New Operating Segments Double Digit
Revenue Growth Declares Quarterly Cash Dividend of $0.05 Per
Share Payable on December 31, 2024
Entravision Communications Corporation (NYSE: EVC), a media and
advertising technology company, today announced financial results
for the three- and nine-month periods ended September 30, 2024.
"During the third quarter we realigned our operating segments
into two segments: Media and Advertising Technology & Services.
Our media segment consists of sales of advertising through various
media, including television, radio and digital. Our advertising
technology & services segment consists of Smadex, our
programmatic ad purchasing platform, and Adwake, our mobile growth
solutions business," said Michael Christenson, Chief Executive
Officer.
Mr. Christenson continued, "Our net revenue from continuing
operations increased 25% in the third quarter of 2024 compared to
the same quarter in 2023, driven primarily by growth in political
advertising revenue and Smadex. Our balance sheet remains strong,
and we are focused on providing highly-rated news and content to
our audiences, strengthening our digital marketing solutions in
combination with our television and radio offerings, and continuing
to grow Smadex."
Unaudited Financial Highlights (In thousands, except share
and per share data)
Three-Month Period
Nine-Month Period
Ended September 30,
Ended September 30,
2024
2023
% Change
2024
2023
% Change
Net revenue
$
97,156
$
77,420
25
%
$
257,986
$
218,787
18
%
Cost of revenue (1)
26,801
21,393
25
%
73,883
57,910
28
%
Operating expenses (2) (5)
52,729
40,648
30
%
144,983
121,523
19
%
Corporate expenses (3) (5)
6,930
13,292
(48
)%
29,989
35,836
(16
)%
Foreign currency (gain) loss
(121
)
269
*
120
1,274
(91
)%
Net income (loss) from continuing
operations
$
(10,841
)
$
(6,103
)
78
%
$
(14,619
)
$
(19,945
)
(27
)%
Net income (loss) from discontinued
operations, net of tax
$
(1,139
)
$
8,822
*
$
(77,931
)
$
22,716
*
Net income (loss) attributable to common
stockholders
$
(11,980
)
$
2,719
*
$
(92,550
)
$
2,771
*
Cash flows from operating activities
$
10,851
$
22,026
(51
)%
$
61,922
$
69,117
(10
)%
Free cash flow (4)
$
9,299
$
17,003
(45
)%
$
55,633
$
49,236
13
%
Net income (loss) per share from
continuing operations, basic and diluted
$
(0.12
)
$
(0.07
)
71
%
$
(0.16
)
$
(0.23
)
(30
)%
Net income (loss) per share from
discontinued operations, basic and diluted
$
(0.01
)
$
0.10
*
$
(0.87
)
$
0.26
*
Net income (loss) per share attributable
to common stockholders, basic and diluted
$
(0.13
)
$
0.03
*
$
(1.03
)
$
0.03
*
Weighted average common shares
outstanding, basic and diluted
89,987,110
87,995,567
89,776,075
87,803,770
(1)
Consists of the costs of online media
acquired from third-party publishers. Media cost is classified as
cost of revenue in the period in which the corresponding revenue is
recognized.
(2)
Operating expenses include direct
operating and selling, general and administrative expenses.
Included in operating expenses are $2.1 million and $2.3 million of
non-cash stock-based compensation for the three-month periods ended
September 30, 2024 and 2023, respectively, and $5.0 million and
$6.0 million of non-cash stock-based compensation for the
nine-month periods ended September 30, 2024 and 2023,
respectively.
(3)
Corporate expenses include $1.6 million
and $4.4 million of non-cash stock-based compensation for the
three-month periods ended September 30, 2024 and 2023,
respectively, and $8.0 million and $9.8 million of non-cash
stock-based compensation for the nine-month periods ended September
30, 2024 and 2023, respectively.
(4)
Free cash flow is defined as cash flows
from operating activities less cash paid for capital
expenditures.
(5)
Effective July 1, 2024, with the
realignment of our operations and reassignment of certain
responsibilities, certain costs that were previously included as
corporate expenses, primarily salaries, are now included in
operating expenses.
Net revenue for the three- and nine-month periods ended
September 30, 2024 increased primarily due to an increase in
advertising revenue from our media segment, and an increase in
advertising revenue from our advertising technology & services
segment. The increase was partially offset by decreases in spectrum
usage rights revenue and retransmission consent revenue in our
media segment.
Cost of revenue for the three- and nine-month periods ended
September 30, 2024 increased primarily due to the increase in
digital advertising revenue.
Operating expenses for the three- and nine-month periods ended
September 30, 2024 increased primarily due to an increase in
salaries, primarily associated with the expansion of our news
programming in our media segment, and increases in salaries and
cloud infrastructure expenses associated with the increase in
revenue in our advertising technology & services segment.
Additionally, effective July 1, 2024, with the realignment of our
operations and reassignment of certain responsibilities, certain
costs that were previously included as corporate expenses,
primarily salaries, are now included in operating expenses.
Corporate expenses for the three-month period ended September
30, 2024 decreased primarily due to a decrease in salaries and
bonus expense, a decrease in non-cash stock-based compensation, a
decrease in professional services expense, and a decrease due to
the realignment of our operations as noted above. This decrease was
partially offset by an increase in audit fees.
Corporate expenses for the nine-month period ended September 30,
2024 decreased primarily due to a decrease in salaries and bonus
expense, a decrease in non-cash stock-based compensation, a
decrease in professional services expense, and a decrease due to
the realignment of our operations as noted above. This decrease was
partially offset by an increase in severance expense.
New Operating Segments
Effective July 1, 2024, we have realigned our operating segments
into two segments – media and advertising technology & services
– consistent with our current operational and management structure.
Our media segment consists of sales of advertising through various
media, including television, radio and digital. We own and/or
operate 49 primary television stations and 44 radio stations (37 FM
and 7 AM), reaching and engaging U.S. Latinos. Our advertising
technology & services segment consists of programmatic ad
services through Smadex, our demand side programmatic ad platform,
and Adwake, our mobile growth solutions business.
Quarterly Cash Dividend
The Company announced today that its Board of Directors approved
a quarterly cash dividend to shareholders of $0.05 per share on the
Company's Class A and Class U common stock, in an aggregate amount
of $4.5 million. The quarterly dividend will be payable on December
31, 2024 to shareholders of record as of the close of business on
December 16, 2024. 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. These non-GAAP financial measures
include Consolidated EBITDA and Free Cash Flow. 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 8.
Consolidated EBITDA
We use the term “consolidated EBITDA” because that term is
defined in our 2023 Credit Agreement. Under the terms of our 2023
Credit Agreement, consolidated EBITDA is a measure that governs
several critical aspects of our 2023 Credit Facility, including,
among other things, financial covenants with which we must comply
and financial ratios which we must maintain in order to borrow
funds needed for the operation of our business and with respect to
the interest rates that we pay on our 2023 Credit Facility. For
example, our 2023 Credit Agreement contains a total net leverage
ratio financial covenant. The total net leverage ratio, or the
ratio of consolidated total debt (net of up to $50.0 million of
unrestricted cash) to trailing-twelve-month consolidated EBITDA,
affects both our ability to borrow from our Revolving Credit
Facility and our applicable margin for the interest rate
calculation. Under our 2023 Credit Agreement, our maximum total
leverage ratio may not exceed 3.25 to 1.00. In addition, our 2023
Credit Agreement contains an interest coverage ratio financial
covenant (calculated as set forth in the 2023 Credit Agreement),
with a minimum permitted ratio of 3.00 to 1.00.
Therefore, we believe that it is important to disclose
consolidated EBITDA to our investors to understand our compliance
with these, and certain other, terms of our 2023 Credit Agreement.
While many in the financial community and we consider consolidated
EBITDA to be important, it should be considered in addition to, but
not as a substitute for or superior to, other measures of financial
performance and liquidity prepared in accordance with accounting
principles generally accepted in the United States of America, such
as operating income (loss), net income (loss) and cash flows from
operating activities. Consolidated EBITDA has certain limitations
because it excludes and includes several important financial line
items as noted above. Therefore, we consider both non-GAAP and GAAP
measures when evaluating our business. Consolidated EBITDA is also
used to make executive compensation decisions.
We calculate Consolidated EBITDA as 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, change in fair value of contingent consideration,
non-recurring cash severance and restructuring charge, EBITDA
attributable to redeemable noncontrolling interest, acquisitions
and dispositions and certain pro-forma cost savings.
Free Cash Flow
We use the term free cash flow as a measure of our liquidity and
we believe that it is a useful indicator for potential investors of
our ability to implement growth strategies and service our debt.
Free cash flow is a non-GAAP measure and should be considered in
addition to, but not as a substitute for, information contained in
our condensed consolidated statement of cash flows as a measure of
liquidity.
We calculate free cash flow as cash flow from operating
activities less capital expenditures.
Balance Sheet and Related Metrics
Cash and marketable securities as of September 30, 2024 totaled
$93.1 million. Total debt as defined in the Company’s credit
agreement was $187.8 million. Net of $50 million of cash and
marketable securities, total leverage as defined in the Company’s
credit agreement was 3.0 times as of September 30, 2024. Net of
total cash and marketable securities, total leverage was 2.0
times.
Consolidated EBITDA, as defined in our 2023 Credit Agreement was
$15.1 million and $30.1 million for the three- and nine-month
periods ended September 30, 2024.
Unaudited Segment Results (In thousands)
Three-Month Period
Nine-Month Period
Ended September 30,
Ended September 30,
2024
2023
% Change
2024
2023
% Change
Net Revenue
Media
$
59,802
$
48,746
23
%
$
154,801
$
144,614
7
%
Advertising Technology & Services
37,354
28,674
30
%
103,185
74,173
39
%
Total
$
97,156
$
77,420
25
%
$
257,986
$
218,787
18
%
Cost of Revenue (1)
Media
$
4,881
$
2,840
72
%
$
11,888
$
7,661
55
%
Advertising Technology & Services
21,920
18,553
18
%
61,995
50,249
23
%
Total
$
26,801
$
21,393
25
%
$
73,883
$
57,910
28
%
Operating Expenses (1)
Media
40,053
32,787
22
%
113,005
99,043
14
%
Advertising Technology & Services
12,676
7,861
61
%
31,978
22,480
42
%
Total
$
52,729
$
40,648
30
%
$
144,983
$
121,523
19
%
Corporate Expenses (1)
$
6,930
$
13,292
(48
)%
$
29,989
$
35,836
(16
)%
(1)
Cost of revenue, operating expenses, and
corporate expenses are defined on page 2.
Notice of Conference Call
Entravision will hold a conference call to discuss its third
quarter 2024 results on Thursday, November 7, 2024 at 5:00 p.m.
Eastern Time. To access the conference call, please dial
1-800-717-1738 or 1-646-307-1865 ten minutes prior to the start
time. 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 media and advertising technology company. In
the U.S., we maintain a diversified portfolio of television and
radio stations and digital advertising services that target Latino
audiences. Our advertising technology business consists of Smadex,
our programmatic ad purchasing platform, and Adwake, our mobile
growth solutions business. Entravision remains the largest
affiliate group of the Univision and UniMás television networks.
Shares of Entravision Class A Common Stock trade on the NYSE under
ticker: EVC. Learn more about our offerings at entravision.com or
connect with us on LinkedIn and Facebook.
Forward-Looking Statements
This press release contains certain forward-looking statements.
These forward-looking statements, which are included in accordance
with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, may involve known and unknown risks,
uncertainties and other factors that may cause the Company’s actual
results and performance in future periods to be materially
different from any future results or performance suggested by the
forward-looking statements in this press release. Although the
Company believes the expectations reflected in such forward-looking
statements are based upon reasonable assumptions, it can give no
assurance that actual results will not differ materially from these
expectations, and the Company disclaims any duty to update any
forward-looking statements made by the Company. From time to time,
these risks, uncertainties and other factors are discussed in the
Company’s filings with the Securities and Exchange Commission.
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,
2024
2023
2024
2023
Net revenue
$
97,156
$
77,420
$
257,986
$
218,787
Expenses:
Cost of revenue
26,801
21,393
73,883
57,910
Direct operating expenses
35,617
28,702
99,174
84,160
Selling, general and administrative
expenses
17,112
11,946
45,809
37,363
Corporate expenses
6,930
13,292
29,989
35,836
Depreciation and amortization
3,882
4,733
13,049
11,948
Change in fair value of contingent
consideration
(650
)
(100
)
(630
)
621
Impairment charge
—
989
—
989
Foreign currency (gain) loss
(121
)
269
120
1,274
89,571
81,224
261,394
230,101
Operating income (loss)
7,585
(3,804
)
(3,408
)
(11,314
)
Interest expense
(4,087
)
(4,346
)
(12,648
)
(12,464
)
Interest income
646
1,068
1,801
2,396
Dividend income
—
—
10
32
Realized gain (loss) on marketable
securities
(1
)
(33
)
(110
)
(94
)
Gain (loss) on debt extinguishment
—
—
(91
)
(1,556
)
Income (loss) before income taxes
4,143
(7,115
)
(14,446
)
(23,000
)
Income tax benefit (expense)
(14,984
)
1,012
(173
)
3,055
Net income (loss) from continuing
operations
(10,841
)
(6,103
)
(14,619
)
(19,945
)
Net income (loss) from discontinued
operations, net of tax
(1,139
)
8,822
(77,931
)
22,716
Net income (loss) attributable to common
stockholders
$
(11,980
)
$
2,719
$
(92,550
)
$
2,771
Basic and diluted earnings per share:
Net income (loss) per share from
continuing operations, basic and diluted
$
(0.12
)
$
(0.07
)
$
(0.16
)
$
(0.23
)
Net income (loss) per share from
discontinued operations, basic and diluted
$
(0.01
)
$
0.10
$
(0.87
)
$
0.26
Net income (loss) per share attributable
to common stockholders, basic and diluted
$
(0.13
)
$
0.03
$
(1.03
)
$
0.03
Cash dividends declared per common share,
basic and diluted
$
0.05
$
0.05
$
0.15
$
0.15
Weighted average common shares
outstanding, basic and diluted
89,987,110
87,995,567
89,776,075
87,803,770
Entravision Communications
Corporation
Consolidated Balance
Sheets
(In thousands;
unaudited)
September 30,
December 31,
2024
2023
ASSETS
Current assets
Cash and cash equivalents
$
90,258
$
67,398
Marketable securities
2,826
13,172
Restricted cash
783
770
Trade receivables, net of allowance for
doubtful accounts
69,758
70,082
Assets held for sale
-
301
Prepaid expenses and other current
assets
31,763
16,863
Current assets of discontinued
operations
-
217,269
Total current assets
195,388
385,855
Property and equipment, net
61,297
66,932
Intangible assets subject to amortization,
net
4,890
7,100
Intangible assets not subject to
amortization
195,174
195,174
Goodwill
50,673
50,674
Deferred income taxes
87
265
Operating leases right of use asset
41,742
42,868
Other assets
8,007
21,223
Noncurrent assets of discontinued
operations
-
95,855
Total assets
$
557,258
$
865,946
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities
Current maturities of long-term debt
$
-
$
8,750
Accounts payable and accrued expenses
64,528
47,776
Operating lease liabilities
7,740
6,748
Current liabilities of discontinued
operations
-
208,779
Total current liabilities
72,268
272,053
Long-term debt, less current maturities,
net of unamortized debt issuance costs
186,902
197,884
Long-term operating lease liabilities
43,171
45,178
Other long-term liabilities
4,443
4,624
Deferred income taxes
43,111
46,849
Noncurrent liabilities of discontinued
operations
-
33,072
Total liabilities
349,895
599,660
Redeemable noncontrolling interest -
discontinued operations
-
43,758
Stockholders' equity
Class A common stock
8
8
Class U common stock
1
1
Additional paid-in capital
820,491
743,246
Accumulated deficit
(612,362
)
(519,812
)
Accumulated other comprehensive income
(loss)
(775
)
(915
)
Total stockholders' equity
207,363
222,528
Total liabilities, redeemable
noncontrolling interest and equity
$
557,258
$
865,946
Entravision Communications
Corporation
Consolidated Statements of
Cash Flows
(In thousands;
unaudited)
Three-Month Period
Nine-Month Period
Ended September 30,
Ended September 30,
2024
2023
2024
2023
Cash flows from operating
activities:
Net income (loss)
$
(11,980
)
$
2,719
$
(92,550
)
$
2,771
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization
3,882
7,356
17,007
20,336
Impairment charge
—
989
49,438
989
Deferred income taxes
(3,500
)
(40
)
(3,286
)
(169
)
Non-cash interest
63
85
223
264
Amortization of syndication contracts
112
118
339
358
Payments on syndication contracts
(108
)
(125
)
(337
)
(366
)
Non-cash stock-based compensation
3,688
7,032
12,422
17,053
(Gain) loss on marketable securities
1
33
110
94
(Gain) loss on disposal of property and
equipment
23
(29
)
206
(11
)
Loss (gain) on the sale of businesses
125
—
45,139
—
(Gain) loss on debt extinguishment
—
—
91
1,556
Change in fair value of contingent
consideration
(650
)
(5,997
)
(13,198
)
(8,939
)
Net income (loss) attributable to
redeemable noncontrolling interest - discontinued operations
—
13
(2,779
)
1
Net income (loss) attributable to
noncontrolling interest - discontinued operations
—
—
—
(342
)
Changes in assets and liabilities:
(Increase) decrease in accounts
receivable
1,025
(1,219
)
10,611
16,261
(Increase) decrease in prepaid expenses
and other current assets, operating leases right of use asset and
other assets
17,662
(3,902
)
(1,928
)
(7,199
)
Increase (decrease) in accounts payable,
accrued expenses and other liabilities
508
14,993
40,414
26,460
Net cash provided by operating
activities
10,851
22,026
61,922
69,117
Cash flows from investing
activities:
Proceeds from sale of businesses, net of
cash divested
—
33
(42,967
)
83
Purchases of property and equipment
(1,552
)
(5,023
)
(6,289
)
(19,881
)
Purchase of a business, net of cash
acquired
—
—
—
(6,930
)
Purchases of marketable securities
—
(1,183
)
—
(11,355
)
Proceeds from sale of marketable
securities
362
10,000
10,381
38,093
Proceeds from loan receivable
—
—
10,748
—
Purchases of investments
—
(100
)
—
(300
)
Issuance of loan receivable
—
(5,550
)
—
(13,636
)
Net cash provided by (used in)
investing activities
(1,190
)
(1,823
)
(28,127
)
(13,926
)
Cash flows from financing
activities:
Proceeds from stock option exercises
—
—
—
554
Tax payments related to shares withheld
for share-based compensation plans
—
(63
)
(27
)
(158
)
Payments on debt
—
(1,250
)
(20,275
)
(214,495
)
Dividends paid
(4,499
)
(4,400
)
(13,471
)
(13,182
)
Distributions to noncontrolling
interest
—
—
(1,078
)
(3,380
)
Payment of contingent consideration
—
(3,403
)
(14,300
)
(35,113
)
Principal payments under finance lease
obligation
(36
)
(37
)
(110
)
(113
)
Proceeds from borrowings on debt
—
1
—
212,420
Payments for debt issuance costs
—
—
—
(1,777
)
Net cash provided by (used in)
financing activities
(4,535
)
(9,152
)
(49,261
)
(55,244
)
Effect of exchange rates on cash, cash
equivalents and restricted cash
—
(3
)
(2
)
(2
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
5,126
11,048
(15,468
)
(55
)
Cash, cash equivalents and restricted
cash:
Beginning
85,915
100,341
106,509
111,444
Ending
$
91,041
$
111,389
$
91,041
$
111,389
Entravision Communications
Corporation
Reconciliation of Consolidated
EBITDA to Net income (loss) attributable to common
stockholders
(In thousands;
unaudited)
The most directly comparable GAAP
financial measure is net income (loss) attributable to common
stockholders. A reconciliation of this non-GAAP measure to net
income (loss) attributable to common stockholders for each of the
periods presented is as follows:
Three-Month Period
Nine-Month Period
Ended September 30,
Ended September 30,
2024
2023
2024
2023
Net income (loss) attributable to common
stockholders
$
(11,980
)
$
2,719
$
(92,550
)
$
2,771
Net income (loss) attributable to
redeemable noncontrolling interest - discontinued operations
—
13
(2,779
)
1
Net income (loss) attributable to
noncontrolling interest - discontinued operations
—
—
—
(342
)
Interest expense
4,087
4,346
12,648
12,464
Interest expense - discontinued
operations
—
108
219
324
Interest income
(646
)
(1,068
)
(1,801
)
(2,396
)
Interest income - discontinued
operations
—
(490
)
(731
)
(1,059
)
Dividend income
—
—
(10
)
(32
)
Realized gain (loss) on marketable
securities
1
33
110
94
(Gain) loss on debt extinguishment
—
—
91
1,556
Income tax expense
14,984
(1,012
)
173
(3,055
)
Income tax expense - discontinued
operations
(125
)
482
(770
)
2,017
Amortization of syndication contracts
112
118
339
358
Payments on syndication contracts
(108
)
(125
)
(337
)
(366
)
Non-cash stock-based compensation
3,688
7,032
12,422
17,053
Depreciation and amortization
3,882
4,733
13,049
11,948
Depreciation and amortization -
discontinued operations
—
2,623
3,958
8,388
Change in fair value of contingent
consideration
(650
)
(100
)
(630
)
621
Change in fair value of contingent
consideration - discontinued operations
—
(5,897
)
(12,568
)
(9,560
)
Impairment charge
—
989
—
989
Impairment charge - discontinued
operations
—
—
49,438
—
Non-recurring cash severance and
restructuring charge
1,722
—
4,849
612
Other operating (gain) loss - discontinued
operations
125
—
45,139
—
EBITDA attributable to redeemable
noncontrolling interest - discontinued operations
—
(319
)
(167
)
(736
)
EBITDA attributable to noncontrolling
interest - discontinued operations
—
—
—
(230
)
Consolidated EBITDA (1)
$
15,092
$
14,185
$
30,092
$
41,420
(1)
Consolidated EBITDA is defined on page
2.
Entravision Communications
Corporation
Reconciliation of Free Cash
Flow to Cash Flows From Operating Activities
(In thousands;
unaudited)
The most directly comparable GAAP
financial measure is cash flows from operating activities. 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,
2024
2023
2024
2023
Cash flows from operating activities
$
10,851
$
22,026
$
61,922
$
69,117
Cash paid for capital expenditures (2)
(1,552
)
(5,023
)
(6,289
)
(19,881
)
Free cash flow (1)
$
9,299
$
17,003
$
55,633
$
49,236
(1)
Free cash flow is defined on page 2.
(2)
Capital expenditures are not part of the
consolidated statement of operations.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241106570064/en/
For more information, please contact:
Mark Boelke Chief Financial Officer Entravision 310-447-3870
ir@entravision.com
Roy Nir VP, Financial Reporting and Investor Relations
Entravision 310-447-3870 ir@entravision.com
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