Tribune Publishing Company (NASDAQ: TPCO) today announced financial
results for the second quarter ended June 30, 2019. Unless
otherwise noted, amounts and disclosures throughout this earnings
release relate to continuing operations and exclude all
discontinued operations including the Los Angeles Times, the San
Diego Union-Tribune and other assets of the California News Group
(collectively, the “California properties”) and
forsalebyowner.com.
Second Quarter 2019 Highlights:
- Total revenues were $250.3 million, down from $253.0 million in
the second quarter of 2018
- Net income from continuing operations was $5.3 million in the
second quarter of 2019 compared to a net loss of $15.1 million in
the second quarter of 2018
- Due to the substantial gain from the sale of the California
properties in June 2018, net income attributable to Tribune
Publishing common stockholders decreased to $2.7 million, or $0.08
per share, in the second quarter of 2019 compared to $265.0
million, or $7.51 per share, in the second quarter of 2018
- Adjusted EBITDA increased to $24.4 million, up $2.2 million
year-over-year
- Digital content revenues increased 32.1% compared to the second
quarter of 2018
- Digital-only subscribers increased 44% to 300,000 at the end of
the second quarter 2019, up from 208,000 at the end of the second
quarter 2018
Timothy P. Knight, Tribune Publishing Chief Executive Officer
and President, said: “We are very pleased with our solid financial
and operational performance in the second quarter 2019, as we
delivered revenue and adjusted EBITDA above the high end of our
guidance, reflecting our strong execution and the success of our
ongoing cost management efforts. We are also proud to report
that we reached 300,000 digital-only subscribers this quarter as
our initiatives to grow our digital subscription volume and revenue
continue to gain traction. In addition, the changes we made
in 2018 to both our newsroom operations and sales strategies
continue to drive operating momentum across the organization.”
Second Quarter 2019 ResultsSecond quarter 2019
total revenues were $250.3 million, down $2.7 million or 1.1%
compared to $253.0 million for the second quarter 2018.
Revenues for the second quarter 2019 include $13.3 million
attributable to two extra operating months in the quarter for the
Virginian-Pilot Media Companies (“VPMC”) acquisition compared to
the prior year period and revenue associated with the Company’s
Transition Service Arrangement with the California properties.
Second quarter 2019 total advertising revenue and digital
advertising revenue were $103.6 million and $23.7 million,
respectively.
Total operating expenses, including depreciation and
amortization, in the second quarter of 2019 were $242.2 million,
down 4.7% compared to $254.3 million in the second quarter of
2018. The decrease resulted from the Company’s ongoing
disciplined cost management partially offset by the impact of
VPMC.
Net income from continuing operations was $5.3 million in
the second quarter of 2019, compared to a loss of $15.1
million in the second quarter of 2018.
Adjusted EBITDA was $24.4 million in the second quarter of 2019,
which grew by $2.2 million versus the second quarter of 2018. The
year-over-year increase is primarily driven by disciplined expense
management and growth in digital content revenue.
For the quarter ended June 30, 2019, capital expenditures
totaled $9.3 million. Cash balance at June 30, 2019 was
$139.9 million, which includes $37.3 million of restricted cash
reflected in long-term assets.
Segment ResultsThe Company operates in two
segments: M, which is comprised of the Company’s media groups
excluding their digital revenues and related expenses (except
digital subscription revenues when bundled with a print
subscription) and X, which includes all digital revenues and
related expenses of the Company from local Tribune Publishing
websites, third-party websites, mobile applications, digital-only
subscriptions, Tribune Content Agency and BestReviews.
Included in the tables below is segment reporting for M and X
for the second quarters of 2019 and 2018.
MSecond quarter 2019 M total revenues were $199.8 million, down
5.9% compared to the second quarter of 2018. Excluding the
impact of VPMC, revenue was down 9.5% year-over-year.
Second quarter 2019 operating expenses for M decreased 8.0%
compared to the prior-year quarter, driven primarily by cost
reduction actions and shifting of costs from M to X partially
offset by increased expenses related to the VPMC
business.
Second quarter 2019 income from operations for M was $11.8 million
and Adjusted EBITDA was $16.6 million, up from $7.9 million and
$15.7 million, respectively, for the second quarter of 2018.
XTotal revenues for X for the second quarter of 2019 were $45.1
million, up 12.3%, primarily driven by the impact of the VPMC
business, as well as core growth in digital-only subscription
revenue. Content revenues in the second quarter of 2019,
which include digital-only subscription revenues, content
syndication and e-commerce revenues, increased by 32.1%
year-over-year. Excluding the impact of the VPMC acquisition,
organic content revenues were up 31.2%.
Second quarter 2019 operating expenses for X decreased 3.2%
compared to the second quarter of 2018, driven primarily by a
decrease in depreciation expenses associated with upgrades to our
digital assets and a reduction in restructuring charges. This
decrease in depreciation expenses was partially offset by increased
resources and associated costs shifting to X from M and increased
expenses associated with the VPMC business.
Second quarter 2019 income from operations for X was $9.5
million, up from $3.5 million in the second quarter of 2018 and
Adjusted EBITDA was $12.2 million, up $1.0 million compared to the
second quarter of 2018.
Digital-only subscribers grew to 300,000, up 44% from the prior
year and up 6% sequentially from the first quarter of 2019.
2019 OutlookFor the full year, the Company
increases its Adjusted EBITDA guidance to a new range of $102
million to $106
million.
For the third quarter of 2019, the Company expects total revenues
to range from $235 million to $240 million and Adjusted EBITDA to
range from $21 million to $23 million.
Conference Call DetailsTribune Publishing will
host a conference call to discuss the Company’s second quarter 2019
results at 5:00 p.m. Eastern Time (4:00 p.m. Central
Time) on Wednesday, August 7, 2019. The conference call
may be accessed via Tribune Publishing’s Investor Relations website
at investor.tribpub.com or by dialing 844.494.0195
(508.637.5599 for international callers) and entering conference ID
6269986. An archived version of the webcast will also be
available for one year on the Tribune Publishing website. You
can also access this replay via telephone, until August 14, 2019,
by dialing 855.859.2056 (404.537.3406 for international
callers) and entering conference ID 6269986.
Non-GAAP Financial InformationAdjusted EBITDA,
Adjusted same-business operating expenses, Adjusted Income (Loss)
From Continuing Operations available to Tribune Publishing common
stockholders, and Adjusted Diluted EPS are not measures presented
in accordance with generally accepted accounting principles in the
United States (U.S. GAAP) and Tribune Publishing’s use of the terms
Adjusted EBITDA, Adjusted same-business operating expenses,
Adjusted Income (Loss) From Continuing Operations available to
Tribune Publishing common stockholders, and Adjusted Diluted EPS
may vary from that of others in the Company’s industry.
Adjusted EBITDA, Adjusted same-business operating expenses,
Adjusted Income (Loss) From Continuing Operations available to
Tribune Publishing common stockholders, and Adjusted Diluted EPS
should not be considered as an alternative to net income (loss),
income from operations, operating expenses, net income (loss) per
diluted share, revenues or any other performance measures derived
in accordance with U.S. GAAP as measures of operating performance
or liquidity. Further information regarding Tribune
Publishing’s presentation of these measures, including a
reconciliation of Adjusted EBITDA, Adjusted same-business operating
expenses, Adjusted Income (Loss) From Continuing Operations
available to Tribune Publishing common stockholders and Adjusted
Diluted EPS to the most directly comparable U.S. GAAP financial
measure, is included below in this press release.
Cautionary Statements Regarding Forward-looking
StatementsThis press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934 that
are based largely on our current expectations and reflect various
estimates and assumptions by us. Forward-looking statements
are subject to certain risks, trends, and uncertainties that could
cause actual results and achievements to differ materially from
those expressed in such forward-looking statements. Such
risks, trends and uncertainties, which in some instances are beyond
our control, include: changes in advertising demand, circulation
levels and audience shares; competition and other economic
conditions; economic and market conditions that could impact the
level of our required contributions to the defined benefit pension
plans to which we contribute; decisions by trustees under
rehabilitation plans (if applicable) or other contributing
employers with respect to multiemployer plans to which we
contribute which could impact the level of our contributions; our
ability to develop and grow our online businesses; changes in
newsprint price; our ability to maintain effective internal control
over financial reporting; concentration of stock ownership among
our principal stockholders whose interests may differ from those of
other stockholders; and other events beyond our control that may
result in unexpected adverse operating results. For more
information about these and other risks see Item 1A (Risk Factors)
of the Company’s most recent Annual Report on Form 10-K and in the
Company’s other reports filed with the Securities and Exchange
Commission.
The words “believe,” “expect,” “anticipate,” “estimate,”
“could,” “should,” “intend,” “may,” “will,” “plan,” “seek” and
similar expressions generally identify forward-looking
statements. However, such words are not the exclusive means
for identifying forward-looking statements, and their absence does
not mean that the statement is not forward-looking. Whether
or not any such forward-looking statements, in fact, occur will
depend on future events, some of which are beyond our
control. Readers are cautioned not to place undue reliance on
such forward-looking statements, which are being made as of the
date of this press release. Except as required by law, we
undertake no obligation to update any forward-looking statements,
whether as a result of new information, future events or
otherwise.
About Tribune Publishing CompanyTribune
Publishing (NASDAQ: TPCO) is a media company rooted in
award-winning journalism. Headquartered in Chicago, Tribune
Publishing operates local media businesses in eight markets with
titles including the Chicago Tribune, New York Daily
News, The Baltimore Sun, Orlando Sentinel, South
Florida's Sun-Sentinel, Virginia’s Daily Press and The
Virginian-Pilot, The Morning Call of Lehigh Valley, Pennsylvania,
and the Hartford Courant.
In addition to award-winning local media businesses, Tribune
Publishing operates national and international brands such as
Tribune Content Agency and The Daily Meal and is the majority owner
of the product review website
BestReviews.
Our brands are committed to informing, inspiring and engaging
local communities. We create and distribute content across
our media portfolio, offering integrated marketing, media, and
business services to consumers and advertisers, including digital
solutions and advertising opportunities.
Investor Relations Contact:Michael
FerreterTribune Publishing Investor
Relations312.222.3225mferreter@tribpub.com
Media Contact:Tilden KatzTribune Publishing
Corporate
Communications312.606.2614tilden.katz@fticonsulting.comSource:
Tribune Publishing
Exhibits:Condensed Consolidated Statements of Income
(Loss)Segment Income, Expenses, and Non-GAAP
ReconciliationsCondensed Consolidated Balance SheetsNon-GAAP
Reconciliations - Income (Loss) from Continuing Operations to
Adjusted EBITDANon-GAAP Reconciliations - Total Operating Expenses
to Adjusted Same-Business Operating ExpensesNon-GAAP
Reconciliations - Income (Loss) from Continuing Operations
available to Tribune Publishing common stockholders to Adjusted Net
Income (Loss) from continuing operations available to Tribune
Publishing common stockholders and Adjusted Diluted EPS
TRIBUNE PUBLISHING
COMPANYCONSOLIDATED STATEMENTS OF INCOME
(LOSS)(In thousands, except per share
data)(Unaudited)
Preliminary
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, 2019 |
|
July 1, 2018 |
|
June 30, 2019 |
|
July 1, 2018 |
|
|
|
|
|
|
|
|
|
Operating
revenues |
|
$ |
250,327 |
|
|
$ |
253,037 |
|
|
$ |
494,852 |
|
|
$ |
491,576 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
242,222 |
|
|
254,282 |
|
|
494,149 |
|
|
524,582 |
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations |
|
8,105 |
|
|
(1,245 |
) |
|
703 |
|
|
(33,006 |
) |
|
|
|
|
|
|
|
|
|
Interest income (expense),
net |
|
315 |
|
|
(5,412 |
) |
|
535 |
|
|
(11,976 |
) |
Loss on early extinguishment
of debt |
|
— |
|
|
(7,666 |
) |
|
— |
|
|
(7,666 |
) |
Loss on equity investments,
net |
|
(555 |
) |
|
(665 |
) |
|
(1,042 |
) |
|
(1,394 |
) |
Other income (expense),
net |
|
(56 |
) |
|
3,640 |
|
|
17 |
|
|
7,303 |
|
Income (loss) from
continuing operations before income taxes |
|
7,809 |
|
|
(11,348 |
) |
|
213 |
|
|
(46,739 |
) |
Income tax expense (benefit) |
|
2,465 |
|
|
3,753 |
|
|
(417 |
) |
|
(2,926 |
) |
Net income (loss) from
continuing operations |
|
5,344 |
|
|
(15,101 |
) |
|
630 |
|
|
(43,813 |
) |
Plus: Earnings (loss) from discontinued operations, net of
taxes |
|
(722 |
) |
|
280,545 |
|
|
(722 |
) |
|
294,745 |
|
Net income
(loss) |
|
4,622 |
|
|
265,444 |
|
|
(92 |
) |
|
250,932 |
|
Less: Income attributable to noncontrolling interest |
|
1,926 |
|
|
448 |
|
|
1,887 |
|
|
710 |
|
Net income (loss)
attributable to Tribune common stockholders |
|
$ |
2,696 |
|
|
$ |
264,996 |
|
|
$ |
(1,979 |
) |
|
$ |
250,222 |
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Tribune per common share - Basic |
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
0.10 |
|
|
$ |
(0.44 |
) |
|
$ |
(0.04 |
) |
|
$ |
(1.27 |
) |
Discontinued operations |
|
(0.02 |
) |
|
7.95 |
|
|
(0.02 |
) |
|
8.41 |
|
Net income (loss) attributable to Tribune per common share -
Basic |
|
$ |
0.08 |
|
|
$ |
7.51 |
|
|
$ |
(0.06 |
) |
|
$ |
7.14 |
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Tribune per common share - Diluted |
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
0.10 |
|
|
$ |
(0.44 |
) |
|
$ |
(0.04 |
) |
|
$ |
(1.27 |
) |
Discontinued operations |
|
(0.02 |
) |
|
7.95 |
|
|
(0.02 |
) |
|
8.41 |
|
Net income (loss) attributable to Tribune per common share -
Diluted |
|
$ |
0.08 |
|
|
$ |
7.51 |
|
|
$ |
(0.06 |
) |
|
$ |
7.14 |
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
35,711 |
|
|
35,288 |
|
|
35,669 |
|
|
35,045 |
|
Diluted |
|
35,866 |
|
|
35,288 |
|
|
35,669 |
|
|
35,045 |
|
TRIBUNE PUBLISHING
COMPANYSEGMENT INFORMATION(In
thousands) (Unaudited)
Preliminary
The tables below show the segmentation of income and expenses
for the three and six months ended June 30, 2019, as compared
to the three and six months ended July 1, 2018.
|
Three Months Ended |
|
M |
|
X |
|
Corporate and Eliminations |
|
Consolidated |
|
June 30, 2019 |
|
July 1, 2018 |
|
June 30, 2019 |
|
July 1, 2018 |
|
June 30, 2019 |
|
July 1, 2018 |
|
June 30, 2019 |
|
July 1, 2018 |
Total revenues |
$ |
199,800 |
|
|
$ |
212,297 |
|
|
$ |
45,066 |
|
|
$ |
40,141 |
|
|
$ |
5,461 |
|
|
$ |
599 |
|
|
$ |
250,327 |
|
|
$ |
253,037 |
|
Operating expenses |
188,030 |
|
|
204,410 |
|
|
35,520 |
|
|
36,691 |
|
|
18,672 |
|
|
13,181 |
|
|
242,222 |
|
|
254,282 |
|
Income (loss) from
operations |
11,770 |
|
|
7,887 |
|
|
9,546 |
|
|
3,450 |
|
|
(13,211 |
) |
|
(12,582 |
) |
|
8,105 |
|
|
(1,245 |
) |
Depreciation and
amortization |
4,941 |
|
|
3,990 |
|
|
2,388 |
|
|
4,505 |
|
|
4,319 |
|
|
4,447 |
|
|
11,648 |
|
|
12,942 |
|
Adjustments (1) |
(125 |
) |
|
3,865 |
|
|
312 |
|
|
3,312 |
|
|
4,488 |
|
|
3,344 |
|
|
4,675 |
|
|
10,521 |
|
Adjusted EBITDA |
$ |
16,586 |
|
|
$ |
15,742 |
|
|
$ |
12,246 |
|
|
$ |
11,267 |
|
|
$ |
(4,404 |
) |
|
$ |
(4,791 |
) |
|
$ |
24,428 |
|
|
$ |
22,218 |
|
(1) See Reconciliation of Income (Loss) From Continuing
Operations to Adjusted EBITDA for additional information on
adjustments.
|
Six Months Ended |
|
M |
|
X |
|
Corporate and Eliminations |
|
Consolidated |
|
Jun 30, 2019 |
|
Jul 1, 2018 |
|
Jun 30, 2019 |
|
Jul 1, 2018 |
|
Jun 30, 2019 |
|
Jul 1, 2018 |
|
Jun 30, 2019 |
|
Jul 1, 2018 |
Total revenues |
$ |
397,825 |
|
|
$ |
416,508 |
|
|
$ |
84,649 |
|
|
$ |
75,285 |
|
|
$ |
12,378 |
|
|
$ |
(217 |
) |
|
$ |
494,852 |
|
|
$ |
491,576 |
|
Operating expenses |
372,374 |
|
|
408,821 |
|
|
80,413 |
|
|
72,453 |
|
|
41,362 |
|
|
43,308 |
|
|
494,149 |
|
|
524,582 |
|
Income (loss) from
operations |
25,451 |
|
|
7,687 |
|
|
4,236 |
|
|
2,832 |
|
|
(28,984 |
) |
|
(43,525 |
) |
|
703 |
|
|
(33,006 |
) |
Depreciation and
amortization |
11,227 |
|
|
7,962 |
|
|
4,565 |
|
|
9,054 |
|
|
7,940 |
|
|
8,943 |
|
|
23,732 |
|
|
25,959 |
|
Adjustments (1) |
3,561 |
|
|
8,744 |
|
|
5,867 |
|
|
5,262 |
|
|
11,857 |
|
|
23,687 |
|
|
21,285 |
|
|
37,693 |
|
Adjusted EBITDA |
$ |
40,239 |
|
|
$ |
24,393 |
|
|
$ |
14,668 |
|
|
$ |
17,148 |
|
|
$ |
(9,187 |
) |
|
$ |
(10,895 |
) |
|
$ |
45,720 |
|
|
$ |
30,646 |
|
(1) See Reconciliation of Income (Loss) From Continuing
Operations to Adjusted EBITDA for additional information on
adjustments.
Segment
M |
|
Three Months Ended |
|
Six Months Ended |
|
|
Jun 30, 2019 |
|
Jul 1, 2018 |
|
% Change |
|
Jun 30, 2019 |
|
Jul 1, 2018 |
|
% Change |
Operating
revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Advertising |
|
$ |
79,827 |
|
|
$ |
87,800 |
|
|
(9.1 |
%) |
|
$ |
155,759 |
|
|
$ |
170,542 |
|
|
(8.7 |
%) |
Circulation |
|
84,809 |
|
|
88,616 |
|
|
(4.3 |
%) |
|
171,479 |
|
|
173,242 |
|
|
(1.0 |
%) |
Other |
|
35,164 |
|
|
35,881 |
|
|
(2.0 |
%) |
|
70,587 |
|
|
72,724 |
|
|
(2.9 |
%) |
Total revenues |
|
199,800 |
|
|
212,297 |
|
|
(5.9 |
%) |
|
397,825 |
|
|
416,508 |
|
|
(4.5 |
%) |
Operating
expenses |
|
188,030 |
|
|
204,410 |
|
|
(8.0 |
%) |
|
372,374 |
|
|
408,821 |
|
|
(8.9 |
%) |
Income from
operations |
|
11,770 |
|
|
7,887 |
|
|
49.2 |
% |
|
25,451 |
|
|
7,687 |
|
|
* |
Depreciation and
amortization |
|
4,941 |
|
|
3,990 |
|
|
23.8 |
% |
|
11,227 |
|
|
7,962 |
|
|
41.0 |
% |
Adjustments (1) |
|
(125 |
) |
|
3,865 |
|
|
* |
|
3,561 |
|
|
8,744 |
|
|
(59.3 |
%) |
Adjusted
EBITDA |
|
$ |
16,586 |
|
|
$ |
15,742 |
|
|
5.4 |
% |
|
$ |
40,239 |
|
|
$ |
24,393 |
|
|
65.0 |
% |
* Represents positive or negative change in excess of
100%(1) See Reconciliation of Income (Loss) From Continuing
Operations to Adjusted EBITDA for additional information on
adjustments.
Segment
X |
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, 2019 |
|
July 1,2018 |
|
% Change |
|
June 30, 2019 |
|
July 1,2018 |
|
% Change |
Operating
revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Advertising |
|
$ |
23,720 |
|
|
$ |
23,987 |
|
|
(1.1 |
%) |
|
$ |
44,556 |
|
|
$ |
46,037 |
|
|
(3.2 |
%) |
Content |
|
21,346 |
|
|
16,154 |
|
|
32.1 |
% |
|
40,093 |
|
|
29,248 |
|
|
37.1 |
% |
Total revenues |
|
45,066 |
|
|
40,141 |
|
|
12.3 |
% |
|
84,649 |
|
|
75,285 |
|
|
12.4 |
% |
Operating
expenses |
|
35,520 |
|
|
36,691 |
|
|
(3.2 |
%) |
|
80,413 |
|
|
72,453 |
|
|
11.0 |
% |
Income from
operations |
|
9,546 |
|
|
3,450 |
|
|
* |
|
4,236 |
|
|
2,832 |
|
|
49.6 |
% |
Depreciation and
amortization |
|
2,388 |
|
|
4,505 |
|
|
(47.0 |
%) |
|
4,565 |
|
|
9,054 |
|
|
(49.6 |
%) |
Adjustments (1) |
|
312 |
|
|
3,312 |
|
|
(90.6 |
%) |
|
5,867 |
|
|
5,262 |
|
|
11.5 |
% |
Adjusted
EBITDA |
|
$ |
12,246 |
|
|
$ |
11,267 |
|
|
8.7 |
% |
|
$ |
14,668 |
|
|
$ |
17,148 |
|
|
(14.5 |
%) |
* Represents positive or negative change in excess of
100%(1) See Reconciliation of Income (Loss) From Continuing
Operations to Adjusted EBITDA for additional information on
adjustments.
TRIBUNE PUBLISHING
COMPANYCONDENSED CONSOLIDATED BALANCE
SHEETS(In
thousands)(Unaudited)
Preliminary
|
|
June 30, 2019 |
|
December 30, 2018 |
Assets |
|
|
|
|
Current
Assets: |
|
|
|
|
Cash |
|
$ |
102,632 |
|
|
$ |
97,560 |
|
Accounts receivable |
|
112,047 |
|
|
145,463 |
|
Inventories |
|
6,516 |
|
|
9,587 |
|
Prepaid expenses and other |
|
19,534 |
|
|
18,197 |
|
Total current assets |
|
240,729 |
|
|
270,807 |
|
Net Properties, Plant
and Equipment |
|
131,883 |
|
|
144,963 |
|
Other
Assets |
|
|
|
|
Goodwill |
|
132,172 |
|
|
132,146 |
|
Intangible assets, net |
|
72,896 |
|
|
77,229 |
|
Software, net |
|
23,270 |
|
|
27,117 |
|
Lease right of use assets |
|
106,851 |
|
|
— |
|
Restricted cash |
|
37,290 |
|
|
43,947 |
|
Other long-term assets |
|
15,509 |
|
|
30,418 |
|
Total other assets |
|
387,988 |
|
|
310,857 |
|
Total
assets |
|
$ |
760,600 |
|
|
$ |
726,627 |
|
|
|
|
|
|
Liabilities and
Equity |
|
|
|
|
Current
Liabilities |
|
|
|
|
Accounts payable |
|
$ |
45,129 |
|
|
$ |
70,555 |
|
Employee compensation and benefits |
|
42,896 |
|
|
61,001 |
|
Deferred revenue |
|
47,632 |
|
|
51,114 |
|
Dividends payable to stockholders |
|
53,845 |
|
|
— |
|
Current portion of long-term lease liability |
|
21,558 |
|
|
— |
|
Current portion of long-term debt |
|
100 |
|
|
405 |
|
Other current liabilities |
|
21,283 |
|
|
21,203 |
|
Liabilities associated with assets held for sale |
|
— |
|
|
6,249 |
|
Total current liabilities |
|
232,443 |
|
|
210,527 |
|
Non-Current
Liabilities |
|
|
|
|
Long-term lease liability |
|
108,416 |
|
|
— |
|
Workers’ compensation, general liability and auto insurance
payable |
|
25,703 |
|
|
30,606 |
|
Pension and postretirement benefits payable |
|
18,477 |
|
|
20,150 |
|
Deferred rent |
|
— |
|
|
25,424 |
|
Long-term debt |
|
6,801 |
|
|
6,799 |
|
Other obligations |
|
8,218 |
|
|
20,053 |
|
Total non-current liabilities |
|
167,615 |
|
|
103,032 |
|
Noncontrolling Equity
Interest |
|
38,243 |
|
|
39,756 |
|
Equity |
|
|
|
|
Total stockholders' equity |
|
322,299 |
|
|
373,312 |
|
Total liabilities and
equity |
|
$ |
760,600 |
|
|
$ |
726,627 |
|
TRIBUNE PUBLISHING
COMPANYNON-GAAP
RECONCILIATIONS(In thousands)
(Unaudited)
Preliminary
Reconciliation of Income (Loss) From Continuing
Operations to Adjusted EBITDA:
|
Three Months Ended |
|
Six Months Ended |
|
June 30, 2019 |
|
July 1, 2018 |
|
% Change |
|
June 30, 2019 |
|
July 1, 2018 |
|
% Change |
Net income (loss) from
continuing operations |
$ |
5,344 |
|
|
$ |
(15,101 |
) |
|
* |
|
$ |
630 |
|
|
$ |
(43,813 |
) |
|
* |
Income tax expense (benefit)
from continuing operations |
2,465 |
|
|
3,753 |
|
|
(34.3 |
%) |
|
(417 |
) |
|
(2,926 |
) |
|
(85.7 |
%) |
Interest expense (income),
net |
(315 |
) |
|
5,412 |
|
|
* |
|
(535 |
) |
|
11,976 |
|
|
* |
Loss on the early
extinguishment of debt |
— |
|
|
7,666 |
|
|
* |
|
— |
|
|
7,666 |
|
|
* |
Loss on equity investments,
net |
555 |
|
|
665 |
|
|
(16.5 |
%) |
|
1,042 |
|
|
1,394 |
|
|
(25.3 |
%) |
Other (income) expense,
net |
56 |
|
|
(3,640 |
) |
|
* |
|
(17 |
) |
|
(7,303 |
) |
|
(99.8 |
%) |
Income (loss) from
operations |
8,105 |
|
|
(1,245 |
) |
|
* |
|
703 |
|
|
(33,006 |
) |
|
* |
Depreciation and
amortization |
11,648 |
|
|
12,942 |
|
|
(10.0 |
%) |
|
23,732 |
|
|
25,959 |
|
|
(8.6 |
%) |
Restructuring and transaction
costs (1) |
1,796 |
|
|
7,578 |
|
|
(76.3 |
%) |
|
12,669 |
|
|
33,163 |
|
|
(61.8 |
%) |
Stock-based compensation |
2,879 |
|
|
2,943 |
|
|
(2.2 |
%) |
|
8,616 |
|
|
4,530 |
|
|
90.2 |
% |
Adjusted EBITDA from
continuing operations |
$ |
24,428 |
|
|
$ |
22,218 |
|
|
9.9 |
% |
|
$ |
45,720 |
|
|
$ |
30,646 |
|
|
49.2 |
% |
* Represents positive or negative change in excess of 100%
(1) - Restructuring and transaction costs include costs related
to Tribune's internal restructuring, such as severance, charges
associated with vacated space, costs related to completed and
potential acquisitions and a one-time charge related to the
Consulting Agreement.
Adjusted EBITDA
Adjusted EBITDA is a financial measure that is not calculated in
accordance with accounting principles generally accepted in the
United States of America (“U.S. GAAP”). Management believes
that because Adjusted EBITDA excludes (i) certain non-cash
expenses (such as depreciation, amortization, stock-based
compensation, and gain/loss on equity investments) and
(ii) expenses that are not reflective of the Company’s core
operating results over time (such as restructuring costs, including
the employee voluntary separation program and gain/losses on
employee benefit plan terminations, litigation or dispute
settlement charges or gains, premiums on stock buyback and
transaction-related costs), this measure provides investors with
additional useful information to measure the Company’s financial
performance, particularly with respect to changes in performance
from period to period. The Company’s management uses Adjusted
EBITDA (a) as a measure of operating performance; (b) for planning
and forecasting in future periods; and (c) in communications with
the Company’s Board of Directors concerning the Company’s financial
performance. In addition, Adjusted EBITDA, or a similarly
calculated measure, has been used as the basis for certain
financial maintenance covenants that the Company is subject to in
connection with certain credit facilities. Since not all
companies use identical calculations, the Company’s presentation of
Adjusted EBITDA may not be comparable to other similarly titled
measures of other companies and should not be used by investors as
a substitute or alternative to net income or any measure of
financial performance calculated and presented in accordance with
U.S. GAAP. Instead, management believes Adjusted EBITDA
should be used to supplement the Company’s financial measures
derived in accordance with U.S. GAAP to provide a more complete
understanding of the trends affecting the business.
Although Adjusted EBITDA is frequently used by investors and
securities analysts in their evaluations of companies, Adjusted
EBITDA has limitations as an analytical tool, and investors should
not consider it in isolation or as a substitute for, or more
meaningful than, amounts determined in accordance with GAAP. Some
of the limitations to using non-GAAP measures as an analytical tool
are: they do not reflect the Company’s interest income and
expense, or the requirements necessary to service interest or
principal payments on the Company’s debt; they do not reflect
future requirements for capital expenditures or contractual
commitments; and although depreciation and amortization charges are
non-cash charges, the assets being depreciated and amortized will
often have to be replaced in the future, and non-GAAP measures do
not reflect any cash requirements for such replacements.
The Company does not provide a reconciliation of Adjusted EBITDA
guidance due to the inherent difficulty in forecasting and
quantifying certain amounts that are necessary for such
reconciliation, including adjustments that could be made for
restructuring and transaction costs, stock-based compensation
amounts and other charges reflected in our reconciliation of
historic numbers, the amount of which, based on historical
experience, could be significant.
TRIBUNE PUBLISHING
COMPANYNON-GAAP
RECONCILIATIONS(In
thousands)(Unaudited)
Preliminary
Reconciliation of Total Operating Expenses to Adjusted
Same-Business Operating Expenses
Adjusted same-business operating expenses consist of total
operating expenses per the income statement, adjusted to exclude
the impact of items listed in the Adjusted EBITDA non-GAAP
reconciliation, the additional expenses related to the 2018
acquisitions (e.g. same-business) and the impact of the Transition
Service Agreement expenses. Management believes that adjusted
same-business operating expenses is informative to investors as it
enhances the investors' overall understanding of the financial
performance of the Company's business as they analyze current
results compared to prior periods.
|
|
Three Months Ended June 30, 2019 |
|
Three Months Ended July 1, 2018 |
|
|
GAAP |
|
Adjustments |
|
AdjustedSame-Business |
|
GAAP |
|
Adjustments |
|
AdjustedSame-Business |
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation |
|
$ |
95,808 |
|
|
$ |
(7,468 |
) |
|
$ |
88,340 |
|
|
$ |
106,455 |
|
|
$ |
(11,640 |
) |
|
$ |
94,815 |
|
Newsprint and ink |
|
15,118 |
|
|
(952 |
) |
|
14,166 |
|
|
16,770 |
|
|
(596 |
) |
|
16,174 |
|
Outside services |
|
80,425 |
|
|
(6,230 |
) |
|
74,195 |
|
|
81,818 |
|
|
(2,200 |
) |
|
79,618 |
|
Other operating expenses |
|
39,223 |
|
|
(8,211 |
) |
|
31,012 |
|
|
36,297 |
|
|
(2,584 |
) |
|
33,713 |
|
Depreciation and
amortization |
|
11,648 |
|
|
(11,648 |
) |
|
— |
|
|
12,942 |
|
|
(12,942 |
) |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
$ |
242,222 |
|
|
$ |
(34,509 |
) |
|
$ |
207,713 |
|
|
$ |
254,282 |
|
|
$ |
(29,962 |
) |
|
$ |
224,320 |
|
|
|
Six Months Ended June 30, 2019 |
|
Six Months Ended July 1, 2018 |
|
|
GAAP |
|
Adjustments |
|
AdjustedSame-Business |
|
GAAP |
|
Adjustments |
|
AdjustedSame-Business |
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation |
|
193,517 |
|
|
$ |
(26,109 |
) |
|
$ |
167,408 |
|
|
$ |
217,293 |
|
|
$ |
(20,708 |
) |
|
$ |
196,585 |
|
Newsprint and ink |
|
31,221 |
|
|
(2,192 |
) |
|
29,029 |
|
|
31,368 |
|
|
(596 |
) |
|
30,772 |
|
Outside services |
|
164,238 |
|
|
(14,539 |
) |
|
149,699 |
|
|
180,803 |
|
|
(23,226 |
) |
|
157,577 |
|
Other operating
expenses |
|
81,441 |
|
|
(25,548 |
) |
|
55,893 |
|
|
69,159 |
|
|
(8,165 |
) |
|
60,994 |
|
Depreciation and
amortization |
|
23,732 |
|
|
(23,732 |
) |
|
— |
|
|
25,959 |
|
|
(25,959 |
) |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
$ |
494,149 |
|
|
$ |
(92,120 |
) |
|
$ |
402,029 |
|
|
$ |
524,582 |
|
|
$ |
(78,654 |
) |
|
$ |
445,928 |
|
TRIBUNE PUBLISHING
COMPANYNON-GAAP
RECONCILIATIONS(In
thousands)(Unaudited)
Preliminary
Reconciliation of Income (Loss) From Continuing
Operations available to Tribune common stockholders to Adjusted
Income (Loss) From Continuing Operations available to Tribune
common stockholders and Adjusted Diluted EPS:
Adjusted net income (loss) from continuing operations available
to Tribune common stockholders is defined as net income (loss) from
continuing operations available to Tribune common stockholders -
GAAP excluding the adjustments for restructuring and transaction
costs, net of the impact of income taxes.
Adjusted Diluted EPS computes Adjusted net income (loss) from
continuing operations available to Tribune common stockholders
divided by diluted weighted average shares outstanding.
Management believes Adjusted Net income (loss) from continuing
operations available to Tribune common stockholders and Adjusted
Diluted EPS are informative to investors as they enhance investors'
overall understanding of the financial performance of the Company's
business as they analyze current results compared to future
recurring projections.
|
Three Months Ended |
|
June 30, 2019 |
|
July 1, 2018 |
|
Earnings |
|
Diluted EPS |
|
Earnings |
|
Diluted EPS |
Net income (loss) from
continuing operations available to Tribune common stockholders -
GAAP (1) |
$ |
3,418 |
|
|
$ |
0.10 |
|
|
$ |
(15,549 |
) |
|
$ |
(0.44 |
) |
Adjustments to operating
expenses, net of 27.8% tax: |
|
|
|
|
|
|
|
Restructuring and transaction costs |
1,297 |
|
|
0.04 |
|
|
5,471 |
|
|
0.16 |
|
Loss on early extinguishment of debt |
— |
|
|
— |
|
|
5,535 |
|
|
0.16 |
|
Adjusted income (loss) from
continuing operations available to Tribune common stockholders -
Non-GAAP |
$ |
4,715 |
|
|
$ |
0.13 |
|
|
$ |
(4,543 |
) |
|
$ |
(0.13 |
) |
|
Six Months Ended |
|
June 30, 2019 |
|
July 1, 2018 |
|
Earnings |
|
Diluted EPS |
|
Earnings |
|
Diluted EPS |
Net income (loss) from
continuing operations available to Tribune common stockholders -
GAAP (1) |
$ |
(1,257 |
) |
|
$ |
(0.04 |
) |
|
$ |
(44,523 |
) |
|
$ |
(1.27 |
) |
Adjustments to operating
expenses, net of 27.8% tax: |
|
|
|
|
|
|
|
Restructuring and transaction costs |
9,147 |
|
|
0.26 |
|
|
23,944 |
|
|
0.68 |
|
Loss on early extinguishment of debt |
— |
|
|
— |
|
|
5,535 |
|
|
0.16 |
|
Adjusted income (loss) from
continuing operations available to Tribune common stockholders -
Non-GAAP |
$ |
7,890 |
|
|
$ |
0.22 |
|
|
$ |
(15,044 |
) |
|
$ |
(0.43 |
) |
(1) In previous periods the Company used Net income (loss)
from continuing operations. The Company believes that using
Net income (loss) from continuing operations available to Tribune
common stockholders is a more accurate GAAP measure for calculating
the impact of adjustments on EPS.
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