Newspaper & Mailroom

American Media, Inc. Reports Results For Third Quarter Of Fiscal Year 2013

Thursday 14. February 2013 - -- Revenue Decreases Slightly to $85 Million, Partially Offset by Decline in Expenses Resulting in Adjusted EBITDA for the Quarter of $26 million, up 22% from prior year --

American Media, Inc. (AMI), the leading content centric media company specializing in celebrity journalism and health and fitness in the U.S., today reported its financial results for the third fiscal quarter ended December 31, 2012.
Revenue
Revenue for the third quarter of fiscal year 2013 was $85 million, compared to $88 million in the third quarter of fiscal year 2012, representing a 3% decrease. For the nine months ended December 31, 2012, revenue was $262 million, as compared to $286 million, an 8% decrease, compared to prior year. The decrease in revenue during both the quarter and nine-month periods primarily reflected the negative impact of Superstorm Sandy, the shift of print advertising dollars to broadcast for the 2012 Summer Olympics and the overall general market weakness for advertising spending due to the continued downturn in the U.S. economy.
Operating Income
Operating income before impairment charges for the third quarter of fiscal year 2013 was $12 million, or $0.8 million higher than the prior year’s third quarter. For the nine months ended December 31, 2012, operating income before impairment charges was $38 million, or $7 million lower than the prior-year period. The decrease in operating income during the nine-month period was primarily due to the above-mentioned decrease in revenue, as well as duplicative expenses incurred in connection with Superstorm Sandy, partially offset by cost reductions generated by the Company as it implemented its management action plans.
Non-cash Impairment of Goodwill and Intangibles
As a result of the Company’s interim impairment testing, the operating results for the third quarter of fiscal year 2013 reflect non-cash goodwill impairment charges of $47 million and non-cash tradename impairment charges of $7 million. These non-cash impairment charges impacted the Celebrity Brands segment ($42 million), the Women’s Active Lifestyle segment ($4 million) and the Men’s Active Lifestyle segment ($8 million).
Earnings Before Interest, Taxes, Depreciation, Amortization and Other Non-Recurring Items (Adjusted EBITDA)
Adjusted EBITDA for the third quarter of fiscal year 2013 was $26 million, compared to $21 million for the third quarter of fiscal year 2012, representing a 22% increase. Adjusted EBITDA for the twelve months ended December 31, 2012 was basically flat to the prior-year period at $106 million.
For a reconciliation of Net Income (Loss) to Adjusted EBITDA and additional information regarding Adjusted EBITDA, please refer to the Sections below titled “Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures” and “Rationale for Use of Non-GAAP Financial Measures”.
Cash
At December 31, 2012, the Company had cash and cash equivalents of $10 million, as well as $20 million outstanding on its revolving credit facility.
Comments By Senior Management
AMI Chairman and Chief Executive Officer David Pecker said, “For Calendar Year 2012, the consumer magazine advertising market was down 8% versus 2011. This general market decline, coupled with the impact of Superstorm Sandy, impacted AMI’s third fiscal quarter advertising revenue, which was down $2 million, or 9%.”
“The revenue shortfall was totally offset by the management action plans we implemented in fiscal year 2012 and fiscal year 2013,” continued Mr. Pecker. “These revenue enhancements and expense reductions more than offset the revenue shortfalls and resulted in a 22% increase in Adjusted EBITDA for the quarter to $26 million.”
AMI Executive Vice President and Chief Financial Officer Chris Polimeni said, “We will continue to operate our business in a disciplined fashion for the balance of fiscal 2013, targeting the opportunities outlined in our management action plans, and project to realize $13 million of cost savings related to SG&A, staff and production, as well as revenue enhancements of $8 million from publishing special edition magazines under the Star, OK!, National Enquirer, Shape, Men’s Fitness and other key AMI brands.”