- Total Revenues of $387.6
million
- Operating loss of $1.4
million
- As Adjusted EBITDA of $33.1
million*
- Free Cash Flow of $21.0
million*
- Declared first quarter dividend of
$0.38
- On January 31, 2019, completed
purchase of the publishing arm of Schurz Communications
New Media Investment Group Inc. (NYSE: NEWM) today reported its
financial results for the first quarter ended March 31, 2019.
($ in million, except per share)
GAAP
Reporting
Q1
2019
Q1
2018
Revenues $ 387.6 $ 340.8 Operating
(loss) income $ (1.4 ) $ 7.1 Net loss
attributable to New Media $ (9.1 ) $ (0.7 )
Non-GAAP
Reporting*
Q1
2019
Q1
2018
As Adjusted EBITDA $ 33.1 $ 32.5 Free
Cash Flow $ 21.0 $ 22.5
*For definitions and reconciliations of Non-GAAP Reporting
measures, please refer to the Non-GAAP Financial Measures Note and
reconciliations below.
“Our results this quarter reflect both solid performance in our
growth businesses and continued progress in stabilizing our
traditional print business. Our revenue of $387.6 million was up
13.7% over the prior year. Our growth businesses, UpCurve and
GateHouse Live, accounted for $34.9 million of total revenue, an
increase of 27.3% compared to last year. We are excited about the
continued opportunity for growth in both of these businesses for
2019 and beyond,” said Michael E Reed, New Media President and
Chief Executive Officer.
He continued: “As Adjusted EBITDA and Free Cash Flow were strong
in the quarter at $33.1 million and $21.0 million respectively. We
have been proactive in taking new measures to grow As Adjusted
EBITDA, which is reflected in our results. At the same time, these
measures – which we believe are crucial to driving profitability –
have prevented us from showing a positive same store revenue trend
in recent quarters. In the first quarter, same store revenue was
down 7.4%, or 80 bps lower than the fourth quarter. With the
execution of planned As Adjusted EBITDA-enhancing measures in the
first quarter, we do expect to show improvement in our same store
revenue trend in the coming quarters.
Finally, in keeping with our goal to purchase strong assets that
integrate well into our portfolio, we completed our purchase of the
publishing arm of Schurz Communications on January 31, for $30.0
million.”
First Quarter 2019 Financial
Results
New Media recorded total revenues of $387.6 million for the
quarter, up 13.7% compared to the prior year, and down 7.4% on an
organic same store basis. The same store trend was marginally lower
than the trend recorded in the fourth quarter of 2018, primarily as
a result of internal initiatives undertaken to improve long term
revenue growth opportunities and profitability. An encouraging
point from the quarter was that same store revenue trends improved
each month during the quarter. The company also expects to see
overall same store revenue and profitably trends improve in Q2 and
through 2019.
Traditional Print advertising revenue decreased 14.8% on an
organic same store basis compared to the prior year period. This
decline was consistent with the fourth quarter of 2018.
Digital revenue increased 23.8% on a reported basis from the
prior year to $47.7 million, which represents 12.3% of total
revenue in the first quarter. UpCurve generated $26.0 million in
revenue, an increase of 34.0% as compared with the prior year on a
reported basis.
Circulation revenue decreased 5.5% on an organic same store
basis, due in large part to our shift away from pricing increases
as we work to grow subscriber volumes. This strategic shift is
working as demonstrated by total subscriber volumes growing for the
second consecutive quarter, as compared to the prior year. Our
digital-only subscription base grew to 174,000, an increase of
43.9% compared to the prior year.
Commercial Print, Distribution and Events revenue increased 1.4%
compared to the prior year on an organic same store basis.
Operating loss was $1.4 million and Net loss attributable to New
Media was $9.1 million. These were burdened by $8.3 million in
one-time expenses, $4.2 million of which were non-cash expenses.
Excluding these one-time expenses, results would have been
Operating income of $6.9 million and a Net loss attributable to New
Media of $0.8 million.
As Adjusted EBITDA and Free Cash Flow were $33.1 million and
$21.0 million, respectively.
First Quarter 2019
Dividend
New Media’s Board of Directors declared a first quarter 2019
cash dividend of $0.38 per share of common stock. The dividend is
payable on May 22, 2019 to shareholders of record as of the close
of business on May 13, 2019.
The declaration and payment of any dividends are at the sole
discretion of the Board of Directors, which may decide to change
the Company’s dividend policy at any time.
Earnings Conference Call
New Media’s management will host a conference call on Thursday,
May 2, 2019 at 9:00 A.M. Eastern Time. A copy of the earnings
release will be posted to the Investor Relations section of New
Media’s website, www.newmediainv.com.
All interested parties are welcome to participate on the live
call. The conference call may be accessed by dialing 1-855-319-1124
(from within the U.S.) or 1-703-563-6359 (from outside of the U.S.)
ten minutes prior to the scheduled start of the call; please
reference “New Media First Quarter Earnings Call” or access code
“2378656.”
A simultaneous webcast of the conference call will be available
to the public on a listen-only basis at www.newmediainv.com.
Please allow extra time prior to the call to visit the website and
download any necessary software required to listen to the internet
broadcast.
A telephonic replay of the conference call will also be
available approximately two hours following the call’s completion
through 11:59 P.M. Eastern Time on Thursday, May 6, 2019 by dialing
1-855-859-2056 (from within the U.S.) or 1-404-537-3406 (from
outside of the U.S.); please reference access code “2378656.”
About New Media Investment Group
Inc.
New Media supports small to mid-size communities by providing
locally-focused print and digital content to its consumers and
premier marketing and technology solutions to our small and medium
business partners. The Company is one of the largest publishers of
locally based print and online media in the United States as
measured by our 156 daily publications. As of March 31, 2019, New
Media operates in over 615 markets across 39 states reaching over
22 million people on a weekly basis and serves over 200,000
business customers.
For more information regarding New Media and to be added to our
email distribution list, please visit www.newmediainv.com.
Same Store and Organic Same Store
Revenues
Same store results take into account material acquisitions and
divestitures of the Company by adjusting prior year performance to
include or exclude financial results as if the Company had owned or
divested a business for the comparable period. The results of
several acquisitions (“tuck-in acquisitions”) were funded from the
Company’s available cash and are not considered material. Organic
same store revenues are same store revenues adjusted to remove
non-material acquisitions and non-material divestitures, and to
adjust for Commercial Print revenues that are now intercompany.
Non-GAAP Financial
Measures
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,
and 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,
and Free Cash Flow
The Company defines Adjusted EBITDA as net income (loss) from
continuing operations before income tax expense (benefit),
interest/financing expense, depreciation and amortization, and
non-cash impairments. The Company defines As Adjusted EBITDA as
Adjusted EBITDA before transaction and project costs, merger and
acquisition related costs, integration and reorganization costs,
gain/loss on sale or disposal of assets, non-cash items such as
non-cash compensation, and Adjusted EBITDA from non-wholly owned
subsidiaries. The Company defines Free Cash Flow as As Adjusted
EBITDA less capital expenditures, cash taxes, interest paid, and
pension payments.
Management’s Use of Adjusted EBITDA, As
Adjusted EBITDA, and Free Cash Flow
Adjusted EBITDA, As Adjusted EBITDA, and Free Cash Flow are not
measures 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. New 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 the Company’s day-to-day operations;
and
- 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.
We use Adjusted EBITDA, As Adjusted EBITDA, and Free Cash Flow
as measures of our deployed revenue generating assets between
periods on a consistent basis. We believe As Adjusted EBITDA and
Free Cash Flow measure our financial performance and help identify
operational factors that management can impact in the short term,
mainly our operating cost structure and expenses. We exclude
mergers and acquisition, transaction, and project related costs
such as diligence activities and new financing related costs
because they represent costs unrelated to the day-to-day operating
performance of the business that management can impact in the short
term. We consider the loss on early extinguishment of debt to be
financing related costs associated with interest expense or
amortization of financing fees, which by definition are excluded
from Adjusted EBITDA. Such charges are incidental to, but not
reflective of our day-to-day operating performance of the business
that management can impact in the short term.
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, including, but not
limited to, statements regarding our ability to execute on our
business plan, including stabilizing our print business, expected
revenue trends, including expectations for same store revenue and
growth in our UpCurve and GateHouse Live businesses, and our
ability to grow subscriber volumes. These statements are based on
management’s current expectations and beliefs and are subject to a
number of risks and uncertainties, such as continued declines in
advertising and circulation revenues, economic conditions in the
markets in which we operate, including natural disasters, tariffs
and other factors affecting economic conditions generally,
competition from other media companies, the possibility of
insufficient interest in our digital and other businesses,
technological developments in the media sector, an ability to
source acquisition opportunities with an attractive risk-adjusted
return profile, inadequate diligence of acquisition targets, and
difficulties integrating and reducing expenses, including at our
newly acquired businesses. These and other risks and uncertainties
could cause actual results to differ materially from those
described in the forward-looking statements, many of which are
beyond our control. The Company can give no assurance that its
expectations will be attained. Accordingly, you should not place
undue reliance on any forward-looking statements contained in this
press release. For a discussion of some of the risks and important
factors that could cause actual results to differ from such
forward-looking statements, see the risks and other factors
detailed from time to time in the Company’s Annual Report on Form
10-K, Quarterly Reports on Form 10-Q, and other filings with the
Securities and Exchange Commission. Furthermore, new risks and
uncertainties emerge from time to time, and it is not possible for
the Company to predict or assess the impact of every factor that
may cause its actual results to differ from those contained in any
forward-looking statements. Such forward-looking statements speak
only as of the date of this press release. The Company expressly
disclaims any obligation to release publicly any updates or
revisions to any forward-looking statements contained herein to
reflect any change in the Company's expectations with regard
thereto or change in events, conditions or circumstances on which
any statement is based.
NEW MEDIA INVESTMENT GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In
thousands, except share data) March 31,
2019 December 30, 2018 Assets Current
assets: Cash and cash equivalents $ 24,597 $ 48,651 Restricted cash
4,054 4,119
Accounts receivable, net of allowance for
doubtful accounts of $8,259 and
$8,042 at March 31, 2019 and December 30,
2018, respectively
153,222 174,274 Inventory 24,972 25,022 Prepaid expenses 30,155
23,935 Other current assets 21,149 21,608
Total current assets 258,149 297,609
Property, plant, and equipment, net of
accumulated depreciation of $229,268
and $219,256 at March 31, 2019 and
December 30, 2018, respectively
347,766 339,608 Operating lease right-of-use assets 102,583 -
Goodwill 316,208 310,737
Intangible assets, net of accumulated
amortization of $110,877 and $101,543 at March 31, 2019 and
December 30, 2018, respectively
485,026 486,054 Other assets 10,936 9,856
Total assets $ 1,520,668 $ 1,443,864
Liabilities and Stockholders' Equity Current liabilities:
Current portion of long-term debt $ 11,296 $ 12,395 Current portion
of operating lease liabilities 13,415 - Accounts payable 28,219
16,612 Accrued expenses 90,290 113,650 Deferred revenue
116,521 105,187 Total current liabilities
259,741 247,844 Long-term liabilities: Long-term debt 435,426
428,180 Long-term operating lease liabilities 96,248 - Deferred
income taxes 7,665 8,282 Pension and other postretirement benefit
obligations 24,094 24,326 Other long-term liabilities 10,498
16,462 Total liabilities 833,672
725,094 Redeemable noncontrolling interests
1,298 1,547 Stockholders’ equity:
Common stock, $0.01 par value,
2,000,000,000 shares authorized;
60,806,451 shares issued and 60,529,861
shares outstanding at
March 31, 2019; 60,508,249 shares issued
and 60,306,286 shares
outstanding at December 30, 2018
608
605 Additional paid-in capital 699,787 721,605 Accumulated other
comprehensive loss (6,911 ) (6,881 ) (Accumulated deficit) retained
earnings (5,224 ) 3,767
Treasury stock, at cost, 276,590 and
201,963 shares at March 31, 2019
and December 30, 2018, respectively
(2,562 ) (1,873 ) Total stockholders' equity
685,698 717,223
Total liabilities, redeemable
noncontrollinginterests and stockholders' equity
$ 1,520,668 $ 1,443,864
NEW MEDIA
INVESTMENT GROUP INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED) (In thousands, except per share data)
Three months ended
March 31, 2019 April 1, 2018 Revenues:
Advertising $ 178,694 $ 163,259 Circulation 152,165 129,991
Commercial printing and other 56,740 47,515
Total revenues 387,599 340,765
Operating costs and expenses: Operating costs 229,495 196,389
Selling, general, and administrative 131,508 118,819 Depreciation
and amortization 20,923 19,247 Integration and reorganization costs
4,112 2,430 Impairment of long-lived assets 1,207 - Net loss (gain)
on sale or disposal of assets 1,789 (3,171 )
Operating (loss) income (1,435 ) 7,051 Interest expense 10,134
8,352 Other income (260 ) (520 ) Loss before income
taxes (11,309 ) (781 ) Income tax benefit (1,954 )
(116 ) Net loss (9,355 ) (665 ) Net loss attributable to redeemable
noncontrolling interests (249 ) - Net loss
attributable to New Media $ (9,106 ) $ (665 ) Loss
per share: Basic: Net loss attributable to New Media $ (0.15 ) $
(0.01 ) Diluted: Net loss attributable to New Media $ (0.15 ) $
(0.01 ) Dividends declared per share $ 0.38 $ 0.37
Comprehensive loss $ (9,385 ) $ (732 )
Comprehensive loss attributable to redeemable noncontrolling
interests (249 ) - Comprehensive loss
attributable to New Media $ (9,136 ) $ (732 )
NEW MEDIA
INVESTMENT GROUP INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In
thousands) Three months Ended
March 31, 2019 April 1, 2018 Cash flows from
operating activities: Net loss $ (9,355 ) $ (665 )
Adjustments to reconcile net loss to net
cash provided by operating
activities:
Depreciation and amortization 20,923 19,247 Non-cash compensation
expense 1,136 1,163 Non-cash interest expense 344 504 Deferred
income taxes (617 ) (92 ) Net loss (gain) on sale or disposal of
assets 1,789 (3,171 ) Impairment of long-lived assets 1,207 -
Pension and other postretirement benefit obligations (276 ) (369 )
Changes in assets and liabilities: Accounts receivable, net 24,684
19,409 Inventory 988 (3,169 ) Prepaid expenses (5,680 ) (3,888 )
Other assets (103,641 ) (1,289 ) Accounts payable 10,803 3,030
Accrued expenses (6,289 ) (17,573 ) Deferred revenue 5,327 4,027
Other long-term liabilities 90,399 1,499
Net cash provided by operating activities 31,742
18,663 Cash flows from investing activities:
Acquisitions, net of cash acquired (37,953 ) (29,409 ) Purchases of
property, plant, and equipment (2,242 ) (1,929 ) Proceeds from sale
of real estate and other assets 2,465 9,207
Net cash used in investing activities
(37,730 ) (22,131 ) Cash flows from financing
activities: Payment of debt issuance costs - (500 ) Borrowings
under term loans - 49,750 Repayments under term loans (2,197 )
(1,031 ) Borrowings under revolving credit facility 54,400 -
Repayments under revolving credit facility (46,400 ) - Purchase of
treasury stock (689 ) (735 ) Payment of dividends (23,245 )
(20,046 ) Net cash (used in) provided by financing
activities (18,131 ) 27,438
Net (decrease) increase in cash, cash
equivalentsand restricted cash
(24,119 ) 23,970 Cash, cash equivalents and restricted cash at
beginning of period 52,770 46,162 Cash,
cash equivalents and restricted cash at end of period $ 28,651
$ 70,132
NEW MEDIA INVESTMENT GROUP INC.
AND SUBSIDIARIES AS ADJUSTED EBITDA AND FREE CASH FLOW
(In thousands, except share data)
Three months ended March 31, 2019 April 1,
2018 Net loss $ (9,355 ) $ (665 ) Income tax benefit
(1,954 ) (116 ) Interest expense 10,134 8,352 Impairment of
long-lived assets 1,207 - Depreciation and amortization
20,923 19,247 Adjusted EBITDA 20,955 26,818
Non-cash compensation and other expense 6,201 6,450 Integration and
reorganization costs 4,112 2,430 Net loss (gain) on sale or
disposal of assets 1,789 (3,171 )
As Adjusted EBITDA
33,057 32,527 Interest Paid(1) (9,567 ) (7,680 ) Net capital
expenditures (2,242 ) (1,929 ) Pension payments (276 ) (369 ) Cash
taxes(2) (13 ) - Free Cash Flow $ 20,959
$ 22,549 Basic weighted average shares outstanding
59,965,036 52,934,640 Diluted weighted average shares outstanding
59,965,036 52,934,640 (1) Average interest paid during 2019
for the three-month period. (2) Cash paid, net of refunds.
NEW MEDIA INVESTMENT GROUP INC. AND SUBSIDIARIES SAME
STORE AND ORGANIC SAME STORE REVENUES (In thousands)
Three months ended March 31,
2019 April 1, 2018 Total revenues from
continuing operations $ 387,599 $ 340,765 Revenue adjustment for
material acquisitions - - Same Store
Revenues 387,599 340,765 Tuck-in Acquisitions(1) (73,059 )
(1,083 ) Organic Same Store Revenues $ 314,540 $
339,682 (1) Tuck-in acquisitions are adjusted to
remove non-material acquisitions and non-material divestitures, and
to adjust for Commercial Print revenues that are now intercompany.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190502005304/en/
Ashley Higgins, Investor Relationsir@newmediainv.com(212)
479-3160
New Media Investment (NYSE:NEWM)
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