PR Newswire | Aug 4, 2020 04:11PM EDT

08/04 15:10 CDT

Entravision Communications Corporation Reports Second Quarter 2020 Results- Announces Quarterly Cash Dividend of $0.025 Per Share - SANTA MONICA, Calif., Aug. 4, 2020

SANTA MONICA, Calif., Aug. 4, 2020 /PRNewswire/ -- Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three- and six-month periods ended June 30, 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 12. Unaudited financial highlights are as follows:

Three-Month Period Six-Month Period

Ended June 30, Ended June 30,

2020 2019 % 2020 2019 % Change Change

Net revenue $ 45,116 $ 69,241 (35) % $ 109,365 $ 133,921 (18) %

Cost ofrevenue - 6,447 8,859 (27) % 13,794 16,501 (16) %digitalmedia (1)

Operating 33,037 43,200 (24) % 73,307 85,944 (15) %expenses (2)

Corporate 5,384 6,501 (17) % 12,224 13,395 (9) %expenses (3)

Foreigncurrency (155) (82) 89 % 1,353 50 *(gain) loss

Consolidatedadjusted 1,724 12,579 (86) % 11,402 20,636 (45) %EBITDA (4)

Free cash $ (1,408) $ 1,860 * $ 3,821 $ 3,153 21 %flow (5)

Net income $ 2,338 $ (16,279) * $ (33,254) $ (14,855) 124 %(loss)

Net incomeper share, $ 0.03 $ (0.19) * $ (0.39) $ (0.17) 129 %basic anddiluted

Weightedaveragecommon 84,123,530 85,359,998 84,220,649 85,728,820sharesoutstanding,basic

Weightedaveragecommon 84,669,250 85,359,998 84,220,649 85,728,820sharesoutstanding,diluted



Cost of revenue - digital media consists primarily of the costs of online(1)media acquired from third-party publishers. Media cost is classified as cost of revenue in the period in which the corresponding revenue is recognized.

For purposes of presentation in this table, the operating expenses line item includes direct operating and selling, general and administrative expenses. Included in operating expenses are $0.1 million of non-cash stock-based compensation for each of the three-month periods ended June 30, 2020 and 2019, and $0.2 million of non-cash stock-based compensation (2)for each of the six-month periods ended June 30, 2020 and 2019. Also for purposes of presentation in this table, the operating expenses line item does 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.

Corporate expenses include $0.7 million of non-cash stock-based (3)compensation for each of the three-month periods ended June 30, 2020 and 2019, and $1.4 million of non-cash stock-based compensation for each of the six-month periods ended June 30, 2020 and 2019.

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 operating gain (loss), gain (loss) on debt extinguishment, income tax (expense) benefit, equity in net income (loss) of nonconsolidated affiliate, non-cash losses, syndication programming amortization less syndication programming payments, revenue from the Federal Communications Commission, or FCC, spectrum incentive auction less related expenses, expenses associated with investments, acquisitions and dispositions and certain pro-forma (4)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), 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.

Free cash flow is defined as consolidated adjusted EBITDA less cash paid for income taxes, net interest expense, capital expenditures and (5)non-recurring cash expenses plus dividend income, and other operating gain (loss). Net interest expense is defined as interest expense, less non-cash interest expense relating to amortization of debt finance costs, and less interest income.

Commenting on the Company's earnings results, Walter F. Ulloa, Chairman and Chief Executive Officer, said, "Our second quarter results were affected by the COVID-19 pandemic and the resulting economic crisis, which resulted in declines in our television, radio and digital segments compared to the prior year. We expect a sustained adverse impact in future periods, depending upon the extent and duration of the economic downturn brought on by the pandemic. Nonetheless, we continue to maintain a solid balance sheet, have reduced costs and will continue to undertake an extensive review of our business in order to more efficiently align operations and further 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."

Quarterly Cash Dividend

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 September 30, 2020 to shareholders of record as of the close of business on September 15, 2020, and the common stock will trade ex-dividend on September 14, 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.

Financial Results



Three-Month period ended June 30, 2020 Compared to Three-Month Period Ended

June 30, 2019

(Unaudited)



Three-Month Period

Ended June 30,

2020 2019 % Change

Net revenue $45,116 $69,241 (35) %

Cost of revenue - digital media (1) 6,447 8,859 (27) %

Operating expenses (1) 33,037 43,200 (24) %

Corporate expenses (1) 5,384 6,501 (17) %

Depreciation and amortization 3,873 4,306 (10) %

Change in fair value contingent - (2,735) (100) %consideration

Impairment charge - 22,368 (100) %

Foreign currency (gain) loss (155) (82) 89 %

Other operating (gain) loss (2,030) (1,597) 27 %



Operating income (loss) (1,440) (11,579)(88) %

Interest expense, net (1,485) (2,697) (45) %

Dividend income - 251 (100) %



Income (loss) before income taxes (2,925) (14,025)(79) %



Income tax benefit (expense) 5,263 (2,252) *

Net income (loss) before equity in net income (loss) of nonconsolidated 2,338 (16,277)* affiliates

Equity in net income (loss) of - (2) (100) %nonconsolidated affiliates, net of tax

Net income (loss) $2,338 $(16,279)*



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

Net revenue decreased to $45.1 million for the three-month period ended June 30, 2020 from $69.2 million for the three-month period ended June 30, 2019, a decrease of $24.1 million. Of the overall decrease, approximately $11.1 million was attributable to our television segment due to decreases in revenue from spectrum usage rights and local and national advertising revenue, partially offset by increases in political advertising revenue and retransmission consent revenue. The decrease in local and national advertising revenue was primarily a result of the continuing economic crisis resulting from the COVID-19 pandemic, ratings declines, competitive factors with other Spanish-language broadcasters, and changing demographic preferences of audiences. We have previously noted 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. In addition, approximately $5.4 million of the overall decrease was attributable to our digital segment and was primarily due to declines in international revenue and the continuing economic crisis resulting from the COVID-19 pandemic. This decline in digital revenue is being driven by a trend whereby revenue is shifting more to programmatic revenue. In addition, approximately $7.6 million of the overall decrease was attributable to our radio segment and was primarily due to decreases in local and national advertising revenue, partially offset by an increase in political advertising revenue. The decrease in local and national advertising revenue was primarily a result of the continuing economic crisis resulting from the COVID-19 pandemic, ratings declines and competitive factors with other Spanish-language broadcasters, and changing demographic preferences of audiences. We have previously noted 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.

Cost of revenue in our digital segment decreased to $6.4 million for the three-month period ended June 30, 2020 from $8.9 million for the three-month period ended June 30, 2019, a decrease of $2.5 million, primarily due to a decrease in expenses associated with the decrease in revenue in our digital segment.

Operating expenses decreased to $33.0 million for the three-month period ended June 30, 2020 from $43.2 million for the three-month period ended June 30, 2019, a decrease of $10.2 million. The decrease was primarily due to decreases in salary expense, as a result of the company-wide reduction in salaries implemented effective April 16, 2020, and expenses associated with the decrease in advertising revenue.

Corporate expenses decreased to $5.4 million for the three-month period ended June 30, 2020 from $6.5 million for the three-month period ended June 30, 2019, a decrease of $1.1 million. The decrease was primarily due to decreases in salary expense, as a result of the company-wide reduction in salaries implemented effective April 16, 2020, and audit fees.

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, which is primarily related to the operations related to our Headway business. We had a foreign currency gain of $0.2 million for the three-month period ended June 30, 2020 compared to a foreign currency gain of $0.1 million for the three-month period ended June 30, 2019. Foreign currency gain was primarily due to currency fluctuations that affected our digital segment operations located outside the United States, primarily those related to the Headway business.

Six-Month period ended June 30, 2020 Compared to Six-Month Period Ended

June 30, 2019

(Unaudited)



Six-Month Period

Ended June 30,

2020 2019 % Change

Net revenue $109,365 $133,921 (18) %

Cost of revenue - digital media (1) 13,794 16,501 (16) %

Operating expenses (1) 73,307 85,944 (15) %

Corporate expenses (1) 12,224 13,395 (9) %

Depreciation and amortization 8,385 8,222 2 %

Change in fair value contingent - (2,376) (100) %consideration

Impairment charge 39,835 22,368 78 %

Foreign currency (gain) loss 1,353 50 *

Other operating (gain) loss (2,866) (3,593) (20) %



Operating income (loss) (36,667) (6,590) 456 %

Interest expense, net (3,542) (5,268) (33) %

Dividend income 24 506 (95) %



Income (loss) before income taxes (40,185) (11,352)254 %



Income tax benefit (expense) 6,931 (3,345) *

Net income (loss) before equity in net income (loss) of nonconsolidated (33,254) (14,697)126 %affiliates

Equity in net income (loss) of - (158) (100) %nonconsolidated affiliates, net of tax

Net income (loss) $(33,254)$(14,855)124 %



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

Net revenue decreased to $109.4 million for the six-month period ended June 30, 2020 from $133.9 million for the six-month period ended June 30, 2019, a decrease of $24.5 million. Of the overall decrease, approximately $10.2 million was attributable to our television segment due to decreases in revenue from spectrum usage rights and local and national advertising revenue, partially offset by increases in political advertising revenue and retransmission consent revenue. The decrease in local and national advertising revenue was primarily a result of the continuing economic crisis resulting from the COVID-19 pandemic, ratings declines, competitive factors with other Spanish-language broadcasters, and changing demographic preferences of audiences. We have previously noted 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. In addition, approximately $6.6 million of the overall decrease was attributable to our digital segment and was primarily due to declines in international revenue and the continuing economic crisis resulting from the COVID-19 pandemic. This decline in digital revenue is being driven by a trend whereby revenue is shifting more to programmatic revenue. In addition, approximately $7.8 million of the overall decrease was attributable to our radio segment and was primarily due to decreases in local and national advertising revenue, partially offset by an increase in political advertising revenue. The decrease in local and national advertising revenue was primarily a result of the continuing economic crisis resulting from the COVID-19 pandemic, ratings declines and competitive factors with other Spanish-language broadcasters, and changing demographic preferences of audiences. We have previously noted 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.

Cost of revenue in our digital segment decreased to $13.8 million for the six-month period ended June 30, 2020 from $16.5 million for the six-month period ended June 30, 2019, a decrease of $2.7 million, primarily due to a decrease in expenses associated with the decrease in revenue in our digital segment.

Operating expenses decreased to $73.3 million for the six-month period ended June 30, 2020 from $85.9 million for the six-month period ended June 30, 2019, a decrease of $12.6 million. The decrease was primarily due to decreases in salary expense, as a result of the company-wide reduction in salaries implemented effective April 16, 2020, and expenses associated with the decrease in advertising revenue.

Corporate expenses decreased to $12.2 million for the six-month period ended June 30, 2020 from $13.4 million for the six-month period ended June 30, 2019, a decrease of $1.2 million. The decrease was primarily due to decreases in salary expense, as a result of the company-wide reduction in salaries implemented effective April 16, 2020, and audit fees.

Impairment charge related to certain FCC licenses in our television and radio reporting units was $23.5 and $8.8 million, respectively, for the six-month period ended June 30, 2020. Impairment charge related to goodwill in our digital reporting unit was $0.8 million for the six-month period ended June 30, 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 six-month period ended June 30, 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, which is primarily related to the operations related to our Headway business. We had a foreign currency loss of $1.4 million for the six-month period ended June 30, 2020 compared to a foreign currency loss of $0.1 million for the six-month period ended June 30, 2019. Foreign currency loss was primarily due to currency fluctuations that affected our digital segment operations located outside the United States, primarily those related to the Headway business.

Segment Results



The following represents selected unaudited segment information:



Three-Month Period Six-Month Period

Ended June 30, Ended June 30,

2020 2019 % Change 2020 2019 % Change

Net Revenue

Television $26,955$38,071(29) %$66,154 $76,324 (13) %

Digital 11,373 16,804(32) % 24,704 31,276 (21) %

Radio 6,788 14,366(53) % 18,507 26,321 (30) %

Total $45,116$69,241(35) %$109,365$133,921(18) %



Cost of Revenue - digital media (1)

Digital $6,447 $8,859 (27) %$13,794 $16,501 (16) %



Operating Expenses (1)

Television 17,736 20,791(15) % 39,493 41,532 (5) %

Digital 6,156 8,485 (27) % 13,020 16,205 (20) %

Radio 9,145 13,924(34) % 20,794 28,207 (26) %

Total $33,037$43,200(24) %$73,307 $85,944 (15) %



Corporate $5,384 $6,501 (17) %$12,224 $13,395 (9) %Expenses (1)



Consolidated adjusted $1,724 $12,579(86) %$11,402 $20,636 (45) %EBITDA (1)



(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 2020 second quarter results on August 4, 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 54 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 UniMs 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.

(Financial Table Follows)

Entravision Communications Corporation

Consolidated Balance Sheets

(In thousands; unaudited)



June 30, December 31,

2020 2019

ASSETS

Current assets

Cash and cash equivalents $69,270 $33,123

Marketable securities 65,098 91,662

Restricted cash 735 734

Trade receivables, net of allowance for doubtful 51,706 71,406 accounts

Assets held for sale 3,099 950

Prepaid expenses and other current assets 16,586 11,557

Total current assets 206,494 209,432

Property and equipment, net 74,810 79,642

Intangible assets subject to amortization, net 9,752 16,772

Intangible assets not subject to amortization 216,853 252,544

Goodwill 45,711 46,511

Operating leases right of use asset 35,126 43,837

Other assets 7,428 7,462

Total assets $596,174 $656,200





LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Current maturities of long-term debt $3,000 $3,000

Accounts payable and accrued expenses 48,572 53,931

Operating lease liabilities 7,830 9,056

Total current liabilities 59,402 65,987

Long-term debt, less current maturities, net of 211,736 213,024 unamortized debt issuance costs

Long-term operating lease liabilities 32,784 41,387

Other long-term liabilities 3,385 3,371

Deferred income taxes 38,607 44,259

Total liabilities 345,914 368,028



Stockholders' equity

Class A common stock 6 6

Class B common stock 2 2

Class U common stock 1 1

Additional paid-in capital 830,900 836,170

Accumulated deficit (581,130) (547,876)

Accumulated other comprehensive income (loss) 481 (131)

Total stockholders' equity 250,260 288,172

Total liabilities and stockholders' equity $596,174 $656,200

Entravision Communications Corporation

Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)



Three-Month Period Six-Month Period

Ended June 30, Ended June 30,

2020 2019 2020 2019

Net revenue $45,116 $69,241 $109,365 $133,921



Expenses:

Cost of revenue - 6,447 8,859 13,794 16,501 digital media

Direct operating 22,140 29,655 48,819 58,585 expenses

Selling, general and 10,897 13,545 24,488 27,359 administrative expenses

Corporate 5,384 6,501 12,224 13,395 expenses

Depreciation and 3,873 4,306 8,385 8,222 amortization

Change in fair value contingent - (2,735) - (2,376) consideration

Impairment charge - 22,368 39,835 22,368

Foreign currency (155) (82) 1,353 50 (gain) loss

Other operating (2,030) (1,597) (2,866) (3,593) (gain) loss

46,556 80,820 146,032 140,511

Operating income (1,440) (11,579) (36,667) (6,590) (loss)

Interest expense (2,024) (3,554) (4,704) (7,044)

Interest income 539 857 1,162 1,776

Dividend income - 251 24 506

Income (loss) before income (2,925) (14,025) (40,185) (11,352) taxes

Income tax 5,263 (2,252) 6,931 (3,345) benefit (expense)



Income (loss) before equity in net income (loss) 2,338 (16,277) (33,254) (14,697) of nonconsolidated affiliate

Equity in net income (loss) of nonconsolidated - (2) - (158) affiliate, net of tax

Net income (loss)$2,338 $(16,279) $(33,254) $(14,855)



Basic and diluted earnings per share:

Net income (loss) per share, basic $0.03 $(0.19) $(0.39) $(0.17) and diluted



Cash dividends declared per $0.03 $0.05 $0.08 $0.10 common share



Weighted average common shares 84,123,530 85,359,998 84,220,649 85,728,820outstanding, basic

Weighted average common shares 84,669,250 85,359,998 84,220,649 85,728,820outstanding, diluted

Entravision Communications Corporation

Consolidated Statements of Cash Flows

(In thousands; unaudited)



Three-Month Period Six-Month Period

Ended June 30, Ended June 30,

2020 2019 2020 2019

Cash flows from operating activities:

Net income (loss) $2,338 $(16,279)$(33,254)$(14,855)

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

Depreciation and 3,873 4,306 8,385 8,222 amortization

Impairment charge - 22,368 39,835 22,368

Deferred income taxes (5,585) 1,002 (7,398) 1,472

Non-cash interest 163 238 332 489

Amortization of 128 125 258 249 syndication contracts

Payments on syndication (123) (92) (253) (227) contracts

Equity in net (income) loss of nonconsolidated - 2 - 158 affiliate

Non-cash stock-based 803 835 1,592 1,635 compensation

(Gain) loss on disposal of (627) 75 (627) 161 property and equipment

Changes in assets and liabilities:

(Increase) decrease in 12,031 (4,038) 19,513 9,619 accounts receivable

(Increase) decrease in prepaid expenses and other 4,064 1,811 5,090 2,680 assets

Increase (decrease) in accounts payable, accrued (9,616) (4,990) (14,010) (12,301)expenses and other liabilities

Net cash provided by 7,449 5,363 19,463 19,670 operating activities

Cash flows from investing activities:

Proceeds from sale of property and equipment and 3,989 - 3,989 - intangibles

Purchases of property and (3,005) (7,910) (5,676) (13,982)equipment

Purchases of intangible (3) - (158) - assets

Purchases of marketable - (1,160) - (1,160) securities

Proceeds from marketable 10,243 10,960 26,860 21,681 securities

Purchases of investments - (100) - (300)

Net cash provided by (used 11,224 1,790 25,015 6,239 in) investing activities

Cash flows from financing activities:

Tax payments related to shares withheld for (15) - (15) (751) share-based compensation plans

Payments on long-term debt (750) (750) (1,500) (1,500)

Dividends paid (2,104) (4,269) (6,322) (8,540)

Repurchase of Class A - (1,302) (525) (9,008) common stock

Payments of capitalized - (225) - (225) debt costs

Net cash used in financing (2,869) (6,546) (8,362) (20,024)activities

Effect of exchange rates on cash, cash equivalents (45) 21 32 13 and restricted cash

Net increase (decrease) in cash, cash equivalents and 15,759 628 36,148 5,898 restricted cash

Cash, cash equivalents and restricted cash:

Beginning 54,246 52,735 33,857 47,465

Ending $70,005 $53,363 $70,005 $53,363

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. Areconciliation 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,

2020 2019 2020 2019



Consolidated adjusted $1,724 $12,579 $11,402 $20,636 EBITDA (1)



Interest expense (2,024) (3,554) (4,704) (7,044)

Interest income 539 857 1,162 1,776

Dividend income - 251 24 506

Income tax expense 5,263 (2,252) 6,931 (3,345)

Equity in net loss of - (2) - (158) nonconsolidated affiliates

Amortization of (129) (125) (258) (249) syndication contracts

Payments on syndication 123 92 253 227 contracts

Non-cash stock-based compensation included in (104) (116) (235) (250) direct operating expenses

Non-cash stock-based compensation included in (699) (719) (1,357) (1,385) corporate expenses

Depreciation and (3,873) (4,306) (8,385) (8,222) amortization

Change in fair value - 2,735 - 2,376 contingent consideration

Impairment charge - (22,368) (39,835) (22,368)

Non-recurring cash (512) (948) (1,118) (948) severance charge

Other operating gain 2,030 1,597 2,866 3,593 (loss)

Net income (loss) 2,338 (16,279) (33,254) (14,855)



Depreciation and 3,873 4,306 8,385 8,222 amortization

Impairment charge - 22,368 39,835 22,368

Deferred income taxes (5,585) 1,002 (7,398) 1,472

Non-cash interest 163 238 332 489

Amortization of 128 125 258 249 syndication contracts

Payments on syndication (123) (92) (253) (227) contracts

Equity in net (income) loss of nonconsolidated - 2 - 158 affiliate

Non-cash stock-based 803 835 1,592 1,635 compensation

(Gain) loss on disposal of (627) 75 (627) 161 property and equipment

Changes in assets and liabilities:

(Increase) decrease in 12,031 (4,038) 19,513 9,619 accounts receivable

(Increase) decrease in prepaid expenses and other 4,064 1,811 5,090 2,680 assets

Increase (decrease) in accounts payable, accrued (9,616) (4,990) (14,010) (12,301)expenses and other liabilities

Cash flows from operating 7,449 5,363 19,463 19,670 activities



(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. Areconciliation 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,

2020 2019 2020 2019

Consolidated adjusted $1,724 $12,579 $11,402 $20,636 EBITDA (1)

Net interest expense (1) (1,322) (2,459) (3,210) (4,779)

Dividend income - 251 24 506

Cash paid for income taxes (323) (1,250) (467) (1,873)

Capital expenditures (2) (3,005) (7,910) (5,676) (13,982)

Non-recurring cash (512) (948) (1,118) (948) severance charge

Other operating gain (loss) 2,030 1,597 2,866 3,593

Free cash flow (1) (1,408) 1,860 3,821 3,153



Capital expenditures (2) 3,005 7,910 5,676 13,982

Change in fair value of - 2,735 - 2,376 contingent consideration

(Gain) loss on disposal of (627) 75 (627) 161 property and equipment

Changes in assets and liabilities:

(Increase) decrease in 12,031 (4,038) 19,513 9,619 accounts receivable

(Increase) decrease in prepaid expenses and other 4,064 1,811 5,090 2,680 assets

Increase (decrease) in accounts payable, accrued (9,616) (4,990) (14,010) (12,301)expenses and other liabilities

Cash Flows From Operating $7,449 $5,363 $19,463 $19,670 Activities



(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.

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SOURCE Entravision Communications Corporation