Other News Releases in Publishing & Information Services
Jean Rah Fya Records Recording Artist Bobby Tinsley Wins for Best R&B/Soul Artist at the 2009 HMMA Awards!
Zagat Surveyors Name Crystal Cruises As Favorite
31 CCHD-Funded Groups Supported, Trained by Pro-Abortion, Homosexual Marriage Activists
Other News Releases in Earnings
Escalon(R) Reports First Quarter Fiscal 2010 Results
Electronic Game Card, Inc. Files 10-Q for Period Ending September 30, 2009
Wolverine Tube Reports 2009 Third Quarter Results
Journalists and Bloggers
Visit PR Newswire for Journalists for releases, photos, ProfNet experts, and customized feeds just for Media.
View and download archived video content distributed by MultiVu on The Digital Center.
See more news releases in: Publishing & Information Services, OTC, SmallCap, Earnings
GateHouse Media Announces Second Quarter 2009 Results
FAIRPORT, N.Y., Aug. 6 /PRNewswire/ --
Second Quarter 2009 Highlights
- Total reported revenues were $151.5 million, a 15.1% decline compared to the prior year.
- Total As Adjusted Revenues were $150.8 million, a decline of 15.2% on a same-store basis.
- Reported operating costs and SG&A expense decreased $17.7 million or 12.1% from the prior year.
- Reported net loss was $496.5 million as compared to a $443.3 million net loss in the prior year. The net loss includes non-cash impairment charges of $481.4 million and $436.1 million, respectively.
- As Adjusted EBITDA was $25.1 million, a 31.6% decline on a same-store basis.
- Levered Free Cash Flow per share was $0.16 versus $0.20 for the prior year.
GateHouse Media, Inc. (the "Company" or "GateHouse Media") (OTC: GHSE) today reported financial results for the quarter ended June 30, 2009.
The Company reported total revenues of $151.5 million, which represented a decline of 15.1% versus prior year. Excluding discontinued operations, As Adjusted Revenues were $150.8 million for the quarter, down 15.2% on a same-store basis versus the same quarter in the prior year. The decline in same-store revenue was driven primarily by the print classified and local advertising categories, which were down 32.4% and 11.3%, respectively. Both categories continue to be impacted by the current recession. Circulation revenue declined 3.0% in the quarter on a same-store basis.
In the quarter, as reported operating and SG&A costs declined by $17.7 million or 12.1%. Same-store expenses declined by 10.9%, driven by compensation expense which declined 11.5%. Expense declines in the quarter reflect cost reduction initiatives implemented in the first half of the year and these trends are expected to continue throughout the year. In addition, declines in newsprint pricing and consumption resulted in a 14.1% reduction in newsprint expense. The Company anticipates it will continue to benefit from lower newsprint prices and consumption declines during the remainder of the year.
As Adjusted EBITDA for the quarter was $25.1 million which was down 31.6% on a same-store basis from the prior year. This was much improved from the 67.4% decline experienced in the first quarter. Levered Free Cash Flow for the second quarter was $9.0 million or $0.16 per share. This was down 20% from $0.20 in the prior year. Reported operating loss for the second quarter was $475.2 million reflecting an impairment charge related to goodwill, mastheads and other long-lived assets in the amount of $481.4 million recorded in the quarter. As a result of the most recent impairment charge, the Company has $14.4 million of goodwill, $36.7 million of mastheads and $271.7 million of other long-lived intangible assets remaining on its balance sheet at June 30, 2009. Excluding the impairment charge, operating income for the quarter was $6.2 million.
Interest expense for the quarter was $15.5 million, down $7.7 million or 33.1% versus the prior year. The decline was driven primarily by lower LIBOR rates.
Non-cash compensation expense for Restricted Stock Grants in the second quarter was $1.2 million. One-time costs and other non-cash expenses in the quarter were $1.8 million. These charges related primarily to reorganization and expense control initiatives introduced to realize permanent expense savings, particularly the reduction in staff levels given the current revenue environment.
Commenting on GateHouse Media's results, Mike Reed, Chief Executive Officer, said, "While the recession continued to impact our performance, we were pleased with the progress we were able to make in the second quarter versus the first quarter of this year. Revenue trends improved slightly and we significantly reduced our run-rate expenses, resulting in better year-over-year performance with regard to As Adjusted EBITDA and Levered Cash Flow per share.
"Our total revenue on a same-store basis declined 15.2% which was slightly better than the 16.3% decline we saw in the first quarter. We are somewhat encouraged that our classified revenue declines versus the prior year improved each month from a 38.8% decline in January to a 30.1% decline June
"Total operating and SG&A expenses declined 12.1% in the second quarter, nearly doubling the 7.1% decline we achieved in the first quarter. This is the result of continued execution of cost reduction initiatives that we put in place to permanently lower our cost structure.
"Our As Adjusted EBITDA was $25.1 million for the quarter and our margin was 16.6%, both significantly improved from the first quarter. Our disciplined expense and cash management also resulted in levered cash flow of $9.0 million or $0.16 per share for the quarter.
"During the second half of 2009 we aim to further stabilize our cash flows through ongoing cost reductions. We also aim to strengthen our local market presence, improve our position as the leading provider of local news and information in each market we serve, execute on our local market digital strategy and position the Company to emerge from this recession in a very strong position."
About GateHouse Media, Inc.
GateHouse Media, Inc., headquartered in Fairport, New York, is one of the largest publishers of locally based print and online media in the United States as measured by its 89 daily publications. GateHouse Media currently serves local audiences of more than 10 million per week across 21 states through hundreds of community publications and local websites. GateHouse Media is traded in the over-the-counter market under the symbol "GHSE."
For more information regarding GateHouse Media and to be added to our email distribution list, please visit www.gatehousemedia.com.
Non-GAAP Financial Measures
A non-GAAP financial measure is generally defined as one that purports to measure historical or future financial performance, financial position or cash flows, but excludes or includes amounts that would not be so adjusted in the most comparable GAAP measure. GateHouse Media defines and uses Adjusted EBITDA, As Adjusted EBITDA, As Adjusted Revenues and Levered Free Cash Flow, non-GAAP financial measures, as set forth below. The Company strongly urges stockholders and other interested persons not to rely on any single financial measure to evaluate its business. In addition, because Adjusted EBITDA, As Adjusted EBITDA, As Adjusted Revenues and Levered Free Cash Flow are not measures of financial performance under GAAP and are susceptible to varying calculations, these non-GAAP measures, as presented in this press release, may differ from and may not be comparable to similarly titled measures used by other companies.
Adjusted EBITDA, As Adjusted EBITDA, As Adjusted Revenues and Levered Free Cash Flow
The Company defines Adjusted EBITDA as income (loss) from continuing operations before interest, income tax expense (benefit), depreciation and amortization and other non-recurring or non-cash items. The Company defines As Adjusted EBITDA as Adjusted EBITDA before other non-cash items such as non-cash compensation and non-recurring integration and reorganization costs. The Company defines As Adjusted Revenues as total revenues plus revenues of discontinued operations while adjusting for the purchase accounting impact on revenues of the SureWest acquisition. The Company defines Levered Free Cash Flow as As Adjusted EBITDA less capital expenditures, cash taxes and interest expense.
Management's Use of Adjusted EBITDA, As Adjusted EBITDA, As Adjusted Revenues and Levered Free Cash Flow
Adjusted EBITDA, As Adjusted EBITDA, As Adjusted Revenues and Levered Free Cash Flow are not measurements of financial performance under GAAP and should not be considered in isolation or as alternatives to income from operations, net income (loss), cash flow from continuing operating activities or any other measure of performance or liquidity derived in accordance with GAAP. GateHouse Media's management believes these non-GAAP measures, as defined above, are useful to investors for the following reasons:
- Evaluating performance and identifying trends in day-to-day performance because the items excluded have little or no significance on its day-to-day operations;
- Providing assessments of controllable expenses that afford management the ability to make decisions which are expected to facilitate meeting current financial goals as well as achieving optimal financial performance; and
- Indicators for management to determine if adjustments to current spending decisions are needed.
Adjusted EBITDA, As Adjusted EBITDA, As Adjusted Revenues and Levered Free Cash Flow provide GateHouse Media with measures of financial performance, independent of items that are beyond the control of management in the short-term, such as depreciation and amortization, taxation and interest expense associated with its capital structure. These metrics measure GateHouse Media's financial performance based on operational factors that management can impact in the short-term, namely the cost structure or expenses of the organization. Adjusted EBITDA, As Adjusted EBITDA, As Adjusted Revenues and Levered Free Cash Flow are some of the metrics used by senior management and the Board of Directors to review the financial performance of the business on a monthly basis. In addition, GateHouse Media's management utilizes these metrics to evaluate the Company's performance, along with other criteria, to determine the funds available for paying the quarterly dividend.
Forward-Looking Statements
Certain items in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are subject to various risks and uncertainties, including without limitation, statements relating to progress made by the Company in its integration efforts, growth in revenues and cash flow, on-line revenues, expense reduction efforts and potential acquisition and sale opportunities. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "will," "should," "potential," "intend," "expect," "endeavor," "seek," "anticipate," "estimate," "overestimate," "underestimate," "believe," "could," "would," "project," "predict," "continue" or other similar words or expressions. Forward looking statements are based on certain assumptions or estimates, discuss future expectations, describe future plans and strategies, contain projections of results of operations or of financial condition or state other forward-looking information. The Company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Although the Company believes that the expectations reflected in such forward looking statements are based on reasonable assumptions, actual results and performance could differ materially from those set forth in the forward-looking statements. Factors which could have a material adverse effect on the Company's operations and future prospects or which could cause events or circumstances to differ from the forward-looking statements include, but are not limited to, the condition of the economy and the credit markets generally, the Company's ability to maintain adequate liquidity and financing sources and an appropriate level of debt, the Company's ability to close on a timely basis upon announced or contemplated transactions, unexpected liabilities arising from any transaction or that the Company will not receive the expected benefits from the transaction, the Company's limited operating history on a combined basis, the Company's ability to generate sufficient cash flow to cover required interest, long-term obligations and dividends, the effect of the Company's indebtedness and long-term obligations on its liquidity, the Company's ability to effectively manage its growth, unforeseen costs associated with the acquisition of new properties, the Company's ability to find suitably priced acquisitions, the Company's ability to integrate acquired assets and businesses, any increases in the price or reduction in the availability of newsprint, seasonal and other fluctuations affecting the Company's revenues and operating results, any declines in circulation, the Company's ability to obtain additional capital on terms acceptable to it, the Company's vulnerability to economic downturns, regulatory changes or acts of nature in certain geographic areas, increases in competition for skilled personnel, departure of key officers, increases in market interest rates, the cost and difficulty of complying with increasing and evolving regulation, and other risks detailed from time to time in the Company's SEC reports, including but not limited to its most recent Annual Report on Form 10-K filed with the SEC under Commission File Number 001-33091. When considering forward- looking statements, readers should keep in mind the risk factors and other cautionary statements in such SEC filings. Readers are also cautioned not to place undue reliance on any of these forward-looking statements, which reflect management's views as of the date of this press release. The factors discussed above and the other factors noted in the Company's SEC filings could cause actual results to differ significantly from those contained in any forward-looking statement. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievements and expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements to reflect any change in expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.
GATEHOUSE MEDIA, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)
Three Three Six Six
months months months months
ended ended ended ended
June 30, June 30, June 30, June 30,
2009 2008 2009 2008
---- ---- ---- ----
Revenues:
Advertising $107,742 $131,467 $202,114 $249,381
Circulation 35,363 36,453 70,999 71,652
Commercial printing
and other 8,361 10,456 16,999 20,572
----- ------ ------ ------
Total revenues 151,466 178,376 290,112 341,605
Operating costs and
expenses:
Operating costs 85,701 96,040 174,151 191,148
Selling, general,
and administrative 42,747 50,150 86,458 97,336
Depreciation and
amortization 15,772 18,324 31,721 36,545
Integration and
reorganization costs 1,052 1,603 1,800 4,205
Impairment of
long-lived assets 206,089 102,518 206,095 102,518
Loss on sale of assets 22 212 186 206
Goodwill and mastheads
impairment 275,310 333,554 275,310 333,554
------- ------- ------- -------
Operating loss (475,227) (424,025) (485,609) (423,907)
Interest expense 15,526 23,217 32,919 47,633
Amortization of
deferred financing costs 340 581 680 1,164
Loss on derivative
instrument 3,706 1,037 5,912 1,756
Other (income) expense (122) 21 673 34
---- -- --- --
Loss from continuing
operations before
income taxes (494,677) (448,881) (525,793) (474,494)
Income tax expense
(benefit) 14 (15,787) 315 (13,316)
-- ------- --- -------
Loss from continuing
operations (494,691) (433,094) (526,108) (461,178)
Loss from discontinued
operations, net
of income taxes (1,776)(a) (10,156) (2,279)(a) (10,862)
------ ------- ------ -------
Net loss $(496,467) $(443,250) $(528,387) $(472,040)
Net loss attributable
to noncontrolling
interest $79 $- $222 $-
--- -- ---- --
Net loss
attributable
to GateHouse
Media $(496,388) $(443,250) $(528,165) $(472,040)
========= ========= ========= =========
Loss per share:
Basic and diluted:
Loss from continuing
operations attributable
to GateHouse Media $(8.61) $(7.59) $(9.17) $(8.09)
Loss from discontinued
operations, attributable
to GateHouse Media,
net of income taxes $(0.03) (0.18) $(0.04) (0.19)
------ ----- ------ -----
Net loss attributable
to GateHouse Media $(8.64) $(7.77) $(9.21) $(8.28)
====== ====== ====== ======
Dividends declared
per share $- $- $- $0.20
Basic weighted
average shares
outstanding 57,426,416 57,024,747 57,330,827 56,996,635
---------- ========== ---------- ==========
Diluted weighted
average shares
outstanding 57,426,416 57,024,747 57,330,827 56,996,635
========== ========== ========== ==========
(a) Included in income from discontinued operations, net of taxes are
total revenues of $59 for the three months ended June 30, 2009
primarily related to Charles City, IA and New Hampton, IA and
$743 for the six months ended June 30, 2009 primarily from Derby,
KS, Charles City, IA and New Hampton, IA.
GATEHOUSE MEDIA, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share data)
June 30, December 31,
2009 2008
---- ----
(unaudited)
Assets
Current assets:
Cash and cash equivalents $16,241 $11,744
Accounts receivable, net of
allowance for doubtful accounts
of $5,141 and $6,024 at June 30, 2009
and December 31, 2008, respectively 62,757 75,274
Inventory 8,303 10,790
Prepaid expenses 5,715 4,576
Other current assets 4,451 3,808
----- -----
Total current assets 97,467 106,192
Property, plant, and equipment, net
of accumulated depreciation of
$69,878 and $57,400 at June 30, 2009
and December 31, 2008, respectively 182,346 194,401
Goodwill 14,361 261,332
Intangible assets, net of
accumulated amortization
of $118,384 and $100,132
at June 30, 2009 and December
31, 2008, respectively 308,351 565,033
Deferred financing costs, net 6,375 7,055
Other assets 5,502 2,489
Long-term assets held for sale 10,633 13,119
------ ------
Total assets $625,035 $1,149,621
======== ==========
Liabilities and Stockholders'
Equity (Deficit)
Current liabilities:
Current portion of long-term
liabilities $1,341 $1,454
Short-term note payable 7,863 11,863
Short-term debt 9,000 17,000
Accounts payable 14,891 20,378
Accrued expenses 38,350 31,495
Accrued interest 3,267 7,895
Deferred revenue 29,560 28,444
------ ------
Total current liabilities 104,272 118,529
Long-term liabilities:
Long-term debt 1,205,500 1,195,000
Long-term liabilities, less
current portion 16,513 16,658
Derivative instruments 46,160 34,957
Pension and other postretirement
benefit obligations 13,320 13,555
------ ------
Total liabilities 1,385,765 1,378,699
--------- ---------
Stockholders' equity (deficit):
Common stock, $0.01 par value,
150,000,000 shares authorized at
June 30, 2009; 58,313,868 and
58,213,868 shares issued, and
58,113,913 and 58,020,693
outstanding at June 30, 2009 and
December 31, 2008, respectively 568 568
Additional paid-in capital 827,606 825,580
Accumulated other comprehensive
loss (56,894) (51,604)
Accumulated deficit (1,531,484) (1,003,319)
Treasury stock, at cost, 199,955
and 193,175 shares at June 30, 2009
and December 31, 2008, respectively (304) (303)
---- ----
Total GateHouse Media
stockholders' deficit (760,508) (229,078)
Noncontrolling Interest (222) -
---- --
Total stockholders' deficit (760,730) (229,078)
-------- --------
Total liabilities and
stockholders' deficit $625,035 $1,149,621
======== ==========
GATEHOUSE MEDIA, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands)
Six months Six months
ended ended
June 30, 2009 June 30, 2008
------------- -------------
Cash flows from operating activities:
Net loss $(528,387) $(472,040)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Depreciation and amortization 31,790 37,607
Amortization of deferred
financing costs 680 1,164
Loss on derivative instrument 5,912 1,756
Non-cash compensation expense 2,026 2,123
Deferred income taxes - (13,406)
Loss on sale of assets 186 206
Pension and other
postretirement benefit
obligations (153) 300
Non-cash interest expense - 618
Impairment of long-lived
assets 208,423 108,429
Goodwill and masthead
impairment 275,310 340,575
Changes in assets and
liabilities, net of
sales/acquisitions:
Accounts receivable, net 12,032 8,496
Inventory 2,450 (2,400)
Prepaid expenses (1,175) (224)
Other assets (3,834) (1,102)
Accounts payable (5,487) 7,089
Accrued expenses 6,804 1,001
Accrued interest (4,628) (1,133)
Deferred revenue 1,271 1,074
Other long-term liabilities (145) (686)
---- ----
Net cash provided by
operating activities 3,075 19,447
----- ------
Cash flows from investing activities:
Purchases of property, plant,
and equipment (1,564) (5,882)
Proceeds from sale of
publications and other assets 4,741 12,501
Acquisitions, net of cash acquired (254) (24,172)
---- -------
Net cash provided by (used
in) investing activities 2,923 (17,553)
----- -------
Cash flows from financing activities:
Payment of debt issuance costs - (6)
Borrowings under term loans - 19,505
Repayments of term loans (1,500) (3,600)
Net borrowings under
revolving credit facility - 17,700
Purchase of treasury stock (1) (65)
Payment of dividends - (34,731)
-- -------
Net cash used in
financing activities (1,501) (1,197)
------ ------
Net increase in cash and
cash equivalents 4,497 697
Cash and cash equivalents at
beginning of period 11,744 12,096
------ ------
Cash and cash equivalents at
end of period $16,241 $12,793
======= =======
GATEHOUSE MEDIA, INC. AND SUBSIDIARIES
As Adjusted EBITDA
(In thousands)
Three months Three months Six months Six months
ended ended ended ended
June 30, June 30, June 30, June 30,
2009 2008 2009 2008
--------- --------- --------- ---------
Loss from continuing
operations $(494,691) $(433,094) $(526,108) $(461,178)
Income tax expense
(benefit) 14 (15,787) 315 (13,316)
Loss on derivative
instrument (1) 3,706 1,037 5,912 1,756
Amortization of deferred
financing costs 340 581 680 1,164
Write-off of
financing costs (2) - 743 -
Interest expense 15,526 23,217 32,919 47,633
Impairment of long-
lived assets 206,089 102,518 206,095 102,518
Depreciation and
amortization 15,772 18,324 31,721 36,545
Goodwill and masthead
impairment 275,310 333,554 275,310 333,554
------- ------- ------- -------
Adjusted EBITDA from
continuing operations 22,064 30,350 27,587 48,676
Non-cash compensation and
other expense 2,186 3,782 4,819 10,747
Non-cash portion of
postretirement benefits
expense (293) 335 (153) 893
Integration and
reorganization costs 1,052 1,603 1,800 4,205
Loss on sale of assets 22 212 234 206
Income from discontinued
operations 20 2,101 125 3,331
-- ----- --- -----
As Adjusted EBITDA 25,051 38,383 34,412 68,058
Net capital expenditures (232) (3,190) (1,564) (5,789)
Cash taxes (4) (40) (137) (40)
Interest paid (15,798) (23,217) (37,445) (47,633)
------- ------- ------- -------
Levered Free Cash
Flow $9,017 $11,936 $(4,734) $14,596
====== ======= ======= =======
(1) Non-cash loss on derivative instruments is related to interest
rate swap agreements which are financing related and are excluded
from Adjusted EBITDA.
GATEHOUSE MEDIA, INC. AND SUBSIDIARIES
As Adjusted Revenues
(In thousands)
Three months Three months Six months Six months
ended ended ended ended
June 30, June 30, June 30, June 30,
2009 2008 2009 2008
--------- --------- --------- ---------
Total revenues from
continuing operations $151,466 $178,376 $290,112 $341,605
Revenues from
discontinued operations 59 6,047 743 13,676
Revenues from non-wholly
owned subsidiary (759) (631) (1,513) (631)
---- ---- ------ ----
As Adjusted Revenues $150,766 $183,792 $289,342 $354,650
======== ======== ======== ========
SOURCE GateHouse Media, Inc.