American Media, Inc. Reports Third Quarter Fiscal 2005 Results.BOCA RATON Boca Raton (bō`kə rətōn`), city (1990 pop. 61,492), Palm Beach co., SE Fla., on the Atlantic; inc. 1925. Boca Raton is a popular resort and retirement community that experienced significant industrial development in the 1970s and 80s. , Fla. -- American Media, Inc. (AMI), the nation's largest publisher of celebrity, health and fitness, and Spanish language Spanish language, member of the Romance group of the Italic subfamily of the Indo-European family of languages (see Romance languages). The official language of Spain and 19 Latin American nations, Spanish is spoken as a first language by about 330 million persons magazines, today announced results for the third fiscal quarter ended December 27, 2004. Financial Highlights: - Revenues for the third fiscal quarter increased 9.3% to $129.4 million, compared to $118.3 million for the prior year fiscal third quarter. - The Company's 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 (as defined later in this press release) increased 1.9% to $32.0 million from $31.4 million for the prior year fiscal quarter. David J. Pecker David Pecker is the Chairman and CEO of American Media. He is the publisher of National Enquirer, Star, Sun, Weekly World News, Globe, Men's Fitness, Muscle and Fitness, Flex and Shape. , American Media's Chairman, 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. commented, "We continue to focus very heavily on the investments that we have made to re-launch Star as a glossy gloss·y adj. gloss·i·er, gloss·i·est 1. Having a smooth, shiny, lustrous surface: glossy satin. See Synonyms at sleek. 2. magazine. We are beginning to see these investments pay dividends with the Star's single copy sales up 6% with a $3.29 cover price through December versus the March 2004 quarter when we transitioned it from a 84 page tabloid tab·loid n. A newspaper of small format giving the news in condensed form, usually with illustrated, often sensational material. adj. 1. In summary form; condensed. 2. Lurid or sensational. with a $2.99 cover price. Advertising revenue for Star is up 50.8% versus the prior year. In addition, Star has increased its subscriptions by 52% since its launch as a glossy magazine bringing total circulation to approximately 1.3 million, an increase of 14.5%. "The results for the Weider acquisition continue to perform better than we originally expected," Mr. Pecker added. "We continue to improve these titles, most recently with the redesign re·de·sign tr.v. re·de·signed, re·de·sign·ing, re·de·signs To make a revision in the appearance or function of. re and re-launch of Men's Fitness Men’s Fitness is a men’s magazine published by American Media, Inc. Founded in the United States in 1987, it was originally called Sports Fitness. The premier issue featured Michael Pare from the television show, The Greatest American Hero. . Average advertising pages for Men's Fitness are up 25% from the prior year with many new advertisers and the most recent issues are selling 17% higher on the newsstand than the prior year issues. Additionally, Shape has continued to out-perform expectations, and has also taken market share from all of its competitors. Shape is now the market share leader in its category with a 19.2% lead in advertising pages over its nearest competitor. As a result of this performance, Shape was named to the Ad Age Top Ten List in 2004. Shape's newsstand sales continue to improve and registered a 4.1% gain over the prior year." Commenting on the remaining outlook for the 2005 fiscal year, American Media's Chief Financial Officer, Tom Severson, added, "We are currently expecting our full fiscal year 2005 EBITDA to finalize fi·nal·ize tr.v. fi·nal·ized, fi·nal·iz·ing, fi·nal·iz·es To put into final form; complete or conclude: "They have jointly agreed ... in the $147 million to $153 million range. This is slig htly less than our previous guidance of $155 million due to an increase in production costs and slightly lower than anticipated advertising revenue projected for certain magazines in the fourth fiscal quarter of 2005. We still expect double digit Noun 1. double digit - a two-digit integer; from 10 to 99 integer, whole number - any of the natural numbers (positive or negative) or zero; "an integer is a number that is not a fraction" advertising revenue growth in the fourth fiscal quarter compared to the prior year. In addition, we will be changing our year end to a calendar or March 31, 2005 year end from a publishing calendar or March 28, 2005 year end. This will result in three additional days of operational expenses in the quarter. We will be reporting on traditional calendar quarters on a going forward basis." Revenues for the fiscal quarter ended December 27, 2004 increased 9.3% to $129.4 million compared to $118.3 million for the prior year fiscal quarter. Advertising revenues increased 29.2% to $37.7 million for the quarter and circulation revenues increased 3.2% to $84.2 million for the quarter. These revenue increases were primarily related to Star's success as a glossy magazine and the continuing strength of Shape. These increases were partially offset by a 7.2% decline in newsstand units for AMI's weekly publications when compared to the prior year quarter. Revenues for the three fiscal quarters ended December 27, 2004 increased 7.9% to $399.4 million compared to $370.2 million for the prior year period. When compared to the prior year period, advertising revenues increased 16.9% to $123.1 million for the three fiscal quarters and circulation revenues increased 4.9% to $253.3 million for the three fiscal quarters. These revenue increases were primarily related to the success of Star magazine and the continuing strength of Shape. These increases were partially offset by an 8.4% decline in newsstand units for AMI's weekly publications when compared to the prior year's three fiscal quarters. Total 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 December 2004 fiscal quarter increased 11.8% to $108.5 million from $97.0 million compared to the prior year fiscal quarter. Total operating expenses for the three fiscal quarters ended December 27, 2004 increased 13.1% to $331.4 million from $292.9 million compared to the prior year three fiscal quarters. These increases in operating expenses for the fiscal quarter and for the three fiscal quarters ended December 27, 2004 were primarily due to an increase in operating expenses related to the new cost structure of the Star as a glossy magazine and an increase in advertising sales expense relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc our increases in advertising revenues. The Company's EBITDA for the December 2004 fiscal quarter increased 1.9% to $32.0 million from $31.4 million compared to the prior year fiscal quarter. The Company's EBITDA for the three fiscal quarters ended December 2004 decreased to $101.2 million from $107.6 million compared to the prior year three fiscal quarters. This decrease was primarily due to an increase in production expenses, the new cost structure of the Star as a glossy magazine and legal charges incurred during the three fiscal quarters ended December 27, 2004. Net loss was $281,000 for the December 2004 fiscal quarter compared to net income of $692,000 in the prior year fiscal quarter primarily due to increased interest expense and depreciation. Net income was $3.1 million for the three fiscal quarters ended December 27, 2004 compared to net income of $12.0 million for the prior year period. This decrease in net income for the period resulted from the circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or mentioned above combined with an increase in interest expense of $4.4 million and an increase in depreciation expense of $2.7 million. AMI Conference Call: The senior management of AMI will hold a conference call to discuss the Company's third quarter results on Wednesday, February 9, 2005 at 5:30 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. . To access the teleconference, please dial (800) 731-1098, reservation number 21231609, ten minutes prior to the start time. If you cannot listen to the teleconference at its scheduled time In rallying, the Scheduled Time of any crew is the time, calculated at the beginning of the event, that they should arrive at any given control. It is different from Due Time in that Due Time is dynamic, ie it can change throughout the event as competitors drop time; whereas , there will be a replay available through February 16, 2005, which can be accessed by dialing (800) 633-8284, reservation number 21231609. 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. : This press release contains "forward-looking statements," within the meaning of federal securities laws that involve risks and uncertainties. All statements herein that address activities, events or developments that the Company expects or anticipates will or may occur in the future, including the Company's estimates of financial performance and such things as business strategy, measures to implement strategy, competitive strengths, goals, references to future success and other events are generally forward-looking statements. The Company's actual results may differ materially from its estimates. Whether actual results, events and developments will conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" the Company's expectations is subject to a number of risks and uncertainties and important factors, many of which are beyond the control of the Company. Among the risks and uncertainties which could cause the Company's actual results to differ from those contemplated by its forward looking statements are the risk that the Company may not be able to successfully develop its magazine operations to the point where these operations generate sufficient cash flow to enable the Company to meet its financial obligations, including the financial covenants under its senior credit facility; industry and economic conditions; and the risks and uncertainties contained in the Company's periodic reports filed with the Securities and Exchange Commission. Consequently, all forward-looking statements made herein are qualified by these cautionary statements and there can be no assurance that the results, events or developments referenced herein will occur or be realized. The Company is providing public dissemination dissemination Medtalk The spread of a pernicious process–eg, CA, acute infection Oncology Metastasis, see there through this press release of certain estimates for its fourth fiscal quarter 2005 financial performance. The Company expressly disclaims any current intention to update its estimates. Reconciliation of Non-GAAP Measures The following table and discussion summarizes EBITDA for the three months and nine months ended December 29, 2003 and December 27, 2004 (dollars in 000's). Adjusted EBITDA is presented to identify EBITDA add-backs and deductions as required under AMI's Credit Agreement. Adjusted EBITDA is used to determine our compliance with our Credit Agreement covenant ratios. Accordingly, Adjusted EBITDA is presented as it is a meaningful measurement for our debt compliance.
Fiscal Fiscal Three Fiscal Three Fiscal
Quarter Quarter Quarters Quarters
Ended Ended Ended Ended
Dec. 29, Dec. 27, Dec. 29, Dec. 27,
2003 2004 2003 2004
-------- -------- -------- --------
Net income (loss) (5) $692 $(281) $12,012 $3,140
Add -
Interest expense 20,054 21,198 57,743 62,173
Income taxes 496 8 7,375 2,579
Depreciation and
Amortization 10,114 11,089 30,325 33,164
Other (income)
expense, net 63 8 123 109
-------- -------- -------- --------
EBITDA (5) 31,419 32,022 107,578 101,165
Management bonus (1) - - 2,310 -
Restructuring
expense (2) - - 2,705 -
Management fees (3) 500 500 1,500 1,500
Star re-launch and new
titles launch
expenses (4) 731 1,109 1,266 7,444
-------- -------- -------- --------
Adjusted EBITDA (5) $32,650 $33,631 $115,359 $110,109
========= ========= ======== ========
(1) Net income for the three fiscal quarters ended December 29, 2003
includes a $2.3 million bonus as an expense granted to certain members
of management as part of the Company's recapitalization on April 17,
2003. This bonus was funded with cash contributed as part of the
recapitalization.
(2) Net income for the three fiscal quarters ended December 29,
2003 includes $2.7 million of severance and relocation expenses
relating to the relocation of publications to our New York facility.
(3) The Company's amended Credit Agreement allows for the add-back
of management fees.
(4) The Company's amended Credit Agreement allows for the add-back
of certain non-recurring Star re-launch costs and expenses relating to
the launch of new magazine titles to the extent such charges and
expenses were incurred during such quarters.
(5) Includes $4.0 million for legal charges for the three fiscal
quarters ended December 27, 2004.
American Media, Inc. is a leading publisher in the fields of weekly celebrity journalism and health and fitness magazines. We publish the following magazines: Star, Shape, Men's Fitness, Muscle & Fitness, Flex A development system for Flash-based applications from Adobe. Introduced in 2004 as a J2EE application, Flex compiles ActionScript code and XML-based user interface descriptions (MXML) into binary Flash files (SWF files). , Muscle & Fitness Hers, Fit Pregnancy, Natural Health, Shape en Espanol, National Enquirer En`quir´er n. 1. See Inquirer. Noun 1. enquirer - someone who asks a question asker, inquirer, querier, questioner , Globe, National Examiner The National Examiner is a supermarket tabloid owned by the American Media Corporation. Like other tabloids, its contents have often come under question, and it has been derided for its sensationalistic writing. , Weekly World News, Sun, Country Weekly and MIRA Mira (mī`rə), [Lat.,=marvelous], variable star in the constellation Cetus; Bayer designation Omicron Ceti; 1992 position R.A. 2h19.0m, Dec. −3°05'. !, as well as other special topic magazines. In addition to print properties, AMI owns Distribution Services, Inc., the country's leading in-store magazine sales and marketing company. On April 17, 2003, we completed a series of transactions whereby principals of Evercore Partners Evercore Partners NYSE: EVR is a boutique investment bank and private equity investment firm located in New York. It was founded by Blackstone Group alumni Austin Beutner and Roger Altman in 1996. , Thomas H. Lee Partners Please help [ rewrite this article] from a neutral point of view. Mark blatant advertising for , using . Thomas H. , L.P., David Pecker, our CEO, and other members of management recapitalized the equity of AMI in a transaction that valued the Company at $1.5 billion. Evercore Partners, based in Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. and 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 , manages approximately $1.3 billion of committed capital through its Evercore Capital Partners ("ECP (Enhanced Capabilities Port) See IEEE 1284. 1. ECP - Engineering Change Proposal. 2. ECP - Enhanced Capabilities Port. 3. ECP - Extended Capabilities Port. 4. ECP - Extended Concurrent Prolog. ") affiliate. ECP investments include AMI, Michigan Michigan (mĭsh`ĭgən), upper midwestern state of the United States. It consists of two peninsulas thrusting into the Great Lakes and has borders with Ohio and Indiana (S), Wisconsin (W), and the Canadian province of Ontario (N,E). Electric Transmission Co., Telenet and Vertis. Thomas H. Lee Partners, L.P., is a Boston-based private equity firm focused on identifying and acquiring substantial ownership positions in growth companies. Founded in 1974, Thomas H. Lee Partners currently manages approximately $12 billion of committed capital, including its most recent fund, the $6.1 billion Thomas H. Lee Equity Fund V. Notable transactions sponsored by the firm include: Simmons Company, Michael Foods, ProSiebenSat.1, American Media, AXIS Capital Holdings Limited, Houghton Mifflin Houghton Mifflin Company is a leading educational publisher in the United States. The company's headquarters is located in Boston's Back Bay. It publishes textbooks, instructional technology materials, assessments, reference works, and fiction and non-fiction for both young readers , TransWestern Publishing, National Waterworks waterworks: see water supply. , Endurance Endurance See also Longevity. Atalanta feminine name denotes power of endurance. [Gk. Myth.: Jobes, 148] Boston marathon famous 26-mile race held annually for long-distance runners. [Am. Pop. Culture: Misc. Specialty Insurance, Vertis, Eye Care Centers of America, Cott Corporation, United Industries, Rayovac, Fisher Scientific Fisher Scientific, formally Fisher Scientific International, Inc. and colloquially Fisher was a biotechnology company that provided products and services to the global scientific research and United States clinical laboratory markets. International, Experian, GNC GNC General Nutrition Centers GNC Gas Natural Comprimido (Argentina) GNC Guidance, Navigation, and Control GNC Grand National Championship (ATV racing) GNC Global Navigation Chart and Snapple Beverage.
AMERICAN MEDIA OPERATIONS, INC.
-------------------------------
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (LOSS)
--------------------------------------------------
(in thousands)
--------------
UNAUDITED
----------------------------------------------------
Three Months Ended Nine Months Ended
------------------------- -------------------------
December 29, December 27, December 29, December 27,
2003 2004 2003 2004
------------ ------------ ------------ ------------
Revenues $118,332 $129,393 $370,179 $399,402
------------ ------------ ------------ ------------
Operating expenses 86,879 97,371 259,662 298,237
Loss on insurance
settlement - - 200 -
Restructuring expense 34 - 2,739 -
Depreciation and
amortization 10,114 11,089 30,325 33,164
------------ ------------ ------------ ------------
Total operating
expenses 97,027 108,460 292,926 331,401
------------ ------------ ------------ ------------
Operating income 21,305 20,933 77,253 68,001
Interest expense (20,054) (21,198) (57,743) ( 62,173)
Other income
(expense), net (63) (8) (123) (109)
------------ ------------ ------------ ------------
Income (loss)
before income
taxes 1,188 (273) 19,387 5,719
Provision for
income taxes (496) (8) (7,375) (2,579)
------------ ------------ ------------ ------------
Net income (loss) $692 $(281) $12,012 $3,140
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