EX-99.1 2 evc-ex99_1.htm EX-99.1 EX-99.1

 

Exhibit 99.1

img19211347_0.jpg 

ENTRAVISION COMMUNICATIONS CORPORATION

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

Overview

On June 28, 2024, Entravision Communications Corporation (the "Company") completed the previously-announced sale of its Entravision Global Partners business (the "Business") to IMS Internet Media Services, Inc. ("IMS"), pursuant to an Equity Purchase Agreement entered into on June 13, 2024 among the Company, Entravision Digital Holdings, LLC ("Seller") and IMS.

Cash proceeds from the transaction, net of working capital and other adjustments, received at the closing were $16.4 million. Immediately after the closing, an amount equal to $6.5 million of the proceeds was paid by the Company to the parties who sold MediaDonuts Pte. Ltd. to Seller on July 1, 2021 (the "MediaDonuts Founders"), pursuant to a previously-disclosed Assignment, Assumption and Release Agreement dated June 13, 2024 among the Company, Seller, IMS and the MediaDonuts Founders.

The Company was also required to make a mandatory debt payment of $4.9 million under its 2023 Credit Facility as a result of the sale.

Unaudited Pro Forma Condensed Consolidated Financial Information

The sale of the Business constitutes a significant disposition for purposes of Item 2.01 of Form 8-K. The Company has also determined that the sale of the Business represents a strategic shift that will have a major effect on the Company’s operations and financial results. Accordingly, the Company will account for the Business as discontinued operations beginning in its Quarterly Report on Form 10-Q for the quarter ended June 30, 2024. As part of this strategic shift, the Company also sold two other businesses during the quarter as described below. As the sales of these three businesses (collectively, the “Businesses”) were all part of a single strategic shift and will be reported together as discontinued operations in future filings, they will also be reflected in the unaudited pro forma condensed financial information presented in this filing.

Sale of Adsmurai

As previously announced, on May 6, 2024, the Company entered into a Share Purchase Agreement (the “Purchase Agreement”), among Adsmurai, S.L. ("Adsmurai"), the Company and the other stockholders of Adsmurai (the “Buyers”). Adsmurai is a Spanish company engaged in the sale and marketing of digital advertising technology platforms.

Pursuant to the Purchase Agreement, as of the Effective Date (as defined in the Purchase Agreement) (i) the Company sold its 51% equity interest in Adsmurai to Buyers, (ii) the Company terminated loans it made to Buyers in the principal amount of €12.3 million and (iii) the parties terminated other previous agreements made between them, including an Options Agreement which contained put redemption features for Buyers and call redemption features for the Company. As consideration, the Company received €15.0 million (approximately $16.2 million as of the Effective Date) ("Total Consideration"). The Purchase Agreement also contains representations, warranties, covenants, indemnities and releases of the parties thereto.

The Total Consideration is payable to the Company as follows:

•
€10.0 million paid on the Effective Date (approximately $10.7 million); and
•
€5.0 million to be paid within six months of the Effective Date (approximately $5.4 million).

Sale of Jack of Digital

On June 28, 2024, the Company completed the sale of Jack of Digital, a digital marketing services company serving clients in Pakistan. The total consideration was $0.1 million.

The Company has prepared the accompanying unaudited pro forma condensed consolidated financial statements (“Pro Forma Information”) in accordance with Article 11 of Regulation S-X. The Pro Forma Information has been derived from the Company's historical consolidated financial statements and reflects certain assumptions and adjustments that management believes are reasonable under the circumstances and given the information available at this time. The Pro Forma Information reflects adjustments that, in the opinion of management, are necessary to present fairly the pro forma financial position as of March 31, 2024 and results of operations for the three-month period ended March 31, 2024 and years ended December 31, 2023, 2022 and 2021. The Pro Forma Information is provided for informational purposes only and is not intended to represent what the Company's financial position or results of operations

 

 

would have been had the sale of the Businesses occurred on March 31, 2024 for the unaudited pro forma condensed consolidated balance sheet and as of January 1, 2021, the beginning of the earliest period presented, for the unaudited pro forma consolidated statements of income, nor is it indicative of its future financial position or results of operations. The Pro Forma Information should be read in conjunction with the Company's historical consolidated financial statements and accompanying notes.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

# # #

(Financial Table Follows)

 

 

 

 

 

Entravision Communications Corporation

Pro Forma Condensed Consolidated Balance Sheet

(In thousands; unaudited)

 

 

 

March 31, 2024

 

 

 

Historical

 

 

Pro Forma

 

 

 

 

 

 

Results

 

 

Adjustments (a)

 

 

Pro Forma

 

ASSETS

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

128,410

 

 

$

29,988

 

(b)

$

98,422

 

Marketable securities

 

 

4,335

 

 

 

-

 

 

 

4,335

 

Restricted cash

 

 

774

 

 

 

-

 

 

 

774

 

Trade receivables, net of allowance for doubtful accounts

 

 

206,065

 

 

 

147,912

 

 

 

58,153

 

Assets held for sale

 

 

301

 

 

 

-

 

 

 

301

 

Prepaid expenses and other current assets

 

 

40,095

 

 

 

4,549

 

 

 

35,546

 

Total current assets

 

 

379,980

 

 

 

182,449

 

 

 

197,531

 

Property and equipment, net

 

 

69,294

 

 

 

4,179

 

 

 

65,115

 

Intangible assets subject to amortization, net

 

 

34,660

 

 

 

28,500

 

 

 

6,160

 

Intangible assets not subject to amortization

 

 

195,174

 

 

 

-

 

 

 

195,174

 

Goodwill

 

 

55,272

 

 

 

4,599

 

(c)

 

50,673

 

Deferred income taxes

 

 

5,175

 

 

 

5,118

 

 

 

57

 

Operating leases right of use asset

 

 

43,543

 

 

 

1,068

 

 

 

42,475

 

Other assets

 

 

21,892

 

 

 

6,186

 

 

 

15,706

 

Total assets

 

$

804,990

 

 

$

232,099

 

 

$

572,891

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

Current maturities of long-term debt

 

$

3,360

 

 

$

860

 

 

$

2,500

 

Accounts payable and accrued expenses

 

 

263,484

 

 

 

222,173

 

 

 

41,311

 

Operating lease liabilities

 

 

7,518

 

 

 

561

 

 

 

6,957

 

Total current liabilities

 

 

274,362

 

 

 

223,594

 

 

 

50,768

 

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

 

 

195,762

 

 

 

6,424

 

(d)

 

189,338

 

Long-term operating lease liabilities

 

 

44,901

 

 

 

501

 

 

 

44,400

 

Other long-term liabilities

 

 

21,404

 

 

 

17,191

 

(e)

 

4,213

 

Deferred income taxes

 

 

55,186

 

 

 

7,548

 

 

 

47,638

 

Total liabilities

 

 

591,615

 

 

 

255,258

 

 

 

336,357

 

Redeemable noncontrolling interest

 

 

39,840

 

 

 

39,840

 

 

 

-

 

Stockholders' equity

 

 

 

 

 

 

 

 

 

Class A common stock

 

 

8

 

 

 

 

 

 

8

 

Class U common stock

 

 

1

 

 

 

 

 

 

1

 

Additional paid-in capital

 

 

743,339

 

 

 

(79,903

)

 

 

823,242

 

Accumulated deficit

 

 

(568,702

)

 

 

17,206

 

(f)

 

(585,908

)

Accumulated other comprehensive income (loss)

 

 

(1,111

)

 

 

(302

)

 

 

(809

)

Total stockholders' equity

 

 

173,535

 

 

 

(62,999

)

 

 

236,534

 

Total liabilities and stockholders' equity

 

$

804,990

 

 

$

232,099

 

 

$

572,891

 

 

 

 

 

 

 

Entravision Communications Corporation

Pro Forma Condensed Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)

 

 

 

Three-Month Period Ended March 31, 2024

 

 

 

Historical

 

 

Pro Forma

 

 

 

 

 

 

Results

 

 

Adjustments (g)

 

 

Pro Forma

 

Net revenue

 

$

277,445

 

 

$

199,269

 

 

$

78,176

 

Expenses:

 

 

 

 

 

 

 

 

 

Cost of revenue - digital

 

 

203,229

 

 

 

180,571

 

 

 

22,658

 

Direct operating expenses

 

 

35,572

 

 

 

3,771

 

 

 

31,801

 

SG&A

 

 

26,695

 

 

 

12,361

 

 

 

14,334

 

Corporate expenses

 

 

12,248

 

 

 

-

 

 

 

12,248

 

Depreciation and amortization

 

 

7,133

 

 

 

2,394

 

 

 

4,739

 

Impairment charge

 

 

49,438

 

 

 

49,438

 

 

 

-

 

Change in fair value of contingent consideration

 

 

(1,420

 )

 

 

(1,200

 )

 

 

(220

 )

Foreign currency (gain) loss

 

 

449

 

 

 

184

 

 

 

265

 

Operating income (loss)

 

 

(55,899

 )

 

 

(48,250

 )

 

 

(7,649

 )

Interest expense

 

 

(4,559

 )

 

 

(116

 )

(h)

 

(4,443

 )

Interest income

 

 

1,130

 

 

 

552

 

 

 

578

 

Dividend income

 

 

10

 

 

 

-

 

 

 

10

 

Realized gain (loss) on marketable securities

 

 

(113

 )

 

 

-

 

 

 

(113

 )

Gain (loss) on debt extinguishment

 

 

(40

)

 

 

-

 

 

 

(40

 )

Income (loss) before income taxes

 

 

(59,471

 )

 

 

(47,814

 )

 

 

(11,657

 )

Income tax benefit (expense)

 

 

7,802

 

 

 

3,655

 

 

 

4,147

 

Net income (loss)

 

 

(51,669

 )

 

 

(44,159

 )

 

 

(7,510

 )

Net (income) loss attributable to redeemable noncontrolling interest

 

 

2,779

 

 

 

2,779

 

 

 

-

 

Net income (loss) attributable to common stockholders

 

$

(48,890

)

 

$

(41,380

)

 

$

(7,510

)

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per share:

 

 

 

 

 

 

 

 

 

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

 

$

(0.55

)

 

 

 

 

$

(0.08

)

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

 

$

(0.55

)

 

 

 

 

$

(0.08

)

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, basic

 

 

89,518,058

 

 

 

 

 

 

89,518,058

 

Weighted average common shares outstanding, diluted

 

 

89,518,058

 

 

 

 

 

 

89,518,058

 

 

 

 

 

Entravision Communications Corporation

Pro Forma Condensed Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)

 

 

 

Year Ended December 31, 2023

 

 

 

Historical

 

 

Pro Forma

 

 

 

 

 

 

Results

 

 

Adjustments (g)

 

 

Pro Forma

 

Net revenue

 

$

1,106,867

 

 

$

809,824

 

 

$

297,043

 

Expenses:

 

 

 

 

 

 

 

 

 

Cost of revenue - digital

 

 

800,401

 

 

 

723,187

 

 

 

77,214

 

Direct operating expenses

 

 

128,470

 

 

 

15,239

 

 

 

113,231

 

SG&A

 

 

91,979

 

 

 

42,218

 

 

 

49,761

 

Corporate expenses

 

 

50,294

 

 

 

-

 

 

 

50,294

 

Depreciation and amortization

 

 

28,007

 

 

 

11,615

 

 

 

16,392

 

Impairment charge

 

 

13,267

 

 

 

 

 

 

13,267

 

Change in fair value of contingent consideration

 

 

(2,539

 )

 

 

(3,360

 )

 

 

821

 

Foreign currency (gain) loss

 

 

900

 

 

 

(1,050

 )

 

 

1,950

 

Other operating (gain) loss

 

 

609

 

 

 

-

 

 

 

609

 

Operating income (loss)

 

 

(4,521

 )

 

 

21,975

 

 

 

(26,496

 )

Interest expense

 

 

(17,291

 )

 

 

(458

 )

(h)

 

(16,833

 )

Interest income

 

 

5,055

 

 

 

1,650

 

 

 

3,405

 

Dividend income

 

 

35

 

 

 

-

 

 

 

35

 

Realized gain (loss) on marketable securities

 

 

(93

 )

 

 

-

 

 

 

(93

 )

Gain (loss) on debt extinguishment

 

 

(1,556

)

 

 

-

 

 

 

(1,556

 )

Income (loss) before income taxes

 

 

(18,371

 )

 

 

23,167

 

 

 

(41,538

 )

Income tax benefit (expense)

 

 

2,750

 

 

 

(5,642

)

 

 

8,392

 

Net income (loss)

 

 

(15,621

 )

 

 

17,525

 

 

 

(33,146

 )

Net (income) loss attributable to redeemable noncontrolling interest

 

 

(158

 )

 

 

(158

 )

 

 

-

 

Net (income) loss attributable to noncontrolling interest

 

 

342

 

 

 

342

 

 

 

-

 

Net income (loss) attributable to common stockholders

 

$

(15,437

)

 

$

17,709

 

 

$

(33,146

)

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per share:

 

 

 

 

 

 

 

 

 

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

 

$

(0.18

)

 

 

 

 

$

(0.38

)

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

 

$

(0.18

)

 

 

 

 

$

(0.38

)

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, basic

 

 

87,901,938

 

 

 

 

 

 

87,901,938

 

Weighted average common shares outstanding, diluted

 

 

87,901,938

 

 

 

 

 

 

87,901,938

 

 

 

 

 

 

Entravision Communications Corporation

Pro Forma Condensed Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)

 

 

 

Year Ended December 31, 2022

 

 

 

Historical

 

 

Pro Forma

 

 

 

 

 

 

Results

 

 

Adjustments (g)

 

 

Pro Forma

 

Net revenue

 

$

956,209

 

 

$

632,218

 

 

$

323,991

 

Expenses:

 

 

 

 

 

 

 

 

 

Cost of revenue - digital

 

 

623,916

 

 

 

553,329

 

 

 

70,587

 

Direct operating expenses

 

 

122,611

 

 

 

13,291

 

 

 

109,320

 

SG&A

 

 

75,165

 

 

 

28,177

 

 

 

46,988

 

Corporate expenses

 

 

49,404

 

 

 

-

 

 

 

49,404

 

Depreciation and amortization

 

 

25,697

 

 

 

10,050

 

 

 

15,647

 

Impairment charge

 

 

1,600

 

 

 

 

 

 

1,600

 

Change in fair value of contingent consideration

 

 

14,210

 

 

 

16,010

 

 

 

(1,800

 )

Foreign currency (gain) loss

 

 

2,972

 

 

 

1,729

 

 

 

1,243

 

Other operating (gain) loss

 

 

382

 

 

 

(41

 )

 

 

423

 

Operating income (loss)

 

 

40,252

 

 

 

9,673

 

 

 

30,579

 

Interest expense

 

 

(10,876

 )

 

 

(340

 )

(h)

 

(10,536

 )

Interest income

 

 

2,864

 

 

 

124

 

 

 

2,740

 

Dividend income

 

 

20

 

 

 

-

 

 

 

20

 

Realized gain (loss) on marketable securities

 

 

(532

 )

 

 

-

 

 

 

(532

 )

Income (loss) before income taxes

 

 

31,728

 

 

 

9,457

 

 

 

22,271

 

Income tax benefit (expense)

 

 

(11,559

)

 

 

(2,688

)

 

 

(8,871

 )

Net income (loss)

 

 

20,169

 

 

 

6,769

 

 

 

13,400

 

Net (income) loss attributable to noncontrolling interest

 

 

(2,050

 )

 

 

(2,049

)

 

 

(1

 )

Net income (loss) attributable to common stockholders

 

$

18,119

 

 

$

4,720

 

 

$

13,399

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per share:

 

 

 

 

 

 

 

 

 

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

 

$

0.21

 

 

 

 

 

$

0.16

 

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

 

$

0.21

 

 

 

 

 

$

0.15

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, basic

 

 

85,391,163

 

 

 

 

 

 

85,391,163

 

Weighted average common shares outstanding, diluted

 

 

87,769,762

 

 

 

 

 

 

87,769,762

 

 

 

 

 

 

 

Entravision Communications Corporation

Pro Forma Condensed Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)

 

 

 

Year Ended December 31, 2021

 

 

 

Historical

 

 

Pro Forma

 

 

 

 

 

 

Results

 

 

Adjustments (g)

 

 

Pro Forma

 

Net revenue

 

$

760,192

 

 

$

484,757

 

 

$

275,435

 

Expenses:

 

 

 

 

 

 

 

 

 

Cost of revenue - digital

 

 

466,517

 

 

 

426,216

 

 

 

40,301

 

Direct operating expenses

 

 

116,449

 

 

 

11,988

 

 

 

104,461

 

SG&A

 

 

56,585

 

 

 

14,731

 

 

 

41,854

 

Corporate expenses

 

 

32,993

 

 

 

-

 

 

 

32,993

 

Depreciation and amortization

 

 

22,420

 

 

 

7,284

 

 

 

15,136

 

Impairment charge

 

 

3,023

 

 

 

1,319

 

 

 

1,704

 

Change in fair value of contingent consideration

 

 

8,224

 

 

 

8,224

 

 

 

-

 

Foreign currency (gain) loss

 

 

508

 

 

 

601

 

 

 

(93

 )

Other operating (gain) loss

 

 

(6,998

 )

 

 

-

 

 

 

(6,998

 )

Operating income (loss)

 

 

60,471

 

 

 

14,394

 

 

 

46,077

 

Interest expense

 

 

(7,020

 )

 

 

(198

 )

(h)

 

(6,822

 )

Interest income

 

 

245

 

 

 

9

 

 

 

236

 

Dividend income

 

 

213

 

 

 

-

 

 

 

213

 

Income (loss) before income taxes

 

 

53,909

 

 

 

14,206

 

 

 

39,703

 

Income tax benefit (expense)

 

 

(18,679

)

 

 

(3,725

)

 

 

(14,954

 )

Net income (loss)

 

 

35,230

 

 

 

10,481

 

 

 

24,749

 

Net (income) loss attributable to redeemable noncontrolling interest

 

 

(5,938

 )

 

 

(5,938

 )

 

 

-

 

Net income (loss) attributable to common stockholders

 

$

29,292

 

 

$

4,543

 

 

$

24,749

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per share:

 

 

 

 

 

 

 

 

 

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

 

$

0.34

 

 

 

 

 

$

0.29

 

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

 

$

0.33

 

 

 

 

 

$

0.28

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, basic

 

 

85,301,603

 

 

 

 

 

 

85,301,603

 

Weighted average common shares outstanding, diluted

 

 

87,910,603

 

 

 

 

 

 

87,910,603

 

 

 

 

 

 

Entravision Communications Corporation

Notes to Unaudited Pro Forma Condensed Consolidated Financial Information

(a)
Adjustments reflect the elimination of assets and liabilities of the Businesses.
(b)
The pro forma impact on cash and cash equivalents is as follows (in thousands):

 

Cash Proceeds from sale of the Businesses

 

$

27,248

 

Payment to MediaDonuts Founders

 

 

(6,500

 )

Mandatory debt repayment

 

 

(4,900

 )

Cash distributed from the Business before closing

 

 

43,460

 

 

 

 

59,308

 

 

(c)
Reflects the elimination of an estimated $4.6 million of goodwill based on the relative fair value of the Businesses as of the date of sale.
(d)
Adjustment includes the mandatory repayment of $4.9 million of debt as a result of the sale of the Business.
(e)
Adjustment includes the payment of $6.5 million to the MediaDonuts Founders as a result of the sale of Business.
(f)
Represents the equity impact of the proforma balance sheet adjustments discussed in (a) – (e) above.
(g)
Adjustments reflect the elimination of revenue, cost of revenue, expenses and taxes which are specific to the operations of the Businesses.
(h)
Adjustment reflects the reduction of interest expense in connection with the mandatory payment of debt of $4.9 million as a result of the sale of the Business.