evc-ex991

SANTA MONICA, CALIFORNIA, August 2, 2018 – Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three- and six-month period ended June 30, 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 is included beginning on page 10. Unaudited financial highlights are as follows:

	Three-Month Period							Six-Month Period
	Ended June 30,							Ended June 30,
	2018		2017		% Change			2018		2017		% Change
Net revenue	$	74,329	$	70,509		5	%	$	141,167	$	128,019		10	%
Cost of revenue - digital (1)		11,384		8,762		30	%		22,009		10,514		109	%
Operating expenses (2)		43,790		41,945		4	%		88,117		80,237		10	%
Corporate expenses (3)		6,266		5,619		12	%		12,241		11,486		7	%

Consolidated adjusted EBITDA (4)		14,866		14,924		(0	)%		21,803		27,494		(21	)%

Free cash flow (5)	$	8,664	$	5,643		54	%	$	10,255	$	12,868		(20	)%

Net income (loss)	$	4,840	$	3,495		38	%	$	3,033	$	6,113		(50	)%

Net income (loss) per share, basic and diluted	$	0.05	$	0.04		25	%	$	0.03	$	0.07		(57	)%

Weighted average common shares outstanding, basic		88,959,935		90,354,982					89,635,759		90,296,057
Weighted average common shares outstanding, diluted		90,021,949		92,033,111					90,805,086		91,897,150

Commenting on the Company’s earnings results, Walter F. Ulloa, Chairman and Chief Executive Officer, said, “During the second quarter, we achieved revenue growth driven by increases in our digital media segment. This growth in our digital media segment offsets a decrease in our television segment, while our radio segment was flat. We also improved our free cash flow and net income over last year’s second quarter. Additionally, we continued to build our digital footprint through our acquisition of Smadex, a digital advertising technology company, while implementing steps to more efficiently align operations and reduce costs. Looking ahead, we remain well positioned to build on our success in further attracting Latino and other audiences worldwide, and expanding our advertiser base to the benefit of our shareholders.”

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 $4.5 million. The quarterly dividend will be payable on September 28, 2018 to shareholders of record as of the close of business on September 14, 2018, and the common stock will trade ex-dividend on September 13, 2018. 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.

	Three-Month Period
	Ended June 30,
	2018			2017			% Change
Net revenue	$	74,329		$	70,509			5	%
Cost of revenue - digital (1)		11,384			8,762			30	%
Operating expenses (1)		43,790			41,945			4	%
Corporate expenses (1)		6,266			5,619			12	%
Depreciation and amortization		4,019			4,577			(12	)%
Change in fair value of contingent consideration		(913	)		-		*
Foreign currency (gain) loss		(17	)		351		*

Operating income (loss)		9,800			9,255			6	%
Interest expense, net		(2,962	)		(3,573	)		(17	)%
Dividend income		417			-		*
Other income (loss)		273			-		*

Income (loss) before income taxes		7,528			5,682			32	%

Income tax benefit (expense)		(2,652	)		(2,119	)		25	%
Net income (loss) before equity in net income (loss) of nonconsolidated affiliates		4,876			3,563			37	%

Equity in net income (loss) of nonconsolidated affiliates, net of tax		(36	)		(68	)		(47	)%

Net income (loss)	$	4,840		$	3,495			38	%

Net revenue increased to $74.3 million for the three-month period ended June 30, 2018 from $70.5 million for the three-month period ended June 30, 2017, an increase of $3.8 million. Of the overall increase, approximately $5.0 million was attributable to our digital segment and was primarily due to growth in the Headway business which was acquired during the second quarter of 2017. The overall increase was partially offset by a decrease in our television segment of approximately $1.3 million primarily due to decreases in national and local advertising revenue, partially offset by an increase in retransmission consent revenue and an increase in political advertising revenue, the latter of which was not material in 2017. Revenue in our radio segment remained constant with an increase in revenue from the 2018 FIFA World Cup offset by decreases in local and national revenue.

Cost of revenue in our digital media segment increased to $11.4 million for the three-month period ended June 30, 2018 from $8.8 million for the three-month period ended June 30, 2017, an increase of $2.6 million, primarily due to the increased revenue in our digital segment.

Operating expenses increased to $43.8 million for the three-month period ended June 30, 2018 from $41.9 million for the three-month period ended June 30, 2017, an increase of $1.9 million. The increase was primarily attributable to our digital segment and was primarily driven by expenses associated with the increase in revenue and an increase in salary expense. We also had an increase in operating expenses in our television segment due to the acquisition of station KMIR-TV during the fourth quarter of 2017, which did not contribute to operating expenses in the prior year period, partially offset by a decrease in expenses associated with the decrease in advertising revenue and a decrease in salary expense.

Corporate expenses increased to $6.3 million for the three-month period ended June 30, 2018 from $5.6 million for the three-month period ended June 30, 2017, an increase of $0.7 million. The increase was primarily due to legal and financial due diligence costs related to the Smadex acquisition and an increase in non-cash stock-based compensation expense.

	Six-Month Period
	Ended June 30,
	2018			2017			% Change
Net revenue	$	141,167		$	128,019			10	%
Cost of revenue - digital (1)		22,009			10,514			109	%
Operating expenses (1)		88,117			80,237			10	%
Corporate expenses (1)		12,241			11,486			7	%
Depreciation and amortization		7,958			8,123			(2	)%
Change in fair value of contingent consideration		1,187			-		*
Foreign currency (gain) loss		196			351			(44	)%

Operating income (loss)		9,459			17,308			(45	)%
Interest expense, net		(5,447	)		(7,109	)		(23	)%
Dividend income		545			-		*
Other income (loss)		295			-		*

Income (loss) before income taxes		4,852			10,199			(52	)%

Income tax benefit (expense)		(1,721	)		(4,018	)		(57	)%
Net income (loss) before equity in net income (loss) of nonconsolidated affiliates		3,131			6,181			(49	)%

Equity in net income (loss) of nonconsolidated affiliates, net of tax		(98	)		(68	)		44	%

Net income (loss)	$	3,033		$	6,113			(50	)%

Net revenue increased to $141.2 million for the six-month period ended June 30, 2018 from $128.0 million for the six-month period ended June 30, 2017, an increase of $13.2 million. Of the overall increase, approximately $19.1 million was attributable to our digital segment and was primarily due to the acquisition of Headway during the second quarter of 2017, which did not contribute to our results of operations for the full six-month period in 2017. The overall increase was partially offset by a decrease in our television segment of approximately $4.5 million primarily due to decreases in national and local advertising revenue, partially offset by an increase in retransmission consent revenue and an increase in political advertising revenue, the latter of which was not material in 2017. Additionally, the overall increase was partially offset by a decrease in our radio segment of approximately $1.6 million primarily due to decreases in local and national advertising revenue, partially offset by an increase in net revenue from the 2018 FIFA World Cup.

Cost of revenue in our digital media segment increased to $22.0 million for the six-month period ended June 30, 2018 from $10.5 million for the six-month period ended June 30, 2017, an increase of $11.5 million, primarily due to the acquisition of Headway during the second quarter of 2017, which did not contribute to our results of operations for the full six-month period in 2017.

Operating expenses increased to $88.1 million for the six-month period ended June 30, 2018 from $80.2 million for the six-month period ended June 30, 2017, an increase of $7.9 million. The increase was primarily due to the acquisition of Headway in our digital segment during the second quarter of 2017, which did not contribute to operating expenses for the full six-month period in the prior year. Additionally, approximately $1.8 million of the overall increase was attributable to our television segment primarily due to the acquisition of station KMIR-TV in the fourth quarter of 2017, which did not contribute to operating expenses in the prior year period, partially offset by a decrease in expenses associated with the decrease in advertising revenue and a decrease in salary expense.

Corporate expenses increased to $12.2 million for the six-month period ended June 30, 2018 from $11.5 million for the six-month period ended June 30, 2017, an increase of $0.7 million. The increase was primarily due to legal and financial due diligence costs related to the Smadex acquisition and an increase in non-cash stock-based compensation expense, partially offset by a decrease in due diligence costs incurred in prior year related to the Headway acquisition.

	Three-Month Period							Six-Month Period
	Ended June 30,							Ended June 30,
		2018		2017	% Change				2018		2017	% Change
Net Revenue
Television	$	36,531	$	37,764		(3	)%	$	71,022	$	75,474		(6	)%
Radio		17,240		17,163		0	%		31,343		32,882		(5	)%
Digital		20,558		15,582		32	%		38,802		19,663		97	%
Total	$	74,329	$	70,509		5	%	$	141,167	$	128,019		10	%

Cost of Revenue - digital (1)
Digital	$	11,384	$	8,762		30	%	$	22,009	$	10,514		109	%

Operating Expenses (1)
Television		20,589		20,150		2	%		42,111		40,355		4	%
Radio		15,437		15,620		(1	)%		30,717		31,341		(2	)%
Digital		7,764		6,175		26	%		15,289		8,541		79	%
Total	$	43,790	$	41,945		4	%	$	88,117	$	80,237		10	%

Corporate Expenses (1)	$	6,266	$	5,619		12	%	$	12,241	$	11,486		7	%

Consolidated adjusted EBITDA (1)	$	14,866	$	14,924		(0	)%	$	21,803	$	27,494		(21	)%

Entravision Communications Corporation will hold a conference call to discuss its 2018 second quarter results on August 2, 2018 at 5 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, 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.

	June 30,			December 31,
	2018			2017


ASSETS
Current assets
Cash and cash equivalents	$	108,892		$	39,560
Marketable securities		132,435			-
Restricted cash		769			222,294
Trade receivables, net of allowance for doubtful accounts		76,378			84,348
Assets held for sale		1,179			-
Prepaid expenses and other current assets		11,990			6,260
Total current assets		331,643			352,462
Property and equipment, net		58,562			60,337
Intangible assets subject to amortization, net		25,828			26,758
Intangible assets not subject to amortization		254,506			251,163
Goodwill		73,566			70,557
Other assets		4,442			4,690
Total assets	$	748,547		$	765,967


LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt	$	3,000		$	3,000
Accounts payable and accrued expenses		52,787			57,563
Deferred revenue		3,386			1,959
Total current liabilities		59,173			62,522
Long-term debt, less current maturities, net of unamortized debt issuance costs		291,237			292,489
Other long-term liabilities		19,553			21,447
Deferred income taxes		42,326			40,639
Total liabilities		412,289			417,097

Stockholders' equity
Class A common stock		6			7
Class B common stock		2			2
Class U common stock		1			1
Additional paid-in capital		874,508			888,650
Accumulated deficit		(536,697	)		(539,730	)
Accumulated other comprehensive income (loss)		(1,562	)		(60	)
Total stockholders' equity		336,258			348,870
Total liabilities and stockholders' equity	$	748,547		$	765,967

	Three-Month Period						Six-Month Period
	Ended June 30,						Ended June 30,
	2018			2017			2018			2017

Net revenue	$	74,329		$	70,509		$	141,167		$	128,019

Expenses:
Cost of revenue - digital		11,384			8,762			22,009			10,514
Direct operating expenses		31,117			29,915			62,150			57,007
Selling, general and administrative expenses		12,673			12,030			25,967			23,230
Corporate expenses		6,266			5,619			12,241			11,486
Depreciation and amortization		4,019			4,577			7,958			8,123
Change in fair value of contingent consideration		(913	)		-			1,187			-
Foreign currency (gain) loss		(17	)		351			196			351
		64,529			61,254			131,708			110,711
Operating income (loss)		9,800			9,255			9,459			17,308
Interest expense		(4,001	)		(3,683	)		(7,399	)		(7,328	)
Interest income		1,039			110			1,952			219
Dividend income		417			-			545			-
Other income (loss)		273			-			295			-
Income (loss) before income taxes		7,528			5,682			4,852			10,199
Income tax benefit (expense)		(2,652	)		(2,119	)		(1,721	)		(4,018	)
Income (loss) before equity in net income (loss) of nonconsolidated affiliate		4,876			3,563			3,131			6,181
Equity in net income (loss) of nonconsolidated affiliate, net of tax		(36	)		(68	)		(98	)		(68	)
Net income (loss)	$	4,840		$	3,495		$	3,033		$	6,113

Basic and diluted earnings per share:
Net income (loss) per share, basic and diluted	$	0.05		$	0.04		$	0.03		$	0.07

Cash dividends declared per common share	$	0.05		$	0.03		$	0.05		$	0.06

Weighted average common shares outstanding, basic		88,959,935			90,354,982			89,635,759			90,296,057
Weighted average common shares outstanding, diluted		90,021,949			92,033,111			90,805,086			91,897,150

	Three-Month Period						Six-Month Period
	Ended June 30,						Ended June 30,
	2018			2017			2018			2017
Cash flows from operating activities:
Net income (loss)	$	4,840		$	3,495		$	3,033		$	6,113
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		4,019			4,577			7,958			8,123
Deferred income taxes		2,043			1,955			1,029			3,428
Non-cash interest expense		414			186			538			369
Amortization of syndication contracts		176			109			352			218
Payments on syndication contracts		(174	)		(102	)		(360	)		(215	)
Equity in net (income) loss of nonconsolidated affiliate		36			68			98			68
Non-cash stock-based compensation		1,176			1,085			2,425			2,060
Changes in assets and liabilities:
(Increase) decrease in accounts receivable		(1,873	)		2,602			9,170			13,581
(Increase) decrease in prepaid expenses and other assets		(2,566	)		(556	)		(6,547	)		(1,447	)
Increase (decrease) in accounts payable, accrued expenses and other liabilities		5,197			(3,029	)		(780	)		(8,992	)
Net cash provided by operating activities		13,288			10,390			16,916			23,306
Cash flows from investing activities:
Proceeds from sale of property and equipment and intangible assets		33			-			33			-
Purchases of property and equipment		(2,680	)		(5,730	)		(5,710	)		(7,296	)
Purchases of intangible assets		-			-			(3,153	)		-
Purchases of businesses, net of cash acquired		(3,563	)		(7,489	)		(3,563	)		(7,489	)
Purchases of marketable securities		-			-			(159,403	)		-
Proceeds from marketable securities		25,000			-			25,000			-
Purchases of investments		(35	)		(1,950	)		(35	)		(2,200	)
Deposits on acquisitions		-			-			-			(190	)
Net cash provided by (used in) investing activities		18,755			(15,169	)		(146,831	)		(17,175	)
Cash flows from financing activities:
Proceeds from stock option exercises		106			215			106			526
Tax payments related to shares withheld for share-based compensation plans		(12	)		-			(2,239	)		-
Payments on long-term debt		(750	)		(937	)		(1,500	)		(1,875	)
Dividends paid		(4,442	)		(2,826	)		(8,960	)		(5,647	)
Repurchase of Class A common stock		(5,258	)		-			(7,660	)		-
Payment of contingent consideration		(2,015	)		-			(2,015	)		-
Net cash used in financing activities		(12,371	)		(3,548	)		(22,268	)		(6,996	)
Effect of exchange rates on cash, cash equivalents and restricted cash		(4	)		(18	)		(10	)		(18	)
Net increase (decrease) in cash, cash equivalents and restricted cash		19,668			(8,345	)		(152,193	)		(883	)
Cash, cash equivalents and restricted cash:
Beginning		89,993			68,982			261,854			61,520
Ending	$	109,661		$	60,637		$	109,661		$	60,637

Reconciliation of Consolidated Adjusted EBITDA to Cash Flows From Operating Activities

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						Six-Month Period
	Ended June 30,						Ended June 30,
		2018			2017			2018			2017

Consolidated adjusted EBITDA (1)	$	14,866		$	14,924		$	21,803		$	27,494

Interest expense		(4,001	)		(3,683	)		(7,399	)		(7,328	)
Interest income		1,039			110			1,952			219
Dividend income		417			-			545			-
Income tax benefit (expense)		(2,652	)		(2,119	)		(1,721	)		(4,018	)
Equity in net loss of nonconsolidated affiliates		(36	)		(68	)		(98	)		(68	)
Amortization of syndication contracts		(176	)		(109	)		(352	)		(218	)
Payments on syndication contracts		174			102			360			215
Non-cash stock-based compensation included in direct operating expenses		(76	)		(307	)		(292	)		(530	)
Non-cash stock-based compensation included in corporate expenses		(1,100	)		(778	)		(2,133	)		(1,530	)
Depreciation and amortization		(4,019	)		(4,577	)		(7,958	)		(8,123	)
Change in fair value of contingent consideration		913			-			(1,187	)		-
Non-recurring cash severance charge		(782	)		-			(782	)		-
Other income (loss)		273			-			295			-
Net income (loss)		4,840			3,495			3,033			6,113


Depreciation and amortization		4,019			4,577			7,958			8,123
Deferred income taxes		2,043			1,955			1,029			3,428
Non-cash interest expense		414			186			538			369
Amortization of syndication contracts		176			109			352			218
Payments on syndication contracts		(174	)		(102	)		(360	)		(215	)
Equity in net (income) loss of nonconsolidated affiliate		36			68			98			68
Non-cash stock-based compensation		1,176			1,085			2,425			2,060
Changes in assets and liabilities:
(Increase) decrease in accounts receivable		(1,873	)		2,602			9,170			13,581
(Increase) decrease in prepaid expenses and other assets		(2,566	)		(556	)		(6,547	)		(1,447	)
Increase (decrease) in accounts payable, accrued expenses and other liabilities		5,197			(3,029	)		(780	)		(8,992	)
Cash flows from operating activities		13,288			10,390			16,916			23,306

	Three-Month Period						Six-Month Period
	Ended June 30,						Ended June 30,
		2018			2017			2018			2017
Consolidated adjusted EBITDA (1)	$	14,866		$	14,924		$	21,803		$	27,494
Net interest expense (1)		(2,549	)		(3,387	)		(4,909	)		(6,740	)
Dividend income		417			-			545			-
Cash paid for income taxes		(608	)		(164	)		(692	)		(590	)
Capital expenditures (2)		(2,680	)		(5,730	)		(5,710	)		(7,296	)
Non-recurring cash severance charge		(782	)		-			(782	)		-
Free cash flow (1)		8,664			5,643			10,255			12,868

Capital expenditures (2)		2,680			5,730			5,710			7,296
Other income (loss)		273			-			295			-
Change in fair value of contingent consideration		913			-			(1,187	)		-
Changes in assets and liabilities:
(Increase) decrease in accounts receivable		(1,873	)		2,602			9,170			13,581
(Increase) decrease in prepaid expenses and other assets		(2,566	)		(556	)		(6,547	)		(1,447	)
Increase (decrease) in accounts payable, accrued expenses and other liabilities		5,197			(3,029	)		(780	)		(8,992	)
Cash Flows From Operating Activities	$	13,288		$	10,390		$	16,916		$	23,306

Christopher T. Young		Mike Smargiassi/Brad Edwards
Chief Financial Officer		The Plunkett Group
Entravision Communications Corporation		212-739-6724
310-447-3870