Entravision Communications Corporation (EVC) Earnings Call Transcript & Summary

Good afternoon, everybody. My name is Aaron Watts. I'm the credit research analyst at Deutsche Bank. I'm very pleased to have Entravision back with us again this year. And I'm also happy to say that we have the full team. Chief Executive Officer, Walter Ulloa; Chief Financial Officer, Chris Young, and the Head of Digital, Juan Saldivar. So guys, thank you very much for being with us, and I know we're not in person, but this is our next best thing.

Nice to be here. Thanks for having us. It's not the breakers, but it'll do.

Yes. Yes. Well, next year. So let's kick it off. A lot to cover. Walter and Chris, the world has changed quite a bit since we spoke at last year's conference. With that in mind, let's get this question out of the way, what has Entravision done proactively to manage the business throughout the pandemic and I see revenue started showing strong sequential growth beginning in the third quarter. Is that cost-cutting? Changes in capital allocation? And before you answer that, I do want to point out for everyone that Entravision is going to report their fourth quarter numbers later this week on March 11. So unfortunately, we can't talk about the Q4 results. Those are out of bounds. But Chris and Walter, I'm sure you can talk about things in a way that can help bring us up to speed without citing those numbers.

Thank you, Aaron, for that question, and thank you for inviting us to your the Deutsche Bank media conference. It's always a pleasure to be part of it. So we made some radical changes to our cost structure in, well, certainly, we were organizing these changes in late March and then in early April, we executed the changes. And it included reducing our staff by about 20%, and most of those were furloughs back in April. We then went on to make these furloughs, most of them, I should say, permanent in the summer. We also took pay cuts across all of our employee roster in addition to helping our stock buyback program and certainly cutting our dividend from -- by 50%. The ultimate goal at that time was capital preservation. We -- certainly, we were -- like everyone else, we didn't know where this was going. So we took some pretty severe measures to protect ourselves in the future. And so that certainly was what we did in April. And we think that these measures that we took were all the right measures at the time. You did mention that we saw a third quarter sequential growth in our -- across our business units. And then we gave patients for fourth quarter of television pacing at plus 46%, audio plus 15%, and our digital business was plus 250%. That certainly was lifted by the acquisition of Cisneros Interactive. So those cost cuts with a strong pacing certainly set us up well for fourth quarter.

Yes. And I'd also add to that. I think we've learned how to become more efficient. We're doing more with less resources. As unfortunate as the COVID was, driving efficiencies is never a bad thing as far as margin performance is concerned. So we've learned how to do more with less, and that's more or less a permanent change in our cost structure for the better or for worse.

That's a good comment. Definitely.

Okay. That's a helpful intro. And Chris, maybe I'll just follow-up that answer with the fact that your balance sheet and capital structure has always been a cornerstone of your business. You also saw a pretty strong free cash flow conversion in the last few years. How are you thinking about that cash generation going forward and the overall stability of your balance sheet? And maybe touch on where your leverage is at right now, and where you'd like it to be in the future?

Sure. Well, we're not a capital-intensive business being a media company, right? So the fact that generally speaking, we had unusually high capital expenditures a couple of years ago. We're a low CapEx business. We also have a great debt deal in place. We're paying on the margins, LIBOR plus 2.75% that -- we're paying less than 3% on our debt right now, which I think is a fantastic rate. So the interest rates are low. And then we've got still plenty of NOLs even after the auction that allow our tax bill to be almost immaterial. So you couple those 3 aspects together, and that free cash flow conversion of our EBITDA generation has been strong, but will be particularly strong going forward, we think. And leverage at the end of the third quarter, as calculated by our credit agreement was 3.6x. That 3.6x only factors in $75 million of our cash, and we had a cash balance of give or take, around $130 million. So if you take the total cash, you're looking at a net leverage of, call it, 2x as of third quarter. And where we want to be, I think we are where we want to be. I think on a net leverage basis, 2x or less is kind of -- you have a completely derisked balance sheet and that can weather any storm, at least that we can foresee. And it also gives us the ability if we find the right opportunity. It gives us capacity to -- if we find something that's really interesting, use the balance sheet for an acquisition opportunity. But we are kind of where we want to be as far as leverage is concerned.

Okay. Great. Let's shift gears and talk about the digital side of the business to start out. Yes. I know Entravision has always been very focused on evolving the way you're running the business to meet the needs of the customers you're addressing. And we've seen this in your development of more programmatic digital solutions.and now with the majority investment in Cisneros Interactive in November of last year. So who is Cisneros Interactive? How does their addition to Entravision enhance your current digital offerings?

So let me just address that in a broad approach here. And perhaps Juan may add to it as we move through it. But we continue to build an exceptional portfolio of digital assets to serve the needs of our clients. We've consolidated our digital business under -- 3 units under one umbrella, Entravision Digital. To start with our U.S. digital business, primarily targets small and medium-sized businesses serving the Latino advertising community in our over 30 broadcast markets in the U.S. by providing digital advertising services. This unit continues to grow and improve. I'm very pleased with the way that business is performing. Another important segment within Entravision Digital is our programmatic solutions business, led by Smadex, our DSP, which has become one of the leading performance-oriented programmatic platforms globally for app and brand marketers and this business registered a growth rate of 9% in Q3. And then, of course, to address your question about Cisneros Interactive. It's primarily a wholesaler of advertising for the world's leading digital companies, including Facebook, Spotify and LinkedIn, who, as you probably know, those businesses have remained resilient globally from the impact of COVID-19. In addition, Cisneros Interactive has a strong digital audio unit, audio add, which complements our audio engage business, which was already existing. And then JustMob complements our video business, ScrollerAds. So we've enhanced our digital businesses just overall with this acquisition. Cisneros' clients primarily consists of large national agencies throughout Latin America. And what makes the Cisneros different than other digital firms is its simplicity. Cisneros is primarily a sales and service business for some of the world's most respected digital brands. It lends its expertise in various emerging markets throughout Latin America. That's what we focus on, the emerging markets in Latin America. And it runs point of collections for -- and sales for these -- some of the most important social media platforms in the world. So we're very bullish about Cisneros Interactive. It fits perfectly into our overall Entravision Digital umbrella, and we expect this business to continue to prosper and grow not only in the fourth quarter, but also into 2021.

Okay. And you noted your digital business is pacing up 250% in your fourth quarter guidance that you previously provided, appreciating you haven't reported full year numbers yet. As you think forward over the coming years, holistically about your digital business, how big can that part of the business get? And do you need to make additional acquisitions to get there? Or can you get to your digital revenue goals more organically?

I think, Aaron, you look at our digital efforts, you should be comfortable in thinking about digital representing about half of our total revenue base going forward. And I don't think you -- I know we don't need to do acquisitions to achieve that goal. So it's going to be going forward, a very significant part of our business.

Okay. Any drivers you can call out that help you get there?

Well, certainly, Cisneros Interactive, is -- it's become an important part of our digital story. It's added jet fuel to our digital growth -- our digital revenue growth certainly in our cadence that we gave for fourth quarter. And then our other digital units are performing well, too, which includes our local business -- our local U.S. digital business, which I talked about that we operate in our over 30 broadcast markets. And then, of course, our Smadex which is our DSP. It's become one of the leading performance-oriented programmatic platforms in the world for app and brand marketers. Just to note about Smadex, we don't receive any value right now for Smadex. But we believe the asset is just worth somewhere between -- well, we believe, approximately $100 million. And how we get to that number is based on the investment that Blackstone made in Liftoff, which is a strong competitor of Smadex. Blackstone invested over $400 million in that DSP. And so we believe that this asset would only continue to be -- become more important in our portfolio. I mentioned earlier that it grew 9% in Q3, and we certainly expect that to continue. And that -- by the way, that business is located in Barcelona. We have about 100 people working in that business. And we've got a great management team led by Jordi de los Pinos, who actually worked in -- at...

Qualcomm.

Qualcomm for about 8 years. He's got an MBA from MIT and just a terrific leader.

Okay. Great. And maybe last question on digital, but -- having followed the company for a long time, I know Juan used to be or he is a director on your Board. I think as of last November, you have appointed him to Chief Digital Strategy and Accountability Officer. Talk about Juan's new role and kind of what his plans are for the company.

So I'm going to talk briefly about his role and his responsibilities, and Juan can talk about what his plans are for digital consumption. I know he has many plans. So Juan, as you pointed out, Aaron, has been a member of our Board since 2014. He's been a very important to us in growing our digital business. He played the most prominent roll in our majority investment in Cisneros, helping Entravision become one of the largest premier digital advertising companies serving the U.S. Hispanic market and the LATAM markets at over tea 21 countries. Juan's previous experience was with the Bertelsmann Group, over 4 years with assignments in Germany, Spain and Mexico and wound up heading Bertelsmann in Mexico, the last 2 years of his time with Bertelsmann. Then he moved over to Televisa. Became the Executive Director of Digital Interactive with Televisa for 8 years. And so as you can tell, he's got a tremendous amount of experience in digital, and we certainly are pleased and fortunate to have him with us now working alongside of us every day. So he's bringing a lot of great ideas and opportunities to us. He's also our -- as well as being our digital -- Chief Digital Officer, he also overseas strategy and accountability. So he's got a big role. Juan, do you want to talk about the plans you've got for digital in 2021 and beyond?

Sure, Walter. Thank you very much, and happy to be here with you. I think, first of all, I think it's important to split what we're trying to do with this project. I will split it in 2. I think one thing that has been something that we have been doing for the past 5, 6 years, which has been investing in platforms and investing in process and automation is literally bringing fruits to our formula. Luckily, we received COVID, well prepared in that front. And I think that -- what Entravision tradition has done, clearly, it's outstanding when it comes to processing orders and taking care of our clients with stronger platforms. Just to use some of these examples, I mean, to use this concept of a driving story, the amount of money and resources and products that we have improved in the past when it comes to managing our finances, managing our sales organization, managing our talent, clearly, it's outstanding. So -- and another side of the equation clearly is what we have invested on how we serve clients, right? When people think of Entravision, they don't -- people often think of us as a TV or an affiliate of Univision, right? But today, we have moved into representing global platforms that bring audiences and advertising platforms and advertising technology to advertisers. We think ourselves above -- within our formula as a very robust sales operation system that serves clearly top secondary Hispanic markets in the U.S. and now and today, more than 20 countries outside the U.S. and in doing so, we've expanded our relationship and our partnership with Univision with our partners as sophisticated as Facebook, Spotify and LinkedIn and others, in order to get closer to the advertiser and provide better services with them. So Cisneros, last year, clearly, springboard that formula into the market. Cisneros, it was a very interesting acquisition because on one end, it clearly took our revenue line to a new level. But also this acquisition is -- has proven to us that if we have strong platforms and strong systems and strong accountability protocols, we can integrate companies and create a lot of value, right? So what we're trying to build here is, again, a very, very a unique sales operation, a unique suite of platforms and accountability protocols that -- in which we can integrate new business units. And at the same time, make sure that we have the talent and the skills. Today, we have, including Cisneros more than 400 people working on our digital assets, which is a big number compared to a marginal, let's say, piece of that number, 4 or 5 years ago. Both -- what's very interesting is that with that presence in more than 20 countries around the world as -- while leveraging all the platforms and the systems and protocols that we have here based in the U.S., we believe that we are building a stellar project for the future.

Okay. Great, Juan. Helpful overview there. Maybe I'll take this chance to kind of shift gears again over to your largest TV -- your largest segment, the television part of the business. And also, let me remind investors, if you do have a question, you can type it in on the online platform, and I will see that and try to incorporate it. So Walter, again, TV is your -- still your largest segment. You have 54 TV stations and are the largest affiliate group of Univision, can you speak broadly about your TV offering?

Well, you said it correctly, Aaron. Our television business, led by our Univision and UniMás affiliates is the core business of the company. And we operate in high-density, high-growth latino markets across the U.S., our audiences represent about 25% of Univision's broadcast distribution nationwide. And we continue to even get better at operating our Univision affiliates. I pointed out that on our -- what we pointed, I should say, in our call -- our third quarter call that our pacing for television was plus 46%. Obviously, political was a large -- was certainly an important part of that pace, but nonetheless, our businesses, our core categories are starting to respond well despite the fact that we're still growing ourselves out of this COVID interruption. So we continue to -- Chris made an interesting comment earlier, which he said that we've become more efficient across our -- all of our business units as a result of what happened to us due to the COVID crisis. And I fully agree with his comment. I believe that there was certain, I'll call it, good things that came out of this crisis, one being that we learned to operate more efficiently, our television businesses, our audio business and now our digital business. Earlier this year, we -- actually, with 2020, we consolidated all of our television stations under one, I'll call it, distribution unit in Macau and Texas. So from that place, we send out all of our programming, all of our commercial inventory to all of our stations, and it's our national master control. So that's just an example of what -- of how we become more efficient in the last 12 months. And I'm certainly proud of everyone and all of their contributions to make us a better company.

Okay. Great. And on the topic of Univision, again, you are the largest affiliate group. They've had some ownership changes there. Do those changes -- do you see those changes impacting Entravision for the better or otherwise? And maybe you can also just touch on how Univision's content has been performing for you relative to the competition?

Well, I'll start with the first part of the question, which is the changes that have been made at Univision. I think they're all very positive. I've seen, certainly, and we'll learn more in this month and into May when Univision has its upfront. But the company is now lived by Wade Davis, and so far, I think he's -- all of the changes he's made have been very positive. And I certainly applauding for -- I think a couple of weeks after he became CEO, he was already implementing his changes. So that certainly was a very important move. I think Univision will a become more dynamic company under his leadership. Certainly, Wade was very involved with Viacom as a CFO, and he was part of that digital transformation in Viacom. So I expect those -- that leadership to continue in -- with Univision. But as far as the program, it's much improved, we think. I mean, not think. We can tell from the ratings. And we see a number of this year of exciting soccer events that are going to help fuel our ratings growth, certainly, Mexican League, it's certainly a very important part of Univision's sports content. And then, of course, the World Cup qualifiers will be part of that this year. So I think ratings across the board have improved. We -- our ratings are greater than Telemundo's to the tune of about 25% or 1 million more viewers than Telemundo has in our Univision markets. So we think Univision as we are headed in the right direction here in 2021 with our television business.

Yes. Certainly, ratings compared to where we we're maybe 5 years ago are a night and day. And we've seen that -- even through COVID, ratings have just been a pleasant surprise to us.

Okay. Great. Political ad spending, record levels of it in 2020, which was, I think, great for most -- everyone in the industry. Entravision surpassed your prior peaks, which I think were almost a decade ago, what do you think contributed to the surge in political spend for Entravision in 2020? And does the Hispanic market represent a growing audience for politicians, more so now than in the past? And I know you've talked about this a lot in the past, but maybe are we finally starting to see it?

Aaron, I think this year was -- as I said, 2020 was a breakout year for Spanish language media and particularly Entravision in terms of its political revenue. As you commented earlier, we generated about $28 million in political revenue in 2020. Our best -- our second best year was in 2012 when we generated $17 million. So we saw a 67% increase in political spend in this last presidential election cycle. And just to give you an estimate or give you some idea of how strong the latino vote responded, the estimates are, this is based upon a UCLA study that 16.6 million voters, Latino voters cast a ballot in 2020 -- in the 2020 presidential election, this represents a 31% increase, nearly double the nationwide 16% growth in ballots cast between 2016 and 2020. This was the single largest 4-year increase on the Latino vote ever. So without the Latino vote, well, let me just -- another comment. Latino voters supported the democratic candidate, Joseph Biden, by a very wide margin across the country and consistent with margins that Obama won in 2008, 2012. And it certainly is clear to me that without the Latino vote, Biden probably does not win Arizona, Nevada and New Mexico. And so I was certainly just pleased and I was really surprised by how well we did actually. I expected the outcome to be pretty strong, but it went beyond any of our estimates in our budgets for this last political cycle. So I think what's going to happen going forward, the Latino voter is only going to become more important, and you're going to see more investment in the Latino vote. And particularly in the markets where we operate, California, Nevada, Arizona, New Mexico, Colorado, Texas, and certainly, Florida and Virginia and Massachusetts. So I'm very bullish about the Latino vote. This was, as I said, this was a spectacular year for the Latino voter. And I think the country is starting to see the strength of the Latino vote by the way we came out in 2020.

Okay. Yes, certainly, it seems like more of a tailwind now. Setting political spending aside for a moment. Can you speak to some of the other drivers of the TV segment over the next kind of 12 to 18 months?

Well, service has been one of our -- was one of our strongest categories in the third quarter. And it will continue to be an important category for us. Auto, which is our second largest ad category was down 19%, but it improved certainly 94% from Q2. Health care was up 27% over the prior period -- prior year period. It also improved 12% sequentially. Grocery stores were also up 8% and over 114% sequentially. The remaining 6 categories were down from the prior year, with the exception of political. But we see all of our categories improving as we certainly moved through -- well, as evidenced by our pacing that we gave for fourth quarter. We think this trend will continue. As the country continues to improve and the COVID crisis, we appear to be getting better, certainly control of it. And as a result, we're going to see more businesses opening up. Certainly, the restaurant business, which has been basically shut down for the last year that will start to open up, we'll -- we're seeing it now. We think that events will come back probably in the summer in some form, maybe not like we've seen in past years, but certainly, we'll have events again. So we're certainly -- and all the economic indicators are telling us that the economy is starting to improve at a pretty strong rate.

And to Walter's point earlier, you're going to see a lot of soccer programming coming up in the next couple of quarters that are going to help drive that in services and auto category as well.

Yes. No, I'm excited to have all the sports back in the mix again now, it's a good trend. Okay. Let's move over to the audio side of the business. You've posted sequential improvement on the audio side in your last reported quarter, like television, audio got a lift from political. What are some of the tailwinds for the radio business as we think forward?

Well, one of the tailwinds is that more people are returning to work and less people are working remotely. I know from my own experience, just the traffic that I see building here in Los Angeles. So as a result, more drivers are tuning in their radio stations -- their favorite radio stations to -- for entertainment and information. We certainly believe we provide them with our outstanding talent in -- well, across the country, but particularly in Los Angeles, the largest radio market in the country led by our ratings record show Erazno y La Chokolata. We're #1 across every demographic in Los Angeles in Spanish language radio. So we expect that certainly to be a driver of our radio -- of our audio growth here in the fourth quarter and beyond. Our programmatic audio business is also improving significantly. So we're pleased to see that. So we have -- one of the things we've done in audio that I need to point out is that -- is the cost cuts that we've taken in audio. We've really -- we -- even before the COVID crisis, we had already had reduced our audio expenses significantly at the start of 2020. And then when we hit the COVID crisis, we then took even more cuts. So the business is primed for cash flow expansion with revenues improving and expenses reduced.

So Walter, are you more happy about seeing traffic come back for the business? Does that supersede your anger at sitting in traffic?

Well, I really -- it's a good question, Aaron. I was certainly conflicted. But my commute to the office was pretty easy there for a while. But that's all starting to change. That's a good thing.

It is a good thing.

I'm pleased to see it. Yes.

Agreed.

Life is coming -- life is returning to normal.

Yes. Chris, one follow-up on the cost side. As we think about the costs you have taken out of the business, are those costs temporary in nature, whereby when revenues come back, some of the costs are coming back? Or should we think about those as being more permanent and accruing down to the margin long term?

Yes. The bulk of the cost cuts were made permanent. Obviously, there's variability as revenue returns, we're paying commissions on revenue. So I'd add variability of, call it, 17% to 20% on the incremental revenues. But certainly, we feel that the bulk of the cost cuts that we've taken across all platforms are going to be more or less permanent.

Okay. Aaron, I just want to add to the comment that you made or the question that you presented around our audio business, we're all -- I think every audio company and certainly in the country is still trying to figure out digital audio. And we're no -- we're in the same position. But we just launched a new product called El Boton. It's an aggregate of all of our local radio stations, and we see it as a source of unique content and talent, unique IP and a space for us to connect with our audiences. And I would like -- Juan, why don't you comment on El Boton, just for a second here.

Of course, I think digital audio, it's a mandate. It's something that we have to definitely execute well. So pretty much on digital audio, we have 2 fronts. First is, what we're going to do with our content and how we're going to take our content towards the consumer, to our audience with a stronger service. And on that front, we have -- we are on a -- we have clearly already a direct-to-consumer site called El Boton where consumers or the audience can consume our shows, our content. But on top of that, we're going to be rolling out different services. So different services and products, so the audience can have further engagement with our -- not only with our content, but also with our talent. And on that front, of course, we have links to our promotions, links to our direct-to-consumer, new slider system and news. Third is, we're going to be aggregating potentially broadcast and offer on demand audio to the audience. And in doing that, we're going to be, I think, creating strong synergies with our studios and our capacity to attract and produce great talent. Secondly is, our audio network. Because at the end, I think it's very important that in all local DMAs, in all cities that we actually cover and offer services. Not only we offer our content, but we offer the efficient audiences and the insights behind the audiences so brands can convert from audio to consumption. So we have a digital audio network that is -- that enables us to offer highly competitive digital audio services to the advertiser community, meaning brands and agencies across the board. Now on that front, yes, we are very focused in the U.S. and making sure that we create great changes, but also abroad, we have also digital audio play, which is performing well, and it's growing fast. It is [indiscernible] has a business unit, and Walter mentioned it early today, called Audio Ad that has both an ad publishing tool or ad tech platform called AudioTrade and also another network that we are actually bundling with our own audio network outside the U.S. So Entravision is definitely committed and focused on having a strong and successful play in the digital audio front, not only leveraging our direct-to-consumer offering and leveraging and making sure that our audience consumes our content well, but also moving forward into the programmatic and performance space in the digital industry.

Yes, that makes a lot of sense. We've seen a lot of focus on podcasting and streaming offerings. Will you be looking to grow in that arena as well?

It's a great question, and thanks for that. Podcasting is still at its infancy when it comes to monetization, especially. Podcasting is growing amazingly fast, and we can see that pretty much, I think, from our experience, and most of us are into consume podcast as a way to entertain ourselves or inform ourselves in the car or at home. But still, the volume is on broadcast. The big volume is on -- is not on podcast. And -- but we foresee that, I think, into 2022, 2023, we're going to still start seeing the scale that can bring monetization into that space. So we are building initiatives around content production in podcast space. Second is podcast aggregation and also podcast branded content production for advertisers. So yes, we're going to be present there. We're being cautious in a sense that monetization is still not there. And we need to take care of our bottom line. But digital audio is very hot in our day-to-day discussions. So more to come.

Just to add to what Juan said, Aaron, through Cisneros Interactive, we've launched a podcast network in Brazil, and we already have 200 podcasts there. We're going to expand that to other territories, including the U.S. and other Latin American countries.

Got it. Okay. And one last question around the fundamentals of the radio business here. So as I think about 2021, you have some ground to make up because you won't have as much political ad spending. Is it these digital initiatives that will help fill that hole? And I guess, how do you see radio -- your radio business recovering? Do you think you can get back to pre-pandemic levels ultimately? And is it all these initiatives kind of combine that help you get there?

Well, let me start with audio. I mean, certainly, the pacing that we gave for fourth quarter was, I think, was strong, plus 15%. So we certainly have -- we have momentum in our audio business going into fourth quarter. And we're working to certainly continue that momentum into 2021. It's improving or has improved, I should say, certainly, through third quarter. And the pace for fourth was certainly something that I was very pleased with. We've reduced our expenses significantly. So -- and then all the things we're doing around digital audio will only enhance the services that we offer through our audio business, our audio segment. So I have strong expectations for audio business going forward.

Okay. Great. I had this question come in from the audience related to the audio business. We've seen a couple of your peers able to monetize their tower portfolio. Cumulus did it most recently. Is that something that could potentially be in play for Entravision to help bring in some additional cash that you could look to invest or deploy otherwise?

It's possible, Aaron. We've done some work on that front. We've not really put ourselves in a position to push -- to pull the trigger per se. But it's generally possible, but it's not something that's on the front burner right now.

Okay. Got it. And maybe that's a good segue to one of my last questions, which is around M&A. We've seen a good amount of industry consolidation in the TV space, perhaps a little less so on the radio side, putting aside podcasting and a lot of the deals we've seen there. Do you expect further M&A activity this year? And should we expect Entravision to take part? And if so, kind of what assets are on your radar?

Well, we'll continue to be active in M&A, M&A review. We continue to look at opportunities in digital that will complement our current digital platform. And we also will look at television as well. If there's an opportunity to bring in a strong TV asset into one of our existing, I'll call it, high-growth latino markets, particularly if the price and the valuation is something that would be accretive. As you pointed out, the television business has gone -- has done a great deal of consolidation over the last 5 years. And so the opportunities are just -- probably aren't -- they're the way we would like. But we continue to look at -- it ever comes along, we'll take a look at it. If we have -- if it's certainly -- if it's a television asset in one of our existing Univision markets. And then audio, it's a -- or radio is something we'll look at. It would have to be complementary to an existing cluster that we have where we have television. We'd be looking to maybe add a radio or Spanish line with radio player. But it has to be at the right valuation. I still don't believe that the valuations around radio are what they need to be. I think they're a little inflated.

But I think importantly, if we want to take a look at those potential transactions, we can. We've got a balance sheet that's been well managed, and we've got a lot of liquidity as far as cash is concerned. So we're in a great position if something interesting comes down the pipe to take full advantage if we want to.

Excellent point, Chris.

Okay. Yes. So we've just got a minute or 2 left. Walter or Chris, if there are any kind of closing remarks or a couple key points you want to leave investors with, what would those be?

Well, there's a few things. One, we have a very solid and improving financial position, as Chris just pointed out, we've carefully managed our business during the pandemic. And we're starting to see the fruits of our labor pay off. Certainly, the investment that we made in digital is starting to pay off, and we're certainly pleased with that. Our target markets, the Latino -- the U.S. Latino market is about a $1.9 trillion market. LATAM is about $4.2 trillion. So we're certainly well positioned for growth in these very important markets. And as I pointed out, our digital business has reached a turning point with the acquisition of Cisneros Interactive. And we can -- will continue to nurture that business, grow it. And as Juan pointed out, it's become a very important part of our strategy going forward.

All right. Great. Well, Walter, Chris, Juan, I know you've got your hands full with everything going on in the business. So we do appreciate you carving out time to spend with us here at the conference as you do every year. So thank you again, and best of luck out there.

Thank you, Aaron. Thank you an invitation. It was great.

Aaron, Thank you.

Okay.