Entravision Communications Corporation (NYSE: EVC), a leading global advertising solutions, media and technology company, today announced financial results for the three- and six-month periods ended June 30, 2023.
Second Quarter 2023 Highlights
- Record quarterly advertising revenue
- Net revenue up 23% over the prior-year quarter
- Net loss attributable to common stockholders of $2.0 million compared to net income attributable to common stockholders of $8.5 million in the prior-year quarter
- Consolidated EBITDA down 37% compared to the prior-year quarter
- Operating cash flow up 7% over the prior-year quarter
- Free cash flow down 89% compared to the prior-year quarter
- Quarterly cash dividend of $0.05 per share
“We delivered another strong quarter at Entravision with record quarterly revenue of $273.4 million, increasing 23% year-over-year,” said Chris Young, Chief Financial Officer. “While elevated operating expenses led to a decline in adjusted EBITDA, we remain focused on managing expenses and leveraging our strong balance sheet to ensure we are well-positioned to grow in the current macroeconomic environment. We were also excited to welcome Michael Christenson as our new CEO at the beginning of July. We look forward to continuing to drive growth under his leadership."
Quarterly Cash Dividend
The Company announced today that its Board of Directors approved a quarterly cash dividend to shareholders of $0.05 per share on the Company's Class A and Class U common stock, in an aggregate amount of $4.4 million. The quarterly dividend will be payable on September 29, 2023 to shareholders of record as of the close of business on September 15, 2023, and the common stock will trade ex-dividend on September 14, 2023. 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 | Six-Month Period | |||||||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||||||
2023 | 2022 | % Change | 2023 | 2022 | % Change | |||||||||||||||
Net revenue | $ | 273,381 | $ | 221,695 | 23 | % | $ | 512,387 | $ | 418,867 | 22 | % | ||||||||
Cost of revenue - digital (1) | 195,836 | 144,965 | 35 | % | 363,592 | 274,856 | 32 | % | ||||||||||||
Operating expenses (2) | 56,630 | 47,371 | 20 | % | 109,260 | 91,233 | 20 | % | ||||||||||||
Corporate expenses (3) | 12,042 | 8,520 | 41 | % | 22,544 | 17,244 | 31 | % | ||||||||||||
Foreign currency (gain) loss | 697 | 993 | (30 | )% | (259 | ) | 146 | * | ||||||||||||
Consolidated EBITDA (4) | 14,213 | 22,481 | (37 | )% | 27,235 | 40,594 | (33 | )% | ||||||||||||
Free cash flow (5) | $ | 1,558 | $ | 14,256 | (89 | )% | $ | 5,466 | $ | 28,583 | (81 | )% | ||||||||
Net income (loss) | $ | (2,001 | ) | $ | 8,467 | * | $ | (302 | ) | $ | 10,354 | * | ||||||||
Net (income) loss attributable to redeemable noncontrolling interest | $ | 12 | $ | - | * | $ | 12 | $ | - | * | ||||||||||
Net (income) loss attributable to noncontrolling interest | $ | - | $ | - | * | $ | 342 | $ | - | * | ||||||||||
Net income (loss) attributable to common stockholders | $ | (1,989 | ) | $ | 8,467 | * | $ | 52 | $ | 10,354 | (99 | )% | ||||||||
Net income (loss) per share attributable to common stockholders, basic and diluted | $ | (0.02 | ) | $ | 0.10 | * | $ | 0.00 | $ | 0.12 | (100 | )% | ||||||||
Weighted average common shares outstanding, basic | 87,787,772 | 84,959,130 | 87,706,282 | 85,735,916 | ||||||||||||||||
Weighted average common shares outstanding, diluted | 87,787,772 | 86,985,817 | 89,807,095 | 87,803,178 | ||||||||||||||||
(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 $2.7 million and $0.9 million of non-cash stock-based compensation for the three-month periods ended June 30, 2023 and 2022, respectively, and $4.6 million and $1.9 million of non-cash stock-based compensation for the six-month periods ended June 30, 2023 and 2022, respectively. | |
(3) | Corporate expenses include $3.2 million and $1.7 million of non-cash stock-based compensation for the three-month periods ended June 30, 2023 and 2022, respectively, and $5.4 million and $3.3 million of non-cash stock-based compensation for the six-month periods ended June 30, 2023 and 2022, respectively. | |
(4) | Consolidated 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 EBITDA because that measure is defined in our 2017 Credit Agreement and 2023 Credit Agreement, 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 EBITDA less cash paid for income taxes, net interest expense, capital expenditures (less amounts reimbursed by landlord) 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 June 30, | |||||||||||
2023 | 2022 | % Change | |||||||||
Net revenue | $ | 273,381 | $ | 221,695 | 23 | % | |||||
Cost of revenue - digital (1) | 195,836 | 144,965 | 35 | % | |||||||
Operating expenses (1) | 56,630 | 47,371 | 20 | % | |||||||
Corporate expenses (1) | 12,042 | 8,520 | 41 | % | |||||||
Depreciation and amortization | 6,509 | 6,263 | 4 | % | |||||||
Change in fair value of contingent consideration | 1,123 | 976 | 15 | % | |||||||
Foreign currency (gain) loss | 697 | 993 | (30 | )% | |||||||
Other operating (gain) loss | — | (834 | ) | (100 | )% | ||||||
Operating income (loss) | 544 | 13,441 | (96 | )% | |||||||
Interest expense, net | (3,269 | ) | (1,612 | ) | 103 | % | |||||
Dividend income | 14 | 11 | 27 | % | |||||||
Realized gain (loss) on marketable securities | (29 | ) | — | * | |||||||
Income (loss) before income taxes | (2,740 | ) | 11,840 | * | |||||||
Income tax benefit (expense) | 739 | (3,373 | ) | * | |||||||
Net income (loss) | (2,001 | ) | 8,467 | * | |||||||
Net (income) loss attributable to redeemable noncontrolling interest | 12 | — | * | ||||||||
Net income (loss) attributable to common stockholders | $ | (1,989 | ) | $ | 8,467 | * | |||||
(1) | Cost of revenue, operating expenses and corporate expenses are defined on page 2. | |
Net revenue in the second quarter of 2023 totaled $273.4 million, up 23% from $221.7 million in the prior-year period. Of the overall increase, $55.5 million was attributable to our digital segment and was primarily due to advertising revenue growth from our digital commercial partnerships business, and due to various acquisitions, which did not contribute to our financial results in our digital segment in the comparable period. The overall increase was partially offset by a decrease of $2.5 million attributable to our television segment, primarily due to decreases in political advertising revenue and national advertising revenue, partially offset by increases in local advertising revenue, spectrum usage rights revenue and retransmission consent revenue. In addition, the overall increase was partially offset by a dec
