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Entravision Communications Corporation Reports Third Quarter 2022 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, 2022.

Third Quarter 2022 Highlights

  • Record third quarter advertising revenue
  • Net revenue up 21% over the prior-year quarter
  • Net income attributable to common stockholders down 23% over the prior-year quarter
  • Consolidated adjusted EBITDA up 12% over the prior-year quarter
  • Operating cash flow up 62% over the prior-year quarter
  • Free cash flow down 31% over the prior-year quarter
  • Quarterly cash dividend of $0.025 per share

“Entravision continued to see progress in the third quarter of 2022, with revenue up 21% versus the prior-year period. Adjusted EBITDA also improved double-digits, increasing 12% year-over-year,” said Walter Ulloa, Chairman and Chief Executive Officer. “Entravision’s strength throughout the quarter was again driven by our digital segment, where revenue improved 29% versus the third quarter of 2021. In our television and audio businesses, political ad spend, in particular, continued to perform strongly."

Mr. Ulloa continued, “Entravision’s solid performance in the third quarter, together with our progress year-to-date, demonstrates the resiliency and growth of our business in a tough macro environment. We continue to strategically expand across the globe and now have operations in 40 countries across five continents in service of more than 7,000 clients. We are thoughtfully positioning our digital teams in emerging economies where Entravision’s unique offerings have a key first-mover advantage and where a critical mass of connected consumers exists alongside a growing advertising industry. We remain optimistic in finding multiple growth opportunities around the world for our digital business and look forward to sharing our progress as we continue to grow and expand globally."

Quarterly Cash Dividend

The Company announced today that its Board of Directors approved a quarterly cash dividend to shareholders of $0.025 per share on the Company's Class A, Class B and Class U common stock, in an aggregate amount of approximately $2.1 million. The quarterly dividend will be payable on December 30, 2022 to shareholders of record as of the close of business on December 15, 2022, and the common stock will trade ex-dividend on December 14, 2022. 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,

 

 

2022

 

 

2021

 

 

% Change

 

 

2022

 

 

2021

 

 

% Change

 

Net revenue

$

241,014

 

 

$

199,008

 

 

 

21

%

 

$

659,881

 

 

$

526,298

 

 

 

25

%

Cost of revenue - digital (1)

 

157,095

 

 

 

124,332

 

 

 

26

%

 

 

431,951

 

 

 

318,118

 

 

 

36

%

Operating expenses (2)

 

49,294

 

 

 

43,113

 

 

 

14

%

 

 

140,527

 

 

 

124,969

 

 

 

12

%

Corporate expenses (3)

 

9,525

 

 

 

7,253

 

 

 

31

%

 

 

26,769

 

 

 

21,756

 

 

 

23

%

Foreign currency (gain) loss

 

1,966

 

 

 

177

 

 

*

 

 

 

2,112

 

 

 

454

 

 

 

365

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated adjusted EBITDA (4)

 

25,972

 

 

 

23,195

 

 

 

12

%

 

 

66,566

 

 

 

55,177

 

 

 

21

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Free cash flow (5)

$

15,443

 

 

$

22,382

 

 

 

(31

)%

 

$

44,026

 

 

$

47,831

 

 

 

(8

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

9,090

 

 

$

13,884

 

 

 

(35

)%

 

$

19,444

 

 

$

31,362

 

 

 

(38

)%

Net (income) loss attributable to redeemable noncontrolling interest

$

-

 

 

$

(1,753

)

 

 

(100

)%

 

$

-

 

 

$

(5,938

)

 

 

(100

)%

Net (income) loss attributable to noncontrolling interest

$

303

 

 

$

-

 

 

*

 

 

$

303

 

 

$

-

 

 

*

 

Net income (loss) attributable to common stockholders

$

9,393

 

 

$

12,131

 

 

 

(23

)%

 

$

19,747

 

 

$

25,424

 

 

 

(22

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

$

0.11

 

 

$

0.14

 

 

 

(21

)%

 

$

0.23

 

 

$

0.30

 

 

 

(23

)%

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

$

0.11

 

 

$

0.14

 

 

 

(21

)%

 

$

0.23

 

 

$

0.29

 

 

 

(21

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, basic

 

84,945,873

 

 

 

85,390,333

 

 

 

 

 

 

85,469,675

 

 

 

85,207,992

 

 

 

 

Weighted average common shares outstanding, diluted

 

87,417,501

 

 

 

88,315,732

 

 

 

 

 

 

87,671,726

 

 

 

87,694,395

 

 

 

 

(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 $1.0 million and $0.3 million of non-cash stock-based compensation for the three-month periods ended September 30, 2022 and 2021, respectively, and $2.9 million and $1.0 million of non-cash stock-based compensation for the nine-month periods ended September 30, 2022 and 2021, respectively.

(3)

Corporate expenses include $1.8 million and $0.8 million of non-cash stock-based compensation for the three-month periods ended September 30, 2022 and 2021, respectively, and $5.1 million and $2.3 million of non-cash stock-based compensation for the nine-month periods ended September 30, 2022 and 2021, 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.

Unaudited Financial Results (In thousands)

 

Three-Month Period

 

 

Ended September 30,

 

 

2022

 

 

2021

 

 

% Change

 

Net revenue

$

241,014

 

 

$

199,008

 

 

 

21

%

Cost of revenue - digital (1)

 

157,095

 

 

 

124,332

 

 

 

26

%

Operating expenses (1)

 

49,294

 

 

 

43,113

 

 

 

14

%

Corporate expenses (1)

 

9,525

 

 

 

7,253

 

 

 

31

%

Depreciation and amortization

 

6,554

 

 

 

5,901

 

 

 

11

%

Change in fair value of contingent consideration

 

734

 

 

 

-

 

 

*

 

Impairment charge

 

-

 

 

 

166

 

 

 

(100

)%

Foreign currency (gain) loss

 

1,966

 

 

 

177

 

 

*

 

Other operating (gain) loss

 

(58

)

 

 

(2,431

)

 

 

(98

)%

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

15,904

 

 

 

20,497

 

 

 

(22

)%

Interest expense, net

 

(2,267

)

 

 

(1,702

)

 

 

33

%

Dividend income

 

6

 

 

 

207

 

 

 

(97

)%

Realized gain (loss) on marketable securities

 

(473

)

 

 

-

 

 

*

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

13,170

 

 

 

19,002

 

 

 

(31

)%

Income tax benefit (expense)

 

(4,080

)

 

 

(5,118

)

 

 

(20

)%

 

 

 

 

 

 

 

 

 

Net income (loss)

 

9,090

 

 

 

13,884

 

 

 

(35

)%

Net (income) loss attributable to redeemable noncontrolling interest

 

-

 

 

 

(1,753

)

 

 

(100

)%

Net (income) loss attributable to noncontrolling interest

 

303

 

 

 

-

 

 

*

 

Net income (loss) attributable to common stockholders

$

9,393

 

 

$

12,131

 

 

 

(23

)%

(1)

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

Net revenue in the third quarter of 2022 totaled $241.0 million, up 21% from $199.0 million in the prior-year period. Of the overall increase, approximately $42.8 million was attributable to our digital segment and was primarily due to advertising revenue growth from our digital commercial partnerships business, and due to our investment in a variable interest entity during the third quarter of 2022 and our acquisition of 365 Digital during the fourth quarter of 2021, neither of which contributed to net revenue in the comparable period ended September 30, 2021. In addition, of the overall increase, approximately $0.1 million was attributable to our audio segment, primarily due to increases in political advertising revenue and local advertising revenue, partially offset by a decrease in national advertising revenue. The overall increase was partially offset by a decrease of approximately $0.8 million attributable to our television segment, primarily due to decreases in local and national advertising revenue, and a decrease in retransmission consent revenue. These decreases were mainly attributed to the expiration of our Univision and UniMás network affiliation agreements in Orlando, Tampa and Washington, D.C. on December 31, 2021. The decrease in our television segment revenue was partially offset by increases in political advertising revenue and spectrum usage rights revenue.

Cost of revenue in the third quarter of 2022 totaled $157.1 million, up 26% from $124.3 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 our investment in a variable interest entity during the third quarter of 2022 and our acquisition of 365 Digital during the fourth quarter of 2021, neither of which incurred cost of revenue for us in the comparable period ended September 30, 2021.

Operating expenses in the third quarter of 2022 totaled $49.3 million, up 14% from $43.1 million in the prior-year period. Of the overall increase, approximately $5.9 million was attributable to our digital segment and was primarily due to an increase in expenses associated with the increase in digital advertising revenue, an increase in salary expense and our investment in a variable interest entity during the third quarter of 2022 and our acquisition of 365 Digital during the fourth quarter of 2021, which did not incur operating expenses for us in the comparable period. Additionally, of the overall increase in operating expenses, approximately $0.4 million was attributable to our audio segment primarily due to an increase in expenses associated with the increase in local advertising revenue. The overall increase in operating expenses was partially offset by a decrease of approximately $0.1 million that was attributable to our television segment primarily due to a decrease in expenses associated with the decrease in local and national advertising revenue, partially offset by an increase in rent expense and an increase in bad debt expense.

Corporate expenses in the third quarter of 2022 totaled $9.5 million, up 31% from $7.3 million in the prior-year period. The increase was primarily due to increases in non-cash stock-based compensation and an increase in salaries.

Unaudited Financial Results (In thousands)

 

Nine-Month Period

 

 

Ended September 30,

 

 

2022

 

 

2021

 

 

% Change

 

Net revenue

$

659,881

 

 

$

526,298

 

 

 

25

%

Cost of revenue - digital (1)

 

431,951

 

 

 

318,118

 

 

 

36

%

Operating expenses (1)

 

140,527

 

 

 

124,969

 

 

 

12

%

Corporate expenses (1)

 

26,769

 

 

 

21,756

 

 

 

23

%

Depreciation and amortization

 

19,212

 

 

 

16,159

 

 

 

19

%

Change in fair value of contingent consideration

 

6,810

 

 

 

-

 

 

*

 

Impairment charge

 

-

 

 

 

1,604

 

 

 

(100

)%

Foreign currency (gain) loss

 

2,112

 

 

 

454

 

 

 

365

%

Other operating (gain) loss

 

(1,011

)

 

 

(4,867

)

 

 

(79

)%

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

33,511

 

 

 

48,105

 

 

 

(30

)%

Interest expense, net

 

(5,309

)

 

 

(5,052

)

 

 

5

%

Dividend income

 

20

 

 

 

211

 

 

 

(91

)%

Realized gain (loss) on marketable securities

 

(473

)

 

 

-

 

 

*

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

27,749

 

 

 

43,264

 

 

 

(36

)%

Income tax benefit (expense)

 

(8,305

)

 

 

(11,902

)

 

 

(30

)%

 

 

 

 

 

 

 

 

 

Net income (loss)

 

19,444

 

 

 

31,362

 

 

 

(38

)%

Net (income) loss attributable to redeemable noncontrolling interest

 

-

 

 

 

(5,938

)

 

 

(100

)%

Net (income) loss attributable to noncontrolling interest

 

303

 

 

 

-

 

 

*

 

Net income (loss) attributable to common stockholders

$

19,747

 

 

$

25,424

 

 

 

(22

)%

(1)

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

Net revenue for the nine-month period of 2022 totaled $659.9 million, up 25% from $526.3 million in the prior-year period. Of the overall increase, approximately $139.1 million was attributable to our digital segment and was primarily due to advertising revenue growth from our digital commercial partnerships business. In addition, the increase in net revenue in our digital segment was due to our investment in a variable interest entity and our acquisition of 365 Digital during the third quarter of 2022 and fourth quarter of 2021, respectively, neither of which contributed to net revenue in the comparable period ended September 30, 2021, and due to our acquisition of MediaDonuts during the third of 2021, which only partially contributed to net revenue in the comparable period ended September 30, 2021. Additionally, of the overall increase, approximately $2.1 million was attributable to our audio segment, primarily due to increases in political advertising revenue and local advertising revenue, partially offset by a decrease in national advertising revenue. The overall increase was partially offset by a decrease of approximately $7.7 million attributable to our television segment, primarily due to decreases in local and national advertising revenue, and a decrease in retransmission consent revenue. These decreases were mainly attributed to the expiration of our Univision and UniMás network affiliation agreements in Orlando, Tampa and Washington, D.C. on December 31, 2021. The decrease in our television segment revenue was partially offset by increases in political advertising revenue and spectrum usage rights revenue.

Cost of revenue for the nine-month period of 2022 totaled $432.0 million, up 36% from $318.1 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 our investment in a variable interest entity and our acquisition of 365 Digital during the third quarter of 2022 and fourth quarter of 2021, respectively, neither of which incurred cost of revenue for us in the comparable period ended September 30, 2021, and due to our acquisition of MediaDonuts during the third of 2021, which only partially incurred cost of revenue for us in the comparable period ended September 30, 2021.

Operating expenses for the nine-month period of 2022 totaled $140.5 million, up 12% from $125.0 million in the prior-year period. Of the overall increase, approximately $15.5 million was attributable to our digital segment and was primarily due to an increase in expenses associated with the increase in digital advertising revenue and an increase in salary expense. In addition, the increase in operating expenses in our digital segment was due to our investment in a variable interest entity and our acquisition of 365 Digital during the third quarter of 2022 and fourth quarter of 2021, respectively, neither of which incurred operating expenses for us in the comparable period ended September 30, 2021, and due to our acquisition of MediaDonuts during the third of 2021, which only partially incurred operating expenses for us in the comparable period ended September 30, 2021. Additionally, of the overall increase in operating expenses, approximately $0.6 million was attributable to our audio segment primarily due to an increase in expenses associated with the increase in local advertising revenue. The overall increase in operating expenses was partially offset by a decrease of approximately $0.6 million that was attributable to our television segment primarily due to a decrease in expenses associated with the decrease in local and national advertising revenue, partially offset by an increase in rent expense and bad debt expense.

Corporate expenses for the nine-month period of 2022 totaled $26.8 million, up 23% from $21.8 million in the prior-year period. The increase was primarily due to increases in non-cash stock-based compensation and an increase in salaries.

Balance Sheet and Related Metrics

Cash and marketable securities as of September 30, 2022 totaled approximately $164.8 million. Total debt under the Company’s credit agreement was $210.0 million. Net of $75 million of cash and marketable securities, total leverage as defined in the Company’s credit agreement was 1.4 times as of September 30, 2022. Net of total cash and marketable securities, total leverage was 0.5 times.

Unaudited Segment Results (In thousands)

 

Three-Month Period

 

 

Nine-Month Period

 

 

Ended September 30,

 

 

Ended September 30,

 

 

2022

 

 

2021

 

 

% Change

 

 

2022

 

 

2021

 

 

% Change

 

Net Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Digital

$

188,877

 

 

$

146,121

 

 

 

29

%

 

$

516,966

 

 

$

377,826

 

 

 

37

%

Television

 

35,678

 

 

 

36,450

 

 

 

(2

)%

 

 

98,918

 

 

 

106,598

 

 

 

(7

)%

Audio

 

16,459

 

 

 

16,437

 

 

 

0

%

 

 

43,997

 

 

 

41,874

 

 

 

5

%

Total

$

241,014

 

 

$

199,008

 

 

 

21

%

 

$

659,881

 

 

$

526,298

 

 

 

25

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Revenue - digital (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Digital

$

157,095

 

 

$

124,332

 

 

 

26

%

 

$

431,951

 

 

$

318,118

 

 

 

36

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Digital

 

19,080

 

 

 

13,187

 

 

 

45

%

 

 

51,577

 

 

 

36,064

 

 

 

43

%

Television

 

20,003

 

 

 

20,148

 

 

 

(1

)%

 

 

58,969

 

 

 

59,548

 

 

 

(1

)%

Audio

 

10,211

 

 

 

9,778

 

 

 

4

%

 

 

29,981

 

 

 

29,357

 

 

 

2

%

Total

$

49,294

 

 

$

43,113

 

 

 

14

%

 

$

140,527

 

 

$

124,969

 

 

 

12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Expenses (1)

$

9,525

 

 

$

7,253

 

 

 

31

%

 

$

26,769

 

 

$

21,756

 

 

 

23

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated adjusted EBITDA (1)

$

25,972

 

 

$

23,195

 

 

 

12

%

 

$

66,566

 

 

$

55,177

 

 

 

21

%

(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 2022 results on Thursday, November 3, 2022 at 4:30 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 10171311. 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 leading global advertising, media and ad-tech solutions company connecting brands to consumers by representing top platforms and publishers. Our dynamic portfolio includes digital, television and audio offerings. Digital, our largest revenue segment, is comprised of four business units: our digital sales representation business; Smadex, our programmatic ad purchasing platform; our branding and mobile performance solutions business; and our digital audio business. Through our digital sales representation business, we connect global media companies such as Meta, Twitter, TikTok and Spotify with advertisers in primarily emerging growth markets worldwide. Smadex is our mobile-first demand side platform, enabling advertisers to execute performance campaigns using machine learning. We also offer a branding and mobile performance solutions business, which provides managed services to advertisers looking to connect with global consumers, primarily on mobile devices, and our digital audio business provides digital audio advertising solutions for advertisers in the Americas. In addition to digital, Entravision has 49 television stations and is the largest affiliate group of the Univision and UniMás television networks. Entravision also manages 45 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 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.

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,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net revenue

 

$

241,014

 

 

$

199,008

 

 

$

659,881

 

 

$

526,298

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue - digital

 

 

157,095

 

 

 

124,332

 

 

 

431,951

 

 

 

318,118

 

Direct operating expenses

 

 

30,086

 

 

 

28,583

 

 

 

87,505

 

 

 

83,480

 

Selling, general and administrative expenses

 

 

19,208

 

 

 

14,530

 

 

 

53,022

 

 

 

41,489

 

Corporate expenses

 

 

9,525

 

 

 

7,253

 

 

 

26,769

 

 

 

21,756

 

Depreciation and amortization

 

 

6,554

 

 

 

5,901

 

 

 

19,212

 

 

 

16,159

 

Change in fair value of contingent consideration

 

 

734

 

 

 

-

 

 

 

6,810

 

 

 

-

 

Impairment charge

 

 

-

 

 

 

166

 

 

 

-

 

 

 

1,604

 

Foreign currency (gain) loss

 

 

1,966

 

 

 

177

 

 

 

2,112

 

 

 

454

 

Other operating (gain) loss

 

 

(58

)

 

 

(2,431

)

 

 

(1,011

)

 

 

(4,867

)

 

 

 

225,110

 

 

 

178,511

 

 

 

626,370

 

 

 

478,193

 

Operating income (loss)

 

 

15,904

 

 

 

20,497

 

 

 

33,511

 

 

 

48,105

 

Interest expense

 

 

(3,055

)

 

 

(1,714

)

 

 

(7,225

)

 

 

(5,287

)

Interest income

 

 

788

 

 

 

12

 

 

 

1,916

 

 

 

235

 

Dividend income

 

 

6

 

 

 

207

 

 

 

20

 

 

 

211

 

Realized gain (loss) on marketable securities

 

 

(473

)

 

 

-

 

 

 

(473

)

 

 

-

 

Income (loss) before income taxes

 

 

13,170

 

 

 

19,002

 

 

 

27,749

 

 

 

43,264

 

Income tax benefit (expense)

 

 

(4,080

)

 

 

(5,118

)

 

 

(8,305

)

 

 

(11,902

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

9,090

 

 

 

13,884

 

 

 

19,444

 

 

 

31,362

 

Net (income) loss attributable to redeemable noncontrolling interest

 

 

-

 

 

 

(1,753

)

 

 

-

 

 

 

(5,938

)

Net (income) loss attributable to noncontrolling interest

 

 

303

 

 

 

-

 

 

 

303

 

 

 

-

 

Net income (loss) attributable to common stockholders

 

$

9,393

 

 

$

12,131

 

 

$

19,747

 

 

$

25,424

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.11

 

 

$

0.14

 

 

$

0.23

 

 

$

0.30

 

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

 

$

0.11

 

 

$

0.14

 

 

$

0.23

 

 

$

0.29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share, basic and diluted

 

$

0.03

 

 

$

0.03

 

 

$

0.08

 

 

$

0.08

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, basic

 

 

84,945,873

 

 

 

85,390,333

 

 

 

85,469,675

 

 

 

85,207,992

 

Weighted average common shares outstanding, diluted

 

 

87,417,501

 

 

 

88,315,732

 

 

 

87,671,726

 

 

 

87,694,395

 

Entravision Communications Corporation

Consolidated Balance Sheets

(In thousands; unaudited)

 

 

 

September 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

121,589

 

 

$

185,094

 

Marketable securities

 

 

43,212

 

 

 

-

 

Restricted cash

 

 

751

 

 

 

749

 

Trade receivables, net of allowance for doubtful accounts

 

 

194,291

 

 

 

201,747

 

Assets held for sale

 

 

-

 

 

 

1,963

 

Prepaid expenses and other current assets

 

 

42,517

 

 

 

18,925

 

Total current assets

 

 

402,360

 

 

 

408,478

 

Property and equipment, net

 

 

61,649

 

 

 

62,498

 

Intangible assets subject to amortization, net

 

 

64,704

 

 

 

64,034

 

Intangible assets not subject to amortization

 

 

209,053

 

 

 

209,053

 

Goodwill

 

 

86,715

 

 

 

71,708

 

Deferred income taxes

 

 

1,462

 

 

 

1,462

 

Operating leases right of use asset

 

 

42,027

 

 

 

25,582

 

Other assets

 

 

8,487

 

 

 

8,527

 

Total assets

 

$

876,457

 

 

$

851,342

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Current maturities of long-term debt

 

$

5,060

 

 

$

4,903

 

Accounts payable and accrued expenses

 

 

240,994

 

 

 

212,655

 

Operating lease liabilities

 

 

5,406

 

 

 

7,304

 

Total current liabilities

 

 

251,460

 

 

 

224,862

 

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

 

 

207,817

 

 

 

207,416

 

Long-term operating lease liabilities

 

 

39,363

 

 

 

20,988

 

Other long-term liabilities

 

 

29,283

 

 

 

72,930

 

Deferred income taxes

 

 

70,064

 

 

 

68,220

 

Total liabilities

 

 

597,987

 

 

 

594,416

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

Class A common stock

 

 

6

 

 

 

6

 

Class B common stock

 

 

2

 

 

 

2

 

Class U common stock

 

 

1

 

 

 

1

 

Additional paid-in capital

 

 

770,639

 

 

 

780,388

 

Accumulated deficit

 

 

(502,747

)

 

 

(522,494

)

Accumulated other comprehensive income (loss)

 

 

(2,025

)

 

 

(977

)

Total stockholders' equity

 

 

265,876

 

 

 

256,926

 

Noncontrolling interest

 

 

12,594

 

 

 

-

 

Total equity

 

 

278,470

 

 

 

256,926

 

Total liabilities and equity

 

$

876,457

 

 

$

851,342

 

Entravision Communications Corporation

Consolidated Statements of Cash Flows

(In thousands; unaudited)

 

 

 

Three-Month Period

 

 

Nine-Month Period

 

 

 

Ended September 30,

 

 

Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

9,090

 

 

$

13,884

 

 

$

19,444

 

 

$

31,362

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

6,554

 

 

 

5,901

 

 

 

19,212

 

 

 

16,159

 

Impairment charge

 

 

-

 

 

 

166

 

 

 

-

 

 

 

1,604

 

Deferred income taxes

 

 

62

 

 

 

4,649

 

 

 

(3,151

)

 

 

8,348

 

Non-cash interest

 

 

365

 

 

 

153

 

 

 

1,076

 

 

 

451

 

Amortization of syndication contracts

 

 

117

 

 

 

119

 

 

 

348

 

 

 

357

 

Payments on syndication contracts

 

 

(70

)

 

 

(115

)

 

 

(304

)

 

 

(354

)

Non-cash stock-based compensation

 

 

2,786

 

 

 

1,094

 

 

 

7,995

 

 

 

3,300

 

(Gain) loss on marketable securities

 

 

473

 

 

 

-

 

 

 

473

 

 

 

-

 

(Gain) loss on disposal of property and equipment

 

 

39

 

 

 

(2,622

)

 

 

(599

)

 

 

(2,622

)

Change in fair value of contingent consideration

 

 

734

 

 

 

-

 

 

 

6,810

 

 

 

-

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

(Increase) decrease in accounts receivable

 

 

4,708

 

 

 

(16,361

)

 

 

22,296

 

 

 

(15,894

)

(Increase) decrease in prepaid expenses and other assets

 

 

1,069

 

 

 

(642

)

 

 

(183

)

 

 

2,267

 

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

 

 

(10,691

)

 

 

3,169

 

 

 

4,725

 

 

 

8,802

 

Net cash provided by operating activities

 

 

15,236

 

 

 

9,395

 

 

 

78,142

 

 

 

53,780

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from sale of property and equipment and intangibles

 

 

-

 

 

 

9,431

 

 

 

2,671

 

 

 

9,431

 

Purchases of property and equipment

 

 

(4,673

)

 

 

(1,433

)

 

 

(7,882

)

 

 

(4,269

)

Purchase of a businesses, net of cash acquired

 

 

-

 

 

 

(12,847

)

 

 

-

 

 

 

(12,847

)

Investment in variable interest entities, net of cash consolidated

 

 

(5,164

)

 

 

-

 

 

 

(5,164

)

 

 

-

 

Purchases of marketable securities

 

 

(5,241

)

 

 

-

 

 

 

(92,480

)

 

 

-

 

Proceeds from marketable securities

 

 

36,369

 

 

 

10,000

 

 

 

46,868

 

 

 

27,800

 

Purchases of investments

 

 

-

 

 

 

(800

)

 

 

-

 

 

 

(800

)

Net cash provided by (used in) investing activities

 

 

21,291

 

 

 

4,351

 

 

 

(55,987

)

 

 

19,315

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from stock option exercises

 

 

-

 

 

 

242

 

 

 

218

 

 

 

414

 

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

 

 

-

 

 

 

(70

)

 

 

(267

)

 

 

(528

)

Payments on long-term debt

 

 

(1,001

)

 

 

(750

)

 

 

(2,501

)

 

 

(2,250

)

Dividends paid

 

 

(2,124

)

 

 

(2,136

)

 

 

(6,415

)

 

 

(6,395

)

Repurchase of Class A common stock

 

 

-

 

 

 

-

 

 

 

(11,280

)

 

 

-

 

Payment of contingent consideration

 

 

(21,734

)

 

 

-

 

 

 

(65,340

)

 

 

-

 

Principal payments under finance lease obligation

 

 

(33

)

 

 

-

 

 

 

(72

)

 

 

-

 

Payments of capitalized debt costs

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(604

)

Net cash used in financing activities

 

 

(24,892

)

 

 

(2,714

)

 

 

(85,657

)

 

 

(9,363

)

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

 

 

5

 

 

 

(3

)

 

 

(1

)

 

 

(3

)

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

 

 

11,640

 

 

 

11,029

 

 

 

(63,503

)

 

 

63,729

 

Cash, cash equivalents and restricted cash:

 

 

 

 

 

 

 

 

 

 

 

 

Beginning

 

 

110,700

 

 

 

172,611

 

 

 

185,843

 

 

 

119,911

 

Ending

 

$

122,340

 

 

$

183,640

 

 

$

122,340

 

 

$

183,640

 

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,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated adjusted EBITDA (1)

 

$

25,972

 

 

$

23,195

 

 

$

66,566

 

 

$

55,177

 

EBITDA attributable to redeemable noncontrolling interest

 

 

-

 

 

 

2,036

 

 

 

-

 

 

 

9,127

 

EBITDA attributable to noncontrolling interest

 

 

(5

)

 

 

-

 

 

 

(5

)

 

 

-

 

Interest expense

 

 

(3,055

)

 

 

(1,714

)

 

 

(7,225

)

 

 

(5,287

)

Interest income

 

 

788

 

 

 

12

 

 

 

1,916

 

 

 

235

 

Dividend income

 

 

6

 

 

 

207

 

 

 

20

 

 

 

211

 

Realized gain (loss) on marketable securities

 

 

(473

)

 

 

-

 

 

 

(473

)

 

 

-

 

Income tax expense

 

 

(4,080

)

 

 

(5,118

)

 

 

(8,305

)

 

 

(11,902

)

Amortization of syndication contracts

 

 

(117

)

 

 

(119

)

 

 

(348

)

 

 

(357

)

Payments on syndication contracts

 

 

70

 

 

 

115

 

 

 

304

 

 

 

354

 

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

 

 

(981

)

 

 

(321

)

 

 

(2,878

)

 

 

(971

)

Non-cash stock-based compensation included in corporate expenses

 

 

(1,805

)

 

 

(773

)

 

 

(5,117

)

 

 

(2,329

)

Depreciation and amortization

 

 

(6,554

)

 

 

(5,901

)

 

 

(19,212

)

 

 

(16,159

)

Change in fair value of contingent consideration

 

 

(734

)

 

 

-

 

 

 

(6,810

)

 

 

-

 

Impairment charge

 

 

-

 

 

 

(166

)

 

 

-

 

 

 

(1,604

)

Other operating gain (loss)

 

 

58

 

 

 

2,431

 

 

 

1,011

 

 

 

4,867

 

Net (income) loss attributable to redeemable noncontrolling interest

 

 

-

 

 

 

(1,753

)

 

 

-

 

 

 

(5,938

)

Net (income) loss attributable to noncontrolling interest

 

 

303

 

 

 

-

 

 

 

303

 

 

 

-

 

Net income (loss) attributable to common stockholders

 

 

9,393

 

 

 

12,131

 

 

 

19,747

 

 

 

25,424

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

6,554

 

 

 

5,901

 

 

 

19,212

 

 

 

16,159

 

Impairment charge

 

 

-

 

 

 

166

 

 

 

-

 

 

 

1,604

 

Deferred income taxes

 

 

62

 

 

 

4,649

 

 

 

(3,151

)

 

 

8,348

 

Non-cash interest

 

 

365

 

 

 

153

 

 

 

1,076

 

 

 

451

 

Amortization of syndication contracts

 

 

117

 

 

 

119

 

 

 

348

 

 

 

357

 

Payments on syndication contracts

 

 

(70

)

 

 

(115

)

 

 

(304

)

 

 

(354

)

Non-cash stock-based compensation

 

 

2,786

 

 

 

1,094

 

 

 

7,995

 

 

 

3,300

 

Realized (gain) loss on marketable securities

 

 

473

 

 

 

-

 

 

 

473

 

 

 

-

 

(Gain) loss on disposal of property and equipment

 

 

39

 

 

 

(2,622

)

 

 

(599

)

 

 

(2,622

)

Change in fair value of contingent consideration

 

 

734

 

 

 

-

 

 

 

6,810

 

 

 

-

 

Net income (loss) attributable to redeemable noncontrolling interest

 

 

-

 

 

 

1,753

 

 

 

-

 

 

 

5,938

 

Net income (loss) attributable to noncontrolling interest

 

 

(303

)

 

 

-

 

 

 

(303

)

 

 

-

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

(Increase) decrease in accounts receivable

 

 

4,708

 

 

 

(16,361

)

 

 

22,296

 

 

 

(15,894

)

(Increase) decrease in prepaid expenses and other assets

 

 

1,069

 

 

 

(642

)

 

 

(183

)

 

 

2,267

 

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

 

 

(10,691

)

 

 

3,169

 

 

 

4,725

 

 

 

8,802

 

Cash flows from operating activities

 

 

15,236

 

 

 

9,395

 

 

 

78,142

 

 

 

53,780

 

(1)

Consolidated adjusted 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,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Consolidated adjusted EBITDA (1)

 

$

25,972

 

 

$

23,195

 

 

$

66,566

 

 

$

55,177

 

Net interest expense (1)

 

 

(1,902

)

 

 

(1,549

)

 

 

(4,233

)

 

 

(4,601

)

Dividend income

 

 

6

 

 

 

207

 

 

 

20

 

 

 

211

 

Cash paid for income taxes

 

 

(4,018

)

 

 

(469

)

 

 

(11,456

)

 

 

(3,554

)

Capital expenditures (2)

 

 

(4,673

)

 

 

(1,433

)

 

 

(7,882

)

 

 

(4,269

)

Other operating gain (loss)

 

 

58

 

 

 

2,431

 

 

 

1,011

 

 

 

4,867

 

Free cash flow (1)

 

 

15,443

 

 

 

22,382

 

 

 

44,026

 

 

 

47,831

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures (2)

 

 

4,673

 

 

 

1,433

 

 

 

7,882

 

 

 

4,269

 

EBITDA attributable to redeemable noncontrolling interest

 

 

-

 

 

 

2,036

 

 

 

-

 

 

 

9,127

 

EBITDA attributable to noncontrolling interest

 

 

(5

)

 

 

-

 

 

 

(5

)

 

 

-

 

(Gain) loss on disposal of property and equipment

 

 

39

 

 

 

(2,622

)

 

 

(599

)

 

 

(2,622

)

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

(Increase) decrease in accounts receivable

 

 

4,708

 

 

 

(16,361

)

 

 

22,296

 

 

 

(15,894

)

(Increase) decrease in prepaid expenses and other assets

 

 

1,069

 

 

 

(642

)

 

 

(183

)

 

 

2,267

 

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

 

 

(10,691

)

 

 

3,169

 

 

 

4,725

 

 

 

8,802

 

Cash Flows From Operating Activities

 

$

15,236

 

 

$

9,395

 

 

$

78,142

 

 

$

53,780

 

(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.

 

Contacts

Christopher T. Young

Chief Financial Officer

Entravision Communications Corporation

310-447-3870

Kimberly Esterkin

ADDO Investor Relations

310-829-5400

evc@addo.com

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