American Media Operations, Inc. Reports Second Quarter and First Half Results.

Business Editors

BOCA RATON, Fla.--(BUSINESS WIRE)--Nov. 13, 2003

American Media, Inc. (AMI) today announced results for the second quarter and six months ended September 29, 2003.

Revenues for the September 2003 fiscal quarter were $126,873,000 compared to $92,092,000 for the prior year quarter. Overall revenues increased $34.8 million, or 37.8%, primarily due to the Weider acquisition. Advertising revenues increased 304.4%, from $9.5 million to $38.5 million, primarily due to the Weider acquisition. Circulation revenues increased by $3,842,000, or 5.0%, to $80.5 million, when compared to the prior year's comparable fiscal quarter. The circulation increase was primarily related to the Weider acquisition partially offset by a 19% decrease in unit sales for the tabloids from the prior year's quarter. Contributing to the tabloid decline in unit sales were factors including the ongoing war in Iraq, continued declines in wholesaler service levels, and increased competition in the celebrity marketplace. Checkout titles are down 11.3% versus prior year on an industry-wide basis. The Company's tabloids' unit sales have improved sequentially and are up 3% in the third quarter versus the second quarter.

Adjusted EBITDA (net income (loss) before interest expense, income taxes, depreciation and amortization, other income, restructuring expense and recapitalization bonus) for the September 2003 fiscal quarter increased from the prior year ($39,956,000 versus $33,722,000) as a result of the Weider acquisition. The restructuring expense is the cost related to the relocation of publications to the Company's New York facility. The recapitalization bonus is a one-time non-recurring bonus paid in connection with the recapitalization of the Company.

Net income was $5,938,000 for the September 2003 fiscal quarter compared to net income of $7,986,000 in the prior year fiscal quarter. The decrease in net income was due, in part, to increased interest expense and amortization as a result of the Weider acquisition.

Revenues for the six months ended September 2003 were $251,847,000 compared to $180,915,000 for the prior year period. Overall revenues increased $70.9 million, or 39.2%, primarily due to the Weider acquisition. Advertising revenues increased 292.4%, from $19.4 million to $76.2 million, primarily due to the Weider acquisition. Circulation revenues increased by $9,636,000, or 6.4%, to $159.8 million, when compared to the prior year's comparable fiscal period. The circulation increase was primarily related to the Weider acquisition partially offset by a 15% decrease in unit sales for the tabloids from the prior year's period. As mentioned earlier, checkout titles are down 11.3% versus prior year on an industry wide basis.

Adjusted EBITDA (net income (loss) before interest expense, income taxes, depreciation and amortization, other income, restructuring expense and recapitalization bonus) for the six-month period increased from the prior year ($81,174,000 versus $65,517,000) as a result of the Weider acquisition.

Net income was $11,320,000 for the six months ended September 29, 2003 compared to net income of $16,038,000 in the prior year period. The decrease in net income was due, in part, to increased interest expense and amortization as a result of the Weider acquisition.

David J. Pecker, American Media's Chairman, President and CEO said, "We are satisfied with our results of $251.8 million of revenues and $81.2 million of adjusted EBITDA for the six months ended September 29, 2003, considering the continued difficult environment for the publishing industry. The celebrity journalism market has become fiercely competitive in the past year, and this has impacted our unit sales. To counteract this, we named Bonnie Fuller as AMI Editorial Director in late June. Bonnie brings to AMI an unparalleled 20 year track record of publishing success, most recently at US Weekly, where she increased newsstand sales from 274,000 copies to over 500,000 in 15 months and took market share from AMI's Star tabloid. Bonnie's first priority is to re-launch Star as a 116-page glossy magazine this January, beginning with the New York and California markets and rolling out nationally by March.

"We also successfully integrated all the Weider properties into AMI," Mr. Pecker added, "and the results are even better than we originally expected. We continue to improve these titles, most recently with the redesign and re-launch of Men's Fitness and Natural Health."

American Media Operations, Inc. owns and publishes personality journalism under the names National Enquirer, Star, Weekly World News, Globe, National Examiner, Sun, Country Weekly, MIRA! and Auto World Magazine. AMI also owns Distribution Services, Inc. (DSI), the leading in-store sales and marketing company.

American Media Operations, Inc. also owns and publishes health and fitness magazines under the names Muscle & Fitness, Shape, Men's Fitness, Muscle & Fitness Hers, Flex, Fit Pregnancy and Natural Health.

On April 17, 2003, we completed a series of transactions whereby principals of Evercore Partners, Thomas H. Lee Partners, 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 and New York, manages approximately $1.3 billion of committed capital through its Evercore Capital Partners ("ECP") affiliate. ECP investments include AMI, Energy Partners, 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. Notable transactions sponsored by the firm include: ProSiebenSat.1, Houghton Mifflin, TransWestern Publishing, National Waterworks, Endurance Specialty Insurance, Vertis, Eye Care Centers of America, Cott Corporation, United Industries, Rayovac, Fisher Scientific International, Experian, GNC and Snapple Beverage.

                   AMERICAN MEDIA OPERATIONS, INC.
             CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                            (in thousands)

                                            UNAUDITED
                           -------------------------------------------
                            Three Months Ended     Six Months Ended
                           --------------------- ---------------------
                           Sept. 23,  Sept. 29,  Sept. 23,  Sept. 29,
                              2002       2003       2002       2003
                           ---------- ---------- ---------- ----------

Revenues                     $92,092   $126,873   $180,915   $251,847
                           ---------- ---------- ---------- ----------

Operating expenses            58,349     86,717    115,281    172,783
Loss on insurance
 settlement                       21        200        117        200
Restructuring expense              -      2,705          -      2,705
Depreciation and
 amortization                  8,315     10,193     15,146     20,211
                           ---------- ---------- ---------- ----------

Total operating expenses      66,685     99,815    130,544    195,899
                           ---------- ---------- ---------- ----------

Operating income              25,407     27,058     50,371     55,948

Interest expense             (11,380)   (17,639)   (24,846)   (37,689)
Other income (expense), net       53         95        103        (60)
                           ---------- ---------- ---------- ----------

Income before income taxes    14,080      9,514     25,628     18,199

Provision for income taxes     6,094      3,576      9,590      6,879
                           ---------- ---------- ---------- ----------

Net income                    $7,986     $5,938    $16,038    $11,320
                           ========== ========== ========== ==========

EBITDA:
  Net income                  $7,986     $5,938    $16,038    $11,320
  Add (deduct) -
   Interest expense           11,380     17,639     24,846     37,689
   Income taxes                6,094      3,576      9,590      6,879
   Depreciation and
    amortization               8,315     10,193     15,146     20,211
   Other (income) expense,
    net                          (53)       (95)      (103)        60
                           ---------- ---------- ---------- ----------

EBITDA                       $33,722    $37,251    $65,517    $76,159
                           ========== ========== ========== ==========

  Add  -
   Restructuring expense           -      2,705          -      2,705
   Recapitalization bonus          -          -          -      2,310
                           ---------- ---------- ---------- ----------

Adjusted EBITDA              $33,722    $39,956    $65,517    $81,174
                           ========== ========== ========== ==========