American Lawyer Media Reports Revenue, EBITDA Gains as Company Releases Third Quarter FY 2004 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 -- American Lawyer Media ALM (formerly American Lawyer Media), is a leading integrated media company, focused on the legal and real estate communities. ALM owns and publishes 33 national and regional magazines and newspapers focused on the legal and real estate communities, including , Inc. (ALM), the nation's leading legal journalism journalism, the collection and periodic publication or transmission of news through media such as newspaper, periodical, television, and radio. Schools and information company, announced today that third-quarter FY 2004 earnings before interest, taxes, depreciation, amortization and other charges (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 ) totaled $6.9 MM, an increase of 1.5%, or $0.1 M, over the third quarter of FY 2003, as the company released results for the third quarter of its 2004 fiscal year, ending September September: see month. 30. Revenues for the third quarter of FY 2004 totaled $32.8 MM, an increase of 2.7%, or $0.9 M, over the third quarter of FY 2003. ALM's operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. for the third quarter of FY 2004 was $4.0 MM, an increase of 0.8% compared to third quarter FY 2003 operating profit. ALM had a net loss of $0.5 M for the third quarter of FY 2004, compared to a net loss of $0.1 M for the third quarter of FY 2003. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the third quarter of FY 2004 totaled $28.8 MM, an increase of 3.0%, or $0.8 M, compared to third-quarter FY 2003 operating expenses. Depreciation, amortization and other charges (all non-cash) for the third quarter of FY 2004 were $2.8 MM, an increase of 1.3% compared to the third quarter of FY 2003. Total interest expense for the third quarter of FY 2004 was $4.8 MM at ALM and $7.1 MM at its parent company, American Lawyer Media Holdings, Inc. Cash interest paid for the third quarter of FY 2004 was $12.0 K at both ALM and American Lawyer Media Holdings, Inc. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. revenues for FY 2004 were $105.5 MM, a gain of 4.5%, or $4.6 MM, compared to the first three quarters of FY 2003. Year-to-date EBITDA for FY 2004 totaled $23.8 MM, an increase of 9.6%, or $2.1 MM, over EBITDA for the first three quarters of FY 2003. FY 2004 year-to-date operating profits totaled $15.0 MM, compared to operating profits of $10.5 MM for the first three quarters of FY 2003. ALM had a net loss for the first three quarters of FY 2004 of $0.2 M, compared to a net loss of $3.2 MM in the first three quarters of FY 2003. Year-to-date FY 2004 operating expenses were $90.5 MM, an increase of 0.1% compared to the same period in FY 2003. Non-cash depreciation, amortization and other charges were $8.7 MM for the first three quarters of FY 2004, a decrease of 22.2%, or $2.5 MM, compared to the first three quarters of FY 2003. Year-to-date FY 2003 depreciation, amortization and other charges included a $1.5 MM non-cash write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of leasehold improvements Leasehold Improvement Improvements on a leased asset that increase the value of the asset. Notes: A leasehold improvement is classified as an asset that must be depreciated over time. and furniture related to office space abandoned during a prior quarter. The lease for the abandoned office space was obtained by ALM as part of its acquisition of Law.com, Inc. on May 1, 2002. Year-to-date FY 2004 operating expenses, excluding non-cash depreciation, amortization and other charges, totaled $81.8 MM, an increase of 3.2%, or $2.5 MM, compared to the same period in FY 2003. Total year-to-date interest expense for FY 2004 was $14.5 MM for ALM and $21.3 MM for American Lawyer Media Holdings, Inc. Year-to-date cash interest paid for both entities totaled $9.2 MM. For FY 2004, the company continues to expect revenue growth to be in the middle single digits with EBITDA growth of at least 10% over FY 2003. Results for the third quarter of FY 2004 include $1.7 MM in revenues and $1.6 MM in expenses, excluding depreciation and amortization, related to ALM's Law.com businesses. ALM's third-quarter FY 2004 results include EBITDA from Law.com of $0.1 M, compared to an EBITDA loss of $0.4 M for the third quarter of FY 2003. ALM's third-quarter FY 2004 results include $0.3 M in revenue received by ALM as a result of an advertising agreement with RealLegal, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control . This was the only non-cash revenue received by ALM in the third quarter of FY 2004, compared to $0.4 M in non-cash revenue in the third quarter of FY 2003. On a year-to-date basis, non-cash revenue totaled $0.7 M for the first three quarters of FY 2004, compared to $1.3 MM for the first three quarters of FY 2003. A consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: statement of operations See Income statement. for the third quarter and first three quarters of the 2004 and 2003 fiscal years, as well as a September 30, 2004 and December December: see month. 31, 2003 balance sheet, including further detail on the results reported above, are included as attachments to this press release. Additional details on company results for the third quarter and first three quarters of FY 2004 are available in reports filed by ALM and its parent corporation, American Lawyer Media Holdings, Inc., with the Securities and Exchange Commission. ALM uses a uniform definition of EBITDA for reporting and discussion of its financial results in press releases and reports filed by ALM and its parent corporation, American Lawyer Media Holdings, Inc., with the Securities and Exchange Commission. EBITDA is defined as earnings before interest, taxes, depreciation, amortization and other charges. Any additional amounts which ALM believes require disclosure in order to allow a more accurate comparison of prior and ongoing operations, from period to period, will be explicitly ex·plic·it adj. 1. a. Fully and clearly expressed; leaving nothing implied. b. Fully and clearly defined or formulated: "generalizations that are powerful, precise, and explicit" stated. ALM's 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 are compiled 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 generally accepted U.S. accounting principles (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). ALM uses 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, to supplement its consolidated financial statements. ALM includes EBITDA information to assist investors in evaluating the company's ability to satisfy cash needs, including interest payments, taxes and capital expenditures. ALM also presents information about cash interest expense because it believes it is a useful way for ALM and its investors to measure ALM's actual cash needs in any period. Headquartered in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. , ALM is a leading integrated media company, focused on the legal industry. ALM currently owns and publishes 35 national and regional legal magazines and newspapers, including The American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Lawyer(R) and The National Law Journal(R). Law.com(R) is the Web's leading legal news and information network. ALM's other businesses include book and newsletter publishing, market research, verdict and settlement reporting, production of legal trade shows, conferences and educational seminars and distribution of content related to the legal industry. ALM was formed by U.S. Equity Partners, L.P., a private equity fund sponsored by Wasserstein Was·ser·stein , Wendy Born 1950. American playwright noted for her comedies, such as The Heidi Chronicles (1988), for which she won a Pulitzer Prize. & Co., LP. More information on ALM and its business and services is available on the Web at www.americanlawyermedia.com. Portions of this release may contain 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. regarding plans, projections or the future performance of American Lawyer Media, Inc. These forward-looking statements are subject to risks and uncertainties. Important cautionary statements and a discussion of risk factors that could affect actual performance are contained in the materials filed by American Lawyer Media, Inc. with the Securities and Exchange Commission.
American Lawyer Media, Inc.
Consolidated Statements of Operations
(In thousands)
(unaudited)
For The Three Months For The Nine Months
Ended Ended
September 30, September 30,
---------------------- ----------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
REVENUES:
Periodicals:
Advertising $18,695 $18,457 $57,366 $56,923
Subscription 6,374 6,264 19,016 18,492
Ancillary products and
services 7,694 7,177 29,125 25,523
---------- ---------- ---------- ----------
Total revenues 32,763 31,898 105,507 100,938
---------- ---------- ---------- ----------
OPERATING EXPENSES:
Editorial 5,196 5,242 15,490 15,643
Production and
distribution 5,643 5,778 18,192 18,070
Selling 6,995 6,741 21,176 20,330
General and
administrative 8,087 7,362 26,899 25,167
Depreciation,
amortization and
other charges 2,831 2,796 8,707 11,189
---------- ---------- ---------- ----------
Total operating
expenses 28,752 27,919 90,464 90,399
---------- ---------- ---------- ----------
Operating income 4,011 3,979 15,043 10,539
Interest expense (4,758) (4,952) (14,455) (14,909)
Other income 37 -- 66 --
---------- ---------- ---------- ----------
(Loss) income
before income
taxes (710) (973) 654 (4,370)
Benefit (provision)
for income taxes 163 854 (870) 1,173
---------- ---------- ---------- ----------
Net loss $(547) $(119) $(216) $(3,197)
========== ========== ========== ==========
Reconciliations of GAAP to Non-GAAP Financial Measures Reconciliations of GAAP to non-GAAP financial measures, such as EBITDA, are provided below. ALM believes that the use of non-GAAP financial measures enables ALM and investors to evaluate, and compare ALM's results from ongoing operations in a more meaningful and consistent manner, from period to period.
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2004 2003 2004 2003
--------- ------- ------- --------
Net loss $(547) $(119) $(216) $(3,197)
Adjustments to arrive at EBITDA:
(Benefit) provision for
income taxes (163) (854) 870 (1,173)
Interest expense 4,758 4,952 14,455 14,909
Depreciation, amortization
and other charges 2,831 2,796 8,707 11,189
--------- ------- ------- --------
Reported EBITDA $6,879 $6,775 $23,816 $21,728
========= ======= ======= ========
American Lawyer Media, Inc.
Consolidated Balance Sheets
(In thousands except share data)
September 30, December 31,
2004 2003
------------- ------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $786 $1,614
Accounts receivable, net of allowance
for doubtful accounts and returns of
$2,274 and $2,582, respectively 16,426 15,657
Deferred tax assets, net 4,411 4,411
Inventories, net 708 592
Due from parent 206 54
Other current assets 3,327 2,385
------------- ------------
Total current assets 25,864 24,713
Property, plant and equipment, net of
accumulated depreciation and amortization
of $27,030 and $24,291, respectively 8,441 8,386
Intangible assets, net of accumulated
amortization of $72,105 and $66,137,
respectively 107,062 113,030
Goodwill, net 148,242 148,242
Deferred financing costs, net of
accumulated amortization of $5,643 and
$4,870, respectively 3,189 3,862
Other assets 5,797 5,380
------------- ------------
Total assets $298,595 $303,613
============= ============
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable $6,067 $5,493
Accrued expenses 12,001 10,271
Accrued interest payable 5,287 841
Deferred income (including deferred
subscription income of $17,597 and $17,391,
respectively) 21,092 20,752
------------- ------------
Total current liabilities 44,447 37,357
------------- ------------
Long-term debt:
Revolving credit facility 19,500 30,400
Senior notes 175,000 175,000
------------- ------------
Total long-term debt 194,500 205,400
Deferred income taxes 14,801 13,978
Other noncurrent liabilities 9,523 11,238
------------- ------------
Total liabilities 263,271 267,973
------------- ------------
Stockholder's equity:
Common stock-$.01 par value; 1,000 shares
authorized; 100 issued and outstanding at
September 30, 2004 and December 31, 2003 -- --
Paid-in-capital 149,488 149,488
Accumulated deficit (112,476) (112,260)
Accumulated other comprehensive loss (1,688) (1,588)
------------- ------------
Total stockholder's equity 35,324 35,640
------------- ------------
Total liabilities and stockholder's
equity $298,595 $303,613
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