- Total Revenues of $387.6 million
- Operating loss of $1.4 million
- As Adjusted EBITDA of $33.1 million*
- Free Cash Flow of $21.0 million*
- Declared first quarter dividend of $0.38
-
On January 31, 2019, completed purchase of the publishing arm of
Schurz Communications
NEW YORK–(BUSINESS WIRE)–New Media Investment Group Inc. (NYSE: NEWM) today reported its
financial results for the first quarter ended March 31, 2019.
| ($ in million, except per share) | ||||||||
|
GAAP Reporting |
Q1 2019 |
Q1 2018 |
||||||
| Revenues | $ | 387.6 | $ | 340.8 | ||||
| Operating (loss) income | $ | (1.4 | ) | $ | 7.1 | |||
| Net loss attributable to New Media | $ | (9.1 | ) | $ | (0.7 | ) | ||
|
Non-GAAP Reporting* |
Q1 2019 |
Q1 2018 |
||||||
| As Adjusted EBITDA | $ | 33.1 | $ | 32.5 | ||||
| Free Cash Flow | $ | 21.0 | $ | 22.5 | ||||
*For definitions and reconciliations of Non-GAAP Reporting measures,
please refer to the Non-GAAP Financial Measures Note and reconciliations
below.
“Our results this quarter reflect both solid performance in our growth
businesses and continued progress in stabilizing our traditional print
business. Our revenue of $387.6 million was up 13.7% over the prior
year. Our growth businesses, UpCurve and GateHouse Live, accounted for
$34.9 million of total revenue, an increase of 27.3% compared to last
year. We are excited about the continued opportunity for growth in both
of these businesses for 2019 and beyond,” said Michael E Reed, New Media
President and Chief Executive Officer.
He continued: “As Adjusted EBITDA and Free Cash Flow were strong in the
quarter at $33.1 million and $21.0 million respectively. We have been
proactive in taking new measures to grow As Adjusted EBITDA, which is
reflected in our results. At the same time, these measures – which we
believe are crucial to driving profitability – have prevented us from
showing a positive same store revenue trend in recent quarters. In the
first quarter, same store revenue was down 7.4%, or 80 bps lower than
the fourth quarter. With the execution of planned As Adjusted
EBITDA-enhancing measures in the first quarter, we do expect to show
improvement in our same store revenue trend in the coming quarters.
Finally, in keeping with our goal to purchase strong assets that
integrate well into our portfolio, we completed our purchase of the
publishing arm of Schurz Communications on January 31, for $30.0
million.”
First Quarter 2019 Financial Results
New Media recorded total revenues of $387.6 million for the quarter, up
13.7% compared to the prior year, and down 7.4% on an organic same store
basis. The same store trend was marginally lower than the trend recorded
in the fourth quarter of 2018, primarily as a result of internal
initiatives undertaken to improve long term revenue growth opportunities
and profitability. An encouraging point from the quarter was that same
store revenue trends improved each month during the quarter. The company
also expects to see overall same store revenue and profitably trends
improve in Q2 and through 2019.
Traditional Print advertising revenue decreased 14.8% on an organic same
store basis compared to the prior year period. This decline was
consistent with the fourth quarter of 2018.
Digital revenue increased 23.8% on a reported basis from the prior year
to $47.7 million, which represents 12.3% of total revenue in the first
quarter. UpCurve generated $26.0 million in revenue, an increase of
34.0% as compared with the prior year on a reported basis.
Circulation revenue decreased 5.5% on an organic same store basis, due
in large part to our shift away from pricing increases as we work to
grow subscriber volumes. This strategic shift is working as demonstrated
by total subscriber volumes growing for the second consecutive quarter,
as compared to the prior year. Our digital-only subscription base grew
to 174,000, an increase of 43.9% compared to the prior year.
Commercial Print, Distribution and Events revenue increased 1.4%
compared to the prior year on an organic same store basis.
Operating loss was $1.4 million and Net loss attributable to New Media
was $9.1 million. These were burdened by $8.3 million in one-time
expenses, $4.2 million of which were non-cash expenses. Excluding these
one-time expenses, results would have been Operating income of $6.9
million and a Net loss attributable to New Media of $0.8 million.
As Adjusted EBITDA and Free Cash Flow were $33.1 million and $21.0
million, respectively.
First Quarter 2019 Dividend
New Media’s Board of Directors declared a first quarter 2019 cash
dividend of $0.38 per share of common stock. The dividend is payable on
May 22, 2019 to shareholders of record as of the close of business on
May 13, 2019.
The declaration and payment of any dividends are at the sole discretion
of the Board of Directors, which may decide to change the Company’s
dividend policy at any time.
Earnings Conference Call
New Media’s management will host a conference call on Thursday, May 2,
2019 at 9:00 A.M. Eastern Time. A copy of the earnings release will be
posted to the Investor Relations section of New Media’s
website, www.newmediainv.com.
All interested parties are welcome to participate on the live call. The
conference call may be accessed by dialing 1-855-319-1124 (from within
the U.S.) or 1-703-563-6359 (from outside of the U.S.) ten minutes prior
to the scheduled start of the call; please reference “New Media First
Quarter Earnings Call” or access code “2378656.”
A simultaneous webcast of the conference call will be available to the
public on a listen-only basis at www.newmediainv.com. Please allow extra
time prior to the call to visit the website and download any necessary
software required to listen to the internet broadcast.
A telephonic replay of the conference call will also be available
approximately two hours following the call’s completion through 11:59
P.M. Eastern Time on Thursday, May 6, 2019 by dialing 1-855-859-2056
(from within the U.S.) or 1-404-537-3406 (from outside of the U.S.);
please reference access code “2378656.”
About New Media Investment Group Inc.
New Media supports small to mid-size communities by providing
locally-focused print and digital content to its consumers and premier
marketing and technology solutions to our small and medium business
partners. The Company is one of the largest publishers of locally based
print and online media in the United States as measured by our 156 daily
publications. As of March 31, 2019, New Media operates in over
615 markets across 39 states reaching over 22 million people on a weekly
basis and serves over 200,000 business customers.
For more information regarding New Media and to be added to our email
distribution list, please visit www.newmediainv.com.
Same Store and Organic Same Store Revenues
Same store results take into account material acquisitions and
divestitures of the Company by adjusting prior year performance to
include or exclude financial results as if the Company had owned or
divested a business for the comparable period. The results of several
acquisitions (“tuck-in acquisitions”) were funded from the Company’s
available cash and are not considered material. Organic same store
revenues are same store revenues adjusted to remove non-material
acquisitions and non-material divestitures, and to adjust for Commercial
Print revenues that are now intercompany.
Non-GAAP Financial Measures
The Company strongly urges stockholders and other interested persons not
to rely on any single financial measure to evaluate its business. In
addition, because Adjusted EBITDA, As Adjusted EBITDA, and Free Cash
Flow are not measures of financial performance under GAAP and are
susceptible to varying calculations, these non-GAAP measures, as
presented in this press release, may differ from and may not be
comparable to similarly titled measures used by other companies.
Adjusted EBITDA, As Adjusted EBITDA, and Free
Cash Flow
The Company defines Adjusted EBITDA as net income (loss) from continuing
operations before income tax expense (benefit), interest/financing
expense, depreciation and amortization, and non-cash impairments. The
Company defines As Adjusted EBITDA as Adjusted EBITDA before transaction
and project costs, merger and acquisition related costs, integration and
reorganization costs, gain/loss on sale or disposal of assets, non-cash
items such as non-cash compensation, and Adjusted EBITDA from non-wholly
owned subsidiaries. The Company defines Free Cash Flow as As Adjusted
EBITDA less capital expenditures, cash taxes, interest paid, and pension
payments.
Management’s Use of Adjusted EBITDA, As
Adjusted EBITDA, and Free Cash Flow
Adjusted EBITDA, As Adjusted EBITDA, and Free Cash Flow are not measures
of financial performance under GAAP and should not be considered in
isolation or as alternatives to income from operations, net income
(loss), cash flow from continuing operating activities or any other
measure of performance or liquidity derived in accordance with GAAP. New
Media’s management believes these non-GAAP measures, as defined above,
are useful to investors for the following reasons:
-
Evaluating performance and identifying trends in day-to-day
performance because the items excluded have little or no significance
on the Company’s day-to-day operations; and -
Providing assessments of controllable expenses that afford management
the ability to make decisions which are expected to facilitate meeting
current financial goals as well as achieving optimal financial
performance.
We use Adjusted EBITDA, As Adjusted EBITDA, and Free Cash Flow as
measures of our deployed revenue generating assets between periods on a
consistent basis. We believe As Adjusted EBITDA and Free Cash Flow
measure our financial performance and help identify operational factors
that management can impact in the short term, mainly our operating cost
structure and expenses. We exclude mergers and acquisition, transaction,
and project related costs such as diligence activities and new financing
related costs because they represent costs unrelated to the day-to-day
operating performance of the business that management can impact in the
short term. We consider the loss on early extinguishment of debt to be
financing related costs associated with interest expense or amortization
of financing fees, which by definition are excluded from Adjusted
EBITDA. Such charges are incidental to, but not reflective of our
day-to-day operating performance of the business that management can
impact in the short term.
Forward-Looking Statements
Certain items in this press release may constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, including, but not limited to, statements regarding
our ability to execute on our business plan, including stabilizing our
print business, expected revenue trends, including expectations for same
store revenue and growth in our UpCurve and GateHouse Live businesses,
and our ability to grow subscriber volumes. These statements are based
on management’s current expectations and beliefs and are subject to a
number of risks and uncertainties, such as continued declines in
advertising and circulation revenues, economic conditions in the markets
in which we operate, including natural disasters, tariffs and other
factors affecting economic conditions generally, competition from other
media companies, the possibility of insufficient interest in our digital
and other businesses, technological developments in the media sector, an
ability to source acquisition opportunities with an attractive
risk-adjusted return profile, inadequate diligence of acquisition
targets, and difficulties integrating and reducing expenses, including
at our newly acquired businesses. These and other risks and
uncertainties could cause actual results to differ materially from those
described in the forward-looking statements, many of which are beyond
our control. The Company can give no assurance that its expectations
will be attained. Accordingly, you should not place undue reliance on
any forward-looking statements contained in this press release. For a
discussion of some of the risks and important factors that could cause
actual results to differ from such forward-looking statements, see the
risks and other factors detailed from time to time in the Company’s
Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other
filings with the Securities and Exchange Commission. Furthermore, new
risks and uncertainties emerge from time to time, and it is not possible
for the Company to predict or assess the impact of every factor that may
cause its actual results to differ from those contained in any
forward-looking statements. Such forward-looking statements speak only
as of the date of this press release. The Company expressly disclaims
any obligation to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change in the
Company’s expectations with regard thereto or change in events,
conditions or circumstances on which any statement is based.
| NEW MEDIA INVESTMENT GROUP INC. AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||||||||
| (In thousands, except share data) | ||||||||
| March 31, 2019 | December 30, 2018 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 24,597 | $ | 48,651 | ||||
| Restricted cash | 4,054 | 4,119 | ||||||
|
Accounts receivable, net of allowance for doubtful accounts of $8,042 at March 31, 2019 and December 30, 2018, respectively |
153,222 | 174,274 | ||||||
| Inventory | 24,972 | 25,022 | ||||||
| Prepaid expenses | 30,155 | 23,935 | ||||||
| Other current assets | 21,149 | 21,608 | ||||||
| Total current assets | 258,149 | 297,609 | ||||||
|
Property, plant, and equipment, net of accumulated depreciation of and $219,256 at March 31, 2019 and December 30, 2018, respectively |
347,766 | 339,608 | ||||||
| Operating lease right-of-use assets | 102,583 | – | ||||||
| Goodwill | 316,208 | 310,737 | ||||||
|
Intangible assets, net of accumulated amortization of $110,877 and |
485,026 | 486,054 | ||||||
| Other assets | 10,936 | 9,856 | ||||||
| Total assets | $ | 1,520,668 | $ | 1,443,864 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Current portion of long-term debt | $ | 11,296 | $ | 12,395 | ||||
| Current portion of operating lease liabilities | 13,415 | – | ||||||
| Accounts payable | 28,219 | 16,612 | ||||||
| Accrued expenses | 90,290 | 113,650 | ||||||
| Deferred revenue | 116,521 | 105,187 | ||||||
| Total current liabilities | 259,741 | 247,844 | ||||||
| Long-term liabilities: | ||||||||
| Long-term debt | 435,426 | 428,180 | ||||||
| Long-term operating lease liabilities | 96,248 | – | ||||||
| Deferred income taxes | 7,665 | 8,282 | ||||||
| Pension and other postretirement benefit obligations | 24,094 | 24,326 | ||||||
| Other long-term liabilities | 10,498 | 16,462 | ||||||
| Total liabilities | 833,672 | 725,094 | ||||||
| Redeemable noncontrolling interests | 1,298 | 1,547 | ||||||
| Stockholders’ equity: | ||||||||
|
Common stock, $0.01 par value, 2,000,000,000 shares authorized; 60,806,451 shares issued and 60,529,861 shares outstanding at March 31, 2019; 60,508,249 shares issued and 60,306,286 shares outstanding at December 30, 2018 |
608 |
|
605 | |||||
| Additional paid-in capital | 699,787 | 721,605 | ||||||
| Accumulated other comprehensive loss | (6,911 | ) | (6,881 | ) | ||||
| (Accumulated deficit) retained earnings | (5,224 | ) | 3,767 | |||||
|
Treasury stock, at cost, 276,590 and 201,963 shares at March 31, and December 30, 2018, respectively |
(2,562 | ) | (1,873 | ) | ||||
| Total stockholders’ equity | 685,698 | 717,223 | ||||||
|
Total liabilities, redeemable noncontrolling |
$ | 1,520,668 | $ | 1,443,864 | ||||
| NEW MEDIA INVESTMENT GROUP INC. AND SUBSIDIARIES | |||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
| AND COMPREHENSIVE LOSS (UNAUDITED) | |||||||||||
| (In thousands, except per share data) | |||||||||||
| Three months ended | |||||||||||
| March 31, 2019 | April 1, 2018 | ||||||||||
| Revenues: | |||||||||||
| Advertising | $ | 178,694 | $ | 163,259 | |||||||
| Circulation | 152,165 | 129,991 | |||||||||
| Commercial printing and other | 56,740 | 47,515 | |||||||||
| Total revenues | 387,599 | 340,765 | |||||||||
| Operating costs and expenses: | |||||||||||
| Operating costs | 229,495 | 196,389 | |||||||||
| Selling, general, and administrative | 131,508 | 118,819 | |||||||||
| Depreciation and amortization | 20,923 | 19,247 | |||||||||
| Integration and reorganization costs | 4,112 | 2,430 | |||||||||
| Impairment of long-lived assets | 1,207 | – | |||||||||
| Net loss (gain) on sale or disposal of assets | 1,789 | (3,171 | ) | ||||||||
| Operating (loss) income | (1,435 | ) | 7,051 | ||||||||
| Interest expense | 10,134 | 8,352 | |||||||||
| Other income | (260 | ) | (520 | ) | |||||||
| Loss before income taxes | (11,309 | ) | (781 | ) | |||||||
| Income tax benefit | (1,954 | ) | (116 | ) | |||||||
| Net loss | (9,355 | ) | (665 | ) | |||||||
| Net loss attributable to redeemable noncontrolling interests | (249 | ) | – | ||||||||
| Net loss attributable to New Media | $ | (9,106 | ) | $ | (665 | ) | |||||
| Loss per share: | |||||||||||
| Basic: | |||||||||||
| Net loss attributable to New Media | $ | (0.15 | ) | $ | (0.01 | ) | |||||
| Diluted: | |||||||||||
| Net loss attributable to New Media | $ | (0.15 | ) | $ | (0.01 | ) | |||||
| Dividends declared per share | $ | 0.38 | $ | 0.37 | |||||||
| Comprehensive loss | $ | (9,385 | ) | $ | (732 | ) | |||||
| Comprehensive loss attributable to redeemable | |||||||||||
| noncontrolling interests | (249 | ) | – | ||||||||
| Comprehensive loss attributable to New Media | $ | (9,136 | ) | $ | (732 | ) | |||||
| NEW MEDIA INVESTMENT GROUP INC. AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||||
| (In thousands) | ||||||||
| Three months Ended | ||||||||
| March 31, 2019 | April 1, 2018 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (9,355 | ) | $ | (665 | ) | ||
|
Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||
| Depreciation and amortization | 20,923 | 19,247 | ||||||
| Non-cash compensation expense | 1,136 | 1,163 | ||||||
| Non-cash interest expense | 344 | 504 | ||||||
| Deferred income taxes | (617 | ) | (92 | ) | ||||
| Net loss (gain) on sale or disposal of assets | 1,789 | (3,171 | ) | |||||
| Impairment of long-lived assets | 1,207 | – | ||||||
| Pension and other postretirement benefit obligations | (276 | ) | (369 | ) | ||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable, net | 24,684 | 19,409 | ||||||
| Inventory | 988 | (3,169 | ) | |||||
| Prepaid expenses | (5,680 | ) | (3,888 | ) | ||||
| Other assets | (103,641 | ) | (1,289 | ) | ||||
| Accounts payable | 10,803 | 3,030 | ||||||
| Accrued expenses | (6,289 | ) | (17,573 | ) | ||||
| Deferred revenue | 5,327 | 4,027 | ||||||
| Other long-term liabilities | 90,399 | 1,499 | ||||||
| Net cash provided by operating activities | 31,742 | 18,663 | ||||||
| Cash flows from investing activities: | ||||||||
| Acquisitions, net of cash acquired | (37,953 | ) | (29,409 | ) | ||||
| Purchases of property, plant, and equipment | (2,242 | ) | (1,929 | ) | ||||
| Proceeds from sale of real estate and other assets | 2,465 | 9,207 | ||||||
| Net cash used in investing activities |
|
(37,730 | ) | (22,131 | ) | |||
| Cash flows from financing activities: | ||||||||
| Payment of debt issuance costs | – | (500 | ) | |||||
| Borrowings under term loans | – | 49,750 | ||||||
| Repayments under term loans | (2,197 | ) | (1,031 | ) | ||||
| Borrowings under revolving credit facility | 54,400 | – | ||||||
| Repayments under revolving credit facility | (46,400 | ) | – | |||||
| Purchase of treasury stock | (689 | ) | (735 | ) | ||||
| Payment of dividends | (23,245 | ) | (20,046 | ) | ||||
| Net cash (used in) provided by financing activities | (18,131 | ) | 27,438 | |||||
|
Net (decrease) increase in cash, cash equivalents |
(24,119 | ) | 23,970 | |||||
| Cash, cash equivalents and restricted cash at beginning of period | 52,770 | 46,162 | ||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 28,651 | $ | 70,132 | ||||
| NEW MEDIA INVESTMENT GROUP INC. AND SUBSIDIARIES | ||||||||
| AS ADJUSTED EBITDA AND FREE CASH FLOW | ||||||||
| (In thousands, except share data) | ||||||||
| Three months ended | ||||||||
| March 31, 2019 | April 1, 2018 | |||||||
| Net loss | $ | (9,355 | ) | $ | (665 | ) | ||
| Income tax benefit | (1,954 | ) | (116 | ) | ||||
| Interest expense | 10,134 | 8,352 | ||||||
| Impairment of long-lived assets | 1,207 | – | ||||||
| Depreciation and amortization | 20,923 | 19,247 | ||||||
| Adjusted EBITDA | 20,955 | 26,818 | ||||||
| Non-cash compensation and other expense | 6,201 | 6,450 | ||||||
| Integration and reorganization costs | 4,112 | 2,430 | ||||||
| Net loss (gain) on sale or disposal of assets | 1,789 | (3,171 | ) | |||||
|
As Adjusted EBITDA |
33,057 | 32,527 | ||||||
| Interest Paid(1) | (9,567 | ) | (7,680 | ) | ||||
| Net capital expenditures | (2,242 | ) | (1,929 | ) | ||||
| Pension payments | (276 | ) | (369 | ) | ||||
| Cash taxes(2) | (13 | ) | – | |||||
| Free Cash Flow | $ | 20,959 | $ | 22,549 | ||||
| Basic weighted average shares outstanding | 59,965,036 | 52,934,640 | ||||||
| Diluted weighted average shares outstanding | 59,965,036 | 52,934,640 | ||||||
| (1) Average interest paid during 2019 for the three-month period. | ||||||||
| (2) Cash paid, net of refunds. | ||||||||
| NEW MEDIA INVESTMENT GROUP INC. AND SUBSIDIARIES | ||||||||
| SAME STORE AND ORGANIC SAME STORE REVENUES | ||||||||
| (In thousands) | ||||||||
| Three months ended | ||||||||
| March 31, 2019 | April 1, 2018 | |||||||
| Total revenues from continuing operations | $ | 387,599 | $ | 340,765 | ||||
| Revenue adjustment for material acquisitions | – | – | ||||||
| Same Store Revenues | 387,599 | 340,765 | ||||||
| Tuck-in Acquisitions(1) | (73,059 | ) | (1,083 | ) | ||||
| Organic Same Store Revenues | $ | 314,540 | $ | 339,682 | ||||
|
(1) Tuck-in acquisitions are adjusted to remove non-material acquisitions and non-material divestitures, |
||||||||
|
and to adjust for Commercial Print revenues that are now intercompany. |
||||||||
Contacts
Ashley Higgins, Investor Relations
[email protected]
(212)
479-3160
