Entravision(US:EVC)2020-11-08 14:12Financial Data and Key Metrics Changes - Revenues for Q3 totaled $63 million, down 8% year-over-year but up 40% sequentially [7][30] - Consolidated operating expenses for Q3 2020 declined 21% year-over-year [7][33] - Adjusted EBITDA increased significantly to $16.4 million for Q3 2020, up 79% compared to $9.1 million in the prior year [7][35] - Free cash flow was approximately $10.6 million in the quarter compared to $326,000 in the prior year period [35] - Earnings per share for Q3 2020 were a positive $0.11 compared to a loss of $0.14 per share in the same period last year [36] Business Line Data and Key Metrics Changes - Television segment generated revenues of $37.8 million, up 4% year-over-year and up 40% sequentially [9][30] - Audio segment revenues totaled $11.5 million, down 22% year-over-year but up 70% sequentially [13][31] - Digital revenues totaled $13.7 million, a decrease of 22% year-over-year but improved 20% sequentially [22][31] Market Data and Key Metrics Changes - Political advertising revenue for Q3 totaled $6.3 million, with expectations to exceed $28 million for 2020 [7][8] - National advertising revenues were up 37% driven mainly by political spend, while local advertising revenues were down 14% due to COVID-19 [9] Company Strategy and Development Direction - The company is focusing on enhancing digital advertising capabilities through strategic investments, including a majority investment in Cisneros Interactive [21][39] - The investment in Cisneros Interactive aims to expand digital service offerings and position the company as a leading digital advertising entity in the U.S. and Latin America [21][40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the prospects for the balance of the year and into 2021, citing strong sequential growth across all operating segments [6][28] - The company anticipates maintaining the majority of its operating cost cuts into Q4 [34] Other Important Information - The company maintained its dividend at $0.025 and is considering future dividend policies based on performance [34][55] - Cash and marketable securities as of September 30, 2020, totaled $136.5 million, with total debt at $216 million [37] Q&A Session Summary Question: What is the political revenue for TV and radio in Q4? - Political for Q4 is approximately $11.1 million for TV and about $3 million for radio [45] Question: Can you provide more color on digital revenue in Q4 excluding Cisneros? - Local digital is pacing strongly at plus 10%, while international business is down 30% [48] Question: What are the cost reductions expected to flow into Q4? - Revenue increase will lead to a variable expense increase of $3 million to $4 million, with an additional $3.9 million associated with Cisneros [53][54] Question: What is the M&A climate in the digital business? - The company is actively looking at digital companies that complement its portfolio and hopes to find reasonable multiples for acquisitions [58] Question: What is the EBITDA margin for Cisneros Interactive? - The EBITDA margin is about 5% to 6%, with full revenue and expense booked on the P&L [65] Question: What is the moat around the Cisneros Interactive business? - The moat includes relationships with major tech platforms like Facebook, Spotify, and LinkedIn, along with strong management [67]