Tribune Publishing Company (NASDAQ: TPCO) today announced financial
results for the third quarter ended September 29, 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”).
Third Quarter 2019 Highlights:
- Total revenues were $236.0 million, down from $255.8 million in
the third quarter of 2018
- Net income from continuing operations was $6.9 million,
compared to a loss of $0.6 million in the third quarter of
2018
- Net loss attributable to Tribune Publishing common stockholders
was $7.1 million, or $0.61 per share, driven by a reserve recorded
in discontinued operations, compared to a loss of $4.0 million, or
$0.11 per share, in the third quarter of 2018
- Adjusted EBITDA was $24.8 million, an increase of $8.2 million
year-over-year
- Digital content revenues increased 49.9% compared to the third
quarter of 2018
- Digital-only subscribers increased 38% to 314,000 at the end of
the third quarter 2019, up from 227,000 at the end of the third
quarter 2018
- Returned a total of $54 million to shareholders in the form of
a $1.50 special dividend in July
Timothy P. Knight, Tribune Publishing Chief Executive Officer
and President, said: “The third quarter represented solid operating
performance, with significant improvement in net income and
adjusted EBITDA. We managed through challenging revenue trends and
controlled costs accordingly. We continue to make progress on our
stated goals of margin improvement and growing our digital-only
subscriber base. We also kept focus on shareholder value through
the dividend issued in July, which returned cash to shareholders
while leaving the Company with strong cash flexibility.”
Third Quarter 2019 ResultsThird quarter 2019
total revenues were $236.0 million, down $19.7 million or 7.7%
compared to $255.8 million for the third quarter 2018. Total
advertising revenue and digital advertising revenue in the quarter
were $93.2 million and $21.8 million, respectively.
Third quarter total operating expenses, including depreciation
and amortization, were $226.7 million, down 14.7% compared to
$265.8 million in the third quarter of 2018. The decrease reflects
the Company’s ongoing disciplined cost management and includes a
$24.7 million decrease in compensation expense compared to a year
ago.
Net income from continuing operations was $6.9 million in
the third quarter of 2019, improving from a loss of $0.6
million in the third quarter of 2018.
Adjusted EBITDA was $24.8 million in the third quarter of 2019,
an increase of 49.1% or $8.2 million compared to the third quarter
of 2018, driven by a reduction in expenses.
For the quarter ended September 29, 2019, capital
expenditures totaled $4.6 million. Cash balance at
September 29, 2019, was $56.5 million, which does not include
$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 third quarters of 2019 and 2018 and corresponding year to
date periods.
MThird quarter 2019 M total revenues were $187.6 million, down
9.5% compared to the third quarter of 2018. Operating expenses for
M decreased $39.6 million or 18.8% compared to the prior-year
quarter, driven primarily by cost reduction actions.
Third quarter 2019 income from operations for M was $16.6
million, up from a loss of $3.3 million, and Adjusted EBITDA in the
quarter was $22.3 million versus $8.1 million in the third quarter
of 2018.
XTotal revenues for X for the third quarter of 2019 were $44.8
million, up 9.1%. Digital content revenues increased 49.9%
year-over-year, due to strong growth from BestReviews and
digital-only subscribers, as digital advertising revenues in the
quarter declined 15.2%.
Third quarter 2019 operating expenses for X increased 11.5%
compared to the third quarter of 2018, driven by higher allocations
of newsroom expenses, partially offset by lower compensation and
depreciation costs.
Third quarter 2019 income from operations for X was $3.1
million, down from $3.7 million in the third quarter of 2018, and
Adjusted EBITDA was $6.1 million, down $4.3 million compared to the
third quarter of 2018.
Digital-only subscribers grew to 314,000, up 38% from the prior
year and up 5% sequentially from the second quarter of 2019.
2019 OutlookFor the full year, the Company
confirmed its Adjusted EBITDA guidance of $102 million to $106
million. For the fourth quarter of 2019, the Company expects total
revenues of $250 million to $254 million.
Conference Call DetailsTribune Publishing will
host a conference call to discuss the Company’s third quarter 2019
results at 5:00 p.m. Eastern Time (4:00 p.m. Central
Time) on Thursday, November 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 1086836. 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 November 14, 2019, by dialing 855.859.2056
(404.537.3406 for international callers) and entering conference ID
1086836.
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
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 |
|
Nine Months Ended |
|
|
September 29,2019 |
|
September 30,2018 |
|
September 29,2019 |
|
September 30,2018 |
|
|
|
|
|
|
|
|
|
Operating revenues |
|
$ |
236,027 |
|
|
$ |
255,770 |
|
|
$ |
730,879 |
|
|
$ |
747,173 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
226,652 |
|
|
265,763 |
|
|
720,801 |
|
|
789,489 |
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations |
|
9,375 |
|
|
(9,993 |
) |
|
10,078 |
|
|
(42,316 |
) |
|
|
|
|
|
|
|
|
|
Interest income (expense), net |
|
(57 |
) |
|
303 |
|
|
478 |
|
|
(11,673 |
) |
Loss on early extinguishment of debt |
|
— |
|
|
— |
|
|
— |
|
|
(7,666 |
) |
Loss on equity investments, net |
|
(2,213 |
) |
|
(434 |
) |
|
(3,255 |
) |
|
(1,828 |
) |
Other income (expense), net |
|
248 |
|
|
3,640 |
|
|
265 |
|
|
10,943 |
|
Income (loss) from
continuing operations before income taxes |
|
7,353 |
|
|
(6,484 |
) |
|
7,566 |
|
|
(52,540 |
) |
Income tax expense (benefit) |
|
480 |
|
|
(5,835 |
) |
|
63 |
|
|
(8,719 |
) |
Net income (loss) from
continuing operations |
|
6,873 |
|
|
(649 |
) |
|
7,503 |
|
|
(43,821 |
) |
Plus: Earnings (loss) from discontinued operations, net of
taxes |
|
(12,848 |
) |
|
(3,586 |
) |
|
(13,570 |
) |
|
290,665 |
|
Net income
(loss) |
|
(5,975 |
) |
|
(4,235 |
) |
|
(6,067 |
) |
|
246,844 |
|
Less: Income (loss) attributable to noncontrolling interest |
|
1,150 |
|
|
(239 |
) |
|
3,037 |
|
|
471 |
|
Net income (loss)
attributable to Tribune common stockholders |
|
$ |
(7,125 |
) |
|
$ |
(3,996 |
) |
|
$ |
(9,104 |
) |
|
$ |
246,373 |
|
|
|
|
|
|
|
|
|
|
Net income (loss)
available to Tribune common stockholders, per common share -
Basic |
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.25 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.29 |
) |
|
$ |
(1.26 |
) |
Discontinued operations |
|
(0.36 |
) |
|
(0.10 |
) |
|
(0.38 |
) |
|
8.27 |
|
Net income (loss) attributable to Tribune per common share -
Basic |
|
$ |
(0.61 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.67 |
) |
|
$ |
7.01 |
|
|
|
|
|
|
|
|
|
|
Net income (loss)
available to Tribune common stockholders, per common share -
Diluted |
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.25 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.29 |
) |
|
$ |
(1.26 |
) |
Discontinued operations |
|
(0.36 |
) |
|
(0.10 |
) |
|
(0.38 |
) |
|
8.27 |
|
Net income (loss) attributable to Tribune per common share -
Diluted |
|
$ |
(0.61 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.67 |
) |
|
$ |
7.01 |
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
35,863 |
|
|
35,409 |
|
|
35,734 |
|
|
35,166 |
|
Diluted |
|
35,863 |
|
|
35,409 |
|
|
35,734 |
|
|
35,166 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRIBUNE PUBLISHING
COMPANYSEGMENT INFORMATION(In
thousands) (Unaudited)
Preliminary
The tables below show the segmentation of income and expenses
for the three and nine months ended September 29, 2019, as
compared to the three and nine months ended
September 30, 2018.
|
Three Months Ended |
|
M |
|
X |
|
Corporate and Eliminations |
|
Consolidated |
|
Sep 29, 2019 |
|
Sep 30, 2018 |
|
Sep 29, 2019 |
|
Sep 30, 2018 |
|
Sep 29, 2019 |
|
Sep 30, 2018 |
|
Sep 29, 2019 |
|
Sep 30, 2018 |
Total revenues |
$ |
187,628 |
|
$ |
207,385 |
|
|
$ |
44,821 |
|
$ |
41,077 |
|
$ |
3,578 |
|
|
$ |
7,308 |
|
|
$ |
236,027 |
|
$ |
255,770 |
|
Operating expenses |
171,009 |
|
210,640 |
|
|
41,696 |
|
37,380 |
|
13,947 |
|
|
17,743 |
|
|
226,652 |
|
265,763 |
|
Income (loss) from
operations |
16,619 |
|
(3,255 |
) |
|
3,125 |
|
3,697 |
|
(10,369 |
) |
|
(10,435 |
) |
|
9,375 |
|
(9,993 |
) |
Depreciation and
amortization |
5,002 |
|
4,151 |
|
|
2,683 |
|
4,274 |
|
3,576 |
|
|
3,754 |
|
|
11,261 |
|
12,179 |
|
Adjustments (1) |
635 |
|
7,182 |
|
|
316 |
|
2,475 |
|
3,219 |
|
|
4,797 |
|
|
4,170 |
|
14,454 |
|
Adjusted EBITDA |
$ |
22,256 |
|
$ |
8,078 |
|
|
$ |
6,124 |
|
$ |
10,446 |
|
$ |
(3,574 |
) |
|
$ |
(1,884 |
) |
|
$ |
24,806 |
|
$ |
16,640 |
|
(1) See Reconciliation of Income (Loss) From Continuing
Operations to Adjusted EBITDA for additional information on
adjustments.
|
Nine Months Ended |
|
M |
|
X |
|
Corporate and Eliminations |
|
Consolidated |
|
Sep 29, 2019 |
|
Sep 30, 2018 |
|
Sep 29, 2019 |
|
Sep 30, 2018 |
|
Sep 29, 2019 |
|
Sep 30, 2018 |
|
Sep 29, 2019 |
|
Sep 30, 2018 |
Total revenues |
$ |
585,453 |
|
$ |
623,893 |
|
$ |
129,470 |
|
$ |
116,189 |
|
$ |
15,956 |
|
|
$ |
7,091 |
|
|
$ |
730,879 |
|
$ |
747,173 |
|
Operating expenses |
543,383 |
|
619,461 |
|
122,109 |
|
109,548 |
|
55,309 |
|
|
60,480 |
|
|
720,801 |
|
789,489 |
|
Income (loss) from operations |
42,070 |
|
4,432 |
|
7,361 |
|
6,641 |
|
(39,353 |
) |
|
(53,389 |
) |
|
10,078 |
|
(42,316 |
) |
Depreciation and
amortization |
16,229 |
|
12,113 |
|
7,248 |
|
13,328 |
|
11,516 |
|
|
12,126 |
|
|
34,993 |
|
37,567 |
|
Adjustments (1) |
4,196 |
|
15,926 |
|
6,183 |
|
7,737 |
|
15,075 |
|
|
28,485 |
|
|
25,454 |
|
52,148 |
|
Adjusted EBITDA |
$ |
62,495 |
|
$ |
32,471 |
|
$ |
20,792 |
|
$ |
27,706 |
|
$ |
(12,762 |
) |
|
$ |
(12,778 |
) |
|
$ |
70,525 |
|
$ |
47,399 |
|
(1) See Reconciliation of Income (Loss) From Continuing
Operations to Adjusted EBITDA for additional information on
adjustments.
Segment
M |
|
Three Months Ended |
|
Nine Months Ended |
|
|
Sep 29, 2019 |
|
Sep 30, 2018 |
|
% Change |
|
Sep 29, 2019 |
|
Sep 30, 2018 |
|
% Change |
Operating
revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Advertising |
|
$ |
71,376 |
|
$ |
83,990 |
|
|
(15.0 |
) |
% |
|
$ |
227,135 |
|
$ |
254,532 |
|
(10.8 |
) |
% |
Circulation |
|
82,992 |
|
87,644 |
|
|
(5.3 |
) |
% |
|
254,471 |
|
260,886 |
|
(2.5 |
) |
% |
Other |
|
33,260 |
|
35,751 |
|
|
(7.0 |
) |
% |
|
103,847 |
|
108,475 |
|
(4.3 |
) |
% |
Total revenues |
|
187,628 |
|
207,385 |
|
|
(9.5 |
) |
% |
|
585,453 |
|
623,893 |
|
(6.2 |
) |
% |
Operating
expenses |
|
171,009 |
|
210,640 |
|
|
(18.8 |
) |
% |
|
543,383 |
|
619,461 |
|
(12.3 |
) |
% |
Income from
operations |
|
16,619 |
|
(3,255 |
) |
|
* |
|
42,070 |
|
4,432 |
|
* |
Depreciation and
amortization |
|
5,002 |
|
4,151 |
|
|
20.5 |
|
% |
|
16,229 |
|
12,113 |
|
34.0 |
|
% |
Adjustments (1) |
|
635 |
|
7,182 |
|
|
(91.2 |
) |
% |
|
4,196 |
|
15,926 |
|
(73.7 |
) |
% |
Adjusted
EBITDA |
|
$ |
22,256 |
|
$ |
8,078 |
|
|
* |
|
$ |
62,495 |
|
$ |
32,471 |
|
92.5 |
|
% |
* 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.
Segment
X |
|
Three Months Ended |
|
Nine Months Ended |
|
|
Sep 29, 2019 |
|
Sep 30, 2018 |
|
% Change |
|
Sep 29, 2019 |
|
Sep 30, 2018 |
|
% Change |
Operating
revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Advertising |
|
$ |
21,843 |
|
$ |
25,748 |
|
(15.2 |
) |
% |
|
$ |
66,399 |
|
$ |
71,785 |
|
(7.5 |
) |
% |
Content |
|
22,978 |
|
15,329 |
|
49.9 |
|
% |
|
63,071 |
|
44,404 |
|
42.0 |
|
% |
Total revenues |
|
44,821 |
|
41,077 |
|
9.1 |
|
% |
|
129,470 |
|
116,189 |
|
11.4 |
|
% |
Operating
expenses |
|
41,696 |
|
37,380 |
|
11.5 |
|
% |
|
122,109 |
|
109,548 |
|
11.5 |
|
% |
Income from
operations |
|
3,125 |
|
3,697 |
|
(15.5 |
) |
% |
|
7,361 |
|
6,641 |
|
10.8 |
|
% |
Depreciation and
amortization |
|
2,683 |
|
4,274 |
|
(37.2 |
) |
% |
|
7,248 |
|
13,328 |
|
(45.6 |
) |
% |
Adjustments (1) |
|
316 |
|
2,475 |
|
(87.2 |
) |
% |
|
6,183 |
|
7,737 |
|
(20.1 |
) |
% |
Adjusted
EBITDA |
|
$ |
6,124 |
|
$ |
10,446 |
|
(41.4 |
) |
% |
|
$ |
20,792 |
|
$ |
27,706 |
|
(25.0 |
) |
% |
* 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.
TRIBUNE PUBLISHING
COMPANYCONDENSED CONSOLIDATED BALANCE
SHEETS(In
thousands)(Unaudited)
Preliminary
|
|
September 29, 2019 |
|
December 30, 2018 |
Assets |
|
|
|
|
Current
Assets: |
|
|
|
|
Cash |
|
$ |
56,526 |
|
$ |
97,560 |
Accounts receivable |
|
103,713 |
|
145,463 |
Inventories |
|
5,682 |
|
9,587 |
Prepaid expenses and other |
|
21,535 |
|
18,197 |
Total current assets |
|
187,456 |
|
270,807 |
Net Properties, Plant
and Equipment |
|
126,952 |
|
144,963 |
Other
Assets |
|
|
|
|
Goodwill |
|
132,172 |
|
132,146 |
Intangible assets, net |
|
70,960 |
|
77,229 |
Software, net |
|
23,066 |
|
27,117 |
Lease right of use assets |
|
102,071 |
|
— |
Restricted cash |
|
37,290 |
|
43,947 |
Other long-term assets |
|
21,709 |
|
30,418 |
Total other assets |
|
387,268 |
|
310,857 |
Total
assets |
|
$ |
701,676 |
|
$ |
726,627 |
|
|
|
|
|
Liabilities and
Equity |
|
|
|
|
Current
Liabilities |
|
|
|
|
Accounts payable |
|
$ |
40,962 |
|
$ |
70,555 |
Employee compensation and benefits |
|
32,954 |
|
61,001 |
Deferred revenue |
|
44,438 |
|
51,114 |
Dividends payable to stockholders |
|
— |
|
— |
Current portion of long-term lease liability |
|
25,120 |
|
— |
Current portion of long-term debt |
|
100 |
|
405 |
Other current liabilities |
|
41,293 |
|
21,203 |
Liabilities associated with assets held for sale |
|
— |
|
6,249 |
Total current liabilities |
|
184,867 |
|
210,527 |
Non-Current
Liabilities |
|
|
|
|
Long-term lease liability |
|
102,430 |
|
— |
Workers’ compensation, general liability and auto insurance
payable |
|
26,895 |
|
30,606 |
Pension and postretirement benefits payable |
|
17,419 |
|
20,150 |
Deferred rent |
|
— |
|
25,424 |
Long-term debt |
|
6,777 |
|
6,799 |
Other obligations |
|
7,861 |
|
20,053 |
Total non-current liabilities |
|
161,382 |
|
103,032 |
Noncontrolling Equity
Interest |
|
54,246 |
|
39,756 |
Equity |
|
|
|
|
Total stockholders' equity |
|
301,181 |
|
373,312 |
Total liabilities and
equity |
|
$ |
701,676 |
|
$ |
726,627 |
|
|
|
|
|
|
|
TRIBUNE PUBLISHING
COMPANYNON-GAAP
RECONCILIATIONS(In thousands)
(Unaudited)
Preliminary
Reconciliation of Income (Loss) From Continuing
Operations to Adjusted EBITDA:
|
Three Months Ended |
|
Nine Months Ended |
|
Sep 29, 2019 |
|
Sep 30, 2018 |
|
% Change |
|
Sep 29, 2019 |
|
Sep 30, 2018 |
|
% Change |
Net income (loss) from
continuing operations |
$ |
6,873 |
|
|
$ |
(649 |
) |
|
* |
|
$ |
7,503 |
|
|
$ |
(43,821 |
) |
|
* |
Income tax expense (benefit) from continuing operations |
480 |
|
|
(5,835 |
) |
|
* |
|
63 |
|
|
(8,719 |
) |
|
* |
Interest expense (income), net |
57 |
|
|
(303 |
) |
|
* |
|
(478 |
) |
|
11,673 |
|
|
* |
Loss on the early extinguishment of debt |
— |
|
|
— |
|
|
* |
|
— |
|
|
7,666 |
|
|
* |
Loss on equity investments, net |
2,213 |
|
|
434 |
|
|
* |
|
3,255 |
|
|
1,828 |
|
|
78.1 |
|
% |
Other (income) expense, net |
(248 |
) |
|
(3,640 |
) |
|
(93.2 |
) |
% |
|
(265 |
) |
|
(10,943 |
) |
|
(97.6 |
) |
% |
Income (loss) from
operations |
9,375 |
|
|
(9,993 |
) |
|
* |
|
10,078 |
|
|
(42,316 |
) |
|
* |
Depreciation and amortization |
11,261 |
|
|
12,179 |
|
|
(7.5 |
) |
% |
|
34,993 |
|
|
37,567 |
|
|
(6.9 |
) |
% |
Restructuring and transaction costs (1) |
1,721 |
|
|
11,472 |
|
|
(85.0 |
) |
% |
|
14,389 |
|
|
44,635 |
|
|
(67.8 |
) |
% |
Stock-based compensation |
2,449 |
|
|
2,982 |
|
|
(17.9 |
) |
% |
|
11,065 |
|
|
7,513 |
|
|
47.3 |
|
% |
Adjusted EBITDA from
continuing operations |
$ |
24,806 |
|
|
$ |
16,640 |
|
|
49.1 |
|
% |
|
$ |
70,525 |
|
|
$ |
47,399 |
|
|
48.8 |
|
% |
* 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 September 29, 2019 |
|
Three Months Ended
September 30, 2018 |
|
|
GAAP |
|
Adjustments |
|
Adjusted Same- Business |
|
GAAP |
|
Adjustments |
|
Adjusted Same- Business |
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation |
|
$ |
83,066 |
|
$ |
(3,484 |
) |
|
$ |
79,582 |
|
$ |
107,762 |
|
$ |
(11,748 |
) |
|
$ |
96,014 |
Newsprint and ink |
|
12,613 |
|
— |
|
|
12,613 |
|
16,980 |
|
— |
|
|
16,980 |
Outside services |
|
77,549 |
|
(295 |
) |
|
77,254 |
|
81,572 |
|
(2,419 |
) |
|
79,153 |
Other operating expenses |
|
42,163 |
|
(390 |
) |
|
41,773 |
|
47,270 |
|
(288 |
) |
|
46,982 |
Depreciation and
amortization |
|
11,261 |
|
(11,261 |
) |
|
— |
|
12,179 |
|
(12,179 |
) |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
$ |
226,652 |
|
$ |
(15,430 |
) |
|
$ |
211,222 |
|
$ |
265,763 |
|
$ |
(26,634 |
) |
|
$ |
239,129 |
|
|
Nine Months Ended September 29, 2019 |
|
Nine Months Ended September 30, 2018 |
|
|
GAAP |
|
Adjustments |
|
Adjusted Same- Business |
|
GAAP |
|
Adjustments |
|
Adjusted Same- Business |
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation |
|
276,583 |
|
$ |
(34,096 |
) |
|
$ |
242,487 |
|
$ |
324,982 |
|
$ |
(39,157 |
) |
|
$ |
285,825 |
Newsprint and ink |
|
43,834 |
|
(3,048 |
) |
|
40,786 |
|
48,348 |
|
(1,831 |
) |
|
46,517 |
Outside services |
|
241,787 |
|
(19,428 |
) |
|
222,359 |
|
262,372 |
|
(29,268 |
) |
|
233,104 |
Other operating expenses |
|
123,604 |
|
(38,084 |
) |
|
85,520 |
|
116,220 |
|
(23,859 |
) |
|
92,361 |
Depreciation and
amortization |
|
34,993 |
|
(34,993 |
) |
|
— |
|
37,567 |
|
(37,567 |
) |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
$ |
720,801 |
|
$ |
(129,649 |
) |
|
$ |
591,152 |
|
$ |
789,489 |
|
$ |
(131,682 |
) |
|
$ |
657,807 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 income (loss) from continuing operations available to
Tribune common stockholders is defined as 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.
Income (loss) from continuing operations available to Tribune
common stockholders - GAAP consists of Net income (loss) from
continuing operations per the Consolidated Statements of Income
(Loss), less Income (loss) attributable to noncontrolling interests
and the noncontrolling interest carrying value adjustment as set
forth in the Earnings Per Share calculation in the Company's Form
10-Q.
Adjusted Diluted EPS computes Adjusted income (loss) from
continuing operations available to Tribune common stockholders
divided by diluted weighted average shares outstanding.
Management believes Adjusted 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 |
|
September 29, 2019 |
|
September 30, 2018 |
|
Earnings |
|
Diluted EPS |
|
Earnings |
|
Diluted EPS |
Income (loss) from continuing operations available to Tribune
common stockholders - GAAP |
$ |
(9,130 |
) |
|
$ |
(0.25 |
) |
|
$ |
(410 |
) |
|
$ |
(0.01 |
) |
Adjustments to operating
expenses, net of 27.8% tax: |
|
|
|
|
|
|
|
Restructuring and transaction costs |
1,243 |
|
|
0.03 |
|
|
8,283 |
|
|
0.23 |
|
Adjusted income (loss) from
continuing operations available to Tribune common stockholders -
Non-GAAP |
$ |
(7,887 |
) |
|
$ |
(0.22 |
) |
|
$ |
7,873 |
|
|
$ |
0.22 |
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
September 29, 2019 |
|
September 30, 2018 |
|
Earnings |
|
Diluted EPS |
|
Earnings |
|
Diluted EPS |
Income (loss) from continuing operations available to Tribune
common stockholders - GAAP |
$ |
(10,387 |
) |
|
$ |
(0.29 |
) |
|
$ |
(44,292 |
) |
|
$ |
(1.26 |
) |
Adjustments to operating
expenses, net of 27.8% tax: |
|
|
|
|
|
|
|
Restructuring and transaction costs |
10,389 |
|
|
0.29 |
|
|
32,226 |
|
|
0.92 |
|
Loss on early extinguishment of debt |
— |
|
|
— |
|
|
5,535 |
|
|
0.16 |
|
Adjusted income (loss) from
continuing operations available to Tribune common stockholders -
Non-GAAP |
$ |
2 |
|
|
$ |
— |
|
|
$ |
(6,531 |
) |
|
$ |
(0.19 |
) |
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