SANTA MONICA, Calif.,
Aug. 6, 2019 /PRNewswire/ --
Entravision Communications Corporation (NYSE: EVC) today reported
financial results for the three- and six-month periods ended
June 30, 2019.
Historical results, which are attached, are in thousands of U.S.
dollars (except share and per share data). This press release
contains certain non-GAAP financial measures as defined by SEC
Regulation G. The GAAP financial measure most directly comparable
to each of these non-GAAP financial measures, and a table
reconciling each of these non-GAAP financial measures to its most
directly comparable GAAP financial measure is included beginning on
page 12. Unaudited financial highlights are as follows:
|
Three-Month
Period
|
|
|
Six-Month
Period
|
|
|
Ended June
30,
|
|
|
Ended June
30,
|
|
|
2019
|
|
|
2018
|
|
|
%
Change
|
|
|
2019
|
|
|
2018
|
|
|
%
Change
|
|
Net
revenue
|
$
|
69,241
|
|
|
$
|
74,329
|
|
|
|
(7)
|
%
|
|
$
|
133,921
|
|
|
$
|
141,167
|
|
|
|
(5)
|
%
|
Cost of revenue -
digital media (1)
|
|
8,859
|
|
|
|
11,384
|
|
|
|
(22)
|
%
|
|
|
16,501
|
|
|
|
22,009
|
|
|
|
(25)
|
%
|
Operating expenses
(2)
|
|
43,200
|
|
|
|
43,790
|
|
|
|
(1)
|
%
|
|
|
85,944
|
|
|
|
88,117
|
|
|
|
(2)
|
%
|
Corporate expenses
(3)
|
|
6,501
|
|
|
|
6,266
|
|
|
|
4
|
%
|
|
|
13,395
|
|
|
|
12,241
|
|
|
|
9
|
%
|
Foreign currency
(gain) loss
|
|
(82)
|
|
|
|
(17)
|
|
|
|
382
|
%
|
|
|
50
|
|
|
|
196
|
|
|
|
(74)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated adjusted
EBITDA (4)
|
|
12,579
|
|
|
|
14,866
|
|
|
|
(15)
|
%
|
|
|
20,636
|
|
|
|
21,803
|
|
|
|
(5)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
(5)
|
$
|
1,860
|
|
|
$
|
8,937
|
|
|
|
(79)
|
%
|
|
$
|
3,153
|
|
|
$
|
10,550
|
|
|
|
(70)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(16,279)
|
|
|
$
|
4,840
|
|
|
*
|
|
|
$
|
(14,855)
|
|
|
$
|
3,033
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share,
basic and diluted
|
$
|
(0.19)
|
|
|
$
|
0.05
|
|
|
*
|
|
|
$
|
(0.17)
|
|
|
$
|
0.03
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding, basic
|
|
85,359,998
|
|
|
|
88,959,935
|
|
|
|
|
|
|
|
85,728,820
|
|
|
|
89,635,759
|
|
|
|
|
|
Weighted average
common shares outstanding, diluted
|
|
85,359,998
|
|
|
|
90,021,949
|
|
|
|
|
|
|
|
85,728,820
|
|
|
|
90,805,086
|
|
|
|
|
|
(1) Cost of revenue – digital media consists primarily of
the costs of online media acquired from third-party publishers.
Media cost is classified as cost of revenue in the period in which
the corresponding revenue is recognized.
(2) For purposes of presentation in this table, the
operating expenses line item includes direct operating and selling,
general and administrative expenses. Included in operating expenses
are $0.1 million and $0.1 million of non-cash stock-based compensation
for the three-month periods ended June 30,
2019 and 2018, respectively, and $0.2
million and $0.3 million of
non-cash stock-based compensation for the six-month periods ended
June 30, 2019 and 2018, respectively.
Also for purposes of presentation in this table, the operating
expenses line item does not include corporate expenses, foreign
currency (gain) loss, depreciation and amortization, impairment
charge, gain (loss) on sale of assets, gain (loss) on debt
extinguishment, other income (loss) and change in fair value of
contingent consideration.
(3) Corporate expenses include $0.7
million and $1.1 million of
non-cash stock-based compensation for the three-month periods ended
June 30, 2019 and 2018, respectively,
and $1.4 million and $2.1 million of non-cash stock-based compensation
for the six-month periods ended June 30,
2019 and 2018, 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 income (loss), gain (loss) on debt extinguishment, income tax
(expense) benefit, equity in net income (loss) of nonconsolidated
affiliate, non-cash losses, syndication programming amortization
less syndication programming payments, revenue from FCC spectrum
incentive auction less related expenses, expenses associated with
investments, acquisitions and dispositions and certain pro-forma
cost savings. We use the term consolidated adjusted EBITDA because
that measure is defined in the agreement governing our current
credit facility (\"the 2017 Credit Facility") and does not include
gain (loss) on sale of assets, depreciation and amortization,
non-cash impairment charge, non-cash stock-based compensation, net
interest expense, other income (loss), gain (loss) on debt
extinguishment, income tax (expense) benefit, equity in net income
(loss) of nonconsolidated affiliate, non-cash losses, syndication
programming amortization less syndication programming payments,
revenue from FCC spectrum incentive auction less related expenses,
expenses associated with investments, acquisitions and dispositions
and certain pro-forma cost savings.
(5) Free cash flow is defined as consolidated adjusted EBITDA
less cash paid for income taxes, net interest expense, capital
expenditures and non-recurring cash expenses plus dividend income,
FCC reimbursement for broadcast television repack and revenue from
FCC auction for broadcast spectrum less related cash expenses. Net
interest expense is defined as interest expense, less non-cash
interest expense relating to amortization of debt finance costs,
and less interest income.
Commenting on the Company's earnings results, Walter F. Ulloa, Chairman and Chief Executive
Officer, said, "Our second quarter results were impacted by
declines in our radio and digital segments compared to the prior
year. However, we did achieve growth in our television segment
compared to the second quarter of 2018. We continue to maintain a
solid balance sheet and return capital to our shareholders through
our share repurchase program and dividend. Looking ahead, we remain
well positioned to build on our success in further attracting
Latino and other audiences worldwide, as we execute our
multiplatform strategy to the benefit of our shareholders."
Quarterly Cash Dividend
The Company announced today that its Board of Directors approved
a quarterly cash dividend to shareholders of $0.05 per share of the Company's Class A, Class B
and Class U common stock, in an aggregate amount of approximately
$4.3 million. The quarterly dividend
will be payable on September 30, 2019
to shareholders of record as of the close of business on
September 16, 2019, and the common
stock will trade ex-dividend on September
13, 2019. 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.
Impairment of Digital Segment Goodwill
The Company recorded an impairment charge of $22.4 million related to goodwill as a result of
an appraisal recently conducted on its digital reporting unit. Due
to changes in key personnel in the Company's digital reporting unit
and updated internal forecasts of future performance of the digital
reporting unit caused by rapid changes in technology and
competition in the digital industry, the Company determined that
triggering events had occurred during the second quarter of 2019
that required an interim impairment assessment for its digital
reporting unit.
Acquisition of KMBH Serving McAllen, Texas
On July 31, 2019, the Company
entered into an agreement with MBTV Texas Valley LLC to acquire
television station KMBH-TV, serving the McAllen, Texas area, for $2.9 million. The transaction, which is
subject to customary closing conditions, including the prior
consent of the FCC, is currently expected to close in the second
half of 2019.
Financial Results
Three-Month period ended June 30, 2019 Compared to Three-Month Period
Ended
June 30,
2018
(Unaudited)
|
Three-Month
Period
|
|
|
Ended June
30,
|
|
|
2019
|
|
|
2018
|
|
|
%
Change
|
|
Net
revenue
|
$
|
69,241
|
|
|
$
|
74,329
|
|
|
|
(7)
|
%
|
Cost of revenue -
digital media (1)
|
|
8,859
|
|
|
|
11,384
|
|
|
|
(22)
|
%
|
Operating expenses
(1)
|
|
43,200
|
|
|
|
43,790
|
|
|
|
(1)
|
%
|
Corporate expenses
(1)
|
|
6,501
|
|
|
|
6,266
|
|
|
|
4
|
%
|
Depreciation and
amortization
|
|
4,306
|
|
|
|
4,019
|
|
|
|
7
|
%
|
Change in fair value
contingent consideration
|
|
(2,735)
|
|
|
|
(913)
|
|
|
|
200
|
%
|
Impairment
charge
|
|
22,368
|
|
|
|
-
|
|
|
*
|
|
Foreign currency
(gain) loss
|
|
(82)
|
|
|
|
(17)
|
|
|
|
382
|
%
|
Other operating
(gain) loss
|
|
(1,597)
|
|
|
|
(273)
|
|
|
|
485
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
(11,579)
|
|
|
|
10,073
|
|
|
*
|
|
Interest expense,
net
|
|
(2,697)
|
|
|
|
(2,962)
|
|
|
|
(9)
|
%
|
Dividend
income
|
|
251
|
|
|
|
417
|
|
|
|
(40)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
|
(14,025)
|
|
|
|
7,528
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
(expense)
|
|
(2,252)
|
|
|
|
(2,652)
|
|
|
|
(15)
|
%
|
Net income (loss)
before equity in net income (loss) of nonconsolidated
affiliates
|
|
(16,277)
|
|
|
|
4,876
|
|
|
*
|
|
Equity in net income
(loss) of nonconsolidated affiliates, net of tax
|
|
(2)
|
|
|
|
(36)
|
|
|
|
(94)
|
%
|
Net income
(loss)
|
$
|
(16,279)
|
|
|
$
|
4,840
|
|
|
*
|
|
(1) Cost of revenue, operating expenses and corporate expenses
are defined on page 1.
Net revenue decreased to $69.2
million for the three-month period ended June 30, 2019 from $74.3
million for the three-month period ended June 30, 2018, a decrease of $5.1 million. Of the overall decrease,
approximately $3.8 million was
attributable to our digital segment and was primarily due to
declines in both international and domestic revenue. The
decline in revenue is driven by a trend whereby revenue is shifting
more to automated self-service platforms, referred to in our
industry as programmatic revenue. Additionally, approximately
$2.8 million of the overall decrease
was attributable to our radio segment and was primarily due to
decreases in local and national advertising revenue, as a result in
part of ratings declines and changing demographic preferences of
audiences, as well as the absence of revenue from the 2018 FIFA
World Cup revenue in 2019 compared to 2018. The overall decrease in
revenue was partially offset by an increase in our television
segment of approximately $1.6 million
and was primarily due to an increase in revenue from spectrum usage
rights, partially offset by a decrease in local advertising
revenue, as a result in part of ratings declines and changing
demographic preferences of audiences and a trend for advertising to
move increasingly from traditional media, such as television, to
new media, such as digital media. The increase in revenue in our
television segment was also partially offset by a decrease in
political advertising revenue, which is not material in 2019.
Cost of revenue in our digital segment decreased to $8.9 million for the three-month period ended
June 30, 2019 from $11.4 million for the three-month period ended
June 30, 2018, a decrease of
$2.5 million, primarily due to the
decrease in revenue in our digital segment and a strategic shift in
our digital business designed to focus on generating revenue with
lower associated costs to produce higher margins.
Operating expenses decreased to $43.2 million for the three-month period
ended June 30, 2019 from $43.8 million for the three-month period ended
June 30, 2018, a decrease of
$0.6 million. The decrease was
primarily due to the decrease in expenses associated with the
decrease in revenue a decrease in salary expense, partially offset
by an increase in severance expense in our digital segment.
Corporate expenses increased to $6.5
million for the three-month period ended June 30, 2019 from $6.3
million for the three-month period ended June 30, 2018, an increase of $0.2 million. The increase was primarily due
to an increase in audit fees.
Impairment charge related to our digital goodwill was
$22.4 million for the three-month
period ended June 30, 2019. The
write-down was pursuant to Accounting Standards Codification (ASC)
350, Intangibles – Goodwill and Other, which requires that goodwill
and certain intangible assets be tested for impairment at least
annually, or more frequently if events or changes in circumstances
indicate the assets might be impaired.
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 U.S., primarily
related to the Headway business. As a result, we have operating
expense, attributable to foreign currency loss, that is primarily
related to the operations related to the Headway business. We had
foreign currency gain of $0.1 million for the three-month
period ended June 30, 2019. Foreign
currency loss was primarily due to currency fluctuations that
affected our digital segment operations located outside the U.S.,
primarily related to our Headway business.
Six-Month Period Ended June 30, 2019 Compared to Six-Month Period
Ended
June 30,
2018
(Unaudited)
|
Six-Month
Period
|
|
|
Ended June
30,
|
|
|
2019
|
|
|
2018
|
|
|
%
Change
|
|
Net
revenue
|
$
|
133,921
|
|
|
$
|
141,167
|
|
|
|
(5)
|
%
|
Cost of revenue -
digital media (1)
|
|
16,501
|
|
|
|
22,009
|
|
|
|
(25)
|
%
|
Operating expenses
(1)
|
|
85,944
|
|
|
|
88,117
|
|
|
|
(2)
|
%
|
Corporate expenses
(1)
|
|
13,395
|
|
|
|
12,241
|
|
|
|
9
|
%
|
Depreciation and
amortization
|
|
8,222
|
|
|
|
7,958
|
|
|
|
3
|
%
|
Change in fair value
contingent consideration
|
|
(2,376)
|
|
|
|
1,187
|
|
|
*
|
|
Impairment
charge
|
|
22,368
|
|
|
|
-
|
|
|
*
|
|
Foreign currency
(gain) loss
|
|
50
|
|
|
|
196
|
|
|
|
(74)
|
%
|
Other operating
(gain) loss
|
|
(3,593)
|
|
|
|
(295)
|
|
|
|
1118
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
(6,590)
|
|
|
|
9,754
|
|
|
*
|
|
Interest expense,
net
|
|
(5,268)
|
|
|
|
(5,447)
|
|
|
|
(3)
|
%
|
Dividend
income
|
|
506
|
|
|
|
545
|
|
|
|
(7)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
|
(11,352)
|
|
|
|
4,852
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
(expense)
|
|
(3,345)
|
|
|
|
(1,721)
|
|
|
|
94
|
%
|
Net income (loss)
before equity in net income (loss) of nonconsolidated
affiliates
|
|
(14,697)
|
|
|
|
3,131
|
|
|
*
|
|
Equity in net income
(loss) of nonconsolidated affiliates, net of tax
|
|
(158)
|
|
|
|
(98)
|
|
|
|
61
|
%
|
Net income
(loss)
|
$
|
(14,855)
|
|
|
$
|
3,033
|
|
|
*
|
|
(1) Cost of revenue, operating expenses and corporate
expenses are defined on page 1.
Net revenue decreased to $133.9
million for the six-month period ended June 30, 2019 from $141.2
million for the six-month period ended June 30, 2018, a decrease of $7.3 million. Of the overall decrease,
approximately $7.5 million was
attributable to our digital segment and was primarily due to
declines in both international and domestic revenue. The
decline in revenue is driven by a trend whereby revenue is shifting
more to automated self-service platforms, referred to in our
industry as programmatic revenue. Additionally, approximately
$5.0 million of the overall decrease
was attributable to our radio segment and was primarily due to
decreases in local and national advertising revenue, as a result in
part of ratings declines and changing demographic preferences of
audiences as well as the absence of revenue from the 2018 FIFA
World Cup revenue in 2019 compared to 2018. The overall decrease in
revenue was partially offset by an increase in our television
segment of approximately $5.3 million
and was primarily due to an increase in revenue from spectrum usage
rights, partially offset by a decrease in local advertising
revenue, as a result in part of ratings declines and changing
demographic preferences of audiences and a trend for advertising to
move increasingly from traditional media, such as television, to
new media, such as digital media. The increase in revenue in our
television segment was also partially offset by a decrease in
political advertising revenue, which is not material in 2019.
Cost of revenue in our digital segment decreased to $16.5 million for the six-month period ended
June 30, 2019 from $22.0 million for the six-month period ended
June 30, 2018, a decrease of
$5.5 million, primarily due to the
decrease in revenue in our digital segment and a strategic shift in
our digital business designed to focus on generating revenue with
lower associated costs to produce higher margins.
Operating expenses decreased to $85.9 million for the six-month period ended
June 30, 2019 from $88.1 million for the six-month period
ended June 30, 2018, a decrease of $2.2
million. The decrease was primarily due to the decrease in
expenses associated with the decrease in revenue a decrease in
salary expense, partially offset by an increase in severance
expense in our digital segment and an increase in fees due to
networks related to retransmission consent agreements in our
television segment.
Corporate expenses increased to $13.4
million for the six-month period ended June 30, 2019 from $12.2
million for the six-month period ended June 30, 2018, an increase of $1.2 million. The increase was primarily due to
an increase in audit fees that we incurred in connection with the
audit of our 2018 financial statements.
Impairment charge related to our digital goodwill was
$22.4 million for the six-month
period ended June 30, 2019. The
write-down was pursuant to Accounting Standards Codification (ASC)
350, Intangibles – Goodwill and Other, which requires that goodwill
and certain intangible assets be tested for impairment at least
annually, or more frequently if events or changes in circumstances
indicate the assets might be impaired.
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 U.S., primarily
related to the Headway business. As a result, we have operating
expense, attributable to foreign currency loss, that is primarily
related to the operations related to the Headway business. We had
foreign currency loss of $0.1 million for the six-month period
ended June 30, 2019 compared to a
foreign currency loss of $0.2 million for the six-month period
ended June 30, 2018. Foreign currency
loss was primarily due to currency fluctuations that affected our
digital segment operations located outside the U.S., primarily
related to our Headway business.
Segment Results
The following represents selected unaudited segment
information:
|
Three-Month
Period
|
|
|
Six-Month
Period
|
|
|
Ended June
30,
|
|
|
Ended June
30,
|
|
|
2019
|
|
|
2018
|
|
|
%
Change
|
|
|
2019
|
|
|
2018
|
|
|
%
Change
|
|
Net
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Television
|
$
|
38,071
|
|
|
$
|
36,531
|
|
|
|
4
|
%
|
|
$
|
76,324
|
|
|
$
|
71,022
|
|
|
|
7
|
%
|
Radio
|
|
14,366
|
|
|
|
17,240
|
|
|
|
(17)
|
%
|
|
|
26,321
|
|
|
|
31,343
|
|
|
|
(16)
|
%
|
Digital
|
|
16,804
|
|
|
|
20,558
|
|
|
|
(18)
|
%
|
|
|
31,276
|
|
|
|
38,802
|
|
|
|
(19)
|
%
|
Total
|
$
|
69,241
|
|
|
$
|
74,329
|
|
|
|
(7)
|
%
|
|
$
|
133,921
|
|
|
$
|
141,167
|
|
|
|
(5)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Revenue -
digital media (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital
|
$
|
8,859
|
|
|
$
|
11,384
|
|
|
|
(22)
|
%
|
|
$
|
16,501
|
|
|
$
|
22,009
|
|
|
|
(25)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Television
|
|
20,791
|
|
|
|
20,589
|
|
|
|
1
|
%
|
|
|
41,532
|
|
|
|
42,111
|
|
|
|
(1)
|
%
|
Radio
|
|
13,924
|
|
|
|
15,437
|
|
|
|
(10)
|
%
|
|
|
28,207
|
|
|
|
30,717
|
|
|
|
(8)
|
%
|
Digital
|
|
8,485
|
|
|
|
7,764
|
|
|
|
9
|
%
|
|
|
16,205
|
|
|
|
15,289
|
|
|
|
6
|
%
|
Total
|
$
|
43,200
|
|
|
$
|
43,790
|
|
|
|
(1)
|
%
|
|
$
|
85,944
|
|
|
$
|
88,117
|
|
|
|
(2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Expenses
(1)
|
$
|
6,501
|
|
|
$
|
6,266
|
|
|
|
4
|
%
|
|
$
|
13,395
|
|
|
$
|
12,241
|
|
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
adjusted EBITDA (1)
|
$
|
12,579
|
|
|
$
|
14,866
|
|
|
|
(15)
|
%
|
|
$
|
20,636
|
|
|
$
|
21,803
|
|
|
|
(5)
|
%
|
(1) Cost of revenue, operating expenses, corporate
expenses, and consolidated adjusted EBITDA are defined on page
1.
Entravision Communications Corporation will hold a conference
call to discuss its 2019 second quarter results on August 6, 2019 at 5 p.m.
Eastern Time. To access the conference call, please dial
412-317-5440 ten minutes prior to the start time. The call will be
webcast live and archived for replay on the investor relations
portion of the Company's web site located at
www.entravision.com.
Entravision Communications Corporation is a leading global media
company that, through its television and radio segments, reaches
and engages U.S. Hispanics across acculturation levels and media
channels. Additionally, our digital segment, whose operations are
located primarily in Spain,
Mexico, and Argentina and other countries in Latin America, reaches a global market. The
Company's expansive portfolio encompasses integrated marketing and
media solutions, comprised of television, radio, and digital
properties and data analytics services. Entravision has 55 primary
television stations and is the largest affiliate group of both the
Univision and UniMás television networks. Entravision also owns and
operates 49 primarily Spanish-language radio stations featuring
nationally recognized talent, as well as the Entravision Audio
Network and Entravision Solutions, a coast-to-coast national spot
and network sales and marketing organization representing
Entravision's owned and operated, as well as its affiliate partner,
radio stations. Entravision's Pulpo digital advertising unit is the
#1-ranked online advertising platform in Hispanic reach according
to comScore Media Metrix®, and Entravision's digital group also
includes Headway, a leading provider of mobile, programmatic, data
and performance digital marketing solutions primarily in
the United States, Mexico and other markets in Latin America. Entravision shares of Class A
Common Stock are traded on The New York Stock Exchange under the
symbol: EVC.
This press release contains certain forward-looking statements.
These forward-looking statements, which are included in accordance
with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, may involve known and unknown risks,
uncertainties and other factors that may cause the Company's actual
results and performance in future periods to be materially
different from any future results or performance suggested by the
forward-looking statements in this press release. Although the
Company believes the expectations reflected in such forward-looking
statements are based upon reasonable assumptions, it can give no
assurance that actual results will not differ materially from these
expectations, and the Company disclaims any duty to update any
forward-looking statements made by the Company. From time to time,
these risks, uncertainties and other factors are discussed in the
Company's filings with the Securities and Exchange Commission.
(Financial Table Follows)
Entravision Communications Corporation
Consolidated Balance Sheets
(In thousands;
unaudited)
|
June
30,
|
|
|
December
31,
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
52,631
|
|
|
$
|
46,733
|
Marketable
securities
|
|
113,349
|
|
|
|
132,424
|
Restricted
cash
|
|
732
|
|
|
|
732
|
Trade receivables, net
of allowance for doubtful accounts
|
|
69,841
|
|
|
|
79,308
|
Assets held for
sale
|
|
1,179
|
|
|
|
1,179
|
Prepaid expenses and
other current assets
|
|
12,558
|
|
|
|
10,672
|
Total current
assets
|
|
250,290
|
|
|
|
271,048
|
Property and
equipment, net
|
|
74,502
|
|
|
|
64,939
|
Intangible assets
subject to amortization, net
|
|
19,442
|
|
|
|
22,598
|
Intangible assets not
subject to amortization
|
|
254,598
|
|
|
|
254,598
|
Goodwill
|
|
51,857
|
|
|
|
74,292
|
Operating leases
right of use asset
|
|
46,206
|
|
|
|
-
|
Other
assets
|
|
2,684
|
|
|
|
2,934
|
Total
assets
|
$
|
699,579
|
|
|
$
|
690,409
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Current maturities of
long-term debt
|
$
|
3,000
|
|
|
$
|
3,000
|
Accounts payable and
accrued expenses
|
|
46,198
|
|
|
|
51,034
|
Operating lease
liabilities
|
|
11,420
|
|
|
|
-
|
Total current
liabilities
|
|
60,618
|
|
|
|
54,034
|
Long-term debt, less
current maturities, net of unamortized debt issuance
costs
|
|
239,032
|
|
|
|
240,541
|
Long-term operating
lease liabilities
|
|
41,091
|
|
|
|
-
|
Other long-term
liabilities
|
|
7,516
|
|
|
|
16,418
|
Deferred income
taxes
|
|
48,401
|
|
|
|
46,684
|
Total
liabilities
|
|
396,658
|
|
|
|
357,677
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
Class A common
stock
|
|
6
|
|
|
|
6
|
Class B common
stock
|
|
2
|
|
|
|
2
|
Class U common
stock
|
|
1
|
|
|
|
1
|
Additional paid-in
capital
|
|
846,345
|
|
|
|
862,299
|
Accumulated
deficit
|
|
(543,019)
|
|
|
|
(528,164)
|
Accumulated other
comprehensive income (loss)
|
|
(414)
|
|
|
|
(1,412)
|
Total stockholders'
equity
|
|
302,921
|
|
|
|
332,732
|
Total liabilities and
stockholders' equity
|
$
|
699,579
|
|
|
$
|
690,409
|
Entravision Communications Corporation
Consolidated Statements of Operations
(In thousands,
except share and per share data)
(Unaudited)
|
|
Three-Month
Period
|
|
|
Six-Month
Period
|
|
|
|
Ended June
30,
|
|
|
Ended June
30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenue
|
|
$
|
69,241
|
|
|
$
|
74,329
|
|
|
$
|
133,921
|
|
|
$
|
141,167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue -
digital media
|
|
|
8,859
|
|
|
|
11,384
|
|
|
|
16,501
|
|
|
|
22,009
|
|
Direct operating
expenses
|
|
|
29,655
|
|
|
|
31,117
|
|
|
|
58,585
|
|
|
|
62,150
|
|
Selling, general and
administrative expenses
|
|
|
13,545
|
|
|
|
12,673
|
|
|
|
27,359
|
|
|
|
25,967
|
|
Corporate
expenses
|
|
|
6,501
|
|
|
|
6,266
|
|
|
|
13,395
|
|
|
|
12,241
|
|
Depreciation and
amortization
|
|
|
4,306
|
|
|
|
4,019
|
|
|
|
8,222
|
|
|
|
7,958
|
|
Change in fair value
contingent consideration
|
|
|
(2,735)
|
|
|
|
(913)
|
|
|
|
(2,376)
|
|
|
|
1,187
|
|
Impairment
charge
|
|
|
22,368
|
|
|
|
-
|
|
|
|
22,368
|
|
|
|
-
|
|
Foreign currency
(gain) loss
|
|
|
(82)
|
|
|
|
(17)
|
|
|
|
50
|
|
|
|
196
|
|
Other operating (gain)
loss
|
|
|
(1,597)
|
|
|
|
(273)
|
|
|
|
(3,593)
|
|
|
|
(295)
|
|
|
|
|
80,820
|
|
|
|
64,256
|
|
|
|
140,511
|
|
|
|
131,413
|
|
Operating income
(loss)
|
|
|
(11,579)
|
|
|
|
10,073
|
|
|
|
(6,590)
|
|
|
|
9,754
|
|
Interest
expense
|
|
|
(3,554)
|
|
|
|
(4,001)
|
|
|
|
(7,044)
|
|
|
|
(7,399)
|
|
Interest
income
|
|
|
857
|
|
|
|
1,039
|
|
|
|
1,776
|
|
|
|
1,952
|
|
Dividend
income
|
|
|
251
|
|
|
|
417
|
|
|
|
506
|
|
|
|
545
|
|
Income (loss) before
income taxes
|
|
|
(14,025)
|
|
|
|
7,528
|
|
|
|
(11,352)
|
|
|
|
4,852
|
|
Income tax benefit
(expense)
|
|
|
(2,252)
|
|
|
|
(2,652)
|
|
|
|
(3,345)
|
|
|
|
(1,721)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
equity in net income (loss) of nonconsolidated
affiliate
|
|
|
(16,277)
|
|
|
|
4,876
|
|
|
|
(14,697)
|
|
|
|
3,131
|
|
Equity in net income
(loss) of nonconsolidated affiliate, net of tax
|
|
|
(2)
|
|
|
|
(36)
|
|
|
|
(158)
|
|
|
|
(98)
|
|
Net income
(loss)
|
|
$
|
(16,279)
|
|
|
$
|
4,840
|
|
|
$
|
(14,855)
|
|
|
$
|
3,033
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share, basic and diluted
|
|
$
|
(0.19)
|
|
|
$
|
0.05
|
|
|
$
|
(0.17)
|
|
|
$
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared per common share
|
|
$
|
0.05
|
|
|
$
|
0.05
|
|
|
$
|
0.10
|
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding, basic
|
|
|
85,359,998
|
|
|
|
88,959,935
|
|
|
|
85,728,820
|
|
|
|
89,635,759
|
|
Weighted average
common shares outstanding, diluted
|
|
|
85,359,998
|
|
|
|
90,021,949
|
|
|
|
85,728,820
|
|
|
|
90,805,086
|
|
Entravision Communications Corporation
Consolidated Statements of Cash Flows
(In thousands;
unaudited)
|
Three-Month
Period
|
|
|
Six-Month
Period
|
|
Ended June
30,
|
|
|
Ended June
30,
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(16,279)
|
|
|
$
|
4,840
|
|
|
$
|
(14,855)
|
|
|
$
|
3,033
|
Adjustments to
reconcile net income (loss) to net cash provided
by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
4,306
|
|
|
|
4,019
|
|
|
|
8,222
|
|
|
|
7,958
|
Impairment
charge
|
|
22,368
|
|
|
|
—
|
|
|
|
22,368
|
|
|
|
—
|
Deferred income
taxes
|
|
1,002
|
|
|
|
2,043
|
|
|
|
1,472
|
|
|
|
1,029
|
Non-cash
interest
|
|
238
|
|
|
|
414
|
|
|
|
489
|
|
|
|
538
|
Amortization of
syndication contracts
|
|
125
|
|
|
|
176
|
|
|
|
249
|
|
|
|
352
|
Payments on
syndication contracts
|
|
(92)
|
|
|
|
(174)
|
|
|
|
(227)
|
|
|
|
(360)
|
Equity in net (income)
loss of nonconsolidated affiliate
|
|
2
|
|
|
|
36
|
|
|
|
158
|
|
|
|
98
|
Non-cash stock-based
compensation
|
|
835
|
|
|
|
1,176
|
|
|
|
1,635
|
|
|
|
2,425
|
(Gain) loss on
disposal of property and equipment
|
|
75
|
|
|
|
—
|
|
|
|
161
|
|
|
|
—
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in
accounts receivable
|
|
(4,038)
|
|
|
|
(1,873)
|
|
|
|
9,619
|
|
|
|
9,170
|
(Increase) decrease in
prepaid expenses and other assets
|
|
1,811
|
|
|
|
(2,566)
|
|
|
|
2,680
|
|
|
|
(6,547)
|
Increase (decrease) in
accounts payable, accrued expenses and other liabilities
|
|
(4,990)
|
|
|
|
5,197
|
|
|
|
(12,301)
|
|
|
|
(780)
|
Net cash provided
by operating activities
|
|
5,363
|
|
|
|
13,288
|
|
|
|
19,670
|
|
|
|
16,916
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from sale of
property and equipment and intangibles
|
|
—
|
|
|
|
33
|
|
|
|
—
|
|
|
|
33
|
Purchases of property
and equipment
|
|
(7,910)
|
|
|
|
(2,680)
|
|
|
|
(13,982)
|
|
|
|
(5,710)
|
Purchases of
intangible assets
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,153)
|
Purchase of a
businesses, net of cash acquired
|
|
—
|
|
|
|
(3,563)
|
|
|
|
—
|
|
|
|
(3,563)
|
Purchases of
marketable securities
|
|
(1,160)
|
|
|
|
—
|
|
|
|
(1,160)
|
|
|
|
(159,403)
|
Proceeds from
marketable securities
|
|
10,960
|
|
|
|
25,000
|
|
|
|
21,681
|
|
|
|
25,000
|
Purchases of
investments
|
|
(100)
|
|
|
|
(35)
|
|
|
|
(300)
|
|
|
|
(35)
|
Net cash provided
by (used in) investing activities
|
|
1,790
|
|
|
|
18,755
|
|
|
|
6,239
|
|
|
|
(146,831)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from stock
option exercises
|
|
—
|
|
|
|
106
|
|
|
|
—
|
|
|
|
106
|
Tax payments related
to shares withheld for share-based compensation plans
|
|
—
|
|
|
|
(12)
|
|
|
|
(751)
|
|
|
|
(2,239)
|
Payments on long-term
debt
|
|
(750)
|
|
|
|
(750)
|
|
|
|
(1,500)
|
|
|
|
(1,500)
|
Dividends
paid
|
|
(4,269)
|
|
|
|
(4,442)
|
|
|
|
(8,540)
|
|
|
|
(8,960)
|
Repurchase of Class A
common stock
|
|
(1,302)
|
|
|
|
(5,258)
|
|
|
|
(9,008)
|
|
|
|
(7,660)
|
Payment of contingent
consideration
|
|
—
|
|
|
|
(2,015)
|
|
|
|
—
|
|
|
|
(2,015)
|
Payments of
capitalized debt costs
|
|
(225)
|
|
|
|
—
|
|
|
|
(225)
|
|
|
|
—
|
Net cash used in
financing activities
|
|
(6,546)
|
|
|
|
(12,371)
|
|
|
|
(20,024)
|
|
|
|
(22,268)
|
Effect of exchange
rates on cash, cash equivalents and restricted cash
|
|
21
|
|
|
|
(4)
|
|
|
|
13
|
|
|
|
(10)
|
Net increase
(decrease) in cash, cash equivalents and restricted
cash
|
|
628
|
|
|
|
19,668
|
|
|
|
5,898
|
|
|
|
(152,193)
|
Cash, cash
equivalents and restricted cash:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning
|
|
52,735
|
|
|
|
89,993
|
|
|
|
47,465
|
|
|
|
261,854
|
Ending
|
$
|
53,363
|
|
|
$
|
109,661
|
|
|
$
|
53,363
|
|
|
$
|
109,661
|
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
|
|
|
Six-Month
Period
|
|
Ended June
30,
|
|
|
Ended June
30,
|
|
2019
|
|
|
2018
|
|
|
|
2019
|
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated adjusted
EBITDA (1)
|
$
|
12,579
|
|
|
$
|
14,866
|
|
|
$
|
20,636
|
|
|
$
|
21,803
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(3,554)
|
|
|
|
(4,001)
|
|
|
|
(7,044)
|
|
|
|
(7,399)
|
Interest
income
|
|
857
|
|
|
|
1,039
|
|
|
|
1,776
|
|
|
|
1,952
|
Dividend
income
|
|
251
|
|
|
|
417
|
|
|
|
506
|
|
|
|
545
|
Income tax
expense
|
|
(2,252)
|
|
|
|
(2,652)
|
|
|
|
(3,345)
|
|
|
|
(1,721)
|
Equity in net loss of
nonconsolidated affiliates
|
|
(2)
|
|
|
|
(36)
|
|
|
|
(158)
|
|
|
|
(98)
|
Amortization of
syndication contracts
|
|
(125)
|
|
|
|
(176)
|
|
|
|
(249)
|
|
|
|
(352)
|
Payments on
syndication contracts
|
|
92
|
|
|
|
174
|
|
|
|
227
|
|
|
|
360
|
Non-cash stock-based
compensation included in direct operating
expenses
|
|
(116)
|
|
|
|
(76)
|
|
|
|
(250)
|
|
|
|
(292)
|
Non-cash stock-based
compensation included in corporate expenses
|
|
(719)
|
|
|
|
(1,100)
|
|
|
|
(1,385)
|
|
|
|
(2,133)
|
Depreciation and
amortization
|
|
(4,306)
|
|
|
|
(4,019)
|
|
|
|
(8,222)
|
|
|
|
(7,958)
|
Change in fair value
contingent consideration
|
|
2,735
|
|
|
|
913
|
|
|
|
2,376
|
|
|
|
(1,187)
|
Impairment
charge
|
|
(22,368)
|
|
|
|
-
|
|
|
|
(22,368)
|
|
|
|
|
Non-recurring cash
severance charge
|
|
(948)
|
|
|
|
(782)
|
|
|
|
(948)
|
|
|
|
(782)
|
Other operating gain
(loss)
|
|
1,597
|
|
|
|
273
|
|
|
|
3,593
|
|
|
|
295
|
Net income
(loss)
|
|
(16,279)
|
|
|
|
4,840
|
|
|
|
(14,855)
|
|
|
|
3,033
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
4,306
|
|
|
|
4,019
|
|
|
|
8,222
|
|
|
|
7,958
|
Impairment
charge
|
|
22,368
|
|
|
|
-
|
|
|
|
22,368
|
|
|
|
-
|
Deferred income
taxes
|
|
1,002
|
|
|
|
2,043
|
|
|
|
1,472
|
|
|
|
1,029
|
Non-cash
interest
|
|
238
|
|
|
|
414
|
|
|
|
489
|
|
|
|
538
|
Amortization of
syndication contracts
|
|
125
|
|
|
|
176
|
|
|
|
249
|
|
|
|
352
|
Payments on
syndication contracts
|
|
(92)
|
|
|
|
(174)
|
|
|
|
(227)
|
|
|
|
(360)
|
Equity in net
(income) loss of nonconsolidated affiliate
|
|
2
|
|
|
|
36
|
|
|
|
158
|
|
|
|
98
|
Non-cash stock-based
compensation
|
|
835
|
|
|
|
1,176
|
|
|
|
1,635
|
|
|
|
2,425
|
(Gain) loss on
disposal of property and equipment
|
|
75
|
|
|
|
-
|
|
|
|
161
|
|
|
|
-
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in
accounts receivable
|
|
(4,038)
|
|
|
|
(1,873)
|
|
|
|
9,619
|
|
|
|
9,170
|
(Increase) decrease in
prepaid expenses and other assets
|
|
1,811
|
|
|
|
(2,566)
|
|
|
|
2,680
|
|
|
|
(6,547)
|
Increase (decrease) in
accounts payable, accrued expenses and other
liabilities
|
|
(4,990)
|
|
|
|
5,197
|
|
|
|
(12,301)
|
|
|
|
(780)
|
Cash flows from
operating activities
|
|
5,363
|
|
|
|
13,288
|
|
|
|
19,670
|
|
|
|
16,916
|
(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
|
|
|
Six-Month
Period
|
|
Ended June
30,
|
|
|
Ended June
30,
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
Consolidated adjusted
EBITDA (1)
|
$
|
12,579
|
|
|
$
|
14,866
|
|
|
$
|
20,636
|
|
|
$
|
21,803
|
Net interest expense
(1)
|
|
(2,459)
|
|
|
|
(2,549)
|
|
|
|
(4,779)
|
|
|
|
(4,909)
|
Dividend
income
|
|
251
|
|
|
|
417
|
|
|
|
506
|
|
|
|
545
|
Cash paid for income
taxes
|
|
(1,250)
|
|
|
|
(608)
|
|
|
|
(1,873)
|
|
|
|
(692)
|
Capital expenditures
(2)
|
|
(7,910)
|
|
|
|
(2,680)
|
|
|
|
(13,982)
|
|
|
|
(5,710)
|
Non-recurring cash
severance charge
|
|
(948)
|
|
|
|
(782)
|
|
|
|
(948)
|
|
|
|
(782)
|
FCC
Reimbursement
|
|
1,597
|
|
|
|
273
|
|
|
|
3,593
|
|
|
|
295
|
Free cash flow
(1)
|
|
1,860
|
|
|
|
8,937
|
|
|
|
3,153
|
|
|
|
10,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
(2)
|
|
7,910
|
|
|
|
2,680
|
|
|
|
13,982
|
|
|
|
5,710
|
Change in fair value
of contingent consideration
|
|
2,735
|
|
|
|
913
|
|
|
|
2,376
|
|
|
|
(1,187)
|
(Gain) loss on
disposal of property and equipment
|
|
75
|
|
|
|
-
|
|
|
|
161
|
|
|
|
-
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in
accounts receivable
|
|
(4,038)
|
|
|
|
(1,873)
|
|
|
|
9,619
|
|
|
|
9,170
|
(Increase) decrease in
prepaid expenses and other assets
|
|
1,811
|
|
|
|
(2,566)
|
|
|
|
2,680
|
|
|
|
(6,547)
|
Increase (decrease) in
accounts payable, accrued expenses and other
liabilities
|
|
(4,990)
|
|
|
|
5,197
|
|
|
|
(12,301)
|
|
|
|
(780)
|
Cash Flows From
Operating Activities
|
$
|
5,363
|
|
|
$
|
13,288
|
|
|
$
|
19,670
|
|
|
$
|
16,916
|
(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.
View original
content:http://www.prnewswire.com/news-releases/entravision-communications-corporation-reports-second-quarter-2019-results-300897469.html
SOURCE Entravision Communications Corporation