Advanstar Releases Third Quarter 2005 Results.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Advanstar Communications Inc. ("Advanstar"), a leading worldwide media company providing integrated marketing solutions, today reported operating results for the third quarter and nine months ended September September: see month. 30, 2005. Third Quarter Overview Advanstar's results for the third quarter of 2005 reflect the implementation of several growth initiatives and the continued implementation of a corporate restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). begun earlier in the year. The corporate restructuring included a workforce and leased office space reduction, resulting in a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge of $1.0 million in the third quarter. The Company expects to incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1.2 million in additional charges over the next six months as the Company continues to execute its restructuring plan. The estimated annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. cost savings of the Company's restructuring is approximately $9.0 million when fully completed. In August 2005 the Company completed the acquisitions of Project Tradeshow ("Project") and Pool Tradeshow ("Pool"). The acquisitions of Project and Pool were completed to expand Advanstar's presence in the contemporary and boutique Boutique A small investment firm specializing in offering specific, but limited services to a select number of individuals. Notes: These investment firms are the alternatives to large financial supermarkets. They provide a highly personalized environment for investing. fashion markets. These events were operated in coordination coordination /co·or·di·na·tion/ (ko-or?di-na´shun) the harmonious functioning of interrelated organs and parts. co·or·di·na·tion n. 1. The harmonious adjustment or interaction of parts. with the Company's fall MAGIC event during the quarter. Joe Loggia loggia Hall, gallery, or porch open to the air on one or more sides. It evolved in the Mediterranean region as an open sitting room with protection from the sun. It is often a roofed, arcaded open gallery on an upper story overlooking a court, though it can also be a , President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Advanstar, said: "Our performance in the third quarter demonstrates the initial results of successfully executing our plan to strengthen the Company and transform our business. First, we improved the operating results of many of our key properties. Second, we maintained our focus on investing in our properties and new initiatives to accelerate our growth, and are already seeing benefits. In particular, our fall MAGIC event outperformed our expectations due to the success of our growth initiatives, which included new trend areas, pavilions and an expanded Sourcing Zone. And, finally, we made substantial progress in our corporate restructuring, and we are operating with significantly increased efficiency. We will continue to focus on these key components of our business strategy through the remainder of the year." Third Quarter Results Revenue from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the in the third quarter of 2005 increased 9.9% to $85.7 million from $78.0 million in the third quarter of 2004. Revenue from continuing operations in the first nine months of 2005 increased 5.7% to $232.3 million from $219.7 million in the same period last year. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. from continuing operations in the third quarter of 2005 increased 35.3% to $21.8 million from $16.1 million in the third quarter of 2004. The quarterly results included a restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $0.4 million related to office closures. The Company also recorded a third quarter charge of $0.6 million for workforce reductions. Operating income from continuing operations in the first nine months of 2005 increased 12.1% to $40.1 million from $35.7 million in 2004. Operating income includes restructuring charges of $1.2 million for vacated leased office space and $1.8 million for severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when costs. Net income in the third quarter of 2005 was $5.2 million compared to a net loss of $9.8 million in the third quarter of 2004 primarily due to improved operating results, reduced interest expense and a third quarter 2004 goodwill impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge of $6.2 million on Advanstar's German tradeshow business included in discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Net income in the first nine months of 2005 was $26.9 million compared to a net loss of $21.5 million in the first nine months of 2004. Net income in the first nine months of 2005 includes operating results of assets sold to Questex in May 2005 and a $53.0 million gain recorded on the sale as discontinued operations. Net income in the nine-month period of 2005 also includes a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact of a $4.6 million cumulative effect of accounting change related to the consolidation of Advanstar.com operating results into Advanstar. These items are partially offset by $12.6 million in costs related to the tender and extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of a portion of the Company's debt in the second quarter of 2005 as well as a $3.1 million restructuring charge in the first nine months of 2005. Net income in the first nine months of 2004 includes operating results of assets sold to Questex as well as other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. sold in 2004, including the Company's art properties, joint venture in France and German tradeshow business as discontinued operations. Cash used in operations was $4.0 million in the first nine months of 2005 compared to cash generated by operations of $11.8 million in the same period last year. Operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. in 2005 was primarily impacted by costs related to the extinguishment of a portion of the Company's debt, severance payments associated with restructuring activities and the sale of assets to Questex. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become from continuing operations in the third quarter of 2005 grew 14.6% to $30.8 million from $26.8 million in the same period of last year. EBITDA from continuing operations in the first nine months of 2005 grew 2.4% to $68.4 million from $66.9 million in the first nine months of last year. Third Quarter Segment Operating Summary Tradeshows and Conferences: Revenue from tradeshows and conferences increased 18.6% to $46.8 million in the third quarter of 2005 from $39.5 million in the third quarter of 2004 due to the strong performance of the fall 2005 MAGIC event, our acquisition of Project and Pool, and the launch of new Life Sciences conferences. MAGIC revenue increased 8.6% over the fall 2004 event, with exhibit space reaching approximately 946,000 square feet. The acquired Project and Pool events contributed $3.3 million of revenue in the quarter. Four new conferences were launched in the third quarter of 2005, including three additional pharmaceutical conferences and a licensing conference. These launches generated $0.7 million of revenue. Contribution margin from tradeshows and conferences increased 11.6% to $28.0 million from $25.1 million in the third quarter of 2004 primarily due to the performance of the fall MAGIC show and acquired Pool and Project events, partially offset by investments made in the Company's Off-Road off-road adj. Existing, taking place, or designed for use off paved or public roads or in rugged terrain: off-road sports such as snowmobiling. and Arenacross event launches. Publications: Revenue from publications in the third quarter of 2005 declined 1.4% to $34.3 million from $34.8 million in the third quarter of 2004. Revenue from Life Sciences custom projects declined $1.2 million in the quarter due to continued impact from the restructuring of the Life Sciences properties and its effect on the 2005 sales cycle. Additionally, primary healthcare and pharmaceutical publications' revenue declined $0.6 million and $0.4 million, respectively, in the third quarter. The Company's flagship primary care publication, Medical Economics, increased revenue in the quarter by 9.4%. In specialty care, while softer revenues were generated from nursing publications, revenue from the Company's other six specialty titles increased 13.5% over the third quarter last year. Revenue from the dental dental /den·tal/ (den´t'l) pertaining to a tooth or teeth. den·tal adj. 1. Of, relating to, or for the teeth. 2. Of, relating to, or intended for dentistry. and veterinary veterinary /vet·er·i·nary/ (vet´er-i-nar?e) 1. pertaining to domestic animals and their diseases. 2. veterinarian. vet·er·i·nar·y adj. publications increased $0.3 million, or 6.6%, and $0.2 million, or 6.7%, respectively, over the third quarter in 2004. New publication launches generated $1.1 million in revenue in the third quarter 2005 and included Dirt Sports and Off-Road Business in Powersports/Automotive, and Locum locum /lo·cum/ (lo´kum) [L.] place. locum te´nens , locum te´nent a practitioner who temporarily takes the place of another. Life, Firstline, Ophthalmology ophthalmology (ŏf'thălmŏl`əjē), branch of medicine specializing in the anatomy, function and diseases of the eye. Ophthalmologists specialize in the medical and surgical treatment of eye disorders, vision measurements for Times Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and Contract Services Europe in Life Sciences.Contribution margin from publications increased 5.5% to $10.4 million from $9.8 million in the third quarter of 2004. The increase is due to cost savings associated with the restructuring efforts in the Life Sciences operating group. Direct Marketing Products and Other: Revenue from direct marketing products and other increased 24.1% in the third quarter to $4.6 million from $3.7 million in the same period of 2004. This increase is due to the adoption of FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). Interpretation No. 46R, "Consolidation of Variable Interest Entities," which requires consolidation of the results of the Company's affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. , Advanstar.com. Contribution margin for direct marketing products and other increased to $2.4 million from $1.2 million in the third quarter of 2004 due to the consolidation of Advanstar.com. General and Administrative: General and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. declined 0.4% to $8.9 million in the third quarter of 2005. The improvement is due to $0.7 million of savings associated with the restructuring of our leased office space, partially offset by $0.4 million in contingent employee compensation related to the 2004 IVT IVT intravenous transfusion. acquisition earn-out Earn-out Refers to an additional payment in a merger or acquisition that is not part of the original acquisition cost, which is based on the acquired company's future earnings relative to a level determined by the merger agreement. and increased costs resulting from the consolidation of the results of Advanstar.com upon the adoption of FASB Interpretation No. 46R, as discussed above. Nine-Month Period Segment Operating Summary Tradeshows and Conferences: Revenue from tradeshows and conferences increased 14.0% to $111.0 million from $97.4 million in the first nine months of 2004. Revenue from the Company's three largest events, MAGIC, Dealer Expo and Licensing International, increased $8.0 million, or 9.6%, compared to the first nine months of 2004. Exhibit space at the spring and fall MAGIC events grew by a combined 2.3% over 2004 to 1,833,300 square feet. Licensing International space increased 6.7% to 194,400 square feet and Dealer Expo space increased 1.7% to 328,300 square feet. The acquisition of Project and Pool contributed $3.3 million of revenue in the first nine months of 2005 from the events held in Las Vegas Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. in coordination with MAGIC in August. The Company also launched the Off-Road Impact tradeshow and conference, complementing the 2004 launches of Dirt Sports and Off-Road Business magazines, 15 new IVT and pharmaceutical conferences, a dental conference -- Digital Radiography digital radiography Imaging A format for producing x-rays in which film used to produce conventional x-ray images is replaced with more sensitive sensitive electronics; DXRs produce images with1⁄2 Congress -- and a licensing conference. These launches generated revenue of $3.6 million in the first nine months of 2005. The increased revenue generated from these tradeshows and conferences was partially offset by the revenue effect of holding one less IMS (1) See IP Multimedia Subsystem. (2) (Information Management System) An early IBM hierarchical DBMS for IBM mainframes. IMS was widely implemented throughout the 1970s under MVS and continues to be used under z/OS. motorcycle motorcycle, motor vehicle whose design is based on the bicycle. The German inventor Gottlieb Daimler is generally credited with building the first practical motorcycle in 1885. The motorcycle did not become dependable and popular, however, until after 1900. event in the first nine months of 2005. Contribution margin from tradeshows and conferences increased 8.2% to $64.9 million in the first nine months of 2005 from $60.0 million in the same period last year. The first nine months of 2005 reflects an increase in contribution margin of $4.9 million, or 9.0%, from MAGIC, Dealer Expo and our Licensing International event. The acquisitions of Project and Pool, as well as the tradeshow and conferences launched during the first nine months of 2005, generated $1.9 million in contribution margin in the period. The increase in contribution margin was partially offset by launch investments in staffing and other direct costs to support our first quarter 2005 launch of the Off-Road Impact tradeshow and conference and our fourth quarter 2005 launch of the Arenacross events. Publications: Revenue from publications in the first nine months of 2005 declined 3.0% to $108.0 million from $111.3 million in the first nine months of 2004. Revenue from Life Sciences custom projects declined $4.2 million, or 37.2%, in the first nine months of 2005, attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk in part to the restructuring of the Life Sciences properties and its effect on the 2005 sales cycle. In specialty care, revenue from the nursing publications declined $1.6 million, or 20.7%, as nursing advertising continues to contract. Revenue from the Company's other six publications in specialty care increased 5.8% year to date over the same period last year. Primary healthcare publication revenue declined 4.0% in the first nine months of the year. Revenue from dental publications increased 9.7% and automotive publications increased revenue 12.1% over the same period last year. New publication launches generated $1.8 million in revenue in the first nine months of 2005 and included Dirt Sports and Off-Road Business in Powersports/Automotive, and Locum Life, Firstline, Ophthalmology Times Europe and Contract Services Europe in Life Sciences. Contribution margin from publications declined 4.9% in the first nine months of 2005 to $33.3 million from $35.0 million in the same period of 2004. The decrease is primarily due to the decline in revenue in Life Sciences projects and the launch investments in the off-road properties of Dirt Sports and Off-Road Business. Direct Marketing Products and Other: Revenue from direct marketing products and other increased 21.0% to $13.3 million from $11.0 million in the first nine months of 2004. This increase is due to the adoption of FASB Interpretation No. 46R, "Consolidation of Variable Interest Entities," which required us to consolidate Consolidate To combine the assets, liabilities, and other financial items of two or more entities into one. Notes: This term is generally used in the context of consolidated financial statements. the results of our affiliate, Advanstar.com. Contribution margin for the direct marketing products and other segment increased 49.1% to $4.5 million in the first nine months of 2005 from $3.0 million in the same period last year, due to the consolidation of Advanstar.com. General and Administrative: General and administrative costs increased 11.2% to $31.2 million from $28.0 million in the first nine months of 2004, due to 1) $0.9 million in staff and management investments for our Life Sciences properties; 2) $0.6 million in costs related to strategic consulting and marketing initiatives; 3) $0.2 million in costs related to Sarbanes-Oxley compliance; 4) $1.0 million contingent employee compensation costs related to the IVT acquisition; and 5) increased costs due to the consolidation of the results of Advanstar.com upon the adoption of FASB Interpretation No. 46R, as discussed above. Discontinued Operations: Income from discontinued operations was $3.0 million in the third quarter of 2005 compared to a loss from discontinued operations of $6.0 million in the third quarter of 2004. Income from discontinued operations was $46.9 million in the first nine months of 2005 compared to a loss of $2.0 million in the first nine months of 2004. The results of the operations, gains on sale, or impairment of goodwill for all assets described below are included in discontinued operations and are not included in reported revenue, contribution margin or EBITDA. In the second quarter of 2005, the Company's last East Coast Fashion event was closed. A $2.3 million impairment charge for the remaining intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. of this business was recorded in the second quarter of 2005. In May and July July: see month. 2005, Advanstar sold the assets and liabilities associated with its tradeshows and conferences, trade publications, and direct marketing products in the Information Technology & Communications, Travel & Hospitality, Beauty, Home Entertainment, Abilities, and Portfolio sectors, including the shares of its Brazilian and Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. subsidiaries for $173.8 million. A gain of $53.0 million on the sale of these assets was recorded in the second quarter of 2005. Properties sold in 2004 included the Company's art industry portfolio, its Post business magazine, its 65% interest in its French joint venture and its German tradeshow business for an aggregate of $24.3 million in cash. Total gain on sale of these assets was $2.1 million, after tax effect. The aggregate goodwill impairment charges recorded in 2004 relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc these assets was $15.6 million. Conference Call Information Advanstar will hold a conference call to review third quarter 2005 results today at 11:00 a.m. Eastern. The call can be accessed by dialing 1-800-399-1392, with access code number 8491145. A copy of this release will also be available at our website, www.advanstar.com. About Advanstar Advanstar Communications Inc. (www.advanstar.com) is a leading worldwide media company providing integrated marketing solutions for the Fashion, Life Sciences and Powersports Powersports are a subset of the generalized category motorsports. Examples of powersport vehicles are motorcycles, ATVs, snowmobiles and PWCs. One of the defining features of any powersport is the use of an engine, in one form or another. industries. Advanstar serves business professionals and consumers in these industries with its portfolio of 87 events, 58 publications and directories, and 125 electronic publications and Web sites, as well as educational and direct marketing products and services. Market-leading brands and a commitment to delivering innovative, quality products and services enables Advanstar to "Connect Our Customers With Theirs." Advanstar has roughly 1,000 employees and currently operates from multiple offices in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and Europe. Business Risks The statements contained in this press release and our other oral and written statements that are not historical in nature are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties. Management of Advanstar believes that its expectations are based upon reasonable assumptions within the bounds of its knowledge of Advanstar's business. However, there can be no assurance that they in fact will be realized. Numerous factors may affect Advanstar's actual results and may cause results to differ materially from those expressed in forward-looking statements made by or on behalf of Advanstar, including such factors listed from time to time in Advanstar's reports filed with the Securities and Exchange Commission including the factors described in Advanstar's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. (333-57201) filed March 29, 2005, under the heading "Certain Factors Which May Affect Future Results." Advanstar does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Non-GAAP Financial Information In this press release Advanstar discloses various non-GAAP financial measures as defined by SEC Regulation G, including EBITDA. A reconciliation of the differences between the GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). financial measures and the non-GAAP financial measures can be found at the end of this press release.
Advanstar Communications Inc.
Summary Financial Information
(Unaudited)
(in thousands)
Quarter Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
Revenue:
Tradeshows
and conferences $ 46,821 $ 39,493 $ 111,022 $ 97,367
Publications 34,307 34,786 107,951 111,333
Direct marketing
products and other 4,563 3,678 13,280 10,973
Total revenue 85,691 77,957 232,253 219,673
Contribution margin:(1)
Tradeshows
and conferences 27,963 25,055 64,875 59,950
Publications 10,361 9,820 33,282 34,989
Direct marketing
products and other 2,381 1,205 4,508 3,023
Total contribution
margin 40,705 36,080 102,665 97,962
General and
administrative expenses 8,896 8,930 31,150 28,005
Restructuring charge 1,041 -- 3,056 --
Provision and funding of
affiliated dot.com
company operations -- 308 -- 3,071
Depreciation and
amortization 8,927 10,694 28,404 31,151
Operating income $ 21,841 $ 16,148 $ 40,055 $ 35,735
Net income (loss) $ 5,206 $ (9,848) $ 26,860 $ (21,529)
Cash flows provided by
(used in):
Operating activities 9,619 15,530 (4,004) 11,813
Investing activities (10,235) 2,316 153,288 10,091
Financing activities (25) (825) (153,171) (11,177)
Other data:
EBITDA(2) $ 30,768 $ 26,842 $ 68,459 $ 66,886
(1) Contribution margin is defined as net revenue less cost of
production and selling, editorial and circulation costs.
(2) A reconciliation of the differences between this non-GAAP
financial measure and the most directly comparable GAAP measure
can be found at the end of this press release.
Advanstar Communications Inc.
Statements of Operations
(Unaudited)
(in thousands)
Quarter Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
Revenue $ 85,691 $ 77,957 $ 232,253 $ 219,673
Operating expenses:
Cost of production 16,404 14,520 43,923 39,464
Selling, editorial and
circulation 28,582 27,357 85,665 82,247
General and
administrative expenses 8,896 8,930 31,150 28,005
Restructuring charge 1,041 -- 3,056 --
Provision and funding
of affiliated dot.com
company operations -- 308 -- 3,071
Depreciation and
amortization 8,927 10,694 28,404 31,151
Total operating
expenses 63,850 61,809 192,198 183,938
Operating income 21,841 16,148 40,055 35,735
Other income (expense):
Interest expense, net (13,635) (17,362) (48,064) (52,939)
Loss on extinguishment
of debt -- -- (12,581) --
Other (expense)
income, net (60) 26 (75) 1,239
Income (loss) from
continuing operations
before income tax
expense 8,146 (1,188) (20,665) (15,965)
Provision for income
taxes 5,894 2,656 4,009 3,548
Income (loss) from
continuing operations
before cumulative
effect of accounting
change 2,252 (3,844) (24,674) (19,513)
Income (loss) from
operations of
discontinued businesses 2,954 (6,004) 46,916 (2,016)
Income (loss) before
cumulative effect of
accounting change 5,206 (9,848) 22,242 (21,529)
Cumulative effect of
accounting change -- -- 4,618 --
Net income (loss) $ 5,206 $ (9,848) $ 26,860 $ (21,529)
The following table reconciles EBITDA to cash flows provided by
operating activities for each period presented:
Quarter Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
In thousands
EBITDA $ 30,768 $ 26,842 $ 68,459 $ 66,886
Depreciation and
amortization (8,927) (10,694) (28,404) (31,151)
Operating income 21,841 16,148 40,055 35,735
Interest expense (13,635) (17,362) (48,064) (52,939)
Write-off of deferred
financing costs -- -- (12,581) --
Other (expense) income,
net (60) 26 (75) 1,239
Provision for income
taxes (5,894) (2,656) (4,009) (3,548)
Cumulative effect of
accounting change -- -- 4,618 --
Income (loss) from
operations of
discontinued businesses 2,954 (6,004) 46,916 (2,016)
Net income (loss) 5,206 (9,848) 26,860 (21,529)
Loss (gain) on sale of
business 94 (109) (52,959) (1,179)
Impairment loss on
tangible assets -- -- 2,272 --
Goodwill impairment -- 6,150 -- 15,570
Cumulative effect of
accounting change -- -- (4,618) --
Write-off of deferred
financing costs -- -- 3,517 --
Depreciation and
amortization 8,925 12,469 31,356 36,777
Deferred income taxes 2,826 3,150 13,766 6,890
Other noncash items 837 628 3,409 2,488
Changes in operating
assets and
liabilities (8,269) 3,090 (27,607) (27,204)
Net cash provided by
(used in) operating
activities $ 9,619 $ 15,530 $ (4,004) $ 11,813
Use of Non-GAAP Financial Information To supplement our consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge presented in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with accounting principles generally accepted in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ("GAAP"), we use non-GAAP measures, such as EBITDA, which are derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from results based on GAAP. The presentation of this additional information is not meant to be considered superior to, in isolation of, or as a substitute for results prepared in accordance with GAAP. We define "EBITDA" as operating income or loss plus amortization and depreciation less amounts attributable to minority interest. EBITDA is a key liquidity measure but should not be construed as an alternative to cash flows from operating activities or operating income (as determined in accordance with GAAP) or as a measure of our profitability or performance. We provide information about EBITDA because we believe it is a useful way for us and our investors to measure our ability to satisfy cash needs, including interest payments on our debt, taxes and capital expenditures. GAAP requires us to provide information about cash flow generated from operations. However, GAAP cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses is reduced by the amount of interest and tax payments and also takes into account changes in net current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. (e.g., changes in working capital) that do not impact net income. Because changes in working capital can reverse in subsequent periods, and because we want to provide information about cash available to satisfy interest and income tax expense (by showing our cash flows before deducting interest and income tax expense), we are also presenting EBITDA information. Our definition of EBITDA does not take into account our working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. , debt service requirements or other commitments. Accordingly, EBITDA is not necessarily indicative of amounts of cash that may be available to us for discretionary purposes. Our method of computation Computation is a general term for any type of information processing that can be represented mathematically. This includes phenomena ranging from simple calculations to human thinking. may not be comparable to other similarly titled measures of other companies. Additionally, our management uses EBITDA to determine our compliance with key financial covenants under our existing Credit Facility, which impact the amount of indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. we are permitted to incur. The definition of EBITDA in our existing Credit Facility is based, in part, on our EBITDA and includes other adjustments described in our credit agreement. |
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