American Media Operations, Inc. Reports Third Quarter Results.Business Editors DELRAY BEACH Delray Beach, resort city (1990 pop. 47,181), Palm Beach co., SE Fla., on the Atlantic coast; settled 1895, inc. 1911. Mostly residential, Delray Beach is also the trade center for a citrus-fruit and vegetable-growing region. , Fla.--(BUSINESS WIRE)--Feb. 5, 2002 American Media, Inc. today announced results for the third quarter and nine months ended December 24, 2001. Revenues for the December 2001 fiscal quarter were $94,552,000 compared to $98,378,000 for the prior year quarter. Results in this quarter reflect a loss of revenues from discontinued/sold operations of $1.1 million. Circulation revenue for continuing publications decreased $4.4 million primarily due to the cancellation of several expanded issues and decreased newsstand copies sold, we believe due to the anthrax anthrax (ăn`thrăks), acute infectious disease of animals that can be secondarily transmitted to humans. It is caused by a bacterium (Bacillus anthracis incident at AMI discussed below. Advertising revenues increased 5.0%, from $10.4 million to $10.9 million, despite a weak industry-wide advertising climate. 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 (loss) before interest expense, income taxes, depreciation and amortization and other income) for the December 2001 fiscal quarter was $32,070,000 versus $36,338,000 in the prior fiscal quarter. The decrease in EBITDA is primarily attributable to the circulation revenue decline as noted above. Net loss was $4,053,000 for the December 2001 fiscal quarter compared to a net loss of $4,119,000 in the prior year fiscal quarter. Revenues for the nine months ended December 24, 2001 were $294,580,000 compared to $295,240,000 for the prior year period. Results for the three quarters reflect a loss of revenues from discontinued/sold operations of $4.6 million. Circulation revenue for continuing publications decreased $1.5 million primarily due to the circulation decline noted above. This decline in circulation revenue was partially offset by the increased cover prices as compared to the prior year period. Advertising revenues increased 12.2% from $26.0 million to $29.2 million. Production expenses increased 4.3%, or $3.2 million, primarily due to increased paper prices in fiscal 2002 versus the prior year period. As a result, EBITDA (net income (loss) before extraordinary charges, interest expense, income taxes, depreciation and amortization and other income) for the nine month period was $97,927,000 versus $101,955,000 in the prior year period. The net loss was $13,158,000 for nine month period ended December 24, 2001 compared to a net loss of $13,224,000 in the prior year period. The Company's 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. headquarters, which housed substantially all editorial operations (including its photo, clipping and research libraries), executive offices and certain administrative functions, was closed on October 7, 2001 by the Palm Beach County Department of Health when traces of anthrax were found on a computer keyboard following the death of a photo editor of the Sun from inhalation anthrax inhalation anthrax Pulmonary anthrax, woolsorter's disease Pulmonology Occupational anthrax caused by inhalation of Brucella anthracis spores, affecting those exposed to aerosols during early processing of goat or other infected animal hair Clinical . In response to the closure of the Boca facility, the Company immediately implemented its hurricane disaster plan to produce all the weekly publications as originally scheduled. The Company temporarily moved its editorial operations into a facility being leased on a short-term basis, which expires in February 2002. As a result of the uncertainty on the timing of being able to return to the Boca Raton headquarters, we have entered into a two year lease for a 53,000 square foot facility two blocks from our current Boca Raton headquarters. We will remain in this leased facility until the Palm Beach County Health Department, OSHA OSHA n. Occupational Safety and Health Administration, a branch of the US Department of Labor responsible for establishing and enforcing safety and health standards in the workplace. (Occupational Safety and Health Administration Occupational Safety and Health Administration (OSHA), U.S. agency established (1970) in the Dept. of Labor (see Labor, United States Department of) to develop and enforce regulations for the safety and health of workers in businesses that are engaged in interstate ) and NIOSH NIOSH National Institute for Occupational Safety & Health, see there NIOSH Recommendations for Safety & Health Standards Agent NIOSH REL*/OSHA PEL† Health effects (National Institute for Occupational Safety and Health National Institute for Occupational Safety and Health, n.pr an institute of the Centers for Disease Control and Prevention that is responsible for assuring safe and healthful working conditions and for developing standards of safety and health. ) deems the Boca Raton facility is safe to return to, or if we are unable to return, we will extend the lease term on this new facility or seek an alternative location. The Company has property insurance on its Boca Raton headquarters and on the building's contents and also has business interruption insurance Noun 1. business interruption insurance - insurance that provides protection for the loss of profits and continuing fixed expenses resulting from a break in commercial activities due to the occurrence of a peril . The amount of any potential loss and related insurance recovery is indeterminable at this time. We believe as a result of the anthrax incident, we have experienced a decline in circulation. When the incident first occurred, there were specific concerns and consumer discomfort and lack of knowledge with respect to the safety of our magazines. The Company quickly responded to safety concerns with an extensive public relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most effort to educate consumers that there was no health risk in buying our magazines. Since the first issues following the anthrax incident, we have witnessed a steady improvement 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. , although they remain below normalized levels. Mr. Pecker said, "We are very gratified grat·i·fy tr.v. grat·i·fied, grat·i·fy·ing, grat·i·fies 1. To please or satisfy: His achievement gratified his father. See Synonyms at please. 2. with our results for the quarter and year-to-date despite being the first company to experience a bio-terrorist attack that resulted in a fatality, the loss of our corporate headquarters with all its contents and the fact that all our employees were required to take antibiotics during this time. Our employees have continued to dedicate themselves to producing high quality publications under difficult circumstances. We anticipate that we will be moving into our new leased facility in mid-February and look forward to introducing our new 60-page format of the National Enquirer En`quir´er n. 1. See Inquirer. Noun 1. enquirer - someone who asks a question asker, inquirer, querier, questioner and Star magazine in April of 2002." American Media Operations, Inc. owns and publishes the National Enquirer, 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, Country Music Magazine, 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. 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 supermarket and drugstore newspaper and magazine distribution company. Evercore Partners, based in 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 and Los Angeles, makes private equity investments through its Evercore Capital Partners affiliate and venture investments through its Evercore Ventures affiliate. Evercore also provides strategic, financial and restructuring advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal . Evercore Capital Partners' investments include: American Media, Vertis, Resources Connection, Energy Partners, Continental Energy Services and Telenet/Callahan Associates International. Ventures investments include Xdrive, Go2Systems, Business.com and Atheros. Recent advisory work includes advising ACNielsen on its merger with VNU VNU Volontaires des Nations Unies (French) VNU Verenigde Nederlandse Uitgeversbedrijven (Dutch) VNU Virtual Network User N.V. and General Mills on its acquisition of Pillsbury from Diageo plc.
AMERICAN MEDIA OPERATIONS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (LOSS)
(in thousands)
UNAUDITED
Three Months Ended Nine Months Ended
------------------ -----------------
December 25, December 24, December 25, December 24,
2000 2001 2000 2001
------------ ------------ ------------ ------------
Revenues $ 98,378 $ 94,552 $ 295,240 $ 294,580
--------- --------- --------- ---------
Operating expenses 62,040 62,482 193,285 196,653
Depreciation and
amortization 21,022 19,704 57,768 58,641
--------- --------- --------- ---------
Total operating
expenses 83,062 82,186 251,053 255,294
--------- --------- --------- ---------
Operating income 15,316 12,366 44,187 39,286
Interest expense (18,273) (15,611) (54,084) (48,581)
Other income, net 387 46 806 127
--------- --------- --------- ---------
Loss before income
taxes (2,570) (3,199) (9,091) (9,168)
Provision for income
taxes 1,549 854 4,133 3,990
--------- --------- --------- ---------
Net loss $ (4,119) $ (4,053) $ (13,224) $ (13,158)
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EBITDA:
Net loss $ (4,119) $ (4,053) $ (13,224) $ (13,158)
Add (deduct) -
Interest expense 18,273 15,611 54,084 48,581
Income taxes 1,549 854 4,133 3,990
Depreciation and
amortization 21,022 19,704 57,768 58,641
Other income (387) (46) (806) (127)
--------- --------- --------- ---------
EBITDA $ 36,338 $ 32,070 $ 101,955 $ 97,927
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