American Media Operations, Inc. Reports Third Quarter Results.Business Editors 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.--(BUSINESS WIRE)--Feb. 17, 2004 American Media, Inc. (AMI) today announced results for the third quarter and nine months ended December 29, 2003. Revenues for the December 2003 fiscal quarter were $118,332,000 compared to $90,670,000 for the prior year quarter. Total revenues increased $27.7 million, or 30.5%, advertising revenues increased 183.2%, from $10.3 million to $29.2 million, and circulation revenues increased by $ 7,420,000, or 10.0%, to $81.5 million, when compared to the prior year's comparable fiscal quarter. These revenue increases were primarily related to the Weider acquisition partially offset by a 9.7% decrease in unit sales unit sales Sales measured in terms of physical units rather than dollars. Unit sales data are often used by financial analysts when evaluating the health of a company. for the tabloids from the prior year's quarter. Contributing to the tabloid decline in unit sales were factors including increased competition in the celebrity journalism marketplace and the continuing supermarket strike in Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, . All checkout titles were down 13% versus prior year on an industry-wide basis. Adjusted 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 (net income before interest expense, income taxes, depreciation and amortization, other income (expense), restructuring expense and recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. bonus) for the December 2003 fiscal quarter decreased from the prior year ($31,453,000 versus $33,336,000). The decline in EBITDA is primarily due to the aforementioned decrease in unit sales for the tabloids as well as one-time investments in Star magazine in preparation of its re-launch from a tabloid to a glossy magazine. The restructuring expense is the people cost related to the relocation of publications to the Company's 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 offices. The recapitalization bonus is a one-time non-recurring bonus paid in connection with the recapitalization of the Company. Net income was $692,000 for the December 2003 fiscal quarter compared to net income of $6,915,000 in the prior year fiscal quarter. The decrease in net income was primarily due to the decrease in EBITDA, coupled with increased interest expense and amortization as a result of the Weider acquisition. Revenues for the nine months ended December 2003 were $370,179,000 compared to $271,585,000 for the prior year period. Total revenues increased $98.6 million, or 36.3%, advertising revenues increased 254.5%, from $29.7 million to $105.3 million, and circulation revenues increased by $17,056,000, or 7.6%, to $241.4 million, when compared to the prior year's comparable fiscal period. These revenue increases were primarily related to the Weider acquisition partially offset by a 13.8% decrease in unit sales for the tabloids from the prior year's period. Contributing to the tabloid decline in unit sales was the increased competition in the celebrity journalism marketplace and the continuing supermarket strike in Southern California. As mentioned earlier, checkout titles were down 13% versus prior year on an industry wide basis. Adjusted EBITDA (net income before interest expense, income taxes, depreciation and amortization , other income (expense), restructuring expense and recapitalization bonus) for the nine-month period increased from the prior year ($112,627,000 versus $98,853,000) as a result of the Weider acquisition. Net income was $12,012,000 for the nine months ended December 29, 2003 compared to net income of $22,953,000 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 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. said, "Our results of $370.2 million of revenues and $112.6 million of adjusted EBITDA for the nine months ended December 29, 2003, were impacted by the continued difficult environment for the publishing industry. The celebrity journalism market has become fiercely competitive in the past year, and coupled with the supermarket strike in Southern California, has contributed to our unit sales decline. We named Bonnie Fuller Bonnie Fuller was the editor of Flare magazine, YM magazine, the first American edition of Marie Claire magazine, Cosmopolitan magazine, Glamour magazine (beginning in 1998), and Us Weekly. as AMI Editorial Director in June 2003. Bonnie bon·ny also bon·nie adj. bon·ni·er, bon·ni·est Scots 1. Physically attractive or appealing; pretty. 2. Excellent. 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 has re-launched Star as a 96-page glossy magazine this past January, beginning with the New York and California markets and rolling out nationally April 1st. Star is seeing substantial acquisition of new, younger readers based on the content and format changes. Advertisers such as General Motors, Miramax, Wrigley's and Movado who never advertised in Star, committed to the test issues. "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 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. and Natural Health." American Media Operations, Inc. owns and publishes personality journalism under the names National Enquirer En`quir´er n. 1. See Inquirer. Noun 1. enquirer - someone who asks a question asker, inquirer, querier, questioner , Star, Weekly World News, 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. , Sun, Country Weekly, 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'. ! and Auto World Magazine, as well as health and fitness magazines under the names Muscle & Fitness, Shape, Men's Fitness, Muscle & Fitness Hers, Flex, Fit Pregnancy and Natural Health. AMI also owns Distribution Services, Inc. (DSI (Dynamic Systems Initiative) An umbrella term for a suite of Microsoft products that help manage the Windows environment in large enterprises. DSI was introduced in 2003. ), the leading in-store 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  This article or section is written like an .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, 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 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 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.
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------
(in thousands)
--------------
UNAUDITED
---------------------------------------------
Three Months Ended Nine Months Ended
------------------ -------------------
Dec. 23, Dec. 29, Dec. 23, Dec. 29,
2002 2003 2002 2003
-------- -------- -------- --------
Revenues $90,670 $118,332 $271,585 $370,179
-------- -------- -------- --------
Operating expenses 57,170 86,879 172,451 259,662
Loss on insurance
settlement 164 - 281 200
Restructuring expense - 34 - 2,739
Depreciation and
amortization 7,302 10,114 22,448 30,325
-------- -------- -------- --------
Total operating
expenses 64,636 97,027 195,180 292,926
-------- -------- -------- --------
Operating income 26,034 21,305 76,405 77,253
Interest expense (15,085) (20,054) (39,931) (57,743)
Other income
(expense), net 121 (63) 224 (123)
-------- -------- -------- --------
Income before
income taxes 11,070 1,188 36,698 19,387
Provision for income
taxes 4,155 496 13,745 7,375
-------- -------- -------- --------
Net income $6,915 $692 $22,953 $12,012
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EBITDA:
Net income $6,915 $692 $22,953 $12,012
Add (deduct) -
Interest expense 15,085 20,054 39,931 57,743
Income taxes 4,155 496 13,745 7,375
Depreciation and
amortization 7,302 10,114 22,448 30,325
Other (income)
expense, net (121) 63 (224) 123
-------- -------- -------- --------
EBITDA $33,336 $31,419 $98,853 $107,578
Add -
Restructuring
expense - 34 - 2,739
Recapitalization
bonus - - - 2,310
-------- -------- -------- --------
Adjusted EBITDA $33,336 $31,453 $98,853 $112,627
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