income taxes | 4,649 | (1,346 | ) | 8,348 | (8,744 | ) | ||||||
| Non-cash interest | 153 | 159 | 451 | 491 | ||||||||
| Amortization of syndication contracts | 119 | 125 | 357 | 383 | ||||||||
| Payments on syndication contracts | (115 | ) | (72 | ) | (354 | ) | (325 | ) | ||||
| Non-cash stock-based compensation | 1,094 | 816 | 3,300 | 2,408 | ||||||||
| (Gain) loss on disposal of property and equipment | (2,622 | ) | (140 | ) | (2,622 | ) | (767 | ) | ||||
| Net income (loss) attributable to redeemable noncontrolling interest | 1,753 | - | 5,938 | - | ||||||||
| Changes in assets and liabilities: | ||||||||||||
| (Increase) decrease in accounts receivable | (16,361 | ) | (5,228 | ) | (15,894 | ) | 14,285 | |||||
| (Increase) decrease in prepaid expenses and other assets | (642 | ) | 1,623 | 2,267 | 6,713 | |||||||
| Increase (decrease) in accounts payable, accrued expenses and other liabilities | 3,169 | (2,633 | ) | 8,802 | (16,643 | ) | ||||||
| Cash flows from operating activities | 9,395 | 6,254 | 53,780 | 25,717 |
(1) Consolidated adjusted EBITDA is defined on page 2.
Entravision Communications
Page 11 of 11
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, | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Consolidated adjusted EBITDA (1) | $ | 23,195 | $ | 16,371 | $ | 55,177 | $ | 27,773 | ||||
| Net interest expense (1) | (1,549 | ) | (1,343 | ) | (4,601 | ) | (4,552 | ) | ||||
| Dividend income | 207 | 3 | 211 | 26 | ||||||||
| Cash paid for income taxes | (469 | ) | (5,082 | ) | (3,554 | ) | (5,549 | ) | ||||
| Capital expenditures (2) | (1,433 | ) | (2,065 | ) | (4,269 | ) | (7,741 | ) | ||||
| Non-recurring cash severance charge | - | - | - | (1,118 | ) | |||||||
| Other operating gain (loss) | 2,431 | 2,683 | 4,867 | 5,549 | ||||||||
| Free cash flow (1) | 22,382 | 10,567 | 47,831 | 14,388 | ||||||||
| Capital expenditures (2) | 1,433 | 2,065 | 4,269 | 7,741 | ||||||||
| EBITDA attributable to redeemable noncontrolling interest | 2,036 | - | 9,127 | - | ||||||||
| (Gain) loss on disposal of property and equipment | (2,622 | ) | (140 | ) | (2,622 | ) | (767 | ) | ||||
| Changes in assets and liabilities: | ||||||||||||
| (Increase) decrease in accounts receivable | (16,361 | ) | (5,228 | ) | (15,894 | ) | 14,285 | |||||
| (Increase) decrease in prepaid expenses and other assets | (642 | ) | 1,623 | 2,267 | 6,713 | |||||||
| Increase (decrease) in accounts payable, accrued expenses and other liabilities | 3,169 | (2,633 | ) | 8,802 | (16,643 | ) | ||||||
| Cash Flows From Operating Activities | $ | 9,395 | $ | 6,254 | $ | 53,780 | $ | 25,717 |
(1) Consolidated adjusted 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.