Tribune Publishing Company (NASDAQ:TPCO) today announced financial
results for the third quarter ended September 30, 2018.
Unless otherwise noted, amounts and disclosures throughout this
earnings release relate to continuing operations and exclude all
discontinued operations including the California properties and
forsalebyowner.com.
Third Quarter 2018 and Year-to-Date
Highlights:
- Third quarter 2018 total revenues were up 8.3% compared to
third quarter 2017
- Digital content revenues were up 86.6% compared to third
quarter 2018
- Digital-only subscribers increased 68% to 227,000 at the end of
the third quarter 2018, up from 135,000 at the end of the third
quarter 2017
Justin Dearborn, Tribune Publishing’s Chairman and CEO, said,
“Despite the industry headwinds and the after-effects of the
Capital Gazette tragedy, we performed well in the quarter and
continue to establish the infrastructure for long-term
success. Our focus on growing paid digital subscribers
continues to pay off. Digital-only subscribers increased 68%
compared to the end of the third quarter 2017.”
Mr. Dearborn also added, “As previously announced, we rebranded
the company back to Tribune Publishing. Tribune remains a
leading news source for the communities we serve and we continue to
be proud of the award winning journalism our newsrooms produce
daily that our readers rely
on.”
Third Quarter 2018 Results
Third quarter 2018 total revenues were $255.8 million, up $19.6
million or 8.3% compared to $236.2 million for third quarter
2017. Revenue for the third quarter 2018 includes $48.2
million attributable to New York Daily News (“NYDN”) (acquired in
September 2017 and which had revenue in Q3, 2017 of $7.6M),
BestReviews.com (acquired in February 2018) and Virginian-Pilot
Media Companies (“VPMC”) (acquired in May 2018), $8.7 million of
revenue associated with our Transition Service Arrangement with the
LA Times and San Diego Union-Tribune and an $8.9 million downward
revenue impact associated with the agreement with Cars.com to
convert Tribune Publishing's eight affiliate markets
into Cars.com's direct retail channel, which went into
effect on February 1, 2018.
Third quarter 2018 total advertising revenue and digital
advertising revenue were $109.8 million and $25.7 million,
respectively. Excluding the NYDN, VPMC and the Cars.com
impact, on a year-over-year basis, total advertising revenue would
have been down 16.2%, and digital advertising revenue and would
have been down 6.7%.
Total operating expenses, including depreciation and
amortization, for third quarter 2018 were $265.8 million, up 11.5%,
compared to $238.3 million for third quarter of 2017. The
increase was mainly due to the impact of including NYDN for the
full quarter, BestReviews and VPMC, partially offset by our ongoing
strong cost management and reduced expenses related to the Cars.com
transition.
Loss from continuing operations for third quarter 2018
was $0.6 million compared to a loss of $12.6 million for
third quarter of 2017.
Adjusted EBITDA for third quarter 2018 was $16.6 million, versus
$20.1 million in the third quarter 2017. The decline is primarily
due to higher newsprint pricing related to the recently rescinded
tariffs, as well as the financial impact from the Capital Gazette
tragedy.
For the nine months ended September 30, 2018, capital
expenditures totaled $49.0 million. Cash balance was $141.5
million, which includes $43.9 million of restricted cash reflected
in long-term assets.
Segment ResultsThe Company operates in two
segments: M, which is comprised of the Company’s media groups
excluding their digital revenues and related expenses, except
digital subscription revenues when bundled with a print
subscription, and X, which includes all digital revenues and
related expenses of the Company from local Tribune Publishing
websites, third party websites, mobile applications, digital-only
subscriptions, Tribune Content Agency and BestReviews. These
segments were previously referred to as troncM and troncX.
Included in the tables below is segment reporting for M and X
for the third quarters of 2018 and 2017.
MThird quarter 2018 M total revenues were $207.4 million, up 4.6%
compared to third quarter 2017. Circulation revenue for third
quarter 2018 increased 14.4% on a year-over-year basis, primarily
due to NYDN and VPMC, which was partially offset by a decrease of
1.2% in advertising revenues.
Third quarter 2018 operating expenses for M increased 12.6%
compared to the prior-year quarter, driven primarily by the
inclusion of the NYDN and VPMC.
Third quarter 2018 loss from operations for M was $3.3 million.
XTotal revenues for X for the third quarter of 2018 were $41.1
million, up 6.0%, primarily driven by the impact of the inclusion
of NYDN, VPMC and BestReviews.com, partially offset by the Cars.com
impact. Third quarter 2018 advertising revenues for X
decreased 15.6% compared to the same period of the prior year
primarily due to the change in our Cars.com arrangement as well as
from lower page views resulting from a new content management
system, Social media and search algorithm changes and our focus on
digital subscription growth. Content revenues in the third
quarter 2018, which includes digital-only subscriptions and content
syndication, increased by 86.6% year-over-year.
Third quarter 2018 income from operations for X was $3.7
million.
Digital-only subscribers grew to 227,000, up 68% from the prior
year and up 7% sequentially.
2018 OutlookRevenue guidance for full year 2018
has narrowed to a range of $1.03 to $1.05 billion and 2018 Adjusted
EBITDA remains at a range of $106 to $112 million.
Conference Call DetailsTribune Publishing will
host a conference call to discuss the Company’s third quarter 2018
results at 5 p.m. Eastern Time (4 p.m. Central Time)
on Wednesday, November 7, 2018. The conference call may
be accessed via Tribune Publishing’s Investor Relations website at
investor.tribpub.com or by dialing 844.494.0195 (508.637.5599 for
international callers) and entering conference ID 2684945. An
archived version of the webcast will also be available for one year
on the Tribune Publishing website. To access the replay via
telephone, available until November 14, 2018, dial
855.859.2056 (404.537.3406 for international callers),
conference ID 2684945.
Non-GAAP Financial InformationAdjusted EBITDA,
Adjusted total operating expenses, Adjusted Net Income, and
Adjusted Diluted EPS. These are not measures presented in
accordance with generally accepted accounting principles in the
United States (US GAAP) and Tribune Publishing’s use of the terms
Adjusted EBITDA, Adjusted total operating expenses, Adjusted Net
Income, and Adjusted Diluted EPS may vary from that of others in
the Company’s industry. Adjusted EBITDA, Adjusted total
operating expenses, Adjusted Net Income, and Adjusted Diluted EPS
should not be considered as an alternative to net income (loss),
income from operations, operating expenses, net income (loss) per
diluted share, revenues or any other performance measures derived
in accordance with US GAAP as measures of operating performance or
liquidity. Further information regarding Tribune Publishing’s
presentation of these measures, including a reconciliation of
Adjusted EBITDA, Adjusted total operating expenses, Adjusted Net
Income and Adjusted Diluted EPS to the most directly comparable US
GAAP financial measure, is included below in this press
release.
Cautionary Statements Regarding Forward-looking
StatementsThis press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934 that
are based largely on our current expectations and reflect various
estimates and assumptions by us. Forward-looking statements
are subject to certain risks, trends, and uncertainties that could
cause actual results and achievements to differ materially from
those expressed in such forward-looking statements. Such
risks, trends and uncertainties, which in some instances are beyond
our control, include: changes in advertising demand, circulation
levels and audience shares; competition and other economic
conditions; economic and market conditions that could impact the
level of our required contributions to the defined benefit pension
plans to which we contribute; decisions by trustees under
rehabilitation plans (if applicable) or other contributing
employers with respect to multiemployer plans to which we
contribute which could impact the level of our contributions; our
ability to develop and grow our online businesses; changes in
newsprint price; our ability to maintain effective internal control
over financial reporting; concentration of stock ownership among
our principal stockholders whose interests may differ from those of
other stockholders; and other events beyond our control that may
result in unexpected adverse operating results. For more
information about these and other risks see Item 1A (Risk Factors)
of the Company’s most recent Annual Report on Form 10-K and in the
Company’s other reports filed with the Securities and Exchange
Commission.
The words “believe,” “expect,” “anticipate,” “estimate,”
“could,” “should,” “intend,” “may,” “will,” “plan,” “seek” and
similar expressions generally identify forward-looking
statements. However, such words are not the exclusive means
for identifying forward-looking statements, and their absence does
not mean that the statement is not forward-looking. Whether
or not any such forward-looking statements, in fact, occur will
depend on future events, some of which are beyond our
control. Readers are cautioned not to place undue reliance on
such forward-looking statements, which are being made as of the
date of this press release. Except as required by law, we
undertake no obligation to update any forward-looking statements,
whether as a result of new information, future events or
otherwise.
About Tribune Publishing CompanyTribune
Publishing (NASDAQ:TPCO) is a media company rooted in award-winning
journalism. Headquartered in Chicago, Tribune Publishing
operates local media businesses in eight markets with titles
including the Chicago Tribune, New York Daily
News, The Baltimore Sun, Orlando Sentinel, South
Florida's Sun-Sentinel, Virginia’s Daily Press and The
Virginian-Pilot, The Morning Call of Lehigh Valley, Pennsylvania,
and the Hartford Courant.
Tribune Publishing also operates Tribune Content Agency and the
Daily Meal and is majority owner of BestReviews.
Our brands are committed to informing, inspiring and
engaging local communities. We create and distribute content across
our media portfolio, offering integrated marketing, media, and
business services to consumers and advertisers, including digital
solutions and advertising opportunities.
Investor Relations Contact:Terry Jimenez
Tribune Publishing Investor Relations 312.222.5787
tjimenez@tribpub.com
Media Contact: Marisa Kollias Tribune
Publishing Corporate Communications 312.222.3308
mkollias@tribpub.com
Source: Tribune Publishing
Exhibits:Condensed Consolidated Statements of Income
(Loss)Segment Income, Expenses, and Non-GAAP
ReconciliationsCondensed Consolidated Balance SheetsNon-GAAP
Reconciliations – Loss from Continuing Operations to Adjusted
EBITDA Non-GAAP Reconciliations – Total Operating Expenses to
Adjusted Total Operating ExpensesNon-GAAP Reconciliations – Loss
from Continuing Operations to Adjusted Net Income (Loss) from
continuing operations and Adjusted Diluted EPS
|
|
|
|
TRIBUNE PUBLISHING
COMPANYCONDENSED CONSOLIDATED STATEMENTS OF INCOME
(LOSS)(In thousands, except per share
data)(Unaudited)Preliminary |
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
September 30,
2018 |
|
September 24,
2017 |
|
September 30,
2018 |
|
September 24,
2017 |
|
|
|
|
|
|
|
|
Operating revenues |
$ |
255,770 |
|
|
$ |
236,155 |
|
|
$ |
747,173 |
|
|
$ |
719,565 |
|
|
|
|
|
|
|
|
|
Operating expenses |
265,763 |
|
|
238,276 |
|
|
789,489 |
|
|
716,231 |
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
(9,993 |
) |
|
(2,121 |
) |
|
(42,316 |
) |
|
3,334 |
|
|
|
|
|
|
|
|
|
Interest income (expense), net |
303 |
|
|
(6,510 |
) |
|
(11,673 |
) |
|
(19,310 |
) |
Loss on early extinguishment of debt |
— |
|
|
— |
|
|
(7,666 |
) |
|
— |
|
Premium on stock buyback |
— |
|
|
— |
|
|
— |
|
|
(6,031 |
) |
Loss on equity investments, net |
(434 |
) |
|
(403 |
) |
|
(1,828 |
) |
|
(2,024 |
) |
Other income, net |
3,640 |
|
|
86 |
|
|
10,943 |
|
|
653 |
|
Loss from continuing operations before income
taxes |
(6,484 |
) |
|
(8,948 |
) |
|
(52,540 |
) |
|
(23,378 |
) |
Income tax (benefit) expense |
(5,835 |
) |
|
3,697 |
|
|
(8,719 |
) |
|
1,612 |
|
Loss from continuing operations |
(649 |
) |
|
(12,645 |
) |
|
(43,821 |
) |
|
(24,990 |
) |
Income (loss) from discontinued operations, net of
taxes |
(3,586 |
) |
|
14,701 |
|
|
290,665 |
|
|
30,898 |
|
Net income (loss) |
(4,235 |
) |
|
2,056 |
|
|
246,844 |
|
|
5,908 |
|
Less: Income (loss) attributable to non-controlling
interests |
(239 |
) |
|
— |
|
|
471 |
|
|
— |
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Tribune common
stockholders |
$ |
(3,996 |
) |
|
$ |
2,056 |
|
|
$ |
246,373 |
|
|
$ |
5,908 |
|
|
|
|
|
|
|
|
|
Net loss attributable to Tribune per common share -
Basic |
|
|
|
|
|
|
|
Loss from continuing operations |
$ |
(0.01 |
) |
|
$ |
(0.38 |
) |
|
$ |
(1.26 |
) |
|
$ |
(0.73 |
) |
Income (loss) from discontinued operations |
(0.10 |
) |
|
0.44 |
|
|
8.27 |
|
|
0.90 |
|
Net income attributable to Tribune per common share
- Basic |
$ |
(0.11 |
) |
|
$ |
0.06 |
|
|
$ |
7.01 |
|
|
$ |
0.17 |
|
|
|
|
|
|
|
|
|
Net loss attributable to Tribune per common share -
Diluted |
|
|
|
|
|
|
|
Loss from continuing operations |
$ |
(0.01 |
) |
|
$ |
(0.38 |
) |
|
$ |
(1.26 |
) |
|
$ |
(0.73 |
) |
Income from discontinued operations |
(0.10 |
) |
|
0.44 |
|
|
8.27 |
|
|
0.90 |
|
Net income attributable to Tribune per common share
- Diluted |
$ |
(0.11 |
) |
|
$ |
0.06 |
|
|
$ |
7.01 |
|
|
$ |
0.17 |
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
Basic |
35,409 |
|
|
33,242 |
|
|
35,166 |
|
|
34,124 |
|
Diluted |
35,409 |
|
|
33,242 |
|
|
35,166 |
|
|
34,124 |
|
|
|
The tables below shows the segmentation of income and expenses
for the three and nine months ended September 30, 2018 as compared
to the three and nine months ended September 24, 2017. The
three and nine month periods ended September 30, 2018 consist of 13
weeks and 39 weeks, respectively. The three and nine month
periods ended September 24, 2017 consist of 13 weeks and 39 weeks,
respectively.
|
|
M |
|
X |
|
Corporate
andEliminations |
|
Consolidated |
|
Three Months
Ended |
|
Three Months
Ended |
|
Three Months
Ended |
|
Three Months
Ended |
|
Sept 30,2018 |
|
Sept 24,2017 |
|
Sept 30,2018 |
|
Sept 24,2017 |
|
Sept 30,2018 |
|
Sept 24,2017 |
|
Sept 30,2018 |
|
Sept 24,2017 |
Total revenues |
$ |
207,385 |
|
|
$ |
198,196 |
|
|
$ |
41,077 |
|
|
$ |
38,738 |
|
|
$ |
7,308 |
|
|
$ |
(779 |
) |
|
$ |
255,770 |
|
|
$ |
236,155 |
|
Operating expenses |
210,640 |
|
|
187,001 |
|
|
37,380 |
|
|
38,247 |
|
|
17,743 |
|
|
13,028 |
|
|
265,763 |
|
|
238,276 |
|
Income (loss) from operations |
(3,255 |
) |
|
11,195 |
|
|
3,697 |
|
|
491 |
|
|
(10,435 |
) |
|
(13,807 |
) |
|
(9,993 |
) |
|
(2,121 |
) |
Depreciation and amortization |
4,151 |
|
|
4,035 |
|
|
4,274 |
|
|
4,059 |
|
|
3,754 |
|
|
4,030 |
|
|
12,179 |
|
|
12,124 |
|
Adjustments |
7,182 |
|
|
3,594 |
|
|
2,475 |
|
|
1,240 |
|
|
4,797 |
|
|
5,272 |
|
|
14,454 |
|
|
10,106 |
|
Adjusted EBITDA |
$ |
8,078 |
|
|
$ |
18,824 |
|
|
$ |
10,446 |
|
|
$ |
5,790 |
|
|
$ |
(1,884 |
) |
|
$ |
(4,505 |
) |
|
$ |
16,640 |
|
|
$ |
20,109 |
|
|
M |
|
X |
|
Corporate
andEliminations |
|
Consolidated |
|
Nine Months
Ended |
|
Nine Months
Ended |
|
Nine Months
Ended |
|
Nine Months
Ended |
|
Sept 30,2018 |
|
Sept 24,2017 |
|
Sept 30,2018 |
|
Sept 24,2017 |
|
Sept 30,2018 |
|
Sept 24,2017 |
|
Sept 30,2018 |
|
Sept 24,2017 |
Total revenues |
$ |
623,893 |
|
|
$ |
606,997 |
|
|
$ |
116,189 |
|
|
$ |
115,145 |
|
|
$ |
7,091 |
|
|
$ |
(2,577 |
) |
|
$ |
747,173 |
|
|
$ |
719,565 |
|
Operating expenses |
619,461 |
|
|
570,052 |
|
|
109,548 |
|
|
112,002 |
|
|
60,480 |
|
|
34,177 |
|
|
789,489 |
|
|
716,231 |
|
Income (loss) from operations |
4,432 |
|
|
36,945 |
|
|
6,641 |
|
|
3,143 |
|
|
(53,389 |
) |
|
(36,754 |
) |
|
(42,316 |
) |
|
3,334 |
|
Depreciation and amortization |
12,113 |
|
|
12,600 |
|
|
13,328 |
|
|
10,748 |
|
|
12,126 |
|
|
11,757 |
|
|
37,567 |
|
|
35,105 |
|
Adjustments |
15,926 |
|
|
9,966 |
|
|
7,737 |
|
|
3,175 |
|
|
28,485 |
|
|
13,021 |
|
|
52,148 |
|
|
26,162 |
|
Adjusted EBITDA |
$ |
32,471 |
|
|
$ |
59,511 |
|
|
$ |
27,706 |
|
|
$ |
17,066 |
|
|
$ |
(12,778 |
) |
|
$ |
(11,976 |
) |
|
$ |
47,399 |
|
|
$ |
64,601 |
|
|
|
Segment M
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
|
September 30,
2018 |
|
September 24,
2017 |
|
%Change |
|
September 30,
2018 |
|
September 24,
2017 |
|
%Change |
Operating revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Advertising |
|
$ |
83,990 |
|
|
$ |
85,051 |
|
|
(1.2 |
%) |
|
$ |
254,532 |
|
|
$ |
269,135 |
|
|
(5.4 |
%) |
Circulation |
|
87,644 |
|
|
76,620 |
|
|
14.4 |
% |
|
260,886 |
|
|
225,631 |
|
|
15.6 |
% |
Other |
|
35,751 |
|
|
36,525 |
|
|
(2.1 |
%) |
|
108,475 |
|
|
112,231 |
|
|
(3.3 |
%) |
Total revenues |
|
207,385 |
|
|
198,196 |
|
|
4.6 |
% |
|
623,893 |
|
|
606,997 |
|
|
2.8 |
% |
Operating expenses |
|
210,640 |
|
|
187,001 |
|
|
12.6 |
% |
|
619,461 |
|
|
570,052 |
|
|
8.7 |
% |
Income from operations |
|
(3,255 |
) |
|
11,195 |
|
|
* |
|
4,432 |
|
|
36,945 |
|
|
(88.0 |
%) |
Depreciation and amortization |
|
4,151 |
|
|
4,035 |
|
|
2.9 |
% |
|
12,113 |
|
|
12,600 |
|
|
(3.9 |
%) |
Adjustments |
|
7,182 |
|
|
3,594 |
|
|
99.8 |
% |
|
15,926 |
|
|
9,966 |
|
|
59.8 |
% |
Adjusted EBITDA |
|
$ |
8,078 |
|
|
$ |
18,824 |
|
|
(57.1 |
%) |
|
$ |
32,471 |
|
|
$ |
59,511 |
|
|
(45.4 |
%) |
|
|
Segment X
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
|
September 30,
2018 |
|
September 24,
2017 |
|
%Change |
|
September 30,
2018 |
|
September 24,
2017 |
|
%Change |
Operating revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Advertising |
|
$ |
25,748 |
|
|
$ |
30,523 |
|
|
(15.6 |
%) |
|
$ |
71,785 |
|
|
$ |
91,016 |
|
|
(21.1 |
%) |
Content |
|
15,329 |
|
|
8,215 |
|
|
86.6 |
% |
|
44,404 |
|
|
24,129 |
|
|
84.0 |
% |
Total revenues |
|
41,077 |
|
|
38,738 |
|
|
6.0 |
% |
|
116,189 |
|
|
115,145 |
|
|
0.9 |
% |
Operating expenses |
|
37,380 |
|
|
38,247 |
|
|
(2.3 |
%) |
|
109,548 |
|
|
112,002 |
|
|
(2.2 |
%) |
Income from operations |
|
3,697 |
|
|
491 |
|
|
* |
|
6,641 |
|
|
3,143 |
|
|
* |
Depreciation and amortization |
|
4,274 |
|
|
4,059 |
|
|
5.3 |
% |
|
13,328 |
|
|
10,748 |
|
|
24.0 |
% |
Adjustments |
|
2,475 |
|
|
1,240 |
|
|
99.6 |
% |
|
7,737 |
|
|
3,175 |
|
|
* |
Adjusted EBITDA |
|
$ |
10,446 |
|
|
$ |
5,790 |
|
|
80.4 |
% |
|
$ |
27,706 |
|
|
$ |
17,066 |
|
|
62.3 |
% |
|
|
TRIBUNE PUBLISHING
COMPANYCONDENSED CONSOLIDATED BALANCE
SHEETS(In
thousands)(Unaudited) |
Preliminary |
|
|
September 30,
2018 |
|
December 31,
2017 |
Assets |
|
|
|
|
Current Assets: |
|
|
|
|
Cash |
|
$ |
97,582 |
|
|
$ |
185,351 |
|
Accounts receivable |
|
135,950 |
|
|
122,501 |
|
Inventories |
|
11,402 |
|
|
7,412 |
|
Prepaid expenses and other |
|
38,991 |
|
|
29,663 |
|
Assets related to discontinued operations |
|
— |
|
|
61,778 |
|
Total current assets |
|
283,925 |
|
|
406,705 |
|
Net Properties, Plant and Equipment |
|
146,067 |
|
|
94,498 |
|
Other Assets |
|
|
|
|
Goodwill and other intangible assets |
|
243,645 |
|
|
154,396 |
|
Restricted cash |
|
43,947 |
|
|
— |
|
Other long-term assets |
|
30,001 |
|
|
32,287 |
|
Assets related to discontinued operations |
|
— |
|
|
177,247 |
|
Total other assets |
|
317,593 |
|
|
363,930 |
|
Total assets |
|
$ |
747,585 |
|
|
$ |
865,133 |
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
Current Liabilities |
|
|
|
|
Accounts payable |
|
$ |
65,946 |
|
|
$ |
65,724 |
|
Employee compensation and benefits |
|
40,058 |
|
|
49,262 |
|
Deferred revenue |
|
53,580 |
|
|
50,314 |
|
Current portion of long-term debt |
|
405 |
|
|
21,486 |
|
Other current liabilities |
|
22,309 |
|
|
15,453 |
|
Liabilities associated with assets held for
sale |
|
51,380 |
|
|
58,665 |
|
Total current liabilities |
|
233,678 |
|
|
260,904 |
|
Non-Current Liabilities |
|
|
|
|
Pension and postretirement benefits payable |
|
17,813 |
|
|
23,438 |
|
Workers’ compensation, general liability and auto
insurance payable |
|
31,453 |
|
|
33,452 |
|
Long-term debt |
|
6,773 |
|
|
331,065 |
|
Other non-current liabilities |
|
44,904 |
|
|
30,612 |
|
Liabilities associated with assets held for
sale |
|
— |
|
|
116,500 |
|
Total non-current liabilities |
|
100,943 |
|
|
535,067 |
|
|
|
|
|
|
Noncontrolling Equity Interest |
|
39,371 |
|
|
— |
|
|
|
|
|
|
Equity |
|
|
|
|
Total stockholders' equity |
|
373,593 |
|
|
69,162 |
|
Total liabilities and equity |
|
$ |
747,585 |
|
|
$ |
865,133 |
|
|
TRIBUNE PUBLISHING
COMPANYNON-GAAP RECONCILIATIONS(In thousands)
(Unaudited) |
Preliminary |
|
Reconciliation of Loss From Continuing
Operations to Adjusted EBITDA: |
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
Sept 30,2018 |
|
Sept 24,2017 |
|
%Change |
|
Sept 30,2018 |
|
Sept 24,2017 |
|
%Change |
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations |
$ |
(649 |
) |
|
$ |
(12,645 |
) |
|
(94.9 |
%) |
|
$ |
(43,821 |
) |
|
$ |
(24,990 |
) |
|
75.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
(5,835 |
) |
|
3,697 |
|
|
* |
|
(8,719 |
) |
|
1,612 |
|
|
* |
Interest expense, net |
(303 |
) |
|
6,510 |
|
|
* |
|
11,673 |
|
|
19,310 |
|
|
(39.5 |
%) |
Loss on early extinguishment of debt |
— |
|
|
— |
|
|
* |
|
7,666 |
|
|
— |
|
|
* |
Premium on stock buyback |
— |
|
|
— |
|
|
* |
|
— |
|
|
6,031 |
|
|
* |
Loss on equity investments, net |
434 |
|
|
403 |
|
|
7.7 |
% |
|
1,828 |
|
|
2,024 |
|
|
(9.7 |
%) |
Other income, net (1) |
(3,640 |
) |
|
(86 |
) |
|
* |
|
(10,943 |
) |
|
(653 |
) |
|
* |
Income (loss) from operations |
(9,993 |
) |
|
(2,121 |
) |
|
* |
|
(42,316 |
) |
|
3,334 |
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
12,179 |
|
|
12,124 |
|
|
0.5 |
% |
|
37,567 |
|
|
35,105 |
|
|
7.0 |
% |
Restructuring and transaction costs (2) |
11,472 |
|
|
7,468 |
|
|
53.6 |
% |
|
44,635 |
|
|
19,454 |
|
|
* |
Stock-based compensation |
2,982 |
|
|
2,562 |
|
|
16.4 |
% |
|
7,513 |
|
|
6,631 |
|
|
13.3 |
% |
Employee voluntary separation program |
— |
|
|
76 |
|
|
* |
|
— |
|
|
77 |
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
16,640 |
|
|
$ |
20,109 |
|
|
(17.3 |
%) |
|
$ |
47,399 |
|
|
$ |
64,601 |
|
|
(26.6 |
%) |
* Represents positive or negative change in excess of 100%
(1) - Effective January 1, 2018, the Company adopted Accounting
Standards Update (“ASU”) 2017-07, Topic 715, Compensation -
Retirement Benefits; Improving the Presentation of Net Periodic
Pension Cost and Net Periodic Postretirement Benefit Cost.
ASU 2017-07 requires certain components of net benefit costs to be
presented outside of income from operations. The standard
required retrospective application. Accordingly amounts
presented in the prior period have been adjusted to conform with
the standard.
(2) - Restructuring and transaction costs include costs related
to Tribune's internal restructuring, such as severance, charges
associated with vacated space, costs related to completed and
potential acquisitions and a one-time charge related to the
Consulting Agreement.
Adjusted EBITDAAdjusted EBITDA is a financial
measure that is not calculated in accordance with accounting
principles generally accepted in the United States of America
(“U.S. GAAP”). Management believes that because Adjusted
EBITDA excludes (i) certain non-cash expenses (such as
depreciation, amortization, stock-based compensation, and gain/loss
on equity investments) and (ii) expenses that are not
reflective of the Company’s core operating results over time (such
as restructuring costs, including the employee voluntary separation
program and gain/losses on employee benefit plan terminations,
litigation or dispute settlement charges or gains, premiums on
stock buyback and transaction-related costs), this measure provides
investors with additional useful information to measure the
Company’s financial performance, particularly with respect to
changes in performance from period to period. The Company’s
management uses Adjusted EBITDA (a) as a measure of operating
performance; (b) for planning and forecasting in future periods;
and (c) in communications with the Company’s Board of Directors
concerning the Company’s financial performance. In addition,
Adjusted EBITDA, or a similarly calculated measure, has been used
as the basis for certain financial maintenance covenants that the
Company is subject to in connection with certain credit
facilities. Since not all companies use identical
calculations, the Company’s presentation of Adjusted EBITDA may not
be comparable to other similarly titled measures of other companies
and should not be used by investors as a substitute or alternative
to net income or any measure of financial performance calculated
and presented in accordance with U.S. GAAP. Instead,
management believes Adjusted EBITDA should be used to supplement
the Company’s financial measures derived in accordance with U.S.
GAAP to provide a more complete understanding of the trends
affecting the business.
Although Adjusted EBITDA is frequently used by investors and
securities analysts in their evaluations of companies, Adjusted
EBITDA has limitations as an analytical tool, and investors should
not consider it in isolation or as a substitute for, or more
meaningful than, amounts determined in accordance with GAAP. Some
of the limitations to using non-GAAP measures as an analytical tool
are: they do not reflect the Company’s interest income and
expense, or the requirements necessary to service interest or
principal payments on the Company’s debt; they do not reflect
future requirements for capital expenditures or contractual
commitments; and although depreciation and amortization charges are
non-cash charges, the assets being depreciated and amortized will
often have to be replaced in the future, and non-GAAP measures do
not reflect any cash requirements for such replacements.
The Company does not provide a reconciliation of Adjusted EBITDA
guidance due to the inherent difficulty in forecasting and
quantifying certain amounts that are necessary for such
reconciliation, including adjustments that could be made for
restructuring and transaction costs, stock-based compensation
amounts and other charges reflected in our reconciliation of
historic numbers, the amount of which, based on historical
experience, could be significant.
Reconciliation of Total Operating Expenses to Adjusted
Total Operating Expenses:
|
Three Months Ended
September 30, 2018 |
|
Three Months Ended
September 24, 2017 |
|
GAAP |
|
Adjustments |
|
Adjusted |
|
GAAP |
|
Adjustments |
|
Adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
Compensation |
$ |
107,762 |
|
|
$ |
(11,748 |
) |
|
$ |
96,014 |
|
|
$ |
97,304 |
|
|
$ |
(6,391 |
) |
|
$ |
90,913 |
|
Newsprint and ink |
16,980 |
|
|
— |
|
|
16,980 |
|
|
12,974 |
|
|
— |
|
|
12,974 |
|
Outside services |
81,572 |
|
|
(2,419 |
) |
|
79,153 |
|
|
78,572 |
|
|
(3,462 |
) |
|
75,110 |
|
Other operating expenses |
47,270 |
|
|
(287 |
) |
|
46,983 |
|
|
37,302 |
|
|
(253 |
) |
|
37,049 |
|
Depreciation and amortization |
12,179 |
|
|
(12,179 |
) |
|
— |
|
|
12,124 |
|
|
(12,124 |
) |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
$ |
265,763 |
|
|
$ |
(26,633 |
) |
|
$ |
239,130 |
|
|
$ |
238,276 |
|
|
$ |
(22,230 |
) |
|
$ |
216,046 |
|
|
Nine Months Ended
September 30, 2018 |
|
Nine Months Ended
September 24, 2017 |
|
GAAP |
|
Adjustments |
|
Adjusted |
|
GAAP |
|
Adjustments |
|
Adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
Compensation |
$ |
324,982 |
|
|
$ |
(28,474 |
) |
|
$ |
296,508 |
|
|
$ |
286,306 |
|
|
$ |
(16,434 |
) |
|
$ |
269,872 |
|
Newsprint and ink |
48,348 |
|
|
— |
|
|
48,348 |
|
|
41,399 |
|
|
— |
|
|
41,399 |
|
Outside services |
262,372 |
|
|
(23,027 |
) |
|
239,345 |
|
|
239,593 |
|
|
(7,031 |
) |
|
232,562 |
|
Other operating expenses |
116,220 |
|
|
(647 |
) |
|
115,573 |
|
|
113,828 |
|
|
(2,697 |
) |
|
111,131 |
|
Depreciation and amortization |
37,567 |
|
|
(37,567 |
) |
|
— |
|
|
35,105 |
|
|
(35,105 |
) |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
$ |
789,489 |
|
|
$ |
(89,715 |
) |
|
$ |
699,774 |
|
|
$ |
716,231 |
|
|
$ |
(61,267 |
) |
|
$ |
654,964 |
|
|
Adjusted Total Operating Expenses
Adjusted total operating expenses consist of total
operating expenses per the income statement, adjusted to exclude
the impact of items listed in the Adjusted EBITDA non-GAAP
reconciliation. Management believes that Adjusted total
operating expenses is informative to investors as it enhances the
investors' overall understanding of the financial performance of
the Company's business as they analyze current results compared to
prior periods.
|
TRIBUNE PUBLISHING
COMPANYNON-GAAP RECONCILIATIONS(In
thousands)(Unaudited) |
Preliminary |
|
Reconciliation of Loss From Continuing
Operations to Adjusted Income (Loss) From Continuing Operations and
Adjusted Diluted EPS: |
|
|
Three Months
Ended |
|
September 30,
2018 |
|
September 24,
2017 |
|
Earnings |
|
Diluted EPS |
|
Earnings |
|
DilutedEPS |
Loss from continuing operations - GAAP |
$ |
(649 |
) |
|
$ |
(0.01 |
) |
|
$ |
(12,645 |
) |
|
$ |
(0.38 |
) |
Adjustments to operating expenses, net of 27.8% tax: |
|
|
|
|
|
|
|
Restructuring and transaction costs |
8,283 |
|
|
0.23 |
|
|
5,392 |
|
|
0.16 |
|
Employee voluntary separation program |
— |
|
|
— |
|
|
55 |
|
|
— |
|
Adjusted income (loss) from continuing operations - Non-GAAP |
$ |
7,634 |
|
|
$ |
0.22 |
|
|
$ |
(7,198 |
) |
|
$ |
(0.22 |
) |
|
Nine Months
Ended |
|
September 30,
2018 |
|
September 24,
2017 |
|
Earnings |
|
DilutedEPS |
|
Earnings |
|
DilutedEPS |
Loss from continuing operations - GAAP |
$ |
(43,821 |
) |
|
$ |
(1.26 |
) |
|
$ |
(24,990 |
) |
|
$ |
(0.73 |
) |
Premium on stock buyback |
— |
|
|
— |
|
|
6,031 |
|
|
0.18 |
|
Adjustments to operating expenses, net of 27.8% tax: |
|
|
|
|
|
|
|
Loss on early extinguishment of debt |
5,535 |
|
|
0.16 |
|
|
— |
|
|
— |
|
Restructuring and transaction costs |
32,226 |
|
|
0.92 |
|
|
14,046 |
|
|
0.41 |
|
Employee voluntary separation program |
— |
|
|
— |
|
|
56 |
|
|
— |
|
Adjusted loss from continuing operations - Non-GAAP |
$ |
(6,060 |
) |
|
$ |
(0.17 |
) |
|
$ |
(4,857 |
) |
|
$ |
(0.14 |
) |
|
|
Adjusted Income (Loss) from continuing operations and
Adjusted Diluted EPS
Adjusted net income (loss) from continuing operations is defined
as income from continuing operations- GAAP excluding the following
adjustments: Restructuring and transaction costs and Employee
voluntary separation program, net of the impact of income
taxes.
Adjusted Diluted EPS computes Adjusted net income (loss) from
continuing operations divided by diluted weighted average shares
outstanding.
Management believes Adjusted Net income (loss) from continuing
operations and Adjusted Diluted EPS are informative to investors as
they enhance investors' overall understanding of the financial
performance of the Company's business as they analyze current
results compared to future recurring projections.
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