Enterprising Investor
5 years ago
New Media Investment Group to Acquire Gannett (8/05/19)
Two Leading Media and Marketing Solutions Companies
Align to Preserve and Enhance Quality Journalism
Creates the leading U.S. print and digital news organization with deep local roots and nationwide scale
Michael Reed to remain Chairman of the Board of Directors and Chief Executive Officer;
Alison Engel expected to become Chief Financial Officer;
Paul Bascobert, newly appointed Chief Executive Officer of Gannett, will become Chief Executive Officer of the combined company’s operating subsidiary
Strategically-aligned leadership committed to expanding and promoting digital offerings and high-quality journalism
Anticipated run-rate cost synergies of $275 - $300 million annually, unlocking meaningful shareholder value
New Media’s external management agreement to be amended at closing and terminated in 2021
NEW YORK & MCLEAN, Va.--(BUSINESS WIRE)--New Media Investment Group Inc. (“New Media”) (NYSE: NEWM) and Gannett Co., Inc. (“Gannett”) (NYSE: GCI) announced today that New Media and Gannett have entered into a definitive agreement (the “Merger Agreement”) pursuant to which New Media will acquire Gannett for a combination of cash and stock (the “Merger”).
Under the terms of the Merger Agreement, shareholders of Gannett will receive $6.25 in cash and 0.5427 of a New Media share for each Gannett share they hold, representing total consideration of $12.06 per Gannett common share based on New Media’s closing stock price as of August 2, 2019, and a premium of approximately 18% to the five-day volume-weighted average price of Gannett shares as of that date. After the close of the transaction, Gannett shareholders will hold approximately 49.5% of the combined company and New Media shareholders will hold approximately 50.5%.
The Merger brings together the portfolios of two leading local newspaper companies, and includes USA TODAY, Gannett’s flagship brand, and its more than 160 brands in the U.K., which will significantly expand the existing USA TODAY NETWORK. This combination will create a broad network of talented, experienced journalists poised to deliver unique and award-winning content for local communities and national audiences. The breadth and depth of each company’s digital offerings will make the combined company a leading digital media player. Additionally, the joining of New Media’s UpCurve and GateHouse Live businesses with Gannett’s ReachLocal and WordStream subsidiaries will provide multiple, diversified marketing and revenue solutions and position the combined company as a stronger partner for advertisers and small businesses (“SMBs”) in the markets served.
With strategically-aligned leadership and significant scale of operations, the Merger will accelerate the combined company’s digital transformation. The Merger also affords an opportunity to realize run-rate cost synergies of $275 - $300 million annually across the combined company in a judicious manner, while continuing to invest in newsrooms.
“We believe this transaction will create value for our shareholders, greater opportunities for our employees, and a stronger future for journalism. Gannett is an innovative, digitally-focused media and marketing solutions company with well-known brands worldwide. Uniting our talented employees and complementary portfolios will enable us to expand our comprehensive, hyperlocal coverage for consumers, deepen our product offering for local businesses, and accelerate our shift from print-centric to dynamic multimedia operations. We are honored to become a part of Gannett’s storied history and a steward of their strong media properties into the future. We are committed to delivering significant synergies in a thoughtful manner, consistent with our shared goals for the business,” said Michael Reed, New Media Chairman and Chief Executive Officer.
“The Gannett Board unanimously determined that this combination with New Media is in the best interests of Gannett shareholders, customers, audiences, and employees, providing significant and immediate value, as well as the ability to benefit from the upside potential of the combined company,” said J. Jeffry Louis, Chairman of the Gannett Board of Directors. “We see numerous opportunities to leverage the combined company’s enhanced scale and financial strength to continue to drive growth in the digital future. Importantly, we have found in New Media a strong partner and cultural fit for Gannett as we continue delivering on a shared commitment to journalistic excellence for the communities we serve.”
The companies will co-host a call to discuss the transaction and second quarter earnings on August 5, 2019 at 4:15 p.m. Eastern Time. Please visit the Investor Relations section of either company’s website (www.newmediainv.com or www.gannett.com).
Compelling Strategic & Financial Benefits
Enhanced scale. New Media and Gannett share a strategic vision, and the combined company’s significantly enhanced scale of operations will enable it to realize this vision more rapidly, while generating value for shareholders and benefits for employees and other stakeholders. The Merger will create a leading local and national media company with 263 daily media organizations across 47 states and Guam and USA TODAY, reaching more than 145 million unique visitors every month, as measured by Comscore. This scale will meaningfully enhance the combined company’s financial profile by leveraging nationwide reach and local presence to expand and deepen relationships with consumers and businesses. As a result, we will accelerate the growth of the combined company’s digital revenue through innovative customer experiences and new marketing solutions for businesses, while creating an expansive journalism network with the resources required to deliver unique and award-winning content.
Accelerate digital strategy. New Media and Gannett believe that a digital transformation of the newspaper industry is vital to the preservation of journalism, and the Merger will accelerate the combined company’s digital transformation. The breadth and depth of each company’s digital offerings will make the combined company a leading digital media player and a stronger partner for advertisers and SMBs.
Significant synergies. New Media and Gannett share a commitment to rationalizing costs as the media industry evolves, while continuing to invest in product development, training for newsrooms and understanding readers’ needs. The Merger is anticipated to result in run-rate cost synergies across the combined company of $275 - $300 million annually, unlocking meaningful shareholder value. The majority of synergies is expected to be realized within 24 months of closing and result from the increased scale of the new organization, sharing of best practices, leveraging existing infrastructure, facility rationalization and other judicious cost reductions.
External Management Agreement. New Media and FIG LLC, an affiliate of Fortress Investment Group (the “Manager”), have amended the external management agreement to set the termination date as December 31, 2021. The amendment, as described in more detail below, also reduces the incentive fee rate payable to the Manager for the remainder of the term.
Leadership and Governance
The combined company’s management team will be led by New Media’s current Chairman and Chief Executive Officer, Michael Reed. Alison Engel, Gannett’s current Chief Financial Officer, is expected to serve as the Chief Financial Officer of the combined organization upon closing. Gannett’s newly appointed Chief Executive Officer, Paul Bascobert, will become Chief Executive Officer of the combined company’s operating subsidiary. The rest of the combined company’s senior executive team, which is expected to be composed of highly experienced leaders from both companies, will be announced at a later date.
Mr. Bascobert was the President of XO Group from 2016 until its sale to Permira Equity in 2019. During his tenure, he helped lead the company’s transformation from a media company to a marketplace business. Prior to XO, Mr. Bascobert led sales, service, and marketing for the Local Businesses segment at Yodle from 2014 until 2016. Before that, he spent four years at Bloomberg LP as President of Bloomberg Businessweek from 2010 until 2014, in addition to serving as Chief Operating Officer of the Media Group from 2011 to 2014. Mr. Bascobert joined Bloomberg from Dow Jones & Co. where he was Senior Vice President of Operations from 2006 until 2007 and Chief Marketing Officer from 2007 until 2009.
The combined company’s Board of Directors will have nine members, including Mr. Reed as Chairman, five independent directors from New Media, and three independent directors from Gannett. Mr. Kevin Sheehan, who currently serves as New Media’s Lead Director, will serve as the combined company’s Lead Director. New Media has been actively engaged in a director search and expects to announce two additional independent directors prior to closing. The companies believe that diversity can strengthen board performance and New Media is actively searching for women and other candidates with diverse backgrounds and experiences.
After the closing of the Merger, both New Media and its operating subsidiary GateHouse, will be rebranded and operate under the “Gannett” brand. The combined company will be headquartered in McLean, Va., with a continued corporate presence in existing locations.
Financing
New Media expects to fund the cash portion of the Merger consideration through a combination of cash on the balance sheet and a new term loan facility (the “Term Loan”) to be funded at closing pursuant to a binding commitment from funds managed by affiliates of Apollo Global Management, LLC (NYSE:APO), a global alternative investment manager with approximately $312 billion in assets under management, as of June 30, 2019, and deep experience in supporting media companies. The Term Loan, which will be used to retire existing financial debt obligations of both companies and to fund the cash component of merger consideration, will be a five-year senior secured term loan facility in an aggregate principal amount of $1.792 billion. The Term Loan will be freely pre-payable without penalty, and the combined company is expected to have a strong cash-flow profile that will permit aggressive deleveraging. Total pro forma leverage at closing of the Merger is expected to be approximately 3.5x LTM As Adjusted EBITDA, before run-rate synergies, and 2.3x including run-rate synergies. Target net leverage within two years of closing is expected to be below 1.75x.
Dividend
Initially, the combined company is expected to have an annual dividend of $0.76 per share. It is expected that the dividend will be increased over time as synergies are realized and leverage is reduced.
External Management Agreement
Concurrent with the entry into the Merger Agreement, New Media and the Manager have agreed to amend the Management and Advisory Agreement dated as of March 6, 2015 (such amendment, the “Amended Management Agreement”), pursuant to which the Manager provides a management team (including the Chief Executive Officer) and other professionals who provide services to New Media.
The Amended Management Agreement, which will become effective upon the closing of the Merger, provides for the following key changes:
1. Establishes a termination date of December 31, 2021, for the Manager’s services in lieu of annual renewals of the term;
2. Reduces the incentive fee rate from 25% to 17.5% for the remainder of the term;
3. Reduces by 50% the number of options that would otherwise be issuable in connection with the issuance of shares as consideration for the Merger, and imposes a premium on the exercise price;
4. Eliminates the Manager’s right to receive options in connection with future equity raises; and
5. Eliminates certain payments otherwise due at or after the end of the term.
In exchange, New Media will issue to the Manager upon closing approximately 4.2 million shares of New Media common stock. The Manager is restricted from selling these shares until the expiration of the Amended Management Agreement, or otherwise upon a change in control and certain other extraordinary events. New Media will also grant the Manager approximately 3.2 million options with an exercise price of $15.50, a 45% premium to the closing price of New Media common stock on August 2, 2019. These options become exercisable upon the first trading day immediately following the first 20 consecutive trading day period in which the closing price of New Media’s common stock (on its principal U.S. national securities exchange) is at or above $20 per share, and also upon a change in control and certain other extraordinary events.
Upon expiration of the term of the Amended Management Agreement, the Manager will cease providing external management services to New Media, and the Manager will no longer be the employer of the person serving in the role of Chief Executive Officer of the combined company (the “Internalization”).
Timing and Approvals
New Media formed the Transaction Committee to review, evaluate, and negotiate the Merger and the Internalization (including the terms of the Amended Management Agreement). The Merger has been unanimously approved by the New Media Transaction Committee and by the Boards of both companies. The New Media Transaction Committee separately, and unanimously, approved the Amended Management Agreement.
The Merger is expected to close by the end of 2019, subject to the satisfaction of customary closing conditions, including receipt of regulatory clearances and approval by the shareholders of each company.
Advisors
Credit Suisse is serving as financial advisor to New Media, and Cravath, Swaine & Moore LLP is serving as principal legal counsel. New Media’s Transaction Committee retained Jefferies LLC as its independent financial advisor, and Wilson Sonsini Goodrich & Rosati as its legal counsel.
Greenhill & Co., LLC and Goldman Sachs & Co. LLC are serving as financial advisors to Gannett, and Skadden, Arps, Slate, Meagher & Flom LLP and Nixon Peabody LLP are serving as legal counsel.
Joint Conference Call and Webcast
New Media and Gannett will co-host a conference call to discuss the transaction and second quarter earnings on August 5, 2019 at 4:15 p.m. Eastern Time. Supplemental information regarding the transaction will be posted to the Investor Relations section of each company’s website.
All interested parties are welcome to participate. 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.) 10 minutes prior to the scheduled start of the call; please reference access code “3747329.” A simultaneous webcast of the conference call will be accessible to the public on a listen-only basis through each company’s website. Please visit www.newmediainv.com and www.gannett.com.
The webcast replay of the conference call will also be available approximately two hours following the completion of the call on the Investor Relation section of each company’s website.
About New Media
New Media Investment Group Inc. (NYSE: NEWM) supports small to mid-size communities by providing locally-focused print and digital content to its consumers and premier marketing and technology solutions to small and medium business partners. New Media is one of the largest publishers of locally based print and online media in the United States as measured by its 154 daily publications. As of June 30, 2019, New Media operates in over 600 markets across 39 states reaching over 21 million people on a weekly basis and serves over 200,000 business customers. For more information regarding New Media and to be added to its email distribution list, please visit www.newmediainv.com.
About Gannett
Gannett Co., Inc. (NYSE: GCI) is an innovative, digitally focused media and marketing solutions company committed to strengthening communities across its network. With an unmatched local-to-national reach, Gannett touches the lives of more than 125 million people monthly with its Pulitzer-Prize winning content, consumer experiences and benefits, and advertiser products and services. Gannett brands include USA TODAY NETWORK with the iconic USA TODAY and more than 100 local media brands, digital marketing services companies ReachLocal, WordStream and SweetIQ, and U.K. media company Newsquest. To connect with Gannett, visit www.gannett.com.
https://www.businesswire.com/news/home/20190805005547/en/New-Media-Investment-Group-Acquire-Gannett
Enterprising Investor
8 years ago
New Media Completes the Acquisition of Harris Enterprises for $20.4 Million (11/30/16)
NEW YORK--(BUSINESS WIRE)--New Media Investment Group Inc. (“New Media” or the “Company”, NYSE:NEWM), one of the largest publishers of locally based print and online media in the United States as measured by number of publications, announced today that it has completed the acquisition of substantially all of the assets of Harris Enterprises, Inc. (“Harris”) for $20.4 million, or at the mid-point of New Media’s acquisition range of 3.5x – 4.5x LTM As Adjusted EBITDA.
Harris, the family-owned collection of local media assets in central Kansas and eastern Iowa, is comprised of six newspapers-of-record and multiple weekly and niche print products. Privately owned and operated for over a century, Harris has consistently been recognized for its quality news coverage, editorial content, printing quality, and digital news innovation. Today, its largest titles include The Hutchinson News (26,200 daily circulation), Salina Journal (24,900 daily circulation), The Burlington Hawk Eye (15,200 daily circulation), The Hays Daily News (8,000 daily circulation), The Garden City Telegram (6,700 daily circulation), and The Ottawa Herald (3,600 circulation, published three times per week). In addition to the print publications, the acquisition also includes Harris’ press facilities and all related websites and other digital operations.
“Dating back as far as 1837, the Harris publications have an established history of providing local news and information to the communities they serve, making them a natural fit for New Media’s growing portfolio of local media assets,” said Michael E. Reed, New Media President and Chief Executive Officer. “After owning the newspapers for over a century, we’re honored the Harris family has chosen New Media as the future owners and look forward to working with their employees to further enhance the partnership the publications have within their respective communities.”
About New Media Investment Group Inc.
New Media is focused primarily on investing in a high quality, diversified portfolio of local media assets, and on growing existing advertising and digital marketing businesses. The Company is one of the largest publishers of locally based print and online media in the United States as measured by its 121 daily publications. As of September 25, 2016, the Company operates in over 525 markets across 36 states. New Media’s portfolio of products, as of September 25, 2016, includes over 600 business and community publications and over 525 websites, serves more than 200,000 business advertising accounts, and reaches 20 million people on a weekly basis.
For more information regarding New Media and to be added to our email distribution list, please visit www.newmediainv.com.
http://www.businesswire.com/news/home/20161130006341/en/Media-Completes-Acquisition-Harris-Enterprises-20.4-Million
Enterprising Investor
8 years ago
New Media Announces Solid Third Quarter 2016 Results and Increases Dividend to $0.35 per Common Share; Announces the Acquisition of Two Local Media Properties (10/27/16)
NEW YORK--(BUSINESS WIRE)--New Media Investment Group Inc. (“New Media” or the “Company”, NYSE:NEWM), one of the largest publishers of locally based print and online media in the United States, as measured by number of daily publications, today reported its financial results for the third quarter ended September 25, 2016.
Quarter 2016 Financial Summary
• Declares a cash dividend of $0.35 per common share, a 6.1% increase to the prior quarter
• Total revenues of $306.8 million, a decrease of 1.7% to the prior year, and a decrease of 1.3% on a same store basis, the fifth consecutive quarter of improving same store revenue trends
• Digital revenue of $32.0 million, an increase of 10.5% to the prior year on a same store basis
• Operating income of $10.6 million
• Net income of $2.8 million
• As Adjusted EBITDA of $37.0 million*
• Free cash flow of $26.9 million*
• Liquidity, consisting of cash on the balance sheet and undrawn revolver, of $94.5 million
Third Quarter 2016 & Subsequent Business Highlights
• Completed the acquisition of The Fayetteville Observer, and its affiliated products, for $18.0 million in Q3
• Acquired substantially all of the assets of each of the Missouri based Tribune Publishing Company, including its flagship daily newspaper, the Columbia Daily Tribune, and the Rochester Business Journal, Inc., including its leading B2B publication, the Rochester Business Journal, for a combined purchase price of $8.5 million in Q4
• Renamed our B2B publishing division as BridgeTower Media which represents a collection of successful legal, financial, real estate, and government affairs publications and affiliated websites
• The Providence Journal was named New England Newspaper of the Year by the New England Newspaper and Press Association in October
Summary of Third Quarter 2016 Results
($ in million)
GAAP Reporting
Revenues $306.8
Operating income $10.6
Net income $2.8
Non-GAAP Reporting*
As Adjusted EBITDA $37.0
Free cash flow $26
*For definitions and reconciliations of Non-GAAP Reporting measures, please refer to the Non-GAAP Financial Measures Note and reconciliations below.
“I’m very pleased to announce that our solid third quarter results represent the fifth consecutive quarter of improving same store revenue trends, increasing sequentially by nearly 200 basis points since last quarter,” said Michael E. Reed, New Media President and Chief Executive Officer. “I’m also excited that our Board has authorized a 6.1% increase to our dividend this quarter. This action reflects our positive outlook for the coming quarters with regard to both our organic growth opportunities and acquisition pipeline.
“In addition to our strong revenue results, I’m excited to announce the acquisition of the Columbia Daily Tribune (“CDT”), highlighting our continued success at purchasing high-quality, local media assets. The Columbia Daily Tribune and its associated niche publications are located in Columbia, MO, home to the University of Missouri. As a dominant local media provider in central Missouri, the CDT today has a daily and Sunday circulation of approximately 15,000 and 17,000, respectively, and has consistently been recognized for its quality news coverage and editorial content. First published in 1901, and owned by the Waters family for over 110 years, the daily newspaper has an extensive history of producing strong journalism, and has won hundreds of state and national awards including 18 awards in last year’s Associated Press Managing Editors annual contest. After owning the newspaper for over a century, we are honored the Waters family has entrusted New Media to carry on its tradition of providing quality content to Columbia and its surrounding region.
“In addition to our acquisition of the daily paper in Columbia, we’re pleased to announce the acquisition of the Rochester Business Journal (“RBJ”) which we believe is the perfect addition to our growing BridgeTower business publication platform. For nearly three decades, the RBJ has been a dominant source of local business news and information in the Rochester-Finger Lakes region of NY that executives come to as their source for award winning content. This acquisition marks our third B2B media acquisition in the past nine months, and accelerates our expanding commitment to providing exclusive business information at a local level.
“As we enter the final months of 2016, I’m pleased with the progress the Company has made year to date. We are very optimistic about the year ahead with regard to our deal pipeline and our organic growth initiatives. New Media’s business strategy remains intact and we are well positioned to continue to execute on our strategy of acquiring great local media assets at attractive valuations, investing in new revenue initiatives that we believe will lead to organic growth, and paying a substantial portion of our cash flow to shareholders in the form of a regular dividend.”
Third Quarter 2016 Financial Results
New Media recorded total revenues of $306.8 million for the quarter, a decrease of 1.7% when compared to the prior year; however, the prior year was positively impacted by $20.2 million of revenues from the Las Vegas Review Journal (“Las Vegas”) which was sold in December of 2015. On a same store basis, total revenues decreased 1.3% to the prior year, the fifth consecutive quarter of improving same store revenue trends.
Total Print Advertising revenue decreased 8.0% on a same store basis primarily driven by continued pressure across Preprints, Classified Print, and Local Print Advertising which decreased 10.0%, 9.2%, and 4.6%, respectively.
Digital, our consistently growing revenue category, increased 10.5% to the prior year on a same store basis to $32.0 million for the quarter. The primary driver of our revenue performance was Propel Business Services which generated $14.7 million this quarter, an increase of 77.4% to the prior year on a same store basis.
Circulation, which comprises over one-third of New Media’s total revenues, increased 3.8% to the prior year on a same store basis. Strong performance in this category was driven by content initiatives, promotions, strategic price increases, and the continued roll-out of our newspaper website redesigns that improve the consumer and advertiser experience. Lastly, Commercial Print and Other revenue increased 6.4% to the prior year on a same store basis, driven by securing commercial print and distribution contracts, as well as the benefit from new business initiatives, such as events revenue.
Operating income of $10.6 million decreased $4.0 million to the prior year, and net income of $2.8 million decreased $3.3 million to the prior year.
As Adjusted EBITDA of $37.0 million and free cash flow of $26.9 million decreased $3.1 million and $3.5 million, respectively, from the prior year. However, the prior year was positively impacted by $2.7 million of As Adjusted EBITDA and free cash flow generated from Las Vegas. In addition to the sale of Las Vegas, the current period was also negatively impacted by $2.6 million of increased health insurance costs which are not expected to repeat at this level.
Third Quarter 2016 Dividend
New Media’s Board of Directors declared a third quarter 2016 cash dividend of $0.35 per share of common stock. The dividend is payable on November 17, 2016 to shareholders of record as of the close of business on November 9, 2016.
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.
Additional Information
For additional information that management believes to be useful for investors, please refer to the presentation posted on the Investor Relations section of New Media’s website, www.newmediainv.com and the Company’s Quarterly Report on Form 10-Q, which will be available on the Company’s website. Nothing on our website is included or incorporated by reference herein.
Earnings Conference Call
New Media’s management will host a conference call on Thursday, October 27, 2016 at 11:00 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 1-877-601-8827 (from within the U.S.) or 1-918-534-8645 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “New Media Third Quarter Earnings Call.”
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, November 10, 2016 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 “96539663.”
About New Media Investment Group Inc.
New Media is focused primarily on investing in a high quality, diversified portfolio of local media assets, and on growing existing advertising and digital marketing businesses. The Company is one of the largest publishers of locally based print and online media in the United States as measured by its 121 daily publications. As of September 25, 2016, the Company operates in over 525 markets across 36 states. New Media’s portfolio of products, as of September 25, 2016, includes over 600 business and community publications and over 525 websites, serves more than 200,000 business advertising accounts, and reaches 20 million people on a weekly basis.
For more information regarding New Media and to be added to our email distribution list, please visit www.newmediainv.com.
Same Store Results
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 not considered material.
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.
http://www.businesswire.com/news/home/20161027005577/en/Media-Announces-Solid-Quarter-2016-Results-Increases
Enterprising Investor
8 years ago
Columbia Daily Tribune bought by New York publisher (9/23/16)
Jacob Kirn
Digital Editor
St. Louis Business Journal
Andy Waters’ family plans to sell the Columbia Daily Tribune of Columbia, Missouri, to GateHouse Media Inc., ending 115 years of local ownership for the newspaper.
Terms of the deal, expected to close Oct. 1, were not disclosed.
New Media Investment Group (NYSE: NEWM), based in New York City, owns GateHouse, which operates 125 daily newspapers across the country. In Missouri, it owns newspapers in Boonville, Kirksville, La Plata, Brookfield, Chillicothe, Hannibal, Moberly, Mexico, Independence, St. Louis, Osage Beach, Camdenton, Rolla, St. James, Waynesville, Greenfield-Miller, Carthage, Aurora, Joplin and Neosho.
The Tribune reported that Columbia, home to the University of Missouri’s flagship campus, will be the largest Missouri city where GateHouse owns a daily newspaper.
“We invested in the Tribune because we believe in Columbia, Missouri’s future,” Jason Taylor, president of GateHouse’s Western Division, told the Tribune Thursday. “We believe in the newspaper, we believe in its people and we are excited that by leveraging the national resources of GateHouse Media we can take this local company to greater heights than ever before.
“What readers and advertisers can expect is for us to innovate and leverage technology and our national footprint to make the newspaper better, its website better and make the community stronger,” he said.
Since January 2011, Andy Waters and his sister, Elizabeth Reifert, have owned the Tribune. Their family has owned the paper since 1905.
Tribune Publisher Vicki Russell told the Tribune that remaining independent was no longer an option.
“Bigger companies can absorb research and development, for example, and spread costs out across the entire company while we were constantly being challenged to do that by ourselves,” Russell told the Tribune.
For the quarter ended June 30, the Tribune reported total subscribers of 14,312 Monday through Saturday, including 13,638 print, and 16,288 Sunday, including 15,615 print, according to the Alliance for Audited Media. A year earlier, for the quarter ended June 30, 2015, it reported total subscribers of 14,812 Monday through Saturday, including 14,109 print, and 17,319 Sunday, including 16,616 print.
The Tribune’s report said Hank Waters would continue to write daily editorials, as he has since May 1966.
GateHouse, based in Pittsford, New York, has been on the hunt for acquisitions since emerging from bankruptcy in 2013.
http://www.bizjournals.com/stlouis/news/2016/09/23/columbia-daily-tribune-bought-by-new-york.html
Enterprising Investor
9 years ago
New Media Announces Solid First Quarter 2016 Results and Dividend of $0.33 per Common Share;
Announces the Acquisition of Journal Multimedia for $18.0 Million (4/28/16)
NEW YORK--(BUSINESS WIRE)--New Media Investment Group Inc. (“New Media” or the “Company”, NYSE:NEWM), one of the largest publishers of locally based print and online media in the United States as measured by number of publications, today reported its financial results for the first quarter ended March 27, 2016.
First Quarter 2016 Financial Summary
• New Media declares a cash dividend of $0.33 per common share
• Total revenues of $300.1 million, an increase of 19.7% to prior year, and a decrease of 5.1% on a same store basis, the third consecutive quarter of improving same store revenue trends*
• Digital revenue of $27.5 million, an increase of 6.9% to prior year on a same store basis*
• Operating income of $7.0 million, an increase of 170.3% to prior year
• Net income of $5.0 million, an increase of $11.0 million to prior year
• As Adjusted EBITDA of $29.1 million, an increase of 15.1% to prior year*
• Free cash flow of $18.6 million, a decrease of 1.7% to prior year; however, adjusting for one-time cash taxes paid as a result of the gain on sale of the Las Vegas Review Journal (“Vegas”) in the current period, and an interest timing benefit in the prior year, adjusted free cash flow increased 19.6% to prior year*
• Free cash flow per basic share of $0.42*
• Liquidity, consisting of cash on the balance sheet and undrawn revolver, of $119.4 million
Quarter 2016 & Subsequent Business Highlights
• Acquired the Business Information Division of Dolan LLC (“Dolan”) for $35.0 million in Q1
• Completed the acquisition of the Erie Times-News (“Erie”) and related publications and certain liabilities for $11.5 million in Q1
• Purchased ThriveHive, an award winning marketing software company that focuses on small businesses, for $11.8 million in Q1
• Reached an agreement in Q2 to acquire substantially all of the assets of Journal Multimedia, a multi-title publishing, events, media, and research company for $18.0 million in cash, which is expected to close later this quarter
• Propel Marketing (“Propel”), our leading national provider of digital marketing products and services for local businesses, was named a Google AdWords Premier Partner for small and medium sized businesses (“SMBs”)
• Sarasota Herald-Tribune investigations editor, Michael Braga, won the Pulitzer Prize for his role in a year-long investigation with the Tampa Bay Times detailing horrific conditions in Florida’s mental health hospitals
[tables deleted]
Since inception New Media has been committed to its acquisition strategy and our year to date activity reflects the positive momentum we have carried into 2016,” said Michael E. Reed, New Media President and Chief Executive Officer. During the first quarter we deployed over $58 million through three acquisitions:
• Dolan – Leading provider of industry-specific news for the legal, financial, real estate, and government affairs sectors in the 17 markets it serves across the U.S.
• Erie – Daily newspaper, first published in 1888, which is the dominant source of local news and advertising in Erie, Pennsylvania
• ThriveHive – Turnkey proprietary software platform that enables SMB owners to manage their own digital and contact marketing campaigns. We believe this acquisition will help drive higher margins for Propel by transforming it from a marketing services reseller into a software and technology platform.
“Subsequent to the quarter, New Media also reached an agreement to acquire substantially all of the assets of Journal Multimedia, a multi-title publisher of business journals, trade and consumer magazines, digital products, and a research and events division for $18.0 million in cash, at the mid-point of our acquisition range of 3.5x to 4.5x the seller’s LTM As Adjusted EBITDA. By leveraging its award-winning business and consumer publications, websites, and events, Journal Multimedia has built a unique and diverse audience and advertiser base, which today is made up of the following assets:
• Central Penn Business Journal, NJBIZ, and Lehigh Valley Business – Regional business journals that serve as the leading source of local business news in their respective markets
• Best Companies Group – Rapidly growing research division that partners with local businesses and media outlets to create “Best Places to Work” publications and events
• Central Penn Parent – Family-focused monthly publication in East and Central Pennsylvania
• Pet Age – National trade magazine serving the pet industry
• FGV Media – Digital marketing company that produces video and web services for SMBs
“The acquisition of Journal Multimedia is compelling as it allows us to further build out the B2B media business we created with the acquisition of Dolan in early Q1. Furthermore, and similar to the acquisition of Dolan, we believe Journal Multimedia’s print product subscribers are the ideal candidates for Propel’s services as they consist of SMBs that market themselves online to support and grow their businesses.
“In addition to the steadfast inorganic growth we have been able to achieve through acquisitions, we are also very pleased with Propel’s continued success. During the first quarter, Propel generated $9.8 million of revenue, a 71.4% increase to the prior year. We’re also excited to announce that Propel recently became a Google AdWords Premier SMB Partner. This program connects Google’s trusted AdWords partners with SMBs that want help creating, managing, and optimizing their online advertising campaigns. This distinction recognizes Propel’s proven expertise, experience, and commitment to SMB owners.
“With our traditional media business producing strong cash flows, and ample liquidity available to be deployed into future acquisitions, we remain confident in New Media’s ability to execute on its inorganic growth strategy. Furthermore, as Propel scales across current and new markets, and as new revenue streams are developed, we continue to see a path for the Company to achieve long-term organic revenue growth by year-end 2017. Looking ahead, we believe our highly accretive acquisitions and improving same store revenue trends position New Media to create substantial returns for our shareholders.”
New Media anticipates the Journal Multimedia deal will close in the second quarter of 2016 subject to customary closing conditions; however, there can be no assurance as to the timing or the occurrence of the closing.
First Quarter 2016 Financial Results
New Media recorded total revenues of $300.1 million for the quarter, an increase of 19.7% when compared to the prior year, and a decrease of 5.1% on a same store basis. Q1 represents the third consecutive quarter of improving same store revenue trends. Total Print Advertising decreased 11.2% on a same store basis primarily driven by continued pressure on Local Print Advertising, Preprints, and Classified Print which decreased 14.0%, 11.3%, and 6.9% respectively. The declines in Print Advertising and Preprints reflect the ongoing secular pressure these categories face, and specifically with Preprints, the decline is driven by major retailers pulling back on frequency, seeking rate concessions, and closing stores in our markets.
Digital continues to be a strong revenue category and increased 6.9% on a same store basis to $27.5 million. Propel generated $9.8 million in revenue, an increase of 71.4% to the prior year on a same store basis.
Circulation, our largest individual revenue category at 35% of total revenues, increased 1.4% on a same store basis driven by promotions and methodical price increases to drive revenue growth. Lastly, Commercial Print and Other revenue, on a same store basis, decreased 4.9% to the prior year.
Total expenses were reduced by 6.7% to the prior year, on a same store basis, totaling $271.0 million after adjusting for non-recurring and non-cash items.
As Adjusted EBITDA of $29.1 million increased $3.8 million, or 15.1%, to the prior year. Free cash flow of $18.6 million was negatively impacted by a $0.9 million one-time income tax charge as a result of the gain on sale of Vegas. In addition, the prior year had an interest timing benefit of $2.6 million. Adjusting for these two items, adjusted free cash flow increased 19.6% to the prior year.
First Quarter 2016 Dividend
New Media’s Board of Directors declared a first quarter 2016 cash dividend of $0.33 per share of common stock. The dividend is payable on May 19, 2016 to shareholders of record as of the close of business on May 11, 2016.
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.
Additional Information
For additional information that management believes to be useful for investors, please refer to the presentation posted on the Investor Relations section of New Media’s website, www.newmediainv.com and the Company’s Quarterly Report on Form 10-Q, which will be available on the Company’s website. Nothing on our website is included or incorporated by reference herein.
Earnings Conference Call
New Media’s management will host a conference call on Thursday, April 28, 2016 at 11:00 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 1-877-601-8827 (from within the U.S.) or 1-918-534-8645 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “New Media First Quarter Earnings Call.”
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 12, 2016 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 “89754742.”
About New Media Investment Group Inc.
New Media is focused primarily on investing in a high quality, diversified portfolio of local media assets, and on growing existing advertising and digital marketing businesses. The Company is one of the largest publishers of locally based print and online media in the United States as measured by our 125 daily publications. As of March 27, 2016, the Company operates in over 520 markets across 35 states. New Media’s portfolio of products, as of March 27, 2016, include over 620 business and community publications and over 520 websites, serve more than 195,000 business advertising accounts, and reach 20 million people on a weekly basis.
For more information regarding New Media and to be added to our email distribution list, please visit www.newmediainv.com.
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 same store results, Adjusted EBITDA, As Adjusted EBITDA, adjusted free cash flow, free cash flow, and free cash flow per share 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.
Same Store Results
Same store results, a non-GAAP financial measure, 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 acquisition of Monroe News and ThriveHive (“tuck-in acquisitions”) were funded from the Company’s available cash and not considered material.
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, non-cash items such as non-cash compensation, non-recurring integration and reorganization costs, gain/loss on sale or disposal of assets, 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;
• 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; and
• Indicators for management to determine if adjustments to current spending decisions are needed.
Adjusted EBITDA, As Adjusted EBITDA, and free cash flow provide New Media with measures of financial performance, independent of items that are beyond the control of management in the short-term, such as depreciation and amortization, taxation, and interest expense associated with its capital structure. These metrics measure New Media’s financial performance based on operational factors that management can impact in the short-term, namely the cost structure or expenses of the organization. Adjusted EBITDA, As Adjusted EBITDA, and free cash flow are some of the metrics used by senior management and the Board of Directors to review the financial performance of the business on a monthly basis. In addition, New Media’s management utilizes these metrics to evaluate the Company’s performance, along with other criteria, to determine the funds available for paying the quarterly dividend.
http://www.businesswire.com/news/home/20160428005574/en/Media-Announces-Solid-Quarter-2016-Results-Dividend
Enterprising Investor
9 years ago
Investor Emerges as Big Player for Small Newspapers (2/24/16)
Private equity-run chain snaps up assets as a sharp drop in prices drives wave of consolidation
By Lukas I. Alpert
The Foster’s Daily Democrat didn’t seem like an attractive takeover target.
The 142-year-old newspaper in Dover, N.H., had suffered an almost 50% decline in circulation in a decade to 12,000 a day and a precipitous drop in ad revenue.
But in late 2014, the family that had run the paper for five generations found an eager buyer: private equity-run newspaper chain New Media Investment Group, which has been snapping up similar assets nationwide.
The $5 million sale was one of many small deals in recent years amid an accelerating wave of consolidation in the highly fractured U.S. newspaper industry. The spectacular decline of print in the past decade has led many investors to turn their back on the industry, providing an opening for bargain hunters who believe newspapers still have value.
The U.S. newspaper industry is dominated by 11 big players including Gannett Co. , Tribune Publishing Co. , Wall Street Journal owner News Corp and New York Times Co. But 45% of the 41 million papers sold every day are titles owned by 200 smaller companies, according to the Alliance for Audited Media.
A move to roll them up is under way, driven by a sharp decline in prices. Last year, 70 daily newspapers changed hands in 27 transactions for $827 million, the highest total for the industry since the 2008 economic crisis, according to data compiled by merger-and-acquisition adviser Dirks, Van Essen & Murray.
New Media, a low-profile outfit managed by private-equity firm Fortress Investment Group LLC, has surfaced as one of the most aggressive consolidators, alongside USA Today owner Gannett and Warren Buffett’s Berkshire Hathaway Media Group.
New Media emerged in 2014 out of the bankruptcy of GateHouse Media and has quietly acquired more than 100 newspapers for $637.5 million during the past two years, bringing its total portfolio to 575 titles.
New Media nearly doubled its revenue in the third quarter of 2015 on a year-over-year basis to $312.1 million, putting it not far behind better-known companies like Tribune and the New York Times. The company is modestly profitable.
“With the changing environment the newspaper industry faces, scale really matters,” New Media Chief Financial Officer Greg Freiberg said at a recent investor presentation. “Looking ahead, our pipeline for acquisitions remains robust.”
The company has been involved in some bigger transactions—notably, its sale of the Las Vegas Review-Journal to casino magnate Sheldon Adelson in December—but largely focuses on low-priced, small papers that continue to generate solid cash flow. Many still have a lock on local advertising, which has protected them from digital competition that has sapped bigger dailies.
The company’s acquisitions over the past two years have included Southern California’s Victorville Daily Press for $8 million, the Providence Journal for $46 million, and the family-owned Erie Times-News for $11.5 million.
Foster’s Daily Democrat was typical of the dynamic in many small markets—a fixture in the community of 30,000 just 65 miles north of Boston that was struggling with the times. Over the past decade, online services like Craigslist had eroded its classified ad business. Circulation had declined steadily as younger readers migrated online. And the cost of building a robust Web presence was proving difficult to afford.
Joshua Foster, an anti-abolitionist Democrat in the then-staunchly Republican North, founded the paper after the Civil War with money he received in compensation when a drunken mob angered by his views tried to tar and feather him and destroyed the printing press of a previous paper he ran. Since then, the Daily Democrat has focused on local news like town council votes, crime and fundraisers. Despite its small circulation, the Daily Democrat is considered influential, with nearly every presidential candidate for decades paying a visit in hopes of snagging an endorsement in the New Hampshire primary.
“There had been a lot of nervousness in my family about how to manage and pay for the transition to the digital world,” said Patty Foster, Joshua’s great-great granddaughter. “We realized that [New Media] had a lot more resources to do this, so it just made better sense.”
Once New Media had acquired the paper, it did what it has done all over the country: cut costs. Ms. Foster said many in the Daily Democrat’s back office and distribution service lost their jobs as operations were combined with a New Media-owned paper in nearby Portsmouth.
At other papers, New Media has made significant cuts in newsrooms and among back-office staff, by centralizing copy editing, layout, ad sales, human resources and finance operations at an Austin, Texas, hub. When it acquired the Providence Journal in 2014, it laid off about 25% of the staff, union officials said. Employees at some papers in the Midwest that were part of the original GateHouse say they haven’t received raises in eight years.
A New Media executive said the moves reflect the challenges faced by the industry, but that the company is committed for the long haul. Looking forward, it is trying to build additional revenue streams by offering digital services such as website building and ad creation to small businesses in the communities where its papers operate.
Other private-equity firms and hedge funds have tried similar approaches in the past, with mixed results. But for investors, New Media’s strategy has so far paid off, with the company’s stock price rising more than 20% since going public in 2014, generating a high dividend yield of 9% (compared to 2.2% for Gannett and 1.3% for the New York Times.)
“New Media has been perhaps the most efficient and systematic consolidator of small-market newspapers in America,” said Jim Friedlich, head of Empirical Media, a consultancy that advises media companies but hasn’t worked with New Media. “So far this seems to be working well for their investors. Whether it is good for their news products and the communities they serve, time will tell.”
The key has been the steep decline in prices, which has enabled New Media and others to buy without being hobbled by debt. In 2007, GateHouse spent $410 million for four small newspapers with combined daily circulation of 125,000. Last year, Gannett reached an agreement to spend $280 million for Journal Media Group ’s 15 papers with circulation of 675,000.
GateHouse went bankrupt in 2013 after amassing $1.28 billion in debt following a string of deals in which it regularly spent more than 10 times earnings before interest, taxes, depreciation and amortization (Ebitda), according to James Goss of Barrington Research. Since it emerged from bankruptcy as New Media, it now aims to spend between 3.5 and five times Ebitda.
“This has only become possible because the industry is so hated and so out of favor,” said one New Media executive, referring to the steep decline in the circulation and valuations of newspapers.
Write to Lukas I. Alpert at lukas.alpert@wsj.com
http://www.wsj.com/articles/new-media-emerges-as-big-player-for-small-newspapers-1456309801?cb=logged0.19055612256917081
Enterprising Investor
9 years ago
New Media Announces Strong Fourth Quarter & Full Year 2015 Results and Dividend of $0.33 per Common Share (2/25/16)
NEW YORK--(BUSINESS WIRE)--New Media Investment Group Inc. (“New Media” or the “Company”, NYSE:NEWM) today reported its financial results for the fourth quarter and full year ended December 27, 2015.
Fourth Quarter 2015 Financial Summary
• New Media declares a cash dividend of $0.33 per common share for the fourth quarter of 2015
• Net income of $56.4 million, an increase of $44.9 million to prior year
• Total revenues of $333.6 million, an increase of 78.6% to prior year, and a decrease of 5.3% on a same store basis*
• Digital revenue of $29.6 million, an increase of 11.3% to prior year on a same store basis*
• Operating income of $66.7 million, an increase of $49.2 million to prior year
• As Adjusted EBITDA of $54.3 million, an increase of 58.2% to prior year*
• Free cash flow of $45.6 million, an increase of 63.6% to prior year*
• Free cash flow per basic share of $1.02, an increase of 37.1%, or $0.28, to prior year despite an additional 7.2 million weighted average shares outstanding*
• Free cash flow and free cash flow per basic share of $88.4 million and $1.98, respectively, including the gain from the sale of the Las Vegas Review-Journal (“Las Vegas”)*
• Liquidity, consisting of cash on the balance sheet and undrawn revolver, of $186.6 million
Full Year 2015 Financial Summary
• Net income of $67.6 million, an increase of $70.8 million to the
prior year
• Total revenues of $1,195.8 million, an increase of 83.3% to prior year, and a decrease of 3.9% on a same store basis*
• Digital revenue of $106.9 million, an increase of 10.7% on a same store basis*
• Operating income of $103.4 million, an increase of $77.1 million to prior year
• As Adjusted EBITDA of $162.1 million, an increase of 81.2% to prior year*
• Free cash flow of $128.0 million, or $2.89 per basic share, an
increase of 36.8% per share to prior year*
• Free cash flow and free cash flow per basic share of $170.8 million and $3.86, respectively, including the gain from the sale of Las Vegas*
Fourth Quarter 2015 & Subsequent Business Highlights
• Propel, our digital marketing services platform, achieved all-time high revenue of $9.4 million in the quarter
• Completed the sale of Las Vegas and its related publications for $140.0 million, or 7.0x LTM pro-forma As Adjusted EBITDA,
resulting in an approximate gain of 69%*
• Acquired the Business Information Division of Dolan LLC (“Dolan”) for $35.0 million, or 2.8x LTM pro-forma As Adjusted EBITDA*
• Completed the acquisition of the Erie Times-News (“Erie”) and related publications and certain liabilities for $11.5 million, or 2.5x LTM pro-forma As Adjusted EBITDA*
• Agreed to move to a transition services agreement ending the management agreement related to the sale of Las Vegas
[tables deleted]
*For definitions and reconciliations of Non-GAAP Reporting measures, please refer to the Non-GAAP Financial Measures Note and reconciliations below.
Michael E. Reed, New Media President and Chief Executive Officer, commented, “Q4 was a very busy and exciting quarter for the Company, and marks a solid finish to a successful year for New Media. During the quarter, the Company announced and completed the sale of the Las Vegas Review-Journal and related publications for $140.0 million, or 7.0x LTM pro-forma As Adjusted EBITDA. The sale, which was completed on December 10, 2015, resulted in an approximate gain of 69%. Concurrent with the sale of Las Vegas, New Media also announced, and has since closed, two local media acquisitions for $46.5 million, for an average 2.7x LTM pro-forma As Adjusted EBITDA. We believe these transactions demonstrate our continued commitment and ability to execute on highly accretive deals that generate substantial returns for our shareholders. To date, New Media has completed twelve acquisitions with a gross purchase price of nearly $640 million, and after factoring in estimated net synergies, the transactions generate levered yields of over 40%.
“In addition to our successful acquisition strategy, Propel had a particularly strong quarter with revenue at a record high of $9.4 million. We continue to believe that as Propel scales, the platform is well positioned to become a meaningful contributor to our overall revenue trends, and in combination with new revenue streams, will offset topline declines by the end of 2017.
“Today, our core business continues to produce strong cash flows and healthy profit margins. We believe New Media is well positioned to remain a disciplined buyer while consolidating the fragmented local media market. As we grow free cash flow through organic and inorganic initiatives, we see an opportunity to increase our dividend while simultaneously lowering our payout ratio. Given our increased liquidity, established track record of sourcing deals, success at growing digital revenue, and stable free cash flow, we believe New Media remains an attractive total return vehicle that will drive substantial returns for our shareholders.”
Fourth Quarter 2015 Financial Results
New Media recorded total revenues of $333.6 million for the quarter, an increase of 78.6% when compared to the prior year, and a decrease of 5.3% on a same store basis. Total Print Advertising decreased 10.5% on a same store basis primarily driven by continued pressure on Local Print Advertising and Preprints, which decreased 11.7% and 11.5%, respectively. The decline in Preprints reflects the challenges the retail sector is currently facing, leading to major retailers decreasing their volume and closing stores in our markets. Classified Print revenue decreased 7.0% on a same store basis; however, declines were muted by obituaries and legals revenue, which continue to be stable subcategories, and currently comprise over 35% of total Classified Print revenue.
Digital continues to be a strong revenue category and increased 11.3% on a same store basis to $29.6 million. Propel generated $9.4 million in revenue, an increase of 68.1% to the prior year on a same store basis.
Circulation, our largest individual revenue category at nearly one-third of total revenues, increased 2.0% on a same store basis, driven by targeted promotions and systematic price increases to drive incremental revenue. Lastly, Commercial Print and Other revenue decreased 11.0% to the prior year, on a same store basis, with 44% of the decline driven by recent acquisitions shifting from external print relationships to intercompany revenue, as they are now part of New Media.
Total expenses, on a same store basis, decreased 2.5% to the prior year totaling $279.3 million, after adjusting for non-recurring and non-cash items. As the Company continues to realize synergies from our acquisitions, we are able to drive lower expenses for the total Company while simultaneously investing in our print and digital initiatives to improve revenue trends.
As Adjusted EBITDA, free cash flow, and free cash flow per basic share were $54.3 million, $45.6 million, and $1.02 for the quarter, an increase of 58.2%, 63.6%, and 37.1% to the prior year, respectively. Including the gain from the sale of Las Vegas, free cash flow and free cash flow per basic share were $88.4 million and $1.98 for the quarter, an increase of $60.5 million and $1.23, or 217.4% and 166.0% to the prior year, respectively.
During the quarter an impairment analysis was performed, and subsequently a $4.8 million masthead impairment was identified. The impairment was related entirely to the legacy GateHouse newspapers that were restructured in late 2013, and therefore had very little headroom for subsequent intangibles valuations.
Fourth Quarter 2015 Dividend
New Media’s Board of Directors declared a fourth quarter 2015 cash dividend of $0.33 per share of common stock. The dividend is payable on March 17, 2016 to shareholders of record as of the close of business on March 9, 2016.
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.
Full Year 2015 Financial Results
New Media recorded revenues of $1,195.8 million in 2015, which represents an increase of 83.3% when compared to the prior year, and a decrease of 3.9% on a same store basis.
Total Print Advertising decreased 7.7% on a same store basis; however, New Media’s Digital revenue increased 10.7% on a same store basis. Propel contributed $31.3 million to Digital revenue, an increase of 69.5% to the prior year on a same store basis. Circulation revenue, our largest individual revenue category, continues to be a stable category and increased 0.5% to the prior year, on a same store basis.
Total expenses in 2015 of $1,033.8 million decreased $35.7 million, or 3.3% compared to the prior year, on a same store basis, after adjusting for non-recurring and non-cash items.
As Adjusted EBITDA, free cash flow, and free cash flow per basic share of $162.1 million, $128.0 million, and $2.89 for the full year increased $72.6 million, $60.3 million, and $0.78 over the prior year, respectively. Including the gain from the sale of Las Vegas, free cash flow and free cash flow per basic share were $170.8 million and $3.86 for the full year, an increase of $103.2 million and $1.75 over the prior year, respectively.
New Media’s 2015 dividends will all be treated as taxable dividends due to our profitable results.
Additional Information
For additional information that management believes to be useful for investors, please refer to the presentation posted on the Investor Relations section of New Media’s website, www.newmediainv.com and the Company’s Annual Report on Form 10-K, which will be available on the Company’s website. Nothing on our website is included or incorporated by reference herein.
Earnings Conference Call
New Media’s management will host a conference call on Thursday, February 25, 2016 at 11:00 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 1-877-601-8827 (from within the U.S.) or 1-918-534-8645 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “New Media Fourth Quarter Earnings Call.”
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, March 10, 2016 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 “38524970.”
About New Media Investment Group Inc.
New Media is focused primarily on investing in a high quality, diversified portfolio of local media assets, and on growing existing advertising and digital marketing businesses. The Company is one of the largest publishers of locally based print and online media in the United States as measured by our 124 daily publications. As of December 27, 2015, the Company operates in over 485 markets across 31 states. New Media’s portfolio of products, as of December 27, 2015, include over 560 community publications and over 485 websites, serve more than 190,000 business advertising accounts, and reaches 19 million people on a weekly basis.
For more information regarding New Media and to be added to our email distribution list, please visit www.newmediainv.com.
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 same store results, Adjusted EBITDA, As Adjusted EBITDA, free cash flow, and adjusted free cash flow including the gain from the sale of Las Vegas 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.
Same Store Results
Same store results, a non-GAAP financial measure, 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 acquisition of Victorville Daily Press, American Consolidated Media Southwest, Petersburg Progress-Index, Foster’s Daily Democrat, and Monroe News (“tuck-in acquisitions”), were funded from the Company’s available cash, and not considered material.
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, non-cash items such as non-cash compensation, non-recurring integration and reorganization costs, gain/loss on sale or disposal of assets, 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;
• 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; and
• Indicators for management to determine if adjustments to current spending decisions are needed.
Adjusted EBITDA, As Adjusted EBITDA, and free cash flow provide New Media with measures of financial performance, independent of items that are beyond the control of management in the short-term, such as depreciation and amortization, taxation, and interest expense associated with its capital structure. These metrics measure New Media’s financial performance based on operational factors that management can impact in the short-term, namely the cost structure or expenses of the organization. Adjusted EBITDA, As Adjusted EBITDA, and free cash flow are some of the metrics used by senior management and the Board of Directors to review the financial performance of the business on a monthly basis. In addition, New Media’s management utilizes these metrics to evaluate the Company’s performance, along with other criteria, to determine the funds available for paying the quarterly dividend.
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 statements regarding the expected benefits of prior and future acquisitions, expected revenue trends and our ability to continue to grow free cash flow and, our dividend and deliver shareholder returns, our ability to leverage our scale to increase our buying power and lower expenses, growing our digital services business and revenues, pursuing and completing future acquisitions and strategic opportunities, the availability of such opportunities and the benefits associated with such opportunities, expected developments related to the Las Vegas management agreement, and improving revenue trends driven by investments in digital and print initiatives. 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 exceeding what we have seen in the past 12 months, economic conditions in the markets in which we operate, competition from other media companies, the possibility of insufficient interest in our digital business, 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 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.
http://www.businesswire.com/news/home/20160225005552/en/Media-Announces-Strong-Fourth-Quarter-Full-Year
Enterprising Investor
9 years ago
New Media Completes the Sale of the Las Vegas Review-Journal for $140 million Resulting in an Approximate Gain of 69% and Announces Agreements to Purchase Two Media Assets with Total Purchase Price of $46.5 million (12/11/15)
NEW YORK--(BUSINESS WIRE)--New Media Investment Group Inc. (“New Media” or the “Company”, NYSE:NEWM) today announced the sale of DB Nevada Holdings, Inc., publisher of the Las Vegas Review-Journal (“the Review-Journal”) and concurrently announced the agreement to acquire two local media assets in separate transactions.
• Completed the sale of the Review-Journal and related publications for $140 million, or 7.0x LTM pro-forma As Adjusted EBITDA
• Announced an agreement to purchase the Business Information Division of Dolan LLC (“Dolan” or “the Dolan assets”)
• Reached an agreement to purchase substantially all of the publishing operations of a dominant, local daily newspaper
• Pro-forma for all three transactions, New Media’s LTM As Adjusted EBITDA and free cash flow remains largely the same as reported in Q3 2015 at approximately $185 million and $144 million, respectively
• The three transactions together will result in an increase of over $90 million of cash to the balance sheet
• Over the next 12 months, New Media expects to have deployable capital which could add approximately $1.65 of incremental free cash flow per share, without raising additional equity, if invested at multiples generally consistent with our prior acquisitions(1)
“We are thrilled to announce these three transactions and believe they demonstrate our continued commitment and ability to generate substantial returns for our shareholders,” said Michael Reed, New Media’s President and CEO. “Although we are a net acquirer of local media businesses, we will opportunistically pursue transactions that are in the best interest of New Media’s shareholders.
“To date, New Media has announced 12 acquisitions for over $635 million, and more importantly, has remained a disciplined buyer of local media assets. Our portfolio, including the two announced purchases, has an average multiple of 3.9x the seller’s LTM As Adjusted EBITDA. Given our increased liquidity and our established track record of sourcing, valuing, integrating, and operating local media assets, we believe New Media is well positioned to continue to execute on all aspects of our strategy.”
Completed Sale of the Review-Journal and related publications for $140 million
New Media completed the sale of the Review-Journal and related publications to News + Media Capital Group LLC for $140 million, or 7.0x LTM pro-forma As Adjusted EBITDA. The sale, which was completed on December 10, 2015, will result in an estimated 69% gain on the transaction(2).
Michael Reed commented, “The Review-Journal continues to be the preeminent newspaper in Las Vegas providing in-depth coverage of community news. Over the past nine months, it has been a privilege working with the Review-Journal’s employees, and we know their award-winning journalistic reputation will continue under the new ownership.
“Although New Media was not actively looking to sell the newspaper, the decision was in the best interest of our shareholders. Looking ahead, we continue to believe we can execute on our acquisition strategy, acquiring local media assets at 3.5x to 4.5x the seller’s LTM As Adjusted EBITDA, despite the premium multiple being paid for a prized asset such as the Review-Journal.”
“We are delighted to have acquired the Review-Journal,” said Michael Schroeder of News + Media Capital Group LLC. “The Review-Journal is the leading newspaper in Las Vegas and Nevada, and we look forward to working with New Media to continue to grow this great publication. We believe good journalism is good business.”
New Media has been engaged by News + Media Capital Group LLC as the manager of the newspaper assets; however, terms of the management agreement have not been disclosed.
Announced an agreement to acquire the Business Information Division of Dolan LLC
Dolan, comprised of 39 print and online publications, is a leading provider of industry-specific news for the legal, financial, real estate, and government affairs sectors in the 17 markets it serves across the U.S. In addition to providing subscribers with content relevant to their daily professional activities, Dolan also develops, organizes, and produces events centered on awards and education seminars. Dolan’s audience of over 46,000 paid subscribers includes attorneys, judges, property owners, building contractors, and other business professionals.
“We are pleased to announce the agreement to acquire the Dolan assets and see a tremendous opportunity to leverage its publications and subscriber base across New Media’s footprint,” said Michael Reed. “In addition to the valuable content Dolan provides to its readership base, we believe their subscribers, which are predominately service oriented business owners, are the ideal customer for our fast-growing digital services business, Propel Marketing.”
Houlihan Lokey served as exclusive financial advisor to Dolan.
New Media anticipates both Dolan and the other local daily newspaper acquisition will close at the end of 2015 or in early 2016, subject to customary closing conditions; however, there can be no assurance as to the timing or the occurrence of either closing.
1) The incremental free cash flow per share included herein is a hypothetical value used for illustrative purposes only and derived from metrics in line with previous acquisitions.
2) Based on internal estimates and management’s current expectations.
About New Media Investment Group Inc.
New Media is focused primarily on investing in a high quality, diversified portfolio of local media assets, and on growing existing advertising and digital marketing businesses. The Company is one of the largest publishers of locally based print and online media in the United States as measured by our 125 daily publications. As of September 27, 2015, the Company operates in over 490 markets across 32 states. New Media’s portfolio of products, as of September 27, 2015, include over 575 community publications and over 490 related websites, serve more than 215,000 business advertising accounts and reach over 22 million people on a weekly basis.
For more information regarding New Media and to be added to our email distribution list, please visit www.newmediainv.com.
http://www.businesswire.com/news/home/20151211005068/en/Media-Completes-Sale-Las-Vegas-Review-Journal-140
Enterprising Investor
9 years ago
New Media Announces Third Quarter 2015 Results and Dividend of $0.33 per Common Share (10/29/15)
NEW YORK--(BUSINESS WIRE)--New Media Investment Group Inc. (“New Media” or the “Company”, NYSE:NEWM) today reported its financial results for the third quarter ended September 27, 2015.
Financial Summary
• New Media declares a cash dividend of $0.33 per common share
• Total revenues of $312.1 million, an increase of 89.1% to prior year, and a decrease of 5.7% on a same store basis*
• Digital revenue of $29.1 million, an increase of 13.1% to prior year on a same store basis*
• Operating income of $14.6 million, an increase of $10.1 million to prior year
• Net income of $6.1 million, an improvement from a loss of $(4.7) million in the prior year
• As Adjusted EBITDA of $40.1 million, an increase of 84.8% to prior year*
• Free cash flow of $30.3 million, an increase of 90.3% to prior year*
• Free cash flow per basic share of $0.68, an increase of 29.8%, or $0.16, to prior year despite a 46.6% increase to weighted average shares outstanding*
• Liquidity, consisting of cash on the balance sheet and undrawn revolver, of $55.3 million
Business Highlights
• Completed the acquisition of substantially all of the assets of the Monroe Publishing Company, including the daily newspaper, the Monroe News, for 4.1x the seller’s 2014 As Adjusted EBITDA
• Postmedia Network Inc. (“Postmedia”), one of the largest Canadian news media companies representing more than 200 brands across multiple print, online, and mobile platforms, became a reseller of Propel’s products and services across Canada
[tables deleted]
Michael E. Reed, New Media President and Chief Executive Officer, commented, “Our performance in Q3 marks another strong quarter for the Company with total revenues, As Adjusted EBITDA, and free cash flow increasing 89.1%, 84.8%, and 90.3% vs. the prior year, respectively. On a same store basis, Q3 total revenues decreased 5.7% vs. prior year driven primarily by declines in our Local Print Advertising and Preprints categories. Same store sequential revenue trends were also impacted by two of our tuck-in acquisitions, ACM Southwest and The Progress-Index, cycling out of our quarterly numbers. We are pleased to report that excluding tuck-in acquisitions, revenue at businesses we have owned for over one year performed much better, decreasing 3.7%, highlighting the operational improvements we are able to make once we have time to execute on our strategy.
“During the quarter, New Media also completed the acquisition of the 190 year old daily newspaper, the Monroe News. The longtime newspaper of record in Monroe County is located near our cluster in Michigan, making it an ideal tuck-in acquisition to integrate into our current operations. Given the fragmented nature of the local media market, we believe there are many similar compelling acquisition opportunities for us in the future. Since inception, New Media has remained committed to being a disciplined buyer of local media assets completing nearly $600 million of acquisitions at an average multiple of 4.1x the seller’s LTM As Adjusted EBITDA. After factoring in estimated net synergies, the multiple reduces to 3.2x and we generate levered yields of over 40%.
“In addition to inorganic growth through acquisition, we are thrilled to report that Postmedia has become a reseller of Propel’s products and services across Canada. Given their well-known brands and reach, we see a tremendous opportunity for Postmedia to grow their digital business. We continue to believe our established local newspaper brands, in-market salesforce, and strong relationships with local businesses will lead to new revenue streams to offset topline declines by the end of 2017. Furthermore, with our LTM annualized dividend payout at approximately 40% of pro-forma LTM free cash flow, the majority of our cash flow is used to fund highly accretive acquisitions and organic growth initiatives. We see an opportunity to grow our dividend as we continue to execute on our organic and inorganic growth initiatives, and looking ahead, we believe New Media remains an attractive total return vehicle that will drive substantial future shareholder returns.”
Third Quarter 2015 Financial Results
New Media recorded total revenues of $312.1 million for the quarter, an increase of 89.1% when compared to the prior year, and a decrease of 5.7% on a same store basis. Excluding the benefit from tuck-in acquisitions, total revenues owned for more than one year decreased 3.7% to prior year.
Total Print Advertising decreased 10.4% on a same store basis primarily driven by Preprints and Local Print Advertising, which decreased 12.3% and 11.9%, respectively. The decline in preprints is driven by major retailers decreasing their volume and numerous store closures in our markets. Classified Print revenue decreased 6.2% on a same store basis; however, obituaries and legals revenue continue to be stable subcategories, and currently comprise over 35% of total Classified Print revenue.
New Media’s Digital revenue contributed $29.1 million to the quarter, a double digit revenue increase of 13.1% on a same store basis. Propel, our digital marketing services business, continued to perform well and its revenue increased 78.8% to the prior year on a same store basis.
Circulation, our largest individual revenue category at nearly one-third of total revenues, continues to be a relatively stable revenue category for the Company, and decreased 1.1% on a same store basis. Finally, on a same store basis, Commercial Print and Other revenue decreased 10.2% to the prior year with over 67% of the decline driven by recent acquisitions shifting from external print relationships to intercompany revenue, as they are now part of New Media.
Total expenses decreased 7.1% to the prior year, on a same store basis, totaling $272.0 million, after adjusting for non-recurring and non-cash items. As the Company continues to realize synergies from our acquisitions, we are able to leverage our scale, centralized back office platform, and buying power to drive lower expenses for the total Company.
As Adjusted EBITDA of $40.1 million increased $18.4 million, or 84.8%, over the prior year. Free cash flow of $30.3 million increased 90.3% over the prior year to $0.68 per basic share.
Third Quarter 2015 Dividend
New Media’s Board of Directors declared a third quarter 2015 cash dividend of $0.33 per share of common stock. The dividend is payable on November 19, 2015 to shareholders of record as of the close of business on November 12, 2015.
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.
Additional Information
For additional information that management believes to be useful for investors, please refer to the presentation posted on the Investor Relations section of New Media’s website, www.newmediainv.com and the Company’s Quarterly Report on Form 10-Q, which will be available on the Company’s website. Nothing on our website is included or incorporated by reference herein.
Earnings Conference Call
New Media’s management will host a conference call on Thursday, October 29, 2015 at 11:00 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 1-877-601-8827 (from within the U.S.) or 1-918-534-8645 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “New Media Third Quarter Earnings Call.”
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, November 12, 2015 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 “55617542.”
About New Media Investment Group Inc.
New Media is focused primarily on investing in a high quality, diversified portfolio of local media assets, and on growing existing advertising and digital marketing businesses. The Company is one of the largest publishers of locally based print and online media in the United States as measured by our 125 daily publications. As of September 27, 2015, the Company operates in over 490 markets across 32 states. New Media’s portfolio of products, as of September 27, 2015, include over 575 community publications and over 490 related websites, serve more than 215,000 business advertising accounts and reach over 22 million people on a weekly basis.
For more information regarding New Media and to be added to our email distribution list, please visit www.newmediainv.com.
http://www.businesswire.com/news/home/20151029005500/en/Media-Announces-Quarter-2015-Results-Dividend-0.33
Enterprising Investor
9 years ago
New Media Announces Second Quarter 2015 Results and Dividend of $0.33 per Common Share (7/30/15)
NEW YORK--(BUSINESS WIRE)--New Media Investment Group Inc. (“New Media” or the “Company”, NYSE:NEWM) today reported its financial results for the second quarter ended June 28, 2015.
Financial Summary
• New Media declares a cash dividend of $0.33 per common share for the second quarter of 2015
• Total revenues of $299.5 million, an increase of 89.0% to prior year, and a decrease of 3.5% on a same store basis*
• Digital revenue of $27.0 million, an increase of 10.7% to prior year on a same store basis*
• Operating income of $19.5 million, an increase of 164.4% to prior year
• Net income of $11.2 million
• As Adjusted EBITDA of $42.4 million, an increase of 74.5% to prior year*
• Free cash flow of $33.2 million, or $0.74 per basic share, an increase of $0.09 per basic share to prior year*
• Liquidity, consisting of cash on the balance sheet and undrawn revolver, of $23.7 million
Business Highlights
• Closed the acquisition of The Columbus Dispatch for $47.0 million, funded with a combination of cash on the balance sheet and an incremental $25.0 million on the Company’s existing term loan
• Entered into a promotional venture with Direct Eats, an online specialty food marketplace; New Media will provide advertising across all of its local markets in exchange for a 12.5% equity stake in Direct Eats
[tables deleted]
“I’m very pleased to announce another strong quarter for New Media supported by our robust financial results, successful execution of our acquisition strategy, and strong cash flow generation,” said Michael E. Reed, New Media President and Chief Executive Officer. “During the second quarter, the Company generated total revenues of $299.5 million, As Adjusted EBITDA of $42.4 million, and free cash flow of $33.2 million, an increase of 89.0%, 74.5%, and 69.4% vs. the prior year, respectively. On a same store basis, total revenues decreased 3.5% vs. prior year driven primarily by pressure on our Local Print Advertising and Preprints categories.
“For the last twelve months, excluding tuck-in acquisitions, total revenues for the Company decreased 4.1%; however, revenue we have owned for over one year performed much better, decreasing 3.2%, highlighting the improvement we believe is due to the Company having time to execute on its operational strategy. We are very proud that most of the publications we have owned for more than one year have better revenue trends than the papers we recently acquired, and better trends than the industry at large. Further, we expect our revenue trends to improve, gradually reaching flat within the next two years. In the meantime, we believe we can shield our cash flows from topline declines through measured expense reductions at our acquired properties, and remain confident in our ability to continue to grow free cash flow and our dividend.
“Near-term, in order to maintain flat same store revenue trends, we believe New Media needs to complete approximately $20 to $40 million of tuck-in acquisitions per year, funded with organically generated cash. This assumes a 3% to 5% decline in same store revenues, in line with the revenue declines we have seen over the past 12 months. We believe this level of acquisitions is highly achievable given the Company’s strong free cash flow generation and proven track record of successfully identifying and acquiring local media assets. While accretive acquisitions are driving the Company’s growth near-term, we believe New Media’s maturing digital initiatives will lead to long-term organic growth.
“In addition to our strong Q2 financial results, New Media also closed the acquisition of The Columbus Dispatch for $47.0 million. The family-owned daily newspaper, first published in 1871, is the longstanding, flagship daily newspaper serving the Columbus, Ohio area. Since inception, New Media has announced $585.8 million of acquisitions at an average 4.1x LTM As Adjusted EBITDA. After factoring in estimated net synergies for the deals we have completed, the multiple reduces further and we will generate levered yields of over 40% for the Company.
“Our strategy and commitment to create value for shareholders has been consistent since becoming a public company in early 2014. We intend to generate substantial value for shareholders by completing accretive acquisitions, investing in print and digital initiatives to drive long-term organic growth, and returning a significant portion of our stable cash flows to shareholders in the form of a dividend. As New Media has grown through acquisitions, we have raised our dividend twice, or 22%, since the prior year, highlighting our commitment to return a significant portion of our stable free cash flow to investors. Looking ahead, we continue to believe our position as a leading source of local news in the markets we serve, and our strategic investments, will continue to generate substantial value for our shareholders.”
Second Quarter 2015 Financial Results
New Media recorded total revenues of $299.5 million for the quarter, an increase of 89.0% when compared to the prior year, and a decrease of 3.5% on a same store basis. Excluding the benefit from tuck-in acquisitions, total revenues decreased 5.3% and total revenues owned for more than one year decreased 3.9% to prior year.
Total Print Advertising decreased 7.1% on a same store basis driven by Preprints and Local Display which decreased 11.2% and 7.9%, respectively. Preprints fell under pressure in the second quarter driven by several major retailers decreasing their volume, and multiple retail store closures in our markets. Classified Print revenue decreased 2.0% on a same store basis; however, obituaries revenue, a subcategory of Classified Print, continues to be a strong category.
New Media’s Digital revenue of $27.0 million contributed positively to the Company’s strong revenue performance increasing 10.7% on a same store basis. Propel, our digital marketing services business, increased 75.8% to the prior year on a same store basis.
Circulation, our largest individual revenue category at nearly one-third of total revenues, continues to be a stable category with revenue increasing 0.4% on a same store basis. Finally, Commercial Print and Other revenue decreased 6.9% to the prior year on a same store basis, with nearly half of the decline driven by recent acquisitions shifting from external print relationships to internal, as they are now part of New Media.
Total expenses decreased 2.9% to the prior year, on a same store basis, totaling $257.1 million, after adjusting for non-recurring and non-cash items. Excluding the additional expense from tuck-in acquisitions, on a same store basis, total expenses decreased 5.5% to prior year, totaling $250.1 million. Organizational efficiency continues to be a central strategic priority, and as the Company continues to grow through acquisitions, we believe we will continue to be able to leverage our scale to increase our buying power.
As Adjusted EBITDA of $42.4 million increased $18.1 million, or 74.5%, over the prior year. Free cash flow of $33.2 million increased 69.4% over the prior year to $0.74 per basic share.
Second Quarter 2015 Dividend
New Media’s Board of Directors declared a second quarter 2015 cash dividend of $0.33 per share of common stock. The dividend is payable on August 20, 2015 to shareholders of record as of the close of business on August 12, 2015.
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.
Additional Information
For additional information that management believes to be useful for investors, please refer to the presentation posted on the Investor Relations section of New Media’s website, www.newmediainv.com and the Company’s Quarterly Report on Form 10-Q, which will be available on the Company’s website. Nothing on our website is included or incorporated by reference herein.
Earnings Conference Call
New Media’s management will host a conference call on Thursday, July 30, 2015 at 11:00 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 1-877-601-8827 (from within the U.S.) or 1-918-534-8645 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “New Media Second Quarter Earnings Call.”
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, August 13, 2015 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 “78908452.”
About New Media Investment Group Inc.
New Media is focused primarily on investing in a high quality, diversified portfolio of local media assets, and on growing existing advertising and digital marketing businesses. The Company is one of the largest publishers of locally based print and online media in the United States as measured by our 125 daily publications. As of June 28, 2015, the Company operates in over 490 markets across 32 states. New Media’s portfolio of products, as of June 28, 2015, include over 575 community publications and over 490 related websites, serve more than 215,000 business advertising accounts and reach over 22 million people on a weekly basis.
For more information regarding New Media and to be added to our email distribution list, please visit www.newmediainv.com.
http://www.businesswire.com/news/home/20150730005598/en/Media-Announces-Quarter-2015-Results-Dividend-0.33#.Vbofo7TbKUk
Enterprising Investor
10 years ago
New Media Announces First Quarter 2015 Results and a 10.0% Increase in its Dividend to $0.33 per Common Share (4/30/15)
NEW YORK--(BUSINESS WIRE)--New Media Investment Group Inc. (“New Media” or the “Company”, NYSE:NEWM) today reported its financial results for the first quarter ended March 29, 2015.
Financial Summary
• New Media declares a cash dividend of $0.33 per share of common stock for the first quarter 2015, a 10.0% increase vs. Q4 2014
• Total revenues of $250.6 million, an increase of 76.4% to prior year, and a decrease of 0.1% on a same store basis*
• Digital revenue of $21.3 million, an increase of 7.5% to the prior year on a same store basis*
• Operating income of $2.6 million
• Net (loss) of $(6.1) million, an improvement of 9.3% to the prior year
• As Adjusted EBITDA of $25.3 million, an increase of 177.8% to the prior year*
• Free cash flow of $19.1 million, or $0.45 per share, an increase of $0.31 per share to the prior year*
• Liquidity, consisting of cash on the balance sheet and undrawn revolver, was $37.9 million as of March 29, 2015
Business Highlights
• Closed two acquisitions, Halifax Media and Stephens Media, for a combined purchase price of $382.5 million
• Completed an equity offering raising gross proceeds of $151.9 million, increasing our liquidity position and ability to execute on our acquisition strategy
• Added a net balance of $102.0 million of incremental debt through our existing term loan and assumed $18.0 million of debt from Halifax
• Increased the revolver capacity in our credit facility by $15.0 million to $40.0 million
[tables deleted]
“New Media’s strong first quarter results position the Company for another solid year,” said New Media President and Chief Executive Officer, Michael E. Reed. “Despite the severe winter weather that negatively impacted our publications in the Northeast, we closed the first quarter with total revenues of $250.6 million, As Adjusted EBITDA of $25.3 million, and free cash flow of $19.1 million, an increase of 76.4%, 177.8%, and 349.9% vs. the prior year, respectively. This growth is being driven by the investments we are making in our digital and print initiatives, such as Propel, BestRide, and the Center for News and Design, our accretive acquisition strategy, and our continued focus on centralizing services to efficiently manage expenses. We are particularly proud of our free cash flow per share growing to $0.45 in Q1 2015, from $0.14 in Q1 2014, demonstrating the success of our organic and inorganic strategies.
“During the first quarter, we closed our two largest acquisitions to date, Halifax Media and Stephens Media, for $280.0 and $102.5 million, respectively. Both companies’ publications are well-established, leading providers of local news in the communities they serve, and present a tremendous opportunity for New Media to expand its digital businesses, as well as realize future synergies. As our operations team continues to integrate the new acquisitions, our separate sourcing team continues to work to identify quality, local media assets that fit our financial and operational criteria. With a strong and growing pipeline of potential tuck-in acquisitions, and significant recurring cash flow from our core newspaper business, we believe New Media remains well positioned to create substantial value for our shareholders.”
First Quarter 2015 Financial Results
New Media recorded total revenues of $250.6 million for the quarter, an increase of 76.4% when compared to the prior year, and a decrease of 0.1% on a same store basis.
Total Print Advertising decreased 0.9% on a same store basis driven by Preprints and Local Display which decreased 3.3% and 2.8%, respectively. The declines in Preprint revenue reflect modest circulation volume losses combined with retail store consolidations in some of our markets. The decline in total Print Advertising was partially offset by Classified Print revenue which increased 4.7% on a same store basis. Within Classified Print, we are seeing year over year improvement in obituaries revenue and legals advertising, which now represent over a third of our total Classified Print revenue.
New Media’s Digital category also contributed to the Company’s overall strong revenue performance increasing 7.5% on a same store basis. Revenue from Propel, our digital marketing services business, increased 51.0% to the prior year on a same store basis.
Circulation, our largest individual revenue category at 32% of total revenues, continues to be a stable category with revenue increasing 0.7% on a same store basis. Finally, Commercial Print and Other revenue decreased 5.2% to the prior year on a same store basis, partially driven by recent acquisitions shifting from external print relationships to internal, as they are now part of New Media. This has no impact on As Adjusted EBITDA or income.
Total expenses in the quarter remained flat to the prior year, on a same store basis, totaling $225.3 million, after adjusting for non-recurring and non-cash items. As the Company continues to grow through acquisitions, we are able to leverage our scale to increase our buying power and offset our continued investments in corporate infrastructure, digital initiatives and tuck-in acquisitions.
Though our publications in the Northeast were impacted by the severe winter weather, both on the revenue and expense side, As Adjusted EBITDA for the quarter totaled $25.3 million, an increase of $16.2 million, or 177.8%, over the prior year. Net (loss) of $(6.1) million was impacted by approximately $3.4 million of acquisition related costs, $2.1 million of costs related to the debt fundraising and amendments, and $1.9 million of severance. Free cash flow of $19.1 million increased 349.9% over the prior year to $0.45 per share.
First Quarter 2015 Dividend
New Media’s Board of Directors declared a first quarter 2015 cash dividend of $0.33 per share of common stock. The dividend is payable on May 21, 2015 to shareholders of record as of the close of business on May 13, 2015.
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.
Additional Information
For additional information that management believes to be useful for investors, please refer to the presentation posted on the Investor Relations section of New Media’s website, www.newmediainv.com and the Company’s Quarterly Report on Form 10-Q, which will be available on the Company’s website. Nothing on our website is included or incorporated by reference herein.
Earnings Conference Call
New Media’s management will host a conference call on Thursday, April 30, 2015 at 10:00 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 1-877-601-8827 (from within the U.S.) or 1-918-534-8645 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “New Media First Quarter Earnings Call.”
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 14, 2015 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 “23403995.”
About New Media Investment Group Inc.
New Media is focused primarily on investing in a high quality, diversified portfolio of local media assets, and on growing existing advertising and digital marketing businesses. The Company is one of the largest publishers of locally based print and online media in the United States as measured by our 126 daily publications. As of April 30, 2015, the Company operates in over 460 markets across 32 states. New Media’s portfolio of products, as of April 30, 2015, include over 550 community publications and over 460 related websites, serve more than 200,000 business advertising accounts and reach over 19 million people on a weekly basis.
For more information regarding New Media and to be added to our email distribution list, please visit www.newmediainv.com.
http://www.businesswire.com/news/home/20150430005546/en/Media-Announces-Quarter-2015-Results-10.0-Increase#.VUIfc4ktGUk
Enterprising Investor
10 years ago
New Media Announces Strong Fourth Quarter & Full Year 2014 Results and an 11.1% Increase in its Dividend to $0.30 per Common Share (2/26/15)
NEW YORK--(BUSINESS WIRE)--New Media Investment Group Inc. (“New Media” or the “Company”, NYSE:NEWM) today reported its financial results for the fourth quarter and full year ended December 28, 2014.
Fourth Quarter Financial Summary
• New Media declares a cash dividend of $0.30 per share of common stock for the fourth quarter of 2014, an 11.1% increase vs. Q3 2014
• Total revenues of $186.8 million, an increase of 16.5% to prior year, and an increase of 1.2% on a same store basis*
• Digital revenue of $16.0 million, an increase of 14.2% on a same store basis*
• Operating income of $17.5 million
• Net income of $11.5 million, or $0.31 per share
• As Adjusted EBITDA of $34.3 million, an increase of 3.3% to prior year*
• Free cash flow of $27.8 million, or $0.74 per share, a decrease of 7.1% to prior year*
• Liquidity, consisting of cash on the balance sheet and undrawn revolver, was $143.7 million as of December 28, 2014
Full Year 2014 Financial Summary
• Total revenues of $652.3 million, an increase of 26.3% to prior year, and an increase of 0.1% on a same store basis*
• Digital revenue of $57.9 million, an increase of 8.3% on a same store basis*
• Operating income of $26.4 million
• Net (loss) of ($3.2) million
• As Adjusted EBITDA of $89.4 million, an increase of 13.1% to prior year*
• Free cash flow of $67.6 million, or $2.11 per share, an increase of 141.8% to prior year*
Q4 2014 & Subsequent Business Highlights
• Achieved strongest quarterly Digital revenue growth, increasing 14.2% vs. an average increase of 6.3% for the previous quarters in 2014
• Closed one acquisition in Q4 2014 for $5.0 million; closed one acquisition and announced another in Q1 2015 for a total purchase price of $382.5 million
• Added a net balance of $102.0 million of incremental debt through our existing term loan and assumed $18.0 million of debt from Halifax in Q1 2015; total gross debt as of February 26, 2015 is approximately $350 million
• Completed an equity offering in Q1 2015 raising gross proceeds of approximately $152 million, increasing our liquidity position and ability to execute on our acquisition strategy
[tables deleted]
Michael E. Reed, New Media President and Chief Executive Officer, commented, “Our strong fourth quarter results highlight the value of our local newspaper content, and reinforce that the investments we are making in our print and digital initiatives are creating value for the Company. Total revenues for the quarter increased 16.5% vs. prior year, and also increased 1.2% on a same store basis. Impressively, Digital revenue increased 14.2% on a same store basis, driven primarily by strong growth in our digital marketing services business, Propel, which increased 171.0% vs. prior year.
“For the full year, the business achieved year over year growth in our Digital, Commercial Print and Circulation revenue categories, increasing 8.3%, 7.8% and 0.9% on a same store basis, respectively. Throughout 2014, we focused on increasing our revenue from these stable and growing revenue categories, and I’m pleased to report that approximately 62% of New Media’s total revenue is now derived from Digital, Circulation, Preprints and Commercial Printing revenue. Going forward, we intend to invest in these categories, as well as our new digital initiatives and other businesses, such as our Center for News and Design, to further diversify our revenue mix away from traditional Print Advertising.
“In addition to the success the newspaper business has achieved, I am also very proud of New Media’s acquisition track record. To date, New Media has announced eight transactions for approximately $540 million, including our recently announced acquisition of Stephens Media. Pro forma for acquisitions we have closed to date, New Media has approximately $1.1 billion in total revenues, $157.0 million of As Adjusted EBITDA, and $125.5 million of free cash flow. Given the accretive acquisitions we have been able to execute on, I’m pleased to announce the Board of Directors has voted to increase the Q4 dividend to $0.30 per common share, an 11.1% increase vs. the previous dividend payment. With total gross debt at approximately $350 million, we remain focused on operating the Company with a modest leverage profile at approximately 2.2x gross debt.
“Looking forward to 2015, we are excited about the opportunity to leverage our in-market sales force, and our position as a leading provider of local content in the communities we serve, to grow total revenues. We believe our centralized services continue to put us in an advantageous position to execute on accretive acquisitions. With our strong cash flow, a healthy dividend and the right capital structure, we are very excited about our opportunity to continue to create substantial value for our shareholders.”
Fourth Quarter 2014 Financial Results
New Media recorded revenues of $186.8 million for the quarter, which represents an increase of 16.5% when compared to the prior year, and an increase of 1.2% on a same store basis.
Total Print Advertising decreased 0.4% on a same store basis driven by Local Display and Preprints which decreased 5.5% and 1.3%, respectively. The declines in Print Advertising were offset by Classified Print revenue which increased 6.5% on a same store basis. Classified Print revenue trends continue to show improvement over prior quarters driven by growth in obituaries revenue and legals advertising. New Media’s Digital category also contributed to the Company’s overall strong revenue performance increasing 14.2% on a same store basis, driven by Propel revenue increasing 171.0% vs. the prior year. Circulation and Commercial Print and Other remain relatively stable with revenue increasing 1.2% and decreasing 0.2% on a same store basis, respectively.
Total expenses in the quarter of $152.5 million increased $6.0 million, or 4.0%, compared to the prior year on a same store basis after adjusting for non-recurring and non-cash items. Expense increases were driven partially by investments in our digital initiatives, such as Propel and BestRide, and our print initiatives, such as the Center for News and Design. To note, the Center for News and Design was chosen by the Associated Press to design and produce their Sports Extra pages, starting with the Super Bowl this year. We believe our investments in both our print and digital businesses are leading to improved revenue trends.
Net income of $11.5 million in the fourth quarter was burdened by approximately $5.2 million of expenses related to acquisitions, financing and restructuring. As Adjusted EBITDA of $34.3 million increased $1.1 million, or 3.3%, over the prior year.
Fourth Quarter 2014 Dividend
New Media’s Board of Directors declared a fourth quarter 2014 cash dividend of $0.30 per share of common stock. The dividend is payable on March 19, 2015 to shareholders of record as of the close of business on March 11, 2015.
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.
Full Year 2014 Financial Results
New Media recorded revenues of $652.3 million in 2014, which represents an increase of 26.3% when compared to the prior year, and was relatively flat on a same store basis, increasing 0.1% vs. prior year.
Total Print Advertising decreased 2.7% on a same store basis; however, New Media’s Digital and Commercial Print and Other businesses increased 8.3% and 7.8% on a same store basis. Propel, our digital marketing services business, contributed $18.5 million to Digital revenue, an increase of 189% vs. prior year on a same store basis. Circulation revenue, our largest individual revenue category at 30% of total revenues, increased 0.9% on a same store basis.
Total expenses in 2014 of $562.9 million increased $8.2 million, or 1.5% compared to the prior year on a same store basis after adjusting for non-recurring and non-cash items.
Net (loss) of ($3.2) million for 2014 was burdened by approximately $17.4 million of expenses related to acquisitions, financing and restructuring. As Adjusted EBITDA of $89.4 million increased $10.3 million, or 13.1%, over the prior year.
Additional Information
For additional information that management believes to be useful for investors, please refer to the presentation posted on the Investor Relations section of New Media’s website, www.newmediainv.com and the Company’s Annual Report on Form 10-K, which will be available on the Company’s website. Nothing on our website is included or incorporated by reference herein.
Earnings Conference Call
New Media’s management will host a conference call on Thursday, February 26, 2015 at 11:00 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 1-877-601-8827 (from within the U.S.) or 1-918-534-8645 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “New Media Fourth Quarter Earnings Call.”
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, March 12, 2015 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 “70992476.”
Fortress Public Filings, Earnings Release and Conference Call
Certain financial information and results for New Media may be disclosed by Fortress Investment Group LLC (“Fortress”, NYSE: FIG) in annual and quarterly reports and other public filings with the Securities and Exchange Commission, as well as in earnings releases and conference calls. These disclosures may occur prior to the release of this information by New Media.
Management of Fortress will host a conference call on February 26, 2015 at 10:00 A.M. Eastern Time. All interested parties are welcome to participate on the live call. The Fortress conference call may be accessed by dialing 1-877-694-6694 (from within the U.S.) or 1-970-315-0985 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “Fortress Fourth Quarter Earnings Call.” A simultaneous webcast of the Fortress conference call will be available to the public on a listen-only basis at www.fortress.com on the Investor Relations page. A copy of the Fortress earnings release will be posted to the Investor Relations section of Fortress’ website, www.fortress.com. Nothing on the Fortress website is included or incorporated by reference herein.
About New Media Investment Group Inc.
New Media is focused primarily on investing in a high quality, diversified portfolio of local media assets, and on growing existing advertising and digital marketing businesses. The Company is one of the largest publishers of locally based print and online media in the United States as measured by the number of daily publications. Including the acquisition of Halifax Media, the Company operates in over 415 markets across 31 states. Including the acquisition of Halifax Media, New Media’s portfolio of products which include over 490 community publications, over 415 related websites, and six yellow page directories, serve more than 175,000 business advertising accounts and reach over 19 million people on a weekly basis.
For more information regarding New Media and to be added to our email distribution list, please visit www.newmediainv.com.
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 same store results, 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.
Same Store Results
Same store results, a non-GAAP financial measure, 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 acquisition of each of Victorville, American Consolidated Media Southwest, Petersburg Progress-Index and Foster’s Daily Democrat is not considered material.
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 other non-cash items such as non-cash compensation, non-recurring integration and reorganization costs 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 its day-to-day operations;
• 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; and
• Indicators for management to determine if adjustments to current spending decisions are needed.
Adjusted EBITDA, As Adjusted EBITDA and free cash flow provide New Media with measures of financial performance, independent of items that are beyond the control of management in the short-term, such as depreciation and amortization, taxation and interest expense associated with its capital structure. These metrics measure New Media’s financial performance based on operational factors that management can impact in the short-term, namely the cost structure or expenses of the organization. Adjusted EBITDA, As Adjusted EBITDA and free cash flow are some of the metrics used by senior management and the Board of Directors to review the financial performance of the business on a monthly basis. In addition, New Media’s management utilizes these metrics to evaluate the Company’s performance, along with other criteria, to determine the funds available for paying the quarterly dividend.
http://www.businesswire.com/news/home/20150226005495/en/Media-Announces-Strong-Fourth-Quarter-Full-Year#.VO8vI4ktGUk
Enterprising Investor
10 years ago
New Media Announces Third Quarter 2014 Results and Dividend of $0.27 per Common Share (10/30/14)
NEW YORK--(BUSINESS WIRE)--New Media Investment Group Inc. (NYSE:NEWM; “New Media” or the “Company”) today reported its financial results for the third quarter ended September 28, 2014.
Financial Summary:
• New Media declares a cash dividend of $0.27 per share of common stock for the third quarter of 2014
• Total revenues of $165.1 million, an increase of 31.0% to prior year, and an increase of 2.3% on a same store basis*
• Digital revenue of $14.5 million, an increase of 6.3% on a same store basis*
• GAAP net (loss) of ($4.7) million and as adjusted net income was $4.2 million, or $0.14 per share*
• As Adjusted EBITDA of $21.7 million, an increase of 12.2% to prior year, or a decrease of 10.6% on a same store basis*
• Free cash flow of $15.9 million, or $0.52 per share, an increase of $7.9 million, or 99.1% on a same store basis*
• Operating income of $4.6 million
• Liquidity, consisting of cash on the balance sheet and undrawn revolver, was $145.1 million as of September 28, 2014
Business Highlights:
• Completed approximately $116.7 million equity raise, net of underwriting fees, increasing our liquidity position and opportunity to execute on our strategy
• Closed on three acquisitions with a total purchase price of $61.3 million
[tables deleted]
Michael E. Reed, New Media President and Chief Executive Officer commented, “I’m very pleased with New Media’s financial performance in the third quarter. Our investments in our newspaper and digital businesses continue to positively impact our revenue trends. We believe our results support our view that local newspapers in smaller markets remain central to those communities, and that our evolving revenue mix, with a greater emphasis on stable or growing categories, is leading to stabilization of our business. Our third quarter revenue results were driven by strong growth in our Digital and Commercial Print businesses which were up 6.3% and 5.6%, respectively. Despite some seasonality we are now beginning to see in our Propel business during the summer months, our digital services business continues to see very strong growth with third quarter revenue up $2.9 million, or 167.5%, over the prior year. Our Circulation and Preprint revenue businesses continue to be stable, which contributes to our improving overall revenue trends.
“Our As Adjusted EBITDA was strong in the quarter at $21.7 million, while continuing to make investments in both our print and digital businesses. We believe these investments will drive future improvement in our overall revenue trends. New Media’s cash flow was also very strong with nearly 75% of our As Adjusted EBITDA converting to free cash flow. Free cash flow in the quarter was $15.9 million, or $0.52 per share. We are also pleased that the Board has authorized a dividend for the quarter of $0.27 per share of common stock.
“Lastly, I’m very excited to announce that New Media successfully completed an equity offering during the quarter raising approximately $116.7 million of net proceeds. The equity better positions the Company to be able to execute on its acquisition strategy, and importantly, move quickly on potential transactions. Our pipeline for acquisitions remains robust and as a reminder, during the third quarter, New Media acquired three local media assets for a total purchase price of $61.3 million. Overall, we remain excited about our ability to execute on both our organic and acquisition strategy, which together, we believe will continue to drive shareholder returns.”
Third Quarter 2014 Financial Results
New Media recorded revenues of $165.1 million for the quarter, which represents an increase of 31.0% when compared to the prior year, and an increase of 2.3% on a same store basis.
Total Print Advertising increased 1.2% on a same store basis driven by Classified Print and Preprints revenue which increased 2.8% and 3.9%, respectively, and Local Display which decreased 1.4% on a same store basis. Classified Print revenue trends continue to show improvement over prior quarters driven by growth in obituaries revenue, and more stable legals advertising. Strength in Preprint revenue is partially being driven by our successful Sunday Select program. New Media’s Digital and Commercial Printing and Other businesses also contributed to the Company’s strong revenue performance increasing 6.3% and 5.6%, respectively, from the prior year on a same store basis. Propel contributed $4.6 million to the third quarter Digital revenue, an increase of $2.9 million from the prior year.
Total expenses in the quarter of $143.4 million were up $6.3 million, or 4.6%, compared to the prior year on a same store basis after adjusting for non-recurring and non-cash items. Expense increases are driven partially by investments in our digital and print initiatives, which we believe are leading to improved revenue trends. Investments are being made in our businesses and products, such as Propel, BestRide and Sunday Select.
Net (loss) for the quarter was ($4.7) million, compared to ($129.2) million in the prior year. After adjusting for expenses related to the acquisitions, financing and restructuring, and reversing tax benefits recorded in the first half of the year, our as adjusted net income was $4.2 million, or $0.14 per share. The acquisition, financing and restructuring expenses incurred were $4.7 million, and the reversal of the tax benefit from the first half of the year was $4.2 million.
As Adjusted EBITDA for the quarter was $21.7 million, which increased $2.4 million or 12.2% over the prior year, and decreased $2.6 million or 10.6% on a same store basis. The decrease on a same store basis was driven by expense investments as noted above.
Free cash flow for the quarter was $15.9 million, or $0.52 per share, which increased $7.9 million, or 99.1% versus the prior year on a same store basis. Operating income of $4.6 million was an increase versus ($90.1) million in the prior year.
Liquidity at the end of the quarter was approximately $145.1 million comprised of $135.1 million of unrestricted cash on the balance sheet and $10.0 million of revolver available.
Third Quarter 2014 Dividend
New Media’s Board of Directors declared a third quarter 2014 cash dividend of $0.27 per share of common stock. The dividend is payable on November 20, 2014 to shareholders of record as of the close of business on November 12, 2014.
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.
Additional Information
For additional information that management believes to be useful for investors, please refer to the presentation posted on the Investor Relations section of New Media’s website, www.newmediainv.com and the Company’s Quarterly Report on Form 10-Q, which will be available on the Company’s website. Nothing on our website is included or incorporated by reference herein.
Earnings Conference Call
New Media’s management will host a conference call on Thursday, October 30, 2014 at 11:00 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 1-877-601-8827 (from within the U.S.) or 1-918-534-8645 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “New Media Third Quarter Earnings Call.”
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, November 13, 2014 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 “19188142.”
http://www.businesswire.com/news/home/20141030005465/en/Media-Announces-Quarter-2014-Results-Dividend-0.27#.VFLwpol0yUk
Enterprising Investor
10 years ago
New Media Announces Second Quarter 2014 Results and Dividend of $0.27 per Common Share (7/31/14)
NEW YORK, Jul 31, 2014 (BUSINESS WIRE) -- New Media Investment Group Inc. today reported its financial results for the second quarter ended June 29, 2014.
Financial Summary:
• New Media declares a cash dividend of $0.27 per share of common stock for the second quarter of 2014
• Total revenues of $158.4 million, an increase of 32.5% to prior year, or a decline of 0.5% on a same store basis*
• GAAP net (loss) of ($3.3) million; however, when adjusting for the expenses related to the refinancing completed in the quarter, as adjusted net income was $7.6 million, or $0.25 per share*
• As Adjusted EBITDA of $24.3 million, an increase of 35.8% to prior year, or 2.5% on a same store basis*
• Free cash flow of $19.6 million, or $0.65 per share, a 7.9% increase to prior year on a same store basis*
• Operating income of $7.4 million, an increase of $5.0 million to prior year
• Digital revenue of $14.5 million, an increase of 4.4% on a same store basis; Propel Marketing (“Propel”) contributed $4.5 million to Digital revenue*
• Liquidity, consisting of cash on the balance sheet and undrawn revolver, was $56.3 million as of June 29, 2014
Business Highlights:
• Refinanced credit facility on June 4, 2014, resulting in lower interest and amortization costs
• Closed on two acquisitions on June 30, 2014 with a total purchase price of $15.3 million
• Announced the signing of an asset purchase agreement to acquire The Providence Journal from A. H. Belo Corporation for $46.0 million. The transaction is expected to close in the third quarter of 2014 subject to customary closing conditions
Michael E. Reed, New Media President and Chief Executive Officer commented, “Our strong second quarter results mark New Media’s sixth consecutive quarter of improving revenue trends, driven by more than 60% of total revenues coming from stable to growing segments of our business. The Company experienced strong cash flow performance in the quarter with As Adjusted EBITDA of $24.3 million and free cash flow per share of $0.65, both up over prior year by 2.5% and 7.9%, respectively, on a same store basis. We are also very pleased to announce our first quarterly dividend of $0.27 per share of common stock for the second quarter of 2014.
“Since Q1 2014, New Media has continued to execute on its acquisition strategy with three announced deals for a total purchase price of $61.3 million. The Company also successfully completed a refinancing of our credit facilities lowering our interest and amortization costs, while also improving our operating flexibility and liquidity position. We closed the quarter with investable liquidity of more than $56 million and our pipeline for potential acquisitions is strong and growing. As we look forward to the second half of 2014, we believe we are well positioned to create substantial value for our shareholders.”
Second Quarter 2014 Financial Results
New Media recorded revenues of $158.4 million for the quarter, which represents an increase of 32.5% when compared to the prior year, and a decline of 0.5% on a same store basis. This represents the Company’s lowest quarterly decline in the past six quarters.
Total Print Advertising declined 4.0% on a same store basis driven by Local Display and Classified Print revenue, which declined 9.2% and 0.7%, respectively, on a same store basis. Classified Print showed significant improvement over prior quarters driven by obituaries revenue growth and more stable employment, automotive and real estate advertising. The Company experienced strong revenue performance from Commercial Printing and Other, and Digital, which increased 14.8% and 4.4%, respectively, from the prior year on a same store basis. Propel contributed $4.5 million to the second quarter Digital revenue, an increase of $2.9 million from the prior year on a same store basis.
Total expenses in the quarter of $134.1 million were down $1.5 million, or 1.1% compared to the prior year on a same store basis after adjusting for non-recurring and non-cash items.
Net (loss) for the quarter was ($3.3) million, compared to ($14.1) million in the prior year, representing an improvement of $10.9 million. After adjusting for the expenses related to our refinancing completed in the second quarter, our as adjusted net income was $7.6 million, or $0.25 per share. The refinancing expenses include loss on extinguished debt of $9.0 million plus fees for the period related to the debt refinance of $1.9 million.
As Adjusted EBITDA for the quarter was $24.3 million, which increased 35.8% over the prior year, and 2.5% on a same store basis.
Free cash flow for the quarter was $19.6 million, or $0.65 per share, which increased 7.9% versus the prior year on a same store basis. Operating income of $7.4 million was an increase of $5.0 million to the prior year.
Liquidity at the end of the quarter was approximately $56.3 million comprised of $31.3 million of unrestricted cash on the balance sheet and $25.0 million of revolver available.
Second Quarter 2014 Dividend
New Media’s Board of Directors declared a second quarter 2014 cash dividend of $0.27 per share of common stock. The dividend is payable on August 21, 2014 to shareholders of record as of the close of business on August 12, 2014.
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.
Additional Information
For additional information that management believes to be useful for investors, please refer to the presentation posted on the Investor Relations section of New Media’s website, www.newmediainv.com and the Company’s Quarterly Report on Form 10-Q , which will be available on the Company’s website. Nothing on our website is included or incorporated by reference herein.
Earnings Conference Call
New Media’s management will host a conference call on Thursday, July 31, 2014 at 11:00 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 1-877-601-8827 (from within the U.S.) or 1-918-534-8645 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “New Media Second Quarter Earnings Call.”
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, August 14, 2014 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 “75479849.”
Fortress Public Filings, Earnings Release and Conference Call
Certain financial information and results for New Media may be disclosed by Fortress Investment Group LLC FIG +4.45% in annual and quarterly reports and other public filings with the Securities and Exchange Commission, as well as in earnings releases and conference calls. These disclosures may occur prior to the release of this information by New Media.
Management of Fortress will host a conference call on July 31, 2014 at 10:00 A.M. Eastern Time. All interested parties are welcome to participate on the live call. The Fortress conference call may be accessed by dialing 1-877-694-6694 (from within the U.S.) or 1-970-315-0985 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “Fortress Second Quarter Earnings Call.” A simultaneous webcast of the Fortress conference call will be available to the public on a listen-only basis at www.fortress.com on the Investor Relations page. A copy of the Fortress earnings release will be posted to the Investor Relations section of Fortress’ website, www.fortress.com . Nothing on the Fortress website is included or incorporated by reference herein.
About New Media Investment Group Inc.
New Media is focused primarily on investing in a high quality, diversified portfolio of local media assets, and on growing existing advertising and digital marketing businesses.The Company is one of the largest publishers of locally based print and online media in the United States as measured by number of daily publications.Including the announced Providence Journal acquisition, the Company will operate in 363 markets across 27 states. Including the announced Providence Journal acquisition, New Media’s portfolio of products, which will include 451 community publications, 367 related websites, and six yellow page directories, will serve more than 130,000 business advertising accounts and will reach over 12 million people on a weekly basis.
For more information regarding New Media and to be added to our email distribution list, please visit www.newmediainv.com .
http://www.marketwatch.com/story/new-media-announces-second-quarter-2014-results-and-dividend-of-027-per-common-share-2014-07-31?reflink=MW_news_stmp
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