Entravision(US:EVC)2025-05-08 20:10PART I. FINANCIAL INFORMATION This section details the company's unaudited financial statements, management's analysis, market risk, and internal controls Financial Statements This section presents the unaudited condensed consolidated financial statements, highlighting the EGP business divestiture, segment realignment, an impairment charge, and a lease abandonment loss Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2025 ($ in thousands) | December 31, 2024 ($ in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | 73,610 | 95,914 | | Assets held for sale | 4,650 | - | | Total assets | 435,822 | 487,278 | | Total current liabilities | 65,308 | 61,626 | | Long-term debt, less current maturities | 184,514 | 186,958 | | Total liabilities | 340,214 | 341,258 | | Total stockholders' equity | 95,608 | 146,020 | Condensed Consolidated Statements of Operations Highlights (Unaudited) | Account | Three-Month Period Ended March 31, 2025 ($ in thousands) | Three-Month Period Ended March 31, 2024 ($ in thousands) | | :--- | :--- | :--- | | Net Revenue | 91,851 | 78,176 | | Impairment charge | 23,673 | - | | Loss on lease abandonment | 25,191 | - | | Operating income (loss) | (52,770) | (7,649) | | Net income (loss) from continuing operations | (47,775) | (7,510) | | Net income (loss) attributable to common stockholders | (47,966) | (48,890) | | Net income (loss) per share, basic and diluted | (0.53) | (0.55) | - The company's EGP business, sold in Q2 2024 following Meta's decision to end its Authorized Sales Partners (ASP) program, is now classified as discontinued operations, representing a strategic shift282933 - In March 2025, the company entered into a letter of intent to sell two Mexico television stations for a combined price of $4.7 million, leading to a $23.7 million impairment charge in Q1 2025 due to a significantly higher carrying value3464 - The company vacated its Santa Monica headquarters in February 2025, resulting in a $25.2 million loss on lease abandonment, comprising $16.1 million for the right-of-use asset and $9.1 million for leasehold improvements66121 - Effective July 1, 2024, the company realigned its operations from three segments (digital, television, audio) into two new reportable segments: Media and Advertising Technology & Services10125 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2025 financial results, highlighting revenue growth, significant operating losses from one-time charges, and the company's liquidity position Q1 2025 vs Q1 2024 Performance Summary | Metric | Q1 2025 ($ in thousands) | Q1 2024 ($ in thousands) | % Change | | :--- | :--- | :--- | :--- | | Net Revenue | 91,851 | 78,176 | 17% | | Operating income (loss) | (52,770) | (7,649) | 590% | | Net income (loss) from continuing operations | (47,775) | (7,510) | 536% | | Net cash provided by (used in) operating activities | (15,244) | 33,375 | N/A | Revenue by Segment (Q1 2025 vs Q1 2024) | Segment | Q1 2025 Revenue ($ in thousands) | Q1 2024 Revenue ($ in thousands) | % Change | | :--- | :--- | :--- | :--- | | Media | 40,977 | 45,766 | (10)% | | Advertising Technology & Services | 50,874 | 32,410 | 57% | | Consolidated | 91,851 | 78,176 | 17% | - The operating loss was primarily driven by two significant one-time charges: a $23.7 million impairment on assets held for sale and a $25.2 million loss on lease abandonment172173 - Management believes the company has sufficient liquidity to operate for the next twelve months, citing $78.1 million in combined cash and marketable securities and the ability to prepay debt to maintain compliance with financial covenants under the 2023 Credit Agreement197203204 - Net cash used in operating activities was $15.2 million in Q1 2025, a significant reversal from the $33.4 million provided in Q1 2024, mainly due to unfavorable changes in working capital209 Quantitative and Qualitative Disclosures About Market Risk The company's primary market risks are interest rate fluctuations on variable-rate debt and foreign currency exposure, neither of which is currently hedged - The company is exposed to interest rate risk with $187.8 million of variable-rate debt outstanding, where a hypothetical 1% (100 basis points) increase in the SOFR would increase annual interest expense by $1.9 million214215 - Foreign currency risk exists from operations outside the U.S., mainly in Europe (Euro), but management does not consider this risk material to consolidated results and has not entered into any hedging contracts216218 Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025219 - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, such controls222 PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits Legal Proceedings The company is subject to various legal claims, but management does not expect a material adverse financial impact - Management does not expect any outstanding legal proceedings to have a material adverse effect on the company's financials224 Risk Factors No new risk factors were reported for the period - No new risk factors were reported for the quarter225 Unregistered Sales of Equity Securities and Use of Proceeds This section details the company's share repurchase program, noting no repurchases in Q1 2025 and total repurchases to date - The company did not repurchase any shares of its Class A common stock during the three-month period ended March 31, 2025227 - As of March 31, 2025, the company has repurchased a total of 1.8 million shares for $11.3 million under its $20 million share repurchase program, approved in March 2022226227 Defaults Upon Senior Securities The company reported no defaults on its senior securities - None reported228 Mine Safety Disclosures This item is not applicable to the company - Not applicable229 Other Information No new or terminated Rule 10b5-1 trading arrangements were reported by directors or officers - No new or terminated insider trading arrangements (Rule 10b5-1) were reported by directors or officers in Q1 2025230 Exhibits This section lists the exhibits filed with the 10-Q report, including executive agreements and required certifications - Filed exhibits include letter agreements with Michael Christenson, Jeffery Liberman, and Mark Boelke, as well as CEO and CFO certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906233