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Section 1: 8-K (8-K)

evc-8k_20200507.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 8-K

 

Current Report

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  May 7, 2020

ENTRAVISION COMMUNICATIONS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

001-15997

95-4783236

(State or other jurisdiction
of incorporation)

(Commission
File Number)

(IRS Employer
Identification No.)

2425 Olympic Boulevard, Suite 6000 West

Santa Monica, California 90404

(Address of principal executive offices) (Zip Code)

(310) 447-3870

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Class A Common Stock

 

EVC

 

The New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

 

 

 


 

Item 2.02   Results of Operations and Financial Condition.

On May 7, 2020, Entravision Communications Corporation (the “Company”) issued a press release announcing its results of operations for the three-month period ended March 31, 2020.  A copy of that press release is furnished herewith as Exhibit 99.1.

The information provided pursuant to Item 2.02 in this Current Report on Form 8-K, including the exhibit thereto, is being furnished under Item 2.02 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed to be incorporated by reference into any future registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, regardless of the general incorporation language of such filing, except as shall be expressly set forth by specific reference in such filing.

Item 9.01   Financial Statements and Exhibits.

(d) Exhibits

 

99.1

Press release issued by Entravision Communications Corporation on May 7, 2020 announcing its results of operations for the three-month period ended March 31, 2020.

- 2 -


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

ENTRAVISION COMMUNICATIONS CORPORATION

 

 

 

Date:  May 7, 2020

 

By:

/s/ Walter F. Ulloa

 

 

 

Walter F. Ulloa

 

 

 

Chairman and Chief Executive Officer

 

- 3 -

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

evc-ex991_6.htm

Exhibit 99.1

 

ENTRAVISION COMMUNICATIONS CORPORATION REPORTS

FIRST QUARTER 2020 RESULTS

 

- Announces Quarterly Cash Dividend of $0.025 Per Share –

 

SANTA MONICA, CALIFORNIA, May 7, 2020 – Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three-month period ended March 31, 2020.

Historical results, which are attached, are in thousands of U.S. dollars (except share and per share data). This press release contains certain non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measure most directly comparable to each of these non-GAAP financial measures, and a table reconciling each of these non-GAAP financial measures to its most directly comparable GAAP financial measure is included beginning on page 10. Unaudited financial highlights are as follows:

 

Three-Month Period

 

 

Ended March 31,

 

 

2020

 

 

2019

 

 

% Change

 

Net revenue

$

64,249

 

 

$

64,680

 

 

 

(1

)%

Cost of revenue - digital media (1)

 

7,347

 

 

 

7,642

 

 

 

(4

)%

Operating expenses (2)

 

40,270

 

 

 

42,744

 

 

 

(6

)%

Corporate expenses (3)

 

6,840

 

 

 

6,894

 

 

 

(1

)%

Foreign currency (gain) loss

 

1,508

 

 

 

132

 

 

 

1042

%

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated adjusted EBITDA (4)

 

9,679

 

 

 

8,057

 

 

 

20

%

 

 

 

 

 

 

 

 

 

 

 

 

Free cash flow (5)

$

5,229

 

 

$

1,293

 

 

 

304

%

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

(35,592

)

 

$

1,424

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share, basic and diluted

$

(0.42

)

 

$

0.02

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, basic

 

84,317,767

 

 

 

86,101,741

 

 

 

 

 

Weighted average common shares outstanding, diluted

 

84,317,767

 

 

 

87,152,987

 

 

 

 

 

 

(1)

Cost of revenue – digital media consists primarily of the costs of online media acquired from third-party publishers. Media cost is classified as cost of revenue in the period in which the corresponding revenue is recognized.

(2)

For purposes of presentation in this table, the operating expenses line item includes direct operating and selling, general and administrative expenses. Included in operating expenses are $0.1 million of non-cash stock-based compensation for each of the three-month periods ended March 31, 2020 and 2019. Also for purposes of presentation in this table, the operating expenses line item does not include corporate expenses, foreign currency (gain) loss, depreciation and amortization, impairment charge, gain (loss) on sale of assets, gain (loss) on debt extinguishment, other income (loss) and change in fair value of contingent consideration.

(3)

Corporate expenses include $0.7 million of non-cash stock-based compensation for each of the three-month periods ended March 31, 2020 and 2019.

(4)

Consolidated adjusted EBITDA means net income (loss) plus gain (loss) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation included in operating and corporate expenses, net interest expense, other income (loss), gain (loss) on debt extinguishment, income tax (expense) benefit, equity in net income (loss) of nonconsolidated affiliate, non-cash losses, syndication programming amortization less syndication programming payments, revenue from the Federal Communications Commission, or FCC, spectrum incentive auction less related expenses, expenses associated with investments, acquisitions and dispositions and certain pro-forma cost savings. We use the term consolidated adjusted EBITDA because that measure is defined in the agreement governing our current credit facility (“the 2017 Credit Facility”) and does not include gain (loss) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation, net interest expense, other income (loss), gain (loss) on debt extinguishment, income tax (expense) benefit, equity in net income (loss) of nonconsolidated affiliate, non-cash losses, syndication programming amortization less syndication programming payments, revenue from FCC spectrum incentive auction less related expenses, expenses associated with investments, acquisitions and dispositions and certain pro-forma cost savings.

(5)

Free cash flow is defined as consolidated adjusted EBITDA less cash paid for income taxes, net interest expense, capital expenditures and non-recurring cash expenses plus dividend income, and FCC reimbursement for broadcast television repack less related cash expenses. Net interest expense is defined as interest expense, less non-cash interest expense relating to amortization of debt finance costs, and less interest income.


Entravision Communications

Page 2 of 11

 

Commenting on the Company’s earnings results, Walter F. Ulloa, Chairman and Chief Executive Officer, said, “Our first quarter results were affected by the COVID-19 pandemic and the resulting economic crisis late in the period, which resulted in declines in our radio and digital segments compared to the prior year. However, we did achieve growth in our television segment compared to the first quarter of 2019. We expect a significantly greater adverse impact in future periods, depending upon the extent and duration of the economic downturn. We continue to maintain a solid balance sheet and are undertaking an extensive review of our business in order to more efficiently align operations and reduce costs. Looking ahead, we remain well positioned to build on our success in further attracting Latino and other audiences worldwide, as we execute our multiplatform strategy to the benefit of our shareholders.”

Quarterly Cash Dividend

The Company announced today that its Board of Directors approved a quarterly cash dividend to shareholders of $0.025 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, 2020 to shareholders of record as of the close of business on June 15, 2020, and the common stock will trade ex-dividend on June 12, 2020. The Company currently anticipates that future cash dividends will be paid on a quarterly basis; however, any decision to pay future cash dividends will be subject to approval by the Board.

Impairment

Due to the current economic crisis resulting from the COVID-19 pandemic, we experienced a decline in performance across all our reporting units beginning late in the first quarter of 2020. Additionally, the digital reporting unit was already facing declining results prior to the onset of the pandemic, caused by continuing competitive pressures and rapid changes in the digital advertising industry, which then further accelerated late in the quarter as a result of the economic crisis resulting from the pandemic. The results of our television and radio reporting units prior to the onset of the pandemic were exceeding internal budgets, driven in large part by political advertising revenue, but declined sharply in the last few weeks of the quarter because of the pandemic and the resulting economic crisis.  As a result, we updated our internal forecasts of future performance and determined that triggering events had occurred during the first quarter of 2020 that required interim impairment assessments related to goodwill, indefinite lived intangible assets and long-lived assets. As a result of these assessments, we recognized impairment charges totaling $39.8 million in the three-month period ended March 31, 2020.

 

 


Entravision Communications

Page 3 of 11

 

Financial Results

Three-Month period ended March 31, 2020 Compared to Three-Month Period Ended

March 31, 2019

(Unaudited)

 

Three-Month Period

 

 

Ended March 31,

 

 

2020

 

 

2019

 

 

% Change

 

Net revenue

$

64,249

 

 

$

64,680

 

 

 

(1

)%

Cost of revenue - digital media (1)

 

7,347

 

 

 

7,642

 

 

 

(4

)%

Operating expenses (1)

 

40,270

 

 

 

42,744

 

 

 

(6

)%

Corporate expenses (1)

 

6,840

 

 

 

6,894

 

 

 

(1

)%

Depreciation and amortization

 

4,512

 

 

 

3,916

 

 

 

15

%

Change in fair value contingent consideration

 

-

 

 

 

359

 

 

 

(100

)%

Impairment charge

 

39,835

 

 

 

-

 

 

*

 

Foreign currency (gain) loss

 

1,508

 

 

 

132

 

 

 

1042

%

Other operating (gain) loss

 

(836

)

 

 

(1,996

)

 

 

(58

)%

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

(35,227

)

 

 

4,989

 

 

*

 

Interest expense, net

 

(2,056

)

 

 

(2,571

)

 

 

(20

)%

Dividend income

 

23

 

 

 

255

 

 

 

(91

)%

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

(37,260

)

 

 

2,673

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax benefit (expense)

 

1,668

 

 

 

(1,093

)

 

*

 

Net income (loss) before equity in net income (loss) of nonconsolidated affiliates

 

(35,592

)

 

 

1,580

 

 

*

 

Equity in net income (loss) of nonconsolidated affiliates, net of tax

 

-

 

 

 

(156

)

 

 

(100

)%

Net income (loss)

$

(35,592

)

 

$

1,424

 

 

*

 

 

(1)

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

Net revenue decreased to $64.2 million for the three-month period ended March 31, 2020 from $64.7 million for the three-month period ended March 31, 2019, a decrease of $0.5 million. Of the overall decrease, approximately $1.2 million was attributable to our digital segment and was primarily due to declines in international revenue.  This decline in digital revenue is being driven by a trend whereby revenue is shifting more to programmatic revenue. In addition, approximately $0.3 million of the overall decrease was attributable to our radio segment and was primarily due to decreases in local and national advertising revenue, as a result primarily of ratings declines, competitive factors with other Spanish-language broadcasters and changing demographic preferences of audiences. Additionally, as we have previously noted, there is a trend for advertising to move increasingly from traditional media, such as radio, to new media, such as digital media, and we expect this trend to continue. The overall decrease was partially offset by an increase of approximately $0.9 million in our television segment due to increases in political advertising revenue and retransmission consent revenue, partially offset by decreases in revenue from spectrum usage rights and local and national advertising revenue, as a result primarily of ratings declines, competitive factors with other Spanish-language broadcasters and changing demographic preferences of audiences. Notwithstanding the increase in our television segment, as we have previously noted, there is a trend for advertising to move increasingly from traditional media, such as television, to new media, such as digital media, and we expect this trend to continue.

Cost of revenue in our digital segment decreased to $7.3 million for the three-month period ended March 31, 2020 from $7.6 million for the three-month period ended March 31, 2019, a decrease of $0.3 million, primarily due to a decrease in expenses associated with the decrease in revenue in our digital segment.

Operating expenses decreased to $40.3 million for the three-month period ended March 31, 2020 from $42.7 million for the three-month period ended March 31, 2019, a decrease of $2.4 million. The decrease was primarily due to a decrease in expenses associated with the decrease in revenue.

Corporate expenses decreased to $6.8 million for the three-month period ended March 31, 2020 from $6.9 million for the three-month period ended March 31, 2019, a decrease of $0.1 million.


Entravision Communications

Page 4 of 11

 

Impairment charge related to certain FCC licenses in our television and radio reporting units was $23.5 and $8.8 million, respectively, for the three-month period ended March 31, 2020. Impairment charge related to goodwill in our digital reporting unit was $0.8 million for the three-month period ended March 31, 2020. Impairment charges related to intangibles subject to amortization and property and equipment in our digital reporting unit was $5.3 million and $1.5 million, respectively, for the three-month period ended March 31, 2020.

Our historical revenues have primarily been denominated in U.S. dollars, and the majority of our current revenues continue to be, and are expected to remain, denominated in U.S. dollars. However, our operating expenses are generally denominated in the currencies of the countries in which our operations are located, and we have operations in countries other than the United States, primarily those operations related to our Headway business. As a result, we have operating expense, attributable to foreign currency, that is primarily related to the operations related to our Headway business. We had a foreign currency loss of $1.5 million for the three-month period ended March 31, 2020 compared to a foreign currency loss of $0.1 million for the three-month period ended March 31, 2019. Foreign currency loss was primarily due to currency fluctuations that affected our digital segment operations located outside the U.S., primarily those related to the Headway business.



Entravision Communications

Page 5 of 11

 

Segment Results

The following represents selected unaudited segment information:

 

  

Three-Month Period

 

 

Ended March 31,

 

 

 

2020

 

 

 

2019

 

 

% Change

 

Net Revenue

 

 

 

 

 

 

 

 

 

 

 

Television

$

39,199

 

 

$

38,253

 

 

 

2

%

Radio

 

11,719

 

 

 

11,955

 

 

 

(2

)%

Digital

 

13,331

 

 

 

14,472

 

 

 

(8

)%

Total

$

64,249

 

 

$

64,680

 

 

 

(1

)%

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Revenue - digital media (1)

 

 

 

 

 

 

 

 

 

 

 

Digital

$

7,347

 

 

$

7,642

 

 

 

(4

)%

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses (1)

 

 

 

 

 

 

 

 

 

 

 

Television

 

21,757

 

 

 

20,741

 

 

 

5

%

Radio

 

11,649

 

 

 

14,283

 

 

 

(18

)%

Digital

 

6,864

 

 

 

7,720

 

 

 

(11

)%

Total

$

40,270

 

 

$

42,744

 

 

 

(6

)%

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Expenses (1)

$

6,840

 

 

$

6,894

 

 

 

(1

)%

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated adjusted EBITDA (1)

$

9,679

 

 

$

8,057

 

 

 

20

%

 

(1)

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

Entravision Communications Corporation will hold a conference call to discuss its 2020 first quarter results on May 7, 2020 at 5 p.m. Eastern Time. To access the conference call, please dial 412-317-5440 ten minutes prior to the start time. The call will be webcast live and archived for replay on the investor relations portion of the Company’s web site located at www.entravision.com.

Entravision is a diversified global media, marketing and technology company that reaches and engages Latino consumers in the United States and other markets primarily including Mexico, Latin America and Spain. Entravision’s portfolio includes digital media properties and advertising technology platforms that deliver performance-based solutions and data insights, along with 55 television stations and 49 radio stations. Entravision’s digital and technology businesses include Smadex, a leading technology platform providing mobile, programmatic, data and performance digital marketing solutions. Entravision is the largest affiliate group of both the Univision and UniMás television networks, and its Spanish-language radio stations feature its nationally recognized talent. Entravision shares of Class A Common Stock are traded on The New York Stock Exchange under the symbol: EVC. Learn more at: www.entravision.com.

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

Page 6 of 11

 

For more information, please contact:

 

Christopher T. Young

  

Mike Smargiassi/Brad Edwards

Chief Financial Officer

  

The Plunkett Group

Entravision Communications Corporation

  

212-739-6724

310-447-3870

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

# # #

(Financial Table Follows)

 


Entravision Communications

Page 7 of 11

 

Entravision Communications Corporation

Consolidated Balance Sheets

(In thousands; unaudited)

 

 

March 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

ASSETS

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

53,512

 

 

$

33,123

 

Marketable securities

 

 

74,684

 

 

 

91,662

 

Restricted cash

 

 

734

 

 

 

734

 

Trade receivables, net of allowance for doubtful accounts

 

 

63,879

 

 

 

71,406

 

Assets held for sale

 

 

6,878

 

 

 

950

 

Prepaid expenses and other current assets

 

 

15,108

 

 

 

11,557

 

Total current assets

 

 

214,795

 

 

 

209,432

 

Property and equipment, net

 

 

76,315

 

 

 

79,642

 

Intangible assets subject to amortization, net

 

 

10,192

 

 

 

16,772

 

Intangible assets not subject to amortization

 

 

216,853

 

 

 

252,544

 

Goodwill

 

 

45,711

 

 

 

46,511

 

Operating leases right of use asset

 

 

41,759

 

 

 

43,837

 

Other assets

 

 

7,506

 

 

 

7,462

 

Total assets

 

$

613,131

 

 

$

656,200

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Current maturities of long-term debt

 

$

3,000

 

 

$

3,000

 

Accounts payable and accrued expenses

 

 

55,557

 

 

 

53,931

 

Operating lease liabilities

 

 

8,802

 

 

 

9,056

 

Total current liabilities

 

 

67,359

 

 

 

65,987

 

Long-term debt, less current maturities, net of unamortized debt issuance costs

 

 

212,380

 

 

 

213,024

 

Long-term operating lease liabilities

 

 

39,476

 

 

 

41,387

 

Other long-term liabilities

 

 

3,611

 

 

 

3,371

 

Deferred income taxes

 

 

42,068

 

 

 

44,259

 

Total liabilities

 

 

364,894

 

 

 

368,028

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

 

 

Class A common stock

 

 

6

 

 

 

6

 

Class B common stock

 

 

2

 

 

 

2

 

Class U common stock

 

 

1

 

 

 

1

 

Additional paid-in capital

 

 

832,216

 

 

 

836,170

 

Accumulated deficit

 

 

(583,468

)

 

 

(547,876

)

Accumulated other comprehensive income (loss)

 

 

(520

)

 

 

(131

)

Total stockholders' equity

 

 

248,237

 

 

 

288,172

 

Total liabilities and stockholders' equity

 

$

613,131

 

 

$

656,200

 

 

 

 


Entravision Communications

Page 8 of 11

 

Entravision Communications Corporation

Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)

 

 

Three-Month Period

 

 

 

Ended March 31,

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

Net revenue

 

$

64,249

 

 

$

64,680

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

Cost of revenue - digital media

 

 

7,347

 

 

 

7,642

 

Direct operating expenses

 

 

26,679

 

 

 

28,930

 

Selling, general and administrative expenses

 

 

13,591

 

 

 

13,814

 

Corporate expenses

 

 

6,840

 

 

 

6,894

 

Depreciation and amortization

 

 

4,512

 

 

 

3,916

 

Change in fair value contingent consideration

 

 

-

 

 

 

359

 

Impairment charge

 

 

39,835

 

 

 

-

 

Foreign currency (gain) loss

 

 

1,508

 

 

 

132

 

Other operating (gain) loss

 

 

(836

)

 

 

(1,996

)

 

 

 

99,476

 

 

 

59,691

 

Operating income (loss)

 

 

(35,227

)

 

 

4,989

 

Interest expense

 

 

(2,680

)

 

 

(3,490

)

Interest income

 

 

624

 

 

 

919

 

Dividend income

 

 

23

 

 

 

255

 

Income (loss) before income taxes

 

 

(37,260

)

 

 

2,673

 

Income tax benefit (expense)

 

 

1,668

 

 

 

(1,093

)

 

 

 

 

 

 

 

 

 

Income (loss) before equity in net income (loss) of nonconsolidated affiliate

 

 

(35,592

)

 

 

1,580

 

Equity in net income (loss) of nonconsolidated affiliate, net of tax

 

 

-

 

 

 

(156

)

Net income (loss)

 

$

(35,592

)

 

$

1,424

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per share:

 

 

 

 

 

 

 

 

Net income (loss) per share, basic and diluted

 

$

(0.42

)

 

$

0.02

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share

 

$

0.05

 

 

$

0.05

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, basic

 

 

84,317,767

 

 

 

86,101,741

 

Weighted average common shares outstanding, diluted

 

 

84,317,767

 

 

 

87,152,987

 

 

 

 


Entravision Communications

Page 9 of 11

 

Entravision Communications Corporation

Consolidated Statements of Cash Flows

(In thousands; unaudited)

 

 

Three-Month Period

 

 

 

Ended March 31,

 

 

 

2020

 

 

2019

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(35,592

)

 

$

1,424

 

Adjustments to reconcile net income (loss) to net cash provided by

  operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

4,512

 

 

 

3,916

 

Impairment charge

 

 

39,835

 

 

 

 

Deferred income taxes

 

 

(1,813

)

 

 

470

 

Non-cash interest

 

 

169

 

 

 

251

 

Amortization of syndication contracts

 

 

130

 

 

 

124

 

Payments on syndication contracts

 

 

(130

)

 

 

(135

)

Equity in net (income) loss of nonconsolidated affiliate

 

 

 

 

 

156

 

Non-cash stock-based compensation

 

 

789

 

 

 

800

 

(Gain) loss on disposal of property and equipment

 

 

 

 

 

86

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

(Increase) decrease in accounts receivable

 

 

7,482

 

 

 

13,657

 

(Increase) decrease in prepaid expenses and other assets

 

 

1,026

 

 

 

869

 

Increase (decrease) in accounts payable, accrued expenses

   and other liabilities

 

 

(4,394

)

 

 

(7,311

)

Net cash provided by operating activities

 

 

12,014

 

 

 

14,307

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(2,671

)

 

 

(6,072

)

Purchases of intangible assets

 

 

(155

)

 

 

 

Proceeds from marketable securities

 

 

16,617

 

 

 

10,721

 

Purchases of investments

 

 

 

 

 

(200

)

Net cash provided by (used in) investing activities

 

 

13,791

 

 

 

4,449

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Tax payments related to shares withheld for share-based compensation plans

 

 

 

 

 

(751

)

Payments on long-term debt

 

 

(750

)

 

 

(750

)

Dividends paid

 

 

(4,218

)

 

 

(4,271

)

Repurchase of Class A common stock

 

 

(525

)

 

 

(7,706

)

Net cash used in financing activities

 

 

(5,493

)

 

 

(13,478

)

Effect of exchange rates on cash, cash equivalents and restricted cash

 

 

77

 

 

 

(8

)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

20,389

 

 

 

5,270

 

Cash, cash equivalents and restricted cash:

 

 

 

 

 

 

 

 

Beginning

 

 

33,857

 

 

 

47,465

 

Ending

 

$

54,246

 

 

$

52,735

 

 

 

 


Entravision Communications

Page 10 of 11

 

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,

 

 

 

2020

 

 

 

2019

 

 

 

 

 

 

 

 

 

Consolidated adjusted EBITDA (1)

$

9,679

 

 

$

8,057

 

 

 

 

 

 

 

 

 

Interest expense

 

(2,680

)

 

 

(3,490

)

Interest income

 

624

 

 

 

919

 

Dividend income

 

23

 

 

 

255

 

Income tax expense

 

1,668

 

 

 

(1,093

)

Equity in net loss of nonconsolidated affiliates

 

-

 

 

 

(156

)

Amortization of syndication contracts

 

(130

)

 

 

(124

)

Payments on syndication contracts

 

130

 

 

 

135

 

Non-cash stock-based compensation included in direct operating expenses

 

(131

)

 

 

(134

)

Non-cash stock-based compensation included in corporate expenses

 

(658

)

 

 

(666

)

Depreciation and amortization

 

(4,512

)

 

 

(3,916

)

Change in fair value contingent consideration

 

-

 

 

 

(359

)

Impairment charge

 

(39,835

)

 

 

-

 

Non-recurring cash severance charge

 

(606

)

 

 

-

 

Other operating gain (loss)

 

836

 

 

 

1,996

 

Net income (loss)

 

(35,592

)

 

 

1,424

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

4,512

 

 

 

3,916

 

Impairment charge

 

39,835

 

 

 

-

 

Deferred income taxes

 

(1,813

)

 

 

470

 

Non-cash interest

 

169

 

 

 

251

 

Amortization of syndication contracts

 

130

 

 

 

124

 

Payments on syndication contracts

 

(130

)

 

 

(135

)

Equity in net (income) loss of nonconsolidated affiliate

 

-

 

 

 

156

 

Non-cash stock-based compensation

 

789

 

 

 

800

 

(Gain) loss on disposal of property and equipment

 

-

 

 

 

86

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

(Increase) decrease in accounts receivable

 

7,482

 

 

 

13,657

 

(Increase) decrease in prepaid expenses and other assets

 

1,026

 

 

 

869

 

Increase (decrease) in accounts payable, accrued expenses and other liabilities

 

(4,394

)

 

 

(7,311

)

Cash flows from operating activities

 

12,014

 

 

 

14,307

 

 

(1)

Consolidated adjusted EBITDA is defined on page 1.

 

 

 


Entravision Communications

Page 11 of 11

 

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,

 

 

 

2020

 

 

 

2019

 

Consolidated adjusted EBITDA (1)

$

9,679

 

 

$

8,057

 

Net interest expense (1)

 

(1,887

)

 

 

(2,320

)

Dividend income

 

23

 

 

 

255

 

Cash paid for income taxes

 

(145

)

 

 

(623

)

Capital expenditures (2)

 

(2,671

)

 

 

(6,072

)

Non-recurring cash severance charge

 

(606

)

 

 

-

 

FCC Reimbursement

 

836

 

 

 

1,996

 

Free cash flow (1)

 

5,229

 

 

 

1,293

 

 

 

 

 

 

 

 

 

Capital expenditures (2)

 

2,671

 

 

 

6,072

 

Change in fair value of contingent consideration

 

-

 

 

 

(359

)

(Gain) loss on disposal of property and equipment

 

-

 

 

 

86

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

(Increase) decrease in accounts receivable

 

7,482

 

 

 

13,657

 

(Increase) decrease in prepaid expenses and other assets

 

1,026

 

 

 

869

 

Increase (decrease) in accounts payable, accrued expenses and other liabilities

 

(4,394

)

 

 

(7,311

)

Cash Flows From Operating Activities

$

12,014

 

 

$

14,307

 

 

(1)

Consolidated adjusted EBITDA, net interest expense, and free cash flow are defined on page 1.

(2)

Capital expenditures are not part of the consolidated statement of operations.

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