Lee Enterprises, Incorporated (NYSE: LEE), a leading provider of
high quality, trusted, local news, information and a major platform
for advertising in 49 markets, today reported earnings(1) of $4.4
million for its fourth fiscal quarter ended September 30,
2018, or 7 cents per diluted common share. For the same quarter a
year ago, earnings totaled $3.5 million, or 6 cents per diluted
common share. For the fiscal year, earnings totaled $47.0 million,
or 82 cents per diluted common share, compared to $28.6 million, or
50 cents per diluted common share, in the prior year, an increase
of $18.4 million in the fiscal year.
"We are pleased with the fourth quarter operating results," said
Kevin Mowbray, President and Chief Executive Officer. "Revenue was
almost flat in the fourth quarter, driven by strong performance
from local advertisers, significant revenue growth from TownNews,
revenue from the BH Media Group management agreement, as well as an
extra week of operations in 2018," Mowbray added.
"Total digital revenue, which includes digital advertising
revenue and digital services revenue, increased 12.6% in the
quarter and totaled $112.8 million in the fiscal year," Mowbray
added. "Over the last seven years, total digital revenue on a same
property basis(2) has grown at a compound annual growth rate of
8.1%, due in part to the substantial revenue growth at
TownNews."
"Revenue at TownNews increased 34.5% in the quarter," said
Mowbray. "On a stand-alone basis, TownNews revenue totaled $18.9
million in 2018 and over the last seven years, revenue at TownNews
has grown at a compound annual growth rate of 9.7%. TownNews is
growing revenue through increased market share and recent successes
entering the broadcast space," Mowbray added.
"We believe we are at the top of the industry at managing the
transition to digital," Mowbray added. "Our margins have remained
steady for more than a decade and are currently more than double
the industry average. Also, based on third party research, we
believe we capture more than twice the industry average in digital
market share," said Mowbray.
"We are optimistic about the future of our local media
operations," Mowbray added. "We believe we can grow our business by
providing high quality, trusted, local content to consumers,
remaining focused on local controllable retail accounts and
expanding our digital services capabilities at TownNews."
Mowbray also noted the following financial highlights for the
quarter and fiscal year:
- Digital advertising revenue increased 8.5% for the quarter and
represented 34.3% of total advertising revenue. For the fiscal
year, digital advertising increased 2.9% on a same property
basis.
- Digital retail advertising on a same property basis, which
represented 61.5% of total digital advertising in the September
quarter, grew 5.2%, driven by an increase in advertising from local
retailers.
- Monthly visits to Lee mobile, tablet, desktop and app sites
averaged 79.8 million, an increase of 12.4% over the prior year
quarter, which fuels digital advertising revenue.
- Subscription revenue increased 4.1% in the quarter through our
premium content offerings and the extra week of operations. For the
fiscal year, subscription revenue on a same property basis,
decreased 1.7%. Over the last three years, subscription revenue has
grown 0.3%.
- On a same property basis, total revenue decreased 5.9% for the
quarter.
"Cash costs(3) on a same property basis were down 4.9% in the
fourth quarter and were down 6.1% in the fiscal year," said Vice
President and Chief Financial Officer, Tim Millage. "We achieved
our cash cost guidance, despite headwinds from newsprint price
increases.
"Adjusted EBITDA(3) was $35.9 million in the fourth quarter,
down 2.4% compared to the fourth quarter of 2017. For the fiscal
year, Adjusted EBITDA totaled $134.8 million, a 6.8% decrease from
fiscal year 2017," Millage said.
"The Company continues to aggressively reduce debt," Millage
added. "Debt reduction in the September quarter was $15.0 million,
totaled $63.5 million in fiscal year 2018 and totaled more than
$240 million over the last three years. As of September 30,
2018, the principal amount of debt was $484.9 million with
leverage, net of cash being reduced to 3.56 times Adjusted EBITDA,"
he added.
"After the end of the fiscal year, we repaid the remaining
balance of the 1st Lien Term Loan, almost five months ahead of its
maturity. The repayment of the 1st Lien Term Loan is a testament to
our strong operating performance, substantial cash flows as well as
our commitment to using substantially all of our available cash
flows to repaying debt," Millage added.
FOURTH QUARTER OPERATING RESULTS
Operating revenue for the 14 weeks ended September 30, 2018
totaled $139.7 million, a decrease of 0.3% compared with a year
ago. On a same property basis, total operating revenue for the 13
weeks ended September 30, 2018 decreased 5.9%.
Advertising and marketing services revenue decreased 7.4% to
$73.7 million. The declines in advertising and marketing services
revenue are due to continued softness in print advertising demand.
Partially offsetting print declines, digital advertising and
marketing services revenue increased 8.5% to $25.3 million and
represented 34.3% of total advertising revenue. On a same property
basis, digital advertising and marketing services revenue increased
3.2% with digital retail up 5.2% in the quarter. Digital retail
advertising revenue represented 61.5% of digital advertising
revenue in the quarter.
Subscription revenue increased 4.1% in the current year quarter
and decreased 2.1% on a same property basis. Average daily
newspaper circulation, including TNI and MNI and digital
subscribers, totaled 0.7 million in the current quarter. Sunday
circulation totaled 1.0 million. Price increases and additional
revenue from premium content partially offset revenue lost from
lower print circulation volumes.
Other revenue, which consists of digital services, commercial
printing and revenue from delivery of third party products,
increased 32.8% in the current year quarter. The increase was
partially due to 34.5% revenue growth at TownNews.
Total digital revenue, including digital advertising and digital
services, was $30.3 million for the quarter, up 12.6% compared with
a year ago and up 7.7% on a same property basis. Mobile, tablet,
desktop and app sites, including TNI and MNI(4), attracted monthly
average visits of 79.8 million for the current quarter, an increase
of 12.4% over the prior year.
Operating expenses for the 14 weeks ended September 30,
2018 increased 2.9%. Cash costs, excluding restructuring costs and
other, increased 0.7% compared to the prior year quarter and
decreased 4.9% on a same property basis. Compensation decreased
9.9% on a same property basis, primarily as a result of a reduction
in staffing levels. Newsprint and ink expense increased 15.1% on a
same property basis due to higher prices partially offset by lower
volumes from unit declines and using lower basis weight newsprint.
Other operating expenses decreased 2.2% on a same property basis,
primarily driven by lower delivery and other print-related costs
and offset in part by higher costs associated with growing digital
revenue and increases in other cash costs from outsourcing.
Restructuring costs and other(5) totaled $1.4 million and $1.2
million in the 2018 quarter and 2017 quarter, respectively.
Including equity in earnings of associated companies,
depreciation and amortization, assets loss (gain) on sales,
impairments and other, and restructuring costs and other, operating
income totaled $19.8 million in the current year quarter, compared
with $21.7 million a year ago.
In the 14 weeks ended September 30, 2018, interest expense
decreased 4.8%, or $0.7 million, due to lower debt balances. The
Company recognized non-operating expense of $0.8 million in the
current year quarter compared to $0.2 million in the same quarter
of the prior year due to a change in fair value of stock warrants.
The Company recognized $1.3 million of debt refinancing and
administrative costs in the current quarter and $1.4 million in the
same quarter of the prior year. The vast majority of the debt
refinancing and administrative costs represent amortization of
refinancing costs paid in 2014.
Income attributable to Lee Enterprises, Incorporated for the
quarter totaled $4.1 million, compared with income of $3.2 million
a year ago. Adjusted EBITDA for the quarter was $35.9 million.
ADJUSTED EARNINGS AND EPS FOR THE QUARTER(3)
The following table summarizes the impact from warrant fair
value adjustments on income attributable to Lee Enterprises,
Incorporated and earnings per diluted common share. Per share
amounts may not add due to rounding.
|
|
|
Quarter Ended |
|
September 30 2018 |
|
September 242017 |
(Thousands of
Dollars, Except Per Share Data) |
Amount |
|
Per Share |
|
Amount |
|
Per Share |
|
|
|
|
Income attributable to
Lee Enterprises, Incorporated, as reported |
4,066 |
|
0.07 |
|
3,185 |
|
0.06 |
Adjustments: |
|
|
|
|
|
|
|
Warrants fair value adjustment |
756 |
|
0.01 |
|
237 |
|
— |
Income
attributable to Lee Enterprises, Incorporated, as adjusted |
4,822 |
|
0.09 |
|
3,422 |
|
0.06 |
FISCAL YEAR OPERATING RESULTS(5)
Operating revenue for 53 weeks ended September 30, 2018
totaled $544.0 million, a decrease of 4.1% compared with the 52
weeks ended September 24, 2017. On a same property basis,
total operating revenue for the 52 weeks ended September 30,
2018 decreased 7.0%.
Advertising and marketing services revenue decreased 8.4% to
$303.4 million due to continued softness in print advertising
demand primarily from big box retailers and classifieds. Digital
advertising and marketing services revenue increased 4.7% to $96.5
million. Digital advertising represented 31.8% of total
advertising.
Subscription revenue increased 1.7% in 2018 compared to
2017.
Total digital revenue was $112.8 million in 2018, up 6.3%
compared to 2017, due to revenue growth at TownNews. On a
standalone basis, revenue at TownNews totaled $18.9 million in
2018.
Operating expenses for 2018 decreased 3.6%. Cash costs,
excluding restructuring costs and other, decreased 3.1% compared to
the prior year and decreased 6.1% on a same property basis.
Compensation decreased 9.4% on a same property basis, primarily as
a result of a decrease in the average number of full-time
equivalent employees of 12.0%. Newsprint and ink expense decreased
1.8% on a same property basis, due to a reduction in newsprint
volume partially offset by higher prices. Other operating expenses
decreased 3.3%, on a same property basis.
Including equity in earnings of associated companies,
depreciation and amortization, assets loss (gain) on sales,
impairments and other, as well as restructuring costs and other in
both years, operating income was $88.5 million in 2018, compared
with $92.5 million a year ago.
In the 53 weeks ended September 30, 2018, interest expense
decreased 8.2%, or $4.7 million, due to lower debt balances, and we
recognized non-operating expense of $0.2 million in 2018 compared
to $10.2 million of non-operating income for the change in fair
value of stock warrants in the prior year. The fair value of the
warrants fluctuates with the market value of our common stock. In
the current fiscal year, $5.3 million of debt financing and
administrative costs were expensed compared to $4.8 million in the
same period a year ago. Debt financing and administrative costs are
mainly amortization of costs paid as part of our refinancing in
2014.
Income attributable to Lee Enterprises, Incorporated for the
year totaled $45.8 million, compared to income of $27.5 million a
year ago.
Adjusted EBITDA for the 53 weeks ended September 30, 2018
was $134.8 million, compared to $144.6 million for the 52 weeks
ended September 24, 2017.
ADJUSTED EARNINGS AND EPS FOR THE FISCAL YEAR
On December 22, 2017, comprehensive tax legislation commonly
referred to as the Tax Cuts and Jobs Act (the “2017 Tax Act”) was
signed into law. Among other provisions, the 2017 Tax Act reduces
the federal statutory corporate income tax rate from 35% to 21% in
December 2017. The reduction of the corporate tax rate will cause
us to adjust our deferred tax assets and liabilities to the lower
federal base rate of 21%. The transitional impact from revaluing
our deferred tax assets and liabilities resulted in an income tax
benefit of $24,872,000 in the 53 weeks ended September 30,
2018.
The following table summarizes the estimated impact from the
2017 Tax Act as well as the warrant fair value adjustments on
income attributable to Lee Enterprises, Incorporated and earnings
per diluted common share.
|
|
|
Year Ended |
|
September 30 2018 |
|
September 24 2017 |
(Thousands of
Dollars, Except Per Share Data) |
Amount |
|
Per Share |
|
Amount |
|
Per Share |
|
|
|
|
|
|
|
|
Income attributable to
Lee Enterprises, Incorporated, as reported |
45,766 |
|
0.82 |
|
27,481 |
|
0.50 |
Adjustments: |
|
|
|
|
|
|
|
Warrants fair value adjustment |
226 |
|
— |
|
(10,181) |
|
(0.19) |
Adjusted income before
income tax impacts |
45,992 |
|
0.82 |
|
17,300 |
|
0.31 |
Income
tax effect of 2017 Tax Act |
(24,872) |
|
(0.44) |
|
— |
|
|
Income tax effects,
total |
(24,872) |
|
(0.44) |
|
— |
|
|
Income attributable to Lee Enterprises, Incorporated, as
adjusted |
21,120 |
|
0.38 |
|
17,300 |
|
0.31 |
DEBT AND FREE CASH FLOW
Debt was reduced $15.0 million in the quarter and $63.5 million
during fiscal year 2018. As of September 30, 2018, the
principal amount of debt was $484.9 million. The principal amount
of our debt, net of cash, is 3.56 times our adjusted EBITDA for the
past 12 months ended September 30, 2018. Interest expense
decreased $0.7 million, or 4.8%, in the quarter and $4.7 million,
or 8.2%, in the past twelve months.
At September 30, 2018, including $5.4 million in cash and
availability under our revolving facility(4), liquidity totaled
$39.6 million compared to $7.0 million of required debt principal
payments over the next twelve months. Our revolving facility
expires December 28, 2018.
In November, shortly after our fiscal year end, the remaining
balance of our 1st Lien Term Loan was repaid, in full, almost five
months ahead of its maturity.
CONFERENCE CALL INFORMATION
As previously announced, we will hold an earnings conference
call and audio webcast today at 9 a.m. Central Time. The live
webcast will be accessible at www.lee.net and will be available for
replay two hours later. Several analysts have been invited to ask
questions on the call. Questions from other participants may be
submitted by participating in the webcast. The call also may be
monitored on a listen-only conference line by dialing (toll free)
866-519-2796 and entering a conference passcode of 748638 at least
five minutes before the scheduled start. Participants on the
listen-only line will not have the opportunity to ask
questions.
ABOUT LEE
Lee Enterprises is a leading provider of local news and
information, and a major platform for advertising, with daily
newspapers, rapidly growing digital products and nearly 300 weekly
and specialty publications serving 49 markets in 20 states. Year to
date, Lee's newspapers have average circulation of 0.7 million
daily and 1.1 million Sunday, and are estimated to reach almost
three million readers in print alone. Lee's markets include St.
Louis, MO; Lincoln, NE; Madison, WI; Davenport, IA; Billings, MT;
Bloomington, IL; and Tucson, AZ. Lee Common Stock is traded on the
New York Stock Exchange under the symbol LEE. For more information
about Lee, please visit www.lee.net.
FORWARD-LOOKING STATEMENTS — The Private Securities Litigation
Reform Act of 1995 provides a “safe harbor” for forward-looking
statements. This release contains information that may be deemed
forward-looking that is based largely on our current expectations,
and is subject to certain risks, trends and uncertainties that
could cause actual results to differ materially from those
anticipated. Among such risks, trends and other uncertainties,
which in some instances are beyond our control, are:
- Our ability to generate cash flows and maintain liquidity
sufficient to service our debt;
- Our ability to comply with the financial covenants in our
credit facilities;
- Our ability to refinance our debt as it comes due;
- Our ability to manage declining print revenue;
- That the warrants issued in our refinancing will not be
exercised;
- The impact and duration of adverse conditions in certain
aspects of the economy affecting our business;
- Changes in advertising and subscription demand;
- Changes in technology that impact our ability to deliver
digital advertising;
- Potential changes in newsprint, other commodities and energy
costs;
- Interest rates;
- Labor costs;
- Legislative and regulatory rulings;
- Our ability to achieve planned expense reductions;
- Our ability to maintain employee and customer
relationships;
- Our ability to manage increased capital costs;
- Our ability to maintain our listing status on the NYSE;
- Competition; and
- Other risks detailed from time to time in our publicly filed
documents.
Any statements that are not statements of
historical fact (including statements containing the words “may”,
“will”, “would”, “could”, “believes”, “expects”, “anticipates”,
“intends”, “plans”, “projects”, “considers” and similar
expressions) generally should be considered forward-looking
statements. Readers are cautioned not to place undue reliance on
such forward-looking statements, which are made as of the date of
this release. We do not undertake to publicly update or revise our
forward-looking statements, except as required by law.
Contact:IR@lee.net(563) 383-2100
|
|
CONSOLIDATED STATEMENTS OF
OPERATIONS(UNAUDITED) |
|
|
Quarter Ended |
Year Ended |
(Thousands of Dollars, Except Per Share Data) |
Sept 30 2018 |
Sept 24 2017 |
Percent Change |
Sept 30 2018 |
Sept 24 2017 |
Percent Change |
|
|
|
|
|
|
|
Advertising and
marketing services |
73,695 |
79,544 |
(7.4) |
303,446 |
331,360 |
(8.4) |
Subscription |
52,703 |
50,616 |
4.1 |
195,108 |
191,922 |
1.7 |
Other |
13,348 |
10,052 |
32.8 |
45,401 |
43,661 |
4.0 |
Total
operating revenue |
139,746 |
140,212 |
(0.3) |
543,955 |
566,943 |
(4.1) |
Operating
expenses: |
|
|
|
|
|
|
Compensation |
48,906 |
50,645 |
(3.4) |
196,334 |
209,692 |
(6.4) |
Newsprint
and ink |
7,028 |
5,688 |
23.6 |
24,949 |
24,904 |
0.2 |
Other
operating expenses |
50,824 |
49,647 |
2.4 |
199,653 |
199,754 |
(0.1) |
Cash costs |
106,758 |
105,980 |
0.7 |
420,936 |
434,350 |
(3.1) |
Total operating revenue less cash costs |
32,988 |
34,232 |
(3.6) |
123,019 |
132,593 |
(7.2) |
Depreciation and
amortization |
7,794 |
10,288 |
(24.2) |
31,766 |
41,282 |
(23.1) |
Assets loss (gain) on
sales, impairments and other |
7,626 |
2,628 |
NM |
6,429 |
(1,150) |
NM |
Restructuring costs and other |
1,400 |
1,150 |
21.7 |
5,550 |
7,523 |
(26.2) |
Operating
expenses |
123,578 |
120,046 |
2.9 |
464,681 |
482,005 |
(3.6) |
Equity in earnings of
associated companies |
3,679 |
1,575 |
NM |
9,249 |
7,609 |
21.6 |
Operating
income |
19,847 |
21,741 |
(8.7) |
88,523 |
92,547 |
(4.3) |
Non-operating income
(expense): |
|
|
|
|
|
|
Interest
expense |
(13,004) |
(13,654) |
(4.8) |
(52,842) |
(57,573) |
(8.2) |
Debt
financing and administrative costs |
(1,251) |
(1,354) |
(7.6) |
(5,311) |
(4,818) |
10.2 |
Other,
net |
(593) |
(874) |
(32.2) |
450 |
10,060 |
(95.5) |
Non-operating expenses, net |
(14,848) |
(15,882) |
(6.5) |
(57,703) |
(52,331) |
10.3 |
Income before income
taxes |
4,999 |
5,859 |
(14.7) |
30,820 |
40,216 |
(23.4) |
Income tax expense
(benefit) |
561 |
2,358 |
(76.2) |
(16,228) |
11,611 |
NM |
Net income |
4,438 |
3,501 |
26.8 |
47,048 |
28,605 |
64.5 |
Net
income attributable to non-controlling interests |
(372) |
(316) |
17.7 |
(1,282) |
(1,124) |
14.1 |
Income
attributable to Lee Enterprises, Incorporated |
4,066 |
3,185 |
27.7 |
45,766 |
27,481 |
66.5 |
|
|
|
|
|
|
|
Earnings
per common share: |
|
|
|
|
Basic |
0.07 |
0.06 |
33.3 |
0.84 |
0.51 |
64.7 |
Diluted |
0.07 |
0.06 |
16.7 |
0.82 |
0.50 |
64.0 |
|
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES(UNAUDITED)
The table below reconciles the non-GAAP financial performance
measure of adjusted EBITDA to net income, its most directly
comparable GAAP measure:
|
Quarter Ended |
Year Ended |
(Thousands of Dollars) |
Sept 30 2018 |
Sept 24 2017 |
Sept 30 2018 |
Sept 24 2017 |
|
|
|
|
|
Net Income |
4,438 |
|
3,501 |
|
47,048 |
|
28,605 |
|
Adjusted to
exclude |
|
|
|
|
Income
tax expense (benefit) |
561 |
|
2,358 |
|
(16,228 |
) |
11,611 |
|
Non-operating expenses (income), net |
14,848 |
|
15,882 |
|
57,703 |
|
52,331 |
|
Equity in
earnings of TNI and MNI |
(3,679 |
) |
(1,575 |
) |
(9,249 |
) |
(7,609 |
) |
Assets
loss (gain) on sales, impairments and other |
7,626 |
|
2,628 |
|
6,429 |
|
(1,150 |
) |
Depreciation and amortization |
7,794 |
|
10,288 |
|
31,766 |
|
41,282 |
|
Restructuring costs and other |
1,400 |
|
1,150 |
|
5,550 |
|
7,523 |
|
Stock
compensation |
417 |
|
524 |
|
1,857 |
|
2,088 |
|
Add: |
|
|
|
|
Ownership
share of TNI and MNI EBITDA (50%) |
2,449 |
|
1,985 |
|
9,883 |
|
9,927 |
|
Adjusted EBITDA |
35,854 |
|
36,741 |
|
134,759 |
|
144,608 |
|
SELECTED BALANCE SHEET INFORMATION
(Thousands of
Dollars) |
September 30
2018 |
September 24
2017 |
Cash |
5,380 |
10,621 |
|
|
|
Debt (Principal
Amount): |
|
|
1st Lien
Term Loan |
6,303 |
45,145 |
Notes |
385,000 |
385,000 |
2nd Lien
Term Loan |
93,556 |
118,240 |
|
484,859 |
548,385 |
SELECTED STATISTICAL INFORMATION
|
Quarter Ended |
|
Year Ended |
|
Sept 302018 |
Sept 242017 |
|
Sept 302018 |
Sept 242017 |
|
|
|
|
|
|
Capital expenditures
(Thousands of Dollars) |
1,744 |
850 |
|
6,025 |
4,078 |
Average common shares -
basic (Thousands of Shares) |
55,005 |
54,226 |
|
54,702 |
53,990 |
Average common shares -
diluted (Thousands of Shares) |
56,599 |
55,575 |
|
55,948 |
55,392 |
Shares
outstanding at end of period (Thousands of Shares) |
|
|
|
57,141 |
56,712 |
|
NOTES
|
|
(1) |
This earnings release is a preliminary report of results for
the periods included. The reader should refer to the
Company's most recent reports on Form 10-Q and on Form 10-K for
definitive information. |
|
|
(2) |
To facilitate a comparison of our results without the impact of
acquisitions, dispositions and the 53rd week of revenues and
expenses, certain revenue and expense trends, as described below,
are presented on a same property basis and are calculated as
follows: |
|
|
|
Reported revenues or expensesLess: revenues or expenses for our
2017 acquisitionsLess: revenues or expenses from enterprises that
were disposed of in 2018 and 2016Less: 53rd week revenue or
expenses in 2018 |
|
|
(3) |
The following are non-GAAP (Generally Accepted Accounting
Principles) financial measures for which reconciliations to
relevant GAAP measures are included in tables accompanying this
release: |
|
• |
Adjusted EBITDA is
a non-GAAP financial performance measure that enhances financial
statement users overall understanding of the operating performance
of the Company. The measure isolates unusual, infrequent or
non-cash transactions from the operating performance of the
business. This allows users to easily compare operating performance
among various fiscal periods and how management measures the
performance of the business. This measure also provides users with
a benchmark that can be used when forecasting future operating
performance of the Company that excludes unusual, nonrecurring or
one time transactions. Adjusted EBITDA is also a component of the
calculation used by stockholders and analysts to determine the
value of our business when using the market approach, which applies
a market multiple to financial metrics. It is also a measure used
to calculate the leverage ratio of the Company, which is a key
financial ratio monitored and used by the Company and its
investors. Adjusted EBITDA is defined as net income (loss), plus
nonoperating expenses, income tax expense (benefit), depreciation
and amortization, assets loss (gain) on sales, impairments and
other, restructuring costs and other, stock compensation and our
50% share of EBITDA from TNI and MNI, minus equity in earnings of
TNI and MNI and curtailment gains. |
|
• |
Adjusted Income (Loss) and Adjusted Earnings (Loss) Per Common
Share are non-GAAP financial performance measures that we believe
offer a useful metric to evaluate overall performance of the
Company by providing financial statement users the operating
performance of the Company on a per share basis excluding the
impact of changes in the warrant valuation as well as unusual and
infrequent transactions. It is defined as income (loss)
attributable to Lee Enterprises, Incorporated and earnings (loss)
per common share adjusted to exclude the impact of the warrant
valuation and the impact of the 2017 Tax Act. |
|
• |
Cash Costs represent a non-GAAP financial performance measure of
operating expenses which are measured on an accrual basis and
settled in cash. This measure is useful to investors in
understanding the components of the Company’s cash-settled
operating costs. Generally, the Company provides forward-looking
guidance of Cash Costs, which can be used by financial statement
users to assess the Company's ability to manage and control its
operating cost structure. Cash Costs are defined as compensation,
newsprint and ink and other operating expenses. Depreciation and
amortization, assets loss (gain) on sales, impairments and other,
other non-cash operating expenses and other expenses are excluded.
Cash Costs also exclude restructuring costs and other, which are
typically paid in cash. |
|
|
(4) |
The 1st Lien Term Loan is the $250 million first lien term loan
and $40 million revolving facility (Revolving Facility) under a
First Lien Credit Agreement dated as of March 31, 2014. The Notes
are the $400 million senior secured notes pursuant to an indenture
dated March 31, 2014. The 2nd Lien Term Loan is the $150 million
second lien term loan under the Second Lien Loan Agreement dated as
of March 31, 2014. TNI refers to TNI Partners publishing operations
in Tucson, AZ. MNI refers to Madison Newspapers, Inc. publishing
operations in Madison, WI. |
|
|
(5) |
Certain amounts as previously reported have been reclassified
to conform with the current period presentation. The prior periods
have been adjusted for comparative purposes, and the
reclassifications have no impact on earnings. |
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