Entravision Communications Corporation Reports Second Quarter 2019 Results

- Announces Quarterly Cash Dividend of $0.05 Per Share -

Published

SANTA MONICA, Calif., Aug. 6, 2019 /PRNewswire/ -- Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three- and six-month periods ended June 30, 2019.

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,
2019 2018 % Change 2019 2018 % Change
Net revenue $ 69,241 $ 74,329 (7) % $ 133,921 $ 141,167 (5) %
Cost of revenue - digital media (1) 8,859 11,384 (22) % 16,501 22,009 (25) %
Operating expenses (2) 43,200 43,790 (1) % 85,944 88,117 (2) %
Corporate expenses (3) 6,501 6,266 4 % 13,395 12,241 9 %
Foreign currency (gain) loss (82) (17) 382 % 50 196 (74) %
Consolidated adjusted EBITDA (4) 12,579 14,866 (15) % 20,636 21,803 (5) %
Free cash flow (5) $ 1,860 $ 8,937 (79) % $ 3,153 $ 10,550 (70) %
Net income (loss) $ (16,279) $ 4,840 $ (14,855) $ 3,033
Net income per share, basic and diluted $ (0.19) $ 0.05 $ (0.17) $ 0.03
Weighted average common shares outstanding, basic 85,359,998 88,959,935 85,728,820 89,635,759
Weighted average common shares outstanding, diluted 85,359,998 90,021,949 85,728,820 90,805,086

(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.

(2) 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 and $0.1 million of non-cash stock-based compensation for the three-month periods ended June 30, 2019 and 2018, respectively, and $0.2 million and $0.3 million of non-cash stock-based compensation for the six-month periods ended June 30, 2019 and 2018, respectively. 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.

(3) Corporate expenses include $0.7 million and $1.1 million of non-cash stock-based compensation for the three-month periods ended June 30, 2019 and 2018, respectively, and $1.4 million and $2.1 million of non-cash stock-based compensation for the six-month periods ended June 30, 2019 and 2018, 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), 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), 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, FCC reimbursement for broadcast television repack and revenue from FCC auction for broadcast spectrum 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, "Our second quarter results were impacted by declines in our radio and digital segments compared to the prior year. However, we did achieve growth in our television segment compared to the second quarter of 2018. We continue to maintain a solid balance sheet and return capital to our shareholders through our share repurchase program and dividend. 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 $0.05 per share of the Company's Class A, Class B and Class U common stock, in an aggregate amount of approximately $4.3 million. The quarterly dividend will be payable on September 30, 2019 to shareholders of record as of the close of business on September 16, 2019, and the common stock will trade ex-dividend on September 13, 2019. 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.

Impairment of Digital Segment Goodwill

The Company recorded an impairment charge of $22.4 million related to goodwill as a result of an appraisal recently conducted on its digital reporting unit. Due to changes in key personnel in the Company's digital reporting unit and updated internal forecasts of future performance of the digital reporting unit caused by rapid changes in technology and competition in the digital industry, the Company determined that triggering events had occurred during the second quarter of 2019 that required an interim impairment assessment for its digital reporting unit.

Acquisition of KMBH Serving McAllen, Texas

On July 31, 2019, the Company entered into an agreement with MBTV Texas Valley LLC to acquire television station KMBH-TV, serving the McAllen, Texas area, for $2.9 million.  The transaction, which is subject to customary closing conditions, including the prior consent of the FCC, is currently expected to close in the second half of 2019.

 

Financial Results

Three-Month period ended June 30, 2019 Compared to Three-Month Period Ended June 30, 2018 (Unaudited)

Three-Month Period Six-Month Period Three-Month Period
Ended June 30, Ended June 30, Ended June 30,
2019 2018 % Change 2019 2018 % Change 2019 2018 % Change
Net revenue $ 69,241 $ 74,329 (7) % $ 133,921 $ 141,167 (5) % Net revenue $ 69,241 $ 74,329 (7) %
Cost of revenue - digital media (1) 8,859 11,384 (22) % 16,501 22,009 (25) % Cost of revenue - digital media (1) 8,859 11,384 (22) %
Operating expenses (2) 43,200 43,790 (1) % 85,944 88,117 (2) % Operating expenses (1) 43,200 43,790 (1) %
Corporate expenses (3) 6,501 6,266 4 % 13,395 12,241 9 % Corporate expenses (1) 6,501 6,266 4 %
Foreign currency (gain) loss (82) (17) 382 % 50 196 (74) % Depreciation and amortization 4,306 4,019 7 %
Change in fair value contingent consideration (2,735) (913) 200 %
Consolidated adjusted EBITDA (4) 12,579 14,866 (15) % 20,636 21,803 (5) % Impairment charge 22,368 -
Foreign currency (gain) loss (82) (17) 382 %
Free cash flow (5) $ 1,860 $ 8,937 (79) % $ 3,153 $ 10,550 (70) % Other operating (gain) loss (1,597) (273) 485 %
Net income (loss) $ (16,279) $ 4,840 $ (14,855) $ 3,033 Operating income (loss) (11,579) 10,073
Interest expense, net (2,697) (2,962) (9) %
Net income per share, basic and diluted $ (0.19) $ 0.05 $ (0.17) $ 0.03 Dividend income 251 417 (40) %
Weighted average common shares outstanding, basic 85,359,998 88,959,935 85,728,820 89,635,759 Income (loss) before income taxes (14,025) 7,528
Weighted average common shares outstanding, diluted 85,359,998 90,021,949 85,728,820 90,805,086
Income tax benefit (expense) (2,252) (2,652) (15) %
Net income (loss) before equity in net income (loss) of nonconsolidated affiliates (16,277) 4,876
Equity in net income (loss) of nonconsolidated affiliates, net of tax (2) (36) (94) %
Net income (loss) $ (16,279) $ 4,840

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

Net revenue decreased to $69.2 million for the three-month period ended June 30, 2019 from $74.3 million for the three-month period ended June 30, 2018, a decrease of $5.1 million. Of the overall decrease, approximately $3.8 million was attributable to our digital segment and was primarily due to declines in both international and domestic revenue.  The decline in revenue is driven by a trend whereby revenue is shifting more to automated self-service platforms, referred to in our industry as programmatic revenue. Additionally, approximately $2.8 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 in part of ratings declines and changing demographic preferences of audiences, as well as the absence of revenue from the 2018 FIFA World Cup revenue in 2019 compared to 2018. The overall decrease in revenue was partially offset by an increase in our television segment of approximately $1.6 million and was primarily due to an increase in revenue from spectrum usage rights, partially offset by a decrease in local advertising revenue, as a result in part of ratings declines and changing demographic preferences of audiences and a trend for advertising to move increasingly from traditional media, such as television, to new media, such as digital media. The increase in revenue in our television segment was also partially offset by a decrease in political advertising revenue, which is not material in 2019.

Cost of revenue in our digital segment decreased to $8.9 million for the three-month period ended June 30, 2019 from $11.4 million for the three-month period ended June 30, 2018, a decrease of $2.5 million, primarily due to the decrease in revenue in our digital segment and a strategic shift in our digital business designed to focus on generating revenue with lower associated costs to produce higher margins.

Operating expenses decreased to $43.2 million for the three-month period ended June 30, 2019 from $43.8 million for the three-month period ended June 30, 2018, a decrease of $0.6 million. The decrease was primarily due to the decrease in expenses associated with the decrease in revenue a decrease in salary expense, partially offset by an increase in severance expense in our digital segment.

Corporate expenses increased to $6.5 million for the three-month period ended June 30, 2019 from $6.3 million for the three-month period ended June 30, 2018, an increase of $0.2 million. The increase was primarily due to an increase in audit fees.

Impairment charge related to our digital goodwill was $22.4 million for the three-month period ended June 30, 2019. The write-down was pursuant to Accounting Standards Codification (ASC) 350, Intangibles – Goodwill and Other, which requires that goodwill and certain intangible assets be tested for impairment at least annually, or more frequently if events or changes in circumstances indicate the assets might be impaired.

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 U.S., primarily related to the Headway business. As a result, we have operating expense, attributable to foreign currency loss, that is primarily related to the operations related to the Headway business. We had foreign currency gain of $0.1 million for the three-month period ended June 30, 2019. Foreign currency loss was primarily due to currency fluctuations that affected our digital segment operations located outside the U.S., primarily related to our Headway business.

 

Six-Month Period Ended June 30, 2019 Compared to Six-Month Period Ended June 30, 2018 (Unaudited)

 

Three-Month Period Six-Month Period Three-Month Period Six-Month Period
Ended June 30, Ended June 30, Ended June 30, Ended June 30,
2019 2018 % Change 2019 2018 % Change 2019 2018 % Change 2019 2018 % Change
Net revenue $ 69,241 $ 74,329 (7) % $ 133,921 $ 141,167 (5) % Net revenue $ 69,241 $ 74,329 (7) % Net revenue $ 133,921 $ 141,167 (5) %
Cost of revenue - digital media (1) 8,859 11,384 (22) % 16,501 22,009 (25) % Cost of revenue - digital media (1) 8,859 11,384 (22) % Cost of revenue - digital media (1) 16,501 22,009 (25) %
Operating expenses (2) 43,200 43,790 (1) % 85,944 88,117 (2) % Operating expenses (1) 43,200 43,790 (1) % Operating expenses (1) 85,944 88,117 (2) %
Corporate expenses (3) 6,501 6,266 4 % 13,395 12,241 9 % Corporate expenses (1) 6,501 6,266 4 % Corporate expenses (1) 13,395 12,241 9 %
Foreign currency (gain) loss (82) (17) 382 % 50 196 (74) % Depreciation and amortization 4,306 4,019 7 % Depreciation and amortization 8,222 7,958 3 %
Change in fair value contingent consideration (2,735) (913) 200 % Change in fair value contingent consideration (2,376) 1,187 *
Consolidated adjusted EBITDA (4) 12,579 14,866 (15) % 20,636 21,803 (5) % Impairment charge 22,368 - Impairment charge 22,368 - *
Foreign currency (gain) loss (82) (17) 382 % Foreign currency (gain) loss 50 196 (74) %
Free cash flow (5) $ 1,860 $ 8,937 (79) % $ 3,153 $ 10,550 (70) % Other operating (gain) loss (1,597) (273) 485 % Other operating (gain) loss (3,593) (295) 1118 %
Net income (loss) $ (16,279) $ 4,840 $ (14,855) $ 3,033 Operating income (loss) (11,579) 10,073 Operating income (loss) (6,590) 9,754 *
Interest expense, net (2,697) (2,962) (9) % Interest expense, net (5,268) (5,447) (3) %
Net income per share, basic and diluted $ (0.19) $ 0.05 $ (0.17) $ 0.03 Dividend income 251 417 (40) % Dividend income 506 545 (7) %
Weighted average common shares outstanding, basic 85,359,998 88,959,935 85,728,820 89,635,759 Income (loss) before income taxes (14,025) 7,528 Income (loss) before income taxes (11,352) 4,852 *
Weighted average common shares outstanding, diluted 85,359,998 90,021,949 85,728,820 90,805,086
Income tax benefit (expense) (2,252) (2,652) (15) % Income tax benefit (expense) (3,345) (1,721) 94 %
Net income (loss) before equity in net income (loss) of nonconsolidated affiliates (16,277) 4,876 Net income (loss) before equity in net income (loss) of nonconsolidated affiliates (14,697) 3,131 *
Equity in net income (loss) of nonconsolidated affiliates, net of tax (2) (36) (94) % Equity in net income (loss) of nonconsolidated affiliates, net of tax (158) (98) 61 %
Net income (loss) $ (16,279) $ 4,840 Net income (loss) $ (14,855) $ 3,033 *

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

Net revenue decreased to $133.9 million for the six-month period ended June 30, 2019 from $141.2 million for the six-month period ended June 30, 2018, a decrease of $7.3 million. Of the overall decrease, approximately $7.5 million was attributable to our digital segment and was primarily due to declines in both international and domestic revenue.  The decline in revenue is driven by a trend whereby revenue is shifting more to automated self-service platforms, referred to in our industry as programmatic revenue. Additionally, approximately $5.0 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 in part of ratings declines and changing demographic preferences of audiences as well as the absence of revenue from the 2018 FIFA World Cup revenue in 2019 compared to 2018. The overall decrease in revenue was partially offset by an increase in our television segment of approximately $5.3 million and was primarily due to an increase in revenue from spectrum usage rights, partially offset by a decrease in local advertising revenue, as a result in part of ratings declines and changing demographic preferences of audiences and a trend for advertising to move increasingly from traditional media, such as television, to new media, such as digital media. The increase in revenue in our television segment was also partially offset by a decrease in political advertising revenue, which is not material in 2019.

Cost of revenue in our digital segment decreased to $16.5 million for the six-month period ended June 30, 2019 from $22.0 million for the six-month period ended June 30, 2018, a decrease of $5.5 million, primarily due to the decrease in revenue in our digital segment and a strategic shift in our digital business designed to focus on generating revenue with lower associated costs to produce higher margins.

Operating expenses decreased to $85.9 million for the six-month period ended June 30, 2019 from $88.1 million for the six-month period ended June 30, 2018, a decrease of $2.2 million. The decrease was primarily due to the decrease in expenses associated with the decrease in revenue a decrease in salary expense, partially offset by an increase in severance expense in our digital segment and an increase in fees due to networks related to retransmission consent agreements in our television segment.

Corporate expenses increased to $13.4 million for the six-month period ended June 30, 2019 from $12.2 million for the six-month period ended June 30, 2018, an increase of $1.2 million. The increase was primarily due to an increase in audit fees that we incurred in connection with the audit of our 2018 financial statements. 

Impairment charge related to our digital goodwill was $22.4 million for the six-month period ended June 30, 2019. The write-down was pursuant to Accounting Standards Codification (ASC) 350, Intangibles – Goodwill and Other, which requires that goodwill and certain intangible assets be tested for impairment at least annually, or more frequently if events or changes in circumstances indicate the assets might be impaired.

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 U.S., primarily related to the Headway business. As a result, we have operating expense, attributable to foreign currency loss, that is primarily related to the operations related to the Headway business. We had foreign currency loss of $0.1 million for the six-month period ended June 30, 2019 compared to a foreign currency loss of $0.2 million for the six-month period ended June 30, 2018. Foreign currency loss was primarily due to currency fluctuations that affected our digital segment operations located outside the U.S., primarily related to our Headway business.

 

Segment Results

The following represents selected unaudited segment information:

 

Three-Month Period Six-Month Period Three-Month Period Six-Month Period Three-Month Period Six-Month Period
Ended June 30, Ended June 30, Ended June 30, Ended June 30, Ended June 30, Ended June 30,
2019 2018 % Change 2019 2018 % Change 2019 2018 % Change 2019 2018 % Change 2019 2018 % Change 2019 2018 % Change
Net revenue $ 69,241 $ 74,329 (7) % $ 133,921 $ 141,167 (5) % Net revenue $ 69,241 $ 74,329 (7) % Net revenue $ 133,921 $ 141,167 (5) % Net Revenue
Cost of revenue - digital media (1) 8,859 11,384 (22) % 16,501 22,009 (25) % Cost of revenue - digital media (1) 8,859 11,384 (22) % Cost of revenue - digital media (1) 16,501 22,009 (25) % Television $ 38,071 $ 36,531 4 % $ 76,324 $ 71,022 7 %
Operating expenses (2) 43,200 43,790 (1) % 85,944 88,117 (2) % Operating expenses (1) 43,200 43,790 (1) % Operating expenses (1) 85,944 88,117 (2) % Radio 14,366 17,240 (17) % 26,321 31,343 (16) %
Corporate expenses (3) 6,501 6,266 4 % 13,395 12,241 9 % Corporate expenses (1) 6,501 6,266 4 % Corporate expenses (1) 13,395 12,241 9 % Digital 16,804 20,558 (18) % 31,276 38,802 (19) %
Foreign currency (gain) loss (82) (17) 382 % 50 196 (74) % Depreciation and amortization 4,306 4,019 7 % Depreciation and amortization 8,222 7,958 3 % Total $ 69,241 $ 74,329 (7) % $ 133,921 $ 141,167 (5) %
Change in fair value contingent consideration (2,735) (913) 200 % Change in fair value contingent consideration (2,376) 1,187 *
Consolidated adjusted EBITDA (4) 12,579 14,866 (15) % 20,636 21,803 (5) % Impairment charge 22,368 - Impairment charge 22,368 - * Cost of Revenue - digital media (1)
Foreign currency (gain) loss (82) (17) 382 % Foreign currency (gain) loss 50 196 (74) % Digital $ 8,859 $ 11,384 (22) % $ 16,501 $ 22,009 (25) %
Free cash flow (5) $ 1,860 $ 8,937 (79) % $ 3,153 $ 10,550 (70) % Other operating (gain) loss (1,597) (273) 485 % Other operating (gain) loss (3,593) (295) 1118 %
Operating Expenses (1)
Net income (loss) $ (16,279) $ 4,840 $ (14,855) $ 3,033 Operating income (loss) (11,579) 10,073 Operating income (loss) (6,590) 9,754 * Television 20,791 20,589 1 % 41,532 42,111 (1) %
Interest expense, net (2,697) (2,962) (9) % Interest expense, net (5,268) (5,447) (3) % Radio 13,924 15,437 (10) % 28,207 30,717 (8) %
Net income per share, basic and diluted $ (0.19) $ 0.05 $ (0.17) $ 0.03 Dividend income 251 417 (40) % Dividend income 506 545 (7) % Digital 8,485 7,764 9 % 16,205 15,289 6 %
Total $ 43,200 $ 43,790 (1) % $ 85,944 $ 88,117 (2) %
Weighted average common shares outstanding, basic 85,359,998 88,959,935 85,728,820 89,635,759 Income (loss) before income taxes (14,025) 7,528 Income (loss) before income taxes (11,352) 4,852 *
Weighted average common shares outstanding, diluted 85,359,998 90,021,949 85,728,820 90,805,086 Corporate Expenses (1) $ 6,501 $ 6,266 4 % $ 13,395 $ 12,241 9 %
Income tax benefit (expense) (2,252) (2,652) (15) % Income tax benefit (expense) (3,345) (1,721) 94 %
Net income (loss) before equity in net income (loss) of nonconsolidated affiliates (16,277) 4,876 Net income (loss) before equity in net income (loss) of nonconsolidated affiliates (14,697) 3,131 * Consolidated adjusted EBITDA (1) $ 12,579 $ 14,866 (15) % $ 20,636 $ 21,803 (5) %
Equity in net income (loss) of nonconsolidated affiliates, net of tax (2) (36) (94) % Equity in net income (loss) of nonconsolidated affiliates, net of tax (158) (98) 61 %
Net income (loss) $ (16,279) $ 4,840 Net income (loss) $ (14,855) $ 3,033 *

(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 2019 second quarter results on August 6, 2019 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.

 

(Financial Table Follows)

 

Entravision Communications Corporation Consolidated Balance Sheets (In thousands; unaudited)

Three-Month Period Six-Month Period Three-Month Period Six-Month Period Three-Month Period Six-Month Period June 30, December 31,
Ended June 30, Ended June 30, Ended June 30, Ended June 30, Ended June 30, Ended June 30, 2019 2018
2019 2018 % Change 2019 2018 % Change 2019 2018 % Change 2019 2018 % Change 2019 2018 % Change 2019 2018 % Change
Net revenue $ 69,241 $ 74,329 (7) % $ 133,921 $ 141,167 (5) % Net revenue $ 69,241 $ 74,329 (7) % Net revenue $ 133,921 $ 141,167 (5) % Net Revenue
Cost of revenue - digital media (1) 8,859 11,384 (22) % 16,501 22,009 (25) % Cost of revenue - digital media (1) 8,859 11,384 (22) % Cost of revenue - digital media (1) 16,501 22,009 (25) % Television $ 38,071 $ 36,531 4 % $ 76,324 $ 71,022 7 % ASSETS
Operating expenses (2) 43,200 43,790 (1) % 85,944 88,117 (2) % Operating expenses (1) 43,200 43,790 (1) % Operating expenses (1) 85,944 88,117 (2) % Radio 14,366 17,240 (17) % 26,321 31,343 (16) % Current assets
Corporate expenses (3) 6,501 6,266 4 % 13,395 12,241 9 % Corporate expenses (1) 6,501 6,266 4 % Corporate expenses (1) 13,395 12,241 9 % Digital 16,804 20,558 (18) % 31,276 38,802 (19) % Cash and cash equivalents $ 52,631 $ 46,733
Foreign currency (gain) loss (82) (17) 382 % 50 196 (74) % Depreciation and amortization 4,306 4,019 7 % Depreciation and amortization 8,222 7,958 3 % Total $ 69,241 $ 74,329 (7) % $ 133,921 $ 141,167 (5) % Marketable securities 113,349 132,424
Change in fair value contingent consideration (2,735) (913) 200 % Change in fair value contingent consideration (2,376) 1,187 * Restricted cash 732 732
Consolidated adjusted EBITDA (4) 12,579 14,866 (15) % 20,636 21,803 (5) % Impairment charge 22,368 - Impairment charge 22,368 - * Cost of Revenue - digital media (1) Trade receivables, net of allowance for doubtful accounts 69,841 79,308
Foreign currency (gain) loss (82) (17) 382 % Foreign currency (gain) loss 50 196 (74) % Digital $ 8,859 $ 11,384 (22) % $ 16,501 $ 22,009 (25) % Assets held for sale 1,179 1,179
Free cash flow (5) $ 1,860 $ 8,937 (79) % $ 3,153 $ 10,550 (70) % Other operating (gain) loss (1,597) (273) 485 % Other operating (gain) loss (3,593) (295) 1118 % Prepaid expenses and other current assets 12,558 10,672
Operating Expenses (1) Total current assets 250,290 271,048
Net income (loss) $ (16,279) $ 4,840 $ (14,855) $ 3,033 Operating income (loss) (11,579) 10,073 Operating income (loss) (6,590) 9,754 * Television 20,791 20,589 1 % 41,532 42,111 (1) % Property and equipment, net 74,502 64,939
Interest expense, net (2,697) (2,962) (9) % Interest expense, net (5,268) (5,447) (3) % Radio 13,924 15,437 (10) % 28,207 30,717 (8) % Intangible assets subject to amortization, net 19,442 22,598
Net income per share, basic and diluted $ (0.19) $ 0.05 $ (0.17) $ 0.03 Dividend income 251 417 (40) % Dividend income 506 545 (7) % Digital 8,485 7,764 9 % 16,205 15,289 6 % Intangible assets not subject to amortization 254,598 254,598
Total $ 43,200 $ 43,790 (1) % $ 85,944 $ 88,117 (2) % Goodwill 51,857 74,292
Weighted average common shares outstanding, basic 85,359,998 88,959,935 85,728,820 89,635,759 Income (loss) before income taxes (14,025) 7,528 Income (loss) before income taxes (11,352) 4,852 * Operating leases right of use asset 46,206 -
Weighted average common shares outstanding, diluted 85,359,998 90,021,949 85,728,820 90,805,086 Corporate Expenses (1) $ 6,501 $ 6,266 4 % $ 13,395 $ 12,241 9 % Other assets 2,684 2,934
Income tax benefit (expense) (2,252) (2,652) (15) % Income tax benefit (expense) (3,345) (1,721) 94 % Total assets $ 699,579 $ 690,409
Net income (loss) before equity in net income (loss) of nonconsolidated affiliates (16,277) 4,876 Net income (loss) before equity in net income (loss) of nonconsolidated affiliates (14,697) 3,131 * Consolidated adjusted EBITDA (1) $ 12,579 $ 14,866 (15) % $ 20,636 $ 21,803 (5) %
Equity in net income (loss) of nonconsolidated affiliates, net of tax (2) (36) (94) % Equity in net income (loss) of nonconsolidated affiliates, net of tax (158) (98) 61 %
Net income (loss) $ (16,279) $ 4,840 Net income (loss) $ (14,855) $ 3,033 * LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt $ 3,000 $ 3,000
Accounts payable and accrued expenses 46,198 51,034
Operating lease liabilities 11,420 -
Total current liabilities 60,618 54,034
Long-term debt, less current maturities, net of unamortized debt issuance costs 239,032 240,541
Long-term operating lease liabilities 41,091 -
Other long-term liabilities 7,516 16,418
Deferred income taxes 48,401 46,684
Total liabilities 396,658 357,677
Stockholders' equity
Class A common stock 6 6
Class B common stock 2 2
Class U common stock 1 1
Additional paid-in capital 846,345 862,299
Accumulated deficit (543,019) (528,164)
Accumulated other comprehensive income (loss) (414) (1,412)
Total stockholders' equity 302,921 332,732
Total liabilities and stockholders' equity $ 699,579 $ 690,409

 

Entravision Communications Corporation Consolidated Statements of Operations (In thousands, except share and per share data) (Unaudited)

 

Three-Month Period Six-Month Period Three-Month Period Six-Month Period Three-Month Period Six-Month Period June 30, December 31, Three-Month Period Six-Month Period
Ended June 30, Ended June 30, Ended June 30, Ended June 30, Ended June 30, Ended June 30, 2019 2018 Ended June 30, Ended June 30,
2019 2018 % Change 2019 2018 % Change 2019 2018 % Change 2019 2018 % Change 2019 2018 % Change 2019 2018 % Change 2019 2018 2019 2018
Net revenue $ 69,241 $ 74,329 (7) % $ 133,921 $ 141,167 (5) % Net revenue $ 69,241 $ 74,329 (7) % Net revenue $ 133,921 $ 141,167 (5) % Net Revenue
Cost of revenue - digital media (1) 8,859 11,384 (22) % 16,501 22,009 (25) % Cost of revenue - digital media (1) 8,859 11,384 (22) % Cost of revenue - digital media (1) 16,501 22,009 (25) % Television $ 38,071 $ 36,531 4 % $ 76,324 $ 71,022 7 % ASSETS Net revenue $ 69,241 $ 74,329 $ 133,921 $ 141,167
Operating expenses (2) 43,200 43,790 (1) % 85,944 88,117 (2) % Operating expenses (1) 43,200 43,790 (1) % Operating expenses (1) 85,944 88,117 (2) % Radio 14,366 17,240 (17) % 26,321 31,343 (16) % Current assets
Corporate expenses (3) 6,501 6,266 4 % 13,395 12,241 9 % Corporate expenses (1) 6,501 6,266 4 % Corporate expenses (1) 13,395 12,241 9 % Digital 16,804 20,558 (18) % 31,276 38,802 (19) % Cash and cash equivalents $ 52,631 $ 46,733 Expenses:
Foreign currency (gain) loss (82) (17) 382 % 50 196 (74) % Depreciation and amortization 4,306 4,019 7 % Depreciation and amortization 8,222 7,958 3 % Total $ 69,241 $ 74,329 (7) % $ 133,921 $ 141,167 (5) % Marketable securities 113,349 132,424 Cost of revenue - digital media 8,859 11,384 16,501 22,009
Change in fair value contingent consideration (2,735) (913) 200 % Change in fair value contingent consideration (2,376) 1,187 * Restricted cash 732 732 Direct operating expenses 29,655 31,117 58,585 62,150
Consolidated adjusted EBITDA (4) 12,579 14,866 (15) % 20,636 21,803 (5) % Impairment charge 22,368 - Impairment charge 22,368 - * Cost of Revenue - digital media (1) Trade receivables, net of allowance for doubtful accounts 69,841 79,308 Selling, general and administrative expenses 13,545 12,673 27,359 25,967
Foreign currency (gain) loss (82) (17) 382 % Foreign currency (gain) loss 50 196 (74) % Digital $ 8,859 $ 11,384 (22) % $ 16,501 $ 22,009 (25) % Assets held for sale 1,179 1,179 Corporate expenses 6,501 6,266 13,395 12,241
Free cash flow (5) $ 1,860 $ 8,937 (79) % $ 3,153 $ 10,550 (70) % Other operating (gain) loss (1,597) (273) 485 % Other operating (gain) loss (3,593) (295) 1118 % Prepaid expenses and other current assets 12,558 10,672 Depreciation and amortization 4,306 4,019 8,222 7,958
Operating Expenses (1) Total current assets 250,290 271,048 Change in fair value contingent consideration (2,735) (913) (2,376) 1,187
Net income (loss) $ (16,279) $ 4,840 $ (14,855) $ 3,033 Operating income (loss) (11,579) 10,073 Operating income (loss) (6,590) 9,754 * Television 20,791 20,589 1 % 41,532 42,111 (1) % Property and equipment, net 74,502 64,939 Impairment charge 22,368 - 22,368 -
Interest expense, net (2,697) (2,962) (9) % Interest expense, net (5,268) (5,447) (3) % Radio 13,924 15,437 (10) % 28,207 30,717 (8) % Intangible assets subject to amortization, net 19,442 22,598 Foreign currency (gain) loss (82) (17) 50 196
Net income per share, basic and diluted $ (0.19) $ 0.05 $ (0.17) $ 0.03 Dividend income 251 417 (40) % Dividend income 506 545 (7) % Digital 8,485 7,764 9 % 16,205 15,289 6 % Intangible assets not subject to amortization 254,598 254,598 Other operating (gain) loss (1,597) (273) (3,593) (295)
Total $ 43,200 $ 43,790 (1) % $ 85,944 $ 88,117 (2) % Goodwill 51,857 74,292 80,820 64,256 140,511 131,413
Weighted average common shares outstanding, basic 85,359,998 88,959,935 85,728,820 89,635,759 Income (loss) before income taxes (14,025) 7,528 Income (loss) before income taxes (11,352) 4,852 * Operating leases right of use asset 46,206 - Operating income (loss) (11,579) 10,073 (6,590) 9,754
Weighted average common shares outstanding, diluted 85,359,998 90,021,949 85,728,820 90,805,086 Corporate Expenses (1) $ 6,501 $ 6,266 4 % $ 13,395 $ 12,241 9 % Other assets 2,684 2,934 Interest expense (3,554) (4,001) (7,044) (7,399)
Income tax benefit (expense) (2,252) (2,652) (15) % Income tax benefit (expense) (3,345) (1,721) 94 % Total assets $ 699,579 $ 690,409 Interest income 857 1,039 1,776 1,952
Net income (loss) before equity in net income (loss) of nonconsolidated affiliates (16,277) 4,876 Net income (loss) before equity in net income (loss) of nonconsolidated affiliates (14,697) 3,131 * Consolidated adjusted EBITDA (1) $ 12,579 $ 14,866 (15) % $ 20,636 $ 21,803 (5) % Dividend income 251 417 506 545
Equity in net income (loss) of nonconsolidated affiliates, net of tax (2) (36) (94) % Equity in net income (loss) of nonconsolidated affiliates, net of tax (158) (98) 61 % Income (loss) before income taxes (14,025) 7,528 (11,352) 4,852
Net income (loss) $ (16,279) $ 4,840 Net income (loss) $ (14,855) $ 3,033 * LIABILITIES AND STOCKHOLDERS' EQUITY Income tax benefit (expense) (2,252) (2,652) (3,345) (1,721)
Current liabilities
Current maturities of long-term debt $ 3,000 $ 3,000 Income (loss) before equity in net income (loss) of nonconsolidated affiliate (16,277) 4,876 (14,697) 3,131
Accounts payable and accrued expenses 46,198 51,034 Equity in net income (loss) of nonconsolidated affiliate, net of tax (2) (36) (158) (98)
Operating lease liabilities 11,420 - Net income (loss) $ (16,279) $ 4,840 $ (14,855) $ 3,033
Total current liabilities 60,618 54,034
Long-term debt, less current maturities, net of unamortized debt issuance costs 239,032 240,541 Basic and diluted earnings per share:
Long-term operating lease liabilities 41,091 - Net income (loss) per share, basic and diluted $ (0.19) $ 0.05 $ (0.17) $ 0.03
Other long-term liabilities 7,516 16,418
Deferred income taxes 48,401 46,684 Cash dividends declared per common share $ 0.05 $ 0.05 $ 0.10 $ 0.05
Total liabilities 396,658 357,677
Weighted average common shares outstanding, basic 85,359,998 88,959,935 85,728,820 89,635,759
Stockholders' equity Weighted average common shares outstanding, diluted 85,359,998 90,021,949 85,728,820 90,805,086
Class A common stock 6 6
Class B common stock 2 2
Class U common stock 1 1
Additional paid-in capital 846,345 862,299
Accumulated deficit (543,019) (528,164)
Accumulated other comprehensive income (loss) (414) (1,412)
Total stockholders' equity 302,921 332,732
Total liabilities and stockholders' equity $ 699,579 $ 690,409

 

Entravision Communications Corporation Consolidated Statements of Cash Flows (In thousands; unaudited)

 

Three-Month Period Six-Month Period Three-Month Period Six-Month Period Three-Month Period Six-Month Period June 30, December 31, Three-Month Period Six-Month Period Three-Month Period Six-Month Period
Ended June 30, Ended June 30, Ended June 30, Ended June 30, Ended June 30, Ended June 30, 2019 2018 Ended June 30, Ended June 30, Ended June 30, Ended June 30,
2019 2018 % Change 2019 2018 % Change 2019 2018 % Change 2019 2018 % Change 2019 2018 % Change 2019 2018 % Change 2019 2018 2019 2018 2019 2018 2019 2018
Net revenue $ 69,241 $ 74,329 (7) % $ 133,921 $ 141,167 (5) % Net revenue $ 69,241 $ 74,329 (7) % Net revenue $ 133,921 $ 141,167 (5) % Net Revenue
Cost of revenue - digital media (1) 8,859 11,384 (22) % 16,501 22,009 (25) % Cost of revenue - digital media (1) 8,859 11,384 (22) % Cost of revenue - digital media (1) 16,501 22,009 (25) % Television $ 38,071 $ 36,531 4 % $ 76,324 $ 71,022 7 % ASSETS Net revenue $ 69,241 $ 74,329 $ 133,921 $ 141,167 Cash flows from operating activities:
Operating expenses (2) 43,200 43,790 (1) % 85,944 88,117 (2) % Operating expenses (1) 43,200 43,790 (1) % Operating expenses (1) 85,944 88,117 (2) % Radio 14,366 17,240 (17) % 26,321 31,343 (16) % Current assets Net income (loss) $ (16,279) $ 4,840 $ (14,855) $ 3,033
Corporate expenses (3) 6,501 6,266 4 % 13,395 12,241 9 % Corporate expenses (1) 6,501 6,266 4 % Corporate expenses (1) 13,395 12,241 9 % Digital 16,804 20,558 (18) % 31,276 38,802 (19) % Cash and cash equivalents $ 52,631 $ 46,733 Expenses: Adjustments to reconcile net income (loss) to net cash provided byoperating activities:
Foreign currency (gain) loss (82) (17) 382 % 50 196 (74) % Depreciation and amortization 4,306 4,019 7 % Depreciation and amortization 8,222 7,958 3 % Total $ 69,241 $ 74,329 (7) % $ 133,921 $ 141,167 (5) % Marketable securities 113,349 132,424 Cost of revenue - digital media 8,859 11,384 16,501 22,009 Depreciation and amortization 4,306 4,019 8,222 7,958
Change in fair value contingent consideration (2,735) (913) 200 % Change in fair value contingent consideration (2,376) 1,187 * Restricted cash 732 732 Direct operating expenses 29,655 31,117 58,585 62,150 Impairment charge 22,368 22,368
Consolidated adjusted EBITDA (4) 12,579 14,866 (15) % 20,636 21,803 (5) % Impairment charge 22,368 - Impairment charge 22,368 - * Cost of Revenue - digital media (1) Trade receivables, net of allowance for doubtful accounts 69,841 79,308 Selling, general and administrative expenses 13,545 12,673 27,359 25,967 Deferred income taxes 1,002 2,043 1,472 1,029
Foreign currency (gain) loss (82) (17) 382 % Foreign currency (gain) loss 50 196 (74) % Digital $ 8,859 $ 11,384 (22) % $ 16,501 $ 22,009 (25) % Assets held for sale 1,179 1,179 Corporate expenses 6,501 6,266 13,395 12,241 Non-cash interest 238 414 489 538
Free cash flow (5) $ 1,860 $ 8,937 (79) % $ 3,153 $ 10,550 (70) % Other operating (gain) loss (1,597) (273) 485 % Other operating (gain) loss (3,593) (295) 1118 % Prepaid expenses and other current assets 12,558 10,672 Depreciation and amortization 4,306 4,019 8,222 7,958 Amortization of syndication contracts 125 176 249 352
Operating Expenses (1) Total current assets 250,290 271,048 Change in fair value contingent consideration (2,735) (913) (2,376) 1,187 Payments on syndication contracts (92) (174) (227) (360)
Net income (loss) $ (16,279) $ 4,840 $ (14,855) $ 3,033 Operating income (loss) (11,579) 10,073 Operating income (loss) (6,590) 9,754 * Television 20,791 20,589 1 % 41,532 42,111 (1) % Property and equipment, net 74,502 64,939 Impairment charge 22,368 - 22,368 - Equity in net (income) loss of nonconsolidated affiliate 2 36 158 98
Interest expense, net (2,697) (2,962) (9) % Interest expense, net (5,268) (5,447) (3) % Radio 13,924 15,437 (10) % 28,207 30,717 (8) % Intangible assets subject to amortization, net 19,442 22,598 Foreign currency (gain) loss (82) (17) 50 196 Non-cash stock-based compensation 835 1,176 1,635 2,425
Net income per share, basic and diluted $ (0.19) $ 0.05 $ (0.17) $ 0.03 Dividend income 251 417 (40) % Dividend income 506 545 (7) % Digital 8,485 7,764 9 % 16,205 15,289 6 % Intangible assets not subject to amortization 254,598 254,598 Other operating (gain) loss (1,597) (273) (3,593) (295) (Gain) loss on disposal of property and equipment 75 161
Total $ 43,200 $ 43,790 (1) % $ 85,944 $ 88,117 (2) % Goodwill 51,857 74,292 80,820 64,256 140,511 131,413 Changes in assets and liabilities:
Weighted average common shares outstanding, basic 85,359,998 88,959,935 85,728,820 89,635,759 Income (loss) before income taxes (14,025) 7,528 Income (loss) before income taxes (11,352) 4,852 * Operating leases right of use asset 46,206 - Operating income (loss) (11,579) 10,073 (6,590) 9,754 (Increase) decrease in accounts receivable (4,038) (1,873) 9,619 9,170
Weighted average common shares outstanding, diluted 85,359,998 90,021,949 85,728,820 90,805,086 Corporate Expenses (1) $ 6,501 $ 6,266 4 % $ 13,395 $ 12,241 9 % Other assets 2,684 2,934 Interest expense (3,554) (4,001) (7,044) (7,399) (Increase) decrease in prepaid expenses and other assets 1,811 (2,566) 2,680 (6,547)
Income tax benefit (expense) (2,252) (2,652) (15) % Income tax benefit (expense) (3,345) (1,721) 94 % Total assets $ 699,579 $ 690,409 Interest income 857 1,039 1,776 1,952 Increase (decrease) in accounts payable, accrued expensesand other liabilities (4,990) 5,197 (12,301) (780)
Net income (loss) before equity in net income (loss) of nonconsolidated affiliates (16,277) 4,876 Net income (loss) before equity in net income (loss) of nonconsolidated affiliates (14,697) 3,131 * Consolidated adjusted EBITDA (1) $ 12,579 $ 14,866 (15) % $ 20,636 $ 21,803 (5) % Dividend income 251 417 506 545 Net cash provided by operating activities 5,363 13,288 19,670 16,916
Equity in net income (loss) of nonconsolidated affiliates, net of tax (2) (36) (94) % Equity in net income (loss) of nonconsolidated affiliates, net of tax (158) (98) 61 % Income (loss) before income taxes (14,025) 7,528 (11,352) 4,852 Cash flows from investing activities:
Net income (loss) $ (16,279) $ 4,840 Net income (loss) $ (14,855) $ 3,033 * LIABILITIES AND STOCKHOLDERS' EQUITY Income tax benefit (expense) (2,252) (2,652) (3,345) (1,721) Proceeds from sale of property and equipment and intangibles 33 33
Current liabilities Purchases of property and equipment (7,910) (2,680) (13,982) (5,710)
Current maturities of long-term debt $ 3,000 $ 3,000 Income (loss) before equity in net income (loss) of nonconsolidated affiliate (16,277) 4,876 (14,697) 3,131 Purchases of intangible assets (3,153)
Accounts payable and accrued expenses 46,198 51,034 Equity in net income (loss) of nonconsolidated affiliate, net of tax (2) (36) (158) (98) Purchase of a businesses, net of cash acquired (3,563) (3,563)
Operating lease liabilities 11,420 - Net income (loss) $ (16,279) $ 4,840 $ (14,855) $ 3,033 Purchases of marketable securities (1,160) (1,160) (159,403)
Total current liabilities 60,618 54,034 Proceeds from marketable securities 10,960 25,000 21,681 25,000
Long-term debt, less current maturities, net of unamortized debt issuance costs 239,032 240,541 Basic and diluted earnings per share: Purchases of investments (100) (35) (300) (35)
Long-term operating lease liabilities 41,091 - Net income (loss) per share, basic and diluted $ (0.19) $ 0.05 $ (0.17) $ 0.03 Net cash provided by (used in) investing activities 1,790 18,755 6,239 (146,831)
Other long-term liabilities 7,516 16,418 Cash flows from financing activities:
Deferred income taxes 48,401 46,684 Cash dividends declared per common share $ 0.05 $ 0.05 $ 0.10 $ 0.05 Proceeds from stock option exercises 106 106
Total liabilities 396,658 357,677 Tax payments related to shares withheld for share-based compensation plans (12) (751) (2,239)
Weighted average common shares outstanding, basic 85,359,998 88,959,935 85,728,820 89,635,759 Payments on long-term debt (750) (750) (1,500) (1,500)
Stockholders' equity Weighted average common shares outstanding, diluted 85,359,998 90,021,949 85,728,820 90,805,086 Dividends paid (4,269) (4,442) (8,540) (8,960)
Class A common stock 6 6 Repurchase of Class A common stock (1,302) (5,258) (9,008) (7,660)
Class B common stock 2 2 Payment of contingent consideration (2,015) (2,015)
Class U common stock 1 1 Payments of capitalized debt costs (225) (225)
Additional paid-in capital 846,345 862,299 Net cash used in financing activities (6,546) (12,371) (20,024) (22,268)
Accumulated deficit (543,019) (528,164) Effect of exchange rates on cash, cash equivalents and restricted cash 21 (4) 13 (10)
Accumulated other comprehensive income (loss) (414) (1,412) Net increase (decrease) in cash, cash equivalents and restricted cash 628 19,668 5,898 (152,193)
Total stockholders' equity 302,921 332,732 Cash, cash equivalents and restricted cash:
Total liabilities and stockholders' equity $ 699,579 $ 690,409 Beginning 52,735 89,993 47,465 261,854
Ending $ 53,363 $ 109,661 $ 53,363 $ 109,661

 

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 Six-Month Period Three-Month Period Six-Month Period Three-Month Period Six-Month Period June 30, December 31, Three-Month Period Six-Month Period Three-Month Period Six-Month Period Three-Month Period Six-Month Period
Ended June 30, Ended June 30, Ended June 30, Ended June 30, Ended June 30, Ended June 30, 2019 2018 Ended June 30, Ended June 30, Ended June 30, Ended June 30, Ended June 30, Ended June 30,
2019 2018 % Change 2019 2018 % Change 2019 2018 % Change 2019 2018 % Change 2019 2018 % Change 2019 2018 % Change 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018
Net revenue $ 69,241 $ 74,329 (7) % $ 133,921 $ 141,167 (5) % Net revenue $ 69,241 $ 74,329 (7) % Net revenue $ 133,921 $ 141,167 (5) % Net Revenue
Cost of revenue - digital media (1) 8,859 11,384 (22) % 16,501 22,009 (25) % Cost of revenue - digital media (1) 8,859 11,384 (22) % Cost of revenue - digital media (1) 16,501 22,009 (25) % Television $ 38,071 $ 36,531 4 % $ 76,324 $ 71,022 7 % ASSETS Net revenue $ 69,241 $ 74,329 $ 133,921 $ 141,167 Cash flows from operating activities: Consolidated adjusted EBITDA (1) $ 12,579 $ 14,866 $ 20,636 $ 21,803
Operating expenses (2) 43,200 43,790 (1) % 85,944 88,117 (2) % Operating expenses (1) 43,200 43,790 (1) % Operating expenses (1) 85,944 88,117 (2) % Radio 14,366 17,240 (17) % 26,321 31,343 (16) % Current assets Net income (loss) $ (16,279) $ 4,840 $ (14,855) $ 3,033
Corporate expenses (3) 6,501 6,266 4 % 13,395 12,241 9 % Corporate expenses (1) 6,501 6,266 4 % Corporate expenses (1) 13,395 12,241 9 % Digital 16,804 20,558 (18) % 31,276 38,802 (19) % Cash and cash equivalents $ 52,631 $ 46,733 Expenses: Adjustments to reconcile net income (loss) to net cash provided byoperating activities: Interest expense (3,554) (4,001) (7,044) (7,399)
Foreign currency (gain) loss (82) (17) 382 % 50 196 (74) % Depreciation and amortization 4,306 4,019 7 % Depreciation and amortization 8,222 7,958 3 % Total $ 69,241 $ 74,329 (7) % $ 133,921 $ 141,167 (5) % Marketable securities 113,349 132,424 Cost of revenue - digital media 8,859 11,384 16,501 22,009 Depreciation and amortization 4,306 4,019 8,222 7,958 Interest income 857 1,039 1,776 1,952
Change in fair value contingent consideration (2,735) (913) 200 % Change in fair value contingent consideration (2,376) 1,187 * Restricted cash 732 732 Direct operating expenses 29,655 31,117 58,585 62,150 Impairment charge 22,368 22,368 Dividend income 251 417 506 545
Consolidated adjusted EBITDA (4) 12,579 14,866 (15) % 20,636 21,803 (5) % Impairment charge 22,368 - Impairment charge 22,368 - * Cost of Revenue - digital media (1) Trade receivables, net of allowance for doubtful accounts 69,841 79,308 Selling, general and administrative expenses 13,545 12,673 27,359 25,967 Deferred income taxes 1,002 2,043 1,472 1,029 Income tax expense (2,252) (2,652) (3,345) (1,721)
Foreign currency (gain) loss (82) (17) 382 % Foreign currency (gain) loss 50 196 (74) % Digital $ 8,859 $ 11,384 (22) % $ 16,501 $ 22,009 (25) % Assets held for sale 1,179 1,179 Corporate expenses 6,501 6,266 13,395 12,241 Non-cash interest 238 414 489 538 Equity in net loss of nonconsolidated affiliates (2) (36) (158) (98)
Free cash flow (5) $ 1,860 $ 8,937 (79) % $ 3,153 $ 10,550 (70) % Other operating (gain) loss (1,597) (273) 485 % Other operating (gain) loss (3,593) (295) 1118 % Prepaid expenses and other current assets 12,558 10,672 Depreciation and amortization 4,306 4,019 8,222 7,958 Amortization of syndication contracts 125 176 249 352 Amortization of syndication contracts (125) (176) (249) (352)
Operating Expenses (1) Total current assets 250,290 271,048 Change in fair value contingent consideration (2,735) (913) (2,376) 1,187 Payments on syndication contracts (92) (174) (227) (360) Payments on syndication contracts 92 174 227 360
Net income (loss) $ (16,279) $ 4,840 $ (14,855) $ 3,033 Operating income (loss) (11,579) 10,073 Operating income (loss) (6,590) 9,754 * Television 20,791 20,589 1 % 41,532 42,111 (1) % Property and equipment, net 74,502 64,939 Impairment charge 22,368 - 22,368 - Equity in net (income) loss of nonconsolidated affiliate 2 36 158 98 Non-cash stock-based compensation included in direct operating expenses (116) (76) (250) (292)
Interest expense, net (2,697) (2,962) (9) % Interest expense, net (5,268) (5,447) (3) % Radio 13,924 15,437 (10) % 28,207 30,717 (8) % Intangible assets subject to amortization, net 19,442 22,598 Foreign currency (gain) loss (82) (17) 50 196 Non-cash stock-based compensation 835 1,176 1,635 2,425 Non-cash stock-based compensation included in corporate expenses (719) (1,100) (1,385) (2,133)
Net income per share, basic and diluted $ (0.19) $ 0.05 $ (0.17) $ 0.03 Dividend income 251 417 (40) % Dividend income 506 545 (7) % Digital 8,485 7,764 9 % 16,205 15,289 6 % Intangible assets not subject to amortization 254,598 254,598 Other operating (gain) loss (1,597) (273) (3,593) (295) (Gain) loss on disposal of property and equipment 75 161 Depreciation and amortization (4,306) (4,019) (8,222) (7,958)
Total $ 43,200 $ 43,790 (1) % $ 85,944 $ 88,117 (2) % Goodwill 51,857 74,292 80,820 64,256 140,511 131,413 Changes in assets and liabilities: Change in fair value contingent consideration 2,735 913 2,376 (1,187)
Weighted average common shares outstanding, basic 85,359,998 88,959,935 85,728,820 89,635,759 Income (loss) before income taxes (14,025) 7,528 Income (loss) before income taxes (11,352) 4,852 * Operating leases right of use asset 46,206 - Operating income (loss) (11,579) 10,073 (6,590) 9,754 (Increase) decrease in accounts receivable (4,038) (1,873) 9,619 9,170 Impairment charge (22,368) - (22,368)
Weighted average common shares outstanding, diluted 85,359,998 90,021,949 85,728,820 90,805,086 Corporate Expenses (1) $ 6,501 $ 6,266 4 % $ 13,395 $ 12,241 9 % Other assets 2,684 2,934 Interest expense (3,554) (4,001) (7,044) (7,399) (Increase) decrease in prepaid expenses and other assets 1,811 (2,566) 2,680 (6,547) Non-recurring cash severance charge (948) (782) (948) (782)
Income tax benefit (expense) (2,252) (2,652) (15) % Income tax benefit (expense) (3,345) (1,721) 94 % Total assets $ 699,579 $ 690,409 Interest income 857 1,039 1,776 1,952 Increase (decrease) in accounts payable, accrued expensesand other liabilities (4,990) 5,197 (12,301) (780) Other operating gain (loss) 1,597 273 3,593 295
Net income (loss) before equity in net income (loss) of nonconsolidated affiliates (16,277) 4,876 Net income (loss) before equity in net income (loss) of nonconsolidated affiliates (14,697) 3,131 * Consolidated adjusted EBITDA (1) $ 12,579 $ 14,866 (15) % $ 20,636 $ 21,803 (5) % Dividend income 251 417 506 545 Net cash provided by operating activities 5,363 13,288 19,670 16,916 Net income (loss) (16,279) 4,840 (14,855) 3,033
Equity in net income (loss) of nonconsolidated affiliates, net of tax (2) (36) (94) % Equity in net income (loss) of nonconsolidated affiliates, net of tax (158) (98) 61 % Income (loss) before income taxes (14,025) 7,528 (11,352) 4,852 Cash flows from investing activities:
Net income (loss) $ (16,279) $ 4,840 Net income (loss) $ (14,855) $ 3,033 * LIABILITIES AND STOCKHOLDERS' EQUITY Income tax benefit (expense) (2,252) (2,652) (3,345) (1,721) Proceeds from sale of property and equipment and intangibles 33 33 Depreciation and amortization 4,306 4,019 8,222 7,958
Current liabilities Purchases of property and equipment (7,910) (2,680) (13,982) (5,710) Impairment charge 22,368 - 22,368 -
Current maturities of long-term debt $ 3,000 $ 3,000 Income (loss) before equity in net income (loss) of nonconsolidated affiliate (16,277) 4,876 (14,697) 3,131 Purchases of intangible assets (3,153) Deferred income taxes 1,002 2,043 1,472 1,029
Accounts payable and accrued expenses 46,198 51,034 Equity in net income (loss) of nonconsolidated affiliate, net of tax (2) (36) (158) (98) Purchase of a businesses, net of cash acquired (3,563) (3,563) Non-cash interest 238 414 489 538
Operating lease liabilities 11,420 - Net income (loss) $ (16,279) $ 4,840 $ (14,855) $ 3,033 Purchases of marketable securities (1,160) (1,160) (159,403) Amortization of syndication contracts 125 176 249 352
Total current liabilities 60,618 54,034 Proceeds from marketable securities 10,960 25,000 21,681 25,000 Payments on syndication contracts (92) (174) (227) (360)
Long-term debt, less current maturities, net of unamortized debt issuance costs 239,032 240,541 Basic and diluted earnings per share: Purchases of investments (100) (35) (300) (35) Equity in net (income) loss of nonconsolidated affiliate 2 36 158 98
Long-term operating lease liabilities 41,091 - Net income (loss) per share, basic and diluted $ (0.19) $ 0.05 $ (0.17) $ 0.03 Net cash provided by (used in) investing activities 1,790 18,755 6,239 (146,831) Non-cash stock-based compensation 835 1,176 1,635 2,425
Other long-term liabilities 7,516 16,418 Cash flows from financing activities: (Gain) loss on disposal of property and equipment 75 - 161 -
Deferred income taxes 48,401 46,684 Cash dividends declared per common share $ 0.05 $ 0.05 $ 0.10 $ 0.05 Proceeds from stock option exercises 106 106 Changes in assets and liabilities:
Total liabilities 396,658 357,677 Tax payments related to shares withheld for share-based compensation plans (12) (751) (2,239) (Increase) decrease in accounts receivable (4,038) (1,873) 9,619 9,170
Weighted average common shares outstanding, basic 85,359,998 88,959,935 85,728,820 89,635,759 Payments on long-term debt (750) (750) (1,500) (1,500) (Increase) decrease in prepaid expenses and other assets 1,811 (2,566) 2,680 (6,547)
Stockholders' equity Weighted average common shares outstanding, diluted 85,359,998 90,021,949 85,728,820 90,805,086 Dividends paid (4,269) (4,442) (8,540) (8,960) Increase (decrease) in accounts payable, accrued expenses and other liabilities (4,990) 5,197 (12,301) (780)
Class A common stock 6 6 Repurchase of Class A common stock (1,302) (5,258) (9,008) (7,660) Cash flows from operating activities 5,363 13,288 19,670 16,916
Class B common stock 2 2 Payment of contingent consideration (2,015) (2,015)
Class U common stock 1 1 Payments of capitalized debt costs (225) (225)
Additional paid-in capital 846,345 862,299 Net cash used in financing activities (6,546) (12,371) (20,024) (22,268)
Accumulated deficit (543,019) (528,164) Effect of exchange rates on cash, cash equivalents and restricted cash 21 (4) 13 (10)
Accumulated other comprehensive income (loss) (414) (1,412) Net increase (decrease) in cash, cash equivalents and restricted cash 628 19,668 5,898 (152,193)
Total stockholders' equity 302,921 332,732 Cash, cash equivalents and restricted cash:
Total liabilities and stockholders' equity $ 699,579 $ 690,409 Beginning 52,735 89,993 47,465 261,854
Ending $ 53,363 $ 109,661 $ 53,363 $ 109,661

(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 Six-Month Period Three-Month Period Six-Month Period Three-Month Period Six-Month Period June 30, December 31, Three-Month Period Six-Month Period Three-Month Period Six-Month Period Three-Month Period Six-Month Period Three-Month Period Six-Month Period
Ended June 30, Ended June 30, Ended June 30, Ended June 30, Ended June 30, Ended June 30, 2019 2018 Ended June 30, Ended June 30, Ended June 30, Ended June 30, Ended June 30, Ended June 30, Ended June 30, Ended June 30,
2019 2018 % Change 2019 2018 % Change 2019 2018 % Change 2019 2018 % Change 2019 2018 % Change 2019 2018 % Change 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018
Net revenue $ 69,241 $ 74,329 (7) % $ 133,921 $ 141,167 (5) % Net revenue $ 69,241 $ 74,329 (7) % Net revenue $ 133,921 $ 141,167 (5) % Net Revenue Consolidated adjusted EBITDA (1) $ 12,579 $ 14,866 $ 20,636 $ 21,803
Cost of revenue - digital media (1) 8,859 11,384 (22) % 16,501 22,009 (25) % Cost of revenue - digital media (1) 8,859 11,384 (22) % Cost of revenue - digital media (1) 16,501 22,009 (25) % Television $ 38,071 $ 36,531 4 % $ 76,324 $ 71,022 7 % ASSETS Net revenue $ 69,241 $ 74,329 $ 133,921 $ 141,167 Cash flows from operating activities: Consolidated adjusted EBITDA (1) $ 12,579 $ 14,866 $ 20,636 $ 21,803 Net interest expense (1) (2,459) (2,549) (4,779) (4,909)
Operating expenses (2) 43,200 43,790 (1) % 85,944 88,117 (2) % Operating expenses (1) 43,200 43,790 (1) % Operating expenses (1) 85,944 88,117 (2) % Radio 14,366 17,240 (17) % 26,321 31,343 (16) % Current assets Net income (loss) $ (16,279) $ 4,840 $ (14,855) $ 3,033 Dividend income 251 417 506 545
Corporate expenses (3) 6,501 6,266 4 % 13,395 12,241 9 % Corporate expenses (1) 6,501 6,266 4 % Corporate expenses (1) 13,395 12,241 9 % Digital 16,804 20,558 (18) % 31,276 38,802 (19) % Cash and cash equivalents $ 52,631 $ 46,733 Expenses: Adjustments to reconcile net income (loss) to net cash provided byoperating activities: Interest expense (3,554) (4,001) (7,044) (7,399) Cash paid for income taxes (1,250) (608) (1,873) (692)
Foreign currency (gain) loss (82) (17) 382 % 50 196 (74) % Depreciation and amortization 4,306 4,019 7 % Depreciation and amortization 8,222 7,958 3 % Total $ 69,241 $ 74,329 (7) % $ 133,921 $ 141,167 (5) % Marketable securities 113,349 132,424 Cost of revenue - digital media 8,859 11,384 16,501 22,009 Depreciation and amortization 4,306 4,019 8,222 7,958 Interest income 857 1,039 1,776 1,952 Capital expenditures (2) (7,910) (2,680) (13,982) (5,710)
Change in fair value contingent consideration (2,735) (913) 200 % Change in fair value contingent consideration (2,376) 1,187 * Restricted cash 732 732 Direct operating expenses 29,655 31,117 58,585 62,150 Impairment charge 22,368 22,368 Dividend income 251 417 506 545 Non-recurring cash severance charge (948) (782) (948) (782)
Consolidated adjusted EBITDA (4) 12,579 14,866 (15) % 20,636 21,803 (5) % Impairment charge 22,368 - Impairment charge 22,368 - * Cost of Revenue - digital media (1) Trade receivables, net of allowance for doubtful accounts 69,841 79,308 Selling, general and administrative expenses 13,545 12,673 27,359 25,967 Deferred income taxes 1,002 2,043 1,472 1,029 Income tax expense (2,252) (2,652) (3,345) (1,721) FCC Reimbursement 1,597 273 3,593 295
Foreign currency (gain) loss (82) (17) 382 % Foreign currency (gain) loss 50 196 (74) % Digital $ 8,859 $ 11,384 (22) % $ 16,501 $ 22,009 (25) % Assets held for sale 1,179 1,179 Corporate expenses 6,501 6,266 13,395 12,241 Non-cash interest 238 414 489 538 Equity in net loss of nonconsolidated affiliates (2) (36) (158) (98) Free cash flow (1) 1,860 8,937 3,153 10,550
Free cash flow (5) $ 1,860 $ 8,937 (79) % $ 3,153 $ 10,550 (70) % Other operating (gain) loss (1,597) (273) 485 % Other operating (gain) loss (3,593) (295) 1118 % Prepaid expenses and other current assets 12,558 10,672 Depreciation and amortization 4,306 4,019 8,222 7,958 Amortization of syndication contracts 125 176 249 352 Amortization of syndication contracts (125) (176) (249) (352)
Operating Expenses (1) Total current assets 250,290 271,048 Change in fair value contingent consideration (2,735) (913) (2,376) 1,187 Payments on syndication contracts (92) (174) (227) (360) Payments on syndication contracts 92 174 227 360 Capital expenditures (2) 7,910 2,680 13,982 5,710
Net income (loss) $ (16,279) $ 4,840 $ (14,855) $ 3,033 Operating income (loss) (11,579) 10,073 Operating income (loss) (6,590) 9,754 * Television 20,791 20,589 1 % 41,532 42,111 (1) % Property and equipment, net 74,502 64,939 Impairment charge 22,368 - 22,368 - Equity in net (income) loss of nonconsolidated affiliate 2 36 158 98 Non-cash stock-based compensation included in direct operating expenses (116) (76) (250) (292) Change in fair value of contingent consideration 2,735 913 2,376 (1,187)
Interest expense, net (2,697) (2,962) (9) % Interest expense, net (5,268) (5,447) (3) % Radio 13,924 15,437 (10) % 28,207 30,717 (8) % Intangible assets subject to amortization, net 19,442 22,598 Foreign currency (gain) loss (82) (17) 50 196 Non-cash stock-based compensation 835 1,176 1,635 2,425 Non-cash stock-based compensation included in corporate expenses (719) (1,100) (1,385) (2,133) (Gain) loss on disposal of property and equipment 75 - 161 -
Net income per share, basic and diluted $ (0.19) $ 0.05 $ (0.17) $ 0.03 Dividend income 251 417 (40) % Dividend income 506 545 (7) % Digital 8,485 7,764 9 % 16,205 15,289 6 % Intangible assets not subject to amortization 254,598 254,598 Other operating (gain) loss (1,597) (273) (3,593) (295) (Gain) loss on disposal of property and equipment 75 161 Depreciation and amortization (4,306) (4,019) (8,222) (7,958) Changes in assets and liabilities:
Total $ 43,200 $ 43,790 (1) % $ 85,944 $ 88,117 (2) % Goodwill 51,857 74,292 80,820 64,256 140,511 131,413 Changes in assets and liabilities: Change in fair value contingent consideration 2,735 913 2,376 (1,187) (Increase) decrease in accounts receivable (4,038) (1,873) 9,619 9,170
Weighted average common shares outstanding, basic 85,359,998 88,959,935 85,728,820 89,635,759 Income (loss) before income taxes (14,025) 7,528 Income (loss) before income taxes (11,352) 4,852 * Operating leases right of use asset 46,206 - Operating income (loss) (11,579) 10,073 (6,590) 9,754 (Increase) decrease in accounts receivable (4,038) (1,873) 9,619 9,170 Impairment charge (22,368) - (22,368) (Increase) decrease in prepaid expenses and other assets 1,811 (2,566) 2,680 (6,547)
Weighted average common shares outstanding, diluted 85,359,998 90,021,949 85,728,820 90,805,086 Corporate Expenses (1) $ 6,501 $ 6,266 4 % $ 13,395 $ 12,241 9 % Other assets 2,684 2,934 Interest expense (3,554) (4,001) (7,044) (7,399) (Increase) decrease in prepaid expenses and other assets 1,811 (2,566) 2,680 (6,547) Non-recurring cash severance charge (948) (782) (948) (782) Increase (decrease) in accounts payable, accrued expenses and other liabilities (4,990) 5,197 (12,301) (780)
Income tax benefit (expense) (2,252) (2,652) (15) % Income tax benefit (expense) (3,345) (1,721) 94 % Total assets $ 699,579 $ 690,409 Interest income 857 1,039 1,776 1,952 Increase (decrease) in accounts payable, accrued expensesand other liabilities (4,990) 5,197 (12,301) (780) Other operating gain (loss) 1,597 273 3,593 295 Cash Flows From Operating Activities $ 5,363 $ 13,288 $ 19,670 $ 16,916
Net income (loss) before equity in net income (loss) of nonconsolidated affiliates (16,277) 4,876 Net income (loss) before equity in net income (loss) of nonconsolidated affiliates (14,697) 3,131 * Consolidated adjusted EBITDA (1) $ 12,579 $ 14,866 (15) % $ 20,636 $ 21,803 (5) % Dividend income 251 417 506 545 Net cash provided by operating activities 5,363 13,288 19,670 16,916 Net income (loss) (16,279) 4,840 (14,855) 3,033
Equity in net income (loss) of nonconsolidated affiliates, net of tax (2) (36) (94) % Equity in net income (loss) of nonconsolidated affiliates, net of tax (158) (98) 61 % Income (loss) before income taxes (14,025) 7,528 (11,352) 4,852 Cash flows from investing activities:
Net income (loss) $ (16,279) $ 4,840 Net income (loss) $ (14,855) $ 3,033 * LIABILITIES AND STOCKHOLDERS' EQUITY Income tax benefit (expense) (2,252) (2,652) (3,345) (1,721) Proceeds from sale of property and equipment and intangibles 33 33 Depreciation and amortization 4,306 4,019 8,222 7,958
Current liabilities