Entravision Communications Corporation Reports Third Quarter 2022 Results

Rhea-AI Summary

Entravision Communications Corporation (NYSE: EVC) reported its Q3 2022 financial results, with a record advertising revenue increase of 21% year-over-year, totaling $241 million. However, net income attributable to common stockholders decreased by 23% to approximately $9.4 million. Adjusted EBITDA rose by 12% to $26 million, while free cash flow fell by 31%. The digital segment drove growth, increasing 29% in revenue. The company announced a quarterly cash dividend of $0.025 per share, payable on December 30, 2022. Entravision continues to expand globally, currently operating in 40 countries.

Positive

• Record Q3 2022 advertising revenue of $241 million, up 21%.
• Digital segment revenue increased by 29%, indicating strong growth.
• Consolidated adjusted EBITDA rose 12%, reaching $26 million.
• Operating cash flow surged by 62%, showing improved cash generation.
• Quarterly cash dividend of $0.025 approved, totaling $2.1 million.

Negative

• Net income attributable to common stockholders fell 23% to $9.4 million.
• Free cash flow decreased by 31% compared to the previous year.
• Operating income declined by 22%, indicating pressure on profit margins.
• Total debt reported at $210 million, raising concerns about leverage.

SANTA MONICA, Calif.--(BUSINESS WIRE)-- Entravision Communications Corporation (NYSE: EVC), a leading global advertising solutions, media and technology company, today announced financial results for the three- and nine-month periods ended September 30, 2022.

Third Quarter 2022 Highlights

• Record third quarter advertising revenue
• Net revenue up 21% over the prior-year quarter
• Net income attributable to common stockholders down 23% over the prior-year quarter
• Consolidated adjusted EBITDA up 12% over the prior-year quarter
• Operating cash flow up 62% over the prior-year quarter
• Free cash flow down 31% over the prior-year quarter
• Quarterly cash dividend of $0.025 per share

“Entravision continued to see progress in the third quarter of 2022, with revenue up 21% versus the prior-year period. Adjusted EBITDA also improved double-digits, increasing 12% year-over-year,” said Walter Ulloa, Chairman and Chief Executive Officer. “Entravision’s strength throughout the quarter was again driven by our digital segment, where revenue improved 29% versus the third quarter of 2021. In our television and audio businesses, political ad spend, in particular, continued to perform strongly."

Mr. Ulloa continued, “Entravision’s solid performance in the third quarter, together with our progress year-to-date, demonstrates the resiliency and growth of our business in a tough macro environment. We continue to strategically expand across the globe and now have operations in 40 countries across five continents in service of more than 7,000 clients. We are thoughtfully positioning our digital teams in emerging economies where Entravision’s unique offerings have a key first-mover advantage and where a critical mass of connected consumers exists alongside a growing advertising industry. We remain optimistic in finding multiple growth opportunities around the world for our digital business and look forward to sharing our progress as we continue to grow and expand globally."

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 December 30, 2022 to shareholders of record as of the close of business on December 15, 2022, and the common stock will trade ex-dividend on December 14, 2022. 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 (In thousands, except share and per share data)
	Three-Month Period												Nine-Month Period
	Ended September 30,												Ended September 30,
	2022				2021				% Change				2022				2021				% Change
Net revenue	$	241,014			$	199,008				21	%		$	659,881			$	526,298				25	%
Cost of revenue - digital (1)		157,095				124,332				26	%			431,951				318,118				36	%
Operating expenses (2)		49,294				43,113				14	%			140,527				124,969				12	%
Corporate expenses (3)		9,525				7,253				31	%			26,769				21,756				23	%
Foreign currency (gain) loss		1,966				177			*					2,112				454				365	%
Consolidated adjusted EBITDA (4)		25,972				23,195				12	%			66,566				55,177				21	%
Free cash flow (5)	$	15,443			$	22,382				(31	)%		$	44,026			$	47,831				(8	)%
Net income (loss)	$	9,090			$	13,884				(35	)%		$	19,444			$	31,362				(38	)%
Net (income) loss attributable to redeemable noncontrolling interest	$	-			$	(1,753	)			(100	)%		$	-			$	(5,938	)			(100	)%
Net (income) loss attributable to noncontrolling interest	$	303			$	-			*				$	303			$	-			*
Net income (loss) attributable to common stockholders	$	9,393			$	12,131				(23	)%		$	19,747			$	25,424				(22	)%
Net income (loss) per share attributable to common stockholders, basic	$	0.11			$	0.14				(21	)%		$	0.23			$	0.30				(23	)%
Net income (loss) per share attributable to common stockholders, diluted	$	0.11			$	0.14				(21	)%		$	0.23			$	0.29				(21	)%
Weighted average common shares outstanding, basic		84,945,873				85,390,333								85,469,675				85,207,992
Weighted average common shares outstanding, diluted		87,417,501				88,315,732								87,671,726				87,694,395

(1)	Consists primarily of the costs of online media acquired from third-party publishers. Media cost is classified as cost of revenue in the period in which the corresponding revenue is recognized.
(2)	Operating expenses include direct operating and selling, general and administrative expenses. Included in operating expenses are $1.0 million and $0.3 million of non-cash stock-based compensation for the three-month periods ended September 30, 2022 and 2021, respectively, and $2.9 million and $1.0 million of non-cash stock-based compensation for the nine-month periods ended September 30, 2022 and 2021, respectively.
(3)	Corporate expenses include $1.8 million and $0.8 million of non-cash stock-based compensation for the three-month periods ended September 30, 2022 and 2021, respectively, and $5.1 million and $2.3 million of non-cash stock-based compensation for the nine-month periods ended September 30, 2022 and 2021, 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 (In thousands)
	Three-Month Period
	Ended September 30,
	2022				2021				% Change
Net revenue	$	241,014			$	199,008				21	%
Cost of revenue - digital (1)		157,095				124,332				26	%
Operating expenses (1)		49,294				43,113				14	%
Corporate expenses (1)		9,525				7,253				31	%
Depreciation and amortization		6,554				5,901				11	%
Change in fair value of contingent consideration		734				-			*
Impairment charge		-				166				(100	)%
Foreign currency (gain) loss		1,966				177			*
Other operating (gain) loss		(58	)			(2,431	)			(98	)%
Operating income (loss)		15,904				20,497				(22	)%
Interest expense, net		(2,267	)			(1,702	)			33	%
Dividend income		6				207				(97	)%
Realized gain (loss) on marketable securities		(473	)			-			*
Income (loss) before income taxes		13,170				19,002				(31	)%
Income tax benefit (expense)		(4,080	)			(5,118	)			(20	)%
Net income (loss)		9,090				13,884				(35	)%
Net (income) loss attributable to redeemable noncontrolling interest		-				(1,753	)			(100	)%
Net (income) loss attributable to noncontrolling interest		303				-			*
Net income (loss) attributable to common stockholders	$	9,393			$	12,131				(23	)%

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

Net revenue in the third quarter of 2022 totaled $241.0 million, up 21% from $199.0 million in the prior-year period. Of the overall increase, approximately $42.8 million was attributable to our digital segment and was primarily due to advertising revenue growth from our digital commercial partnerships business, and due to our investment in a variable interest entity during the third quarter of 2022 and our acquisition of 365 Digital during the fourth quarter of 2021, neither of which contributed to net revenue in the comparable period ended September 30, 2021. In addition, of the overall increase, approximately $0.1 million was attributable to our audio segment, primarily due to increases in political advertising revenue and local advertising revenue, partially offset by a decrease in national advertising revenue. The overall increase was partially offset by a decrease of approximately $0.8 million attributable to our television segment, primarily due to decreases in local and national advertising revenue, and a decrease in retransmission consent revenue. These decreases were mainly attributed to the expiration of our Univision and UniMás network affiliation agreements in Orlando, Tampa and Washington, D.C. on December 31, 2021. The decrease in our television segment revenue was partially offset by increases in political advertising revenue and spectrum usage rights revenue.

Cost of revenue in the third quarter of 2022 totaled $157.1 million, up 26% from $124.3 million in the prior-year period. The increase was primarily due to increased cost of revenue related to advertising revenue growth from our digital commercial partnerships business, and due to our investment in a variable interest entity during the third quarter of 2022 and our acquisition of 365 Digital during the fourth quarter of 2021, neither of which incurred cost of revenue for us in the comparable period ended September 30, 2021.

Operating expenses in the third quarter of 2022 totaled $49.3 million, up 14% from $43.1 million in the prior-year period. Of the overall increase, approximately $5.9 million was attributable to our digital segment and was primarily due to an increase in expenses associated with the increase in digital advertising revenue, an increase in salary expense and our investment in a variable interest entity during the third quarter of 2022 and our acquisition of 365 Digital during the fourth quarter of 2021, which did not incur operating expenses for us in the comparable period. Additionally, of the overall increase in operating expenses, approximately $0.4 million was attributable to our audio segment primarily due to an increase in expenses associated with the increase in local advertising revenue. The overall increase in operating expenses was partially offset by a decrease of approximately $0.1 million that was attributable to our television segment primarily due to a decrease in expenses associated with the decrease in local and national advertising revenue, partially offset by an increase in rent expense and an increase in bad debt expense.

Corporate expenses in the third quarter of 2022 totaled $9.5 million, up 31% from $7.3 million in the prior-year period. The increase was primarily due to increases in non-cash stock-based compensation and an increase in salaries.

Unaudited Financial Results (In thousands)
	Nine-Month Period
	Ended September 30,
	2022				2021				% Change
Net revenue	$	659,881			$	526,298				25	%
Cost of revenue - digital (1)		431,951				318,118				36	%
Operating expenses (1)		140,527				124,969				12	%
Corporate expenses (1)		26,769				21,756				23	%
Depreciation and amortization		19,212				16,159				19	%
Change in fair value of contingent consideration		6,810				-			*
Impairment charge		-				1,604				(100	)%
Foreign currency (gain) loss		2,112				454				365	%
Other operating (gain) loss		(1,011	)			(4,867	)			(79	)%
Operating income (loss)		33,511				48,105				(30	)%
Interest expense, net		(5,309	)			(5,052	)			5	%
Dividend income		20				211				(91	)%
Realized gain (loss) on marketable securities		(473	)			-			*
Income (loss) before income taxes		27,749				43,264				(36	)%
Income tax benefit (expense)		(8,305	)			(11,902	)			(30	)%
Net income (loss)		19,444				31,362				(38	)%
Net (income) loss attributable to redeemable noncontrolling interest		-				(5,938	)			(100	)%
Net (income) loss attributable to noncontrolling interest		303				-			*
Net income (loss) attributable to common stockholders	$	19,747			$	25,424				(22	)%

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

Net revenue for the nine-month period of 2022 totaled $659.9 million, up 25% from $526.3 million in the prior-year period. Of the overall increase, approximately $139.1 million was attributable to our digital segment and was primarily due to advertising revenue growth from our digital commercial partnerships business. In addition, the increase in net revenue in our digital segment was due to our investment in a variable interest entity and our acquisition of 365 Digital during the third quarter of 2022 and fourth quarter of 2021, respectively, neither of which contributed to net revenue in the comparable period ended September 30, 2021, and due to our acquisition of MediaDonuts during the third of 2021, which only partially contributed to net revenue in the comparable period ended September 30, 2021. Additionally, of the overall increase, approximately $2.1 million was attributable to our audio segment, primarily due to increases in political advertising revenue and local advertising revenue, partially offset by a decrease in national advertising revenue. The overall increase was partially offset by a decrease of approximately $7.7 million attributable to our television segment, primarily due to decreases in local and national advertising revenue, and a decrease in retransmission consent revenue. These decreases were mainly attributed to the expiration of our Univision and UniMás network affiliation agreements in Orlando, Tampa and Washington, D.C. on December 31, 2021. The decrease in our television segment revenue was partially offset by increases in political advertising revenue and spectrum usage rights revenue.

Cost of revenue for the nine-month period of 2022 totaled $432.0 million, up 36% from $318.1 million in the prior-year period. The increase was primarily due to increased cost of revenue related to advertising revenue growth from our digital commercial partnerships business, and due to our investment in a variable interest entity and our acquisition of 365 Digital during the third quarter of 2022 and fourth quarter of 2021, respectively, neither of which incurred cost of revenue for us in the comparable period ended September 30, 2021, and due to our acquisition of MediaDonuts during the third of 2021, which only partially incurred cost of revenue for us in the comparable period ended September 30, 2021.

Operating expenses for the nine-month period of 2022 totaled $140.5 million, up 12% from $125.0 million in the prior-year period. Of the overall increase, approximately $15.5 million was attributable to our digital segment and was primarily due to an increase in expenses associated with the increase in digital advertising revenue and an increase in salary expense. In addition, the increase in operating expenses in our digital segment was due to our investment in a variable interest entity and our acquisition of 365 Digital during the third quarter of 2022 and fourth quarter of 2021, respectively, neither of which incurred operating expenses for us in the comparable period ended September 30, 2021, and due to our acquisition of MediaDonuts during the third of 2021, which only partially incurred operating expenses for us in the comparable period ended September 30, 2021. Additionally, of the overall increase in operating expenses, approximately $0.6 million was attributable to our audio segment primarily due to an increase in expenses associated with the increase in local advertising revenue. The overall increase in operating expenses was partially offset by a decrease of approximately $0.6 million that was attributable to our television segment primarily due to a decrease in expenses associated with the decrease in local and national advertising revenue, partially offset by an increase in rent expense and bad debt expense.

Corporate expenses for the nine-month period of 2022 totaled $26.8 million, up 23% from $21.8 million in the prior-year period. The increase was primarily due to increases in non-cash stock-based compensation and an increase in salaries.

Balance Sheet and Related Metrics

Cash and marketable securities as of September 30, 2022 totaled approximately $164.8 million. Total debt under the Company’s credit agreement was $210.0 million. Net of $75 million of cash and marketable securities, total leverage as defined in the Company’s credit agreement was 1.4 times as of September 30, 2022. Net of total cash and marketable securities, total leverage was 0.5 times.

Unaudited Segment Results (In thousands)
	Three-Month Period												Nine-Month Period
	Ended September 30,												Ended September 30,
	2022				2021				% Change				2022				2021				% Change
Net Revenue
Digital	$	188,877			$	146,121				29	%		$	516,966			$	377,826				37	%
Television		35,678				36,450				(2	)%			98,918				106,598				(7	)%
Audio		16,459				16,437				0	%			43,997				41,874				5	%
Total	$	241,014			$	199,008				21	%		$	659,881			$	526,298				25	%
Cost of Revenue - digital (1)
Digital	$	157,095			$	124,332				26	%		$	431,951			$	318,118				36	%
Operating Expenses (1)
Digital		19,080				13,187				45	%			51,577				36,064				43	%
Television		20,003				20,148				(1	)%			58,969				59,548				(1	)%
Audio		10,211				9,778				4	%			29,981				29,357				2	%
Total	$	49,294			$	43,113				14	%		$	140,527			$	124,969				12	%
Corporate Expenses (1)	$	9,525			$	7,253				31	%		$	26,769			$	21,756				23	%
Consolidated adjusted EBITDA (1)	$	25,972			$	23,195				12	%		$	66,566			$	55,177				21	%

(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 third quarter 2022 results on Thursday, November 3, 2022 at 4:30 p.m. Eastern Time. To access the conference call, please dial (844) 836-8739 (U.S.) or (412) 317-5440 (Int’l) ten minutes prior to the start time and reference Conference ID number 10171311. 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 leading global advertising, media and ad-tech solutions company connecting brands to consumers by representing top platforms and publishers. Our dynamic portfolio includes digital, television and audio offerings. Digital, our largest revenue segment, is comprised of four business units: our digital sales representation business; Smadex, our programmatic ad purchasing platform; our branding and mobile performance solutions business; and our digital audio business. Through our digital sales representation business, we connect global media companies such as Meta, Twitter, TikTok and Spotify with advertisers in primarily emerging growth markets worldwide. Smadex is our mobile-first demand side platform, enabling advertisers to execute performance campaigns using machine learning. We also offer a branding and mobile performance solutions business, which provides managed services to advertisers looking to connect with global consumers, primarily on mobile devices, and our digital audio business provides digital audio advertising solutions for advertisers in the Americas. In addition to digital, Entravision has 49 television stations and is the largest affiliate group of the Univision and UniMás television networks. Entravision also manages 45 primarily Spanish-language radio stations that feature nationally recognized, Emmy award-winning talent. Shares of Entravision Class A Common Stock trade on the NYSE under ticker: EVC. Learn more about our offerings at entravision.com or connect with us on LinkedIn and Facebook.

Forward-Looking Statements

This press release contains certain forward-looking statements. These forward-looking statements, which are included in accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, may involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results and performance in future periods to be materially different from any future results or performance suggested by the forward-looking statements in this press release. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that actual results will not differ materially from these expectations, and the Company disclaims any duty to update any forward-looking statements made by the Company. From time to time, these risks, uncertainties and other factors are discussed in the Company’s filings with the Securities and Exchange Commission.

Entravision Communications Corporation Consolidated Statements of Operations (In thousands, except share and per share data) (Unaudited)
		Three-Month Period								Nine-Month Period
		Ended September 30,								Ended September 30,
		2022				2021				2022				2021
Net revenue		$	241,014			$	199,008			$	659,881			$	526,298
Expenses:
Cost of revenue - digital			157,095				124,332				431,951				318,118
Direct operating expenses			30,086				28,583				87,505				83,480
Selling, general and administrative expenses			19,208				14,530				53,022				41,489
Corporate expenses			9,525				7,253				26,769				21,756
Depreciation and amortization			6,554				5,901				19,212				16,159
Change in fair value of contingent consideration			734				-				6,810				-
Impairment charge			-				166				-				1,604
Foreign currency (gain) loss			1,966				177				2,112				454
Other operating (gain) loss			(58	)			(2,431	)			(1,011	)			(4,867	)
			225,110				178,511				626,370				478,193
Operating income (loss)			15,904				20,497				33,511				48,105
Interest expense			(3,055	)			(1,714	)			(7,225	)			(5,287	)
Interest income			788				12				1,916				235
Dividend income			6				207				20				211
Realized gain (loss) on marketable securities			(473	)			-				(473	)			-
Income (loss) before income taxes			13,170				19,002				27,749				43,264
Income tax benefit (expense)			(4,080	)			(5,118	)			(8,305	)			(11,902	)
Net income (loss)			9,090				13,884				19,444				31,362
Net (income) loss attributable to redeemable noncontrolling interest			-				(1,753	)			-				(5,938	)
Net (income) loss attributable to noncontrolling interest			303				-				303				-
Net income (loss) attributable to common stockholders		$	9,393			$	12,131			$	19,747			$	25,424
Basic and diluted earnings per share:
Net income (loss) per share attributable to common stockholders, basic		$	0.11			$	0.14			$	0.23			$	0.30
Net income (loss) per share attributable to common stockholders, diluted		$	0.11			$	0.14			$	0.23			$	0.29
Cash dividends declared per common share, basic and diluted		$	0.03			$	0.03			$	0.08			$	0.08
Weighted average common shares outstanding, basic			84,945,873				85,390,333				85,469,675				85,207,992
Weighted average common shares outstanding, diluted			87,417,501				88,315,732				87,671,726				87,694,395

Entravision Communications Corporation Consolidated Balance Sheets (In thousands; unaudited)
		September 30,				December 31,
		2022				2021
ASSETS
Current assets
Cash and cash equivalents		$	121,589			$	185,094
Marketable securities			43,212				-
Restricted cash			751				749
Trade receivables, net of allowance for doubtful accounts			194,291				201,747
Assets held for sale			-				1,963
Prepaid expenses and other current assets			42,517				18,925
Total current assets			402,360				408,478
Property and equipment, net			61,649				62,498
Intangible assets subject to amortization, net			64,704				64,034
Intangible assets not subject to amortization			209,053				209,053
Goodwill			86,715				71,708
Deferred income taxes			1,462				1,462
Operating leases right of use asset			42,027				25,582
Other assets			8,487				8,527
Total assets		$	876,457			$	851,342
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt		$	5,060			$	4,903
Accounts payable and accrued expenses			240,994				212,655
Operating lease liabilities			5,406				7,304
Total current liabilities			251,460				224,862
Long-term debt, less current maturities, net of unamortized debt issuance costs			207,817				207,416
Long-term operating lease liabilities			39,363				20,988
Other long-term liabilities			29,283				72,930
Deferred income taxes			70,064				68,220
Total liabilities			597,987				594,416
Stockholders' equity
Class A common stock			6				6
Class B common stock			2				2
Class U common stock			1				1
Additional paid-in capital			770,639				780,388
Accumulated deficit			(502,747	)			(522,494	)
Accumulated other comprehensive income (loss)			(2,025	)			(977	)
Total stockholders' equity			265,876				256,926
Noncontrolling interest			12,594				-
Total equity			278,470				256,926
Total liabilities and equity		$	876,457			$	851,342

Entravision Communications Corporation Consolidated Statements of Cash Flows (In thousands; unaudited)
		Three-Month Period								Nine-Month Period
		Ended September 30,								Ended September 30,
		2022				2021				2022				2021
Cash flows from operating activities:
Net income (loss)		$	9,090			$	13,884			$	19,444			$	31,362
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization			6,554				5,901				19,212				16,159
Impairment charge			-				166				-				1,604
Deferred income taxes			62				4,649				(3,151	)			8,348
Non-cash interest			365				153				1,076				451
Amortization of syndication contracts			117				119				348				357
Payments on syndication contracts			(70	)			(115	)			(304	)			(354	)
Non-cash stock-based compensation			2,786				1,094				7,995				3,300
(Gain) loss on marketable securities			473				-				473				-
(Gain) loss on disposal of property and equipment			39				(2,622	)			(599	)			(2,622	)
Change in fair value of contingent consideration			734				-				6,810				-
Changes in assets and liabilities:
(Increase) decrease in accounts receivable			4,708				(16,361	)			22,296				(15,894	)
(Increase) decrease in prepaid expenses and other assets			1,069				(642	)			(183	)			2,267
Increase (decrease) in accounts payable, accrued expenses and other liabilities			(10,691	)			3,169				4,725				8,802
Net cash provided by operating activities			15,236				9,395				78,142				53,780
Cash flows from investing activities:
Proceeds from sale of property and equipment and intangibles			-				9,431				2,671				9,431
Purchases of property and equipment			(4,673	)			(1,433	)			(7,882	)			(4,269	)
Purchase of a businesses, net of cash acquired			-				(12,847	)			-				(12,847	)
Investment in variable interest entities, net of cash consolidated			(5,164	)			-				(5,164	)			-
Purchases of marketable securities			(5,241	)			-				(92,480	)			-
Proceeds from marketable securities			36,369				10,000				46,868				27,800
Purchases of investments			-				(800	)			-				(800	)
Net cash provided by (used in) investing activities			21,291				4,351				(55,987	)			19,315
Cash flows from financing activities:
Proceeds from stock option exercises			-				242				218				414
Tax payments related to shares withheld for share-based compensation plans			-				(70	)			(267	)			(528	)
Payments on long-term debt			(1,001	)			(750	)			(2,501	)			(2,250	)
Dividends paid			(2,124	)			(2,136	)			(6,415	)			(6,395	)
Repurchase of Class A common stock			-				-				(11,280	)			-
Payment of contingent consideration			(21,734	)			-				(65,340	)			-
Principal payments under finance lease obligation			(33	)			-				(72	)			-
Payments of capitalized debt costs			-				-				-				(604	)
Net cash used in financing activities			(24,892	)			(2,714	)			(85,657	)			(9,363	)
Effect of exchange rates on cash, cash equivalents and restricted cash			5				(3	)			(1	)			(3	)
Net increase (decrease) in cash, cash equivalents and restricted cash			11,640				11,029				(63,503	)			63,729
Cash, cash equivalents and restricted cash:
Beginning			110,700				172,611				185,843				119,911
Ending		$	122,340			$	183,640			$	122,340			$	183,640

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								Nine-Month Period
		Ended September 30,								Ended September 30,
		2022				2021				2022				2021
Consolidated adjusted EBITDA (1)		$	25,972			$	23,195			$	66,566			$	55,177
EBITDA attributable to redeemable noncontrolling interest			-				2,036				-				9,127
EBITDA attributable to noncontrolling interest			(5	)			-				(5	)			-
Interest expense			(3,055	)			(1,714	)			(7,225	)			(5,287	)
Interest income			788				12				1,916				235
Dividend income			6				207				20				211
Realized gain (loss) on marketable securities			(473	)			-				(473	)			-
Income tax expense			(4,080	)			(5,118	)			(8,305	)			(11,902	)
Amortization of syndication contracts			(117	)			(119	)			(348	)			(357	)
Payments on syndication contracts			70				115				304				354
Non-cash stock-based compensation included in direct operating expenses			(981	)			(321	)			(2,878	)			(971	)
Non-cash stock-based compensation included in corporate expenses			(1,805	)			(773	)			(5,117	)			(2,329	)
Depreciation and amortization			(6,554	)			(5,901	)			(19,212	)			(16,159	)
Change in fair value of contingent consideration			(734	)			-				(6,810	)			-
Impairment charge			-				(166	)			-				(1,604	)
Other operating gain (loss)			58				2,431				1,011				4,867
Net (income) loss attributable to redeemable noncontrolling interest			-				(1,753	)			-				(5,938	)
Net (income) loss attributable to noncontrolling interest			303				-				303				-
Net income (loss) attributable to common stockholders			9,393				12,131				19,747				25,424
Depreciation and amortization			6,554				5,901				19,212				16,159
Impairment charge			-				166				-				1,604
Deferred income taxes			62				4,649				(3,151	)			8,348
Non-cash interest			365				153				1,076				451
Amortization of syndication contracts			117				119				348				357
Payments on syndication contracts			(70	)			(115	)			(304	)			(354	)
Non-cash stock-based compensation			2,786				1,094				7,995				3,300
Realized (gain) loss on marketable securities			473				-				473				-
(Gain) loss on disposal of property and equipment			39				(2,622	)			(599	)			(2,622	)
Change in fair value of contingent consideration			734				-				6,810				-
Net income (loss) attributable to redeemable noncontrolling interest			-				1,753				-				5,938
Net income (loss) attributable to noncontrolling interest			(303	)			-				(303	)			-
Changes in assets and liabilities:
(Increase) decrease in accounts receivable			4,708				(16,361	)			22,296				(15,894	)
(Increase) decrease in prepaid expenses and other assets			1,069				(642	)			(183	)			2,267
Increase (decrease) in accounts payable, accrued expenses and other liabilities			(10,691	)			3,169				4,725				8,802
Cash flows from operating activities			15,236				9,395				78,142				53,780

(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								Nine-Month Period
		Ended September 30,								Ended September 30,
		2022				2021				2022				2021
Consolidated adjusted EBITDA (1)		$	25,972			$	23,195			$	66,566			$	55,177
Net interest expense (1)			(1,902	)			(1,549	)			(4,233	)			(4,601	)
Dividend income			6				207				20				211
Cash paid for income taxes			(4,018	)			(469	)			(11,456	)			(3,554	)
Capital expenditures (2)			(4,673	)			(1,433	)			(7,882	)			(4,269	)
Other operating gain (loss)			58				2,431				1,011				4,867
Free cash flow (1)			15,443				22,382				44,026				47,831
Capital expenditures (2)			4,673				1,433				7,882				4,269
EBITDA attributable to redeemable noncontrolling interest			-				2,036				-				9,127
EBITDA attributable to noncontrolling interest			(5	)			-				(5	)			-
(Gain) loss on disposal of property and equipment			39				(2,622	)			(599	)			(2,622	)
Changes in assets and liabilities:
(Increase) decrease in accounts receivable			4,708				(16,361	)			22,296				(15,894	)
(Increase) decrease in prepaid expenses and other assets			1,069				(642	)			(183	)			2,267
Increase (decrease) in accounts payable, accrued expenses and other liabilities			(10,691	)			3,169				4,725				8,802
Cash Flows From Operating Activities		$	15,236			$	9,395			$	78,142			$	53,780

(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.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20221103005507/en/

Christopher T. Young

Chief Financial Officer

Entravision Communications Corporation

310-447-3870

Kimberly Esterkin

ADDO Investor Relations

310-829-5400

evc@addo.com

Source: Entravision Communications Corporation

FAQ

What were the financial highlights for Entravision Communications in Q3 2022?

Entravision reported Q3 2022 net revenue of $241 million, a 21% increase, but net income dropped 23% to $9.4 million.

How did Entravision's digital segment perform in Q3 2022?

The digital segment saw a significant revenue increase of 29% in Q3 2022.

What was the cash dividend announced by Entravision for Q3 2022?

Entravision approved a quarterly cash dividend of $0.025 per share, amounting to approximately $2.1 million.

What impact did the latest financial results have on Entravision's stock performance?

The decrease in net income and free cash flow may raise concerns among investors, potentially affecting stock performance.

How does Entravision's total debt impact its financial standing?

As of September 30, 2022, Entravision reported total debt of $210 million, which could signal leverage concerns for investors.