Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma condensed consolidated balance sheet as of September 27, 2015 and the unaudited pro forma condensed consolidated statement of operations for the nine months ended September 27, 2015 are based on the unaudited condensed consolidated financial statements of New Media Investment Group Inc. (“New Media” or “the Company”) as of and for the nine months ended September 27, 2015.
On December 10, 2015, the Company sold the net assets of the Las Vegas Review Journal and related entities (“Las Vegas Review Journal”) to News + Media Capital Group LLC for $140 million, plus estimated working capital. The unaudited pro forma condensed consolidated statement of operations for the nine months ended September 27, 2015 gives effect to the sale as if it had occurred or had become effective as of March 18, 2015, the acquisition date of Stephens Media, LLC (“Stephens Media”), which included the Las Vegas Review Journal. The pro forma adjustments eliminate all income statement activity of the Las Vegas Review Journal from March 18, 2015 to September 27, 2015. The unaudited pro forma condensed consolidated balance sheet as of September 27, 2015 gives effect to the disposition as if it had occurred on September 27, 2015.
The pro forma financial information is provided for informational and illustrative purposes only and should be read in conjunction with New Media’s historical financial statements and related notes thereto included in the Company’s Quarterly Report on Form 10-Q filed on October 29, 2015 with the Securities and Exchange Commission.
The unaudited pro forma condensed consolidated financial information has been prepared to reflect adjustments to the Company’s historical condensed consolidated financial information that are (i) directly attributable to the sale of the Las Vegas Review Journal, (ii) factually supportable and (iii) with respect to the unaudited pro forma condensed consolidated statement of operations, expected to have a continuing impact on the Company’s results. However, such adjustments are estimates and may not prove to be accurate. Information regarding these adjustments is subject to risks and uncertainties that could cause actual results to differ materially from the Company’s unaudited pro forma combined financial information.
The impact of the acquisition of substantially all of the assets of Stephens Media on March 18, 2015 was not reflected in the Company’s historical condensed consolidated statement of operations of New Media for year ended December 28, 2014; accordingly, no pro forma adjustments have been made to these financial statements as there is no impact of this transaction on the respective historical financial information.
The unaudited pro forma condensed consolidated financial information is included for illustrative and informational purposes only and does not purport to reflect the Company’s results of operations or financial condition had the pro forma transaction occurred at an earlier date. The unaudited pro forma condensed consolidated financial information also should not be considered representative of the Company’s future financial condition or results of operations.
All tables are presented in thousands unless otherwise noted.
NEW MEDIA INVESTMENT GROUP AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Balance Sheet
(In thousands)
| | | | | | | | | | | | |
| | | As of September 27, 2015 | |
| | | New Media Historical
September 27, 2015 | | | Las Vegas Accounting for
Sale and
Other Adjustments (b) | | | Pro Forma
September 27, 2015 | |
Assets | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 30,330 | | | $ | 140,000 | (a) | | $ | 170,330 | |
Restricted cash | | | 6,967 | | | | — | | | | 6,967 | |
Accounts receivable, net | | | 130,905 | | | | (9,240 | ) | | | 121,665 | |
Inventory | | | 18,404 | | | | (1,717 | ) | | | 16,687 | |
Prepaid expenses | | | 13,505 | | | | (802 | ) | | | 12,703 | |
Deferred income taxes | | | 4,541 | | | | — | | | | 4,541 | |
Other current assets | | | 11,484 | | | | (23 | ) | | | 11,461 | |
| | | | | | | | | | | | |
Total current assets | | | 216,136 | | | | 128,218 | | | | 344,354 | |
Property, plant, and equipment, net | | | 438,260 | | | | (40,404 | ) | | | 397,856 | |
Goodwill | | | 177,569 | | | | (6,385 | ) | | | 171,184 | |
Intangible assets, net | | | 343,728 | | | | (31,385 | ) | | | 312,343 | |
Deferred financing costs, net | | | 3,247 | | | | — | | | | 3,247 | |
Other assets | | | 2,336 | | | | — | | | | 2,336 | |
| | | | | | | | | | | | |
Total assets | | $ | 1,181,276 | | | $ | 50,044 | | | $ | 1,231,320 | |
| | | | | | | | | | | | |
Liabilities and Stockholders’ Equity | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | |
Current portion of long-term liabilities | | $ | 618 | | | $ | — | | | $ | 618 | |
Current portion of long-term debt | | | 3,509 | | | | — | | | | 3,509 | |
Accounts payable | | | 17,827 | | | | (647 | ) | | | 17,180 | |
Accrued expenses | | | 91,430 | | | | (1,054 | ) | | | 90,376 | |
Deferred revenue | | | 66,527 | | | | (4,938 | ) | | | 61,589 | |
| | | | | | | | | | | | |
Total current liabilities | | | 179,911 | | | | (6,639 | ) | | | 173,272 | |
Long-term liabilities: | | | | | | | | | | | | |
Long-term debt | | | 368,755 | | | | — | | | | 368,755 | |
Long-term liabilities, less current portion | | | 8,244 | | | | — | | | | 8,244 | |
Deferred income taxes | | | 8,265 | | | | — | | | | 8,265 | |
Pension and other postretirement benefit obligations | | | 12,301 | | | | — | | | | 12,301 | |
| | | | | | | | | | | | |
Total liabilities | | | 577,476 | | | | (6,639 | ) | | | 570,837 | |
| | | | | | | | | | | | |
Stockholders’ equity: | | | | | | | | | | | | |
Common stock | | | 445 | | | | — | | | | 445 | |
Additional paid-in capital | | | 605,917 | | | | — | | | | 605,917 | |
Accumulated other comprehensive loss | | | (4,399 | ) | | | — | | | | (4,399 | ) |
Retained earnings | | | 1,837 | | | | 56,683 | (c) | | | 58,520 | |
| | | | | | | | | | | | |
Total stockholders’ equity | | | 603,800 | | | | 56,683 | | | | 660,483 | |
| | | | | | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 1,181,276 | | | $ | 50,044 | | | $ | 1,231,320 | |
| | | | | | | | | | | | |
NEW MEDIA INVESTMENT GROUP AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)
| | | | | | | | | | | | |
| | | Nine Months Ended September 27, 2015 | |
| | | New Media Historical
September 27, 2015 | | | Las Vegas Accounting
for Sale and
Other Adjustments (d) | | | Pro Forma
September 27,
2015 | |
Revenues: | | | | | | | | | | | | |
Advertising | | $ | 500,105 | | | $ | (30,522 | ) | | $ | 469,583 | |
Circulation | | | 273,255 | | | | (10,218 | ) | | | 263,037 | |
Commercial printing and other | | | 88,806 | | | | (4,170 | ) | | | 84,636 | |
| | | | | | | | | | | | |
Total revenues | | | 862,166 | | | | (44,910 | ) | | | 817,256 | |
Operating costs and expenses: | | | | | | | | | | | | |
Operating costs | | | 476,830 | | | | (22,114 | ) | | | 454,716 | |
Selling, general, and administrative | | | 288,660 | | | | (15,856 | ) | | | 272,804 | |
Depreciation and amortization | | | 51,301 | | | | (3,042 | ) | | | 48,259 | |
Integration and reorganization costs | | | 5,221 | | | | (108 | ) | | | 5,113 | |
Loss on sale or disposal of assets | | | 3,407 | | | | 1 | | | | 3,408 | |
| | | | | | | | | | | | |
Operating income | | | 36,747 | | | | (3,791 | ) | | | 32,956 | |
Interest expense | | | 21,888 | | | | — | | | | 21,888 | |
Amortization of deferred financing costs | | | 2,547 | | | | — | | | | 2,547 | |
Loss on early extinguishment of debt | | | — | | | | — | | | | — | |
Other income | | | (8 | ) | | | — | | | | (8 | ) |
| | | | | | | | | | | | |
Income before income taxes | | | 12,320 | | | | (3,791 | ) | | | 8,529 | |
Income tax expense | | | 1,083 | | | | (333 | ) | | | 750 | |
| | | | | | | | | | | | |
Net income | | $ | 11,237 | | | $ | (3,458 | ) | | $ | 7,779 | |
| | | | | | | | | | | | |
Income (loss) per share: | | | | | | | | | | | | |
Basic: | | | | | | | | | | | | |
Net income | | $ | 0.25 | | | | | | | $ | 0.18 | |
Diluted: | | | | | | | | | | | | |
Net income | | $ | 0.25 | | | | | | | $ | 0.18 | |
Comprehensive income | | $ | 11,307 | | | | | | | $ | 7,849 | |
| | | |
Basic weighted average shares outstanding | | | 44,075,025 | | | | | | | | 44,075,025 | |
Diluted weighted average shares outstanding | | | 44,246,585 | | | | | | | | 44,246,585 | |
NEW MEDIA INVESTMENT GROUP INC. AND SUBSIDIARIES
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
(In thousands, except share and per share data)
| a. | Reflects the proceeds, net of estimated transaction expenses, received from the sale of the Las Vegas Review Journal less any cash, which is an excluded asset from the transaction, on hand at the Las Vegas Review Journal as of September 27, 2015. |
| b. | Reflects the Company’s disposition of the Las Vegas Review Journal. Amounts represent adjustments necessary to remove the historical assets and liabilities that were disposed as part of this transaction. |
| c. | Reflects the adjustments related to the gain on sale from the disposition of the Las Vegas Review Journal. The following table summarizes the preliminary gain on sale calculation: |
| | | | |
Sale price, including estimated working capital | | $ | 141,000 | |
Net book value of working capital accounts | | | (5,143 | ) |
Net book value of fixed and intangible assets | | | (78,174 | ) |
Estimated transaction costs | | | (1,000 | ) |
| | | | |
Estimated gain on sale | | $ | 56,683 | |
| | | | |
No adjustment has been made to the sale proceeds to give effect to any potential post-closing adjustments under the terms of the asset purchase agreement.
| d. | Reflects the Company’s disposition of the Las Vegas Review Journal. Amounts represent adjustments necessary to remove the historical revenues and expenses of the Las Vegas Review Journal from the acquisition date of March 18, 2015 to the historical condensed consolidated statement of operations date of September 27, 2015. Such adjustments exclude the effect of the gain on sale, as this represents a non-recurring transaction. |
The income tax effect of the pro-forma adjustments was estimated by applying the 8.8% rate that was presented in the historical financial statements of New Media to the $3,791 of net income that was eliminated as a result of this transaction.
