Entravision Communications Corporation

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 Estricant of Congressional Relations. Thank you. You may begin.

Thank you, Operator. Good afternoon, everyone, and welcome to EntraVision's fourth quarter and full year 2020 earnings conference call. I hope everyone is staying healthy and safe. Joining me on the call today is Walter Ulloa, Chairman and Chief Executive Officer, and Chris Young, 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 refer to EnterVision's SEC filings for a list of risks and uncertainties that could impact actual results. This call is the property of Entrevision Communications Corporation. Any redistribution, retransmission, or rebroadcast of this call in any form without the express written consent of Entrevision Communications Corporation is strictly prohibited. Also, this call will contain non-GAAP financial measures. The company has provided a reconciliation of these non-GAAP financial measures to their most comparable GAAP measures in today's press release. The press release is available on the company's website and was filed with the FCC on Form 8-K. I will now turn the call over to Walter Ulloa, InterVision's Chief Executive Officer. Walter Ulloa, InterVision's Chief Executive Officer Thank you, Kimberly, and good afternoon, everyone.

We appreciate you joining us today for InterVision's fourth quarter and 2020 earnings call. InterVision had a very strong fourth quarter. As a result, we are well positioned for growth in the first quarter and full year 2021. Beginning with the top line, revenues for the quarter totaled $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. While I will speak to the digital segment in further detail shortly, we are particularly pleased with our performance of Cisneros Interactive led by Victor Kong. Cisneros Interactive continues to be additive to our cash flow and EBITDA, and we have the utmost confidence that they will successfully execute their business plan in 2021. As highlighted last quarter, political ad sales were also a strong driver of our fourth quarter revenues. In 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 Cisnero Interactive on a full form of basis, revenue increased by 39% in the quarter. Adjusted EBITDA totaled $32.6 million for the fourth quarter of 2020, an increase of 195% compared to $11.1 million in 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 million in 2019, or a 47% EBITDA growth in 2020 versus 2019. 2020 was a very challenging year, but thanks to 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 primed for growth. With the onset of COVID-19, we made a number of expense cuts in anticipation of a prolonged economic impact from the virus. Fortunately, due in part to these proactive reductions in our SG&A, our business continued to grow quarter over quarter. As a result, we were able to reinstate certain expenses back in the business, namely employee salaries. I could not be prouder of the team we have assembled at Entrevision. Their commitment to both our clients and our company this past year never wavered. I was pleased to be able to reinstate our well-deserved employee salaries to the pre-COVID-19 levels. Even though salary expenses have been reinstated, the rest of our 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, in Q4, we more than doubled our prior record of free cash flow set in the second quarter of 2006. This strong cash flow generation should help offset some of the revenue loss from the lack of political ad sales in the first quarter of 2021. With that as a background, let's turn to our three operating segments in 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, television advertising and multicast 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 television revenues increased by 10%, with television political revenues totaling $11.1 million in the quarter versus the non-material amount of political revenue in the fourth quarter of 2019. Excluding political revenue, national advertising revenues were up 20%, driven mainly by Tier 2 automotive and health care. while local advertising revenues, excluding political, were up 2%, driven by legal services and health care. On a full-year basis, television revenues totaled $154.5 million, up 3% year-over-year. Excluding political ad sales, core television revenues for 2020 were $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 television ad category, increased 3% year-over-year, but improved 28% from Q3 2020. Services, our second largest advertising category, was up 17% compared to the prior year period. Healthcare, 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 television 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 in November 2020. For adults 18 to 49 in early local news, our Univision television stations finished ahead of or tied their Telemundo competitor in 11 of 17 markets where we have head-to-head competition. In late local news, we finished ahead of or tied Telemundo competitors in 10 markets along the 17 markets where we have head-to-head competition. Additionally, our early local news ranked number one or two against English TV and Spanish language television competitors in nine markets. And we built up audience levels from the 15-minute lead-in in eight markets. Our late local newscasts ranked number one or two against English and Spanish language television competitors in six markets. Our local news teams reported the latest on the COVID-19 pandemic and an unprecedented election year. During the full week, our Univision and Unimas television stations combined have a cumulative audience of 3.8 million persons two plus in our markets combined. compared to Telemundo's 3.1 million persons 2+. We have 22% more viewers than Telemundo in our television footprint. During weekday primetime, when comparing to all stations in total, we had a higher rating than at least one of the big four networks in nine markets among adults 18 to 49 and 10 markets among adults 18 to 34. Telecast for Univision's Latin Grammy Awards show on November 19th was among the top 10 broadcast television primetime programs for the night, among adults 18 to 49 and adults 25 to 54 in 13 markets. Among adults 18 to 34, the show ranked among the top 10 in 15 markets. Our sales teams did a remarkable job selling the Latin Grammys, setting a revenue record for this signature TV special with revenues up 25% over 2019. Now let's turn to our audio operating segment. Audio revenues for the fourth quarter totaled $16.2 million. an increase of 17% over the prior year period and up 41% sequentially. Local audio revenues decreased 3% over the prior year fourth quarter, while 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 political revenues totaling $3 million in the quarter versus a non-material amount of political revenue in the fourth quarter of 2019. Excluding political span, national advertising revenues were up 8% driven by the service category, while local advertising revenues were down 11% in our audio unit as a result of the continued impact of the COVID-19 pandemic. On a full year basis, audio revenues totaled $46.3 million, down 16% year-over-year. Excluding political ad sales, core audio revenues for 2020 were down 26% over full year 2019. The 12 markets where we subscribed to Miller Kaplan data, we outperformed the market by 34.6 points in total revenue combined. We outperformed the total market in 11 out of the 12 markets where we subscribed to Miller Kaplan. Turning to radio advertising categories, services, our largest category, representing 26% of our total audio revenue, improved 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 ad in 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 was grocery store advertising, which improved 3% over the prior year period. We also saw increases in the product brand and paid programming categories. The remaining top 10 advertising categories were all down year over year in the fourth quarter, with the exception of political ads, where revenues totaled $3 million in the fourth quarter compared to an immaterial amount in the prior year period. On a particular note, during the quarter, we announced the launch of our new streaming destination, El Boton. Listeners can now stream their favorite Entrevision radio shows and stations directly on their mobile phones or desktops. We are positioning El Boton as a hub to direct our audiences across different genres while also aggregating content to provide our listeners a seamless search and discovery experience. The addition of digitally streaming content to our radio offering fits with Entrevision's overall positioning as an omni-channel audio solutions expert. The firm deployment of our podcast offering, mobile app presence, and first-party data subscription services are also part of Entrevision's vision. On this front, it is important to note that our recent investment in the digital space includes the acquisition of a controlling stake of AudioAd, the strongest audio network and digital audio publisher platform in Latin America. This investment enhances our proprietary AudioAd network, AudioEngage, currently serving the U.S. Latino market. In addition, with the Super Bowl just a month ago, Entrevision has now completed its fifth season as the NFL's exclusive nationwide Spanish-language radio broadcaster. The NFL has been an exceptional partner, and we look forward to continuing to share their programming with our radio listenership. Looking at our audio division ratings performance for fall 2020, among the Spanish-language radio stations, the Erasmo Electrocolata Show is ranked number one in nine out of 14 markets, including Los Angeles, released for fall among Hispanic adults 18 to 49, including Thais, and number one in 11 markets, including Los Angeles, among Hispanic adults 25 to 54. Across our 14 O&O radio stations, the Erasmo y la Chocolata show reached more than 608,000 Hispanics, 18 to 49, in the fall 2020 survey. High-profile shows, Eugenio Lucas y El Sheldon Piolín anchor our morning drive and midday spots on La Suave Sita Network and on Jose in Los Angeles and Riverside. For fall 2020, Piolín ranked as the number one or two Spanish-language midday show, including Los Angeles, in 10 out of our 13 markets released among Hispanic adults 18 to 49, including ties. It will show that Henio Lucas was number one or two among Spanish-language radio stations in eight out of our 11 El Henio markets, among Hispanic adults 18 to 49 and Hispanic adults 25 to 54. In IntraVision's audio markets, Hispanic list is recovering at a faster rate than the total market average. Fall 2020, Hispanic adults 18 to 49 weekly reach was at 95% of 2019 levels. while fall 2020 reach for total adults 18 to 49 was at 91% of 2019 levels. Now moving on to digital. Our third and final operating segment is digital. Digital revenues totaled $105 million for the fourth quarter of 2020, a substantial increase of 424% as compared to the prior year period. Sequentially, digital revenues improved 669%. On a pro forma basis for Cisneros Interactive, digital revenue increased 67 percent compared to the prior year period. On a quarterly basis, digital revenues surpassed that of our television segment. On a full year basis, digital revenues totaled 143.3 million, an increase of 108 percent compared to 2019. Throughout the past year, we made a number of strategic moves aimed at furthering EnterVision's digital segment by building a portfolio of exceptional digital service offerings with creative and programmatic capabilities that meet our clients' needs around the globe. First in May, we brought our digital capabilities together through the launch of Entrevision Interactive, which provides advertisers and agencies a single source to engage consumers globally. Then in October, we announced our strategic majority investment in Cisneros Interactive. Through our majority investment in Cisneros Interactive, we represent the strongest global audience in ad tech platforms such as Facebook, Spotify, and LinkedIn across Latin America. Last but not least, in November we announced the appointment of Juan Saldivar as our new Chief Digital Strategy and Accountability Officer. Juan has over two decades of experience in media, marketing, technology, 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. Juan has been a member of our board since 2014. and he and his team were instrumental in the acquisition of Cisneros Interactive and its integration into Entrevision. Prior to Juan's appointment, we did not have a single leader running all of our digital business units. With Juan, a 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 serve today more than 4,000 clients in 21 countries. Entrevision believes it is critical to understand, participate, and build technology to serve the programmatic advertising space. On this front, Smatics, our Barcelona-based machine learning DSP platform with proprietary technology, has continued to grow and serve the most demanding clients in the gaming, mobile performance, and app space by matching the strongest transparency, contextual, demographic features, and performance standards. Due to the impact of COVID-19, digital platform usage has 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 1 publishers. In 2021, EnterVision will continue exploring the most prominent growth markets around the globe as it deploys its digital services and considers strategic and complementary investments and acquisitions. Overall, while 2020 was a challenging year, our business reemerged in the fourth quarter exceeding our expectations and demonstrating the strength of Entrevision's business model. One last thing I would like to comment on before handing it over to Chris is our political performance in 2020. As we discussed earlier, 2020 was a record for Entrevision in terms of political revenue. We generated over $28 million in political revenue in 2020, which was an incredible 65% increase over our prior year record of $17 million in 2012. According to a recently published UCLA Latino study of the 2020 presidential election turnout, approximately 16.6 million Latinos cast votes in the 2020 election. This represents a 31% increase and nearly doubled the nationwide growth of 16% in ballots cast between 2016 and 2020. Latino voters supported Joe Biden by a margin across the country consistent with margins that Obama won in both 2008 and 2012. That said, without the Latino vote, President Biden probably would not have been able to win Arizona, Nevada, and New Mexico. We expected the outcome of the Latino vote in 2020 to be strong, but it went beyond our estimates. I believe that going forward, the Latino voter is only going to become more important, and you're going to see much more investment in the Latino vote, particularly in the markets where we operate, California, Nevada, Arizona, New Mexico, Colorado, Texas, and certainly Florida, Virginia, and Massachusetts. So I'm very bullish about the future and the continuing important role Latinos will play in U.S. politics. Now, before I speak to our areas of focus for the new calendar year, I will now turn the call over to Chris Young, our CFO, to speak further about our fourth quarter 2020 performance and first quarter 21 pacings. Chris?

Thanks, Walter, and good afternoon, everyone. As Walter has discussed, revenue for the fourth quarter 2020 totaled $171.7 million. an increase of 142% from the fourth quarter of 2019 and up 173% sequentially. When comparing on a pro forma basis and including Cisneros Interactive's revenue in our 2019 results, revenues increased 51% year-over-year. For our TV division, ad 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. Lastly, digital revenues totaled $105 million, up 424% year-over-year. When comparing on a pro forma basis and including Cisneros Interactive's revenue in 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. SG&A expenses were $14 million for the quarter, a decrease of 1% compared to $14.1 million in the year-ago period. Excluding the Cisneros acquisition, SG&A expenses were down 23%. Direct operating expenses totaled $31.9 million for Q4 of 2020, an increase of 6% compared to Q4 of 2019. Excluding the Cisneros acquisition, direct operating expenses were down 2%. Finally, corporate expenses for the fourth quarter increased 18%, totaling $9.3 million, compared to $7.9 million in 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 a dividend at 2.5 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 costs 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%. Consolidated 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, Adjusted EBITDA was up 159% year-over-year. This was a record quarter for EBITDA generation due in part to the 2020 presidential election cycle and the contribution of Cisneros Interactive. Entrevision's 51% 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 in 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 IntraVision's free cash flow generation. Strong free cash flow has been the cornerstone of IntraVision's business and supported our ability to grow both organically and through acquisitions without the need to take on significant leverage. We expect this high free cash flow conversion rate to continue for the foreseeable future. Earnings per share for the fourth quarter 2020 were 24 cents compared to 9 cents per share in the same quarter of last year. Net cash interest expense was 1.3 million for the fourth quarter compared to 2.2 million in the same quarter of last year. Cash capital expenditures for fourth quarter totaled 1.3 million compared to 4.1 million in 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 $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 2.3 times as of the end of the fourth quarter. Net of total accessible cash and marketable securities, our total net leverage was 1.3 times. Turning now to our pacings for the first quarter of 2021. As of today, our TV advertising business is presently pacing a minus 14%, with core TV, excluding political, pacing at a minus 4%. Our audio business is pacing a 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 in Cisneros revenue generated in Q1 of last year of approximately $42.2 million, Our digital business on a pro forma basis is currently pacing at a plus 65%. Now, before I turn the call back to Walter, there's one other item I'd like to review. As part of our expanding business operations and geographic footprint, IntraVision acquired a majority interest in Cisneros Interactive 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 in a position to file our 10-K by the standard SEC filing deadline of next Tuesday, March 16th. If that's the case, we will file a notice with the SEC to extend our 10-K filing deadline for an additional 15 days. Our auditors 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 in 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. All this said, we believe Cisneros 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 you, Walter. Walter?

Thanks, Chris. As is evident from our fourth quarter performance, InterVision enters 2021 at a very strong revenue run rate. Even without political revenues 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, our leverage is very low, which leaves us with a lot of dry powder to continue to make acquisitions while still investing in our organic growth. In addition to growing our digital business organically, we also look to grow our digital efforts through acquisitions, including acquiring complementary businesses in similar geographic regions as 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 IntraVision, 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 in 2020, as well as express my strong gratitude to our incredible on-air talent that 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 Entrevision. 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 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question is from Michael Kapinski with Noble Capital Markets.

Please proceed with your questions. Thanks for 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 you retroactively increased the salaries, I guess, and the bonuses and that was all in 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 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, we went back in December, did the math on how much they had given up, and we turned around and cut them a check for the difference in December. That was a total one-time payment of approximately $2 million. Okay. And then what you're trying to do is just restore a run rate expense bank for your model. And what you basically need to do is take, I would take our third quarter expense. That's the last kind of clean look without the moving parts there on the salary front. And then you would add around $250,000 a quarter for TV and corporate each, and then another call it $200,000 for radio expense.

That'll get you to where you should be. Gotcha. And then can you just kind of give me a sense of what did Cisneros do in revenues year over year and a quarter on a standalone basis of what was the rate of growth that they experienced? And then embedded in your Q1 pacings, could you just kind of give us a sense of how much Cisneros is growing? And then I guess finally on that front, what are the prospects that Cisneros grows beyond You know, the Facebook, Spotify, and LinkedIn. Is there another platform, you know, Twitter or anything else that you could see in terms of the prospect of growth there? Can you just kind of give us a sense of where you're seeing the growth?

Sure. Well, I'll cover the numbers and maybe Walter will chime in on the other platforms. So this fourth quarter of 2019, Cisneros did about 42.8 million in revenue. And in 2020, just remember we acquired them on October 13th, so you've got a stop period of 12 days that's not on our books. But just the portion that was on our books, that was $89.2 million. So you've got a growth there of call it 110%. Right.

And then in terms of what would you – you gave us pacing data for Q1. What would scenarios be growing at in Q1?

Oh, if you factor in that same logic there for first quarter, probably another 100%. Okay. Same growth trajectory consistent with what we did in the fourth quarter.

Can you give us a sense of where you're seeing the growth or what is it growing platform, just growing volume? How should we look at the growth there?

Well, there are three primary platforms. Right. are really the drivers of that business and really, you know, if you had to kind of cipher through the three, it's really Facebook. The Facebook business in the emerging markets where Cisneros operates is just performing really, really well, and that's really the primary driver.

And then what's in terms of – I haven't done the math here, Chris, but if you factored out Cisneros in the first quarter, what would your digital revenues be then in terms of pay think?

In terms of pacing? Oh, we don't have that broken out. You know what? 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, in the past you've made some comments about what you would like to see in terms of the contributions from digital in terms of the total company. Maybe I wanted to see if you wanted to update that expectation or maybe give some guidance on what your thought is how this company might work in the next three to five years.

Well, I'll just make a couple comments, Michael, and thank you for your questions. You know, our total digital revenue was about 60% of total revenue in Q4, and we expect that trend to continue in 2021. We also are looking to grow our digital portfolio and identify, I'll call it, accretive complementary assets to our digital businesses. And so, you know, that is something that we're actively involved in, We're looking at opportunities all the time and doing whatever analysis we need to do and trying to find the right fit, just like we did with Sustainable Interactive.

Walter, do you have any thoughts in terms of what you would like to see your digital contributions be in terms of total company revenues in the next couple of years?

You know, I won't make a comment on that more than what I've said already. I mean, you know, it's already 60% of total revenue. We expect that to continue this year in 2021. You know, as we add more digital businesses to the portfolio, it'll increase. But to what level, I don't know. But, you know, we're certainly – one of the great – I'll call it – benefit building our digital portfolio is the talent that comes with it you know we've got some great talent around the world working in our digital businesses and it just makes everything better not only our global digital business but also our US digital business we continue to integrate digital assets and talent into our US digital business and expand our offering to particularly expand our offering to advertisers that want to reach the Hispanic market and using digital solutions to do that. So we complement our broadcast business with our U.S. local digital business.

Well, congratulations. It was a great quarter, and it seems like Centenarios is off to a strong start. Congratulations on that as well.

Thank you, Michael. 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 the very difficult environment.

Thanks, Mike.

And as a reminder, if you have any questions, you may press star 1 on your telephone keypad. Doing so will ensure that you are in the question queue. Our next question is from Lisa Springer with Singularity Research. Please proceed with your question.

Thank you, and congratulations on a strong quarter.

Thanks, Lisa. Thanks, Lisa.

Regarding M&A coming up in 2021, are we likely to, you know, how is it more likely to see small acquisitions, a number of small acquisitions, or do you think you might be making another large one? What's the environment out there? What kind of assets are available?

Well, Lisa, we continue to look for, like I said, assets that are complementary and assets that are accretive. So, you know, to the business, you know, we're just constantly looking for opportunities that might help the business grow. Certainly growth is one of our number one goals. not only to achieve the goals 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 run across and how it pencils out in terms of, you know, is it a business that's strategic to our growth? Does 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 the needs of our businesses? And then finally, you know, is it accretive to our stock?

Okay, thank you. And my next question concerns the dividend. What factors would have to fall into place for a restoration of the dividend to the former level?

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

Okay, great. All right, thank you.

Thanks, Lisa. And our next question is from Michael Kopinski with Noble Capital Markets. Please proceed with your question.

Thank you. Just a couple of quick follow-ups. On the TV side of the business, a 1% retransmission revenue growth is kind of anemic, it seems, relative to the industry. I was wondering if you'd give some thoughts about what we're likely to see in 2021. And then in terms of your core pacing data being down 4%, it seems a little lighter than The rest of the industry is indicating that Q1 core is up, which is a little surprising, I guess, and was wondering what factors might be going into your core pacing data. If you can just kind of give us some color there.

Sure, Michael. On the retrans front, you know, our deal with Univision is basically locked in at high levels. single-digit rate increases year over year. I think we're at $0.27 for 2021. $0.26, I just got corrected. But the problem therein is that the subscriber counts keep offsetting those rate increases. So we saw subs decline by around a little more than 2% in 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 the subcount. So until those subcounts start to normalize, that's the pattern that we're going to be up against. I'd say retrans for the Spanish language side of the business is going to be maybe flat to maybe up 1% or 2% for the balance of the year. And then the retrans, however, on the English language side should be growing in the, if not 10% to 15% range shown for the balance of the year as well. So that's a separate – that's a completely separate retransmission process. That's a negotiation that takes place with us directly with the cable companies as opposed to Univision representing us on the Spanish language side.

And, Chris, just to remind me, do you not get the benefit of the OTT platforms, or how do you – We do not. How does you –

For Univision, no. There's no OTT arrangement between Univision and ourselves. It's been talked about from time to time, but we've never really hunkered down and gotten a deal done. We do have an OTT arrangement with NBC, our Palm Springs affiliate, but that's the only one at this time. And Fox, sorry. Fox as well. The core business being down 4%, You know, what we're seeing is that's actually been improving pretty significantly over the past several weeks. So that would have been a very different answer maybe four or five weeks ago. So, you know, vis-a-vis the industry, auto as a category for TV is still, you know, kind of pacing in the minus seven, minus eight range, and that's our number two category. What's been offsetting that is the legal services category, which has really been growing nicely, close to double digits. Restaurants are, for the first time, restaurant advertising has been with us as flat. We haven't seen that since pre-COVID, so that's a sign of better things to come as well as the vaccine takes hold. But, you know, the minus four, we're not so concerned about. It's the trends that we're focused on, and the trends tell us that we may end up a little better than the minus four in the core by once the quarter is all done.

Great. Okay. Thank you. That's all I have.

Thank you, Mike.

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

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

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