Entravision Communications Corporation Reports Third Quarter 2018 Results

- Announces Quarterly Cash Dividend of $0.05 Per Share -

News provided by

Entravision Communications Corporation

Nov 07, 2018, 16:16 ET

SANTA MONICA, Calif., Nov. 7, 2018 /PRNewswire/ -- Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three- and nine-month periods ended September 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, are included beginning on page 11. Unaudited financial highlights are as follows:


Three-Month Period


Nine-Month Period


Ended September 30,


Ended September 30,


2018

2017

% Change



2018

2017

% Change


Net revenue:
















Revenue from advertising and retransmission consent

$

73,397

$

70,612


4

%


$

213,933

$

198,631


8

%

Revenue from spectrum usage rights


1,178


263,943


(100)

%



1,809


263,943


(99)

%

Total net revenue


74,575


334,555


(78)

%



215,742


462,574


(53)

%

















Cost of revenue - television (spectrum usage rights) (1)


-


12,131


(100)

%



-


12,131


(100)

%

Cost of revenue - digital media (1)


13,240


9,910


34

%



35,249


20,424


73

%

Operating expenses (2)


44,092


43,044


2

%



132,209


123,281


7

%

Corporate expenses (3)


6,913


8,209


(16)

%



19,154


19,695


(3)

%

















Consolidated adjusted EBITDA (4)


11,299


12,707


(11)

%



33,102


40,201


(18)

%

















Free cash flow (5)

$

1,887

$

268,849


(99)

%


$

12,142

$

281,717


(96)

%

















Net income (loss)

$

2,215

$

157,208


(99)

%


$

5,248

$

163,321


(97)

%

















Net income (loss) per share, basic

$

0.02

$

1.74


(99)

%


$

0.06

$

1.81


(97)

%

Net income (loss) per share, diluted

$

0.02

$

1.71


(99)

%


$

0.06

$

1.78


(97)

%

















Weighted average common shares outstanding, basic


88,852,342


90,517,492






89,371,750


90,370,679




Weighted average common shares outstanding, diluted


90,122,425


92,161,108






90,574,663


91,985,946






(1)

Cost of revenue – digital media 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. Cost of revenue – television (spectrum usage rights) consists primarily of the carrying value of spectrum usage rights surrendered in the

FCC auction for broadcast spectrum.

(2)

Operating expenses include direct operating and selling, general and administrative expenses. Included in operating expenses are $0.2 million and $0.3 million of non-cash stock-based compensation for the three-month periods ended September 30, 2018 and 2017, respectively, and $0.4 million and $0.8 million of non-cash stock-based compensation for the nine-month periods ended September 30, 2018 and 2017, respectively. Operating expenses do not include corporate expenses, foreign currency (gain) loss, depreciation and amortization, impairment charge, gain (loss) on sale of assets, gain (loss) on debt extinguishment, other income (loss) and change in fair value of contingent consideration. 

(3)

Corporate expenses include $1.1 million and $0.8 million of non-cash stock-based compensation for the three-month periods ended September 30, 2018 and 2017, respectively, and $3.3 million and $2.3 million of non-cash stock-based compensation for the nine-month periods ended September 30, 2018 and 2017, 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 income (loss), non-recurring cash expenses, 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, 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), non-recurring cash expenses, 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, 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 revenue from FCC spectrum incentive auction less related cash expenses. Net interest expense is defined as interest expense, less non-cash interest expense relating to amortization of debt finance costs, and less interest income.

Commenting on the Company's earnings results, Walter F. Ulloa, Chairman and Chief Executive Officer, said, "During the third quarter, we achieved growth in advertising revenue, driven by increases in our digital media segment. This growth in our digital media segment offset decreases in our television and radio segments. Additionally, we had a decrease in spectrum usage rights revenue compared to last year's third quarter, when we recorded our FCC auction results. We continue to maintain a solid balance sheet, and looking ahead, we remain well positioned to build on our success in further attracting Latino and other audiences worldwide, as we execute our multi-platform strategy to the benefit of our shareholders."

Quarterly Cash Dividend

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 December 31, 2018 to shareholders of record as of the close of business on December 14, 2018, and the common stock will trade ex-dividend on December 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.

Financial Results






Three-Month Period Ended September 30, 2018 Compared to Three-Month Period Ended September 30, 2017

(Unaudited)





Three-Month Period



Ended September 30,



2018



2017



% Change


Net revenue:












Revenue from advertising and retransmission consent

$

73,397



$

70,612




4

%

Revenue from spectrum usage rights


1,178




263,943




(100)

%

Total net revenue


74,575




334,555




(78)

%













Cost of revenue - television (spectrum usage rights) (1)


-




12,131




(100)

%

Cost of revenue - digital media (1)


13,240




9,910




34

%

Operating expenses (1)


44,092




43,044




2

%

Corporate expenses (1)


6,913




8,209




(16)

%

Depreciation and amortization


4,094




4,337




(6)

%

Change in fair value of contingent consideration


(114)




-



*


Foreign currency (gain) loss


335




(58)



*














Operating income (loss)


6,015




256,982




(98)

%

Interest expense, net


(3,062)




(3,500)




(13)

%

Dividend income


457




-



*


Other income (loss)


327




-



*














Income (loss) before income taxes


3,737




253,482




(99)

%













Income tax benefit (expense)


(1,443)




(96,167)




(98)

%

Net income (loss) before equity in net income (loss) of nonconsolidated affiliates


2,294




157,315




(99)

%













Equity in net income (loss) of nonconsolidated affiliates, net of tax


(79)




(107)




(26)

%













Net income (loss)

$

2,215



$

157,208




(99)

%


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

Net revenue from advertising and retransmission consent increased to $73.4 million for the three-month period ended September 30, 2018 from $70.6 million for the three-month period ended September 30, 2017, an increase of $2.8 million. Of the overall increase, approximately $5.3 million was attributable to our digital segment and was primarily due to the growth in the Headway business, which we acquired in the second quarter of 2017. This overall increase was offset by a decrease of approximately $1.3 million that was attributable to our television segment and was primarily due to decreases in national and local advertising revenue, partially offset by an increase in political advertising revenue, which was not material in 2017. In addition, the overall increase was offset by a decrease of approximately $1.1 million that was attributable to our radio segment and was primarily due to decreases in local and national advertising revenue, partially offset by an increase in revenue from the 2018 FIFA World Cup, and an increase in political advertising revenue, which was not material in 2017.

Net revenue from spectrum usage rights decreased to $1.2 million for the three-month period ended September 30, 2018 from $263.9 million for the three-month period ended September 30, 2017, a decrease of $262.7 million. The decrease was primarily due to revenue earned in 2017 in connection with our participation in the FCC auction for broadcast spectrum, which revenue did not recur in the current year.

We did not incur cost of revenue related to revenue from spectrum usage rights for the three- month period ended September 30, 2018. Cost of revenue related to revenue from spectrum usage rights was $12.1 million for the three-month period ended September 30, 2017, related to the FCC auction for broadcast spectrum.

Cost of revenue in our digital media segment increased to $13.2 million for the three-month period ended September 30, 2018 from $9.9 million for the three-month period ended September 30, 2017, an increase of $3.3 million, primarily due to the increased revenue in our digital segment.

Operating expenses increased to $44.1 million for the three-month period ended September 30, 2018 from $43.0 million for the three-month period ended September 30, 2017, an increase of $1.1 million. This overall increase was primarily attributable to our digital segment and was primarily due to the increase in revenue and an increase in salary expense. Additionally, the overall increase was attributable to our television segment and was 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. The overall increase was partially offset by a decrease in expenses associated with the decrease in advertising revenue and a decrease in salary expenses in our television and radio segments.

Corporate expenses decreased to $6.9 million for the three-month period September 30, 2018 from $8.2 million for the three-month period ended September 30, 2017, a decrease of $1.3 million. The decrease was primarily due to expenses associated with the FCC auction for broadcast spectrum recorded in the three-month period ended September 30, 2017, which expenses did not recur in 2018, partially offset by increases in salary expense and non-cash stock-based compensation expense.

Nine-Month Period Ended September 30, 2018 Compared to Nine-Month Period Ended September 30, 2017

(Unaudited)



Nine-Month Period



Ended September 30,



2018



2017



% Change


Net revenue:












Revenue from advertising and retransmission consent

$

213,933



$

198,631




8

%

Revenue from spectrum usage rights


1,809




263,943




(99)

%

Total net revenue


215,742




462,574




(53)

%













Cost of revenue - television (spectrum usage rights) (1)


-




12,131




(100)

%

Cost of revenue - digital media (1)


35,249




20,424




73

%

Operating expenses (1)


132,209




123,281




7

%

Corporate expenses (1)


19,154




19,695




(3)

%

Depreciation and amortization


12,052




12,460




(3)

%

Change in fair value of contingent consideration


1,073




-



*


Foreign currency (gain) loss


531




293




81

%













Operating income (loss)


15,474




274,290




(94)

%

Interest expense, net


(8,509)




(10,609)




(20)

%

Dividend income


1,002




-



*


Other income (loss)


622




-



*














Income (loss) before income taxes


8,589




263,681




(97)

%













Income tax benefit (expense)


(3,164)




(100,185)




(97)

%

Net income (loss) before equity in net income (loss) of nonconsolidated affiliates


5,425




163,496




(97)

%













Equity in net income (loss) of nonconsolidated affiliates, net of tax


(177)




(175)




1

%













Net income (loss)

$

5,248



$

163,321




(97)

%


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

Net revenue from advertising and retransmission consent increased to $213.9 million for the nine-month period ended September 30, 2018 from $198.6 million for the nine-month period ended September 30, 2017, an increase of $15.3 million. Of the overall increase, approximately $24.4 million was attributable to our digital segment and was primarily due to the growth in the Headway business, which we acquired in the second quarter of 2017, and which did not contribute to our results of operations for the full nine-month period in 2017. This overall increase was offset by a decrease of approximately $6.4 million that was attributable to our television segment and was primarily due to decreases in national and local advertising revenue, partially offset by increases in retransmission consent revenue and political advertising revenue, the latter of which was not material in 2017. In addition, the overall increase was offset by a decrease of approximately $2.7 million that was attributable to our radio segment and was primarily due to decreases in local and national advertising revenue, partially offset by an increase in revenue from the 2018 FIFA World Cup, and an increase in political advertising revenue, which was not material in 2017.

Net revenue from spectrum usage rights decreased to $1.8 million for the nine-month period ended September 30, 2018 from $263.9 million for the nine-month period ended September 30, 2017, a decrease of $262.1 million. The decrease was primarily due to revenue earned in 2017 in connection with our participation in the FCC auction for broadcast spectrum, which revenue did not recur in the current year.

We did not incur cost of revenue related to revenue from spectrum usage rights for the nine- month period ended September 30, 2018. Cost of revenue related to revenue from spectrum usage rights was $12.1 million for the nine-month periods ended September 30, 2017, related to the FCC auction for broadcast spectrum.

Cost of revenue in our digital media segment increased to $35.2 million for the nine-month period ended September 30, 2018 from $20.4 million for the nine-month period ended September 30, 2017, an increase of $14.8 million, primarily due to the growth in the Headway business, which we acquired in the second quarter of 2017, and which did not contribute to our results of operations for the full nine-month period in 2017.

Operating expenses increased to $132.2 million for the nine-month period ended September 30, 2018 from $123.3 million for the nine-month period ended September 30, 2017, an increase of $8.9 million. This overall increase was primarily 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 operating expenses for the full nine-month period in 2017. Additionally, the overall increase was attributable to our television segment and was 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. The overall increase was partially offset by a decrease in expenses associated with the decrease in advertising revenue and a decrease in salary expenses in our television and radio segments.

Corporate expenses decreased to $19.2 million for the nine-month period ended September 30, 2018 from $19.7 million for the nine-month period ended September 30, 2017, a decrease of $0.5 million. The decrease was primarily due to expenses associated with the FCC auction for broadcast spectrum recorded in the nine-month period ended September 30, 2017, which expenses did not recur in 2018, and due to due diligence costs related to the Headway acquisition during the second quarter of 2017, partially offset by increases in salary expense, non-cash stock-based compensation expense, and due diligence costs related to the acquisition of Smadex, S.I. in the second quarter of 2018.  

Segment Results


The following represents selected unaudited segment information:



Three-Month Period



Nine-Month Period



Ended September 30,



Ended September 30,




2018




2017



% Change




2018




2017



% Change


Net Revenue
























Revenue from advertising and retransmission consent
























Television

$

35,183



$

36,547




(4)

%


$

105,574



$

112,021




(6)

%

Radio


15,783




16,934




(7)

%



47,126




49,816




(5)

%

Digital


22,431




17,131




31

%



61,233




36,794




66

%

Total


73,397




70,612




4

%



213,933




198,631




8

%

























Revenue from spectrum usage rights


1,178




263,943




(100)

%



1,809




263,943




(99)

%

Total net revenue


74,575




334,555




(78)

%



215,742




462,574




(53)

%

























Cost of Revenue (1)
























Television

$

-



$

12,131




(100)

%


$

-



$

12,131




(100)

%

Digital


13,240




9,910




34

%



35,249




20,424




73

%

Total

$

13,240



$

22,041




(40)

%


$

35,249



$

32,555




8

%

























Operating Expenses (1)
























Television


20,462




20,161




1

%



62,573




60,516




3

%

Radio


14,676




15,953




(8)

%



45,393




47,294




(4)

%

Digital


8,954




6,930




29

%



24,243




15,471




57

%

Total

$

44,092



$

43,044




2

%


$

132,209



$

123,281




7

%

























Corporate Expenses (1)

$

6,913



$

8,209




(16)

%


$

19,154



$

19,695




(3)

%

























Consolidated adjusted EBITDA (1)

$

11,299



$

12,707




(11)

%


$

33,102



$

40,201




(18)

%


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

Entravision Communications Corporation will hold a conference call to discuss its 2018 third quarter results on November 7, 2018 at 5:00 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.

(Financial Table Follows)

Entravision Communications Corporation

Consolidated Balance Sheets

(In thousands; unaudited)



September 30,



December 31,



2018



2017


















ASSETS








Current assets








Cash and cash equivalents

$

101,789



$

39,560


Marketable securities


132,410




-


Restricted cash


769




222,294


Trade receivables, net of allowance for doubtful accounts


78,092




84,348


Assets held for sale


1,179




-


Prepaid expenses and other current assets


13,217




6,260


Total current assets


327,456




352,462


Property and equipment, net


63,204




60,337


Intangible assets subject to amortization, net


24,196




26,758


Intangible assets not subject to amortization


254,506




251,163


Goodwill


74,149




70,557


Other assets


5,087




4,690


Total assets

$

748,598



$

765,967


















LIABILITIES AND STOCKHOLDERS' EQUITY








Current liabilities








Current maturities of long-term debt

$

3,000



$

3,000


Accounts payable and accrued expenses


52,795




57,563


Deferred revenue


4,351




1,959


Total current liabilities


60,146




62,522


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


290,614




292,489


Other long-term liabilities


19,237




21,447


Deferred income taxes


43,172




40,639


Total liabilities


413,169




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


871,321




888,650


Accumulated deficit


(534,482)




(539,730)


Accumulated other comprehensive income (loss)


(1,419)




(60)


Total stockholders' equity


335,429




348,870


Total liabilities and stockholders' equity

$

748,598



$

765,967


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,



2018



2017



2018



2017


Net revenue:
















Revenue from advertising and retransmission consent

$

73,397



$

70,612



$

213,933



$

198,631


Revenue from spectrum usage rights


1,178




263,943




1,809




263,943


Total net revenue


74,575




334,555




215,742




462,574


















Expenses:
















Cost of revenue - television (spectrum usage rights)


-




12,131




-




12,131


Cost of revenue - digital


13,240




9,910




35,249




20,424


Direct operating expenses


31,694




30,231




93,844




87,238


Selling, general and administrative expenses


12,398




12,813




38,365




36,043


Corporate expenses


6,913




8,209




19,154




19,695


Depreciation and amortization


4,094




4,337




12,052




12,460


Change in fair value of contingent consideration


(114)




-




1,073




-


Foreign currency (gain) loss


335




(58)




531




293




68,560




77,573




200,268




188,284


Operating income (loss)


6,015




256,982




15,474




274,290


Interest expense


(3,995)




(3,756)




(11,394)




(11,084)


Interest income


933




256




2,885




475


Dividend income


457




-




1,002




-


Other income (loss)


327




-




622




-


Income (loss) before income taxes


3,737




253,482




8,589




263,681


Income tax benefit (expense)


(1,443)




(96,167)




(3,164)




(100,185)


Income (loss) before equity in net income (loss) of nonconsolidated affiliate


2,294




157,315




5,425




163,496


Equity in net income (loss) of nonconsolidated affiliate, net of tax


(79)




(107)




(177)




(175)


Net income (loss)

$

2,215



$

157,208



$

5,248



$

163,321


















Basic and diluted earnings per share:
















Net income per share, basic

$

0.02



$

1.74



$

0.06



$

1.81


Net income per share, diluted

$

0.02



$

1.71



$

0.06



$

1.78


















Cash dividends declared per common share

$

0.05



$

0.05



$

0.15



$

0.11


















Weighted average common shares outstanding, basic


88,852,342




90,517,492




89,371,750




90,370,679


Weighted average common shares outstanding, diluted


90,122,425




92,161,108




90,574,663




91,985,946


Entravision Communications Corporation

Consolidated Statements of Cash Flows

(In thousands; unaudited)



Three-Month Period



Nine-Month Period



Ended September 30,



Ended September 30,



2018



2017



2018



2017


Cash flows from operating activities:
















Net income (loss)

$

2,215



$

157,208



$

5,248



$

163,321


Adjustments to reconcile net income (loss) to net cash provided by
   operating activities:
















Depreciation and amortization


4,094




4,337




12,052




12,460


Cost of revenue - television (spectrum usage rights)


-




12,131




-




12,131


Deferred income taxes


913




96,086




1,942




99,514


Non-cash interest expense


290




226




828




595


Amortization of syndication contracts


174




93




526




311


Payments on syndication contracts


(156)




(85)




(516)




(300)


Equity in net (income) loss of nonconsolidated affiliate


79




107




177




175


Non-cash stock-based compensation


1,286




1,089




3,711




3,149


Changes in assets and liabilities:
















(Increase) decrease in accounts receivable


(592)




(791)




8,578




12,790


(Increase) decrease in prepaid expenses and other assets


(663)




(383)




(7,210)




(1,830)


Increase (decrease) in accounts payable, accrued expenses
   and other liabilities


(2,059)




130




(2,839)




(8,862)


Net cash provided by (used in) operating activities


5,581




270,148




22,497




293,454


Cash flows from investing activities:
















Proceeds from sale of property and equipment and intangible assets


-




-




33




-


Purchases of property and equipment


(6,567)




(2,343)




(12,277)




(9,639)


Purchases of intangible assets


-




(32,588)




(3,153)




(32,588)


Purchases of businesses, net of cash acquired


41




-




(3,522)




(7,489)


Purchases of marketable securities


-




-




(159,403)




-


Proceeds from marketable securities


-




-




25,000




-


Purchases of investments


(935)




-




(970)




(2,200)


Deposits on acquisitions


-




(1,050)




-




(1,240)


Net cash provided by (used in) investing activities


(7,461)




(35,981)




(154,292)




(53,156)


Cash flows from financing activities:
















Proceeds from stock option exercises


(29)




(515)




77




11


Tax payments related to shares withheld for share-based compensation plans


-




-




(2,239)




-


Payments on long-term debt


(750)




(938)




(2,250)




(2,813)


Dividends paid


(4,443)




(4,532)




(13,403)




(10,179)


Repurchase of Class A common stock


-




(1,778)




(7,660)




(1,778)


Payment of contingent consideration


-




-




(2,015)




-


Net cash provided by (used in) financing activities


(5,222)




(7,763)




(27,490)




(14,759)


Effect of exchange rates on cash, cash equivalents and restricted cash


(1)




35




(11)




17


Net increase (decrease) in cash, cash equivalents and restricted cash


(7,103)




226,439




(159,296)




225,556


Cash, cash equivalents and restricted cash:
















Beginning


109,661




60,637




261,854




61,520


Ending

$

102,558



$

287,076



$

102,558



$

287,076


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,




2018




2017




2018




2017


















Consolidated adjusted EBITDA (1)

$

11,299



$

12,707



$

33,102



$

40,201


















Net revenue - FCC spectrum incentive auction


-




263,943




-




263,943


Expenses - FCC spectrum incentive auction


-




(14,234)




-




(14,234)


Interest expense


(3,995)




(3,756)




(11,394)




(11,084)


Interest income


933




256




2,885




475


Dividend income


457




-




1,002




-


Income tax benefit (expense)


(1,443)




(96,167)




(3,164)




(100,185)


Equity in net loss of nonconsolidated affiliates


(79)




(107)




(177)




(175)


Amortization of syndication contracts


(174)




(93)




(526)




(311)


Payments on syndication contracts


156




85




516




300


Non-cash stock-based compensation included in direct operating expenses


(156)




(276)




(448)




(806)


Non-cash stock-based compensation included in corporate expenses


(1,130)




(813)




(3,263)




(2,343)


Depreciation and amortization


(4,094)




(4,337)




(12,052)




(12,460)


Change in fair value of contingent consideration


114




-




(1,073)




-


Non-recurring cash severance charge


-




-




(782)




-


Other income (loss)


327




-




622




-


Net income (loss)


2,215




157,208




5,248




163,321


































Depreciation and amortization


4,094




4,337




12,052




12,460


Cost of revenue - television (spectrum usage rights)


-




12,131




-




12,131


Deferred income taxes


913




96,086




1,942




99,514


Non-cash interest expense


290




226




828




595


Amortization of syndication contracts


174




93




526




311


Payments on syndication contracts


(156)




(85)




(516)




(300)


Equity in net (income) loss of nonconsolidated affiliate


79




107




177




175


Non-cash stock-based compensation


1,286




1,089




3,711




3,149


Changes in assets and liabilities:
















(Increase) decrease in accounts receivable


(592)




(791)




8,578




12,790


(Increase) decrease in prepaid expenses and other assets


(663)




(383)




(7,210)




(1,830)


Increase (decrease) in accounts payable, accrued expenses and other liabilities


(2,059)




130




(2,839)




(8,862)


Cash flows from operating activities


5,581




270,148




22,497




293,454



(1)      Consolidated adjusted EBITDA is defined on page 1.

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,




2018




2017




2018




2017


Consolidated adjusted EBITDA (1)

$

11,299



$

12,707



$

33,102



$

40,201


Net interest expense (1)


(2,772)




(3,273)




(7,681)




(10,014)


Dividend income


457




-




1,002




-


Cash paid for income taxes


(530)




(82)




(1,222)




(671)


Capital expenditures (2)


(6,567)




(2,343)




(12,277)




(9,639)


Non-recurring cash severance charge


-




-




(782)




-


Net revenue - FCC spectrum incentive auction


-




263,943




-




263,943


Expenses - FCC spectrum incentive auction


-




(2,103)




-




(2,103)


Free cash flow (1)


1,887




268,849




12,142




281,717


















Capital expenditures (2)


6,567




2,343




12,277




9,639


Other income (loss)


327




-




622




-


Change in fair value of contingent consideration


114




-




(1,073)




-


Changes in assets and liabilities:
















(Increase) decrease in accounts receivable


(592)




(791)




8,578




12,790


(Increase) decrease in prepaid expenses and other assets


(663)




(383)




(7,210)




(1,830)


Increase (decrease) in accounts payable, accrued expenses and other
liabilities


(2,059)




130




(2,839)




(8,862)


Cash Flows From Operating Activities

$

5,581



$

270,148



$

22,497



$

293,454



(1)     Consolidated adjusted EBITDA, net interest expense, and free cash flow are defined on page 1.

(2)     Capital expenditures are not part of the consolidated statement of operations.

SOURCE Entravision Communications Corporation