Entravision(US:EVC)2025-03-06 21:15Part I Business Entravision, post-EGP divestiture, operates in Media and Advertising Technology & Services, focusing on U.S. Latino audiences and global programmatic advertising - The company realigned into Media and Advertising Technology & Services segments after divesting its Entravision Global Partners (EGP) business in Q2 20248965 FY 2024 Revenue Breakdown by Segment | Segment | Revenue Contribution (%) | Source Chunk | | :--- | :--- | :--- | | Media | ~61% | [20] | | Advertising Technology & Services | ~39% | [20] | - The company operates one of the largest Spanish-language TV and radio station groups in the U.S., serving as the largest affiliate for TelevisaUnivision networks until December 31, 2026182324 - In 2024, the company significantly expanded local news programming by adding 107 new weekly newscasts to boost political advertising revenue2728 - The Advertising Technology & Services segment is powered by Smadex, an AI-driven programmatic ad platform, and Adwake, a performance-based media agency195458 - The EGP business divestiture was driven by Meta Platforms, Inc.'s decision to terminate its Authorized Sales Partners (ASP) program64 - As of December 31, 2024, the company had approximately 990 employees worldwide, with 684 in the U.S. and 306 internationally83 Risk Factors The company faces significant risks including declining media audiences, intense ad-tech competition, substantial debt, and evolving regulatory and data privacy landscapes - Media operations face risks from declining audiences, intense competition, and heavy reliance on TelevisaUnivision affiliation agreements, which can complicate corporate transactions949598 - Ad Tech & Services risks include rapid technological changes, reduced ad inventory, intense competition, and evolving privacy regulations impacting data usage100102105 - Financial risks include $187.0 million in debt as of December 31, 2024, with restrictive covenants, and reduced consolidated EBITDA post-EGP sale potentially challenging covenant compliance113114115 - Regulatory risks involve extensive FCC regulation and the potential for material adverse effects from non-renewal of broadcast licenses, alongside evolving global data protection laws like GDPR and CCPA122124125 Unresolved Staff Comments The company reports no unresolved staff comments - None136 Cybersecurity Entravision maintains a cybersecurity risk management program, overseen by the Audit Committee and CISO, with no material threats identified to date - The company implemented security awareness training, expanded asset management, and enhanced identity and access management with multi-factor authentication138139 - No cybersecurity threats have been identified that materially affected or are reasonably likely to materially affect the company's business or financial condition143 - Cybersecurity governance is managed by the Audit Committee, receiving periodic reports, and a CISO leading the day-to-day program144145 Properties The company's corporate headquarters are leased in Burbank, CA, with a decision to vacate its former Santa Monica headquarters, while media properties are mixed owned and leased - Corporate headquarters are a leased 12,000 sq. ft. space in Burbank, CA, with the lease expiring in February 2026148 - The company decided to vacate its former Santa Monica headquarters in February 2025, ceasing lease payments on the property whose lease runs through January 2034148542 Legal Proceedings The company is involved in litigation incidental to its business from time to time but is not currently a party to any lawsuit that management believes is likely to have a material adverse effect on the company - No current legal proceedings are expected to have a material adverse effect on the company or its business151 Mine Safety Disclosures This item is not applicable to the company - Not applicable152 Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Entravision's Class A common stock trades on the NYSE as 'EVC', pays a dividend subject to Board discretion and debt covenants, and has a $20 million share repurchase program with no 2024 activity - The company's Class A common stock is listed on The New York Stock Exchange under the symbol 'EVC'154 - A $20 million share repurchase program was approved in March 2022, with no repurchases in 2024, and $11.3 million used to repurchase 1.8 million shares to date161162 - The company pays a common stock dividend, but future policy is at Board discretion and restricted by the 2023 Credit Agreement160 Reserved This item is reserved Management's Discussion and Analysis of Financial Condition and Results of Operations In 2024, consolidated net revenue grew significantly, but an operating loss was driven by substantial impairment charges, with the EGP divestiture impacting future cash flows and debt covenant compliance Consolidated Results of Operations (in thousands) | Metric | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Revenue | $364,948 | $297,043 | 23% | | Media | $222,061 | $196,268 | 13% | | Ad Tech & Services | $142,887 | $100,775 | 42% | | Operating Income (Loss) | ($51,980) | ($26,496) | 96% | | Impairment Charge | $61,220 | $13,267 | 361% | | Net Income (Loss) from Cont. Ops | ($70,290) | ($33,146) | 112% | - The company achieved record political advertising revenue in 2024, marking the fifth consecutive election cycle with increased political ad revenue171 - A significant impairment charge of $61.2 million was recorded in 2024, including $43.3 million for goodwill and $17.9 million for FCC licenses in the media segment182 - The EGP business disposition is expected to materially affect future cash flow from operations, potentially impacting liquidity and compliance with 2023 Credit Agreement financial covenants210 - Management believes its cash position ($95.9 million in cash and equivalents, $4.7 million in marketable securities as of December 31, 2024) and ability to prepay debt will ensure compliance with financial covenants for the next twelve months207213 Consolidated EBITDA (Non-GAAP) Reconciliation (in thousands) | | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Net income (loss) attributable to common stockholders | $(148,908) | $(15,437) | | Consolidated EBITDA | $49,531 | $57,666 | Quantitative and Qualitative Disclosures About Market Risk The company faces market risk from variable-rate debt, with $187.8 million outstanding, and foreign currency exposure, primarily in Euros, but does not currently hedge these risks - As of December 31, 2024, the company had $187.8 million of variable rate bank debt outstanding under its 2023 Credit Facility263 - A hypothetical 1% increase in SOFR would increase annual interest expense and decrease cash flow from operations by approximately $1.9 million264 - The company faces foreign currency risks from non-U.S. operations, primarily in Euros, but does not use hedging instruments as the effect is not material265267 Financial Statements and Supplementary Data This section presents audited consolidated financial statements, including notes on the discontinued EGP business, significant goodwill and intangible asset impairments, long-term debt, and related-party transactions - Deloitte & Touche LLP provided an unqualified opinion on financial statements and internal controls, identifying goodwill impairment as a critical audit matter308318 Consolidated Balance Sheet Summary (in thousands) | | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $186,300 | $385,855 | | Goodwill | $7,352 | $50,674 | | Total Assets | $487,278 | $865,946 | | Total Current Liabilities | $61,626 | $272,053 | | Long-Term Debt, net | $186,958 | $197,884 | | Total Liabilities | $341,258 | $599,660 | | Total Stockholders' Equity | $146,020 | $222,528 | - Note 4 details the EGP business sale in Q2 2024, resulting in a $45.2 million combined loss included in net loss from discontinued operations, with results presented as discontinued for all periods419424427 - Note 6 details a $43.3 million goodwill impairment and $17.9 million FCC license impairment in 2024, plus an additional $49.4 million impairment related to discontinued operations442445429 - Note 10 outlines 2023 Credit Facility covenants, including a total net leverage ratio not exceeding 3.25 to 1.00 and an interest coverage ratio minimum of 3.00 to 1.00, with the company in compliance as of December 31, 2024468 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None269 Controls and Procedures Management, including the CEO and CFO, concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2024, with no material changes reported in Q4 2024 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the report period end270 - Management's assessment and Deloitte & Touche LLP's unqualified opinion confirmed effective internal control over financial reporting as of December 31, 2024271273 - No material changes to internal control over financial reporting occurred during the fourth quarter of 2024275 Other Information During the fourth quarter of 2024, no directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No insider trading arrangements under Rule 10b5-1 were adopted or terminated by directors or officers during Q4 2024276 Disclosure Regarding Foreign Jurisdictions That Prevent Inspections This item is not applicable to the company - Not applicable277 Part III Directors, Executive Officers, Corporate Governance, and Other Matters (Items 10-14) Information for Items 10-14, covering directors, executive officers, compensation, security ownership, and related-party transactions, is incorporated by reference from the 2025 Proxy Statement - Information for Items 10-14 is incorporated by reference from the company's Proxy Statement for the 2025 Annual Meeting of Stockholders280281282 Part IV Exhibits and Financial Statement Schedules This section lists all documents filed as part of the Form 10-K, including consolidated financial statements, schedules, and a comprehensive index of exhibits - This item lists the financial statements, financial statement schedules, and all exhibits filed with the annual report287288 Form 10-K Summary The company reports no Form 10-K summary - None295