American Media, Inc. To Explore Refinancing Options

- Reports Significant Balance Sheet Deleveraging, Strong Advertising Performance and Newsstand Sales Stabilization -

Jul 06, 2015, 11:21 ET from American Media, Inc.

NEW YORK, July 6, 2015 /PRNewswire/ – American Media, Inc. (AMI) announced on its earnings call on July 1, 2015 that its revenue and Adjusted EBITDA from continuing operations for the fiscal year ended March 31, 2015 were $245.2 million and $74.4 million, respectively.  AMI also reported the deleveraging of its balance sheet through the repurchase of its first and second lien notes in the aggregate amount of $58.1 million.  AMI stated that during Fiscal Year 2015, its digital revenue increased 26% to $9.9 million.  

In his remarks, AMI Chairman, CEO and President David J. Pecker commented that advertising remains strong in the first quarter of AMI's new fiscal year, with print and digital ad revenues for Men's Fitness, Star and OK magazines all up versus the prior fiscal year. He also noted that for the first time since the publishing industry's second largest wholesaler ceased operations in May 2014, AMI newsstand unit sales in the celebrity market have stabilized.

For Fiscal Year 2016, AMI provided revenue and Adjusted EBITDA guidance of $230-$235 million and $80-$85 million, respectively.

Mr. Pecker concluded his remarks by saying that, based on significant deleveraging during Fiscal Year 2015, AMI's strong print and digital advertising performance, the stabilization of newsstand sales and AMI's projected cash flow from operations of $35 million for Fiscal Year 2016, the company is evaluating refinancing options for its $273.2 million of outstanding First Lien Notes due December 2017.  Any refinancing of the outstanding first lien notes will be subject to market conditions.

For information concerning any forward-looking statements and Adjusted EBITDA mentioned above, please see Appendix A to this Press Release. 

This press release does not constitute an offer to sell or the solicitation of an offer to buy securities, and shall not constitute an offer, solicitation or sale in any jurisdiction in which, or to any persons to whom, such offering, solicitation or sale would be unlawful.

About American Media, Inc.

American Media, Inc. (AMI) owns and operates the leading print and digital celebrity and active lifestyle media brands in the United States. AMI's titles include National Enquirer, Star, OK!, Globe, National Examiner, Soap Opera Digest, Men's Fitness, Muscle & Fitness, Flex and Muscle & Fitness Hers. AMI also manages 14 different digital sites including RadarOnline.com, OKmagazine.com, MensFitness.com and MuscleandFitness.com. AMI's magazines have a combined total circulation of 3.2+ million and reach more than 40 million men and women each month. AMI's digital properties reach an average of 49+ million unique visitors and 224+ million page views monthly.


APPENDIX A

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION IN THE PRESS RELEASE TO WHICH THIS APPENDIX IS ATTACHED

This Press Release contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to our current beliefs regarding future events or our future operating or financial performance.  By their nature, forward-looking statements involve risks, trends, and uncertainties that could cause actual results to differ materially from those anticipated in any forward-looking statements.  Such factors include, but are not limited to, those items described in "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in AMI's Annual Report on Form 10-K for the fiscal year ended March 31, 2015.

We have tried, where possible, to identify such statements by using words such as "believes," "expects," "intends," "may," "anticipates," "plans," or the negation thereof, or similar expressions in connection with any discussion of future operating or financial performance.  Any forward-looking statement is and will be based upon our then-current expectations, estimates and assumptions regarding future events and is applicable only as of the date such statement is made.

We caution you not to place undue reliance on any forward-looking statement included in this Press Release, which speaks only as of the date of this Press Release. We undertake no obligation to publicly update or revise any forward-looking statement contained in this Press Release, whether as a result of new information, future events or otherwise, except as required by law.

Financial Disclosure regarding non-GAAP financial measures

Adjusted EBITDA is a measure we use to gauge our operating performance.  Adjusted EBITDA is defined as net income (loss) attributable to AMI plus interest expense, provision (benefit) for income taxes, depreciation and amortization, provision for impairment of intangible assets and goodwill, deferred debt costs and deferred rack costs, adjusted for merger and related transaction(s) costs, restructuring costs and severance, costs related to launches, re-launches or closures of publications and certain other costs. We believe that the inclusion of Adjusted EBITDA is appropriate to evaluate our operating performance compared to our operating plans and/or prior years, to value prospective acquisitions and to highlight trends.

Management believes our investors use Adjusted EBITDA as a gauge to measure the performance of their investment in AMI. Management compensates for limitations of using non-GAAP financial measures by using them to supplement GAAP results to provide a more complete understanding of the factors and trends affecting our business than GAAP results alone can provide.  Adjusted EBITDA is not a recognized term under GAAP, and does not purport to be an alternative to income from continuing operations as a measure of operating performance or to cash flows from operating activities as a measure of liquidity.  Because not all companies use identical calculations, our presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies.

Set forth below is a reconciliation of net loss attributable to American Media, Inc. and subsidiaries to Adjusted EBITDA for the fiscal year ended March 31, 2015.  We have not provided quantitative reconciliation of forecasted Adjusted EBITDA because such reconciliation would include a significant amount of uncertainty in projecting the costs deducted to arrive at this measure. As such, management does not believe that this reconciling information would be meaningful.

 



in thousands

Fiscal year
ended
March 31,
2015



Net loss attributable to American Media, Inc. and subsidiaries

$    (27,127)



Add (deduct):




Interest expense

50,846



Provision (benefit) for income taxes

(31,268)



Depreciation and amortization

14,920



Impairment of goodwill and intangible assets

18,458



Amortization of deferred debt costs

4,011



Amortization of deferred rack costs

5,869



Amortization of short-term racks

8,581



Merger and related transaction(s) costs

4,755



Restructuring costs and severance

7,087



Loss on sale of publications

2,472



Costs related to launches and closures of publications

1,260



AMI share of bad debt related to wholesaler shutdowns

8,352



Pro forma adjustment related to investment in affiliates

312



Other

5,902



Adjusted EBITDA

$     74,430



 

 

SOURCE American Media, Inc.