Entravision Communications Corporation Reports Fourth Quarter And Full Year 2018 Results
SANTA MONICA, Calif., May 7, 2019 /PRNewswire/ -- Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three- and twelve-month periods ended December 31, 2018.
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, are included beginning on page 12. Unaudited financial highlights are as follows:
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2018 2017 % Change 2018 2017 % Change
Net revenue:
Revenue from advertising and $
80,906 $
73,460 10 $
294,839 $
272,091 8
% %
retransmission consent
Revenue from spectrum usage rights 1,167
* 2,976 263,943 (99)
%
$
82,073 $
73,460 12 $
297,815 $
536,034 (44)
% %
Cost of revenue - television (spectrum 209
* 12,340
*
usage rights) (1)
Cost of revenue - digital media (1) 9,847 12,090 (19) 45,096 32,998 37
% %
Operating expenses (2) 44,568 45,118 (1) 176,777 168,399 5
% %
Corporate expenses (3) 7,711 8,242 (6) 26,865 27,937 (4)
% %
Foreign currency (gain) loss 1,085 57 1804 1,616 350 362
% %
Consolidated adjusted EBITDA (4) 20,936 10,891 92 54,038 50,608 7
% %
Free cash flow (5) $
12,237 $
5,855 109 $
25,001 $
287,088 (91)
% %
Net income $
6,913 $
12,740 (46) $
12,161 $
175,698 (93)
% %
Net income per share, basic $
0.08 $
0.14 (43) $
0.14 $
1.95 (93)
% %
Net income per share, diluted $
0.08 $
0.14 (43) $
0.13 $
1.91 (93)
% %
Weighted average common shares 88,357,076 89,980,200 89,115,997 90,272,257
outstanding, basic
Weighted average common shares 89,598,683 91,613,199 90,328,583 91,891,957
outstanding, diluted
(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. Cost of revenue - television (spectrum usage rights) consists primarily of the carrying value of spectrum usage rights surrendered in the Federal Communications Commission ("FCC") auction for
broadcast spectrum.
(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 $0.3 million and $0.4
million of non-cash stock-based compensation for the three-month periods ended December 31, 2018 and 2017, respectively, and $0.7 million and $1.2 million of non-cash stock-based compensation for the twelve
month periods ended December 31, 2018 and 2017, respectively. 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 $1.8 million and $2.5 million of non-cash stock-based compensation for the three-month periods ended December 31, 2018 and 2017, respectively, and $5.1 million and $4.9 million of
non-cash stock-based compensation for the twelve-month periods ended December 31, 2018 and 2017, 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 income (loss), non-recurring cash expenses, 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. 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), non-recurring cash expenses, 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, FCC reimbursement
for broadcast television repack and revenue from FCC auction for broadcast spectrum 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.
Commenting on the Company's earnings results, Walter F. Ulloa, Chairman and Chief Executive Officer, said, "During the fourth quarter, we achieved growth in advertising revenue, driven by an increase in our television segment. We also improved our free cash flow over the fourth quarter of 2017. We continue to maintain a solid balance sheet and return capital to our shareholders through our share repurchase program and dividend. 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 has approved a quarterly cash dividend to shareholders of $0.05 per share of the Company's Class A, Class B and Class U common stock, in an aggregate amount of approximately $4.3 million. The quarterly dividend will be payable on June 28, 2019 to shareholders of record as of the close of business on June 14, 2019, and the common stock will trade ex-dividend on June 13, 2019. As previously announced, 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.
Form 10-K Filed Today
The Company today filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (its "Form 10-K") with the Securities and Exchange Commission (the "SEC").
As previously disclosed by the Company, on April 3, 2019 the Company received a notice from the New York Stock Exchange (the "NYSE") that the Company was not in compliance with the NYSE's continued listing requirements under the timely filing criteria established in Section 802.01E of the NYSE Listed Company Manual (the "NYSE Rules"), because the Company did not timely file its Form 10-K with the SEC on or prior to the due date thereof or by the extended filing due date provided by Rule 12b-25. Such notices are routinely issued by the NYSE when there are late filings with the SEC. The NYSE informed the Company that, under the NYSE Rules, the Company had six months from April 2, 2019 to file its Form 10-K with the SEC. With today's filing of the Form 10-K with the SEC, the Company believes it has regained compliance with the NYSE Rules with respect to the Company's filing of its Form 10-K.
Expects to File Form 12b-25 for Extension of Filing Deadline for Form 10-Q for First Quarter
The Company announced today that it expects to file a notification of late filing on Form 12b-25 with the SEC, which provides an automatic 5-day extension of the filing deadline for its Quarterly Report on Form 10-Q for the first quarter ended March 31, 2019 (the "2019 First Quarter Form 10-Q"), to May 15, 2019. Due to the Company's delay in filing the Form 10-K, the Company experienced delays in the preparation of its financial statements for the first quarter ended March 31, 2019 and the filing of the 2019 First Quarter Form 10-Q. The Company expects to file the 2019 First Quarter Form 10-Q and announce the timing of a conference call to discuss its financial results for the first quarter ended March 31, 2019 as soon as practicable.
Financial Results
Three-Month Period Ended December 31, 2018 Compared to Three-Month Period Ended December 31, 2017
(Unaudited)
Three Months Ended
December 31,
2018 2017 % Change
Net, revenue from advertising and retransmission consent $
80,906 $
73,460 10
%
Revenue from spectrum usage rights 1,167 *
Total net revenue 82,073 73,460 12
%
Cost of revenue - television (spectrum usage rights) (1) 209 *
Cost of revenue - digital media (1) 9,847 12,090 (19)
%
Operating expenses (1) 44,568 45,118 (1)
%
Corporate expenses (1) 7,711 8,242 (6)
%
Depreciation and amortization 4,221 3,951 7
%
Change in fair value of contingent consideration (2,275) *
Foreign currency (gain) loss 1,085 57 1804
%
Other operating (gain) loss (565) (262) 116
%
Operating income 17,481 4,055 331
%
Interest expense, net (3,261) (5,326) (39)
%
Dividend income 473 *
Gain (loss) on debt extinguishment (550) (3,306) (83)
%
Impairment loss on investment (1,320) *
Income before income taxes 12,823 (4,577) *
Income tax (expense) benefit (4,713) 17,452 *
Net income (loss) before equity in net income (loss) of nonconsolidated 8,110 12,875 (37)
%
affiliates
Equity in net income (loss) of nonconsolidated affiliates (1,197) (135) 787
%
Net income $
6,913 $
12,740 (46)
%
(1) Cost of revenue, operating expenses and corporate expenses are defined on page 1.
Net revenue from advertising and retransmission consent increased to $80.9 million for the three-month period ended December 31, 2018 from $73.5 million for the three-month period ended December 31, 2017, an increase of $7.4 million. Of the overall increase, approximately $8.3 million was attributable to our television segment and was primarily due to an increase in political advertising revenue, which was not material in 2017, and an increase in retransmission consent revenue. This overall increase was partially offset by a decrease of approximately $0.6 million and $0.3 million that was attributable to our digital and radio segments, respectively.
Net revenue from spectrum usage rights was $1.2 million for the three-month period ended December 31, 2018. There was no revenue from spectrum usage rights for the three-month period ended December 31, 2017.
Cost of revenue in our digital media segment decreased to $9.8 million for the three-month period ended December 31, 2018 from $12.1 million for the three-month period ended December 31, 2017, a decrease of $2.3 million. The decrease was primarily due to the decrease in revenue.
Operating expenses decreased to $44.6 million for the three-month period ended December 31, 2018 from $45.1 million for the three-month period ended December 31, 2017, a decrease of $0.5 million. Of the overall decrease, approximately $2.0 million was attributable to our radio segment and was primarily due to a decrease in expenses associated with the decrease in revenue and a decrease in salary expense. The overall decrease was partially offset by an increase of approximately $1.0 million that was attributable to our digital segment and was primarily due to the acquisition of Smadex in the second quarter of 2018, which did not contribute to direct operating expenses in 2017. Additionally, the overall decrease was partially offset by an increase of approximately $0.5 million that was attributable to our television segment and was primarily due to an increase in expenses associated with the increase in revenue.
Corporate expenses decreased to $7.7 million for the three-month period December 31, 2018 from $8.2 million for the three-month period ended December 31, 2017, a decrease of $0.5 million, primarily due to a decrease in non-cash stock-based compensation expense.
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 U.S., primarily related to the Headway business. As a result, we have operating expense, attributable to foreign currency loss, that is primarily related to the operations related to the Headway business. Foreign currency loss increased to $1.1 million for the three-month period December 31, 2018 from $0.1 million for the three-month period December 31, 2017, an increase of $1.0 million, which was primarily due to currency fluctuations that affected our digital segment operations located outside the U.S., primarily related to the Headway business.
We recognized an impairment charge of $1.3 million for the three-month period December 31, 2018, related to a decrease in value of a cost method investment.
Twelve-month Period Ended December 31, 2018 Compared to Twelve-month Period Ended December 31, 2017
(Unaudited)
Twelve Months Ended
December 31,
2018 2017 % Change
Net revenue:
Revenue from advertising and retransmission consent $
294,839 $
272,091 8
%
Revenue from spectrum usage rights 2,976 263,943 (99)
%
Total net revenue 297,815 536,034 (44)
%
Cost of revenue - television (spectrum usage rights) (1) 12,340 *
Cost of revenue - digital media (1) 45,096 32,998 37
%
Operating expenses (1) 176,777 168,399 5
%
Corporate expenses (1) 26,865 27,937 (4)
%
Depreciation and amortization 16,273 16,411 (1)
%
Change in fair value of contingent consideration (1,202) *
Foreign currency (gain) loss 1,616 350 362
%
Other operating (gain) loss (1,187) (262) 353
%
Operating income 33,577 277,861 (88)
%
Interest expense, net (11,770) (15,935) (26)
%
Dividend income 1,475 *
Gain (loss) on debt extinguishment (550) (3,306) (83)
%
Impairment loss on investment (1,320) *
Income before income taxes 21,412 258,620 (92)
%
Income tax (expense) benefit (7,877) (82,612) (90)
%
Net income (loss) before equity in net income (loss) of nonconsolidated 13,535 176,008 (92)
%
affiliates
Equity in net income (loss) of nonconsolidated affiliates (1,374) (310) 343
%
Net income $
12,161 $
175,698 (93)
%
(1) Cost of revenue, operating expenses and corporate expenses are defined on page 1.
Net revenue from advertising and retransmission consent increased to $294.8 million for the twelve-month period ended December 31, 2018 from $272.1 million for the twelve-month period ended December 31, 2017, an increase of approximately $22.7 million. Of the overall increase, $23.9 million was attributable to our digital media segment and was primarily due to the growth in the Headway business, which we acquired in the second quarter of 2017. Additionally, $1.9 million of the overall increase was attributable to our television segment and was primarily due to an increase in political advertising revenue, which was not material in 2017, and an increase in retransmission consent revenue, partially offset by decreases in national and local advertising revenue, as part of a trend for advertising to move increasingly from traditional media, such as television and radio, to new media, such as digital media. The overall increase was partially offset by a decrease in our radio segment of $3.0 million, primarily due to decreases in local and national advertising revenue, partially offset by an increase in political advertising revenue, which was not material in 2017, and an increase in revenue from the 2018 FIFA World Cup.
Net revenue from spectrum usage rights decreased to $3.0 million for the twelve-month period ended December 31, 2018 from $263.9 million for the twelve-month period ended December 31, 2017. The decrease was primarily due to revenue from the FCC auction for broadcast spectrum in the prior year, which revenue was not significant in 2018.
We did not incur cost of revenue related to revenue from spectrum usage rights in 2018. Cost of revenue related to revenue from spectrum usage rights was $12.3 million for the twelve-month period ended December 31, 2017, related to the FCC auction for broadcast spectrum.
Cost of revenue in our digital media segment increased to $45.1 million for the twelve-month period ended December 31, 2018 from $33.0 million for the twelve-month period ended December 31, 2017, an increase of $12.1 million, primarily due to the growth in the Headway business, which we acquired in the second quarter of 2017.
Operating expenses increased to $176.8 million for the twelve-month period ended December 31, 2018 from $168.4 million for the twelve-month period ended December 31, 2017, an increase of $8.4 million. Of the overall increase, approximately $9.8 million was attributable to our digital media segment and was primarily due to expenses associated with the increase in revenue, and due to the acquisitions of Headway during the second quarter of 2017, which did not contribute to direct operating expenses for the full year in 2017, and Smadex in the second quarter of 2018. Additionally, $2.6 million of the overall increase was attributable to our television segment and was primarily due to the acquisition of station KMIR-TV in the fourth quarter of 2017, which did not contribute to direct operating expenses in that year, and expenses associated with the increase in advertising revenue. The overall increase was partially offset by a decrease in expenses associated with the decrease in radio advertising revenue and a decrease in salary expenses in our television and radio segments.
Corporate expenses decreased to $26.9 million for the twelve-month period ended December 31, 2018 from $27.9 million for the twelve-month period ended December 31, 2017, a decrease of $1.0 million. The decrease was primarily due to expenses associated with the FCC auction for broadcast spectrum recorded in 2017, which expenses did not recur in 2018, and due diligence costs related to the Headway acquisition during the second quarter of 2017, partially offset by increase in salary expense, non-cash stock-based compensation expense, and due diligence costs related to the Smadex acquisition in 2018.
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 U.S., primarily related to the Headway business. As a result, we have operating expense, attributable to foreign currency loss, that is primarily related to the operations related to the Headway business. Foreign currency loss increased to $1.6 million for the year ended December 31, 2018 from $0.4 million for the year ended December 31, 2017, an increase of $1.2 million, which was primarily due to currency fluctuations that affected our digital segment operations located outside the U.S., primarily related to the Headway business.
We recognized an impairment charge of $1.3 million for the three-month period December 31, 2018, related to a decrease in value of a cost method investment.
Segment Results
The following represents selected unaudited segment information:
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2018 2017 % Change 2018 2017 % Change
Net Revenue
Revenue from advertising and retransmission
consent
Television $
44,361 $
36,038 23 $
149,935 $
148,059 1
% %
Radio 16,796 17,118 (2) 63,922 66,934 (4)
% %
Digital 19,749 20,304 (3) 80,982 57,098 42
% %
Total $
80,906 $
73,460 10 $
294,839 $
272,091 8
% %
Revenue from spectrum usage rights (television) $
1,167
$ * $
2,976 $
263,943 (99)
%
Total Net Revenue $
82,073 $
73,460 12 $
297,815 $
536,034 (44)
% %
Cost of Revenue (1)
Television 209 * 12,340 *
Digital 9,847 12,090 (19) 45,096 32,998 37
% %
Total $
9,847 $
12,299 (20) $
45,096 $
45,338 (1)
% %
Operating Expenses (1)
Television 21,725 21,214 2 84,298 81,730 3
% %
Radio 13,975 16,021 (13) 59,368 63,315 (6)
% %
Digital 8,868 7,883 12 33,111 23,354 42
% %
Total $
44,568 $
45,118 (1) $
176,777 $
168,399 5
% %
Corporate Expenses (1) $
7,711 $
8,242 (6) $
26,865 $
27,937 (4)
% %
Foreign currency (gain) loss $
1,085 $
57 1804 $
1,616 $
350 362
% %
Consolidated adjusted EBITDA (1) $
20,936 $
10,891 92 $
54,038 $
50,608 7
% %
(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 2018 fourth quarter results on May 7, 2019 at 5:00 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 Communications Corporation is a leading global media company that, through its television and radio segments, reaches and engages U.S. Hispanics across acculturation levels and media channels. Additionally, our digital segment, whose operations are located primarily in Spain, Mexico, and Argentina and other countries in Latin America, reaches a global market. The Company's expansive portfolio encompasses integrated marketing and media solutions, comprised of television, radio, and digital properties and data analytics services. Entravision has 55 primary television stations and is the largest affiliate group of both the Univision and UniMás television networks. Entravision also owns and operates 49 primarily Spanish-language radio stations featuring nationally recognized talent, as well as the Entravision Audio Network and Entravision Solutions, a coast-to-coast national spot and network sales and marketing organization representing Entravision's owned and operated, as well as its affiliate partner, radio stations. Entravision's Pulpo digital advertising unit is the #1-ranked online advertising platform in Hispanic reach according to comScore Media Metrix®, and Entravision's digital group also includes Headway, a leading provider of mobile, programmatic, data and performance digital marketing solutions primarily in the United States, Mexico and other markets in Latin America. Entravision shares of Class A Common Stock are traded on The New York Stock Exchange under the symbol: EVC.
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, including the length of time that may be required for the Company to file the Form 10-Q and whether the Company files the Form 10-Q on or prior to the due date thereof or by the extended filing due date provided by Rule 12b-25, 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)
December 31, December 31,
2018 2017
ASSETS
Current assets
Cash and cash equivalents $
46,733 $
39,560
Marketable securities 132,424
Restricted Cash 732 222,294
Trade receivables, net of allowance for doubtful accounts 79,308 84,348
Assets held for sale 1,179
Prepaid expenses and other current assets 10,672 6,260
Total current assets 271,048 352,462
Property and equipment, net 64,939 60,337
Intangible assets subject to amortization, net 22,598 26,758
Intangible assets not subject to amortization 254,598 251,163
Goodwill 74,292 70,729
Other assets 2,934 4,690
Total assets $
690,409 $
766,139
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt $
3,000 $
3,000
Accounts payable and accrued expenses 51,034 61,847
Total current liabilities 54,034 64,847
Long-term debt, less current maturities, net of unamortized debt issuance costs 240,541 292,489
Other long-term liabilities 16,418 19,889
Deferred income taxes 46,684 40,639
Total liabilities 357,677 417,864
Stockholders' equity
Class A common stock 6 7
Class B common stock 2 2
Class U common stock 1 1
Additional paid-in capital 862,299 888,650
Accumulated deficit (528,164) (540,325)
Accumulated other comprehensive income (loss) (1,412) (60)
Total stockholders' equity 332,732 348,275
Total liabilities and stockholders' equity $
690,409 $
766,139
Entravision Communications Corporation
Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
Three-Month Period Twelve-Month Period
Ended December 31, Ended December 31,
2018 2017 2018 2017
Net revenue
Revenue from advertising and retransmission consent $
80,906 $
73,460 $
294,839 $
272,091
Revenue from spectrum usage rights 1,167 2,976 263,943
82,073 73,460 297,815 536,034
Expenses:
Cost of revenue - television (spectrum usage rights) 209 12,340
Cost of revenue - digital media 9,847 12,090 45,096 32,998
Direct operating expenses 31,398 32,045 125,242 119,283
Selling, general and administrative expenses 13,170 13,073 51,535 49,116
Corporate expenses 7,711 8,242 26,865 27,937
Depreciation and amortization 4,221 3,951 16,273 16,411
Change in fair value of contingent consideration (2,275) (1,202)
Foreign currency (gain) loss 1,085 57 1,616 350
Other operating (gain) loss (565) (262) (1,187) (262)
64,592 69,405 264,238 258,173
Operating income 17,481 4,055 33,577 277,861
Interest expense (4,349) (5,625) (15,743) (16,709)
Interest income 1,088 299 3,973 774
Dividend income 473 1,475
Gain (loss) on debt extinguishment (550) (3,306) (550) (3,306)
Impairment loss on investment (1,320) (1,320)
Income before income taxes 12,823 (4,577) 21,412 258,620
Income tax (expense) benefit (4,713) 17,452 (7,877) (82,612)
Income (loss) before equity in net income (loss) of nonconsolidated 8,110 12,875 13,535 176,008
affiliate
Equity in net income (loss) of nonconsolidated affiliate (1,197) (135) (1,374) (310)
Net income $
6,913 $
12,740 $
12,161 $
175,698
Basic and diluted earnings per share:
Net income per share, basic $
0.08 $
0.14 $
0.14 $
1.95
Net income per share, diluted $
0.08 $
0.14 $
0.13 $
1.91
Cash dividends declared per common share, basic $
0.05 $
0.05 $
0.20 $
0.16
Cash dividends declared per common share, diluted $
0.05 $
0.05 $
0.20 $
0.16
Weighted average common shares outstanding, basic 88,357,076 89,980,200 89,115,997 90,272,257
Weighted average common shares outstanding, diluted 89,598,683 91,613,199 90,328,583 91,891,957
Entravision Communications Corporation
Consolidated Statements of Cash Flows
(In thousands; unaudited)
Three-Month Period Twelve-Month Period
Ended December 31, Ended December 31,
2018 2017 2018 2017
Cash flows from operating activities:
Net income $
6,913 $
12,740 $
12,161 $
175,698
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 4,221 3,951 16,273 16,411
Cost of revenue - television (spectrum usage rights) 209 12,340
Impairment loss on investment 1,320 1,320
Deferred income taxes 2,670 (17,627) 4,612 81,766
Non-cash interest 296 2,642 1,124 3,237
Amortization of syndication contracts 125 141 651 452
Payments on syndication contracts (127) (145) (643) (445)
Equity in net (income) loss of nonconsolidated affiliate 1,197 135 1,374 310
Non-cash stock-based compensation 2,076 2,942 5,787 6,091
(Gain) loss on sale of property 28 28
(Gain) loss on debt extinguishment 550 3,306 550 3,306
Changes in assets and liabilities:
(Increase) decrease in trade receivables, net (2,683) (12,376) 5,895 414
(Increase) decrease in prepaid expenses and other current assets 1,629 917 (5,581) (913)
Increase (decrease) in accounts payable, accrued expenses and (6,888) 11,203 (9,727) 2,825
other liabilities
Net cash provided by operating activities 11,299 8,066 33,796 301,520
Cash flows from investing activities:
Proceeds from sale of property and equipment and intangibles 50 33 50
Purchases of property and equipment (4,729) (2,439) (17,006) (12,078)
Purchases of intangibles (3,153) (32,588)
Purchase of a businesses, net of cash acquired (21,660) (3,522) (29,149)
Purchases of marketable securities (159,403)
Proceeds from marketable securities 25,000
Purchases of investments (525) (250) (1,495) (2,450)
Deposits on acquisition 1,050 (190)
Net cash used in investing activities (5,254) (23,249) (159,546) (76,405)
Cash flows from financing activities:
Proceeds from stock option exercises 172 697 249 708
Tax payments related to shares withheld for share-based compensation (29) (798) (2,268) (798)
plans
Payments on long-term debt (50,750) (290,750) (53,000) (293,563)
Dividends paid (4,379) (4,491) (17,782) (14,670)
Repurchase of Class A common stock (6,152) (3,552) (13,812) (5,330)
Payment of contingent consideration (3,819) (2,015) (3,819)
Termination of swap agreements (2,441) (2,441)
Proceeds from borrowings on long-term debt 298,500 298,500
Payments of capitalized debt offering and issuance costs (3,382) (3,382)
Net cash used in financing activities (61,138) (10,036) (88,628) (24,795)
Effect of exchange rates on cash, cash equivalents and restricted cash (3) (11) 14
Net increase (decrease) in cash and cash equivalents (55,093) (25,222) (214,389) 200,334
Cash and cash equivalents:
Beginning 102,558 287,076 261,854 61,520
Ending $
47,465 $
261,854 $
47,465 $
261,854
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 Twelve-Month Period
Ended December 31, Ended December 31,
2018 2017 2018 2017
Consolidated adjusted EBITDA (1) $
20,936 $
10,891 $
54,038 $
50,608
Net revenue - FCC spectrum incentive auction 263,943
Expenses - FCC spectrum incentive auction (209) (14,443)
Interest expense (4,349) (5,625) (15,743) (16,709)
Interest income 1,088 299 3,973 774
Gain (loss) on debt extinguishment (550) (3,306) (550) (3,306)
Income tax (expense) benefit (4,713) 17,452 (7,877) (82,612)
Amortization of syndication contracts (125) (141) (651) (452)
Payments on syndication contracts 127 145 643 445
Non-cash stock-based compensation included in direct operating
expenses (284) (430) (732) (1,236)
Non-cash stock-based compensation included in corporate (1,792) (2,512) (5,055) (4,855)
expenses
Depreciation and amortization (4,221) (3,951) (16,273) (16,411)
Change in fair value of contingent consideration 2,275 1,202
Non-recurring severance charge (782)
Dividend income 473 1,475
Other income (loss) 565 262 1,187 262
Impairment loss on investment (1,320) (1,320)
Equity in net income (loss) of nonconsolidated affiliates (1,197) (135) (1,374) (310)
Net income 6,913 12,740 12,161 175,698
Depreciation and amortization 4,221 3,951 16,273 16,411
Cost of revenue - television (spectrum usage rights) 209 12,340
Impairment loss on investment 1,320 1,320
Deferred income taxes 2,670 (17,627) 4,612 81,766
Amortization of debt issuance costs 296 2,642 1,124 3,237
Amortization of syndication contracts 125 141 651 452
Payments on syndication contracts (127) (145) (643) (445)
Equity in net (income) loss of nonconsolidated affiliate 1,197 135 1,374 310
Non-cash stock-based compensation 2,076 2,942 5,787 6,091
(Gain) loss on sale of property 28 28
(Gain) loss on debt extinguishment 550 3,306 550 3,306
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (2,683) (12,376) 5,895 414
(Increase) decrease in prepaid expenses and other assets 1,629 917 (5,581) (913)
Increase (decrease) in accounts payable, accrued expenses and (6,888) 11,203 (9,727) 2,825
other liabilities
Net cash provided by (used in ) operating activities $
11,299 $
8,066 $
33,796 $
301,520
(1) Consolidated adjusted EBITDA is defined on page 1.
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 Twelve-Month Period
Ended December 31, Ended December 31,
2018 2017 2018 2017
Consolidated adjusted EBITDA (1) $
20,936 $
10,891 $
54,038 $
50,608
Net, cash interest expense (1) (2,965) (2,685) (10,646) (12,698)
Dividend income 473 1,475
Cash paid for income taxes (2,043) (174) (3,265) (846)
Capital expenditures (2) (4,729) (2,439) (17,006) (12,078)
FCC reimbursement 565 262 1,187 262
Non-recurring cash severance charge (782)
Net revenue - FCC spectrum incentive auction 263,943
Expenses - FCC spectrum incentive auction (2,103)
Free cash flow (1) 12,237 5,855 25,001 287,088
Capital expenditures (2) 4,729 2,439 17,006 12,078
Change in fair value of contingent consideration 2,275 1,202
(Gain) loss on sale of property 28 28
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (2,683) (12,376) 5,895 414
(Increase) decrease in prepaid expenses and other assets 1,629 917 (5,581) (913)
Increase (decrease) in accounts payable, accrued expenses and other (6,888) 11,203 (9,727) 2,825
liabilities
Cash Flows From Operating Activities $
11,299 $
8,066 $
33,796 $
301,520
(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.
View original content:http://www.prnewswire.com/news-releases/entravision-communications-corporation-reports-fourth-quarter-and-full-year-2018-results-300845151.html
SOURCE Entravision Communications Corporation
