Business News
GateHouse Media Announces Second Quarter 2009 Results
Friday 07. August 2009 - Total reported revenues were $151.5 million, a 15.1% decline compared to the prior year.
Second Quarter 2009 Highlights
— Total reported revenues were $151.5 million, a 15.1% decline compared to the prior year.
— Total As Adjusted Revenues were $150.8 million, a decline of 15.2% on a same-store basis.
— Reported operating costs and SG&A expense decreased $17.7 million or 12.1% from the prior year.
— Reported net loss was $496.5 million as compared to a $443.3 million net loss in the prior year. The net loss includes non-cash impairment charges of $481.4 million and $436.1 million, respectively.
— As Adjusted EBITDA was $25.1 million, a 31.6% decline on a same-store basis.
— Levered Free Cash Flow per share was $0.16 versus $0.20 for the prior year.
GateHouse Media, Inc. (the “Company” or “GateHouse Media”) today reported financial results for the quarter ended June 30, 2009.
The Company reported total revenues of $151.5 million, which represented a decline of 15.1% versus prior year. Excluding discontinued operations, As Adjusted Revenues were $150.8 million for the quarter, down 15.2% on a same-store basis versus the same quarter in the prior year. The decline in same-store revenue was driven primarily by the print classified and local advertising categories, which were down 32.4% and 11.3%, respectively. Both categories continue to be impacted by the current recession. Circulation revenue declined 3.0% in the quarter on a same-store basis.
In the quarter, as reported operating and SG&A costs declined by $17.7 million or 12.1%. Same-store expenses declined by 10.9%, driven by compensation expense which declined 11.5%. Expense declines in the quarter reflect cost reduction initiatives implemented in the first half of the year and these trends are expected to continue throughout the year. In addition, declines in newsprint pricing and consumption resulted in a 14.1% reduction in newsprint expense. The Company anticipates it will continue to benefit from lower newsprint prices and consumption declines during the remainder of the year.
As Adjusted EBITDA for the quarter was $25.1 million which was down 31.6% on a same-store basis from the prior year. This was much improved from the 67.4% decline experienced in the first quarter. Levered Free Cash Flow for the second quarter was $9.0 million or $0.16 per share. This was down 20% from $0.20 in the prior year. Reported operating loss for the second quarter was $475.2 million reflecting an impairment charge related to goodwill, mastheads and other long-lived assets in the amount of $481.4 million recorded in the quarter. As a result of the most recent impairment charge, the Company has $14.4 million of goodwill, $36.7 million of mastheads and $271.7 million of other long-lived intangible assets remaining on its balance sheet at June 30, 2009. Excluding the impairment charge, operating income for the quarter was $6.2 million.
Interest expense for the quarter was $15.5 million, down $7.7 million or 33.1% versus the prior year. The decline was driven primarily by lower LIBOR rates.
Non-cash compensation expense for Restricted Stock Grants in the second quarter was $1.2 million. One-time costs and other non-cash expenses in the quarter were $1.8 million. These charges related primarily to reorganization and expense control initiatives introduced to realize permanent expense savings, particularly the reduction in staff levels given the current revenue environment.
Commenting on GateHouse Media’s results, Mike Reed, Chief Executive Officer, said, “While the recession continued to impact our performance, we were pleased with the progress we were able to make in the second quarter versus the first quarter of this year. Revenue trends improved slightly and we significantly reduced our run-rate expenses, resulting in better year-over-year performance with regard to As Adjusted EBITDA and Levered Cash Flow per share.
“Our total revenue on a same-store basis declined 15.2% which was slightly better than the 16.3% decline we saw in the first quarter. We are somewhat encouraged that our classified revenue declines versus the prior year improved each month from a 38.8% decline in January to a 30.1% decline June
“Total operating and SG&A expenses declined 12.1% in the second quarter, nearly doubling the 7.1% decline we achieved in the first quarter. This is the result of continued execution of cost reduction initiatives that we put in place to permanently lower our cost structure.
“Our As Adjusted EBITDA was $25.1 million for the quarter and our margin was 16.6%, both significantly improved from the first quarter. Our disciplined expense and cash management also resulted in levered cash flow of $9.0 million or $0.16 per share for the quarter.
“During the second half of 2009 we aim to further stabilize our cash flows through ongoing cost reductions. We also aim to strengthen our local market presence, improve our position as the leading provider of local news and information in each market we serve, execute on our local market digital strategy and position the Company to emerge from this recession in a very strong position.”