Entravision Communications Corporation Reports First Quarter 2021 Results

SANTA MONICA, Calif.--(BUSINESS WIRE)--Entravision Communications Corporation (NYSE: EVC), a leading global media and marketing technology company, today announced financial results for the three-month period ended March 31, 2021.

First Quarter 2021 Highlights

• Net revenue up 132% over the same prior-year period
• Net income attributable to common stockholders of $5.4 million, compared to a loss of $35.6 million in the prior year
• Consolidated Adjusted EBITDA up 47% over the same prior-year period
• Operating cash flow up 95% over the same prior-year period
• Free cash flow up 149% over the same prior-year period
• Quarterly cash dividend of $0.025 per share

“We are very pleased with our results for the first quarter 2021, with core television and audio performing well, along with our digital segment that continues to see solid growth,” said Walter F. Ulloa, Chairman and Chief Executive Officer. “We are particularly pleased with the progress of our recent acquisition of Cisneros Interactive through which we significantly expanded Entravision’s digital offerings to customers, including representing some of the strongest global audience and ad tech platforms. As we grew our top line, we also remained cost conscious and continue to operate a much more efficient business than even prior to the onset of the COVID-19 pandemic. Overall, we are optimistic for gradual, but continued progress throughout the balance of the year as macroeconomic conditions progress.”

Quarterly Cash Dividend

The Company announced today that its Board of Directors approved a quarterly cash dividend to shareholders of $0.025 per share on the Company's Class A, Class B and Class U common stock, in an aggregate amount of approximately $2.1 million. The quarterly dividend will be payable on June 30, 2021 to shareholders of record as of the close of business on June 16, 2021, and the common stock will trade ex-dividend on June 15, 2021. The Company currently anticipates that future cash dividends will be paid on a quarterly basis; however, any decision to pay future cash dividends will be subject to approval by the Board.

Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measure most directly comparable to each of these non-GAAP financial measures, and a table reconciling each of these non-GAAP financial measures to its most directly comparable GAAP financial measure is included beginning on page 9.

Unaudited Financial Highlights

	Three-Month Period
	Ended March 31,
	2021			2020			% Change
Net revenue	$	148,880		$	64,249		132	%
Cost of revenue - digital (1)		84,756			7,347		*
Operating expenses (2)		40,414			40,270		0	%
Corporate expenses (3)		7,158			6,840		5	%
Foreign currency (gain) loss		586			1,508		(61	)%
Consolidated adjusted EBITDA (4)		14,195			9,679		47	%
Free cash flow (5)	$	13,029		$	5,229		149	%
Net income (loss)	$	7,002		$	(35,592	)	*
Net (income) loss attributable to redeemable noncontrolling interest	$	(1,573	)	$	-		*
Net income (loss) attributable to common stockholders	$	5,429		$	(35,592	)	*
Net income (loss) per share attributable to common stockholders, basic and diluted	$	0.06		$	(0.42	)	*
Weighted average common shares outstanding, basic		85,041,628			84,317,767
Weighted average common shares outstanding, diluted		86,986,581			84,317,767

(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 includes direct operating and selling, general and administrative expenses. Included in operating expenses are $0.3 million and $0.1 million of non-cash stock-based compensation for the three-month periods ended March 31, 2021 and 2020, respectively.
(3)	Corporate expenses include $0.8 million and $0.7 million of non-cash stock-based compensation for the three-month periods ended March 31, 2021 and 2020, respectively.
(4)	Consolidated adjusted EBITDA means net income (loss) plus gain (loss) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation included in operating and corporate expenses, net interest expense, other operating gain (loss), gain (loss) on debt extinguishment, income tax (expense) benefit, equity in net income (loss) of nonconsolidated affiliate, non-cash losses, syndication programming amortization less syndication programming payments, revenue from the Federal Communications Commission, or FCC, spectrum incentive auction less related expenses, expenses associated with investments, EBITDA attributable to redeemable noncontrolling interest, acquisitions and dispositions and certain pro-forma cost savings. We use the term consolidated adjusted EBITDA because that measure is defined in the agreement governing our current credit facility (“the 2017 Credit Facility”) and does not include gain (loss) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation, net interest expense, other income (loss), gain (loss) on debt extinguishment, income tax (expense) benefit, equity in net income (loss) of nonconsolidated affiliate, non-cash losses, syndication programming amortization less syndication programming payments, revenue from FCC spectrum incentive auction less related expenses, expenses associated with investments, EBITDA attributable to redeemable noncontrolling interest, acquisitions and dispositions and certain pro-forma cost savings.
(5)	Free cash flow is defined as consolidated adjusted EBITDA less cash paid for income taxes, net interest expense, capital expenditures and non-recurring cash expenses plus dividend income, and other operating gain (loss). Net interest expense is defined as interest expense, less non-cash interest expense relating to amortization of debt finance costs, and less interest income.

Unaudited Financial Results

	Three-Month Period
	Ended March 31,
	2021			2020			% Change
Net revenue	$	148,880		$	64,249		132	%
Cost of revenue - digital (1)		84,756			7,347		*
Operating expenses (1)		40,414			40,270		0	%
Corporate expenses (1)		7,158			6,840		5	%
Depreciation and amortization		5,184			4,512		15	%
Impairment charge		1,326			39,835		(97	)%
Foreign currency (gain) loss		586			1,508		(61	)%
Other operating (gain) loss		(1,913	)		(836	)	129	%
Operating income (loss)		11,369			(35,227	)	*
Interest expense, net		(1,577	)		(2,056	)	(23	)%
Dividend income		2			23		(91	)%
Income (loss) before income taxes		9,794			(37,260	)	*
Income tax benefit (expense)		(2,792	)		1,668		*
Net income (loss)		7,002			(35,592	)	*
Net (income) loss attributable to redeemable noncontrolling interest		(1,573	)		-		*
Net income (loss) attributable to common stockholders	$	5,429		$	(35,592	)	*

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

Net revenue in the first quarter of 2021 totaled $148.9 million, up 132% from $64.2 million in the prior-year period. Of the overall increase, approximately $88.2 million was attributable to our digital segment and was primarily due to our acquisition of a majority interest in Cisneros Interactive during the fourth quarter of 2020, partially offset by a decrease in advertising revenue as a result of declines in pre-acquisition digital revenue and the continuing economic crisis resulting from the COVID-19 pandemic. The overall increase in net revenue was partially offset by a decrease of approximately $3.1 million attributable to our television segment due to a decrease in political revenue, partially offset by increases in revenue from spectrum usage rights and local and national advertising revenue. Additionally, the overall increase in net revenue was partially offset by a decrease of approximately $0.4 million attributable to our radio segment.

Cost of revenue in the first quarter of 2021 totaled $84.8 million compared to $7.3 million in the prior-year period. The increase was primarily due to increased costs of revenue associated with the increase in net revenue due to our acquisition of a majority interest in Cisneros Interactive during the fourth quarter of 2020.

Operating expenses in the first quarter of 2021 totaled $40.4 million, up slightly from $40.3 million in the prior-year period. The increase was primarily due to our acquisition of a majority interest in Cisneros Interactive during the fourth quarter of 2020, partially offset by decreases in salary expense associated with furloughs and layoffs that occurred in 2020.

Corporate expenses in the first quarter of 2021 totaled $7.2 million, up 5% from $6.8 million in the prior-year period. The increase was primarily due to an increase in salaries and audit fees.

Balance Sheet & Related Metrics

Cash and marketable securities as of March 31, 2021 totaled approximately $166 million. Total debt was $214.5 million. Net of $75 million of cash and marketable securities, total leverage as defined in the Company’s credit agreement was 2.1 times at the end of the first quarter 2021. Net of total accessible cash and marketable securities, total leverage was 1.0 times.

Unaudited Segment Results

	Three-Month Period
	Ended March 31,
	2021		2020		% Change
Net Revenue
Television	$	36,091	$	39,199	(8	)%
Digital		101,482		13,331	661	%
Radio		11,307		11,719	(4	)%
Total	$	148,880	$	64,249	132	%
Cost of Revenue - digital (1)
Digital	$	84,756	$	7,347	*
Operating Expenses (1)
Television		19,884		21,757	(9	)%
Digital		10,850		6,864	58	%
Radio		9,680		11,649	(17	)%
Total	$	40,414	$	40,270	0	%
Corporate Expenses (1)	$	7,158	$	6,840	5	%
Consolidated adjusted EBITDA (1)	$	14,195	$	9,679	47	%

(1)	Cost of revenue, operating expenses, corporate expenses, and consolidated adjusted EBITDA are defined on page 2.

Notice of Conference Call

Entravision Communications Corporation will hold a conference call to discuss its first quarter 2021 results on Thursday, May 6, 2021 at 5 p.m. Eastern Time. To access the conference call, please dial [phone] (U.S.) or [phone] (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 diversified global media, marketing and technology company serving clients throughout the United States and in more than 20 countries across Latin America, Europe, and Asia. Entravision has 54 television stations and is the largest affiliate group of the Univision and UniMás television networks, and 48 Spanish-language radio stations that feature nationally recognized, award-winning talent. Our dynamic digital portfolio includes Entravision Digital, which serves SMBs in high-density U.S. Latino markets and provides cutting-edge mobile programmatic solutions and demand-side platforms that allow advertisers to execute performance campaigns using machine-learned bidding algorithms, along with Cisneros Interactive, a leader in digital advertising solutions in the Latin American and U.S. Hispanic markets representing major technology platforms. Shares of Entravision Class A Common Stock trade on The New York Stock Exchange under the ticker symbol: EVC. Learn more about all of our media, marketing and technology 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 Balance Sheets
(In thousands; unaudited)
	March 31,			December 31,
	2021			2020
ASSETS
Current assets
Cash and cash equivalents	$	149,987		$	119,162
Marketable securities		15,745			27,988
Restricted cash		749			749
Trade receivables, net of allowance for doubtful accounts		132,149			142,004
Assets held for sale		6,138			2,141
Prepaid expenses and other current assets		18,418			18,021
Total current assets		323,186			310,065
Property and equipment, net		69,737			72,004
Intangible assets subject to amortization, net		47,587			49,412
Intangible assets not subject to amortization		211,753			216,653
Goodwill		58,043			58,043
Operating leases right of use asset		34,276			33,525
Other assets		7,586			7,643
Total assets	$	752,168		$	747,345
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt	$	3,000		$	3,000
Accounts payable and accrued expenses		124,369			126,849
Operating lease liabilities		7,510			7,290
Total current liabilities		134,879			137,139
Long-term debt, less current maturities, net of unamortized debt issuance costs		209,811			210,454
Long-term operating lease liabilities		32,015			31,775
Other long-term liabilities		3,616			3,732
Deferred income taxes		56,306			54,980
Total liabilities		436,627			438,080
Redeemable noncontrolling interest		34,858			33,285
Stockholders' equity
Class A common stock		6			6
Class B common stock		2			2
Class U common stock		1			1
Additional paid-in capital		827,749			828,813
Accumulated deficit		(546,357	)		(551,786	)
Accumulated other comprehensive income (loss)		(718	)		(1,056	)
Total stockholders' equity		280,683			275,980
Total liabilities and stockholders' equity	$	752,168		$	747,345

Entravision Communications Corporation
Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
	Three-Month Period
	Ended March 31,
	2021			2020
Net revenue	$	148,880		$	64,249
Expenses:
Cost of revenue - digital		84,756			7,347
Direct operating expenses		26,561			26,679
Selling, general and administrative expenses		13,853			13,591
Corporate expenses		7,158			6,840
Depreciation and amortization		5,184			4,512
Impairment charge		1,326			39,835
Foreign currency (gain) loss		586			1,508
Other operating (gain) loss		(1,913	)		(836	)
		137,511			99,476
Operating income (loss)		11,369			(35,227	)
Interest expense		(1,717	)		(2,680	)
Interest income		140			624
Dividend income		2			23
Income (loss) before income taxes		9,794			(37,260	)
Income tax benefit (expense)		(2,792	)		1,668
Net income (loss)		7,002			(35,592	)
Net (income) loss attributable to redeemable noncontrolling interest		(1,573	)		-
Net income (loss) attributable to common stockholders	$	5,429		$	(35,592	)
Basic and diluted earnings per share:
Net income (loss) per share attributable to common stockholders, basic and diluted	$	0.06		$	(0.42	)
Cash dividends declared per common share, basic and diluted	$	0.03		$	0.05
Weighted average common shares outstanding, basic		85,041,628			84,317,767
Weighted average common shares outstanding, diluted		86,986,581			84,317,767

Entravision Communications Corporation
Consolidated Statements of Cash Flows
(In thousands; unaudited)
	Three-Month Period
	Ended March 31,
	2021			2020
Cash flows from operating activities:
Net income (loss)	$	7,002		$	(35,592	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		5,184			4,512
Impairment charge		1,326			39,835
Deferred income taxes		2,987			(1,813	)
Non-cash interest		139			169
Amortization of syndication contracts		119			130
Payments on syndication contracts		(124	)		(130	)
Non-cash stock-based compensation		1,071			789
Changes in assets and liabilities:
(Increase) decrease in accounts receivable		9,927			7,482
(Increase) decrease in prepaid expenses and other assets		1,177			1,026
Increase (decrease) in accounts payable, accrued expenses and other liabilities		(5,356	)		(4,394	)
Net cash provided by operating activities		23,452			12,014
Cash flows from investing activities:
Purchases of property and equipment		(1,838	)		(2,671	)
Purchases of intangible assets		—			(155	)
Proceeds from marketable securities		12,120			16,617
Net cash provided by (used in) investing activities		10,282			13,791
Cash flows from financing activities:
Tax payments related to shares withheld for share-based compensation plans		(9	)		—
Payments on long-term debt		(750	)		(750	)
Dividends paid		(2,126	)		(4,218	)
Repurchase of Class A common stock		—			(525	)
Net cash used in financing activities		(2,885	)		(5,493	)
Effect of exchange rates on cash, cash equivalents and restricted cash		(24	)		77
Net increase (decrease) in cash, cash equivalents and restricted cash		30,825			20,389
Cash, cash equivalents and restricted cash:
Beginning		119,911			33,857
Ending	$	150,736		$	54,246

Entravision Communications Corporation

Reconciliation of Consolidated Adjusted EBITDA to Cash Flows From Operating Activities

(In thousands; unaudited)

The most directly comparable GAAP financial measure is operating cash flow. A reconciliation of this non-GAAP measure to cash flows from operating activities for each of the periods presented is as follows:

	Three-Month Period
	Ended March 31,
	2021			2020
Consolidated adjusted EBITDA (1)	$	14,195		$	9,679
EBITDA attributable to redeemable noncontrolling interest		2,837			-
Interest expense		(1,717	)		(2,680	)
Interest income		140			624
Dividend income		2			23
Income tax expense		(2,792	)		1,668
Amortization of syndication contracts		(119	)		(130	)
Payments on syndication contracts		124			130
Non-cash stock-based compensation included in direct operating expenses		(316	)		(131	)
Non-cash stock-based compensation included in corporate expenses		(755	)		(658	)
Depreciation and amortization		(5,184	)		(4,512	)
Impairment charge		(1,326	)		(39,835	)
Non-recurring cash severance charge		-			(606	)
Other operating gain (loss)		1,913			836
Net (income) loss attributable to redeemable noncontrolling interest		(1,573	)		-
Net income (loss) attributable to common stockholders		5,429			(35,592	)
Depreciation and amortization		5,184			4,512
Impairment charge		1,326			39,835
Deferred income taxes		2,987			(1,813	)
Non-cash interest		139			169
Amortization of syndication contracts		119			130
Payments on syndication contracts		(124	)		(130	)
Non-cash stock-based compensation		1,071			789
Net income (loss) attributable to redeemable noncontrolling interest		1,573			-
Changes in assets and liabilities:
(Increase) decrease in accounts receivable		9,927			7,482
(Increase) decrease in prepaid expenses and other assets		1,177			1,026
Increase (decrease) in accounts payable, accrued expenses and other liabilities		(5,356	)		(4,394	)
Cash flows from operating activities		23,452			12,014

(1)	Consolidated adjusted EBITDA is defined on page 2.

Entravision Communications Corporation

Reconciliation of Free Cash Flow to Cash Flows From Operating Activities

(In thousands; unaudited)

The most directly comparable GAAP financial measure is operating cash flow. A reconciliation of this non-GAAP measure to cash flows from operating activities for each of the periods presented is as follows:

	Three-Month Period
	Ended March 31,
	2021			2020
Consolidated adjusted EBITDA (1)	$	14,195		$	9,679
Net interest expense (1)		(1,438	)		(1,887	)
Dividend income		2			23
Cash paid for income taxes		195			(145	)
Capital expenditures (2)		(1,838	)		(2,671	)
Non-recurring cash severance charge		-			(606	)
Other operating gain (loss)		1,913			836
Free cash flow (1)		13,029			5,229
Capital expenditures (2)		1,838			2,671
EBITDA attributable to redeemable noncontrolling interest		2,837			-
Changes in assets and liabilities:
(Increase) decrease in accounts receivable		9,927			7,482
(Increase) decrease in prepaid expenses and other assets		1,177			1,026
Increase (decrease) in accounts payable, accrued expenses and other liabilities		(5,356	)		(4,394	)
Cash Flows From Operating Activities	$	23,452		$	12,014

(1)	Consolidated adjusted EBITDA, net interest expense, and free cash flow are defined on page 2.
(2)	Capital expenditures are not part of the consolidated statement of operations.