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Entravision Communications Corporation Reports Second Quarter 2021 Results

Entravision Communications Corporation Reports Second Quarter 2021 Results

 

SANTA MONICA, Calif.--(BUSINESS WIRE)-- Entravision Communications Corporation (NYSE: EVC), a leading global media, marketing and technology company, today announced financial results for the three- and six-month periods ended June 30, 2021.

Second Quarter 2021 Highlights

  • Net revenue up 295% over the prior-year period
  • Net income attributable to common stockholders up 236% over the prior-year period
  • Consolidated Adjusted EBITDA up 932% over the prior-year period
  • Operating cash flow up 181% over the prior-year period
  • Free cash flow of $12.4 million compared to a loss of $1.4 million in the prior-year period
  • Quarterly cash dividend of $0.025 per share

“Entravision had a strong second quarter of 2021 and an even stronger first half of the year. Net revenues for the second quarter improved 295% as compared to the prior-year period, while Adjusted EBITDA increased 932% year-over-year,” said Walter F. Ulloa, Chairman and Chief Executive Officer. “Growth in the quarter was largely driven by our digital business, which is now our largest segment, currently at 73% of consolidated revenues. Our core television and audio businesses also saw sequential and year-over-year revenue improvements, bolstering our overall performance.”

Mr. Ulloa continued, “Our digital segment continues to represent a significant part of the growth of our business. Right after the end of the second quarter we acquired MediaDonuts, a company engaged in the sale and marketing of digital advertising in Southeast Asia. Through the acquisition of MediaDonuts, along with our acquisition of a majority interest in Cisneros Interactive during the fourth quarter of 2020, we have now added two digital powerhouses to our platform whose combined leadership, sales, operations and geographic reach further propel our core digital offerings and position us to partner with the world’s leading technology and social platforms."

Quarterly Cash Dividend

The Company also 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 September 30, 2021 to shareholders of record as of the close of business on September 15, 2021, and the common stock will trade ex-dividend on September 14, 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 10.

Unaudited Financial Highlights

 

Three-Month Period

 

 

Six-Month Period

 

 

Ended June 30,

 

 

Ended June 30,

 

 

2021

 

 

2020

 

 

% Change

 

 

2021

 

 

2020

 

 

% Change

 

Net revenue

$

178,410

 

 

$

45,116

 

 

 

295

%

 

$

327,290

 

 

$

109,365

 

 

 

199

%

Cost of revenue - digital (1)

 

109,030

 

 

 

6,447

 

 

*

 

 

 

193,786

 

 

 

13,794

 

 

*

 

Operating expenses (2)

 

41,442

 

 

 

33,037

 

 

 

25

%

 

 

81,856

 

 

 

73,307

 

 

 

12

%

Corporate expenses (3)

 

7,345

 

 

 

5,384

 

 

 

36

%

 

 

14,503

 

 

 

12,224

 

 

 

19

%

Foreign currency (gain) loss

 

(309

)

 

 

(155

)

 

 

99

%

 

 

277

 

 

 

1,353

 

 

 

(80

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated adjusted EBITDA (4)

 

17,787

 

 

 

1,724

 

 

 

932

%

 

 

31,982

 

 

 

11,402

 

 

 

180

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Free cash flow (5)

$

12,420

 

 

$

(1,408

)

 

*

 

 

$

25,449

 

 

$

3,821

 

 

 

566

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

10,476

 

 

$

2,338

 

 

 

348

%

 

$

17,478

 

 

$

(33,254

)

 

*

 

Net (income) loss attributable to redeemable noncontrolling interest

$

(2,612

)

 

$

-

 

 

*

 

 

$

(4,185

)

 

$

-

 

 

*

 

Net income (loss) attributable to common stockholders

$

7,864

 

 

$

2,338

 

 

 

236

%

 

$

13,293

 

 

$

(33,254

)

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share attributable to common stockholders, basic

$

0.09

 

 

$

0.03

 

 

 

200

%

 

$

0.16

 

 

$

(0.39

)

 

*

 

Net income (loss) per share attributable to common stockholders, diluted

$

0.09

 

 

$

0.03

 

 

 

200

%

 

$

0.15

 

 

$

(0.39

)

 

*

 

Weighted average common shares outstanding, basic

 

85,188,182

 

 

 

84,123,530

 

 

 

 

 

 

85,115,310

 

 

 

84,220,649

 

 

 

 

Weighted average common shares outstanding, diluted

 

87,777,039

 

 

 

84,669,250

 

 

 

 

 

 

87,382,215

 

 

 

84,220,649

 

 

 

 

(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 June 30, 2021 and 2020, respectively, and $0.6 million and $0.2 million of non-cash stock-based compensation for the six-month periods ended June 30, 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 June 30, 2021 and 2020, respectively, and $1.6 million and $1.4 million of non-cash stock-based compensation for the six-month periods ended June 30, 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 June 30,

 

 

2021

 

 

2020

 

 

% Change

 

Net revenue

$

178,410

 

 

$

45,116

 

 

 

295

%

Cost of revenue - digital (1)

 

109,030

 

 

 

6,447

 

 

*

 

Operating expenses (1)

 

41,442

 

 

 

33,037

 

 

 

25

%

Corporate expenses (1)

 

7,345

 

 

 

5,384

 

 

 

36

%

Depreciation and amortization

 

5,074

 

 

 

3,873

 

 

 

31

%

Impairment charge

 

112

 

 

 

-

 

 

*

 

Foreign currency (gain) loss

 

(309

)

 

 

(155

)

 

 

99

%

Other operating (gain) loss

 

(523

)

 

 

(2,030

)

 

 

(74

)%

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

16,239

 

 

 

(1,440

)

 

*

 

Interest expense, net

 

(1,773

)

 

 

(1,485

)

 

 

19

%

Dividend income

 

2

 

 

 

-

 

 

*

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

14,468

 

 

 

(2,925

)

 

*

 

Income tax benefit (expense)

 

(3,992

)

 

 

5,263

 

 

*

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

10,476

 

 

 

2,338

 

 

 

348

%

Net (income) loss attributable to redeemable noncontrolling interest

 

(2,612

)

 

 

-

 

 

*

 

Net income (loss) attributable to common stockholders

$

7,864

 

 

$

2,338

 

 

 

236

%

(1)

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

Net revenue in the second quarter of 2021 totaled $178.4 million, up 295% from $45.1 million in the prior-year period. Of the overall increase, approximately $118.8 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. In addition, of the overall increase, approximately $7.1 million was attributable to our television segment, primarily due to increases in local and national advertising revenue, partially offset by decreases in political revenue and revenue from spectrum usage rights. Additionally, of the overall increase, approximately $7.3 million was attributable to our radio segment primarily due to increases in local and national advertising revenue, partially offset by a decrease in political revenue.

Cost of revenue in the second quarter of 2021 totaled $109.0 million compared to $6.4 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 second quarter of 2021 totaled $41.4 million, up 25% from $33.0 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, and due to an increase in expenses associated with the increase in advertising revenue, partially offset by decreases in bad debt and salary expense associated with furloughs and layoffs that occurred in 2020.

Corporate expenses in the second quarter of 2021 totaled $7.3 million, up 36% from $5.4 million in the prior-year period. The increase was primarily due to an increase in salaries, audit fees and financial due diligence fees.

 

Six-Month Period

 

 

Ended June 30,

 

 

2021

 

 

2020

 

 

% Change

 

Net revenue

$

327,290

 

 

$

109,365

 

 

 

199

%

Cost of revenue - digital (1)

 

193,786

 

 

 

13,794

 

 

*

 

Operating expenses (1)

 

81,856

 

 

 

73,307

 

 

 

12

%

Corporate expenses (1)

 

14,503

 

 

 

12,224

 

 

 

19

%

Depreciation and amortization

 

10,258

 

 

 

8,385

 

 

 

22

%

Impairment charge

 

1,438

 

 

 

39,835

 

 

 

(96

)%

Foreign currency (gain) loss

 

277

 

 

 

1,353

 

 

 

(80

)%

Other operating (gain) loss

 

(2,436

)

 

 

(2,866

)

 

 

(15

)%

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

27,608

 

 

 

(36,667

)

 

*

 

Interest expense, net

 

(3,350

)

 

 

(3,542

)

 

 

(5

)%

Dividend income

 

4

 

 

 

24

 

 

 

(83

)%

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

24,262

 

 

 

(40,185

)

 

*

 

Income tax benefit (expense)

 

(6,784

)

 

 

6,931

 

 

*

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

17,478

 

 

 

(33,254

)

 

*

 

Net (income) loss attributable to redeemable noncontrolling interest

 

(4,185

)

 

 

-

 

 

*

 

Net income (loss) attributable to common stockholders

$

13,293

 

 

$

(33,254

)

 

*

 

(1)

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

Net revenue for the six-month period of 2021 totaled $327.3 million, up 199% from $109.4 million in the prior-year period. Of the overall increase, approximately $207.0 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. In addition, of the overall increase, approximately $3.9 million was attributable to our television segment, primarily due to increases in local and national advertising revenue, and revenue from spectrum usage rights, partially offset by a decrease in political revenue. Additionally, of the overall increase, approximately $6.9 million was attributable to our radio segment primarily due to increases in local and national advertising revenue, partially offset by a decrease in political revenue.

Cost of revenue for the six-month period of 2021 totaled $193.8 million compared to $13.8 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 for the six-month period of 2021 totaled $81.9 million, up 12% from $73.3 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, and due to an increase in expenses associated with the increase in advertising revenue, partially offset by decreases in bad debt and salary expense associated with furloughs and layoffs that occurred in 2020.

Corporate expenses for the six-month period of 2021 totaled $14.5 million, up 19% from $12.2 million in the prior-year period. The increase was primarily due to an increase in salaries, audit fees and financial due diligence fees.

Balance Sheet and Related Metrics

Cash and marketable securities as of June 30, 2021 totaled approximately $181.9 million. Total debt was $213.8 million. Net of $75 million of cash and marketable securities, total leverage as defined in the Company’s credit agreement was 1.7 times as of June 30, 2021. Net of total accessible cash and marketable securities, total leverage was 0.7 times.

Unaudited Segment Results

 

Three-Month Period

 

 

Six-Month Period

 

 

Ended June 30,

 

 

Ended June 30,

 

 

2021

 

 

2020

 

 

% Change

 

 

2021

 

 

2020

 

 

% Change

 

Net Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Digital

$

130,223

 

 

$

11,373

 

 

 

1045

%

 

$

231,705

 

 

$

24,704

 

 

 

838

%

Television

 

34,057

 

 

 

26,955

 

 

 

26

%

 

 

70,148

 

 

 

66,154

 

 

 

6

%

Radio

 

14,130

 

 

 

6,788

 

 

 

108

%

 

 

25,437

 

 

 

18,507

 

 

 

37

%

Total

$

178,410

 

 

$

45,116

 

 

 

295

%

 

$

327,290

 

 

$

109,365

 

 

 

199

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Revenue - digital (1)