Entravision Communications Corporation Reports First Quarter 2023 Results
05/04/2023 - 04:05 PM
SANTA MONICA, Calif. --(BUSINESS WIRE)--
Entravision Communications Corporation (NYSE: EVC), a leading global advertising solutions, media and technology company, today announced financial results for the three-month period ended March 31, 2023.
First Quarter 2023 Highlights
Record first quarter revenue
Net revenue up 21% over the prior-year quarter
Net income attributable to common stockholders up 8% over the prior-year quarter
Consolidated EBITDA down 28% compared to the prior-year quarter
Operating cash flow down 31% compared to the prior-year quarter
Free cash flow down 73% compared to the prior-year quarter
Quarterly cash dividend of $0.05
Entered into $275 Million
“Entravision saw continued growth in the first quarter of 2023, with revenue up 21% year-over-year," said Chris Young, Interim Chief Executive Officer and Chief Financial Officer. “Growth for the quarter was led by our digital segment, which is impressive given difficult macro conditions and decreased political advertising revenue from last year."
Mr. Young continued, “With a solid balance sheet in place, strong free cash flow generation, and an acute focus on expense management, Entravision is well-equipped to navigate the current economic environment. As we progress through additional quarters, we will continue to seek out opportunities, including acquisitions, that will enhance our digital offerings and strengthen our ability to compete internationally."
Quarterly Cash Dividend
The Company announced today that its Board of Directors approved a quarterly cash dividend to shareholders of $0.05 $4.4 million
$275 Million
On March 17, 2023, the Company entered into the 2023 Amended and Restated Credit Facility (the "2023 Credit Facility"), which consists of a $200 million $75 million $11.5 million $100 million
Non-GAAP Financial Measures
This press release contains certain non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measure most directly comparable to each of these non-GAAP financial measures, and a table reconciling each of these non-GAAP financial measures to its most directly comparable GAAP financial measure is included beginning on page 9.
Unaudited Financial Highlights (In thousands, except share and per share data)
Three-Month Period
Ended March 31,
2023
2022
% Change
Net revenue
$
239,006
$
197,172
21
%
Cost of revenue - digital (1)
167,756
129,891
29
%
Operating expenses (2)
52,630
43,862
20
%
Corporate expenses (3)
10,502
8,724
20
%
Foreign currency (gain) loss
(956
)
(847
)
13
%
Consolidated EBITDA (4)
13,022
18,113
(28
)%
Free cash flow (5)
$
3,908
$
14,327
(73
)%
Net income (loss)
$
1,699
$
1,887
(10
)%
Net (income) loss attributable to noncontrolling interest
$
342
$
-
*
Net income (loss) attributable to common stockholders
$
2,041
$
1,887
8
%
Net income (loss) per share attributable to common stockholders, basic and diluted
$
0.02
$
0.02
0
%
Weighted average common shares outstanding, basic
87,623,887
86,522,378
Weighted average common shares outstanding, diluted
89,786,585
88,630,216
(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 $1.9 million $1.0 million
(3)
Corporate expenses include $2.2 million $1.6 million
(4)
Consolidated EBITDA means net income (loss) plus gain (loss) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation included in operating and corporate expenses, net interest expense, other operating gain (loss), gain (loss) on debt extinguishment, income tax (expense) benefit, equity in net income (loss) of nonconsolidated affiliate, non-cash losses, syndication programming amortization less syndication programming payments, revenue from the Federal Communications Commission, or FCC, spectrum incentive auction less related expenses, expenses associated with investments, EBITDA attributable to redeemable noncontrolling interest, acquisitions and dispositions and certain pro-forma cost savings. We use the term consolidated EBITDA because that measure is defined in our 2017 Credit Agreement and 2023 Credit Agreement, and does not include gain (loss) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation, net interest expense, other income (loss), gain (loss) on debt extinguishment, income tax (expense) benefit, equity in net income (loss) of nonconsolidated affiliate, non-cash losses, syndication programming amortization less syndication programming payments, revenue from FCC spectrum incentive auction less related expenses, expenses associated with investments, EBITDA attributable to redeemable noncontrolling interest, acquisitions and dispositions and certain pro-forma cost savings.
(5)
Free cash flow is defined as consolidated EBITDA less cash paid for income taxes, net interest expense, capital expenditures (less amounts reimbursed by landlord) and non-recurring cash expenses plus dividend income, and other operating gain (loss). Net interest expense is defined as interest expense, less non-cash interest expense relating to amortization of debt finance costs, and less interest income.
Unaudited Financial Results (In thousands)
Three-Month Period
Ended March 31,
2023
2022
% Change
Net revenue
$
239,006
$
197,172
21
%
Cost of revenue - digital (1)
167,756
129,891
29
%
Operating expenses (1)
52,630
43,862
20
%
Corporate expenses (1)
10,502
8,724
20
%
Depreciation and amortization
6,471
6,395
1
%
Change in fair value of contingent consideration
(4,065
)
5,100
*
Foreign currency (gain) loss
(956
)
(847
)
13
%
Other operating (gain) loss
-
(119
)
(100
)%
Operating income (loss)
6,668
4,166
60
%
Interest expense, net
(3,168
)
(1,430
)
122
%
Dividend income
18
3
500
%
Realized gain (loss) on marketable securities
(32
)
-
*
Gain (loss) on debt extinguishment
(1,556
)
-
*
Income (loss) before income taxes
1,930
2,739
(30
)%
Income tax benefit (expense)
(231
)
(852
)
(73
)%
Net income (loss)
1,699
1,887
(10
)%
Net (income) loss attributable to noncontrolling interest
342
-
*
Net income (loss) attributable to common stockholders
$
2,041
$
1,887
8
%
(1)
Cost of revenue, operating expenses and corporate expenses are defined on page 2.
Net revenue in the first quarter of 2023 totaled $239.0 million 21% from $197.2 million $42.8 million $0.6 million $0.4 million
Cost of revenue in the first quarter of 2023 totaled $167.8 million 29% from $129.9 million
Operating expenses in the first quarter of 2023 totaled $52.6 million 20% from $43.9 million $6.3 million $0.9 million $1.6 million
Corporate expenses in the first quarter of 2023 totaled $10.5 million 20% from $8.7 million
Balance Sheet and Related Metrics
Cash and marketable securities as of March 31, 2023 totaled $179.8 million $211.5 million $50 million
Unaudited Segment Results (In thousands)
Three-Month Period
Ended March 31,
2023
2022
% Change
Net Revenue
Digital
$
196,482
$
153,711
28
%
Television
30,312
30,867
(2
)%
Audio
12,212
12,594
(3
)%
Total
$
239,006
$
197,172
21
%
Cost of Revenue - digital (1)
Digital
$
167,756
$
129,891
29
%
Operating Expenses (1)
Digital
21,539
15,235
41
%
Television
20,099
19,240
4
%
Audio
10,992
9,387
17
%
Total
$
52,630
$
43,862
20
%
Corporate Expenses (1)
$
10,502
$
8,724
20
%
Consolidated EBITDA (1)
$
13,022
$
18,113
(28
)%
(1)
Cost of revenue, operating expenses, corporate expenses, and consolidated EBITDA are defined on page 2.
Notice of Conference Call
Entravision Communications Corporation will hold a conference call to discuss its first quarter 2023 results on Thursday, May 4, 2023 at 5:00 p.m. Eastern Time. To access the conference call, please dial (844) 836-8739 (U.S. ) or (412) 317-5440 (Int’l) ten minutes prior to the start time and reference Conference ID number 10176751. 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 global advertising solutions, media and technology company. Over the past three decades, we have strategically evolved into a digital powerhouse, expertly connecting brands to consumers in the U.S. , Latin America , Europe , Asia and Africa . Our digital segment, the company’s largest by revenue, offers a full suite of end-to-end advertising services in 40 countries. We have commercial partnerships with Meta, Twitter, TikTok, and Spotify, and marketers can use our Smadex and other platforms to deliver targeted advertising to audiences around the globe. In the U.S. , we maintain a diversified portfolio of television and radio stations that target Hispanic audiences and complement our global digital services. 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
Ended March 31,
2023
2022
Net revenue
$
239,006
$
197,172
Expenses:
Cost of revenue - digital
167,756
129,891
Direct operating expenses
29,862
27,823
Selling, general and administrative expenses
22,768
16,039
Corporate expenses
10,502
8,724
Depreciation and amortization
6,471
6,395
Change in fair value of contingent consideration
(4,065
)
5,100
Foreign currency (gain) loss
(956
)
(847
)
Other operating (gain) loss
—
(119
)
232,338
193,006
Operating income (loss)
6,668
4,166
Interest expense
(4,028
)
(1,836
)
Interest income
860
406
Dividend income
18
3
Realized gain (loss) on marketable securities
(32
)
—
Gain (loss) on debt extinguishment
(1,556
)
—
Income (loss) before income taxes
1,930
2,739
Income tax benefit (expense)
(231
)
(852
)
Net income (loss)
1,699
1,887
Net (income) loss attributable to noncontrolling interest
342
—
Net income (loss) attributable to common stockholders
$
2,041
$
1,887
Basic and diluted earnings per share:
Net income (loss) per share attributable to common stockholders, basic and diluted
$
0.02
$
0.02
Cash dividends declared per common share, basic and diluted
$
0.05
$
0.03
Weighted average common shares outstanding, basic
87,623,887
86,522,378
Weighted average common shares outstanding, diluted
89,786,585
88,630,216
Entravision Communications Corporation
Consolidated Balance Sheets
(In thousands; unaudited)
March 31,
December 31,
2023
2022
ASSETS
Current assets
Cash and cash equivalents
$
141,455
$
110,691
Marketable securities
38,367
44,528
Restricted cash
757
753
Trade receivables, net of allowance for doubtful accounts
191,486
224,713
Assets held for sale
301
—
Prepaid expenses and other current assets
30,135
27,238
Total current assets
402,501
407,923
Property and equipment, net
65,868
61,362
Intangible assets subject to amortization, net
58,908
61,811
Intangible assets not subject to amortization
207,453
207,453
Goodwill
86,991
86,991
Deferred income taxes
2,591
2,591
Operating leases right of use asset
45,883
44,413
Other assets
8,088
8,297
Total assets
$
878,283
$
880,841
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt
$
5,778
$
5,256
Accounts payable and accrued expenses
233,791
237,415
Operating lease liabilities
6,029
5,570
Total current liabilities
245,598
248,241
Long-term debt, less current maturities, net of unamortized debt issuance costs
207,016
207,292
Long-term operating lease liabilities
44,580
42,151
Other long-term liabilities
27,168
30,198
Deferred income taxes
67,357
67,590
Total liabilities
591,719
595,472
Stockholders' equity
Class A common stock
8
8
Class U common stock
1
1
Additional paid-in capital
776,198
776,298
Accumulated deficit
(502,334
)
(504,375
)
Accumulated other comprehensive income (loss)
(1,368
)
(1,510
)
Total stockholders' equity
272,505
270,422
Noncontrolling interest
14,059
14,947
Total equity
286,564
285,369
Total liabilities and equity
$
878,283
$
880,841
Entravision Communications Corporation
Consolidated Statements of Cash Flows
(In thousands; unaudited)
Three-Month Period
Ended March 31,
2023
2022
Cash flows from operating activities:
Net income (loss)
$
1,699
$
1,887
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization
6,471
6,395
Deferred income taxes
(205
)
(359
)
Non-cash interest
133
280
Amortization of syndication contracts
120
116
Payments on syndication contracts
(120
)
(118
)
Non-cash stock-based compensation
4,053
2,573
(Gain) loss on marketable securities
32
—
(Gain) loss on disposal of property and equipment
68
(151
)
(Gain) loss on debt extinguishment
1,556
-
Change in fair value of contingent consideration
(4,065
)
5,100
Changes in assets and liabilities:
(Increase) decrease in accounts receivable
33,157
29,380
(Increase) decrease in prepaid expenses and other current assets, operating leases right of use asset and other assets
948
(2,405
)
Increase (decrease) in accounts payable, accrued expenses and other liabilities
(7,152
)
10,521
Net cash provided by operating activities
36,695
53,219
Cash flows from investing activities:
Proceeds from sale of property and equipment and intangibles
—
164
Purchases of property and equipment
(6,750
)
(1,547
)
Purchases of marketable securities
(9,397
)
(85,517
)
Proceeds from sale of marketable securities
15,704
—
Purchases of investments
(120
)
—
Net cash used in investing activities
(563
)
(86,900
)
Cash flows from financing activities:
Proceeds from stock option exercises
313
218
Tax payments related to shares withheld for share-based compensation plans
(80
)
(257
)
Payments on debt
(211,748
)
(750
)
Dividends paid
(4,932
)
(2,167
)
Repurchase of Class A common stock
—
(7,142
)
Payment of contingent consideration
—
(14,730
)
Principal payments under finance lease obligation
(38
)
(10
)
Proceeds from borrowings on debt
212,405
—
Payments for debt issuance costs
(1,285
)
—
Net cash used in financing activities
(5,365
)
(24,838
)
Effect of exchange rates on cash, cash equivalents and restricted cash
1
(1
)
Net increase (decrease) in cash, cash equivalents and restricted cash
30,768
(58,520
)
Cash, cash equivalents and restricted cash:
Beginning
111,444
185,843
Ending
$
142,212
$
127,323
Entravision Communications Corporation
Reconciliation of Consolidated EBITDA to Cash Flows From Operating Activities
(In thousands; unaudited)
The most directly comparable GAAP financial measure is operating cash flow. A reconciliation of this non-GAAP measure to cash flows from operating activities for each of the periods presented is as follows:
Three-Month Period
Ended March 31,
2023
2022
Consolidated EBITDA (1)
$
13,022
$
18,113
EBITDA attributable to noncontrolling interest
230
-
Interest expense
(4,028
)
(1,836
)
Interest income
860
406
Dividend income
18
3
Realized gain (loss) on marketable securities
(32
)
-
Income tax expense
(231
)
(852
)
Amortization of syndication contracts
(120
)
(116
)
Payments on syndication contracts
120
118
Non-cash stock-based compensation included in direct operating expenses
(1,856
)
(958
)
Non-cash stock-based compensation included in corporate expenses
(2,197
)
(1,615
)
Depreciation and amortization
(6,471
)
(6,395
)
Change in fair value of contingent consideration
4,065
(5,100
)
Non-recurring cash severance charge
(125
)
-
Other operating gain (loss)
-
119
Gain (loss) on debt extinguishment
(1,556
)
-
Net (income) loss attributable to noncontrolling interest
342
-
Net income (loss) attributable to common stockholders
2,041
1,887
Depreciation and amortization
6,471
6,395
Deferred income taxes
(205
)
(359
)
Non-cash interest
133
280
Amortization of syndication contracts
120
116
Payments on syndication contracts
(120
)
(118
)
Non-cash stock-based compensation
4,053
2,573
Realized (gain) loss on marketable securities
32
-
(Gain) loss on debt extinguishment
1,556
-
(Gain) loss on disposal of property and equipment
68
(151
)
Change in fair value of contingent consideration
(4,065
)
5,100
Net income (loss) attributable to noncontrolling interest
(342
)
-
Changes in assets and liabilities:
(Increase) decrease in accounts receivable
33,157
29,380
(Increase) decrease in prepaid expenses and other current assets, operating leases right of use asset and other assets
948
(2,405
)
Increase (decrease) in accounts payable, accrued expenses and other liabilities
(7,152
)
10,521
Cash flows from operating activities
36,695
53,219
(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 operating cash flow. A reconciliation of this non-GAAP measure to cash flows from operating activities for each of the periods presented is as follows:
Three-Month Period
Ended March 31,
2023
2022
Consolidated EBITDA (1)
$
13,022
$
18,113
Net interest expense (1)
(3,035
)
(1,150
)
Dividend income
18
3
Cash paid for income taxes
(72
)
(1,211
)
Capital expenditures (2)
(6,750
)
(1,547
)
Landlord incentive reimbursement
850
-
Non-recurring cash severance charge
(125
)
-
Other operating gain (loss)
-
119
Free cash flow (1)
3,908
14,327
Capital expenditures (2)
6,750
1,547
Landlord incentive reimbursement
(850
)
-
EBITDA attributable to noncontrolling interest
230
-
(Gain) loss on disposal of property and equipment
68
(151
)
Cash paid for income taxes
72
1,211
Deferred income taxes
(205
)
(359
)
Income tax (expense) benefit
(231
)
(852
)
Changes in assets and liabilities:
(Increase) decrease in accounts receivable
33,157
29,380
(Increase) decrease in prepaid expenses and other current assets, operating leases right of use asset and other assets
948
(2,405
)
Increase (decrease) in accounts payable, accrued expenses and other liabilities
(7,152
)
10,521
Cash Flows From Operating Activities
$
36,695
$
53,219
(1)
Consolidated EBITDA, net interest expense, and free cash flow are defined on page 2.
(2)
Capital expenditures are not part of the consolidated statement of operations.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230503006128/en/
Christopher T. Young
evc@addo.com
Source: Entravision Communications Corporation
