evc-ex991

SANTA MONICA, CALIFORNIA, May 7, 2020 – Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three-month period ended March 31, 2020.

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
	Ended March 31,
	2020			2019		% Change
Net revenue	$	64,249		$	64,680		(1	)%
Cost of revenue - digital media (1)		7,347			7,642		(4	)%
Operating expenses (2)		40,270			42,744		(6	)%
Corporate expenses (3)		6,840			6,894		(1	)%
Foreign currency (gain) loss		1,508			132		1042	%

Consolidated adjusted EBITDA (4)		9,679			8,057		20	%

Free cash flow (5)	$	5,229		$	1,293		304	%

Net income (loss)	$	(35,592	)	$	1,424	*

Net income per share, basic and diluted	$	(0.42	)	$	0.02	*

Weighted average common shares outstanding, basic		84,317,767			86,101,741
Weighted average common shares outstanding, diluted		84,317,767			87,152,987

Commenting on the Company’s earnings results, Walter F. Ulloa, Chairman and Chief Executive Officer, said, “Our first quarter results were affected by the COVID-19 pandemic and the resulting economic crisis late in the period, which resulted in declines in our radio and digital segments compared to the prior year. However, we did achieve growth in our television segment compared to the first quarter of 2019. We expect a significantly greater adverse impact in future periods, depending upon the extent and duration of the economic downturn. We continue to maintain a solid balance sheet and are undertaking an extensive review of our business in order 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, as we execute our multiplatform strategy to the benefit of our shareholders.”

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 June 30, 2020 to shareholders of record as of the close of business on June 15, 2020, and the common stock will trade ex-dividend on June 12, 2020. 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.

Due to the current economic crisis resulting from the COVID-19 pandemic, we experienced a decline in performance across all our reporting units beginning late in the first quarter of 2020. Additionally, the digital reporting unit was already facing declining results prior to the onset of the pandemic, caused by continuing competitive pressures and rapid changes in the digital advertising industry, which then further accelerated late in the quarter as a result of the economic crisis resulting from the pandemic. The results of our television and radio reporting units prior to the onset of the pandemic were exceeding internal budgets, driven in large part by political advertising revenue, but declined sharply in the last few weeks of the quarter because of the pandemic and the resulting economic crisis. As a result, we updated our internal forecasts of future performance and determined that triggering events had occurred during the first quarter of 2020 that required interim impairment assessments related to goodwill, indefinite lived intangible assets and long-lived assets. As a result of these assessments, we recognized impairment charges totaling $39.8 million in the three-month period ended March 31, 2020.

	Three-Month Period
	Ended March 31,
	2020			2019			% Change
Net revenue	$	64,249		$	64,680			(1	)%
Cost of revenue - digital media (1)		7,347			7,642			(4	)%
Operating expenses (1)		40,270			42,744			(6	)%
Corporate expenses (1)		6,840			6,894			(1	)%
Depreciation and amortization		4,512			3,916			15	%
Change in fair value contingent consideration		-			359			(100	)%
Impairment charge		39,835			-		*
Foreign currency (gain) loss		1,508			132			1042	%
Other operating (gain) loss		(836	)		(1,996	)		(58	)%

Operating income (loss)		(35,227	)		4,989		*
Interest expense, net		(2,056	)		(2,571	)		(20	)%
Dividend income		23			255			(91	)%

Income (loss) before income taxes		(37,260	)		2,673		*

Income tax benefit (expense)		1,668			(1,093	)	*
Net income (loss) before equity in net income (loss) of nonconsolidated affiliates		(35,592	)		1,580		*
Equity in net income (loss) of nonconsolidated affiliates, net of tax		-			(156	)		(100	)%
Net income (loss)	$	(35,592	)	$	1,424		*

Net revenue decreased to $64.2 million for the three-month period ended March 31, 2020 from $64.7 million for the three-month period ended March 31, 2019, a decrease of $0.5 million. Of the overall decrease, approximately $1.2 million was attributable to our digital segment and was primarily due to declines in international revenue. This decline in digital revenue is being driven by a trend whereby revenue is shifting more to programmatic revenue. In addition, approximately $0.3 million of the overall decrease was attributable to our radio segment and was primarily due to decreases in local and national advertising revenue, as a result primarily of ratings declines, competitive factors with other Spanish-language broadcasters and changing demographic preferences of audiences. Additionally, as we have previously noted, there is a trend for advertising to move increasingly from traditional media, such as radio, to new media, such as digital media, and we expect this trend to continue. The overall decrease was partially offset by an increase of approximately $0.9 million in our television segment due to increases in political advertising revenue and retransmission consent revenue, partially offset by decreases in revenue from spectrum usage rights and local and national advertising revenue, as a result primarily of ratings declines, competitive factors with other Spanish-language broadcasters and changing demographic preferences of audiences. Notwithstanding the increase in our television segment, as we have previously noted, there is a trend for advertising to move increasingly from traditional media, such as television, to new media, such as digital media, and we expect this trend to continue.

Cost of revenue in our digital segment decreased to $7.3 million for the three-month period ended March 31, 2020 from $7.6 million for the three-month period ended March 31, 2019, a decrease of $0.3 million, primarily due to a decrease in expenses associated with the decrease in revenue in our digital segment.

Operating expenses decreased to $40.3 million for the three-month period ended March 31, 2020 from $42.7 million for the three-month period ended March 31, 2019, a decrease of $2.4 million. The decrease was primarily due to a decrease in expenses associated with the decrease in revenue.

Corporate expenses decreased to $6.8 million for the three-month period ended March 31, 2020 from $6.9 million for the three-month period ended March 31, 2019, a decrease of $0.1 million.

Impairment charge related to certain FCC licenses in our television and radio reporting units was $23.5 and $8.8 million, respectively, for the three-month period ended March 31, 2020. Impairment charge related to goodwill in our digital reporting unit was $0.8 million for the three-month period ended March 31, 2020. Impairment charges related to intangibles subject to amortization and property and equipment in our digital reporting unit was $5.3 million and $1.5 million, respectively, for the three-month period ended March 31, 2020.

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 United States, primarily those operations related to our Headway business. As a result, we have operating expense, attributable to foreign currency, that is primarily related to the operations related to our Headway business. We had a foreign currency loss of $1.5 million for the three-month period ended March 31, 2020 compared to a foreign currency loss of $0.1 million for the three-month period ended March 31, 2019. Foreign currency loss was primarily due to currency fluctuations that affected our digital segment operations located outside the U.S., primarily those related to the Headway business.

	Three-Month Period
	Ended March 31,
		2020		2019	% Change
Net Revenue
Television	$	39,199	$	38,253		2	%
Radio		11,719		11,955		(2	)%
Digital		13,331		14,472		(8	)%
Total	$	64,249	$	64,680		(1	)%

Cost of Revenue - digital media (1)
Digital	$	7,347	$	7,642		(4	)%

Operating Expenses (1)
Television		21,757		20,741		5	%
Radio		11,649		14,283		(18	)%
Digital		6,864		7,720		(11	)%
Total	$	40,270	$	42,744		(6	)%

Corporate Expenses (1)	$	6,840	$	6,894		(1	)%

Consolidated adjusted EBITDA (1)	$	9,679	$	8,057		20	%

Entravision Communications Corporation will hold a conference call to discuss its 2020 first quarter results on May 7, 2020 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 is a diversified global media, marketing and technology company that reaches and engages Latino consumers in the United States and other markets primarily including Mexico, Latin America and Spain. Entravision’s portfolio includes digital media properties and advertising technology platforms that deliver performance-based solutions and data insights, along with 55 television stations and 49 radio stations. Entravision’s digital and technology businesses include Smadex, a leading technology platform providing mobile, programmatic, data and performance digital marketing solutions. Entravision is the largest affiliate group of both the Univision and UniMás television networks, and its Spanish-language radio stations feature its nationally recognized talent. Entravision shares of Class A Common Stock are traded on The New York Stock Exchange under the symbol: EVC. Learn more at: www.entravision.com.

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.

	March 31,			December 31,
	2020			2019
ASSETS
Current assets
Cash and cash equivalents	$	53,512		$	33,123
Marketable securities		74,684			91,662
Restricted cash		734			734
Trade receivables, net of allowance for doubtful accounts		63,879			71,406
Assets held for sale		6,878			950
Prepaid expenses and other current assets		15,108			11,557
Total current assets		214,795			209,432
Property and equipment, net		76,315			79,642
Intangible assets subject to amortization, net		10,192			16,772
Intangible assets not subject to amortization		216,853			252,544
Goodwill		45,711			46,511
Operating leases right of use asset		41,759			43,837
Other assets		7,506			7,462
Total assets	$	613,131		$	656,200


LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt	$	3,000		$	3,000
Accounts payable and accrued expenses		55,557			53,931
Operating lease liabilities		8,802			9,056
Total current liabilities		67,359			65,987
Long-term debt, less current maturities, net of unamortized debt issuance costs		212,380			213,024
Long-term operating lease liabilities		39,476			41,387
Other long-term liabilities		3,611			3,371
Deferred income taxes		42,068			44,259
Total liabilities		364,894			368,028

Stockholders' equity
Class A common stock		6			6
Class B common stock		2			2
Class U common stock		1			1
Additional paid-in capital		832,216			836,170
Accumulated deficit		(583,468	)		(547,876	)
Accumulated other comprehensive income (loss)		(520	)		(131	)
Total stockholders' equity		248,237			288,172
Total liabilities and stockholders' equity	$	613,131		$	656,200

	Three-Month Period
	Ended March 31,
	2020			2019

Net revenue	$	64,249		$	64,680

Expenses:
Cost of revenue - digital media		7,347			7,642
Direct operating expenses		26,679			28,930
Selling, general and administrative expenses		13,591			13,814
Corporate expenses		6,840			6,894
Depreciation and amortization		4,512			3,916
Change in fair value contingent consideration		-			359
Impairment charge		39,835			-
Foreign currency (gain) loss		1,508			132
Other operating (gain) loss		(836	)		(1,996	)
		99,476			59,691
Operating income (loss)		(35,227	)		4,989
Interest expense		(2,680	)		(3,490	)
Interest income		624			919
Dividend income		23			255
Income (loss) before income taxes		(37,260	)		2,673
Income tax benefit (expense)		1,668			(1,093	)

Income (loss) before equity in net income (loss) of nonconsolidated affiliate		(35,592	)		1,580
Equity in net income (loss) of nonconsolidated affiliate, net of tax		-			(156	)
Net income (loss)	$	(35,592	)	$	1,424

Basic and diluted earnings per share:
Net income (loss) per share, basic and diluted	$	(0.42	)	$	0.02

Cash dividends declared per common share	$	0.05		$	0.05

Weighted average common shares outstanding, basic		84,317,767			86,101,741
Weighted average common shares outstanding, diluted		84,317,767			87,152,987

	Three-Month Period
	Ended March 31,
	2020			2019
Cash flows from operating activities:
Net income (loss)	$	(35,592	)	$	1,424
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		4,512			3,916
Impairment charge		39,835			—
Deferred income taxes		(1,813	)		470
Non-cash interest		169			251
Amortization of syndication contracts		130			124
Payments on syndication contracts		(130	)		(135	)
Equity in net (income) loss of nonconsolidated affiliate		—			156
Non-cash stock-based compensation		789			800
(Gain) loss on disposal of property and equipment		—			86
Changes in assets and liabilities:
(Increase) decrease in accounts receivable		7,482			13,657
(Increase) decrease in prepaid expenses and other assets		1,026			869
Increase (decrease) in accounts payable, accrued expenses and other liabilities		(4,394	)		(7,311	)
Net cash provided by operating activities		12,014			14,307
Cash flows from investing activities:
Purchases of property and equipment		(2,671	)		(6,072	)
Purchases of intangible assets		(155	)		—
Proceeds from marketable securities		16,617			10,721
Purchases of investments		—			(200	)
Net cash provided by (used in) investing activities		13,791			4,449
Cash flows from financing activities:
Tax payments related to shares withheld for share-based compensation plans		—			(751	)
Payments on long-term debt		(750	)		(750	)
Dividends paid		(4,218	)		(4,271	)
Repurchase of Class A common stock		(525	)		(7,706	)
Net cash used in financing activities		(5,493	)		(13,478	)
Effect of exchange rates on cash, cash equivalents and restricted cash		77			(8	)
Net increase (decrease) in cash, cash equivalents and restricted cash		20,389			5,270
Cash, cash equivalents and restricted cash:
Beginning		33,857			47,465
Ending	$	54,246		$	52,735

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
	Ended March 31,
		2020			2019

Consolidated adjusted EBITDA (1)	$	9,679		$	8,057

Interest expense		(2,680	)		(3,490	)
Interest income		624			919
Dividend income		23			255
Income tax expense		1,668			(1,093	)
Equity in net loss of nonconsolidated affiliates		-			(156	)
Amortization of syndication contracts		(130	)		(124	)
Payments on syndication contracts		130			135
Non-cash stock-based compensation included in direct operating expenses		(131	)		(134	)
Non-cash stock-based compensation included in corporate expenses		(658	)		(666	)
Depreciation and amortization		(4,512	)		(3,916	)
Change in fair value contingent consideration		-			(359	)
Impairment charge		(39,835	)		-
Non-recurring cash severance charge		(606	)		-
Other operating gain (loss)		836			1,996
Net income (loss)		(35,592	)		1,424

Depreciation and amortization		4,512			3,916
Impairment charge		39,835			-
Deferred income taxes		(1,813	)		470
Non-cash interest		169			251
Amortization of syndication contracts		130			124
Payments on syndication contracts		(130	)		(135	)
Equity in net (income) loss of nonconsolidated affiliate		-			156
Non-cash stock-based compensation		789			800
(Gain) loss on disposal of property and equipment		-			86
Changes in assets and liabilities:
(Increase) decrease in accounts receivable		7,482			13,657
(Increase) decrease in prepaid expenses and other assets		1,026			869
Increase (decrease) in accounts payable, accrued expenses and other liabilities		(4,394	)		(7,311	)
Cash flows from operating activities		12,014			14,307

	Three-Month Period
	Ended March 31,
		2020			2019
Consolidated adjusted EBITDA (1)	$	9,679		$	8,057
Net interest expense (1)		(1,887	)		(2,320	)
Dividend income		23			255
Cash paid for income taxes		(145	)		(623	)
Capital expenditures (2)		(2,671	)		(6,072	)
Non-recurring cash severance charge		(606	)		-
FCC Reimbursement		836			1,996
Free cash flow (1)		5,229			1,293

Capital expenditures (2)		2,671			6,072
Change in fair value of contingent consideration		-			(359	)
(Gain) loss on disposal of property and equipment		-			86
Changes in assets and liabilities:
(Increase) decrease in accounts receivable		7,482			13,657
(Increase) decrease in prepaid expenses and other assets		1,026			869
Increase (decrease) in accounts payable, accrued expenses and other liabilities		(4,394	)		(7,311	)
Cash Flows From Operating Activities	$	12,014		$	14,307

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