Michael W. Ferro, Jr. Appointed Non-Executive
Chairman Of Tribune Publishing Board Of Directors
Highlights:
- Investment to support Tribune
Publishing’s ongoing strategic plan, including acquisitions and
digital initiatives
- Board of Directors appoints Michael W.
Ferro, Jr. as Director and Non-Executive Chairman of the Board of
Directors
- Eddy W. Hartenstein, former
Non-Executive Chairman, remains on the Tribune Publishing Board of
Directors
- Company provides financial updates
- Preliminary 2015 Company Revenues
expected to be in a range of $1.66 billion to $1.67 billion
- Full-year preliminary 2015 Adjusted
EBITDA expected to be $154 million to $157 million
- Company ended fiscal year 2015 with $41
million of cash
- Board of Directors suspends quarterly
cash dividend
Tribune Publishing Company (NYSE: TPUB) today announced it has
completed a $44.4 million private placement transaction with
Merrick Media, LLC that will enhance the Company’s position for
pursuing strategic acquisitions and digital initiatives. Michael W.
Ferro, Jr., Chairman and CEO of Merrick Media, joins the Tribune
Publishing Board of Directors as Non-Executive Chairman.
Eddy W. Hartenstein, who has served as Non-Executive Chairman of
Tribune Publishing since its spin-off from Tribune Media Company in
August 2014, remains on the Tribune Publishing Board of
Directors.
Commenting on the $44.4 million private placement transaction,
Tribune Publishing Chief Executive Officer Jack Griffin said, “This
transaction supports key elements of our ongoing strategic plan and
provides our Company with additional capital to accelerate our
growth strategies. We continue to evaluate growth opportunities
where we can achieve measurable, value-enhancing synergies that
drive financial contribution and maximize shareholder value.”
Eddy Hartenstein commented, “We are pleased to have Michael
Ferro join our Board. He is a proven value creator, and his strong
entrepreneurial business acumen enhances our ability to execute our
strategic plan and grow the Company.”
Michael Ferro said, “I am excited to be working with
the Company’s award-winning brands. I see tremendous upside to
create value and put Tribune Publishing at the forefront of
technology and content to benefit journalists and
shareholders.”
Private Placement
Transaction:
Tribune Publishing today announced that it has completed a $44.4
million private placement of common stock with Merrick Media,
LLC.
The Company issued an aggregate of 5,220,000 shares of its
common stock to Merrick Media, LLC for an aggregate purchase price
of $44.4 million in a private placement transaction exempt from
registration under the Securities Act of 1933, as amended. In
connection with the investment, Merrick Media entered into
customary standstill arrangements, including limitations on
additional share acquisitions and an agreement to vote its shares
in support of the nominees of the Board of Directors.
The closing of the private placement occurred on February 3,
2016. The Company intends to use proceeds from this issuance to
execute further on its growth strategy, including strategic
acquisitions and digital initiatives.
Morgan Stanley acted as financial advisor to Tribune Publishing
on this transaction.
Michael W. Ferro, Jr. Named Chairman of
the Board:
In connection with the private placement, Tribune Publishing has
appointed Michael W. Ferro, Jr. to be its Non-Executive Chairman of
the Board. Mr. Ferro is a recognized entrepreneur and technology
innovator with a significant track record of leading companies that
deliver significant value for shareholders.
In addition to his role at Merrick Media, LLC, Mr. Ferro also
served as Director and Chairman of the Board of Chicago-based Merge
Healthcare, Inc., where he oversaw the revitalization of the
technology company and its highly successful sale last year to
IBM.
Mr. Ferro is also the past Chairman, Chief Executive Officer and
founder of Click Commerce, Inc. Under Mr. Ferro’s leadership, Click
Commerce pioneered the market for Internet portals that drove the
integration of disparate systems in numerous vertical markets.
Mr. Ferro is the former Chairman of the media and technology
company Wrapports, LLC, whose investments include the Chicago
Sun-Times, Chicago Reader and several high-growth digital
businesses, such as themuse.com and thecube.com. Mr. Ferro will
retain his economic interest in Wrapports, LLC. He has relinquished
all operating involvement with the Chicago Sun-Times.
Tribune Publishing Preliminary Fiscal
Year 2015 Financial Update:
- Preliminary Company Revenues are
expected to be in a range of $1.66 billion to $1.67 billion
- Full-year preliminary 2015 Adjusted
EBITDA is expected to be $154 million to $157 million1
- Company ended fiscal year 2015 with $41
million of cash
As of year-end 2015, digital metrics were as follows:
- December 2015 – all-time record of
unique visitors at 51.2 million, according to comScore Media
Metrix
- Total Digital Subscribers of 790,000 at
year end, sequentially up 11% from 2015 third quarter
- Digital-only subscribers of 88,000 at
year end, sequentially up 8% from 2015 third quarter
Common Stock Cash Dividend Policy
Change:
The Company also announced today that the Board of Directors has
suspended the Company’s quarterly common stock cash dividend. The
Company currently intends to use the related cash savings to
preserve financial flexibility while funding the Company’s growth
strategy. Any future determination to declare and pay dividends
will be made at the discretion of the Company’s Board of Directors
after taking into account the Company’s financial results, capital
requirements and other factors it may deem relevant. The Company
will pay its previously declared fourth quarter dividend on
February 11, 2016.
The Company will hold a conference call with investors at 9 a.m.
CST on Thursday, February 4, 2016 regarding today’s announcement.
CEO Jack Griffin and Chief Financial Officer Sandra Martin will be
on the call to discuss the transaction.
To access the live webcast and view related materials, please
visit investor.tribpub.com.
Participants can pre-register for the call using the following
link: http://dpregister.com/10080490. Participants who pre-register
will be given a unique PIN to gain immediate access to the call,
bypassing the live operator. Participants may pre-register at any
time, including up to and after the call start time. For those who
do not pre-register, please dial 1-866-777-2509 in the U.S. or
1-412-317-5413 internationally at least 10 minutes prior to the
scheduled start. The conference call will be “listen only” for
participants other than Tribune Publishing management and financial
analysts.
The conference call will be available on-demand via the Investor
Relations section of the Company’s website approximately one hour
after conclusion of the call. The audio also will be available for
one year on the Company’s website, and the replay via telephone
will be available until February 11, 2016. To access the replay via
telephone, dial 1-877-344-7529 in the U.S. or 1-412-317-0088
internationally, code 10080490.
1 Adjusted EBITDA is a non-GAAP financial measure. See “Use of
Non-GAAP Financial Measures” below for more information.
About Tribune Publishing Company
Tribune Publishing Company (NYSE:TPUB) is a diversified media
and marketing-solutions company that delivers innovative
experiences for audiences and advertisers across all platforms. The
company’s diverse portfolio of iconic news and information brands
includes 11 award-winning major daily titles, more than 60 digital
properties and more than 180 verticals in markets, including Los
Angeles; San Diego; Chicago; South Florida; Orlando; Baltimore;
Carroll County and Annapolis, Md.; Hartford, Conn.; Allentown, Pa.,
and Newport News, Va. Tribune Publishing also offers an array of
customized marketing solutions, and operates a number of niche
products, including Hoy, El Sentinel and VidaLatina, making Tribune
Publishing the country’s largest Spanish-language publisher.
Tribune Publishing Company is headquartered in Chicago.
Cautionary Statements Regarding Forward-looking
Statements
This 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
involve risks and uncertainties, including, without limitation,
statements regarding Tribune Publishing’s expectations regarding
its full-year 2015 financial results and use of proceeds from the
private placement transaction. Statements containing words such as
“may,” “believe,” “anticipate,” “expect,” “intend,” “plan,”
“project,” “will,” “projections,” “continue,” “business outlook,”
“estimate,” “outlook,” or similar expressions constitute
forward-looking statements. Differences in Tribune Publishing’s
actual results from those described in these forward-looking
statements may result from actions taken by Tribune Publishing as
well as from risks and uncertainties beyond Tribune Publishing’s
control. These risks and uncertainties include competition and
other economic conditions including fragmentation of the media
landscape and competition from other media alternatives; changes in
advertising demand, circulation levels and audience shares; the
Company’s ability to develop and grow its online businesses; the
Company’s ability to complete, and realize benefits or synergies
from, acquisitions or divestitures or to operate its businesses
effectively following acquisitions or divestitures; the Company’s
reliance on revenue from printing and distributing third-party
publications; changes in newsprint prices; macroeconomic trends and
conditions; the Company’s reliance on third-party suppliers for
various services; the Company’s ability to adapt to technological
changes; adverse results from litigation, governmental
investigations or tax-related proceedings or audits; execution and
integration of management changes; the Company’s ability to attract
and retain employees; the Company’s success in implementing expense
mitigation initiatives, the Company’s ability to satisfy pension
and other postretirement employee benefit obligations; changes in
accounting standards; the effect of labor strikes, lockouts and
labor negotiations; regulatory and judicial rulings; the Company’s
ability to satisfy future capital and liquidity requirements; the
Company’s ability to access the credit and capital markets at the
times and in the amounts needed and on acceptable terms, and other
events beyond the Company’s control that may result in unexpected
adverse operating results. The Company’s actual results could also
be impacted by the other risks detailed from time to time in its
publicly filed documents, including in Item 1A (Risk Factors) of
its most recent Annual Report on Form 10-K and Quarterly
Report on Form 10-Q. The Company undertakes no obligation to
publicly update or revise any forward-looking statement, whether as
a result of new information, future events or otherwise, except as
required by law.
The expected financial results included in this report are
preliminary and pending the completion of the Company’s financial
closing and review procedures. As a result, there is a possibility
that the Company’s final results will vary from the preliminary
estimates and such differences could be material.
Use of Non-GAAP Financial Measures
To provide investors with additional information regarding
Tribune Publishing’s financial guidance, this press release
includes references to Adjusted EBITDA. This is not a measure
presented in accordance with generally accepted accounting
principles in the United States (US GAAP) and Tribune Publishing’s
use of the term Adjusted EBITDA may vary from that of others in
Tribune Publishing’s industry. Adjusted EBITDA should not be
considered as an alternative to net income (loss), income from
operations, revenues or any other performance measures derived in
accordance with US GAAP as a measure of operating performance or
liquidity.
Adjusted EBITDA is defined as net income before income taxes,
interest income, interest expense, depreciation and amortization,
income and losses from equity investments, corporate management fee
from Tribune Media Company (formerly Tribune Company), pension
credits, stock-based compensation, certain unusual and
non-recurring items (including spin-related costs) and
reorganization items. Tribune Publishing’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 Tribune Publishing’s Board of Directors
concerning the company’s financial performance. Management believes
the presentation of Adjusted EBITDA enhances investors’ overall
understanding of the financial performance of the company’s
business as a stand-alone company. In addition, Adjusted EBITDA, or
a similarly calculated measure, is used as the basis for certain
financial maintenance covenants that Tribune Publishing is subject
to in connection with certain credit facilities. Since not all
companies use identical calculations, Tribune Publishing’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 GAAP. Instead, management believes Adjusted EBITDA
should be used to supplement Tribune Publishing’s financial
measures derived in accordance with 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 Tribune Publishing’s interest income and
expense, or the requirements necessary to service interest or
principal payments on Tribune Publishing’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.
(TPUB-F)
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Tribune Publishing CompanyInvestor Contacts:Alex Rotonen,
469-528-9090arotonen@tribpub.comorKimbre Neidhart,
469-528-9366kneidhart@tribpub.comorPress Contacts:Matthew
Hutchison, 312-222-3305matt.hutchison@tribpub.comorDana Meyer,
312-222-3308dmeyer@tribpub.com
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