Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 04, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | EVC | |
Entity Registrant Name | ENTRAVISION COMMUNICATIONS CORP | |
Entity Central Index Key | 1,109,116 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Class A common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 64,544,938 | |
Class B common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 14,927,613 | |
Class U common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 9,352,729 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 89,224 | $ 39,560 |
Marketable securities | 157,752 | |
Restricted cash | 769 | 222,294 |
Trade receivables, (including related parties of $4,910 and $4,653) net of allowance for doubtful accounts of $3,013 and $2,566 | 73,728 | 84,348 |
Prepaid expenses and other current assets (including related parties of $274 and $274) | 9,732 | 6,260 |
Total current assets | 331,205 | 352,462 |
Property and equipment, net of accumulated depreciation of $182,255 and $179,869 | 60,075 | 60,337 |
Intangible assets subject to amortization, net of accumulated amortization of $89,084 and $87,632 (including related parties of $9,248 and $9,555) | 25,306 | 26,758 |
Intangible assets not subject to amortization | 254,506 | 251,163 |
Goodwill | 70,557 | 70,557 |
Other assets | 4,253 | 4,690 |
Total assets | 745,902 | 765,967 |
Current liabilities | ||
Current maturities of long-term debt | 3,000 | 3,000 |
Accounts payable and accrued expenses (including related parties of $2,645 and $2,548) | 46,397 | 57,563 |
Deferred revenue | 1,535 | 1,959 |
Total current liabilities | 50,932 | 62,522 |
Long-term debt, less current maturities, net of unamortized debt issuance costs of $3,637 and $3,761 | 291,863 | 292,489 |
Other long-term liabilities | 23,420 | 21,447 |
Deferred income taxes | 39,289 | 40,639 |
Total liabilities | 405,504 | 417,097 |
Commitments and contingencies (note 5) | ||
Stockholders' equity | ||
Additional paid-in capital | 882,935 | 888,650 |
Accumulated deficit | (541,538) | (539,730) |
Accumulated other comprehensive income (loss) | (1,009) | (60) |
Total stockholders' equity | 340,398 | 348,870 |
Total liabilities and stockholders' equity | 745,902 | 765,967 |
Class A common stock | ||
Stockholders' equity | ||
Common stock | 7 | 7 |
Class B common stock | ||
Stockholders' equity | ||
Common stock | 2 | 2 |
Class U common stock | ||
Stockholders' equity | ||
Common stock | $ 1 | $ 1 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Trade receivables, related parties | $ 4,910 | $ 4,653 |
Trade receivables, allowance for doubtful accounts | 3,013 | 2,566 |
Prepaid expenses and other current assets | 9,732 | 6,260 |
Property and equipment, accumulated depreciation | 182,255 | 179,869 |
Accumulated amortization of Intangible assets | 89,084 | 87,632 |
Intangible assets subject to amortization, net | 25,306 | 26,758 |
Accounts payable and accrued expenses | 46,397 | 57,563 |
Unamortized debt issuance costs | 3,637 | 3,761 |
Related Parties | ||
Prepaid expenses and other current assets | 274 | 274 |
Intangible assets subject to amortization, net | 9,248 | 9,555 |
Accounts payable and accrued expenses | $ 2,645 | $ 2,548 |
Class A common stock | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 260,000,000 | 260,000,000 |
Common stock, shares issued | 65,586,094 | 66,069,325 |
Common stock, shares outstanding | 65,586,094 | 66,069,325 |
Class B common stock | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 14,927,613 | 14,927,613 |
Common stock, shares outstanding | 14,927,613 | 14,927,613 |
Class U common stock | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 9,352,729 | 9,352,729 |
Common stock, shares outstanding | 9,352,729 | 9,352,729 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Net Revenue | $ 66,838 | $ 57,510 |
Expenses: | ||
Cost of revenue - digital media | 10,625 | 1,752 |
Direct operating expenses (including related parties of $2,048 and $2,320) (including non-cash stock-based compensation of $216 and $223) | 31,033 | 27,092 |
Selling, general and administrative expenses | 13,294 | 11,200 |
Corporate expenses (including non-cash stock-based compensation of $1,033 and $752) | 5,975 | 5,867 |
Depreciation and amortization (includes direct operating of $2,536 and $2,205; selling, general and administrative of $1,313 and $1,016; and corporate of $90 and $325) (including related parties of $307 and $581) | 3,939 | 3,546 |
Change in fair value of contingent consideration | 2,100 | |
Foreign currency (gain) loss | 213 | |
Total expenses | 67,179 | 49,457 |
Operating income (loss) | (341) | 8,053 |
Interest expense | (3,398) | (3,645) |
Interest income | 913 | 109 |
Dividend income | 128 | |
Other income (loss) | 22 | |
Income (loss) before income taxes | (2,676) | 4,517 |
Income tax benefit (expense) | 930 | (1,899) |
Income (loss) before equity in net income (loss) of nonconsolidated affiliate | (1,746) | 2,618 |
Equity in net income (loss) of nonconsolidated affiliate, net of tax | (62) | |
Net income (loss) | $ (1,808) | $ 2,618 |
Basic and diluted earnings per share: | ||
Net income (loss) per share, basic and diluted | $ (0.02) | $ 0.03 |
Cash dividends declared per common share | $ 0.05 | $ 0.03 |
Weighted average common shares outstanding, basic | 90,319,092 | 90,236,476 |
Weighted average common shares outstanding, diluted | 90,319,092 | 91,760,531 |
Consolidated Statements of Ope5
Consolidated Statements of Operations (Parenthetical) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Direct operating expenses | $ 31,033 | $ 27,092 |
Non-cash stock-based compensation | 1,249 | 975 |
Depreciation and amortization | 3,939 | 3,546 |
Related Parties | ||
Direct operating expenses | 2,048 | 2,320 |
Depreciation and amortization | 307 | 581 |
Direct Operating Expenses | ||
Non-cash stock-based compensation | 216 | 223 |
Depreciation and amortization | 2,536 | 2,205 |
Corporate Expenses | ||
Non-cash stock-based compensation | 1,033 | 752 |
Depreciation and amortization | 90 | 325 |
Selling, General and Administrative Expenses | ||
Depreciation and amortization | $ 1,313 | $ 1,016 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income (loss) | $ (1,808) | $ 2,618 |
Other comprehensive income (loss), net of tax: | ||
Change in foreign currency translation | 290 | |
Change in fair value of available for sale securities | (1,239) | |
Change in fair value of interest rate swap agreements | 553 | |
Total other comprehensive income (loss) | (949) | 553 |
Comprehensive income (loss) | $ (2,757) | $ 3,171 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (1,808) | $ 2,618 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 3,939 | 3,546 |
Deferred income taxes | (1,014) | 1,473 |
Amortization of debt issue costs | 124 | 183 |
Amortization of syndication contracts | 176 | 109 |
Payments on syndication contracts | (186) | (113) |
Equity in net (income) loss of nonconsolidated affiliate | 62 | |
Non-cash stock-based compensation | 1,249 | 975 |
Changes in assets and liabilities: | ||
(Increase) decrease in accounts receivable | 11,043 | 10,979 |
(Increase) decrease in prepaid expenses and other assets | (3,981) | (891) |
Increase (decrease) in accounts payable, accrued expenses and other liabilities | (5,977) | (5,963) |
Net cash provided by operating activities | 3,627 | 12,916 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (3,030) | (1,526) |
Purchases of intangible assets | (3,153) | |
Purchases of marketable securities | (159,403) | |
Purchases of investments | (250) | |
Deposits on acquisition | (230) | |
Net cash used in investing activities | (165,586) | (2,006) |
Cash flows from financing activities: | ||
Proceeds from stock option exercises | 311 | |
Tax payments related to shares withheld for share-based compensation plans | (2,227) | |
Payments on long-term debt | (750) | (938) |
Dividends paid | (4,518) | (2,821) |
Repurchase of Class A common stock | (2,402) | |
Net cash used in financing activities | (9,897) | (3,448) |
Effect of exchange rates on cash, cash equivalents and restricted cash | (5) | |
Net increase (decrease) in cash, cash equivalents and restricted cash | (171,861) | 7,462 |
Cash, cash equivalents and restricted cash: | ||
Beginning | 261,854 | 61,520 |
Ending | 89,993 | 68,982 |
Cash payments for: | ||
Interest | 3,274 | 3,462 |
Income taxes | 84 | 426 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Capital expenditures financed through accounts payable, accrued expenses and other liabilities | 870 | $ 786 |
Contingent consideration included in accounts payable, accrued expenses and other liabilities | $ 18,000 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | 1. BASIS OF PRESENTATION Presentation The consolidated financial statements included herein have been prepared by Entravision Communications Corporation (the “Company”), pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted pursuant to such rules and regulations. These consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The unaudited information contained herein has been prepared on the same basis as the Company’s audited consolidated financial statements and, in the opinion of the Company’s management, includes all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the information for the periods presented. The interim results presented herein are not necessarily indicative of the results of operations that may be expected for the full fiscal year ending December 31, 2018 or any other future period. Certain amounts in the Company’s prior year period consolidated financial statements and notes to the financial statements have been reclassified to conform to current period presentation. |
The Company and Significant Acc
The Company and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
The Company and Significant Accounting Policies | 2. THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES Nature of Business The Company 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, the Company’s digital segment, whose operations are located primarily in Spain, Mexico, Argentina and other countries in Latin America, reaches a global market. Entravision’s expansive portfolio encompasses integrated marketing and media solutions, comprised of television, radio, and digital properties (including data analytics services). The Company’s management has determined that the Company operates in three reportable segments as of March 31, 2018, based upon the type of advertising medium, which segments are television, radio, and digital. As of March 31, 2018, the Company owns and/or operates 55 primary television stations located primarily in California, Colorado, Connecticut, Florida, Kansas, Massachusetts, Nevada, New Mexico, Texas and Washington, D.C. The Company’s television operations comprise the largest affiliate group of both the top-ranked primary television network of Univision Communications Inc. (“Univision”) and Univision’s UniMás network. The television broadcasting segment includes revenue generated from advertising, retransmission consent agreements and the monetization of the Company’s spectrum assets. Radio operations consist of 49 operational radio stations, 38 FM and 11 AM, in 16 markets located in Arizona, California, Colorado, Florida, Nevada, New Mexico and Texas. Entravision also operates Entravision Solutions as its national sales representation division, through which it sells advertisements and syndicate radio programming to more than 300 stations across the United States. The Company operates a proprietary technology and data platform that delivers digital advertising in various advertising formats that allows advertisers to reach audiences across a wide range of Internet-connected devices on its owned and operated digital media sites; the digital media sites of its publisher partners; and on other digital media sites it can access through third-party platforms and exchanges. Restricted Cash As of March 31, 2018, the Company’s balance sheet includes $0.8 million in restricted cash, which was deposited into a separate account as temporary collateral for the Company’s letters of credit. As of December 31, 2017, the Company’s balance sheet includes $222.3 million in restricted cash of which $221.5 million relates to proceeds received by the Company for its participation in the FCC auction for broadcast spectrum which were deposited into the account of a qualified intermediary to comply with Internal Revenue Code Section 1031 requirements to execute a like-kind exchange. The remaining $0.8 million in restricted cash was used as temporary collateral for the Company’s letters of credit. Related Party Substantially all of the Company’s stations are Univision- or UniMás-affiliated television stations. The Company’s network affiliation agreements with Univision provide certain of its owned stations the exclusive right to broadcast Univision’s primary network and UniMás network programming in their respective markets. Under the network affiliation agreement, the Company retains the right to sell no less than four minutes per hour of the available advertising time on stations that broadcast Univision network programming, and the right to sell approximately four and a half minutes per hour of the available advertising time on stations that broadcast UniMás network programming, subject to adjustment from time to time by Univision. Under the network affiliation agreement, Univision acts as the Company’s exclusive third-party sales representative for the sale of certain national advertising on the Company’s Univision- and UniMás-affiliate television stations, and it pays certain sales representation fees to Univision relating to sales of all advertising for broadcast on the Company’s Univision- and UniMás-affiliate television stations. During the three-month periods ended March 31, 2018 and 2017, the amount the Company paid Univision in this capacity was $2.0 million and $2.3 million, respectively. The Company also generates revenue under two marketing and sales agreements with Univision, which gives the Company the right to manage the marketing and sales operations of Univision-owned Univision affiliates in six markets – Albuquerque, Boston, Denver, Orlando, Tampa and Washington, D.C. Under the Company’s proxy agreement with Univision, the Company grants Univision the right to negotiate the terms of retransmission consent agreements for its Univision- and UniMás-affiliated television station signals. Among other things, the proxy agreement provides terms relating to compensation to be paid to the Company by Univision with respect to retransmission consent agreements entered into with multichannel video programming distributors, (“MVPDs”). As of March 31, 2018, the amount due to the Company from Univision was $4.9 million related to the agreements for the carriage of its Univision and UniMás-affiliated television station signals. During the three-month periods ended March 31, 2018 and 2017, retransmission consent revenue accounted for approximately $8.9 million and $8.0 million, respectively, of which $7.5 million and $7.3 million, respectively, relate to the Univision proxy agreement. The term of the proxy agreement extends with respect to any MVPD for the length of the term of any retransmission consent agreement in effect before the expiration of the proxy agreement. Univision currently owns approximately 10% of the Company’s common stock on a fully-converted basis. The Class U common stock held by Univision has limited voting rights and does not include the right to elect directors. As the holder of all of the Company’s issued and outstanding Class U common stock, so long as Univision holds a certain number of shares, the Company will not, without the consent of Univision, merge, consolidate or enter into another business combination, dissolve or liquidate the Company or dispose of any interest in any Federal Communications Commission, or FCC, license for any of its Univision-affiliated television stations, among other things. Each share of Class U common stock is automatically convertible into one share of Class A common stock (subject to adjustment for stock splits, dividends or combinations) in connection with any transfer to a third party that is not an affiliate of Univision. Stock-Based Compensation The Company measures all stock-based awards using a fair value method and recognizes the related stock-based compensation expense in the consolidated financial statements over the requisite service period. As stock-based compensation expense recognized in the Company’s consolidated financial statements is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. Stock-based compensation expense related to grants of stock options and restricted stock units was $1.2 million and $1.0 million for the three-month periods ended March 31, 2018 and 2017, respectively. Stock Options Stock-based compensation expense related to stock options is based on the fair value on the date of grant using the Black-Scholes option pricing model and is amortized over the vesting period, generally between 1 to 4 years. As of March 31, 2018, there was less than $0.1 million of total unrecognized compensation expense related to grants of stock options that is expected to be recognized over a weighted-average period of 0.8 years. Restricted Stock Units Stock-based compensation expense related to restricted stock units is based on the fair value of the Company’s stock price on the date of grant and is amortized over the vesting period, generally between 1 to 4 years. As of March 31, 2018, there was approximately $5.7 million of total unrecognized compensation expense related to grants of restricted stock units that is expected to be recognized over a weighted-average period of 1.6 years. Income (Loss) Per Share The following table illustrates the reconciliation of the basic and diluted income (loss) per share computations required by Accounting Standards Codification (ASC) 260-10, “Earnings per Share” (in thousands, except share and per share data): Three-Month Period Ended March 31, 2018 2017 Basic earnings per share: Numerator: Net income (loss) $ (1,808 ) $ 2,618 Denominator: Weighted average common shares outstanding 90,319,092 90,236,476 Per share: Net income (loss) per share $ (0.02 ) $ 0.03 Diluted earnings per share: Numerator: Net income (loss) $ (1,808 ) $ 2,618 Denominator: Weighted average common shares outstanding 90,319,092 90,236,476 Dilutive securities: Stock options and restricted stock units - 1,524,055 Diluted shares outstanding 90,319,092 91,760,531 Per share: Net income (loss) per share $ (0.02 ) $ 0.03 Basic income (loss) per share is computed as net income (loss) divided by the weighted average number of shares outstanding for the period. Diluted income (loss) per share reflects the potential dilution, if any, that could occur from shares issuable through stock options and restricted stock awards. For the three-month period ended March 31, 2018, all dilutive securities have been excluded as their inclusion would have had an antidilutive effect on loss per share. The number of securities whose conversion would result in an incremental number of shares that would be included in determining the weighted average shares outstanding for diluted earnings per share if their effect was not antidilutive was 1,276,642 For the three-month period ended March 31, 2017, a total of 3,177 shares of dilutive securities were not included in the computation of diluted income per share because the exercise prices of the dilutive securities were greater than the average market price of the common shares. Treasury Stock Treasury stock is included as a deduction from equity in the Stockholders’ Equity section of the Consolidated Balance Sheets. On July 13, 2017, the Board of Directors approved a share repurchase of up to $15 million of the Company’s outstanding common stock. Under the share repurchase program, the Company is authorized to purchase shares from time to time through open market purchases or negotiated purchases, subject to market conditions and other factors The Company repurchased 0.5 million shares of Class A common stock at an average price of $4.78, for an aggregate purchase price of approximately $2.4 million, during the three-month period ended March 31, 2018. All such repurchased shares were retired as of March 31, 2018. 2017 Credit Facility On November 30, 2017 (the “Closing Date”), the Company entered into its 2017 Credit Facility pursuant to the 2017 Credit Agreement. The 2017 Credit Facility consists of a $300.0 million senior secured Term Loan B Facility (the “Term Loan B Facility”), which was drawn in full on the Closing Date. In addition, the 2017 Credit Facility provides that the Company may increase the aggregate principal amount of the 2017 Credit Facility by up to an additional $100.0 million plus the amount that would result in its first lien net leverage ratio (as such term is used in the 2017 Credit Agreement) not exceeding 4.0 to 1.0, subject to satisfying certain conditions. Borrowings under the Term Loan B Facility were used on the Closing Date to (a) repay in full all of the Company’s and its subsidiaries’ outstanding obligations under the Company’s previous credit facility (“2013 Credit Facility”) and to terminate the agreement governing the 2013 Credit Facility (“2013 Credit Agreement”), (b) pay fees and expenses in connection with the 2017 Credit Facility, and (c) for general corporate purposes. The 2017 Credit Facility is guaranteed on a senior secured basis by certain of its existing and future wholly-owned domestic subsidiaries, and is secured on a first priority basis by the Company’s and those subsidiaries’ assets. The Company’s borrowings under the 2017 Credit Facility bear interest on the outstanding principal amount thereof from the date when made at a rate per annum equal to either: (i) the Eurodollar Rate (as defined in the 2017 Credit Agreement) plus 2.75%; or (ii) the Base Rate (as defined in the 2017 Credit Agreement) plus 1.75%. The Term Loan B Facility expires on November 30, 2024 (the “Maturity Date”). In the event the Company engages in a transaction that has the effect of reducing the yield of any loans outstanding under the Term Loan B Facility within six months of the Closing Date, the Company will owe 1% of the amount of the loans so repriced or replaced to the Lenders thereof (such fee, the “Repricing Fee”). Other than the Repricing Fee, the amounts outstanding under the 2017 Credit Facility may be prepaid at the Company’s option without premium or penalty, provided that certain limitations are observed, and subject to customary breakage fees in connection with the prepayment of a LIBOR rate loan. The principal amount of the Term Loan B Facility shall be paid in installments on the dates and in the respective amounts set forth in the 2017 Credit Agreement, with the final balance due on the Maturity Date. Subject to certain exceptions, the 2017 Credit Facility contains covenants that limit the ability of the Company and its restricted subsidiaries to, among other things: • incur liens on the Company’s property or assets; • make certain investments; • incur additional indebtedness; • consummate any merger, dissolution, liquidation, consolidation or sale of substantially all assets; • dispose of certain assets; • make certain restricted payments; • make certain acquisitions; • enter into substantially different lines of business; • enter into certain transactions with affiliates; • use loan proceeds to purchase or carry margin stock or for any other prohibited purpose; • change or amend the terms of the Company’s organizational documents or the organization documents of certain restricted subsidiaries in a materially adverse way to the lenders, or change or amend the terms of certain indebtedness; • enter into sale and leaseback transactions; • make prepayments of any subordinated indebtedness, subject to certain conditions; and • change the Company’s fiscal year, or accounting policies or reporting practices. The 2017 Credit Facility also provides for certain customary events of default, including the following: • default for three (3) business days in the payment of interest on borrowings under the 2017 Credit Facility when due; • default in payment when due of the principal amount of borrowings under the 2017 Credit Facility; • failure by the Company or any subsidiary to comply with the negative covenants and certain other covenants relating to maintaining the legal existence of the Company and certain of its restricted subsidiaries and compliance with anti-corruption laws; • failure by the Company or any subsidiary to comply with any of the other agreements in the 2017 Credit Agreement and related loan documents that continues for thirty (30) days (or ten (10) days in the case of failure to comply with covenants related to inspection rights of the administrative agent and lenders and permitted uses of proceeds from borrowings under the 2017 Credit Facility) after the Company’s officers first become aware of such failure or first receive written notice of such failure from any lender; • default in the payment of other indebtedness if the amount of such indebtedness aggregates to $15.0 million or more, or failure to comply with the terms of any agreements related to such indebtedness if the holder or holders of such indebtedness can cause such indebtedness to be declared due and payable; • certain events of bankruptcy or insolvency with respect to the Company or any significant subsidiary; • final judgment is entered against the Company or any restricted subsidiary in an aggregate amount over $15.0 million, and either enforcement proceedings are commenced by any creditor or there is a period of 30 consecutive days during which the judgment remains unpaid and no stay is in effect; • any material provision of any agreement or instrument governing the 2017 Credit Facility ceases to be in full force and effect; and • any revocation, termination, substantial and adverse modification, or refusal by final order to renew, any media license, or the requirement (by final non-appealable order) to sell a television or radio station, where any such event or failure is reasonably expected to have a material adverse effect. The Term Loan B Facility does not contain any financial covenants. In connection with the Company entering into the 2017 Credit Agreement, the Company and its restricted subsidiaries also entered into a Security Agreement, pursuant to which the Company and the Credit Parties each granted a first priority security interest in the collateral securing the 2017 Credit Facility for the benefit of the lenders under the 2017 Credit Facility. Additionally, the 2017 Credit Agreement contains a definition of “Consolidated EBITDA” that excludes revenue related to the Company’s participation in the FCC auction for broadcast spectrum and related expenses, as compared to the definition of “Consolidated Adjusted EBITDA” under the 2013 Credit Agreement which included such items. The carrying amount of the Term Loan B Facility as of March 31, 2018 was was Derivative Instruments Prior to November 28, 2017, the Company used derivatives in the management of interest rate risk with respect to interest expense on variable rate debt. The Company was party to interest rate swap agreements with financial institutions that fixed the variable benchmark component (LIBOR) of its interest rate on a portion of its term loan beginning December 31, 2015. On November 28, 2017, the Company terminated these swap agreements in conjunction with the refinancing of its debt. The Company’s current policy prohibits entering into derivative instruments for speculation or trading purposes. The carrying amount of the Company’s interest rate swap agreements were recorded at fair value, including consideration of non-performance risk, when material. The fair value of each interest rate swap agreement was determined by using multiple broker quotes, adjusted for non-performance risk, when material, which estimate the future discounted cash flows of any future payments that may be made under such agreements. Fair Value Measurements The Company measures certain financial assets and liabilities at fair value on a recurring basis. Fair value is the price the Company would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date. ASC 820, “Fair Value Measurements and Disclosures”, defines and establishes a framework for measuring fair value and expands disclosures about fair value measurements. In accordance with ASC 820, the Company has categorized its financial assets and liabilities, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy as set forth below. Level 1 – Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the company has the ability to access at the measurement date. Level 2 – Assets and liabilities whose values are based on quoted prices for similar attributes in active markets; quoted prices in markets where trading occurs infrequently; and inputs other than quoted prices that are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 – Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheets (in millions): March 31, 2018 Total Fair Value and Carrying Value on Balance Fair Value Measurement Category (in millions) Sheet Level 1 Level 2 Level 3 Assets: Money market account $ 45.1 $ - $ 45.1 $ - Certificates of deposit $ 8.2 $ $ 8.2 $ - Corporate bonds $ 174.5 $ - $ 174.5 $ Liabilities: Contingent Consideration $ 18.0 $ - $ - $ 18.0 December 31, 2017 Total Fair Value and Carrying Value on Balance Fair Value Measurement Category Sheet Level 1 Level 2 Level 3 Liabilities: Contingent Consideration $ 15.9 $ - $ - $ 15.9 During the three-month period ended March 31, 2018, the Company invested $230.0 million into a money market fund, certificates of deposit, and corporate bonds. All certificates of deposit are within the current FDIC insurance limits and all corporate bonds are investment grade. The Company’s available for sale securities are comprised of certificates of deposit and bonds. These securities are valued using quoted prices for similar attributes in active markets (Level 2). Since these investments are classified as available for sale, they are recorded at their fair market value within Cash and cash equivalents and Marketable securities in the Unaudited Consolidated Balance Sheet and their unrealized gains or losses are included in other comprehensive income. As of March 31, 2018, the following table summarizes the amortized cost and the unrealized (gains) losses of the available for sale securities (in thousands): Certificates of Deposit Corporate Bonds Amortized Cost Unrealized (gains) losses Amortized Cost Unrealized (gains) losses Due within a year $ - $ - $ 60,010 $ (79) Due after one year through five years 8,282 (34) 115,953 (1,394) Total $ 8,282 $ (34) $ 175,963 $ (1,473) The Company will regularly review its available for sale securities for other-than-temporary impairment. For the three-month period ended March 31, 2018, the Company did not consider any of its securities to be other-than-temporarily impaired and, accordingly, did not recognize any impairment losses. Included in interest income for the three-month period ended March 31, 2018 was interest income related to the Company’s available-for-sale securities of $0.7 million. Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) includes the cumulative gains and losses of derivative instruments that qualify as cash flow hedges, foreign currency translation adjustments and changes in the fair value of available for sale securities. The following table provides a roll-forward of accumulated other comprehensive income (loss) for the three-month periods ended 2018 2017 Accumulated other comprehensive loss as of January 1, $ (0.1 ) $ (3.0 ) Other comprehensive income (loss) $ (1.2 ) 0.9 Income tax benefit $ 0.3 (0.3 ) Other comprehensive income (loss), net of tax $ (0.9 ) 0.6 Accumulated other comprehensive loss as of March 31, $ (1.0 ) $ (2.4 ) Foreign Currency The Company’s reporting currency is the U.S. dollar. All transactions initiated in foreign currencies are translated into U.S. dollars in accordance with ASC Topic 830, “Foreign Currency Matters” and the related rate fluctuation on transactions is included in the consolidated statements of operations. For foreign operations with the local currency as the functional currency, assets and liabilities are translated from the local currencies into U.S. dollars at the exchange rate prevailing at the balance sheet date and equity is translated at historical rates. Revenues and expenses are translated at the average exchange rate for the period. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive (income) loss. Cost of Revenue Cost of revenue related to the Company’s television segment consists primarily of the carrying value of spectrum usage rights that were surrendered in the FCC auction for broadcast spectrum. Cost of revenue related to the Company’s digital segment consists primarily of the costs of online media acquired from third-party publishers. Recent Accounting Pronouncements In March 2018, the FASB issued ASU 2018-4, Investments – Debt Securities (Topic 320) and Regulated Operations (Topic 980) In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842, ) Newly Adopted Accounting Standards In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740), Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118. Income Tax Accounting Implications of the Tax Cuts and Jobs Act In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting effective for interim and annual reporting periods beginning after December 15, 2017. In January 2017, the FASB issued ASU 2017-01 , Business Combinations (Topic 805) - Clarifying the Definition of a Business In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers On January 1, 2018, the Company adopted ASC Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. Opening retained earnings as of January 1, 2018 were not affected as there was no cumulative impact of adopting Topic 606. U.S. Tax Reform On December 22, 2017, the President signed the 2017 Tax Act. The 2017 Tax Act makes broad and complex changes to the U.S. tax code that affected the Company’s financial results for the year ended December 31, 2017 and may affect financial results for the year ending December 31, 2018 and future years, including, but not limited to: (1) a reduction of the U.S. federal corporate tax rate from 35% to 21%; (2) a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries; (3) a new provision designed to tax global intangible low-taxed income (“GILTI”); (4) limitations on the deductibility of certain executive compensation; and (5) limitations on the use of Federal Tax Credits to reduce the U.S. income tax liability. The SEC staff issued SAB 118, which provides guidance on accounting for the tax effects of the 2017 Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the 2017 Tax Act enactment date for the Company to complete the accounting under ASC 740. In accordance with SAB 118, the Company must reflect the income tax effects of those aspects of the Act for which the accounting under ASC 740 is complete. To the extent that accounting for certain income tax effects of the 2017 Tax Act is incomplete but the Company is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. The Company was able to make a reasonable estimate of the impact of the reduction in the corporate tax rate and no significant provisional items were identified that could result in a material impact to the estimate upon finalization in 2018. Effective January 1, 2018, the 2017 Tax Act subjects a U.S. corporation to tax on its GILTI. The Company has elected an accounting policy to treat taxes due on the GILTI inclusion as a current period expense. The impact on the effective tax rate for the period ended March 31, 2018 was not significant. |
Revenues
Revenues | 3 Months Ended |
Mar. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Revenues | 3. REVENUES Adoption of ASC Topic 606, "Revenue from Contracts with Customers" Revenue Recognition Revenues are recognized when control of the promised services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Broadcast Advertising. Television and radio revenue related to the sale of advertising is recognized at the time of broadcast. Broadcast advertising rates are fixed based on each medium’s ability to attract audiences in demographic groups targeted by advertisers and rates can vary based on the time of day and ratings of the programming airing in that day part. Digital Advertising. Revenue from digital advertising primarily consists of two types: (1) Display advertisements on websites and mobile applications that are sold based on a cost-per-thousand impressions delivered (typically referred to as “CPM”). These impressions are delivered through the Company’s websites and through third party publishers either through direct relationships with the publishers or through digital advertising exchanges. (2) Performance driven advertising whereby the customer engages the Company to drive consumers to perform an action such as the download of a mobile application, the installation of an application, or the first use of an application (typically referred to cost per action “CPA” or cost per installation “CPI”). Broadcast and digital advertising revenue is recognized over time in a series as a single performance obligation as the ad, impression or performance advertising is delivered per the insertion order. The Company applies the practical expedient to recognize revenue for each distinct advertising service delivered at the amount the Company has the right to invoice, which corresponds directly to the value a customer has received relative to the Company’s performance. Contracts with customers are short term in nature and billing occurs on a monthly basis with payment due in 30 days. Value added taxes collected concurrent with advertising revenue producing activities are excluded from revenue. Cash payments received prior to services rendered result in deferred revenue, which is then recognized as revenue when the advertising time or space is actually provided. Retransmission Consent. The Company generates revenue from retransmission consent agreements that are entered into with multichannel video programming distributors, or MVPDs. The Company grants the MVPDs access to its television station signals so that they may rebroadcast the signals and charge their subscribers for this programming. Payments are received on a monthly basis based on the number of monthly subscribers. Retransmission revenues are considered licenses of functional intellectual property and are recognized over time utilizing the sale-based or usage-based royalty exception. The Company’s performance obligation is to provide the licensee access to our intellectual property. MVPD subscribers receive and consume the content monthly as the television signal is delivered. Spectrum Usage Rights. The Company generates revenue from agreements associated with its television stations’ spectrum usage rights from a variety of sources, including but not limited to agreements with third parties to utilize excess spectrum for the broadcast of their multicast networks; charging fees to accommodate the operations of third parties, including moving channel positions or accepting interference with broadcasting operations; and modifying and/or relinquishing spectrum usage rights while continuing to broadcast through channel sharing or other arrangements. Revenue generated by Spectrum Usage Rights agreements are recognized over the period of the lease or when we have relinquished all or a portion of our spectrum usage rights for a station or have relinquished our rights to operate a station on the existing channel free from interference. Other Revenue. The Company generates other revenues that are related to its broadcast operations which primarily consist of representation fees earned by the Company’s radio national representation firm, talent fees for the Company’s on air personalities, ticket and concession sales for radio events, rent from tenants of the Company’s owned facilities, barter revenue, and revenue generated under joint sales agreements. In the case of representation fees, the Company does not control the distinct service, the commercial advertisement, prior to delivery and therefore recognizes revenue on a net basis. Similarly for joint service agreements, the Company does not own the station providing the airtime and therefore recognizes revenue on a net basis. In the case of talent fees, the on air personality is an employee of the Company and therefore the Company controls the service provided and recognizes revenue gross with an expense for fees paid to the employee. Practical Expedients and Exemptions The Company does not disclose the value of unsatisfied performance obligations when (i) contracts have an original expected length of one year or less, which applies to effectively all advertising contracts, and (ii) variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property, which applies to retransmission consent revenue. The Company applies the practical expedient to expense contract acquisition costs, such as sales commissions generated either by internal direct sales employees or through third party advertising agency intermediaries, when incurred because the amortization period is one year or less. These costs are recorded within direct operating expenses. Disaggregated Revenue The following table presents our revenues disaggregated by major source for the three-month periods ended (in thousands): 2018 2017 Broadcast advertising $ 37,709 $ 42,788 Digital advertising 18,244 4,081 Spectrum Usage Rights 108 - Retransmission Consent 8,853 7,960 Other 1,924 2,681 Total revenue $ 66,838 $ 57,510 Contracts are entered into directly with customers or through an advertising agency that represents the customer. Sales of advertising to customers or agencies within a station’s designated market area (“DMA”) are referred to as local revenue, whereas sales from outside the DMA are referred to as national revenue. The following table further disaggregates the Company’s broadcast advertising revenue by sales channel for the three-month periods ended (in thousands): 2018 2017 Local Direct $ 14,593 $ 16,503 Local Agency 6,916 7,403 National Agency 16,200 18,882 Total revenue $ 37,709 $ 42,788 Deferred Revenues The Company records deferred revenues when cash payments are received or due in advance of its performance, including amounts which are refundable. The increase in the deferred revenue balance for the three-month period ended March 31, 2018 is primarily driven by cash payments received or due in advance of satisfying the Company’s performance obligations, offset by revenues recognized that were included in the deferred revenue balance as of December 31, 2017 . The Company’s payment terms vary by the type and location of customer and the products or services offered. The term between invoicing and when payment is due is not significant, typically 30 days. For certain customer types, the Company requires payment before the services are delivered to the customer. (in thousands) December 31, 2017 Increase Decrease * March 31, 2018 Deferred revenue $ 1,535 1,959 (1,535) $ 1,959 * The amount disclosed in the decrease column reflects revenue that has been recorded in the three-month period ended March 31, 2018. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 4. SEGMENT INFORMATION The Company’s management has determined that the Company operates in three reportable segments as of March 31, 2018, based upon the type of advertising medium, which segments are television, radio, and digital. The Company’s segments results reflect information presented on the same basis that is used for internal management reporting and it is also how the chief operating decision maker evaluates the business. Television The Company owns and/or operates 55 primary television stations located primarily in California, Colorado, Connecticut, Florida, Kansas, Massachusetts, Nevada, New Mexico, Texas and Washington, D.C. Radio The Company owns and operates 49 radio stations (38 FM and 11 AM) located primarily in Arizona, California, Colorado, Florida, Nevada, New Mexico and Texas. The Company owns and operates a national sales representation division, Entravision Solutions, through which the Company sells advertisements and syndicates radio programming to approximately 300 stations across the United States. Digital The Company owns and operates digital operations, offering mobile, digital and other interactive media platforms and services on Internet-connected devices, including local websites and social media, that provide users with news information and other content. Separate financial data for each of the Company’s operating segments are provided below. Segment operating profit (loss) is defined as operating profit (loss) before corporate expenses and foreign currency (gain) loss. The Company generated 19% of its revenue outside the United States during the three-month period ended March 31, 2018. There were no significant sources of revenue generated outside the United States during the three-month period ended March 31, 2017. The Company evaluates the performance of its operating segments based on the following (in thousands): Three-Month Period Ended March 31, % 2018 2017 Change Net revenue Television $ 34,491 $ 37,710 (9 )% Radio 14,103 15,719 (10 )% Digital 18,244 4,081 347 % Consolidated 66,838 57,510 16 % Cost of revenue - digital media 10,625 1,752 506 % Direct operating expenses Television 15,550 14,754 5 % Radio 10,674 11,017 (3 )% Digital 4,809 1,321 264 % Consolidated 31,033 27,092 15 % Selling, general and administrative expenses Television 5,972 5,451 10 % Radio 4,606 4,704 (2 )% Digital 2,716 1,045 160 % Consolidated 13,294 11,200 19 % Depreciation and amortization Television 2,204 2,463 (11 )% Radio 619 726 (15 )% Digital 1,116 357 213 % Consolidated 3,939 3,546 11 % Segment operating profit (loss) Television 10,765 15,042 (28 )% Radio (1,796 ) (728 ) 147 % Digital (1,022 ) (394 ) 159 % Consolidated 7,947 13,920 (43 )% Corporate expenses 5,975 5,867 2 % Change in fair value of contingent consideration 2,100 - * Foreign currency (gain) loss 213 - * Operating income (loss) (341 ) 8,053 * Interest expense $ (3,398 ) $ (3,645 ) (7 )% Interest income 913 109 738 % Dividend income 128 - * Other income (loss) 22 - * Income (loss) before income taxes (2,676 ) 4,517 (159 )% Capital expenditures Television $ 2,080 $ 967 Radio 81 268 Digital 66 9 Consolidated $ 2,227 $ 1,244 March 31, December 31, 2018 2017 Total assets Television 543,974 556,942 Radio 122,636 126,248 Digital 79,292 82,777 Consolidated $ 745,902 $ 765,967 * Percentage not meaningful. |
Litigation
Litigation | 3 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Litigation | 5. LITIGATION The Company is subject to various outstanding claims and other legal proceedings that may arise in the ordinary course of business. In the opinion of management, any liability of the Company that may arise out of or with respect to these matters will not materially adversely affect the financial position, results of operations or cash flows of the Company. |
Significant Transactions
Significant Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Significan Transactions [Abstract] | |
Significant Transactions | 6. SIGNIFICANT TRANSACTIONS KMCC-TV On January 16, 2018, the Company completed the acquisition of television station KMCC-TV, which serves the Las Vegas, Nevada area, for an aggregate $3.6 million. The transaction was treated as an asset acquisition with the majority of the purchase price recorded in “Intangible assets not subject to amortization” on the Company’s consolidated balance sheet. Change in Fair Value of Contingent Consideration On April 4, 2017, the Company completed the acquisition of 100% of the stock of Headway, a provider of mobile, programmatic, data and performance digital marketing solutions primarily in the United States, Mexico and other markets in Latin America. The acquisition of Headway includes a contingent consideration arrangement that requires additional consideration to be paid by the Company to Headway based upon the achievement of certain annual performance benchmarks over a three-year period. During the quarter ended March 31, 2018, the Company increased the fair value of Contingent Consideration from $15.9 million to $18.0 million, with the resulting charge of $2.1 million recorded in “Change in Fair Value of Contingent Consideration” in the Company’s consolidated statement of operations. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 7. SUBSEQUENT EVENTS Expense Reductions In April 2018, the Company implemented a reduction in personnel and implemented certain discretionary expense cuts. The Company expects to recognize a charge of approximately $0.8 million in the second quarter of 2018 for severance costs related to these actions. Additionally, the Company currently anticipates that these actions will result in approximately $8 million in annualized savings beginning in the second quarter of 2018. Share Repurchase Program Subsequent to March 31, 2018, the Company repurchased an additional 1.0 million shares of its Class A common stock for an aggregate purchase price of $5.1 million, or an average price per share of $4.85. To date, the Company has repurchased a total of approximately 2.5 million shares of its Class A common stock for aggregate purchase price of approximately $12.8 million, or an average price per share of $5.10 since the beginning of the share repurchase program. On April 11, 2018, the Board of Directors approved the repurchase of up to an additional $15 million of the Company’s Class A common stock, for a total repurchase authorization of up to $30 million. Under the new share repurchase program, the Company is authorized to purchase shares from time to time through open market purchases or negotiated purchases, subject to market conditions and other factors |
The Company and Significant A15
The Company and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Restricted Cash | Restricted Cash As of March 31, 2018, the Company’s balance sheet includes $0.8 million in restricted cash, which was deposited into a separate account as temporary collateral for the Company’s letters of credit. As of December 31, 2017, the Company’s balance sheet includes $222.3 million in restricted cash of which $221.5 million relates to proceeds received by the Company for its participation in the FCC auction for broadcast spectrum which were deposited into the account of a qualified intermediary to comply with Internal Revenue Code Section 1031 requirements to execute a like-kind exchange. The remaining $0.8 million in restricted cash was used as temporary collateral for the Company’s letters of credit. |
Related Party | Related Party Substantially all of the Company’s stations are Univision- or UniMás-affiliated television stations. The Company’s network affiliation agreements with Univision provide certain of its owned stations the exclusive right to broadcast Univision’s primary network and UniMás network programming in their respective markets. Under the network affiliation agreement, the Company retains the right to sell no less than four minutes per hour of the available advertising time on stations that broadcast Univision network programming, and the right to sell approximately four and a half minutes per hour of the available advertising time on stations that broadcast UniMás network programming, subject to adjustment from time to time by Univision. Under the network affiliation agreement, Univision acts as the Company’s exclusive third-party sales representative for the sale of certain national advertising on the Company’s Univision- and UniMás-affiliate television stations, and it pays certain sales representation fees to Univision relating to sales of all advertising for broadcast on the Company’s Univision- and UniMás-affiliate television stations. During the three-month periods ended March 31, 2018 and 2017, the amount the Company paid Univision in this capacity was $2.0 million and $2.3 million, respectively. The Company also generates revenue under two marketing and sales agreements with Univision, which gives the Company the right to manage the marketing and sales operations of Univision-owned Univision affiliates in six markets – Albuquerque, Boston, Denver, Orlando, Tampa and Washington, D.C. Under the Company’s proxy agreement with Univision, the Company grants Univision the right to negotiate the terms of retransmission consent agreements for its Univision- and UniMás-affiliated television station signals. Among other things, the proxy agreement provides terms relating to compensation to be paid to the Company by Univision with respect to retransmission consent agreements entered into with multichannel video programming distributors, (“MVPDs”). As of March 31, 2018, the amount due to the Company from Univision was $4.9 million related to the agreements for the carriage of its Univision and UniMás-affiliated television station signals. During the three-month periods ended March 31, 2018 and 2017, retransmission consent revenue accounted for approximately $8.9 million and $8.0 million, respectively, of which $7.5 million and $7.3 million, respectively, relate to the Univision proxy agreement. The term of the proxy agreement extends with respect to any MVPD for the length of the term of any retransmission consent agreement in effect before the expiration of the proxy agreement. Univision currently owns approximately 10% of the Company’s common stock on a fully-converted basis. The Class U common stock held by Univision has limited voting rights and does not include the right to elect directors. As the holder of all of the Company’s issued and outstanding Class U common stock, so long as Univision holds a certain number of shares, the Company will not, without the consent of Univision, merge, consolidate or enter into another business combination, dissolve or liquidate the Company or dispose of any interest in any Federal Communications Commission, or FCC, license for any of its Univision-affiliated television stations, among other things. Each share of Class U common stock is automatically convertible into one share of Class A common stock (subject to adjustment for stock splits, dividends or combinations) in connection with any transfer to a third party that is not an affiliate of Univision. |
Stock-Based Compensation | Stock-Based Compensation The Company measures all stock-based awards using a fair value method and recognizes the related stock-based compensation expense in the consolidated financial statements over the requisite service period. As stock-based compensation expense recognized in the Company’s consolidated financial statements is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. Stock-based compensation expense related to grants of stock options and restricted stock units was $1.2 million and $1.0 million for the three-month periods ended March 31, 2018 and 2017, respectively. Stock Options Stock-based compensation expense related to stock options is based on the fair value on the date of grant using the Black-Scholes option pricing model and is amortized over the vesting period, generally between 1 to 4 years. As of March 31, 2018, there was less than $0.1 million of total unrecognized compensation expense related to grants of stock options that is expected to be recognized over a weighted-average period of 0.8 years. Restricted Stock Units Stock-based compensation expense related to restricted stock units is based on the fair value of the Company’s stock price on the date of grant and is amortized over the vesting period, generally between 1 to 4 years. As of March 31, 2018, there was approximately $5.7 million of total unrecognized compensation expense related to grants of restricted stock units that is expected to be recognized over a weighted-average period of 1.6 years. |
Income (Loss) Per Share | Income (Loss) Per Share The following table illustrates the reconciliation of the basic and diluted income (loss) per share computations required by Accounting Standards Codification (ASC) 260-10, “Earnings per Share” (in thousands, except share and per share data): Three-Month Period Ended March 31, 2018 2017 Basic earnings per share: Numerator: Net income (loss) $ (1,808 ) $ 2,618 Denominator: Weighted average common shares outstanding 90,319,092 90,236,476 Per share: Net income (loss) per share $ (0.02 ) $ 0.03 Diluted earnings per share: Numerator: Net income (loss) $ (1,808 ) $ 2,618 Denominator: Weighted average common shares outstanding 90,319,092 90,236,476 Dilutive securities: Stock options and restricted stock units - 1,524,055 Diluted shares outstanding 90,319,092 91,760,531 Per share: Net income (loss) per share $ (0.02 ) $ 0.03 Basic income (loss) per share is computed as net income (loss) divided by the weighted average number of shares outstanding for the period. Diluted income (loss) per share reflects the potential dilution, if any, that could occur from shares issuable through stock options and restricted stock awards. For the three-month period ended March 31, 2018, all dilutive securities have been excluded as their inclusion would have had an antidilutive effect on loss per share. The number of securities whose conversion would result in an incremental number of shares that would be included in determining the weighted average shares outstanding for diluted earnings per share if their effect was not antidilutive was 1,276,642 For the three-month period ended March 31, 2017, a total of 3,177 shares of dilutive securities were not included in the computation of diluted income per share because the exercise prices of the dilutive securities were greater than the average market price of the common shares. |
Treasury Stock | Treasury Stock Treasury stock is included as a deduction from equity in the Stockholders’ Equity section of the Consolidated Balance Sheets. On July 13, 2017, the Board of Directors approved a share repurchase of up to $15 million of the Company’s outstanding common stock. Under the share repurchase program, the Company is authorized to purchase shares from time to time through open market purchases or negotiated purchases, subject to market conditions and other factors The Company repurchased 0.5 million shares of Class A common stock at an average price of $4.78, for an aggregate purchase price of approximately $2.4 million, during the three-month period ended March 31, 2018. All such repurchased shares were retired as of March 31, 2018. |
Derivative Instruments | Derivative Instruments Prior to November 28, 2017, the Company used derivatives in the management of interest rate risk with respect to interest expense on variable rate debt. The Company was party to interest rate swap agreements with financial institutions that fixed the variable benchmark component (LIBOR) of its interest rate on a portion of its term loan beginning December 31, 2015. On November 28, 2017, the Company terminated these swap agreements in conjunction with the refinancing of its debt. The Company’s current policy prohibits entering into derivative instruments for speculation or trading purposes. The carrying amount of the Company’s interest rate swap agreements were recorded at fair value, including consideration of non-performance risk, when material. The fair value of each interest rate swap agreement was determined by using multiple broker quotes, adjusted for non-performance risk, when material, which estimate the future discounted cash flows of any future payments that may be made under such agreements. |
Fair Value Measurements | Fair Value Measurements The Company measures certain financial assets and liabilities at fair value on a recurring basis. Fair value is the price the Company would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date. ASC 820, “Fair Value Measurements and Disclosures”, defines and establishes a framework for measuring fair value and expands disclosures about fair value measurements. In accordance with ASC 820, the Company has categorized its financial assets and liabilities, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy as set forth below. Level 1 – Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the company has the ability to access at the measurement date. Level 2 – Assets and liabilities whose values are based on quoted prices for similar attributes in active markets; quoted prices in markets where trading occurs infrequently; and inputs other than quoted prices that are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 – Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheets (in millions): March 31, 2018 Total Fair Value and Carrying Value on Balance Fair Value Measurement Category (in millions) Sheet Level 1 Level 2 Level 3 Assets: Money market account $ 45.1 $ - $ 45.1 $ - Certificates of deposit $ 8.2 $ $ 8.2 $ - Corporate bonds $ 174.5 $ - $ 174.5 $ Liabilities: Contingent Consideration $ 18.0 $ - $ - $ 18.0 December 31, 2017 Total Fair Value and Carrying Value on Balance Fair Value Measurement Category Sheet Level 1 Level 2 Level 3 Liabilities: Contingent Consideration $ 15.9 $ - $ - $ 15.9 During the three-month period ended March 31, 2018, the Company invested $230.0 million into a money market fund, certificates of deposit, and corporate bonds. All certificates of deposit are within the current FDIC insurance limits and all corporate bonds are investment grade. The Company’s available for sale securities are comprised of certificates of deposit and bonds. These securities are valued using quoted prices for similar attributes in active markets (Level 2). Since these investments are classified as available for sale, they are recorded at their fair market value within Cash and cash equivalents and Marketable securities in the Unaudited Consolidated Balance Sheet and their unrealized gains or losses are included in other comprehensive income. As of March 31, 2018, the following table summarizes the amortized cost and the unrealized (gains) losses of the available for sale securities (in thousands): Certificates of Deposit Corporate Bonds Amortized Cost Unrealized (gains) losses Amortized Cost Unrealized (gains) losses Due within a year $ - $ - $ 60,010 $ (79) Due after one year through five years 8,282 (34) 115,953 (1,394) Total $ 8,282 $ (34) $ 175,963 $ (1,473) The Company will regularly review its available for sale securities for other-than-temporary impairment. For the three-month period ended March 31, 2018, the Company did not consider any of its securities to be other-than-temporarily impaired and, accordingly, did not recognize any impairment losses. Included in interest income for the three-month period ended March 31, 2018 was interest income related to the Company’s available-for-sale securities of $0.7 million. |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) includes the cumulative gains and losses of derivative instruments that qualify as cash flow hedges, foreign currency translation adjustments and changes in the fair value of available for sale securities. The following table provides a roll-forward of accumulated other comprehensive income (loss) for the three-month periods ended 2018 2017 Accumulated other comprehensive loss as of January 1, $ (0.1 ) $ (3.0 ) Other comprehensive income (loss) $ (1.2 ) 0.9 Income tax benefit $ 0.3 (0.3 ) Other comprehensive income (loss), net of tax $ (0.9 ) 0.6 Accumulated other comprehensive loss as of March 31, $ (1.0 ) $ (2.4 ) |
Foreign Currency | Foreign Currency The Company’s reporting currency is the U.S. dollar. All transactions initiated in foreign currencies are translated into U.S. dollars in accordance with ASC Topic 830, “Foreign Currency Matters” and the related rate fluctuation on transactions is included in the consolidated statements of operations. For foreign operations with the local currency as the functional currency, assets and liabilities are translated from the local currencies into U.S. dollars at the exchange rate prevailing at the balance sheet date and equity is translated at historical rates. Revenues and expenses are translated at the average exchange rate for the period. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive (income) loss. |
Cost of Revenue | Cost of Revenue Cost of revenue related to the Company’s television segment consists primarily of the carrying value of spectrum usage rights that were surrendered in the FCC auction for broadcast spectrum. Cost of revenue related to the Company’s digital segment consists primarily of the costs of online media acquired from third-party publishers. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2018, the FASB issued ASU 2018-4, Investments – Debt Securities (Topic 320) and Regulated Operations (Topic 980) In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842, ) Newly Adopted Accounting Standards In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740), Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118. Income Tax Accounting Implications of the Tax Cuts and Jobs Act In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting effective for interim and annual reporting periods beginning after December 15, 2017. In January 2017, the FASB issued ASU 2017-01 , Business Combinations (Topic 805) - Clarifying the Definition of a Business In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers On January 1, 2018, the Company adopted ASC Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. Opening retained earnings as of January 1, 2018 were not affected as there was no cumulative impact of adopting Topic 606. U.S. Tax Reform On December 22, 2017, the President signed the 2017 Tax Act. The 2017 Tax Act makes broad and complex changes to the U.S. tax code that affected the Company’s financial results for the year ended December 31, 2017 and may affect financial results for the year ending December 31, 2018 and future years, including, but not limited to: (1) a reduction of the U.S. federal corporate tax rate from 35% to 21%; (2) a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries; (3) a new provision designed to tax global intangible low-taxed income (“GILTI”); (4) limitations on the deductibility of certain executive compensation; and (5) limitations on the use of Federal Tax Credits to reduce the U.S. income tax liability. The SEC staff issued SAB 118, which provides guidance on accounting for the tax effects of the 2017 Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the 2017 Tax Act enactment date for the Company to complete the accounting under ASC 740. In accordance with SAB 118, the Company must reflect the income tax effects of those aspects of the Act for which the accounting under ASC 740 is complete. To the extent that accounting for certain income tax effects of the 2017 Tax Act is incomplete but the Company is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. The Company was able to make a reasonable estimate of the impact of the reduction in the corporate tax rate and no significant provisional items were identified that could result in a material impact to the estimate upon finalization in 2018. Effective January 1, 2018, the 2017 Tax Act subjects a U.S. corporation to tax on its GILTI. The Company has elected an accounting policy to treat taxes due on the GILTI inclusion as a current period expense. The impact on the effective tax rate for the period ended March 31, 2018 was not significant. |
2013 Credit Facility | |
Credit Facility | |
2017 Credit Facility | |
Credit Facility | 2017 Credit Facility On November 30, 2017 (the “Closing Date”), the Company entered into its 2017 Credit Facility pursuant to the 2017 Credit Agreement. The 2017 Credit Facility consists of a $300.0 million senior secured Term Loan B Facility (the “Term Loan B Facility”), which was drawn in full on the Closing Date. In addition, the 2017 Credit Facility provides that the Company may increase the aggregate principal amount of the 2017 Credit Facility by up to an additional $100.0 million plus the amount that would result in its first lien net leverage ratio (as such term is used in the 2017 Credit Agreement) not exceeding 4.0 to 1.0, subject to satisfying certain conditions. Borrowings under the Term Loan B Facility were used on the Closing Date to (a) repay in full all of the Company’s and its subsidiaries’ outstanding obligations under the Company’s previous credit facility (“2013 Credit Facility”) and to terminate the agreement governing the 2013 Credit Facility (“2013 Credit Agreement”), (b) pay fees and expenses in connection with the 2017 Credit Facility, and (c) for general corporate purposes. The 2017 Credit Facility is guaranteed on a senior secured basis by certain of its existing and future wholly-owned domestic subsidiaries, and is secured on a first priority basis by the Company’s and those subsidiaries’ assets. The Company’s borrowings under the 2017 Credit Facility bear interest on the outstanding principal amount thereof from the date when made at a rate per annum equal to either: (i) the Eurodollar Rate (as defined in the 2017 Credit Agreement) plus 2.75%; or (ii) the Base Rate (as defined in the 2017 Credit Agreement) plus 1.75%. The Term Loan B Facility expires on November 30, 2024 (the “Maturity Date”). In the event the Company engages in a transaction that has the effect of reducing the yield of any loans outstanding under the Term Loan B Facility within six months of the Closing Date, the Company will owe 1% of the amount of the loans so repriced or replaced to the Lenders thereof (such fee, the “Repricing Fee”). Other than the Repricing Fee, the amounts outstanding under the 2017 Credit Facility may be prepaid at the Company’s option without premium or penalty, provided that certain limitations are observed, and subject to customary breakage fees in connection with the prepayment of a LIBOR rate loan. The principal amount of the Term Loan B Facility shall be paid in installments on the dates and in the respective amounts set forth in the 2017 Credit Agreement, with the final balance due on the Maturity Date. Subject to certain exceptions, the 2017 Credit Facility contains covenants that limit the ability of the Company and its restricted subsidiaries to, among other things: • incur liens on the Company’s property or assets; • make certain investments; • incur additional indebtedness; • consummate any merger, dissolution, liquidation, consolidation or sale of substantially all assets; • dispose of certain assets; • make certain restricted payments; • make certain acquisitions; • enter into substantially different lines of business; • enter into certain transactions with affiliates; • use loan proceeds to purchase or carry margin stock or for any other prohibited purpose; • change or amend the terms of the Company’s organizational documents or the organization documents of certain restricted subsidiaries in a materially adverse way to the lenders, or change or amend the terms of certain indebtedness; • enter into sale and leaseback transactions; • make prepayments of any subordinated indebtedness, subject to certain conditions; and • change the Company’s fiscal year, or accounting policies or reporting practices. The 2017 Credit Facility also provides for certain customary events of default, including the following: • default for three (3) business days in the payment of interest on borrowings under the 2017 Credit Facility when due; • default in payment when due of the principal amount of borrowings under the 2017 Credit Facility; • failure by the Company or any subsidiary to comply with the negative covenants and certain other covenants relating to maintaining the legal existence of the Company and certain of its restricted subsidiaries and compliance with anti-corruption laws; • failure by the Company or any subsidiary to comply with any of the other agreements in the 2017 Credit Agreement and related loan documents that continues for thirty (30) days (or ten (10) days in the case of failure to comply with covenants related to inspection rights of the administrative agent and lenders and permitted uses of proceeds from borrowings under the 2017 Credit Facility) after the Company’s officers first become aware of such failure or first receive written notice of such failure from any lender; • default in the payment of other indebtedness if the amount of such indebtedness aggregates to $15.0 million or more, or failure to comply with the terms of any agreements related to such indebtedness if the holder or holders of such indebtedness can cause such indebtedness to be declared due and payable; • certain events of bankruptcy or insolvency with respect to the Company or any significant subsidiary; • final judgment is entered against the Company or any restricted subsidiary in an aggregate amount over $15.0 million, and either enforcement proceedings are commenced by any creditor or there is a period of 30 consecutive days during which the judgment remains unpaid and no stay is in effect; • any material provision of any agreement or instrument governing the 2017 Credit Facility ceases to be in full force and effect; and • any revocation, termination, substantial and adverse modification, or refusal by final order to renew, any media license, or the requirement (by final non-appealable order) to sell a television or radio station, where any such event or failure is reasonably expected to have a material adverse effect. The Term Loan B Facility does not contain any financial covenants. In connection with the Company entering into the 2017 Credit Agreement, the Company and its restricted subsidiaries also entered into a Security Agreement, pursuant to which the Company and the Credit Parties each granted a first priority security interest in the collateral securing the 2017 Credit Facility for the benefit of the lenders under the 2017 Credit Facility. Additionally, the 2017 Credit Agreement contains a definition of “Consolidated EBITDA” that excludes revenue related to the Company’s participation in the FCC auction for broadcast spectrum and related expenses, as compared to the definition of “Consolidated Adjusted EBITDA” under the 2013 Credit Agreement which included such items. The carrying amount of the Term Loan B Facility as of March 31, 2018 was was |
The Company and Significant A16
The Company and Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Reconciliation of Basic and Diluted Income (Loss) Per Share | The following table illustrates the reconciliation of the basic and diluted income (loss) per share computations required by Accounting Standards Codification (ASC) 260-10, “Earnings per Share” (in thousands, except share and per share data): Three-Month Period Ended March 31, 2018 2017 Basic earnings per share: Numerator: Net income (loss) $ (1,808 ) $ 2,618 Denominator: Weighted average common shares outstanding 90,319,092 90,236,476 Per share: Net income (loss) per share $ (0.02 ) $ 0.03 Diluted earnings per share: Numerator: Net income (loss) $ (1,808 ) $ 2,618 Denominator: Weighted average common shares outstanding 90,319,092 90,236,476 Dilutive securities: Stock options and restricted stock units - 1,524,055 Diluted shares outstanding 90,319,092 91,760,531 Per share: Net income (loss) per share $ (0.02 ) $ 0.03 |
Fair Value of Assets and Liabilities Measured on Recurring Basis | The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheets (in millions): March 31, 2018 Total Fair Value and Carrying Value on Balance Fair Value Measurement Category (in millions) Sheet Level 1 Level 2 Level 3 Assets: Money market account $ 45.1 $ - $ 45.1 $ - Certificates of deposit $ 8.2 $ $ 8.2 $ - Corporate bonds $ 174.5 $ - $ 174.5 $ Liabilities: Contingent Consideration $ 18.0 $ - $ - $ 18.0 December 31, 2017 Total Fair Value and Carrying Value on Balance Fair Value Measurement Category Sheet Level 1 Level 2 Level 3 Liabilities: Contingent Consideration $ 15.9 $ - $ - $ 15.9 |
Summary of Amortized Cost and Unrealized (Gains) Losses of Available for Sale Securities | As of March 31, 2018, the following table summarizes the amortized cost and the unrealized (gains) losses of the available for sale securities (in thousands): Certificates of Deposit Corporate Bonds Amortized Cost Unrealized (gains) losses Amortized Cost Unrealized (gains) losses Due within a year $ - $ - $ 60,010 $ (79) Due after one year through five years 8,282 (34) 115,953 (1,394) Total $ 8,282 $ (34) $ 175,963 $ (1,473) |
Summary of Components of AOCI | Accumulated other comprehensive income (loss) includes the cumulative gains and losses of derivative instruments that qualify as cash flow hedges, foreign currency translation adjustments and changes in the fair value of available for sale securities. The following table provides a roll-forward of accumulated other comprehensive income (loss) for the three-month periods ended 2018 2017 Accumulated other comprehensive loss as of January 1, $ (0.1 ) $ (3.0 ) Other comprehensive income (loss) $ (1.2 ) 0.9 Income tax benefit $ 0.3 (0.3 ) Other comprehensive income (loss), net of tax $ (0.9 ) 0.6 Accumulated other comprehensive loss as of March 31, $ (1.0 ) $ (2.4 ) |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Disaggregation of Revenue by Major Source and by Sales Channel | The following table presents our revenues disaggregated by major source for the three-month periods ended (in thousands): 2018 2017 Broadcast advertising $ 37,709 $ 42,788 Digital advertising 18,244 4,081 Spectrum Usage Rights 108 - Retransmission Consent 8,853 7,960 Other 1,924 2,681 Total revenue $ 66,838 $ 57,510 The following table further disaggregates the Company’s broadcast advertising revenue by sales channel for the three-month periods ended (in thousands): 2018 2017 Local Direct $ 14,593 $ 16,503 Local Agency 6,916 7,403 National Agency 16,200 18,882 Total revenue $ 37,709 $ 42,788 |
Summary of Deferred Revenue | (in thousands) December 31, 2017 Increase Decrease * March 31, 2018 Deferred revenue $ 1,535 1,959 (1,535) $ 1,959 * The amount disclosed in the decrease column reflects revenue that has been recorded in the three-month period ended March 31, 2018. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Separate Financial Data for Each of Company's Operating Segment | Separate financial data for each of the Company’s operating segments are provided below. Segment operating profit (loss) is defined as operating profit (loss) before corporate expenses and foreign currency (gain) loss. The Company generated 19% of its revenue outside the United States during the three-month period ended March 31, 2018. There were no significant sources of revenue generated outside the United States during the three-month period ended March 31, 2017. The Company evaluates the performance of its operating segments based on the following (in thousands): Three-Month Period Ended March 31, % 2018 2017 Change Net revenue Television $ 34,491 $ 37,710 (9 )% Radio 14,103 15,719 (10 )% Digital 18,244 4,081 347 % Consolidated 66,838 57,510 16 % Cost of revenue - digital media 10,625 1,752 506 % Direct operating expenses Television 15,550 14,754 5 % Radio 10,674 11,017 (3 )% Digital 4,809 1,321 264 % Consolidated 31,033 27,092 15 % Selling, general and administrative expenses Television 5,972 5,451 10 % Radio 4,606 4,704 (2 )% Digital 2,716 1,045 160 % Consolidated 13,294 11,200 19 % Depreciation and amortization Television 2,204 2,463 (11 )% Radio 619 726 (15 )% Digital 1,116 357 213 % Consolidated 3,939 3,546 11 % Segment operating profit (loss) Television 10,765 15,042 (28 )% Radio (1,796 ) (728 ) 147 % Digital (1,022 ) (394 ) 159 % Consolidated 7,947 13,920 (43 )% Corporate expenses 5,975 5,867 2 % Change in fair value of contingent consideration 2,100 - * Foreign currency (gain) loss 213 - * Operating income (loss) (341 ) 8,053 * Interest expense $ (3,398 ) $ (3,645 ) (7 )% Interest income 913 109 738 % Dividend income 128 - * Other income (loss) 22 - * Income (loss) before income taxes (2,676 ) 4,517 (159 )% Capital expenditures Television $ 2,080 $ 967 Radio 81 268 Digital 66 9 Consolidated $ 2,227 $ 1,244 March 31, December 31, 2018 2017 Total assets Television 543,974 556,942 Radio 122,636 126,248 Digital 79,292 82,777 Consolidated $ 745,902 $ 765,967 * Percentage not meaningful. |
The Company and Significant A19
The Company and Significant Accounting Policies - Additional Information (Detail) | Nov. 30, 2017USD ($) | Mar. 31, 2018USD ($)SegmentStationLocation$ / sharesshares | Mar. 31, 2017USD ($)shares | Dec. 31, 2018 | Dec. 31, 2017USD ($) | Jul. 13, 2017USD ($) |
Accounting Policies [Line Items] | ||||||
Number of reportable segments | Segment | 3 | |||||
Restricted cash | $ 769,000 | $ 222,294,000 | ||||
Retransmission consent revenue | $ 8,900,000 | $ 8,000,000 | ||||
Number of Class A common stock shares converted | shares | 1 | |||||
Share-based compensation expenses | $ 1,200,000 | $ 1,000,000 | ||||
Shares of dilutive securities not included in computation of diluted income per share | shares | 1,276,642 | 3,177 | ||||
Amount approved under share purchase program | $ 15,000,000 | |||||
Unamortized debt issuance costs | $ 3,637,000 | $ 3,761,000 | ||||
Amount invested in money market fund, certificates of deposit, and corporate bonds | 230,000,000 | |||||
Interest income related to available-for-sale securities | 913,000 | $ 109,000 | ||||
Federal income tax rate | 35.00% | |||||
Scenario Plan | ||||||
Accounting Policies [Line Items] | ||||||
Federal income tax rate | 21.00% | |||||
Available-for-Sale Securities | ||||||
Accounting Policies [Line Items] | ||||||
Interest income related to available-for-sale securities | $ 700,000 | |||||
Interest Rate Swap Agreements | ||||||
Accounting Policies [Line Items] | ||||||
Interest rate swap agreement beginning date | Dec. 31, 2015 | |||||
Interest rate swap terminated date | Nov. 28, 2017 | |||||
2017 Credit Facility | ||||||
Accounting Policies [Line Items] | ||||||
Agreement date | Nov. 30, 2017 | |||||
Additional borrowing capacity | $ 100,000,000 | |||||
First lien net leverage ratio | 4.00% | |||||
Percentage of repricing fee | 1.00% | |||||
Certain customary events of default, number of business days to default in the payment of interest on borrowings | 3 days | |||||
Certain customary events of default, number of days default continue for compliance with other agreement | 30 days | |||||
Certain customary events of default, number of days default continue for financial statement delivery obligations | 10 days | |||||
Certain customary events of default, indebtedness aggregate amount | $ 15,000,000 | |||||
Certain customary events of default, failure in payment of final judgments aggregate amount | $ 15,000,000 | |||||
Certain customary events of default, failure in payment of final judgments aggregate amount period | 30 days | |||||
2017 Credit Facility | Eurodollar Rate | ||||||
Accounting Policies [Line Items] | ||||||
Variable interest rate basis spread on debt | 2.75% | |||||
2017 Credit Facility | Base Rate Margin | ||||||
Accounting Policies [Line Items] | ||||||
Variable interest rate basis spread on debt | 1.75% | |||||
2017 Credit Facility | Term Loan B Facility | ||||||
Accounting Policies [Line Items] | ||||||
Senior Secured debt | $ 300,000,000 | |||||
Maturity date of revolving credit facility | Nov. 30, 2024 | |||||
Period considered for applicability of repricing fees | 6 months | |||||
2013 Credit Facility | Term Loan B Facility | ||||||
Accounting Policies [Line Items] | ||||||
Carrying value of term loan | $ 294,900,000 | |||||
Unamortized debt issuance costs | 3,600,000 | |||||
Estimated fair value of term loan | $ 298,900,000 | |||||
Class A common stock | ||||||
Accounting Policies [Line Items] | ||||||
Number of shares repurchased | shares | 500,000 | |||||
Average price of repurchased shares | $ / shares | $ 4.78 | |||||
Aggregate purchase price of repurchased shares | $ 2,400,000 | |||||
Employee Stock Options | ||||||
Accounting Policies [Line Items] | ||||||
Weighted average period for recognition of unrecognized compensation expense | 9 months 18 days | |||||
Restricted Stock Units | ||||||
Accounting Policies [Line Items] | ||||||
Weighted average period for recognition of unrecognized compensation expense | 1 year 7 months 6 days | |||||
Total unrecognized compensation expense related to grants of restricted stock units | $ 5,700,000 | |||||
Univision | ||||||
Accounting Policies [Line Items] | ||||||
Payment of sales representation fees to television stations | 2,000,000 | 2,300,000 | ||||
Amount due from television stations for carriage | 4,900,000 | |||||
Retransmission consent revenue | $ 7,500,000 | $ 7,300,000 | ||||
Common stock percentage held by Univision | 10.00% | |||||
UniMas | ||||||
Accounting Policies [Line Items] | ||||||
Affiliate advertising minutes per hour for which entity has right to sell | 4 minutes 30 seconds | |||||
Accounting Standards Update 2016-18 | ||||||
Accounting Policies [Line Items] | ||||||
Restricted cash | $ 800,000 | $ 222,300,000 | ||||
Restricted cash used as collateral for letters of credit | 800,000 | |||||
Accounting Standards Update 2016-18 | FCC | ||||||
Accounting Policies [Line Items] | ||||||
Proceeds for broadcast spectrum | $ 221,500,000 | |||||
Minimum | Employee Stock Options | ||||||
Accounting Policies [Line Items] | ||||||
Vesting period | 1 year | |||||
Minimum | Restricted Stock Units | ||||||
Accounting Policies [Line Items] | ||||||
Vesting period | 1 year | |||||
Minimum | Univision | ||||||
Accounting Policies [Line Items] | ||||||
Affiliate advertising minutes per hour for which entity has right to sell | 4 minutes | |||||
Maximum | ||||||
Accounting Policies [Line Items] | ||||||
Total unrecognized compensation expense employee stock option plans | $ 100,000 | |||||
Maximum | Employee Stock Options | ||||||
Accounting Policies [Line Items] | ||||||
Vesting period | 4 years | |||||
Maximum | Restricted Stock Units | ||||||
Accounting Policies [Line Items] | ||||||
Vesting period | 4 years | |||||
Television | ||||||
Accounting Policies [Line Items] | ||||||
Number of stations owned | Station | 55 | |||||
Radio | ||||||
Accounting Policies [Line Items] | ||||||
Number of stations owned | Station | 49 | |||||
Radio operations stations, number of location | Location | 16 | |||||
Advertisements and Syndicate Radio Programming | Minimum | ||||||
Accounting Policies [Line Items] | ||||||
Number of stations owned | Station | 300 |
The Company and Significant A20
The Company and Significant Accounting Policies - Reconciliation of Basic and Diluted Income (Loss) Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share Basic And Diluted [Abstract] | ||
Net income (loss) | $ (1,808) | $ 2,618 |
Denominator: | ||
Weighted average common shares outstanding, basic | 90,319,092 | 90,236,476 |
Basic earnings per share: | ||
Net income (loss) per share | $ (0.02) | $ 0.03 |
Denominator: | ||
Weighted average common shares outstanding, basic | 90,319,092 | 90,236,476 |
Dilutive securities: | ||
Stock options and restricted stock units | 1,524,055 | |
Weighted average common shares outstanding, diluted | 90,319,092 | 91,760,531 |
Diluted earnings per share: | ||
Net income (loss) per share | $ (0.02) | $ 0.03 |
The Company and Significant A21
The Company and Significant Accounting Policies - Fair Value Assets and Liabilities Measured on Recurring Basis (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Contingent Consideration | $ 18 | $ 15.9 |
Money Market Account | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available for sale securities | 45.1 | |
Certificates of Deposit | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available for sale securities | 8.2 | |
Corporate Bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available for sale securities | 174.5 | |
Level 2 | Money Market Account | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available for sale securities | 45.1 | |
Level 2 | Certificates of Deposit | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available for sale securities | 8.2 | |
Level 2 | Corporate Bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available for sale securities | 174.5 | |
Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Contingent Consideration | $ 18 | $ 15.9 |
The Company and Significant A22
The Company and Significant Accounting Policies - Summary of Amortized Cost and Unrealized (Gains) Losses of Available for Sale Securities (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Certificates of Deposit | |
Amortized Cost | |
Due after one year through five years | $ 8,282 |
Total | 8,282 |
Unrealized (gains)losses | |
Due after one year through five years | (34) |
Total | (34) |
Corporate Bonds | |
Amortized Cost | |
Due within a year | 60,010 |
Due after one year through five years | 115,953 |
Total | 175,963 |
Unrealized (gains)losses | |
Due within a year | (79) |
Due after one year through five years | (1,394) |
Total | $ (1,473) |
The Company and Significant A23
The Company and Significant Accounting Policies - Summary of Components of AOCI (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Equity [Abstract] | ||
Accumulated other comprehensive loss | $ (60) | $ (3,000) |
Other comprehensive income (loss) | (1,200) | 900 |
Income tax benefit | 300 | (300) |
Total other comprehensive income (loss) | (949) | 553 |
Accumulated other comprehensive loss | $ (1,009) | $ (2,400) |
Revenues - Summary of Revenues
Revenues - Summary of Revenues Disaggregated by Major Source (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation Of Revenue [Line Items] | ||
Total Revenue | $ 66,838 | $ 57,510 |
Broadcast Advertising | ||
Disaggregation Of Revenue [Line Items] | ||
Total Revenue | 37,709 | 42,788 |
Digital Advertising | ||
Disaggregation Of Revenue [Line Items] | ||
Total Revenue | 18,244 | 4,081 |
Spectrum Usage Rights | ||
Disaggregation Of Revenue [Line Items] | ||
Total Revenue | 108 | |
Retransmission Consent | ||
Disaggregation Of Revenue [Line Items] | ||
Total Revenue | 8,853 | 7,960 |
Other | ||
Disaggregation Of Revenue [Line Items] | ||
Total Revenue | $ 1,924 | $ 2,681 |
Revenues - Summary of Disaggreg
Revenues - Summary of Disaggregation of Broadcast Advertising Revenue by Sales Channel (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation Of Revenue [Line Items] | ||
Total revenue | $ 37,709 | $ 42,788 |
Local Direct | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 14,593 | 16,503 |
Local Agency | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 6,916 | 7,403 |
National Agency | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | $ 16,200 | $ 18,882 |
Revenues - Summary of Deferred
Revenues - Summary of Deferred Revenue (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Revenue From Contract With Customer [Abstract] | |
Beginning Balance | $ 1,535 |
Increase | 1,959 |
Decrease | (1,535) |
Ending Balance | $ 1,959 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 3 Months Ended | |
Mar. 31, 2018SegmentStation | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | Segment | 3 | |
Percentage of revenue generated from outside the United States | 19.00% | 0.00% |
Television | ||
Segment Reporting Information [Line Items] | ||
Number of stations owned | 55 | |
Radio | ||
Segment Reporting Information [Line Items] | ||
Number of stations owned | 49 | |
Advertisements and Syndicates Radio Programming | Minimum | ||
Segment Reporting Information [Line Items] | ||
Number of stations owned | 300 |
Segment Information - Separate
Segment Information - Separate Financial Data for Each of Company's Operating Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||
Net Revenue | $ 66,838 | $ 57,510 | |
Direct operating expenses | 31,033 | 27,092 | |
Selling, general and administrative expenses | 13,294 | 11,200 | |
Depreciation and amortization | 3,939 | 3,546 | |
Operating income (loss) | (341) | 8,053 | |
Corporate expenses | 5,975 | 5,867 | |
Change in fair value of contingent consideration | 2,100 | ||
Foreign currency (gain) loss | 213 | ||
Interest expense | (3,398) | (3,645) | |
Interest income | 913 | 109 | |
Dividend income | 128 | ||
Other income (loss) | 22 | ||
Income (loss) before income taxes | (2,676) | 4,517 | |
Capital expenditures | 2,227 | 1,244 | |
Total assets | $ 745,902 | 765,967 | $ 765,967 |
Percentage change in net revenue | 16.00% | ||
Percentage change in direct operating expenses | 15.00% | ||
Percentage change in selling, general and administrative expenses | 19.00% | ||
Percentage change in depreciation and amortization | 11.00% | ||
Percentage change in segment operating profit (loss) | (43.00%) | ||
Percentage change in corporate expenses | 2.00% | ||
Percentage change in interest expense | (7.00%) | ||
Percentage change in interest income | 738.00% | ||
Percentage change in income (loss) before income taxes | (159.00%) | ||
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Operating income (loss) | $ 7,947 | 13,920 | |
Corporate, Non-Segment | |||
Segment Reporting Information [Line Items] | |||
Corporate expenses | 5,975 | 5,867 | |
Television | |||
Segment Reporting Information [Line Items] | |||
Net Revenue | 34,491 | 37,710 | |
Direct operating expenses | 15,550 | 14,754 | |
Selling, general and administrative expenses | 5,972 | 5,451 | |
Depreciation and amortization | 2,204 | 2,463 | |
Capital expenditures | 2,080 | 967 | |
Total assets | $ 543,974 | 556,942 | |
Percentage change in net revenue | (9.00%) | ||
Percentage change in direct operating expenses | 5.00% | ||
Percentage change in selling, general and administrative expenses | 10.00% | ||
Percentage change in depreciation and amortization | (11.00%) | ||
Percentage change in segment operating profit (loss) | (28.00%) | ||
Television | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Operating income (loss) | $ 10,765 | 15,042 | |
Radio | |||
Segment Reporting Information [Line Items] | |||
Net Revenue | 14,103 | 15,719 | |
Direct operating expenses | 10,674 | 11,017 | |
Selling, general and administrative expenses | 4,606 | 4,704 | |
Depreciation and amortization | 619 | 726 | |
Capital expenditures | 81 | 268 | |
Total assets | $ 122,636 | 126,248 | |
Percentage change in net revenue | (10.00%) | ||
Percentage change in direct operating expenses | (3.00%) | ||
Percentage change in selling, general and administrative expenses | (2.00%) | ||
Percentage change in depreciation and amortization | (15.00%) | ||
Percentage change in segment operating profit (loss) | 147.00% | ||
Radio | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Operating income (loss) | $ (1,796) | (728) | |
Digital | |||
Segment Reporting Information [Line Items] | |||
Net Revenue | 18,244 | 4,081 | |
Cost of revenue | 10,625 | 1,752 | |
Direct operating expenses | 4,809 | 1,321 | |
Selling, general and administrative expenses | 2,716 | 1,045 | |
Depreciation and amortization | 1,116 | 357 | |
Capital expenditures | 66 | 9 | |
Total assets | $ 79,292 | 82,777 | |
Percentage change in net revenue | 347.00% | ||
Percentage change in cost of revenue | 506.00% | ||
Percentage change in direct operating expenses | 264.00% | ||
Percentage change in selling, general and administrative expenses | 160.00% | ||
Percentage change in depreciation and amortization | 213.00% | ||
Percentage change in segment operating profit (loss) | 159.00% | ||
Digital | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Operating income (loss) | $ (1,022) | $ (394) |
Significant Transactions - Addi
Significant Transactions - Additional Information (Detail) - USD ($) $ in Thousands | Jan. 16, 2018 | Apr. 04, 2017 | Mar. 31, 2018 | Dec. 31, 2017 |
Significant Transactions [Line Items] | ||||
Fair value of Contingent Consideration, charge | $ 2,100 | |||
KMCC-TV | ||||
Significant Transactions [Line Items] | ||||
Business acquisition date | Jan. 16, 2018 | |||
Payment to acquire television station | $ 3,600 | |||
Business acquisition description of acquired entity | the Company completed the acquisition of television station KMCC-TV, which serves the Las Vegas, Nevada area | |||
Headway | ||||
Significant Transactions [Line Items] | ||||
Business acquisition date | Apr. 4, 2017 | |||
Ownership Interest acquired | 100.00% | |||
Contingent consideration agreement, payment period | 3 years | |||
Contingent Consideration | 18,000 | $ 15,900 | ||
Headway | Change in Fair Value of Contingent Consideration | ||||
Significant Transactions [Line Items] | ||||
Fair value of Contingent Consideration, charge | $ 2,100 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Millions | Apr. 01, 2018 | May 09, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | May 09, 2018 | Apr. 11, 2018 | Jul. 13, 2017 |
Subsequent Event [Line Items] | |||||||
Amount approved under share purchase program | $ 15,000,000 | ||||||
Class A common stock | |||||||
Subsequent Event [Line Items] | |||||||
Number of shares repurchased | 0.5 | ||||||
Aggregate purchase price of repurchased shares | $ 2,400,000 | ||||||
Average price of repurchased shares | $ 4.78 | ||||||
Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Annualized savings on expense cuts | $ 8,000,000 | ||||||
Amount approved under share purchase program | $ 30,000,000 | ||||||
Subsequent Event | Class A common stock | |||||||
Subsequent Event [Line Items] | |||||||
Number of shares repurchased | 1 | 2.5 | |||||
Aggregate purchase price of repurchased shares | $ 5,100,000 | $ 12,800,000 | |||||
Average price of repurchased shares | $ 4.85 | $ 5.10 | |||||
Amount approved under share purchase program | $ 15,000,000 | ||||||
Scenario, Forecast | |||||||
Subsequent Event [Line Items] | |||||||
Severance costs | $ 800,000 |