Exhibit 99.1
New Media Announces Strong Fourth Quarter & Full Year 2017 Results, Dividend of $0.37 per Common Share and the Anticipated Acquisition of the Eugene, Oregon Register-Guard for $14.25 million
NEW YORK, N.Y. February 28, 2018 – 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 31, 2017.
Fourth Quarter 2017 Financial Summary
| | • | | New Media declares a cash dividend of $0.37 per common share for the fourth quarter of 2017 |
| | • | | Total revenues of $394.4 million, an increase of 18.2% to prior year on a reported basis, and down 5.6% on an organic same store basis, an improvement of 80bps sequentially, from the third quarter |
| | • | | Digital revenue of $41.7 million, an increase of 28.6% to prior year on a reported basis |
| | • | | Operating income of $32.4 million |
| | • | | Net income of $26.4 million |
| | • | | As Adjusted EBITDA of $59.0 million* |
| | • | | Free Cash Flow of $47.8 million* |
| | • | | Liquidity, consisting of cash on the balance sheet and undrawn revolver, of $82.6 million at the close of 2017 |
Full Year 2017 Financial Summary
| | • | | Total revenues of $1,342.0 million, which were up 6.9% to prior year on a reported basis and down 5.9% to prior year on an organic same store basis |
| | • | | Digital revenue of $143.4 million, an increase of 15.7% on a reported basis |
| | • | | Operating income of $34.6 million |
| | • | | Net loss of $0.9 million |
| | • | | As Adjusted EBITDA of $166.1 million* |
| | • | | Free Cash Flow of $126.0 million* |
Fourth Quarter 2017 & Subsequent Business Highlights
| | • | | Closed the acquisition of certain newspapers and related assets of Morris Publishing Group (“Morris”) on October 2, 2017 for $120.0 million |
| | • | | Closed the acquisition of substantially all of the assets of E.A. Sherman Publishing Company in Newport, RI for $1.3 million on October 27, 2017 |
| | • | | Anticipated closing of the acquisition of the Eugene, ORRegister-Guardin the first quarter for $14.25 million |
| | • | | Anticipated closing of the acquisition of the Holden, MA Landmark Corp. in the first quarter for $1.2 million |
| | • | | Closed on $50 million of term loan debt on February 16, 2018 via the accordion feature of existing credit facility. $49.2 million of net proceeds bringspro-forma liquidity, consisting of cash on the balance sheet and undrawn revolver, to $131.8 million. |
| | • | | UpCurve, our small and medium business (“SMB”) solutions platform, achieved another record quarter and year with $20.8 million and $71.3 million in revenue, respectively, a 31.7% increase to prior year for the quarter and a 34.5% increase to 2016 for the full yearD |
| | • | | Encouraging revenue trends and initiatives that give New Media confidence heading into 2018: |
D Comparison to prior year reported Propel Business Services revenue.
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| | • | | Continued improvement of our organic same store revenue trend, resulting from our new business growth initiatives |
| | • | | UpCurve Cloud achieved $4.2 million in revenue in the fourth quarter, up 64.2% over prior year with churn less than 10% and over 65% of revenue is recurring |
| | • | | New Media’s events business more than doubled revenue over the prior year to $15.7 million in 2017 through hosting 235 events |
| | • | | Our view of acquisition pipeline remains strong with several attractive opportunities potentially available on the near-term horizon |
Summary of Fourth Quarter and Full Year 2017 Results
| | | | | | | | |
| ($ in million, except per share) | | | |
GAAP Reporting | | Q4 2017 | | | FY 2017 | |
Revenues | | $ | 394.4 | | | $ | 1,342.0 | |
Operating income | | $ | 32.4 | | | $ | 34.6 | |
Net income / (loss) | | $ | 26.4 | | | $ | (0.9 | ) |
| | |
Non-GAAP Reporting* | | Q4 2017 | | | FY 2017 | |
As Adjusted EBITDA | | $ | 59.0 | | | $ | 166.1 | |
Free Cash Flow | | $ | 47.8 | | | $ | 126.0 | |
| * | For definitions and reconciliations ofNon-GAAP Reporting measures, please refer to theNon-GAAP Financial Measures Note and reconciliations below. |
“We are pleased with our strong results in the fourth quarter, especially the continued improvement to our organic same store revenue trend, which improved 80bps sequentially from our third quarter performance,” said Michael E. Reed, New Media President and Chief Executive Officer. “This was a result of strong performance from our stable and growing revenue areas led by UpCurve, GateHouse Live, and circulation revenue. We are further encouraged by the start to the first quarter this year, and expect our organic same store revenue trend to continue to improve over our fourth quarter results.”
“We have also been working to integrate the Morris Publishing Group acquisition, which contributed to a strong quarter for us. We are also excited about our current pipeline for deals, including the anticipated transactions we are announcing today in Eugene, Oregon and in Massachusetts. TheRegister-Guard, in Eugene, Oregon, is expected to be a great addition to our footprint in the west, with its long history of being the dominant source of news in the Willamette Valley and over 47,000 Sunday circulation. We are excited that the Baker family has trusted us as the next steward for this paper.”
“Digital revenue saw a 28.6% increase in the quarter versus prior year, growing to $41.7 million, with UpCurve being the largest driver. UpCurve earned $20.8 million in revenue this quarter, up 31.7% to prior year, and had nearly 15,000 active SMB customers at the close of the year. UpCurve Cloud, our IT services business, continues to see strong growth with revenue increasing 64.2% from prior year. We now fulfill over 100,000G-Suite and SugarCRM licenses for SMBs nationwide, which has been a great recurring revenue business with less than 10% annual churn. We are very excited about this fast growing area, as it is in high demand with SMBs today.”
“GateHouse Live, our events division, delivered on its forecast to more than double its revenue in 2017 over the prior year, finishing with $15.7 million. We launched this business in 2015 and it has successfully grown to 235 events in 2017 across our communities. We now have several proven signature events that we have rolled out across our top markets and are investing in both creating new events and further expanding our current events into more markets. We expect continued strong growth from this business in 2018.”
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“Another segment of our business that we are highly focused on is our single largest revenue category, circulation. Importantly this quarter, circulation revenue saw a 90bps improvement over its third quarter trend and was down 0.6% on an organic same store basis to prior year. We are focused on maintaining this trend throughout 2018 as we expect this category to grow to over $500 million in annual revenue for us and we believe its stability will help lead to overall improved organic same store revenue trends.”
“With the strong close to 2017, we are optimistic in our ability to continue to deliver solid returns for shareholders in 2018. We believe with the continued growth of our new business initiatives and pipeline of attractive acquisition opportunities, we are well positioned to deliver returns for our shareholders. We are also pleased to announce that our board approved a dividend of $0.37 per share for the quarter, which adds to the total return for our shareholders and shows the confidence we have in our business as we head into 2018.”
Fourth Quarter 2017 Financial Results
New Media recorded total revenues of $394.4 million for the quarter, up 18.2% to the prior year, and down 5.6% on an organic same store basis. This was an improvement of 80bps from the third quarter organic same store trend. Traditional Print Advertising decreased 13.2% on an organic same store basis, an improvement of 80bps from the third quarter trend. We continue to see pressure on brick and mortar retailers, a source of revenue for this category.
Digital revenue increased 28.6% on a reported basis to the prior year to $41.7 million. UpCurve generated $20.8 million in revenue, an increase of 31.7% to the prior year on a reported basis.
Circulation revenue declined 0.6% on an organic same store basis. Commercial Print, Distribution and Events revenue increased 6.2% to the prior year, on an organic same store basis, with GateHouse Live being a large contributor to this growth.
Operating income was $32.4 million and Net income was $26.4 million.
As Adjusted EBITDA and Free Cash Flow were $59.0 million and $47.8 million, respectively.
Fourth Quarter 2017 Dividend
New Media’s Board of Directors declared a fourth quarter 2017 cash dividend of $0.37 per share of common stock. The dividend is payable on March 22, 2018 to shareholders of record as of the close of business on March 14, 2018.
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 2017 Financial Results
New Media recorded revenues of $1,342.0 million in 2017, which represents an increase of 6.9% when compared to the prior year on a reported basis, and a decrease of 5.9% on an organic same store basis.
Total Print Advertising decreased 13.3% from prior year on an organic same store basis to $594.2 million.
UpCurve contributed $71.3 million to Digital revenue, and was up 34.5% to the prior year on a reported basis. Total digital revenue was $143.4 million for the year, growing 15.7% to prior year on a reported basis.
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Circulation revenue, our largest individual revenue category, saw revenue of $474.3 million in 2017, down 0.4% to the prior year on an organic same store basis. Commercial Print, Distribution and Events revenue was $130.1 million, growing 2.0% to prior year on an organic same store basis.
Operating income ended the year at $34.6 million and New Media recorded a Net loss of $0.9 million.
As Adjusted EBITDA and Free Cash Flow were $166.1 million and $126.0 million for the year, respectively.
New Media’s 2017 dividends will not be treated as taxable dividends, as they are a return of capital.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Record
Date | | | Pay Date | | | Distribution | | | Form | | | Ordinary
Dividend | | | Qualified
Dividend(1) | | | Long-
Term
Capital
Gain | | | Return
of
Capital | |
4Q16 | | | 3/8/2017 | | | | 3/16/2017 | | | | 0.35 | | | | Cash | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 0.35 | |
1Q17 | | | 5/10/2017 | | | | 5/18/2017 | | | | 0.35 | | | | Cash | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 0.35 | |
2Q17 | | | 8/9/2017 | | | | 8/17/2017 | | | | 0.35 | | | | Cash | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 0.35 | |
3Q17 | | | 11/8/2017 | | | | 11/16/2017 | | | | 0.37 | | | | Cash | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 0.37 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | | | | | | | | | 1.42 | | | | | | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 1.42 | |
| (1) | Qualified Dividend is a subset of, and included in, the Ordinary Dividend amount. |
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 Form10-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 Wednesday, February 28, 2018 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 dialing1-855-319-1124 (from within the U.S.) or1-703-563-6359 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “New Media Fourth Quarter Earnings Call” or access code “8865249.”
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 three hours following the call’s completion through 10:59 P.M. Eastern Time on Wednesday, March 14, 2018 by dialing1-855-859-2056 (from within the U.S.) or1-404-537-3406 (from outside of the U.S.); please reference access code “8865249.”
About New Media Investment Group Inc.
New Media supports small tomid-size communities by providing locally-focused print and digital content to its consumers and premier marketing and technology solutions to our small and medium business partners. The Company is one of the largest publishers of locally based print and online media in the United States as measured by our 142 daily publications. As of December 31, 2017, New Media operates in over 565 markets across 38 states reaching over 22 million people on a weekly basis and serves approximately 215,000 business customers.
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For more information regarding New Media and to be added to our email distribution list, please visit www.newmediainv.com.
Same Store and Organic Same Store Revenues
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 are not considered material. Organic same store revenues are same store revenues adjusted to removenon-material acquisitions andnon-material divestitures, and to adjust for Commercial Print revenues that are now intercompany.
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, thesenon-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, andnon-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 asnon-cash compensation, and Adjusted EBITDA fromnon-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 thesenon-GAAP measures, as defined above, are useful to investors for the following reasons:
| | • | | Evaluating performance and identifying trends inday-to-day performance because the items excluded have little or no significance on the Company’sday-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 theday-to-day operating performance of the business that management can
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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 ourday-to-day operating performance of the business that management can impact in the short term.
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, but not limited to, statements regarding our ability to deliver on our investment thesis and execute on our operational strategy, our ability to complete the anticipated acquisitions described in this press release and the anticipated timing of closing such acquisitions, the availability of future acquisitions and strategic opportunities, finding, pursuing and completing future acquisitions and strategic opportunities and the benefits associated with such opportunities, expected revenue trends, including expectations for revenue growth, our ability to pay and continue to grow our dividend and deliver shareholder returns, growing our digital business and revenues, growing our events business and revenues, growing our circulation revenues and the impact of such growth on organic same store revenue trends, and our ability to identify, implement, and realize expense savings. 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 traditional revenue categories, 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, including 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 Form10-K, Quarterly Reports on Form10-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.
Contact:
Ashley Higgins, Investor Relations
ir@newmediainv.com
(212)479-3160
Source: New Media Investment Group Inc.
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NEW MEDIA INVESTMENT GROUP INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share data)
| | | | | | | | |
| | | December 31,
2017 | | | December 25,
2016 | |
| Assets | | | | | | | | |
Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | 43,056 | | | $ | 172,246 | |
Restricted cash | | | 3,106 | | | | 3,406 | |
Accounts receivable, net of allowance for doubtful accounts of $5,998 and
$5,478 at December 31, 2017 and December 25, 2016, respectively | | | 151,692 | | | | 138,115 | |
Inventory | | | 18,654 | | | | 18,167 | |
Prepaid expenses | | | 23,378 | | | | 18,720 | |
Other current assets | | | 23,311 | | | | 19,694 | |
| | | | | | | | |
Total current assets | | | 263,197 | | | | 370,348 | |
Property, plant, and equipment, net of accumulated depreciation of $171,395
and $130,839 at December 31, 2017 and December 25, 2016, respectively | | | 373,123 | | | | 381,319 | |
Goodwill | | | 236,555 | | | | 227,954 | |
Intangible assets, net of accumulated amortization of $67,588 and $43,632
at December 31, 2017 and December 25, 2016, respectively | | | 403,493 | | | | 351,477 | |
Other assets | | | 7,178 | | | | 4,932 | |
| | | | | | | | |
Total assets | | $ | 1,283,546 | | | $ | 1,336,030 | |
| | | | | | | | |
| Liabilities and Stockholders’ Equity | | | | | | | | |
Current liabilities: | | | | | | | | |
Current portion of long-term debt | | $ | 2,716 | | | $ | 14,387 | |
Accounts payable | | | 15,750 | | | | 19,105 | |
Accrued expenses | | | 97,027 | | | | 84,389 | |
Deferred revenue | | | 88,164 | | | | 77,987 | |
| | | | | | | | |
Total current liabilities | | | 203,657 | | | | 195,868 | |
Long-term liabilities: | | | | | | | | |
Long-term debt | | | 357,195 | | | | 338,860 | |
Long-term liabilities, less current portion | | | 14,759 | | | | 12,597 | |
Deferred income taxes | | | 8,080 | | | | 7,786 | |
Pension and other postretirement benefit obligations | | | 25,462 | | | | 25,946 | |
| | | | | | | | |
Total liabilities | | | 609,153 | | | | 581,057 | |
| | | | | | | | |
Stockholders’ equity: | | | | | | | | |
Common stock, $0.01 par value, 2,000,000,000 shares authorized at
December 31, 2017 and December 25, 2016; 53,367,853 and 53,543,226
issued at December 31, 2017 and December 25, 2016, respectively | | | 534 | # | | | 531 | |
Additionalpaid-in capital | | | 683,168 | | | | 742,543 | |
Accumulated other comprehensive loss | | | (5,461 | ) | | | (3,977 | ) |
(Accumulated deficit) retained earnings | | | (2,767 | ) | | | 16,293 | |
Treasury stock, at cost, 140,972 and 46,438 shares at December 31, 2017
and December 25, 2016, respectively | | | (1,081 | ) | | | (417 | ) |
| | | | | | | | |
Total stockholders’ equity | | | 674,393 | | | | 754,973 | |
| | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 1,283,546 | | | $ | 1,336,030 | |
| | | | | | | | |
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NEW MEDIA INVESTMENT GROUP INC. AND SUBSIDIARIES
Consolidated Statements of Operations
and Comprehensive (Loss) Income
(In thousands, except per share data)
| | | | | | | | | | | | | | | | |
| | | Three months
ended | | | Three months
ended | | | Year ended | | | Year ended | |
| | | December 31,
2017 | | | December 25,
2016 | | | December 31,
2017 | | | December 25,
2016 | |
Revenues: | | | | | | | | | | | | | | | | |
Advertising | | $ | 201,563 | | | $ | 182,426 | | | $ | 683,990 | | | $ | 684,900 | |
Circulation | | | 140,164 | | | | 108,833 | | | | 474,324 | | | | 421,497 | |
Commercial printing and other | | | 52,704 | | | | 42,325 | | | | 183,690 | | | | 148,959 | |
| | | | | | | | | | | | | | | | |
Total revenues | | | 394,431 | | | | 333,584 | | | | 1,342,004 | | | | 1,255,356 | |
Operating costs and expenses: | | | | | | | | | | | | | | | | |
Operating costs | | | 210,287 | | | | 179,329 | | | | 742,822 | | | | 699,312 | |
Selling, general, and administrative | | | 128,993 | | | | 108,818 | | | | 448,331 | | | | 414,983 | |
Depreciation and amortization | | | 19,773 | | | | 17,410 | | | | 74,394 | | | | 67,774 | |
Integration and reorganization costs | | | 2,086 | | | | 820 | | | | 8,903 | | | | 8,352 | |
Impairment of long-lived assets | | | 657 | | | | — | | | | 7,142 | | | | — | |
Goodwill and mastheads impairment | | | — | | | | — | | | | 27,448 | | | | — | |
Loss (gain) on sale or disposal of assets | | | 211 | | | | 239 | | | | (1,649 | ) | | | 3,564 | |
| | | | | | | | | | | | | | | | |
Operating income | | | 32,424 | | | | 26,968 | | | | 34,613 | | | | 61,371 | |
Interest expense | | | 8,193 | | | | 7,366 | | | | 30,476 | | | | 29,635 | |
Loss on early extinguishment of debt | | | — | | | | — | | | | 4,767 | | | | — | |
Other (income) expense | | | (121 | ) | | | 2,731 | | | | (196 | ) | | | 2,414 | |
| | | | | | | | | | | | | | | | |
Income (loss) before income taxes | | | 24,352 | | | | 16,871 | | | | (434 | ) | | | 29,322 | |
Income tax (benefit) expense | | | (2,076 | ) | | | 2,375 | | | | 481 | | | | (2,319 | ) |
| | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 26,428 | | | $ | 14,496 | | | $ | (915 | ) | | $ | 31,641 | |
| | | | | | | | | | | | | | | | |
Income (loss) per share: | | | | | | | | | | | | | | | | |
Basic: | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 0.50 | | | $ | 0.31 | | | $ | (0.02 | ) | | $ | 0.70 | |
Diluted: | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 0.50 | | | $ | 0.31 | | | $ | (0.02 | ) | | $ | 0.70 | |
Dividends declared per share | | $ | 0.37 | | | $ | 0.35 | | | $ | 1.42 | | | $ | 1.34 | |
Comprehensive income (loss) | | $ | 24,861 | | | $ | 13,616 | | | $ | (2,399 | ) | | $ | 30,822 | |
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NEW MEDIA INVESTMENT GROUP INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
| | | | | | | | |
| | | Year ended | | | Year ended | |
| | | December 31,
2017 | | | December 25,
2016 | |
Cash flows from operating activities: | | | | | | | | |
Net (loss) income | | $ | (915 | ) | | $ | 31,641 | |
Adjustments to reconcile net (loss) income to net cash
provided by operating activities: | | | | | | | | |
Depreciation and amortization | | | 74,394 | | | | 67,774 | |
Non-cash compensation expense | | | 3,135 | | | | 2,442 | |
Non-cash interest expense | | | 2,339 | | | | 2,786 | |
Non-cash loss on early extinguishment of debt | | | 2,344 | | | | — | |
Deferred income taxes | | | 294 | | | | (2,862 | ) |
(Gain) loss on sale or disposal of assets | | | (1,649 | ) | | | 3,564 | |
Pension and other postretirement benefit obligations | | | (1,963 | ) | | | (2,276 | ) |
Impairment of long-lived assets | | | 7,142 | | | | — | |
Goodwill and mastheads impairment | | | 27,448 | | | | — | |
Non-cash charge to investments | | | 250 | | | | 2,766 | |
Changes in assets and liabilities: | | | | | | | | |
Accounts receivable, net | | | 4,981 | | | | 14,880 | |
Inventory | | | 1,073 | | | | (999 | ) |
Prepaid expenses | | | (3,538 | ) | | | (1,805 | ) |
Other assets | | | (4,332 | ) | | | (3,617 | ) |
Accounts payable | | | (3,996 | ) | | | 4,986 | |
Accrued expenses | | | 6,645 | | | | (21,723 | ) |
Deferred revenue | | | (4,607 | ) | | | (629 | ) |
Other long-term liabilities | | | 1,761 | | | | 1,433 | |
| | | | | | | | |
Net cash provided by operating activities | | | 110,806 | | | | 98,361 | |
| | | | | | | | |
Cash flows from investing activities: | | | | | | | | |
Purchases of property, plant, and equipment | | | (11,090 | ) | | | (10,631 | ) |
Proceeds from sale of publications and other assets | | | 14,972 | | | | 3,284 | |
Acquisitions, net of cash acquired | | | (164,155 | ) | | | (137,486 | ) |
| | | | | | | | |
Net cash used in investing activities | | | (160,273 | ) | | | (144,833 | ) |
| | | | | | | | |
Cash flows from financing activities: | | | | | | | | |
Payment of debt issuance costs | | | (3,576 | ) | | | — | |
Borrowings under term loans | | | 20,000 | | | | — | |
Repayments under term loans | | | (14,443 | ) | | | (3,509 | ) |
Payment of offering costs | | | (431 | ) | | | (83 | ) |
Issuance of common stock, net of underwriter’s discount | | | — | | | | 135,849 | |
Purchase of treasury stock | | | (664 | ) | | | (417 | ) |
Repurchase of common stock | | | (5,001 | ) | | | — | |
Payment of dividends | | | (75,608 | ) | | | (59,760 | ) |
| | | | | | | | |
Net cash (used in) provided by financing activities | | | (79,723 | ) | | | 72,080 | |
| | | | | | | | |
Net (decrease) increase in cash and cash equivalents | | | (129,190 | ) | | | 25,608 | |
Cash and cash equivalents at beginning of period | | | 172,246 | | | | 146,638 | |
| | | | | | | | |
Cash and cash equivalents at end of period | | $ | 43,056 | | | $ | 172,246 | |
| | | | | | | | |
Supplemental disclosures on cash flow information: | | | | | | | | |
Cash interest paid | | $ | 33,626 | | | $ | 26,908 | |
Cash income taxes paid | | $ | 52 | | | $ | 2,601 | |
9
NEW MEDIA INVESTMENT GROUP INC. AND SUBSIDIARIES
As Adjusted EBITDA and Free Cash Flow
(In thousands, except share data)
| | | | | | | | | | | | | | | | |
| | | Three months ended | | | Three months ended | | | Year ended | | | Year ended | |
| | | December 31,
2017 | | | December 25,
2016 | | | December 31,
2017 | | | December 25,
2016 | |
Net income (loss) | | $ | 26,428 | | | $ | 14,496 | | | $ | (915 | ) | | $ | 31,641 | |
Income tax (benefit) expense | | | (2,076 | ) | | | 2,375 | | | | 481 | | | | (2,319 | ) |
Interest expense | | | 8,193 | | | | 7,366 | | | | 30,476 | | | | 29,635 | |
Impairment of long-lived assets | | | 657 | | | | — | | | | 7,142 | | | | — | |
Loss on early extinguishment of debt | | | — | | | | — | | | | 4,767 | | | | — | |
Goodwill and mastheads impairment | | | — | | | | — | | | | 27,448 | | | | — | |
Depreciation and amortization | | | 19,773 | | | | 17,410 | | | | 74,394 | | | | 67,774 | |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA from continuing operations | | | 52,975 | | | | 41,647 | | | | 143,793 | | | | 126,731 | |
Non-cash compensation and other expense | | | 3,705 | | | | 6,945 | | | | 15,021 | | | | 17,175 | |
Integration and reorganization costs | | | 2,086 | | | | 820 | | | | 8,903 | | | | 8,352 | |
Loss (gain) on sale or disposal of assets | | | 211 | | | | 239 | | | | (1,649 | ) | | | 3,564 | |
| | | | | | | | | | | | | | | | |
As Adjusted EBITDA | | | 58,977 | | | | 49,651 | | | | 166,068 | | | | 155,822 | |
Interest Paid(1) | | | (6,917 | ) | | | (6,748 | ) | | | (26,983 | ) | | | (26,908 | ) |
Net capital expenditures | | | (3,884 | ) | | | (2,900 | ) | | | (11,090 | ) | | | (10,631 | ) |
Pension payments | | | (160 | ) | | | (479 | ) | | | (1,963 | ) | | | (2,276 | ) |
Cash taxes(2) | | | (203 | ) | | | (693 | ) | | | (52 | ) | | | (2,601 | ) |
| | | | | | | | | | | | | | | | |
Free Cash Flow | | | 47,814 | | | | 38,831 | | | | 125,980 | | | | 113,406 | |
| | | | | | | | | | | | | | | | |
Basic weighted average shares outstanding | | | 52,876,929 | | | | 47,391,972 | | | | 53,010,421 | | | | 45,234,369 | |
Diluted weighted average shares outstanding | | | 53,094,493 | | | | 47,466,939 | | | | 53,010,421 | | | | 45,316,907 | |
| (1) | Average interest paid during 2017 for the twelve month period. |
| (2) | Cash paid, net of refunds. |
10
NEW MEDIA INVESTMENT GROUP INC. AND SUBSIDIARIES
Same Store and Organic Same Store Revenues
(In thousands)
| | | | | | | | | | | | | | | | |
| | | Three months ended | | | Three months ended | | | Year ended | | | Year ended | |
| | | December 31,
2017 | | | December 25,
2016 | | | December 31,
2017 | | | December 25,
2016 | |
Total revenues from continuing operations | | $ | 394,431 | | | $ | 333,584 | | | $ | 1,342,004 | | | $ | 1,255,356 | |
Revenue adjustment for material acquisitions(1) | | | — | | | | — | | | | — | | | | 773 | |
| | | | | | | | | | | | | | | | |
Same Store Revenues | | | 394,431 | | | | 333,584 | | | | 1,342,004 | | | | 1,256,129 | |
Tuck-in Acquisitions(2) | | | (63,129 | ) | | | (3,090 | ) | | | (150,197 | ) | | | (10,106 | ) |
53rd Week Adjustment | | | (19,438 | ) | | | — | | | | (19,438 | ) | | | — | |
| | | | | | | | | | | | | | | | |
Organic Same Store Revenues | | $ | 311,864 | | | $ | 330,494 | | | $ | 1,172,369 | | | $ | 1,246,023 | |
| | | | | | | | | | | | | | | | |
| (1) | Material acquisitions include Erie. |
| (2) | Tuck-in acquisitions are adjusted to remove non-material acquisitions and non-material divestitures, and to adjust for Commercial Print revenues that are now intercompany. |
11
