Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Entravision Communications Corporation Reports Second Quarter 2024 Results By: Entravision Communications Corporation via Business Wire August 08, 2024 at 16:05 PM EDT Declares Quarterly Cash Dividend of $0.05 Per Share Payable on September 30, 2024 Discontinues Entravision Global Partners Business Entravision Communications Corporation (NYSE: EVC), a media and advertising technology company, today announced financial results for the three- and six-month periods ended June 30, 2024. "During the second quarter of 2024 we conducted a review of our digital strategy, operations and cost structure, and made the decision to sell Entravision Global Partners ('EGP'), our global digital commercial partnerships business. The sale was completed during the quarter, and the EGP business is reported as discontinued operations in our financial statements," said Michael Christenson, Chief Executive Officer. Mr. Christenson continued, "Our net revenue from continuing operations increased 12% in the second quarter of 2024 compared to the same quarter in 2023. We remain focused on our 2024 priorities: maximize political revenue, provide highly-rated news and content to our audiences, strengthen our digital marketing solutions in combination with our television and audio offerings, and continue to grow Smadex, our programmatic ad purchasing platform.” Unaudited Financial Highlights (In thousands, except share and per share data) Three-Month Period Six-Month Period Ended June 30, Ended June 30, 2024 2023 % Change 2024 2023 % Change Net revenue $ 82,654 $ 73,719 12 % $ 160,830 $ 141,366 14 % Cost of revenue - digital (1) 24,424 19,649 24 % 47,082 36,516 29 % Operating expenses (2) 46,119 41,466 11 % 92,254 80,875 14 % Corporate expenses (3) 10,811 12,042 (10 )% 23,059 22,544 2 % Foreign currency (gain) loss (24 ) 792 * 241 1,006 (76 )% Net income (loss) from continuing operations $ 3,732 $ (5,826 ) * $ (3,778 ) $ (13,842 ) (73 )% Net income (loss) from discontinued operations, net of tax $ (35,412 ) $ 3,837 * $ (76,792 ) $ 13,894 * Net income (loss) attributable to common stockholders $ (31,680 ) $ (1,989 ) 1493 % $ (80,570 ) $ 52 * Cash flows from operating activities $ 17,696 $ 10,396 70 % $ 51,071 $ 47,091 8 % Free cash flow (4) $ 15,702 $ 2,288 586 % $ 46,334 $ 32,233 44 % Net income (loss) per share from continuing operations, basic and diluted $ 0.04 $ (0.07 ) * $ (0.04 ) $ (0.16 ) (75 )% Net income (loss) per share from discontinued operations, basic and diluted $ (0.39 ) $ 0.04 * $ (0.86 ) $ 0.16 * Net income (loss) per share attributable to common stockholders, basic and diluted $ (0.35 ) $ (0.02 ) 1650 % $ (0.90 ) $ 0.00 * Weighted average common shares outstanding, basic 89,820,737 87,787,772 89,669,397 87,706,282 Weighted average common shares outstanding, diluted 90,721,280 87,787,772 89,669,397 87,706,282 (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 $1.5 million and $2.2 million of non-cash stock-based compensation for the three-month periods ended June 30, 2024 and 2023, respectively, and $2.9 million and $3.7 million of non-cash stock-based compensation for the six-month periods ended June 30, 2024 and 2023, respectively. (3) Corporate expenses include $2.7 million and $3.2 million of non-cash stock-based compensation for the three-month periods ended June 30, 2024 and 2023, respectively, and $6.4 million and $5.4 million of non-cash stock-based compensation for the six-month periods ended June 30, 2024 and 2023, respectively. (4) Free cash flow is defined as cash flows from operating activities less cash paid for capital expenditures. Net revenue for the three- and six-month periods ended June 30, 2024 increased primarily due to an increase in advertising revenue from our digital business units in our digital segment, and political advertising revenue in our television and audio segments, partially offset by decreases in advertising revenue, spectrum usage rights revenue and retransmission consent revenue in our television segment, and a decrease in advertising revenue in our audio segment. Cost of revenue for the three- and six-month periods ended June 30, 2024 increased primarily due to the increase in digital advertising revenue. Operating expenses for the three-month period ended June 30, 2024 increased primarily due to increases in salaries and cloud infrastructure expenses associated with the increase in digital advertising revenue, and an increase in salaries, primarily associated with the expansion of our news programming in our television segment, partially offset by a decrease in rent expense and a decrease in expenses associated with the decrease in advertising revenue in our audio segment. Operating expenses for the six-month period ended June 30, 2024 increased primarily due to increases in salaries and cloud infrastructure expenses associated with the increase in digital advertising revenue, and an increase in salaries, primarily associated with the expansion of our news programming in our television segment, partially offset by a decrease in rent expense and a decrease in expenses associated with the decrease in advertising revenue in our audio segment. Corporate expenses for the three-month period ended June 30, 2024 decreased primarily due to a decrease in professional services expense, and a decrease in non-cash stock-based compensation, partially offset by an increase in severance expense. Corporate expenses for the six-month period ended June 30, 2024 increased primarily due to an increase in severance expense, an increase in non-cash stock-based compensation, and an increase in salaries, partially offset by a decrease in professional services expense. Sale of EGP As a result of the communication from Meta on March 4, 2024, that it intended to wind down its Authorized Sales Partners ("ASP") program globally and end its relationship with all of its ASPs, including us, by July 1, 2024, we conducted a thorough review of our digital strategy, operations and cost structure, and during the second quarter of 2024 made the decision to dispose of the operations of EGP, our digital commercial partnerships business. The disposition of EGP will allow us to enhance our strategic focus on our media business and our advertising technology business. The results of the EGP business are reported as discontinued operations in our financial statements. 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 September 30, 2024 to shareholders of record as of the close of business on September 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 June 30, 2024 totaled $88.3 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 June 30, 2024. Net of total cash and marketable securities, total leverage was 2.2 times. Consolidated EBITDA, as defined in our 2023 Credit Agreement was $10.5 million and $15.0 million for the three- and six-month periods ended June 30, 2024. Unaudited Segment Results (In thousands) Three-Month Period Six-Month Period Ended June 30, Ended June 30, 2024 2023 % Change 2024 2023 % Change Net Revenue Digital $ 41,068 $ 30,234 36 % $ 79,290 $ 55,357 43 % Television 28,577 29,943 (5 )% 57,126 60,255 (5 )% Audio 13,009 13,542 (4 )% 24,414 25,754 (5 )% Total $ 82,654 $ 73,719 12 % $ 160,830 $ 141,366 14 % Cost of Revenue - digital (1) Digital $ 24,424 $ 19,649 24 % $ 47,082 $ 36,516 29 % Operating Expenses (1) Digital 12,779 9,879 29 % 24,724 18,197 36 % Television 22,635 19,868 14 % 45,603 39,967 14 % Audio 10,705 11,719 (9 )% 21,927 22,711 (3 )% Total $ 46,119 $ 41,466 11 % $ 92,254 $ 80,875 14 % Corporate Expenses (1) $ 10,811 $ 12,042 (10 )% $ 23,059 $ 22,544 2 % (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 second quarter 2024 results on Thursday, August 8, 2024 at 4:30 p.m. Eastern Time. To access the conference call, please dial (877) 407-9716 (U.S.) or (201) 493-6779 (Int’l) ten minutes prior to the start time. 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 Hispanic 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 Six-Month Period Ended June 30, Ended June 30, 2024 2023 2024 2023 Net revenue $ 82,654 $ 73,719 $ 160,830 $ 141,366 Expenses: Cost of revenue - digital 24,424 19,649 47,082 36,516 Direct operating expenses 31,756 28,856 63,557 55,458 Selling, general and administrative expenses 14,363 12,610 28,697 25,417 Corporate expenses 10,811 12,042 23,059 22,544 Depreciation and amortization 4,428 3,713 9,167 7,214 Change in fair value of contingent consideration 240 21 20 721 Foreign currency (gain) loss (24 ) 792 241 1,006 85,998 77,683 171,823 148,876 Operating income (loss) (3,344 ) (3,964 ) (10,993 ) (7,510 ) Interest expense (4,118 ) (4,195 ) (8,561 ) (8,118 ) Interest income 577 720 1,155 1,328 Dividend income — 14 10 32 Realized gain (loss) on marketable securities 4 (29 ) (109 ) (61 ) Gain (loss) on debt extinguishment (51 ) — (91 ) (1,556 ) Income (loss) before income taxes (6,932 ) (7,454 ) (18,589 ) (15,885 ) Income tax benefit (expense) 10,664 1,628 14,811 2,043 Net income (loss) from continuing operations 3,732 (5,826 ) (3,778 ) (13,842 ) Net income (loss) from discontinued operations, net of tax (35,412 ) 3,837 (76,792 ) 13,894 Net income (loss) attributable to common stockholders $ (31,680 ) $ (1,989 ) $ (80,570 ) $ 52 Basic and diluted earnings per share: Net income (loss) per share from continuing operations, basic and diluted $ 0.04 $ (0.07 ) $ (0.04 ) $ (0.16 ) Net income (loss) per share from discontinued operations, basic and diluted $ (0.39 ) $ 0.04 $ (0.86 ) $ 0.16 Net income (loss) per share attributable to common stockholders, basic and diluted $ (0.35 ) $ (0.02 ) $ (0.90 ) $ 0.00 Cash dividends declared per common share, basic and diluted $ 0.05 $ 0.05 $ 0.10 $ 0.10 Weighted average common shares outstanding, basic 89,820,737 87,787,772 89,669,397 87,706,282 Weighted average common shares outstanding, diluted 90,721,280 87,787,772 89,669,397 87,706,282 Entravision Communications Corporation Consolidated Balance Sheets (In thousands; unaudited) June 30, December 31, 2024 2023 ASSETS Current assets Cash and cash equivalents $ 85,136 $ 67,398 Marketable securities 3,160 13,172 Restricted cash 779 770 Trade receivables, net of allowance for doubtful accounts 68,847 70,082 Assets held for sale - 301 Prepaid expenses and other current assets 46,681 16,863 Current assets of discontinued operations - 217,269 Total current assets 204,603 385,855 Property and equipment, net 63,418 66,932 Intangible assets subject to amortization, net 5,372 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 42,799 42,868 Other assets 7,480 21,223 Noncurrent assets of discontinued operations - 95,855 Total assets $ 569,606 $ 865,946 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current maturities of long-term debt $ - $ 8,750 Accounts payable and accrued expenses 59,547 47,776 Operating lease liabilities 7,736 6,748 Current liabilities of discontinued operations - 208,779 Total current liabilities 67,283 272,053 Long-term debt, less current maturities, net of unamortized debt issuance costs 186,847 197,884 Long-term operating lease liabilities 44,127 45,178 Other long-term liabilities 4,370 4,624 Deferred income taxes 46,571 46,849 Noncurrent liabilities of discontinued operations - 33,072 Total liabilities 349,198 599,660 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 821,590 743,246 Accumulated deficit (600,382 ) (519,812 ) Accumulated other comprehensive income (loss) (809 ) (915 ) Total stockholders' equity 220,408 222,528 Total liabilities, redeemable noncontrolling interest and equity $ 569,606 $ 865,946 Entravision Communications Corporation Consolidated Statements of Cash Flows (In thousands; unaudited) Three-Month Period Six-Month Period Ended June 30, Ended June 30, 2024 2023 2024 2023 Cash flows from operating activities: Net income (loss) $ (31,680 ) $ (1,989 ) $ (80,570 ) $ 52 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 5,992 6,509 13,125 12,980 Impairment charge — — 49,438 — Deferred income taxes 4,438 76 214 (129 ) Non-cash interest 68 46 160 179 Amortization of syndication contracts 114 120 227 240 Payments on syndication contracts (114 ) (121 ) (229 ) (241 ) Non-cash stock-based compensation 3,287 5,968 8,734 10,021 (Gain) loss on marketable securities (4 ) 29 109 61 (Gain) loss on disposal of property and equipment 86 (50 ) 183 18 Loss (gain) on the sale of businesses 45,014 — 45,014 — (Gain) loss on debt extinguishment 51 — 91 1,556 Change in fair value of contingent consideration (11,128 ) 1,123 (12,548 ) (2,942 ) Net income (loss) attributable to redeemable noncontrolling interest - discontinued operations — (12 ) (2,779 ) (12 ) Net income (loss) attributable to noncontrolling interest - discontinued operations — — — (342 ) Changes in assets and liabilities: (Increase) decrease in accounts receivable (19,887 ) (15,677 ) 9,586 17,480 (Increase) decrease in prepaid expenses and other current assets, operating leases right of use asset and other assets (12,440 ) (4,245 ) (19,590 ) (3,297 ) Increase (decrease) in accounts payable, accrued expenses and other liabilities 33,899 18,619 39,906 11,467 Net cash provided by operating activities 17,696 10,396 51,071 47,091 Cash flows from investing activities: Proceeds from sale of businesses, net of cash divested (42,967 ) — (42,967 ) — Proceeds from sale of assets — 50 — 50 Purchases of property and equipment (1,994 ) (8,108 ) (4,737 ) (14,858 ) Purchase of a business, net of cash acquired — (6,930 ) — (6,930 ) Purchases of marketable securities — (775 ) — (10,172 ) Proceeds from sale of marketable securities 1,177 12,389 10,019 28,093 Proceeds from loan receivable 10,748 — 10,748 — Purchases of investments — (80 ) — (200 ) Issuance of loan receivable — (8,086 ) — (8,086 ) Net cash provided by (used in) investing activities (33,036 ) (11,540 ) (26,937 ) (12,103 ) Cash flows from financing activities: Proceeds from stock option exercises — 241 — 554 Tax payments related to shares withheld for share-based compensation plans — (15 ) (27 ) (95 ) Payments on debt (10,000 ) (1,497 ) (20,275 ) (213,245 ) Dividends paid (4,496 ) (4,396 ) (8,972 ) (8,782 ) Distributions to noncontrolling interest — (2,834 ) (1,078 ) (3,380 ) Payment of contingent consideration (13,400 ) (31,710 ) (14,300 ) (31,710 ) Principal payments under finance lease obligation (33 ) (38 ) (74 ) (76 ) Proceeds from borrowings on debt — 14 — 212,419 Payments for debt issuance costs — (492 ) — (1,777 ) Net cash provided by (used in) financing activities (27,929 ) (40,727 ) (44,726 ) (46,092 ) Effect of exchange rates on cash, cash equivalents and restricted cash — — (2 ) 1 Net increase (decrease) in cash, cash equivalents and restricted cash (43,269 ) (41,871 ) (20,594 ) (11,103 ) Cash, cash equivalents and restricted cash: Beginning 129,184 142,212 106,509 111,444 Ending $ 85,915 $ 100,341 $ 85,915 $ 100,341 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 Six-Month Period Ended June 30, Ended June 30, 2024 2023 2024 2023 Net income (loss) attributable to common stockholders $ (31,680 ) $ (1,989 ) $ (80,570 ) $ 52 Net income (loss) attributable to redeemable noncontrolling interest - discontinued operations — (12 ) (2,779 ) (12 ) Net income (loss) attributable to noncontrolling interest - discontinued operations — — — (342 ) Interest expense 4,118 4,195 8,561 8,118 Interest expense - discontinued operations 103 111 219 216 Interest income (577 ) (720 ) (1,155 ) (1,328 ) Interest income - discontinued operations (179 ) (317 ) (731 ) (569 ) Dividend income — (14 ) (10 ) (32 ) Realized gain (loss) on marketable securities (4 ) 29 109 61 (Gain) loss on debt extinguishment 51 — 91 1,556 Income tax expense (10,664 ) (1,628 ) (14,811 ) (2,043 ) Income tax expense - discontinued operations 3,010 889 (645 ) 1,535 Amortization of syndication contracts 114 120 227 240 Payments on syndication contracts (114 ) (121 ) (229 ) (241 ) Non-cash stock-based compensation 3,287 5,968 8,734 10,021 Depreciation and amortization 4,428 3,713 9,167 7,214 Depreciation and amortization - discontinued operations 1,564 2,796 3,958 5,766 Change in fair value of contingent consideration 240 21 20 721 Change in fair value of contingent consideration - discontinued operations (11,368 ) 1,102 (12,568 ) (3,663 ) Impairment charge - discontinued operations — — 49,438 — Non-recurring cash severance and restructuring charge 3,127 487 3,127 612 Other operating (gain) loss - discontinued operations 45,014 — 45,014 — EBITDA attributable to redeemable noncontrolling interest - discontinued operations — (417 ) (167 ) (417 ) EBITDA attributable to noncontrolling interest - discontinued operations — — — (230 ) Consolidated EBITDA (1) $ 10,470 $ 14,213 $ 15,000 $ 27,235 (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 Six-Month Period Ended June 30, Ended June 30, 2024 2023 2024 2023 Cash flows from operating activities $ 17,696 $ 10,396 $ 51,071 $ 47,091 Cash paid for capital expenditures (2) (1,994 ) (8,108 ) (4,737 ) (14,858 ) Free cash flow (1) $ 15,702 $ 2,288 $ 46,334 $ 32,233 (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/20240808999947/en/Contacts 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 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Entravision Communications Corporation Reports Second Quarter 2024 Results By: Entravision Communications Corporation via Business Wire August 08, 2024 at 16:05 PM EDT Declares Quarterly Cash Dividend of $0.05 Per Share Payable on September 30, 2024 Discontinues Entravision Global Partners Business Entravision Communications Corporation (NYSE: EVC), a media and advertising technology company, today announced financial results for the three- and six-month periods ended June 30, 2024. "During the second quarter of 2024 we conducted a review of our digital strategy, operations and cost structure, and made the decision to sell Entravision Global Partners ('EGP'), our global digital commercial partnerships business. The sale was completed during the quarter, and the EGP business is reported as discontinued operations in our financial statements," said Michael Christenson, Chief Executive Officer. Mr. Christenson continued, "Our net revenue from continuing operations increased 12% in the second quarter of 2024 compared to the same quarter in 2023. We remain focused on our 2024 priorities: maximize political revenue, provide highly-rated news and content to our audiences, strengthen our digital marketing solutions in combination with our television and audio offerings, and continue to grow Smadex, our programmatic ad purchasing platform.” Unaudited Financial Highlights (In thousands, except share and per share data) Three-Month Period Six-Month Period Ended June 30, Ended June 30, 2024 2023 % Change 2024 2023 % Change Net revenue $ 82,654 $ 73,719 12 % $ 160,830 $ 141,366 14 % Cost of revenue - digital (1) 24,424 19,649 24 % 47,082 36,516 29 % Operating expenses (2) 46,119 41,466 11 % 92,254 80,875 14 % Corporate expenses (3) 10,811 12,042 (10 )% 23,059 22,544 2 % Foreign currency (gain) loss (24 ) 792 * 241 1,006 (76 )% Net income (loss) from continuing operations $ 3,732 $ (5,826 ) * $ (3,778 ) $ (13,842 ) (73 )% Net income (loss) from discontinued operations, net of tax $ (35,412 ) $ 3,837 * $ (76,792 ) $ 13,894 * Net income (loss) attributable to common stockholders $ (31,680 ) $ (1,989 ) 1493 % $ (80,570 ) $ 52 * Cash flows from operating activities $ 17,696 $ 10,396 70 % $ 51,071 $ 47,091 8 % Free cash flow (4) $ 15,702 $ 2,288 586 % $ 46,334 $ 32,233 44 % Net income (loss) per share from continuing operations, basic and diluted $ 0.04 $ (0.07 ) * $ (0.04 ) $ (0.16 ) (75 )% Net income (loss) per share from discontinued operations, basic and diluted $ (0.39 ) $ 0.04 * $ (0.86 ) $ 0.16 * Net income (loss) per share attributable to common stockholders, basic and diluted $ (0.35 ) $ (0.02 ) 1650 % $ (0.90 ) $ 0.00 * Weighted average common shares outstanding, basic 89,820,737 87,787,772 89,669,397 87,706,282 Weighted average common shares outstanding, diluted 90,721,280 87,787,772 89,669,397 87,706,282 (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 $1.5 million and $2.2 million of non-cash stock-based compensation for the three-month periods ended June 30, 2024 and 2023, respectively, and $2.9 million and $3.7 million of non-cash stock-based compensation for the six-month periods ended June 30, 2024 and 2023, respectively. (3) Corporate expenses include $2.7 million and $3.2 million of non-cash stock-based compensation for the three-month periods ended June 30, 2024 and 2023, respectively, and $6.4 million and $5.4 million of non-cash stock-based compensation for the six-month periods ended June 30, 2024 and 2023, respectively. (4) Free cash flow is defined as cash flows from operating activities less cash paid for capital expenditures. Net revenue for the three- and six-month periods ended June 30, 2024 increased primarily due to an increase in advertising revenue from our digital business units in our digital segment, and political advertising revenue in our television and audio segments, partially offset by decreases in advertising revenue, spectrum usage rights revenue and retransmission consent revenue in our television segment, and a decrease in advertising revenue in our audio segment. Cost of revenue for the three- and six-month periods ended June 30, 2024 increased primarily due to the increase in digital advertising revenue. Operating expenses for the three-month period ended June 30, 2024 increased primarily due to increases in salaries and cloud infrastructure expenses associated with the increase in digital advertising revenue, and an increase in salaries, primarily associated with the expansion of our news programming in our television segment, partially offset by a decrease in rent expense and a decrease in expenses associated with the decrease in advertising revenue in our audio segment. Operating expenses for the six-month period ended June 30, 2024 increased primarily due to increases in salaries and cloud infrastructure expenses associated with the increase in digital advertising revenue, and an increase in salaries, primarily associated with the expansion of our news programming in our television segment, partially offset by a decrease in rent expense and a decrease in expenses associated with the decrease in advertising revenue in our audio segment. Corporate expenses for the three-month period ended June 30, 2024 decreased primarily due to a decrease in professional services expense, and a decrease in non-cash stock-based compensation, partially offset by an increase in severance expense. Corporate expenses for the six-month period ended June 30, 2024 increased primarily due to an increase in severance expense, an increase in non-cash stock-based compensation, and an increase in salaries, partially offset by a decrease in professional services expense. Sale of EGP As a result of the communication from Meta on March 4, 2024, that it intended to wind down its Authorized Sales Partners ("ASP") program globally and end its relationship with all of its ASPs, including us, by July 1, 2024, we conducted a thorough review of our digital strategy, operations and cost structure, and during the second quarter of 2024 made the decision to dispose of the operations of EGP, our digital commercial partnerships business. The disposition of EGP will allow us to enhance our strategic focus on our media business and our advertising technology business. The results of the EGP business are reported as discontinued operations in our financial statements. 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 September 30, 2024 to shareholders of record as of the close of business on September 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 June 30, 2024 totaled $88.3 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 June 30, 2024. Net of total cash and marketable securities, total leverage was 2.2 times. Consolidated EBITDA, as defined in our 2023 Credit Agreement was $10.5 million and $15.0 million for the three- and six-month periods ended June 30, 2024. Unaudited Segment Results (In thousands) Three-Month Period Six-Month Period Ended June 30, Ended June 30, 2024 2023 % Change 2024 2023 % Change Net Revenue Digital $ 41,068 $ 30,234 36 % $ 79,290 $ 55,357 43 % Television 28,577 29,943 (5 )% 57,126 60,255 (5 )% Audio 13,009 13,542 (4 )% 24,414 25,754 (5 )% Total $ 82,654 $ 73,719 12 % $ 160,830 $ 141,366 14 % Cost of Revenue - digital (1) Digital $ 24,424 $ 19,649 24 % $ 47,082 $ 36,516 29 % Operating Expenses (1) Digital 12,779 9,879 29 % 24,724 18,197 36 % Television 22,635 19,868 14 % 45,603 39,967 14 % Audio 10,705 11,719 (9 )% 21,927 22,711 (3 )% Total $ 46,119 $ 41,466 11 % $ 92,254 $ 80,875 14 % Corporate Expenses (1) $ 10,811 $ 12,042 (10 )% $ 23,059 $ 22,544 2 % (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 second quarter 2024 results on Thursday, August 8, 2024 at 4:30 p.m. Eastern Time. To access the conference call, please dial (877) 407-9716 (U.S.) or (201) 493-6779 (Int’l) ten minutes prior to the start time. 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 Hispanic 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 Six-Month Period Ended June 30, Ended June 30, 2024 2023 2024 2023 Net revenue $ 82,654 $ 73,719 $ 160,830 $ 141,366 Expenses: Cost of revenue - digital 24,424 19,649 47,082 36,516 Direct operating expenses 31,756 28,856 63,557 55,458 Selling, general and administrative expenses 14,363 12,610 28,697 25,417 Corporate expenses 10,811 12,042 23,059 22,544 Depreciation and amortization 4,428 3,713 9,167 7,214 Change in fair value of contingent consideration 240 21 20 721 Foreign currency (gain) loss (24 ) 792 241 1,006 85,998 77,683 171,823 148,876 Operating income (loss) (3,344 ) (3,964 ) (10,993 ) (7,510 ) Interest expense (4,118 ) (4,195 ) (8,561 ) (8,118 ) Interest income 577 720 1,155 1,328 Dividend income — 14 10 32 Realized gain (loss) on marketable securities 4 (29 ) (109 ) (61 ) Gain (loss) on debt extinguishment (51 ) — (91 ) (1,556 ) Income (loss) before income taxes (6,932 ) (7,454 ) (18,589 ) (15,885 ) Income tax benefit (expense) 10,664 1,628 14,811 2,043 Net income (loss) from continuing operations 3,732 (5,826 ) (3,778 ) (13,842 ) Net income (loss) from discontinued operations, net of tax (35,412 ) 3,837 (76,792 ) 13,894 Net income (loss) attributable to common stockholders $ (31,680 ) $ (1,989 ) $ (80,570 ) $ 52 Basic and diluted earnings per share: Net income (loss) per share from continuing operations, basic and diluted $ 0.04 $ (0.07 ) $ (0.04 ) $ (0.16 ) Net income (loss) per share from discontinued operations, basic and diluted $ (0.39 ) $ 0.04 $ (0.86 ) $ 0.16 Net income (loss) per share attributable to common stockholders, basic and diluted $ (0.35 ) $ (0.02 ) $ (0.90 ) $ 0.00 Cash dividends declared per common share, basic and diluted $ 0.05 $ 0.05 $ 0.10 $ 0.10 Weighted average common shares outstanding, basic 89,820,737 87,787,772 89,669,397 87,706,282 Weighted average common shares outstanding, diluted 90,721,280 87,787,772 89,669,397 87,706,282 Entravision Communications Corporation Consolidated Balance Sheets (In thousands; unaudited) June 30, December 31, 2024 2023 ASSETS Current assets Cash and cash equivalents $ 85,136 $ 67,398 Marketable securities 3,160 13,172 Restricted cash 779 770 Trade receivables, net of allowance for doubtful accounts 68,847 70,082 Assets held for sale - 301 Prepaid expenses and other current assets 46,681 16,863 Current assets of discontinued operations - 217,269 Total current assets 204,603 385,855 Property and equipment, net 63,418 66,932 Intangible assets subject to amortization, net 5,372 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 42,799 42,868 Other assets 7,480 21,223 Noncurrent assets of discontinued operations - 95,855 Total assets $ 569,606 $ 865,946 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current maturities of long-term debt $ - $ 8,750 Accounts payable and accrued expenses 59,547 47,776 Operating lease liabilities 7,736 6,748 Current liabilities of discontinued operations - 208,779 Total current liabilities 67,283 272,053 Long-term debt, less current maturities, net of unamortized debt issuance costs 186,847 197,884 Long-term operating lease liabilities 44,127 45,178 Other long-term liabilities 4,370 4,624 Deferred income taxes 46,571 46,849 Noncurrent liabilities of discontinued operations - 33,072 Total liabilities 349,198 599,660 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 821,590 743,246 Accumulated deficit (600,382 ) (519,812 ) Accumulated other comprehensive income (loss) (809 ) (915 ) Total stockholders' equity 220,408 222,528 Total liabilities, redeemable noncontrolling interest and equity $ 569,606 $ 865,946 Entravision Communications Corporation Consolidated Statements of Cash Flows (In thousands; unaudited) Three-Month Period Six-Month Period Ended June 30, Ended June 30, 2024 2023 2024 2023 Cash flows from operating activities: Net income (loss) $ (31,680 ) $ (1,989 ) $ (80,570 ) $ 52 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 5,992 6,509 13,125 12,980 Impairment charge — — 49,438 — Deferred income taxes 4,438 76 214 (129 ) Non-cash interest 68 46 160 179 Amortization of syndication contracts 114 120 227 240 Payments on syndication contracts (114 ) (121 ) (229 ) (241 ) Non-cash stock-based compensation 3,287 5,968 8,734 10,021 (Gain) loss on marketable securities (4 ) 29 109 61 (Gain) loss on disposal of property and equipment 86 (50 ) 183 18 Loss (gain) on the sale of businesses 45,014 — 45,014 — (Gain) loss on debt extinguishment 51 — 91 1,556 Change in fair value of contingent consideration (11,128 ) 1,123 (12,548 ) (2,942 ) Net income (loss) attributable to redeemable noncontrolling interest - discontinued operations — (12 ) (2,779 ) (12 ) Net income (loss) attributable to noncontrolling interest - discontinued operations — — — (342 ) Changes in assets and liabilities: (Increase) decrease in accounts receivable (19,887 ) (15,677 ) 9,586 17,480 (Increase) decrease in prepaid expenses and other current assets, operating leases right of use asset and other assets (12,440 ) (4,245 ) (19,590 ) (3,297 ) Increase (decrease) in accounts payable, accrued expenses and other liabilities 33,899 18,619 39,906 11,467 Net cash provided by operating activities 17,696 10,396 51,071 47,091 Cash flows from investing activities: Proceeds from sale of businesses, net of cash divested (42,967 ) — (42,967 ) — Proceeds from sale of assets — 50 — 50 Purchases of property and equipment (1,994 ) (8,108 ) (4,737 ) (14,858 ) Purchase of a business, net of cash acquired — (6,930 ) — (6,930 ) Purchases of marketable securities — (775 ) — (10,172 ) Proceeds from sale of marketable securities 1,177 12,389 10,019 28,093 Proceeds from loan receivable 10,748 — 10,748 — Purchases of investments — (80 ) — (200 ) Issuance of loan receivable — (8,086 ) — (8,086 ) Net cash provided by (used in) investing activities (33,036 ) (11,540 ) (26,937 ) (12,103 ) Cash flows from financing activities: Proceeds from stock option exercises — 241 — 554 Tax payments related to shares withheld for share-based compensation plans — (15 ) (27 ) (95 ) Payments on debt (10,000 ) (1,497 ) (20,275 ) (213,245 ) Dividends paid (4,496 ) (4,396 ) (8,972 ) (8,782 ) Distributions to noncontrolling interest — (2,834 ) (1,078 ) (3,380 ) Payment of contingent consideration (13,400 ) (31,710 ) (14,300 ) (31,710 ) Principal payments under finance lease obligation (33 ) (38 ) (74 ) (76 ) Proceeds from borrowings on debt — 14 — 212,419 Payments for debt issuance costs — (492 ) — (1,777 ) Net cash provided by (used in) financing activities (27,929 ) (40,727 ) (44,726 ) (46,092 ) Effect of exchange rates on cash, cash equivalents and restricted cash — — (2 ) 1 Net increase (decrease) in cash, cash equivalents and restricted cash (43,269 ) (41,871 ) (20,594 ) (11,103 ) Cash, cash equivalents and restricted cash: Beginning 129,184 142,212 106,509 111,444 Ending $ 85,915 $ 100,341 $ 85,915 $ 100,341 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 Six-Month Period Ended June 30, Ended June 30, 2024 2023 2024 2023 Net income (loss) attributable to common stockholders $ (31,680 ) $ (1,989 ) $ (80,570 ) $ 52 Net income (loss) attributable to redeemable noncontrolling interest - discontinued operations — (12 ) (2,779 ) (12 ) Net income (loss) attributable to noncontrolling interest - discontinued operations — — — (342 ) Interest expense 4,118 4,195 8,561 8,118 Interest expense - discontinued operations 103 111 219 216 Interest income (577 ) (720 ) (1,155 ) (1,328 ) Interest income - discontinued operations (179 ) (317 ) (731 ) (569 ) Dividend income — (14 ) (10 ) (32 ) Realized gain (loss) on marketable securities (4 ) 29 109 61 (Gain) loss on debt extinguishment 51 — 91 1,556 Income tax expense (10,664 ) (1,628 ) (14,811 ) (2,043 ) Income tax expense - discontinued operations 3,010 889 (645 ) 1,535 Amortization of syndication contracts 114 120 227 240 Payments on syndication contracts (114 ) (121 ) (229 ) (241 ) Non-cash stock-based compensation 3,287 5,968 8,734 10,021 Depreciation and amortization 4,428 3,713 9,167 7,214 Depreciation and amortization - discontinued operations 1,564 2,796 3,958 5,766 Change in fair value of contingent consideration 240 21 20 721 Change in fair value of contingent consideration - discontinued operations (11,368 ) 1,102 (12,568 ) (3,663 ) Impairment charge - discontinued operations — — 49,438 — Non-recurring cash severance and restructuring charge 3,127 487 3,127 612 Other operating (gain) loss - discontinued operations 45,014 — 45,014 — EBITDA attributable to redeemable noncontrolling interest - discontinued operations — (417 ) (167 ) (417 ) EBITDA attributable to noncontrolling interest - discontinued operations — — — (230 ) Consolidated EBITDA (1) $ 10,470 $ 14,213 $ 15,000 $ 27,235 (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 Six-Month Period Ended June 30, Ended June 30, 2024 2023 2024 2023 Cash flows from operating activities $ 17,696 $ 10,396 $ 51,071 $ 47,091 Cash paid for capital expenditures (2) (1,994 ) (8,108 ) (4,737 ) (14,858 ) Free cash flow (1) $ 15,702 $ 2,288 $ 46,334 $ 32,233 (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/20240808999947/en/Contacts 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
Declares Quarterly Cash Dividend of $0.05 Per Share Payable on September 30, 2024 Discontinues Entravision Global Partners Business
Entravision Communications Corporation (NYSE: EVC), a media and advertising technology company, today announced financial results for the three- and six-month periods ended June 30, 2024. "During the second quarter of 2024 we conducted a review of our digital strategy, operations and cost structure, and made the decision to sell Entravision Global Partners ('EGP'), our global digital commercial partnerships business. The sale was completed during the quarter, and the EGP business is reported as discontinued operations in our financial statements," said Michael Christenson, Chief Executive Officer. Mr. Christenson continued, "Our net revenue from continuing operations increased 12% in the second quarter of 2024 compared to the same quarter in 2023. We remain focused on our 2024 priorities: maximize political revenue, provide highly-rated news and content to our audiences, strengthen our digital marketing solutions in combination with our television and audio offerings, and continue to grow Smadex, our programmatic ad purchasing platform.” Unaudited Financial Highlights (In thousands, except share and per share data) Three-Month Period Six-Month Period Ended June 30, Ended June 30, 2024 2023 % Change 2024 2023 % Change Net revenue $ 82,654 $ 73,719 12 % $ 160,830 $ 141,366 14 % Cost of revenue - digital (1) 24,424 19,649 24 % 47,082 36,516 29 % Operating expenses (2) 46,119 41,466 11 % 92,254 80,875 14 % Corporate expenses (3) 10,811 12,042 (10 )% 23,059 22,544 2 % Foreign currency (gain) loss (24 ) 792 * 241 1,006 (76 )% Net income (loss) from continuing operations $ 3,732 $ (5,826 ) * $ (3,778 ) $ (13,842 ) (73 )% Net income (loss) from discontinued operations, net of tax $ (35,412 ) $ 3,837 * $ (76,792 ) $ 13,894 * Net income (loss) attributable to common stockholders $ (31,680 ) $ (1,989 ) 1493 % $ (80,570 ) $ 52 * Cash flows from operating activities $ 17,696 $ 10,396 70 % $ 51,071 $ 47,091 8 % Free cash flow (4) $ 15,702 $ 2,288 586 % $ 46,334 $ 32,233 44 % Net income (loss) per share from continuing operations, basic and diluted $ 0.04 $ (0.07 ) * $ (0.04 ) $ (0.16 ) (75 )% Net income (loss) per share from discontinued operations, basic and diluted $ (0.39 ) $ 0.04 * $ (0.86 ) $ 0.16 * Net income (loss) per share attributable to common stockholders, basic and diluted $ (0.35 ) $ (0.02 ) 1650 % $ (0.90 ) $ 0.00 * Weighted average common shares outstanding, basic 89,820,737 87,787,772 89,669,397 87,706,282 Weighted average common shares outstanding, diluted 90,721,280 87,787,772 89,669,397 87,706,282 (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 $1.5 million and $2.2 million of non-cash stock-based compensation for the three-month periods ended June 30, 2024 and 2023, respectively, and $2.9 million and $3.7 million of non-cash stock-based compensation for the six-month periods ended June 30, 2024 and 2023, respectively. (3) Corporate expenses include $2.7 million and $3.2 million of non-cash stock-based compensation for the three-month periods ended June 30, 2024 and 2023, respectively, and $6.4 million and $5.4 million of non-cash stock-based compensation for the six-month periods ended June 30, 2024 and 2023, respectively. (4) Free cash flow is defined as cash flows from operating activities less cash paid for capital expenditures. Net revenue for the three- and six-month periods ended June 30, 2024 increased primarily due to an increase in advertising revenue from our digital business units in our digital segment, and political advertising revenue in our television and audio segments, partially offset by decreases in advertising revenue, spectrum usage rights revenue and retransmission consent revenue in our television segment, and a decrease in advertising revenue in our audio segment. Cost of revenue for the three- and six-month periods ended June 30, 2024 increased primarily due to the increase in digital advertising revenue. Operating expenses for the three-month period ended June 30, 2024 increased primarily due to increases in salaries and cloud infrastructure expenses associated with the increase in digital advertising revenue, and an increase in salaries, primarily associated with the expansion of our news programming in our television segment, partially offset by a decrease in rent expense and a decrease in expenses associated with the decrease in advertising revenue in our audio segment. Operating expenses for the six-month period ended June 30, 2024 increased primarily due to increases in salaries and cloud infrastructure expenses associated with the increase in digital advertising revenue, and an increase in salaries, primarily associated with the expansion of our news programming in our television segment, partially offset by a decrease in rent expense and a decrease in expenses associated with the decrease in advertising revenue in our audio segment. Corporate expenses for the three-month period ended June 30, 2024 decreased primarily due to a decrease in professional services expense, and a decrease in non-cash stock-based compensation, partially offset by an increase in severance expense. Corporate expenses for the six-month period ended June 30, 2024 increased primarily due to an increase in severance expense, an increase in non-cash stock-based compensation, and an increase in salaries, partially offset by a decrease in professional services expense. Sale of EGP As a result of the communication from Meta on March 4, 2024, that it intended to wind down its Authorized Sales Partners ("ASP") program globally and end its relationship with all of its ASPs, including us, by July 1, 2024, we conducted a thorough review of our digital strategy, operations and cost structure, and during the second quarter of 2024 made the decision to dispose of the operations of EGP, our digital commercial partnerships business. The disposition of EGP will allow us to enhance our strategic focus on our media business and our advertising technology business. The results of the EGP business are reported as discontinued operations in our financial statements. 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 September 30, 2024 to shareholders of record as of the close of business on September 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 June 30, 2024 totaled $88.3 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 June 30, 2024. Net of total cash and marketable securities, total leverage was 2.2 times. Consolidated EBITDA, as defined in our 2023 Credit Agreement was $10.5 million and $15.0 million for the three- and six-month periods ended June 30, 2024. Unaudited Segment Results (In thousands) Three-Month Period Six-Month Period Ended June 30, Ended June 30, 2024 2023 % Change 2024 2023 % Change Net Revenue Digital $ 41,068 $ 30,234 36 % $ 79,290 $ 55,357 43 % Television 28,577 29,943 (5 )% 57,126 60,255 (5 )% Audio 13,009 13,542 (4 )% 24,414 25,754 (5 )% Total $ 82,654 $ 73,719 12 % $ 160,830 $ 141,366 14 % Cost of Revenue - digital (1) Digital $ 24,424 $ 19,649 24 % $ 47,082 $ 36,516 29 % Operating Expenses (1) Digital 12,779 9,879 29 % 24,724 18,197 36 % Television 22,635 19,868 14 % 45,603 39,967 14 % Audio 10,705 11,719 (9 )% 21,927 22,711 (3 )% Total $ 46,119 $ 41,466 11 % $ 92,254 $ 80,875 14 % Corporate Expenses (1) $ 10,811 $ 12,042 (10 )% $ 23,059 $ 22,544 2 % (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 second quarter 2024 results on Thursday, August 8, 2024 at 4:30 p.m. Eastern Time. To access the conference call, please dial (877) 407-9716 (U.S.) or (201) 493-6779 (Int’l) ten minutes prior to the start time. 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 Hispanic 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 Six-Month Period Ended June 30, Ended June 30, 2024 2023 2024 2023 Net revenue $ 82,654 $ 73,719 $ 160,830 $ 141,366 Expenses: Cost of revenue - digital 24,424 19,649 47,082 36,516 Direct operating expenses 31,756 28,856 63,557 55,458 Selling, general and administrative expenses 14,363 12,610 28,697 25,417 Corporate expenses 10,811 12,042 23,059 22,544 Depreciation and amortization 4,428 3,713 9,167 7,214 Change in fair value of contingent consideration 240 21 20 721 Foreign currency (gain) loss (24 ) 792 241 1,006 85,998 77,683 171,823 148,876 Operating income (loss) (3,344 ) (3,964 ) (10,993 ) (7,510 ) Interest expense (4,118 ) (4,195 ) (8,561 ) (8,118 ) Interest income 577 720 1,155 1,328 Dividend income — 14 10 32 Realized gain (loss) on marketable securities 4 (29 ) (109 ) (61 ) Gain (loss) on debt extinguishment (51 ) — (91 ) (1,556 ) Income (loss) before income taxes (6,932 ) (7,454 ) (18,589 ) (15,885 ) Income tax benefit (expense) 10,664 1,628 14,811 2,043 Net income (loss) from continuing operations 3,732 (5,826 ) (3,778 ) (13,842 ) Net income (loss) from discontinued operations, net of tax (35,412 ) 3,837 (76,792 ) 13,894 Net income (loss) attributable to common stockholders $ (31,680 ) $ (1,989 ) $ (80,570 ) $ 52 Basic and diluted earnings per share: Net income (loss) per share from continuing operations, basic and diluted $ 0.04 $ (0.07 ) $ (0.04 ) $ (0.16 ) Net income (loss) per share from discontinued operations, basic and diluted $ (0.39 ) $ 0.04 $ (0.86 ) $ 0.16 Net income (loss) per share attributable to common stockholders, basic and diluted $ (0.35 ) $ (0.02 ) $ (0.90 ) $ 0.00 Cash dividends declared per common share, basic and diluted $ 0.05 $ 0.05 $ 0.10 $ 0.10 Weighted average common shares outstanding, basic 89,820,737 87,787,772 89,669,397 87,706,282 Weighted average common shares outstanding, diluted 90,721,280 87,787,772 89,669,397 87,706,282 Entravision Communications Corporation Consolidated Balance Sheets (In thousands; unaudited) June 30, December 31, 2024 2023 ASSETS Current assets Cash and cash equivalents $ 85,136 $ 67,398 Marketable securities 3,160 13,172 Restricted cash 779 770 Trade receivables, net of allowance for doubtful accounts 68,847 70,082 Assets held for sale - 301 Prepaid expenses and other current assets 46,681 16,863 Current assets of discontinued operations - 217,269 Total current assets 204,603 385,855 Property and equipment, net 63,418 66,932 Intangible assets subject to amortization, net 5,372 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 42,799 42,868 Other assets 7,480 21,223 Noncurrent assets of discontinued operations - 95,855 Total assets $ 569,606 $ 865,946 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current maturities of long-term debt $ - $ 8,750 Accounts payable and accrued expenses 59,547 47,776 Operating lease liabilities 7,736 6,748 Current liabilities of discontinued operations - 208,779 Total current liabilities 67,283 272,053 Long-term debt, less current maturities, net of unamortized debt issuance costs 186,847 197,884 Long-term operating lease liabilities 44,127 45,178 Other long-term liabilities 4,370 4,624 Deferred income taxes 46,571 46,849 Noncurrent liabilities of discontinued operations - 33,072 Total liabilities 349,198 599,660 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 821,590 743,246 Accumulated deficit (600,382 ) (519,812 ) Accumulated other comprehensive income (loss) (809 ) (915 ) Total stockholders' equity 220,408 222,528 Total liabilities, redeemable noncontrolling interest and equity $ 569,606 $ 865,946 Entravision Communications Corporation Consolidated Statements of Cash Flows (In thousands; unaudited) Three-Month Period Six-Month Period Ended June 30, Ended June 30, 2024 2023 2024 2023 Cash flows from operating activities: Net income (loss) $ (31,680 ) $ (1,989 ) $ (80,570 ) $ 52 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 5,992 6,509 13,125 12,980 Impairment charge — — 49,438 — Deferred income taxes 4,438 76 214 (129 ) Non-cash interest 68 46 160 179 Amortization of syndication contracts 114 120 227 240 Payments on syndication contracts (114 ) (121 ) (229 ) (241 ) Non-cash stock-based compensation 3,287 5,968 8,734 10,021 (Gain) loss on marketable securities (4 ) 29 109 61 (Gain) loss on disposal of property and equipment 86 (50 ) 183 18 Loss (gain) on the sale of businesses 45,014 — 45,014 — (Gain) loss on debt extinguishment 51 — 91 1,556 Change in fair value of contingent consideration (11,128 ) 1,123 (12,548 ) (2,942 ) Net income (loss) attributable to redeemable noncontrolling interest - discontinued operations — (12 ) (2,779 ) (12 ) Net income (loss) attributable to noncontrolling interest - discontinued operations — — — (342 ) Changes in assets and liabilities: (Increase) decrease in accounts receivable (19,887 ) (15,677 ) 9,586 17,480 (Increase) decrease in prepaid expenses and other current assets, operating leases right of use asset and other assets (12,440 ) (4,245 ) (19,590 ) (3,297 ) Increase (decrease) in accounts payable, accrued expenses and other liabilities 33,899 18,619 39,906 11,467 Net cash provided by operating activities 17,696 10,396 51,071 47,091 Cash flows from investing activities: Proceeds from sale of businesses, net of cash divested (42,967 ) — (42,967 ) — Proceeds from sale of assets — 50 — 50 Purchases of property and equipment (1,994 ) (8,108 ) (4,737 ) (14,858 ) Purchase of a business, net of cash acquired — (6,930 ) — (6,930 ) Purchases of marketable securities — (775 ) — (10,172 ) Proceeds from sale of marketable securities 1,177 12,389 10,019 28,093 Proceeds from loan receivable 10,748 — 10,748 — Purchases of investments — (80 ) — (200 ) Issuance of loan receivable — (8,086 ) — (8,086 ) Net cash provided by (used in) investing activities (33,036 ) (11,540 ) (26,937 ) (12,103 ) Cash flows from financing activities: Proceeds from stock option exercises — 241 — 554 Tax payments related to shares withheld for share-based compensation plans — (15 ) (27 ) (95 ) Payments on debt (10,000 ) (1,497 ) (20,275 ) (213,245 ) Dividends paid (4,496 ) (4,396 ) (8,972 ) (8,782 ) Distributions to noncontrolling interest — (2,834 ) (1,078 ) (3,380 ) Payment of contingent consideration (13,400 ) (31,710 ) (14,300 ) (31,710 ) Principal payments under finance lease obligation (33 ) (38 ) (74 ) (76 ) Proceeds from borrowings on debt — 14 — 212,419 Payments for debt issuance costs — (492 ) — (1,777 ) Net cash provided by (used in) financing activities (27,929 ) (40,727 ) (44,726 ) (46,092 ) Effect of exchange rates on cash, cash equivalents and restricted cash — — (2 ) 1 Net increase (decrease) in cash, cash equivalents and restricted cash (43,269 ) (41,871 ) (20,594 ) (11,103 ) Cash, cash equivalents and restricted cash: Beginning 129,184 142,212 106,509 111,444 Ending $ 85,915 $ 100,341 $ 85,915 $ 100,341 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 Six-Month Period Ended June 30, Ended June 30, 2024 2023 2024 2023 Net income (loss) attributable to common stockholders $ (31,680 ) $ (1,989 ) $ (80,570 ) $ 52 Net income (loss) attributable to redeemable noncontrolling interest - discontinued operations — (12 ) (2,779 ) (12 ) Net income (loss) attributable to noncontrolling interest - discontinued operations — — — (342 ) Interest expense 4,118 4,195 8,561 8,118 Interest expense - discontinued operations 103 111 219 216 Interest income (577 ) (720 ) (1,155 ) (1,328 ) Interest income - discontinued operations (179 ) (317 ) (731 ) (569 ) Dividend income — (14 ) (10 ) (32 ) Realized gain (loss) on marketable securities (4 ) 29 109 61 (Gain) loss on debt extinguishment 51 — 91 1,556 Income tax expense (10,664 ) (1,628 ) (14,811 ) (2,043 ) Income tax expense - discontinued operations 3,010 889 (645 ) 1,535 Amortization of syndication contracts 114 120 227 240 Payments on syndication contracts (114 ) (121 ) (229 ) (241 ) Non-cash stock-based compensation 3,287 5,968 8,734 10,021 Depreciation and amortization 4,428 3,713 9,167 7,214 Depreciation and amortization - discontinued operations 1,564 2,796 3,958 5,766 Change in fair value of contingent consideration 240 21 20 721 Change in fair value of contingent consideration - discontinued operations (11,368 ) 1,102 (12,568 ) (3,663 ) Impairment charge - discontinued operations — — 49,438 — Non-recurring cash severance and restructuring charge 3,127 487 3,127 612 Other operating (gain) loss - discontinued operations 45,014 — 45,014 — EBITDA attributable to redeemable noncontrolling interest - discontinued operations — (417 ) (167 ) (417 ) EBITDA attributable to noncontrolling interest - discontinued operations — — — (230 ) Consolidated EBITDA (1) $ 10,470 $ 14,213 $ 15,000 $ 27,235 (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 Six-Month Period Ended June 30, Ended June 30, 2024 2023 2024 2023 Cash flows from operating activities $ 17,696 $ 10,396 $ 51,071 $ 47,091 Cash paid for capital expenditures (2) (1,994 ) (8,108 ) (4,737 ) (14,858 ) Free cash flow (1) $ 15,702 $ 2,288 $ 46,334 $ 32,233 (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/20240808999947/en/
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