Toggle SGML Header (+)


Section 1: 8-K (FORM 8-K)

Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 27, 2019

 

 

New Media Investment Group Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-36097   38-3910250
(State or other jurisdiction of incorporation)   (Commission File Number)   (I.R.S. Employer Identification No.)

1345 Avenue of the Americas

New York, NY 10105

212-479-3160

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging Growth Company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Section 2 – Financial Information

 

Item 2.02

Results of Operations and Financial Condition

On February 27, 2019, New Media Investment Group Inc. (the “Company”) issued a press release announcing its financial results for the quarter and year ended December 31, 2019. A copy of the press release is furnished herewith as Exhibit 99.1, which is incorporated herein by reference.

The information furnished pursuant to this Current Report on Form 8-K (including the exhibit hereto) shall not be considered “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any filing by the Company under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, unless the Company expressly sets forth by specific reference in such filing that such information is to be considered “filed” or incorporated by reference therein.

Section 9 – Financial Statements and Exhibits

 

Item 9.01

Financial Statements and Exhibits

 

(d)

Exhibits

 

99.1    Press Release dated February 27, 2019


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

    NEW MEDIA INVESTMENT GROUP INC.
Date: February 27, 2019     By:   /s/ Michael E. Reed
    Michael E. Reed
    Chief Executive Officer and President
(Back To Top)

Section 2: EX-99.1 (EX-99.1)

EX-99.1

Exhibit 99.1

 

LOGO

New Media Announces Solid Fourth Quarter & Full Year 2018 Results,

Dividend of $0.38 per Common Share

 

NEW YORK, N.Y. February 27, 2019 – 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 30, 2018.

Fourth Quarter 2018 Financial Summary

 

   

New Media declared a cash dividend of $0.38 per common share for the fourth quarter of 2018

 

   

Operating income of $25.2 million

 

   

Net income attributable to New Media of $13.3 million

 

   

Total revenues of $416.0 million, an increase of 5.5% to prior year on a reported basis, and down 6.6% on an organic same store basis excluding, for comparability, the impact of ASC Topic 606

 

   

Natural disasters affected several properties, which we estimate resulted in approximately $2.3 million of loss to revenue, As Adjusted EBTIDA and Free Cash Flow within the fourth quarter. Adjusting for this impact, organic same store revenue would have been down 6.0%.

 

   

Digital revenue of $48.4 million, an increase of 16.4% to prior year on a reported basis

 

   

As Adjusted EBITDA of $56.4 million

 

   

Free Cash Flow of $42.7 million

 

   

Liquidity, consisting of cash on the balance sheet and undrawn revolver, of $88.2 million at the close of Q4 2018

Full Year 2018 Financial Summary

 

   

Operating income of $58.1 million

 

   

Net income attributable to New Media of $18.2 million

 

   

Total revenues of $1.53 billion, an increase of 13.7% compared to the prior year on a reported basis and a decrease of 5.3% compared to the prior year on an organic same store basis excluding, for comparability, the impact of ASC Topic 606

 

   

Digital revenue of $179.2 million, an increase of 25.2% year-over-year on a reported basis

 

   

As Adjusted EBITDA of $181.8 million

 

   

Free Cash Flow of $131.9 million

Business Highlights

 

   

Closed the acquisition of The Oklahoman in Oklahoma City, OK for $12.5 million on October 1, 2018

 

   

Closed the acquisition of Progressive Business Media for $35.0 million on November 16, 2018

 

   

UpCurve, our small and medium business (“SMB”) solutions platform, achieved $26.9 million in revenue for the fourth quarter, a 29.6% increase as compared with the same quarter in the prior year. Excluding the $1.6 million impact of ASC Topic 606, UpCurve revenue growth increased 37.5% compared to prior year period.

 

   

GateHouse Live and Promotions achieved $10.2 million in revenue, a 23.8% increase compared with the prior year period

 

   

Subsequent to year end, closed the acquisition of the publishing arm of Schurz Communications for $30.0 million on January 31, 2019

 

1


Summary of Fourth Quarter and Full Year 2018 Results

 

($ in million, except per share)       

GAAP Reporting

   Q4 2018      FY 2018  

Revenues

   $ 416.0      $ 1,526.0  

Operating income

   $ 25.2      $ 58.1  

Net income

   $ 13.3      $ 18.2  

Non-GAAP Reporting*

   Q4 2018      FY 2018  

As Adjusted EBITDA

   $ 56.4      $ 181.8  

Free Cash Flow

   $ 42.7      $ 131.9  

 

*

For definitions and reconciliations of Non-GAAP Reporting measures, please refer to the Non-GAAP Financial Measures Note and reconciliations below.

“2018 was a year of strong progress for New Media,” said Michael E. Reed, New Media President and Chief Executive Officer. “I am very pleased with the operational execution and the financial results we achieved across many areas of our business. Importantly, our same store revenue trends improved 60bps in 2018 to a decrease of 5.3%, an improvement from the 5.9% decline in 2017. We expect continued improvement in that trend in 2019, as we progress toward our goal of same store revenue growth. Overall, we delivered just over $1.5 billion in revenue for the year, an increase of 13.7% over 2017. We also delivered $181.8 million of EBITDA and $131.9 million of Free Cash Flow, both increasing over 2017. We deployed over $200 million of capital in 2018 acquiring leading media and experiential businesses in important markets which are already integrating well into our portfolio. Our track record illustrates that we are seen as a preferred acquirer of local news franchises, due to our commitment to quality local journalism and the successful execution of our business model. As a result of the continued strength of the Company’s operations and financial results, the Company’s Board of Directors increased the dividend in 2018 for the fifth consecutive year, paying total dividends in 2018 of $1.49 per share.

“We continued to make strong progress with our growth businesses in 2018, which were the primary contributors to our improved same store revenue trend. UpCurve produced $95.8 million in revenue for the year, up 34.4% over 2017, or up 42.9% excluding the impact of ASC Topic 606. Importantly, UpCurve experienced full year positive cash flow for the first time in 2018. Our GateHouse Live events business and our Promotions business also achieved strong results, with revenue of $45.7 million, up 58.0% over 2017. On a combined basis, these two businesses produced total revenue of $141.5 million, an increase of 41.2% over 2017. We expect to see these businesses continue to grow meaningfully in 2019 and beyond.

“We are also making strong progress in our core business of consumer marketing and subscriptions. We implemented a strategic shift this year to focus more on driving volumes, especially digital subscriptions, while relying less on pricing to build our consumer revenue foundation. To accomplish this, we created a centralized consumer agency with dedicated talent who are investing into customer acquisition channels and focused on retention and our customer experience. The fourth quarter organic same store circulation trends were down modestly to previous quarters, reflecting the temporary impact associated with our strategy shift and the hurricanes. However, our overall paid circulation volumes have increased by over 1,000 subscribers per week for the past twenty weeks – results which have not been achieved for the past ten years. Continued execution of this strategy is expected to produce paid subscriber growth in the mid-term, providing a more stable and sustainable circulation revenue base. As consumer marketing and subscriptions are our single largest revenue category, it is vital that we achieve long-term revenue growth driven by customer growth, and we believe we are on that track now.

“The results of the fourth quarter of 2018 reflect the impact of hurricanes in the southeast, the temporary impact to circulation revenue trends driven by our change in strategy, and a very large commercial print job we cycled in the quarter. Excluding these temporary impacts, our performance was actually quite good. We continue to execute well on our organic revenue growth strategy, we continue to reduce and reallocate costs to both improve cash flow and invest in growth, and we continue to find highly accretive acquisitions. I am confident about the future for New Media and our ability to create outsized returns for our shareholders.

 

2


“We also are announcing this morning that our Chief Financial Officer, Greg Freiberg, is leaving to pursue other opportunities. Over the past five years, Greg has made many contributions to the Company, including building a strong finance team who will continue in his footsteps. Greg will continue to assist with the transition to his successor, a search for whom is underway. I would like to personally thank Greg for his contributions to our growth and I wish him the very best in his next endeavor.”

Greg Freiberg also commented, “It’s been an honor to work with the experienced and motivated team at New Media. During my tenure with the Company, we successfully executed over $1 billion in acquisitions and repositioned the Company’s portfolio toward higher-growth digital and experiential businesses. New Media has an unparalleled position in small to mid-markets, owning some of the most respected brands in media. With its pivot toward new media and consumer experiences, I am convinced the future is bright for the Company and I look forward to seeing its continued growth.”

Fourth Quarter 2018 Financial Results

New Media recorded total revenues of $416.0 million for the quarter, up 5.5% to the prior year, and down 6.6% on an organic same store basis, excluding the $1.6 million impact of ASC Topic 606. The Company adopted ASC Topic 606 – “Revenue from Contracts with Customers” on January 1, 2018 using a modified retrospective method. The impact is the revenue treatment of certain UpCurve Cloud transactions at “net” vs. previously being at “gross”, with no adjustment to the prior year or 2018 beginning Retained Earnings. This is a 180bps decrease as compared with our third quarter organic same store revenue performance, due to weaker print trends, natural disasters, and investments made in circulation. Natural disasters affected several of our southeast locations, which we estimate resulted in approximately $2.3 million loss in revenue, As Adjusted EBITDA and Free Cash Flow within the fourth quarter, adjusting for the natural disasters, organic same store revenue decreased 6.0% as compared with the prior year period. Traditional Print advertising revenue decreased 15.0% on an organic same store basis to prior year, reflecting a weak holiday season for traditional brick and mortal retailers.

Digital revenue increased 16.4% on a reported basis from the prior year to $48.5 million or 20.4% excluding the $1.6 million impact of ASC Topic 606. UpCurve generated $26.9 million in revenue, an increase of 29.6% to the prior year on a reported basis. Excluding the $1.6 million impact of ASC Topic 606, UpCurve performance increased 37.5% as compared with the prior year period.

Circulation revenue declined 3.3% on an organic same store basis, due in large part to our shift away from pricing increases to stabilizing volume trends. Our digital-only subscription base grew to 145,000, an increase of 35% year-over- year. Commercial Print, Distribution and Events revenue increased 1.7% versus the prior year on an organic same store basis, with GateHouse Live driving this growth.

Operating income was $25.2 million and Net income attributable to New Media was $13.3 million.

As Adjusted EBITDA and Free Cash Flow were $56.4 million and $42.7 million, respectively.

Full Year 2018 Financial Results

New Media recorded revenues of $1,526.0 million in 2018, which represents an increase of 13.7% when compared to the prior year on a reported basis, and a decrease of 5.3% on an organic same store basis.

Total Print Advertising decreased 13.7% from prior year on an organic same store basis to $618.3 million.

 

3


UpCurve contributed $95.8 million to Digital revenue, an increase of 34.4% compared to the prior year on a reported basis, and up 42.9% excluding the impact of ASC Topic 606. Total digital revenue was $179.2 million for the year, growing 25.2% over the prior year on a reported basis.

Circulation revenue, our largest individual revenue category, achieved revenue of $575.0 million in 2018, down 2.2% to the prior year on an organic same store basis. Commercial Print, Distribution and Events revenue was $153.6 million, growing 5.7% versus the prior year on an organic same store basis.

Operating income ended the year at $58.1 million and Net income attributable to New Media totaled $18.2 million.

As Adjusted EBITDA and Free Cash Flow were $181.8 million and $131.9 million for the year, respectively.

New Media’s 2018 dividends will not be treated as taxable dividends, as they are a return of capital.

Fourth Quarter 2018 Dividend

New Media’s Board of Directors declared a fourth quarter 2018 cash dividend of $0.38 per share of common stock. The dividend is payable on March 20, 2019 to shareholders of record as of the close of business on March 11, 2019.

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.

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 most recent Quarterly Report on Form 10-Q or Annual Report on Form 10-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 27, 2019 at 9:00 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 dialing 1-855-319-1124 (from within the U.S.) or 1-703-563-6359 (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 “4063209.”

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 two hours following the call’s completion through 11:59 P.M. Eastern Time on Wednesday, March 13, 2019 by dialing 1-855-859-2056 (from within the U.S.) or 1-404-537-3406 (from outside of the U.S.); please reference access code “4063209.”

About New Media Investment Group Inc.

New Media supports small to mid-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.

 

4


The Company is one of the largest publishers of locally based print and online media in the United States as measured by our 146 daily publications. As of December 31, 2018, New Media operates in over 580 markets across 37 states reaching over 22 million people on a weekly basis and serves over 199,000 business customers.

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 remove non-material acquisitions and non-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, these non-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, and non-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 as non-cash compensation, and Adjusted EBITDA from non-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 these non-GAAP measures, as defined above, are useful to investors for the following reasons:

 

   

Evaluating performance and identifying trends in day-to-day performance because the items excluded have little or no significance on the Company’s day-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,

 

5


transaction, and project related costs such as diligence activities and new financing related costs because they represent costs unrelated to the day-to-day operating performance of the business that management can 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 our day-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 execute on our business plan, the availability of future acquisitions and strategic opportunities, finding, pursuing and completing future acquisitions and strategic opportunities and the benefits associated with such opportunities, deliver shareholder value, expected revenue trends, including expectations for revenue growth in our UpCurve and GateHouse Live businesses, 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 advertising and circulation revenues exceeding what we have seen in the past 12 months, economic conditions in the markets in which we operate, including natural disasters, tariffs and other factors affecting economic conditions generally, competition from other media companies, the possibility of insufficient interest in our digital and other businesses, 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 Form 10-K, Quarterly Reports on Form 10-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.

 

6


NEW MEDIA INVESTMENT GROUP INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands, except share data)

 

     December 30,
2018
    December 31,
2017
 
Assets

 

Current assets:

    

Cash and cash equivalents

   $ 48,651     $ 43,056  

Restricted cash

     4,119       3,106  

Accounts receivable, net of allowance for doubtful accounts of $8,042 and $5,998 at December 30, 2018 and December 31, 2017, respectively

     174,274       151,692  

Inventory

     25,022       18,654  

Prepaid expenses

     23,935       23,378  

Other current assets

     21,608       23,311  
  

 

 

   

 

 

 

Total current assets

     297,609       263,197  

Property, plant, and equipment, net of accumulated depreciation of $219,256 and $171,395 at December 30, 2018 and December 31, 2017, respectively

     339,608       373,123  

Goodwill

     310,737       236,555  

Intangible assets, net of accumulated amortization of $101,543 and $67,588 at December 30, 2018 and December 31, 2017, respectively

     486,054       403,493  

Other assets

     9,856       7,178  
  

 

 

   

 

 

 

Total assets

   $ 1,443,864     $ 1,283,546  
  

 

 

   

 

 

 
Liabilities and Stockholders’ Equity

 

Current liabilities:

    

Current portion of long-term debt

   $ 12,395     $ 2,716  

Accounts payable

     16,612       15,750  

Accrued expenses

     113,650       97,027  

Deferred revenue

     105,187       88,164  
  

 

 

   

 

 

 

Total current liabilities

     247,844       203,657  

Long-term liabilities:

    

Long-term debt

     428,180       357,195  

Deferred income taxes

     8,282       8,080  

Pension and other postretirement benefit obligations

     24,326       25,462  

Other long-term liabilities

     16,462       14,759  
  

 

 

   

 

 

 

Total liabilities

     725,094       609,153  
  

 

 

   

 

 

 

Redeemable noncontrolling interest

     1,547       —    
  

 

 

   

 

 

 

Stockholders’ equity:

    

Common stock, $0.01 par value, 2,000,000,000 shares authorized; 60,508,249 shares issued and 60,306,286 shares outstanding at December 30, 2018; 53,367,853 shares issued and 53,226,881 shares outstanding at December 31, 2017

     605       534  

Additional paid-in capital

     721,605       683,168  

Accumulated other comprehensive loss

     (6,881     (5,461

Retained earnings (accumulated deficit)

     3,767       (2,767

Treasury stock, at cost, 201,963 and 140,972 shares at December 30, 2018 and December 31, 2017, respectively

     (1,873     (1,081
  

 

 

   

 

 

 

Total stockholders’ equity

     717,223       674,393  
  

 

 

   

 

 

 

Total liabilities, redeemable noncontrolling interest and stockholders’ equity

   $ 1,443,864     $ 1,283,546  
  

 

 

   

 

 

 

 

7


NEW MEDIA INVESTMENT GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In thousands, except per share data)

 

     Three months ended     Year ended  
     December 30,
2018
    December 31,
2017
    December 30,
2018
    December 31,
2017
 

Revenues:

        

Advertising

   $ 200,998     $ 201,563     $ 728,327     $ 683,990  

Circulation

     154,503       140,164       574,963       474,324  

Commercial printing and other

     60,538       52,704       222,734       183,690  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     416,039       394,431       1,526,024       1,342,004  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        

Operating costs

     230,299       210,287       865,234       742,822  

Selling, general, and administrative

     137,756       129,277       505,282       449,108  

Depreciation and amortization

     20,515       19,773       84,791       74,394  

Integration and reorganization costs

     1,768       2,086       15,011       8,903  

Impairment of long-lived assets

     417       657       1,538       7,142  

Goodwill and mastheads impairment

     —         —         —         27,448  

Net loss (gain) on sale or disposal of assets

     80       211       (3,971     (1,649
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     25,204       32,140       58,139       33,836  

Interest expense

     9,606       8,193       36,072       30,476  

Loss on early extinguishment of debt

     2,886       —         2,886       4,767  

Other expense (income)

     452       (405     (838     (973
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     12,260       24,352       20,019       (434

Income tax (benefit) expense

     (679     (2,076     1,912       481  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     12,939       26,428       18,107       (915

Net loss attributable to redeemable noncontrolling interest

     (321     —         (89     —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to New Media

   $ 13,260     $ 26,428     $ 18,196     $ (915
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) per share:

        

Basic:

        

Net income (loss) attributable to New Media

   $ 0.22     $ 0.50     $ 0.31     $ (0.02
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted:

        

Net income (loss) attributable to New Media

   $ 0.22     $ 0.50     $ 0.31     $ (0.02
  

 

 

   

 

 

   

 

 

   

 

 

 

Dividends declared per share

   $ 0.38     $ 0.37     $ 1.49     $ 1.42  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

8


NEW MEDIA INVESTMENT GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)

 

     Year ended  
     December 30, 2018     December 31, 2017  

Cash flows from operating activities:

    

Net income (loss)

   $ 18,107     $ (915

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

    

Depreciation and amortization

     84,791       74,394  

Non-cash compensation expense

     3,156       3,135  

Non-cash interest expense

     1,996       2,339  

Deferred income taxes

     202       294  

Net gain on sale or disposal of assets

     (3,971     (1,649

Non-cash charge to investments

     505       250  

Non-cash loss on early extinguishment of debt

     2,886       2,344  

Impairment of long-lived assets

     1,538       7,142  

Goodwill and mastheads impairment

     —         27,448  

Pension and other postretirement benefit obligations

     (2,575     (1,963

Changes in assets and liabilities:

    

Accounts receivable, net

     15       4,981  

Inventory

     (4,336     1,073  

Prepaid expenses

     3,338       (3,538

Other assets

     4,434       (4,632

Accounts payable

     (2,530     (3,996

Accrued expenses

     8,019       6,645  

Deferred revenue

     (7,642     (4,607

Other long-term liabilities

     1,626       1,761  
  

 

 

   

 

 

 

Net cash provided by operating activities

     109,559       110,506  
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Acquisitions, net of cash acquired

     (204,877     (164,155

Purchases of property, plant, and equipment

     (11,639     (11,090

Proceeds from sale of publications, real estate and other assets, and insurance proceeds

     15,040       14,972  
  

 

 

   

 

 

 

Net cash used in investing activities

     (201,476     (160,273
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Payment of debt issuance costs

     (800     (3,576

Borrowings under term loans

     79,675       20,000  

Borrowings under revolving credit facility

     20,000       —    

Repayments under term loans

     (3,093     (14,443

Repayments under revolving credit facility

     (20,000     —    

Payment of offering costs

     (369     (431

Issuance of common stock, net of underwriters’ discount

     111,099       —    

Purchase of treasury stock

     (792     (664

Repurchase of common stock

     —         (5,001

Payments of dividends

     (87,195     (75,608
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     98,525       (79,723
  

 

 

   

 

 

 

Net increase (decrease) in cash, cash equivalents and restricted cash

     6,608       (129,490

Cash, cash equivalents and restricted cash at beginning of period

     46,162       175,652  
  

 

 

   

 

 

 

Cash, cash equivalents and restricted cash at end of period

   $ 52,770     $ 46,162  
  

 

 

   

 

 

 

 

9


NEW MEDIA INVESTMENT GROUP INC. AND SUBSIDIARIES

AS ADJUSTED EBITDA AND FREE CASH FLOW

(In thousands, except share data)

 

    Three months ended     Year ended  
    December 30, 2018     December 31, 2017     December 30, 2018     December 31, 2017  

Net income (loss)

  $ 12,939     $ 26,428     $ 18,107     $ (915

Income tax (benefit) expense

    (679     (2,076     1,912       481  

Interest expense

    9,606       8,193       36,072       30,476  

Impairment of long-lived assets

    417       657       1,538       7,142  

Loss on early extinguishment of debt

    2,886       —         2,886       4,767  

Goodwill and mastheads impairment

    —         —         —         27,448  

Depreciation and amortization

    20,515       19,773       84,791       74,394  
 

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

    45,684       52,975       145,306       143,793  

Non-cash compensation and other expense

    8,906       3,705       25,500       15,021  

Integration and reorganization costs

    1,768       2,086       15,011       8,903  

Net loss (gain) on sale or disposal of assets

    80       211       (3,971     (1,649
 

 

 

   

 

 

   

 

 

   

 

 

 

As Adjusted EBITDA

    56,438       58,977       181,846       166,068  

Interest Paid(1)

    (9,384     (6,917     (34,414     (26,983

Net capital expenditures

    (3,610     (3,884     (11,639     (11,090

Pension payments

    (414     (160     (2,575     (1,963

Cash taxes(2)

    (330     (203     (1,272     (52
 

 

 

   

 

 

   

 

 

   

 

 

 

Free Cash Flow

  $ 42,700     $ 47,814     $ 131,946     $ 125,980  
 

 

 

   

 

 

   

 

 

   

 

 

 

Basic weighted average shares outstanding

    59,921,421       52,876,929       58,013,617       53,010,421  

Diluted weighted average shares outstanding

    60,124,974       53,094,493       58,398,147       53,010,421  

 

(1)

Average interest paid during 2017 and 2018 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     Year ended  
     December 30, 2018     December 31, 2017     December 30, 2018     December 31, 2017  

Total revenues from continuing operations

   $  416,039     $ 394,431     $ 1,526,024     $ 1,342,004  

Revenue adjustment for material acquisitions

     —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Same Store Revenues

     416,039       394,431       1,526,024       1,342,004  

Tuck-in Acquisitions(1)

     (69,294     (1,804     (285,032     (6,218

53rd Week Adjustment

     —         (19,438       (19,438
  

 

 

   

 

 

   

 

 

   

 

 

 

Organic Same Store Revenues(2),(3)

   $ 346,745     $ 373,189     $ 1,240,992     $ 1,316,348  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

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.

(2)

Revenue recognized during the three and twelve months ended December 30, 2018 was impacted by $1,642 and $6,022 respectively as a result of applying ASC Topic 606. For comparison purposes to the prior year quarter and prior year, removing the impact of the revenue recognized from ASC Topic 606 would have resulted in an Organic Same Store Revenues declines of 6.6% for the quarter and 5.3% for the year.

(3)

Revenue recognized during the three months ended December 30, 2018 was negatively impacted by ($2,300) as a result of Natural Disasters. For comparison purposes to the prior year quarter, removing the impact of Natural Disasters would have resulted in an Organic Same Store Revenues decline of 6.0%.

 

11

(Back To Top)