Q4 2020 Entravision Communications Corp Earnings Call

Greetings and welcome to the Entravision Communications Corporation fourth quarter, and full year 2020 earnings Conference call. As a reminder, this conference is being recorded it is now my pleasure to introduce your host Kimberly Astrachan from Investor Relations. Thank you you may begin.

Thank you operator, good afternoon, everyone and welcome to Entravision fourth quarter, and full year, 2020 earnings Conference call I hope, everyone is staying healthy and safe.

Joining me on the call today, it's Walter Yellow, Chairman and Chief Executive Officer, and Christine <unk> Chief Financial Officer.

Before we begin I must inform you that this conference call will contain forward looking statements that are subject to risks and uncertainties that could cause actual results to differ please.

Please refer to Entravision and SEC filings for a list of risks and uncertainties that could impact actual results.

This call is the property of Entravision Communications Corp.

Any redistribution retransmission or rebroadcast of this call and any form without the expressed written consent of Entravision Communications Corporation is strictly prohibited also this call will contain non-GAAP financial measure.

The company has provided a reconciliation of these non-GAAP financial measures to their most comparable GAAP measure and today's press release.

The press release is available on the company's website and was filed with the SEC on form eight Pat.

I will now turn the call over to Walker yellow Entravision Chief Executive Officer.

Thank you Kimberly and good afternoon, everyone. We appreciate you joining us today for Entravision as fourth quarter, and 2020 earnings call Entravision and had a very strong fourth quarter. As a result, we are well positioned for growth and the first quarter and full year 2021.

Beginning with the top line revenues for the quarter totaled a $171 7 million up 142% year over year, and 173% sequentially on a pro forma basis, including Cisneros interactive revenues improved 51% over the fourth quarter of 2019.

Our digital segment performed well due in large part to our acquisition of Cisneros interactive well I will speak to the digital segment and further detail. Shortly we are particularly pleased with our performance as the terrorists interactive led by Victor call cause narrows interactive continues to be additive to our cash flow and EBITDA and we have the utmost com.

But they will successfully execute their business plan in 2020 one.

As highlighted last quarter political AD sales were also a strong driver of our fourth quarter revenues and total political advertising revenue for the fourth quarter of 14.2 million, surpassing our prior record set in the fourth quarter of 2012.

Excluding political AD sales and including this narrow interactive pulse on a pro forma basis revenue increased by 39% and the quarter.

Adjusted EBITDA totaled $32 6 million for the fourth quarter of 2020 and increase of 195 per cent compared to $11 1 million and the prior year period.

On a pro forma basis, EBITDA increased 159% in 2020 versus 2019.

Moving beyond the fourth quarter and turning to the full year results.

For 2020 revenues totaled $344 million up 26% over 2019.

Adjusted EBITDA totaled $60 4 million for full year, 2020 as compared to $41 2.002 million 19, or a 47% EBITDA growth in 2020 versus 2019.

On the 20th a very challenging year, but thanks for the strength of our business model, our proactive and conservative cost cutting measures and the dedication of all our employees our business continued to improve each quarter from the lows of the second quarter in 2020.

We enter 2021 prime for growth with the onset of COVID-19, we made a number of expense cuts and anticipation of a prolonged economic impact from the virus.

Fortunately.

Due in part to these proactive reductions and our SG&A our business continued to grow quarter over quarter. As a result, we were able to reinstate certain expenses back and the business, namely employee salaries I could not be prouder of the team we have assembled at entravision their commitment to both our clients at our company this past year never wavered.

And was pleased to be able to reinstate our well deserved employee salaries to their pre COVID-19 levels, even though salary expenses had been reinstated the rest of on expense cuts remain in place and we will continue to operate as a leaner more efficient business with strong free cash flow generation as Chris Young our CFO will discuss.

Shortly and Q4, we more than doubled our prior record of free cash flow set and there was second quarter of 2000 and and six.

This strong cash flow generation should help offset some of the revenue loss from the lack of political AD sales and the first quarter of 2021 with that as a background, let's turn to our three operating segments and further detail.

Our television division generated revenues of $50 5 million for the quarter up 37% compared to the prior year and up 34% sequentially.

Breaking this down further TV advertising and multi cast revenue was up 48% over the prior year fourth quarter, while retransmission consent revenues were up 1% year over year.

Excluding political spend our core TV revenues increased by 10%.

And with TV and political revenues totaling $11 1 million and in the quarter versus a non material amount of political revenue and the fourth quarter of 2019, excluding political revenue national advertising revenues were up 20%.

And mainly by tier two automotive and health care, while local advertising revenues, excluding political were up.

Up 2% driven by legal services and health care.

On a full year basis, TV revenues totaled $154 5 million up 3% year over year, excluding political AD sales core TV revenues for 'twenty, and 'twenty, where $131 9 million a decrease of 12% over full year 2019, turning to our top 10 television.

AD categories, although several advertising categories did see year over year revenue declines many experienced improvements sequentially. Another indication that our business continues on an upward trend auto our largest TV AD category increased 3% year over year, but improved 28% from Q3 2012.

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Services, our second largest advertising category was up 17% compared to the prior year period.

Health care, our third largest category was up 26% over the prior year and also improved 102% sequentially.

Media was up 22% year over year and up 26% sequentially.

Retail, while still down 21% year over year posted a strong gain sequentially of 60%.

Next let's discuss our TV ratings performance for the quarter in all cases, I will be referring to the performance. Among Hispanic adults ages 18 to 49, unless otherwise noted.

Our Univision television affiliates built upon their market leadership and November 2020.

For adults 18 to 49 and early local news our Univision television stations and finished ahead of or tied their telemundo competitor and 11 of 17 markets, where we have head to head competition and late local news. We finished ahead of or tied Telemundo competitors and 10 markets I'm on the 17 markets, where we have head to head competition. Additionally on.

Early local news ranked number one or two against English and Spanish language, TV competitors and nine markets and we built up audience levels from the 15 minute lead in and eight markets. Our late local newscasts ranked number one or two against English and Spanish language TV competitors and six markets.

Our local news teams reported the latest on the COVID-19, pandemic and and unprecedented election year during.

And a full week, our Univision and only modest television stations combined have a cumulative audience of $3 8 million persons two plus and our markets combined compared to a telemundo $3 1 million persons two plus we have 22% more viewers than Telemundo and our television footprint.

During weekday prime time, when comparing to all stations and total we had a higher ratings and at least one of the big four networks and nine markets. Among adults 18 to 49 and 10 markets among adults 18 to 34.

Telecast for you individually Latin Grammy Award show on November 19th was among the top 10 broadcast TV primetime programs for the night among adults 18 to 49 and adults 25 to 54 and 13 markets. Among adults 18 to 34 at the show ranked among the top 10 and 15 markets. Our sales teams did a remarkable job.

And telling them the Latin Grammys study and a revenue record for the signature T V special with revenues up 25% over 2019.

Now, let's turn to our audio operating segment audio revenue for the fourth quarter totaled $16 2 million and increase of 17% over the prior year period and up 41% sequentially.

Local audio revenues decreased 3% over the prior year fourth quarter on National revenues were up 51% over prior year, largely bolstered by political AD sales, excluding political spend core radio revenues declined 5% versus the prior year fourth quarter with the political revenues totaling $3 million in the quarter.

A non material amount and political revenue and the fourth quarter of 2019.

Excluding political spend national advertising revenues were up 8% driven by the service category, while local advertising revenues were down 11% and our audio unit as a result of the continued impact of the COVID-19 pandemic on.

A full year basis audio revenue totaled $46 3 million down 16% year over year, excluding political AD sales core audio revenues were 2024 down 26% over full year 2019.

The 12 markets, where we subscribe to Miller Kaplan data, we outperformed the market by 34.6 points and total revenue combined we outperformed the total market and 11 out of the 12 markets, where we subscribe to Miller Kaplan turning to radio advertising categories services, our largest category representing 26%.

Of our total audio revenue improved to 31% over the prior year fourth quarter period legal services, including those related to immigration as well as government messaging regarding COVID-19 safety continued to represent a large portion of the services add and this past quarter.

Auto our second largest advertising category declined 28% for the fourth quarter as compared to the fourth quarter of 19, but was up 49% sequentially.

Auto repair advertising was up a healthy 34% year over year, as what's grocery store advertising, which improved 3% over the prior year period.

We also saw increases and the product brand and paid programming and categories.

Remaining top 10 advertising categories were all down year over year in the fourth quarter with the exception and political ads, but revenues totaled $3 million and the fourth quarter compared to an immaterial amount and the prior year period.

Particular note during the quarter, we announced the launch of our new streaming destination and bolt on and that's just can now stream their favorite Entravision radio shows and stations directly on their mobile phones or desktops, and we are positioning and bolt on as a hub to direct our audiences across different genres, and well also aggregating content to provide our listeners have seen the search.

And discovery experience.

And a digitally streaming content to our radio offering fits with Entravision is overall positioning as an omni channel audio solutions expert the firm deployment of a podcast offering mobile app presence and first party data subscription services are also part of Entravision vision on this front. It is important to note that our recent investments and the day.

It'll space includes the acquisition of a controlling stake audio AD the strongest audio network and digital audio publisher platform and Latin America.

Vestment and enhances our proprietary audio AD network audio engage currently serving the U S. Latino market.

In addition, with the Super Bowl just a month ago Entravision has now completed its fifth season as the Nfl's exclusive nationwide Spanish language radio broadcaster the NFL and has been an exceptional partner and we look forward to continuing to share their programming with our radio listenership looking.

Looking at our audio division and ratings performance for fall 2020 and.

And on the Spanish language radio stations that you raised on electrical lot to show is ranked number one and nine out of 14 markets, including and Los Angeles released for fall. Among Hispanic adults 18 to 49, including ties and number one and 11 markets, including Los Angeles. Among Hispanic adults 25 to 54 across our 14 O and O radio stations the euro.

And then electrical lot to show reached more than 608000, Hispanics 18 to 49 in the fall 2020 survey.

High profile shows and handle Lucas El show, the appealing and anchor our morning drive and mid day spot spot on loss, while those hit the network and on Jose and Los Angeles, and Riverside for fall 'twenty, and 'twenty peeling and ranked as the number one or two Spanish language midday show, including Los Angeles, and 10 out of our 13 markets released him on the Hispanic adults 18 to 49, including <unk>.

And show the hand, you'll Lucas was number one or two among Spanish language radio stations and eight out of our 11 L and your markets. Among Hispanic adults 18 to 49 and Hispanic adults 25 to 54 and Entravision audio markets. Hispanic list is recovering at a faster rate and a total market average fall 2020.

Panic adults 18 to 49 and weekly reach was and 95% of 2019 levels, well fall 2020 reach with total adult 18 to 49 was at 91% of 2019 levels.

Now moving onto digital.

Our third and final operating segment is digital digital revenues totaled a 105 million for the fourth quarter of 2020, a substantial increase of 424% as compared to the prior year period.

<unk> digital revenue improved 669% on a pro forma basis for Cisneros interactive digital revenue increased 67% compared to the prior year period.

And on a quarterly basis digital revenues surpassed that of our television segment.

On a full year basis digital revenues totaled $143 3 million and increase of 108% compared to 2019.

Throughout the past year, we've made a number of strategic moves aimed at further and Entravision digital segment by building a portfolio of exceptional digital service offerings with creative and programmatic capabilities that meet our clients' needs around the globe and.

First and May we brought our digital capabilities together with the launch of Entravision interactive, which provides advertisers and agencies a single source to engage consumers globally, then and now.

October we announced our strategic majority investment and Cisneros interactive.

Through our majority investment in CIS and arrows interactive represent the strongest global audience and AD tech platforms, such as Facebook, Spotify and linked and across Latin America.

And last but not least in November we announced the appointment and once all day about it as our new Chief digital strategy and Accountability Officer.

<unk> has over two decades of experience and media marketing technology and venture capital and E. Commerce industries as a result of working for Bertelsmann in Germany, Spain, and Mexico, and as executive director of Televisa Digital interactive for seven years, one it's been a member of our board since 2014 and he and his.

Team were instrumental and the acquisition of Cisneros interactive and its integration into Entravision prior to one's appointment, we did not have a single leader running on all of our digital business units with one and fluent Spanish speaker at the helm of our U S and global digital businesses, we expect to be able to grow our solutions technology and talent pool. That's served today more than 4000 clients and 21 countries.

And your vision and believes it is critical to understand participate and build technology to serve the programmatic advertising space on this front fanatics, our Barcelona based on machine learning DSP platform with proprietary technology has continued to grow and serve the most demanding clients and the gaming and mobile performance and App space by matching the strong.

This transparency contextual demographic features and performance standards.

Due to the impact of COVID-19, and digital platform usage is increasingly increased all over the world and specifically in Latin America, where it has accelerated internet adoption and penetration.

Digital video is also a core pillar within our digital and interactive strategy. Our video network continues to expand and close exclusive connections with tier one publishers.

In 2020, one entravision will continue exploring the most prominent growth markets around the globe I said deploys its digital services and consider strategic and complementary investments and acquisitions.

Overall, while 2020 was a challenging year, our business reemerge in the fourth quarter exceeding our expectations and demonstrate the strength of Entravision business bottom.

One last thing I would like to comment on and before handing it over to Chris is our political performance in 2020 as we discussed earlier 2020 was a record for Entravision in terms of political revenue.

Generated over $28 million and political revenue in 'twenty, and 'twenty, which was an incredible 65% increase over our prior year record of 17 billion and 2012. According to a recently published at UCLA. Latino study of the 2020 presidential election turn out.

Approximately $16 6 million Latinos cast votes, and the 2020 election. This represents a 31% increase and nearly double the nationwide growth of 16% and Dallas cash between 2016 and 2020 Latino voters supported Joe Biden and by our margin across the country consistent with margins that Obama.

And in both 2008 and 2012.

That said without the Latino vote, president bite and probably would not have been able to win Arizona, Nevada, and new Mexico, We expect that the outcome of the Latino vote in 2020 to be strong, but it went beyond our estimates I believe that going forward and Latino voter is only going to become more important and you're going to see much more investment and the Latino vote, particularly in them.

Markets, where we operate and California, and Nevada, Arizona, New Mexico, Colorado, Texas, and certainly, Florida, Virginia, and Massachusetts. So on.

I'm very bullish about the future and the continuing important role Latinos will play and U S politics, and before I speak to our areas of focus for the new calendar year, and well now turn the call over to Chris Young our CFO to speak further about our fourth quarter, 2020 performance and first quarter 'twenty, one pacings, Chris Thanks, Walter and good afternoon, everyone.

And as Walter has discussed revenue for the fourth quarter, 2020 totaled $171 7 million and increase of 142% from the fourth quarter of 2019 and up 173% sequentially.

And when comparing on a pro forma basis, and including Cisneros interactive revenue and our 2019 results revenues increased 51% year over year.

For our television division and revenues totaled 41.8 million up 48% year over year.

Retransmission revenue totaled $8 8 million and was up 1% year over year.

For our audio division revenues totaled $16 2 million up 17% over the prior year period.

And lastly, digital revenues totaled $105 million up 424% year over year.

When comparing on a pro forma basis, and including Cisneros interactive as revenue and our 2019 results digital revenues increased 67% year over year.

As Walter spoke to earlier in today's call over the past few quarters, we've taken strategic steps to limit our expenses due to market conditions. Throughout this process. It has become apparent to us that we maintain most of these cuts in 2021 while still running the business at an optimal level and.

And expenses were $14 million for the quarter, a decrease of 1% compared to $14 1 million and a year ago period.

Excluding the Cisneros acquisition SG&A expenses were down 23%.

Direct operating expenses totaled $31 9 million for Q4, 2020 and increase of 6% compared to Q4 of 2019. Excluding this is narrows acquisition direct operating expenses were down 2%.

Finally, corporate expenses for the fourth quarter increased 18% totaling $9 3 million compared to seven 9 million and the same quarter of last year. The primary driver of corporate expense with salary expense as we retroactively restored salary cuts executed early in the year along with bonus expense.

During the fourth quarter, our share buyback program remained on hold we also maintained the dividend at two and a half cents per share and continued to eliminate expenses at the operating and corporate levels deemed secondary to serving our core media business.

We will continue to evaluate our buyback and dividend each quarter, which will be at the discretion of our board of directors expense wise, we expect that our operating expenses, excluding digital cost of goods sold and corporate will be roughly flat in the first quarter as compared to the prior year period.

Excluding expenses related to Cisneros operating expenses are expected to be down approximately 13%.

Solidago adjusted EBITDA totaled $32 6 million for the fourth quarter up 195% compared to the fourth quarter of last year.

On a pro forma basis accounting for the Cisneros interactive acquisition adjust.

Adjusted EBITDA was up 159% year over year.

This was a record quarter for and free EBITDA generation due in part to the 2020 presidential election cycle and the contribution of the scenarios interactive and.

Provisions 51 per cent portion of Cisneros interactive adjusted EBITDA was $3 6 million for the fourth quarter.

Free cash flow as defined in our earnings release was approximately $28 6 million and the quarter up 495% compared to the fourth quarter of last year similar to adjusted EBITDA. The fourth quarter of 2020 also represented a record quarter for Entravision as free cash flow generation.

On free cash flow has been the cornerstone of Entravision business and supported our ability to grow both organically and through acquisitions without the need to take on significant leverage. We expect this this high free cash flow conversion rate to continue for the foreseeable future.

Earnings per share for the fourth quarter, 'twenty, and 'twenty, where 24 cents compared to nine cents per share and the same quarter of last year.

Net cash interest expense was $1 3 million for the fourth quarter compared to $2 2 million and the same quarter of last year.

Cash capital expenditures for fourth quarter totaled $1 3 million compared to $4 1 million and the prior year. This brought us to $9 1 million in cash capital expenditures for the full year of 2020.

Turning to our balance sheet, which remains very strong cash and marketable securities as of December 31, 2020 totaled a 147.2 million total debt was 215 million net of 75 million of cash and marketable securities on the books, our total leverage as defined in our credit agreement was two three times as of the and.

The fourth quarter and.

Net of total accessible cash and marketable securities. Our total net leverage was one three times.

Turning now to our pacings for the first quarter of 2021 as of today, our television advertising business is presently pacing minus 14% with core TV, excluding political pacing at a minus 4%.

Our audio business is pacing and minus 8% with core audio excluding political again pacing at a minus 6%.

And our digital business, including revenue from Cisneros Interactive is pacing plus 500% factoring and Cisneros revenue generated in Q1 of last year of approximately $42 2 million or digital business on a pro forma basis is currently pacing at a plus 65%.

Now before I turn the call back to Walter Theres, one other item I'd like to review.

As part of our expanding business operations and geographic footprint Entravision acquired a majority interest and Cisneros interactive and during the fourth quarter of 2020.

As a result, we've experienced a longer audit process and our auditors have informed us that they have not yet completed their audit procedures as of the time of this call.

As a result, we anticipate that we won't be and are positioned to file our 10-K by the standard is E. C filing deadline of next Tuesday March 16th if that's the case, we will file a notice with the FCC to extend our 10-K filing deadline for additional 15 days on.

Orders have informed us that they anticipate completing their audit procedures by the end of March and we expect to file the 10-K as soon as practical.

As a result of all this please note that the financial results reported on our press release and this call are subject to completion of our audit and we refer you to our form 10-K for audited financial results on.

All this said, we believe and start with interactive has been an excellent addition to our digital business. We're excited about the future of Cisneros interactive and how this business has enhanced our product portfolio and service offerings and aligns with our mission and sales operations with that I'll turn the call back to Walter Walter.

Thanks, Chris as is evident from our fourth quarter performance Entravision entered 2021 had a very strong revenue run rate even without political revenue. This year with a leaner cost structure, we expect higher profitability from each of our operating segments as Chris noted our free cash flow generation remains high.

And our balance sheet is strong as a result of our leverage is very low which leaves us with a lot of dry powder to continue to make acquisitions, while still investing and our organic growth.

In addition to go on our digital business organically and we also look to grow our digital efforts through acquisitions, including acquiring complementary businesses and similar geographic regions Cisneros interactive.

We plan to target companies with similar multiples to that of Cisneros interactive and that are accretive to earnings.

It is clear there is a solid runway ahead for Entravision and while this past year was challenging we learned to operate our business units more efficiently and have positioned our company for continued success I'd like to thank all of our employees for their hard work and 2020 as well and express my strong gratitude to our incredible on air talent.

We kept our radio and television audiences well informed during the most newsworthy and volatile year. Thank you again for your time today and your continued support of Entravision, Chris and I will now open up the call for questions operator.

And at this time, we'll be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad and confirmation tone will indicate your line is and the question queue. You May Press Star two if you would like to remove your question from the queue for participants using speaker equipment and it may be necessary to pick up on your handset before pressing and historic.

He's one.

One of them on me please while we poll for questions.

And our first question is from Michael Pinsky with Noble capital markets. Please proceed with your question.

And so we're taking the questions and congratulations on your quarter first of all you took a lot of cost out of the business, obviously last year and use you retroactively.

Increase the salaries, I guess and the bonuses and that was all on the fourth quarter. So that was like a true up or I'm, just trying to get a sense of how much of the reinstatement of the salaries what would that mean free for the full year cost increases this year and if you could just tell us when you will lap the significant part of the cost cuts this year.

Hey, Michael Yes that was a true up payment. So what we did was everyone who took a pay cut back on April 15th.

And then.

On the how much they had given up and we turned around and cut the mud check for the difference.

In December that was the total one time payment of approximately $2 million.

And then what you would what you're trying to do is just run rate expense.

Thanks for your model and what you basically need to do is take I would take our third quarter expense.

That's the last one on kind of clean look without the moving parts there on on the sound.

And we front and then.

You would add around 250 Grand a quarter for T V and corporates, each and then another call it 200 Grand.

Core radio expense.

Okay.

Good day.

Gotcha, and then can you just kind of give me a sense of what did so its narrows do and revenues year over year and the quarter on a standalone basis.

What what was the rate of growth that they experience and then embedded in your Q1 pacings could you just kind of give us a sense of how much since narrows and is growing and then I guess finally on that front and what are the prospects that narrows grows beyond you know the Facebook Spotify and Linkedin or are there is there another platform.

And you know Twitter or anything else that you could.

See in terms of the prospect of growth there or.

And just kind of give us a sense of where you're seeing the growth.

Sure well I'll cover I'll cover the numbers and and maybe Walter will chime in on the other platforms. So this fourth quarter of 2019.

Cisneros did about $42 8 million of revenue.

And in 2020, just remember we acquired them on October 13th So you've got a stub period of 12 days, that's not on our books, but just a portion of that was on our books that was $89 2 million. So you've got a growth there of call it 110%.

Mhm.

Right and then in terms of what what would you you gave us pacing data for Q1, and what what would scenarios be growing out in Q1.

Oh, if you factor in and that's same logic, there for first quarter, probably another 100%.

And the other way same growth trajectory consistent with what we did and the fourth quarter can.

Can you give us a sense of where you're seeing the growth or what is it growing platform just going volume what were what is the how how should we look at the growth there as well.

Well, it's the three there are three primary platforms right.

Really the drivers of that business and really you know if you had to kind of.

And through the three it's really Facebook Facebook business and the emerging markets where it is.

And this narrows operates.

Just performing really really well and that's really the primary driver.

And then what's in terms of.

<unk> done the math here, Chris, but if you factored out zero and the first quarter, what would be what would your digital.

Revenue speed and are on pace and paint in terms of pacing.

In terms of pacing Oh, yeah, I don't have that broken out.

Yeah.

You know what all let me come up with that number and get back to you on that.

Okay, and then maybe if you could just talk a little bit about the M&A environment right now I know that it sounds like you would love to be able to make more digital acquisitions.

Walter you and the past you've made some comments about what you would like to see in terms of the contribution from digital in terms of the total company.

Maybe.

Wanted to see if you wanted to update that those are you know that.

Net expectation or maybe give us some guidance on what you thought and how this company might work and the next three to five years.

Well I'll just make a couple of comments and Michael.

And for your questions.

You know our total digital revenue and it was about 60% of total revenue in Q4, and and we expect that trend to continue and in 2020 one.

We also are looking to grow our digital portfolio and and and identify a I'll call. It the accretive complementary assets to our digital businesses and so you know that there's something that we actively who are actively involved in.

We're looking at opportunities all the time and and and doing you know whatever analysis, we need to do and trying to find the right fit them just like we did with the stainless interactive.

And Walter do you have any thoughts in terms of what you would like to see your digital contribution to be in terms of total company revenues and you know and.

Next a couple of years.

And I don't I won't make a comment on that more than what I've said already I mean, I'm you know it it's already 60% of total revenue we expect that to continue this year and in 2020, one and you know as we add more digital businesses to the portfolio it'll increase but what you know.

And what level I don't know, but you know we're certainly one of the one of the the.

Great and they'll call it a.

Benefits of building our digital portfolio is the talent that comes with it you know we've got some great talent around the world I'm, working and our digital businesses and.

It makes everything better and not only our global digital business, but also our U S digital business and where we continue to to integrate them and you know digital.

Assets, and and and and and talent into.

And to our U S digital business and expand our offering to particularly on expand our offering to appetizers and want to reach the Hispanic market and and tea and using digital solutions to do that so we complement our broadcast business with our digital our U S local digital business.

Well congratulations it was a great quarter and it seems like the terrorists is off to a strong start congratulations on that as well. Thanks.

Thank you Michael Yeah, we're very proud of the fourth quarter and certainly in terms of what we've been able to achieve over the last year. Despite a very difficult environment. Thanks, Mike.

Yeah.

And as a reminder, if you have any questions you May press star one on your telephone keypad door zone and ensure that you are and the question queue.

Our next question is from Lisa Springer with singular research.

Proceed with your question.

Thank you and congratulations on a strong quarter.

Uh huh.

Thankfully regarding M&A coming up in 2020. One are we likely to you know how is it more likely to see small acquisitions and number of small acquisitions or where you think you might be making another large one.

What's the environment.

Environment out there what kind of yes, it's available.

Well at least that we continue to look for like I said and assets that are complementary and assets that are accretive so you.

You know two to the business you know where we're at.

It would just you know constantly looking for for for opportunities that might be might help the business grow and.

Certainly growth is and I wonder where number one and goals.

And that'll do it too.

<unk> achieved the growth we have today, but to continue to grow going forward.

So I can't really give you an answer on the size of the business. I mean, you know it just depends on what we went across and and how it pencils out in terms of you know is it is it a business is strategic to our tour growth is it fit our current portfolio is the culture of the business that we're buying the talent that we're buying you know do they fit and.

The needs of our businesses and then finally, you know what's what's is it accretive to our.

Two our stock.

Mhm, Okay. Thank you and my next question concerns the dividend what factors would have to fall into place for a restoration of a dividend to the former level.

Well.

It's it's tough to define the factors per se. It's an issue that's going to be looked at by the board a quarterly for the balance of the year and Oh I can say that is stay.

Stay tuned.

Okay, Great alright, Thank you thanks Lisa.

Yeah.

And alright.

And our next question is from Michal Krupinski with Noble capital markets. Please proceed with your question.

And just a couple of quick follow ups on on the team decided the business on 1% retransmission revenue growth is kind of anemic. It seems relative to the industry. I was wondering if you give some thoughts about what we're likely to see and 'twenty 'twenty. One and then in terms of your core pacing data being down 4%.

A little lighter than the rest of the industry and the rest of the industry, indicating that Q1 core is up which is a little surprising I guess and.

And was wondering what factors might be going into your core pacing data you can just kind of give us some color there.

Sure Michael on the Retrans front art deal with Univision Ah is basically locked in at high single digit rate increases year over year I think we're at 27 cents for for 2020 one 'twenty six.

26 cents I, just got corrected, but the but the problem there and is that the subscriber counts keep offsetting those are rate increases. So we saw subs decline.

Around a little more than 2% and the last quarter and it's just where the industry is headed right. Now. So you take one step forward with the rate increase but then another step backwards with this sub counts so until those sub counts start to.

You know normalize, though and that's that's the pattern that we're gonna be up against I I'd say retrans for the Spanish language side of the business is going to be maybe flat to maybe up a one or 2% for the balance of the year and then the Retrans. However on the English language side should be growing and the a 10% to 15% range.

And for the balance of the year as well.

That's a separate that's completely separate retransmission process. That's a negotiation that takes place with us directly with the with the cable companies as opposed to individual representing us on the Spanish language side.

And Chris just remind me are.

And do you not get the benefit of the OTT platforms or how how do you. We do not know how did you for Univision no. There there's no OTT arrangement between Univision and ourselves and that's been talked about from time to time, but we've never really hunkered down and gotten the deal done and so we do have and OTT arrangement.

And then D C.

Our Palm Springs, and Felipe, but that's the only one at this time and Fox sorry talks as well.

And then kick on.

The core business being down 4%.

And what we're seeing is that's actually been improving pretty significantly over the past several weeks so that would've been a very different answer maybe four or five weeks ago. So you know vis vis the industry auto as a category for T V's still.

No kind of pacing and the minus seven minus eight range and that's our number two category, what's and offsetting that is the legal services category, which has really been growing nicely and close to double digits.

Restaurants or for the first time, a restaurant the advertising spend with US is flat and we havent seen that since the pre COVID-19. So that's a sign of better things to come as well as the vaccine and takes hold but.

The the minus four we're not so we're not so concerned about its the trends that we're focused on and the trends tell us that we may end up a little better than the minus four and a core and once the quarters old on them.

Great. Okay. Thank you that's all I have thank you Mike.

Yeah.

And we have reached the end of the question and answer session I will now turn the call over to Walter Ulloa for closing remarks.

Thank you Mollie and thank you again, everyone for joining us today and for your support we are optimistic about the future of Entravision and we look forward to sharing our progress with you on our first quarter earnings call in May.

And this concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.

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