Company Delivers Year-over-year Net Income
Growth Driven by Continued Growth in Digital Subscribers and
Content Revenue and Ongoing Cost Management Efforts
Tribune Publishing Company (NASDAQ:TPCO) today announced financial
results for the fourth quarter and full year ended December 30,
2018. Unless otherwise noted, amounts and disclosures
throughout this earnings release relate to continuing operations
and exclude all discontinued operations including the Los Angeles
Times, San Diego Union-Tribune and other assets of the California
News Group (collectively, the “California properties”) and
forsalebyowner.com.
Fourth Quarter 2018 Highlights:
- Total revenues of $283.5 million were down 4.2%
year-over-year
- Net income increased to $2.4 million, or $0.07 per share, in
the fourth quarter of 2018 compared to a loss of $0.4 million, or a
loss of $0.01 per share in the fourth quarter of 2017
- Adjusted EBITDA increased to $46.5 million, up $11.3 million
year-over-year
- Digital content revenues were up 145% compared to the fourth
quarter of 2017
- Digital-only subscribers increased 47% to 250,000 at the end of
the fourth quarter 2018, up from 170,000 at the end of the fourth
quarter 2017
Timothy P. Knight, Tribune Publishing CEO and President, said,
“2018 was a year of transition as we made important changes to our
media portfolio to position the infrastructure and organization for
long-term success. We also made tremendous progress in
growing our paid digital subscriber base as digital-only
subscribers increased 47% from the end of the fourth quarter 2017
and related digital content revenues more than doubled. In
addition, our relentless focus on execution drove a significant
year-over-year improvement in Adjusted EBITDA and EPS in the fourth
quarter.”
Mr. Knight continued, “As we enter 2019, we are optimistic about
the strength of our business and the opportunities that lie
ahead. We are pleased to announce that the Board approved a
new $25 million, two-year stock repurchase program. The
program demonstrates the confidence we have in the strength of our
business and our ability to generate cash flow. As part of
our disciplined capital allocation strategy, we will continue to
make the necessary investments in people and products and look to
return capital to shareholders as we work to deliver shareholder
value.”
“Tribune remains a leading news source for the communities we
serve, and we are proud of the award-winning journalism our
newsrooms produce daily. We are also very pleased that the
prestigious National Press Foundation’s Benjamin C. Bradlee Editor
of the Year award was recently presented to Rick Hutzell, the
Editor of the Capital Gazette,” Mr. Knight said.
Fourth Quarter 2018 ResultsFourth quarter 2018
total revenues were $283.5 million, down $12.4 million or 4.2%
compared to $295.9 million for fourth quarter 2017. Revenue
for the fourth quarter 2018 includes $34.5 million attributable to
the BestReviews and the Virginian-Pilot Media Companies (“VPMC”)
acquisitions and revenue associated with the Company’s Transition
Service Arrangement with the California properties, offset by core
revenue declines, a $9.8 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, as well as $16.9 million associated with an extra
operating week in 2017.
Fourth quarter 2018 total advertising revenue and digital
advertising revenue were $127.5 million and $26.2 million,
respectively. Excluding the VPMC and Cars.com impact, total
advertising revenue would have been down 12.5% year-over-year.
Total operating expenses, including depreciation and
amortization, in the fourth quarter of 2018 were $287.4 million,
down 1.0%, compared to $290.3 million in the fourth quarter of
2017. The decrease resulted from the Company’s ongoing strong
cost management and reduced expenses related to the Cars.com
transition, partially offset by the impact of the BestReviews and
VPMC acquisitions.
Income from continuing operations was $4.0 million in the
fourth quarter of 2018, compared to a loss of $4.8 million in
the fourth quarter of 2017.
Adjusted EBITDA was $46.5 million in the fourth quarter of 2018,
versus $35.2 million in the fourth quarter of 2017. The increase is
primarily due to a $4.8 million contribution from the BestReviews
and VPMC acquisitions and $6.5 million improved profitability from
continuing operations due to reduced compensation and bad debt
expense.
For the full year ended December 30, 2018, capital expenditures
totaled $53.2 million. Cash balance at December 30, 2018, 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.
Included in the tables below is segment reporting for M and X
for the fourth quarters of 2018 and 2017.
MFourth quarter 2018 M total revenues were $227.2 million, down
8.3% compared to the fourth quarter of 2017. Excluding the
impact of the Virginian-Pilot and the extra week in 2017,
advertising revenue was down 12.0%, which sequentially was a
significant improvement compared to the third quarter of 2018.
Fourth quarter 2018 operating expenses for M increased 1.8%
compared to the prior-year quarter, driven primarily by the impact
of the VPMC acquisition as well as one-time restructuring
costs.
Fourth quarter 2018 income from operations for M was $0.5
million and Adjusted EBITDA was $33.2 million.
XTotal revenues for X for the fourth quarter of 2018 were $49.4
million, up 1.2%, primarily driven by the impact of the VPMC and
BestReviews acquisitions, as well as core growth in Digital Only
Subscription revenue, partially offset by the Cars.com impact and
the extra week in 2017. Fourth quarter 2018 advertising
revenues for X decreased 33.3% year-over-year primarily due to the
change in the Company’s Cars.com arrangement, the extra week in
2017 as well as from lower page views resulting from social media
and search algorithm changes. Content revenues in the fourth
quarter of 2018, which includes digital-only subscriptions, content
syndication and commerce revenues, increased by 144.8%
year-over-year. Excluding the impact of the VPMC and
BestReviews acquisitions, content revenues would have been up
organically 23.7%.
Fourth quarter 2018 income from operations for X was $6.3
million versus a loss of $0.9 million in the fourth quarter of
2017. Adjusted EBITDA was $14.3 million, up $10.3 million
compared to the fourth quarter of 2017.
Digital-only subscribers grew to 250,000, up 47% from the prior
year and up 10% sequentially from the third quarter of 2018.
2019 OutlookThe Company expects full year 2019
Adjusted EBITDA will be a range of $100 million to $105
million.
For the first quarter of 2019, the Company expects revenue to
range from $235 million to $240 million and Adjusted EBITDA to
range from $18 million to $19 million versus $8.4 million in the
first quarter of 2018.
Stock Repurchase AuthorizationOn March 13,
2019, Tribune Publishing also announced that the Company’s Board of
Directors authorized a stock repurchase program under which, the
Company may purchase up to $25 million of its outstanding common
stock over the next two years. The purchases may be made
in open-market transactions or privately negotiated transactions
and may be made from time to time depending on market conditions,
share price, trading volume, cash needs and other business
factors.
The authorization reflects the progress the Company has made
over the last several years to reduce debt and strengthen its
balance sheet as well as the Company’s confidence in its ability to
generate strong cash flow to support balanced capital allocation
including continued investments in the business and the return of
capital to shareholders.
Conference Call DetailsTribune Publishing will
host a conference call to discuss the Company’s fourth quarter 2018
results at 5:00 p.m. Eastern Time (4:00 p.m. Central
Time) on Wednesday, March 13, 2019. 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
3176871. 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 March 20, 2019,
dial 855.859.2056 (404.537.3406 for international callers),
conference ID 3176871.
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 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 JimenezTribune
Publishing, EVP/CFO312.222.5787tjimenez@tribpub.com
Media Contact:Tilden KatzTribune Publishing
Corporate
Communications312.606.2614tilden.katz@fticonsulting.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
EBITDANon-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 |
|
Year Ended |
|
|
December 30, 2018 |
|
December 31, 2017 |
|
December 30, 2018 |
|
December 31, 2017 |
|
|
|
|
|
|
|
|
|
Operating
revenues |
|
$ |
283,496 |
|
|
$ |
295,888 |
|
|
$ |
1,030,669 |
|
|
$ |
1,015,453 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
287,392 |
|
|
290,292 |
|
|
1,076,881 |
|
|
1,006,523 |
|
|
|
|
|
|
|
|
|
|
Income (loss)
from operations |
|
(3,896 |
) |
|
5,596 |
|
|
(46,212 |
) |
|
8,930 |
|
|
|
|
|
|
|
|
|
|
Interest expense,
net |
|
320 |
|
|
(7,024 |
) |
|
(11,353 |
) |
|
(26,334 |
) |
Loss on early
extinguishment of debt |
|
— |
|
|
— |
|
|
(7,666 |
) |
|
— |
|
Premium on stock
buyback |
|
— |
|
|
— |
|
|
— |
|
|
(6,031 |
) |
Loss on equity
investments, net |
|
(40 |
) |
|
(701 |
) |
|
(1,868 |
) |
|
(2,725 |
) |
Other income, net |
|
3,570 |
|
|
2,882 |
|
|
14,513 |
|
|
3,535 |
|
Income (loss)
from continuing operations before income taxes |
|
(46 |
) |
|
753 |
|
|
(52,586 |
) |
|
(22,625 |
) |
Income
tax (benefit) expense |
|
(4,004 |
) |
|
5,576 |
|
|
(12,723 |
) |
|
7,188 |
|
Income (loss)
from continuing operations |
|
3,958 |
|
|
(4,823 |
) |
|
(39,863 |
) |
|
(29,813 |
) |
Income
(loss) from discontinued operations, net of taxes |
|
(1,155 |
) |
|
4,450 |
|
|
289,510 |
|
|
35,348 |
|
Net income
(loss) |
|
2,803 |
|
|
(373 |
) |
|
249,647 |
|
|
5,535 |
|
Less:
Income attributable to non-controlling interests |
|
385 |
|
|
— |
|
|
856 |
|
|
— |
|
Net income
(loss) attributable to Tribune common stockholders |
|
$ |
2,418 |
|
|
$ |
(373 |
) |
|
$ |
248,791 |
|
|
$ |
5,535 |
|
|
|
|
|
|
|
|
|
|
Net income
(loss) attributable to Tribune per common share -
Basic |
|
|
|
|
|
|
|
|
Income
(loss) from continuing operations |
|
$ |
0.10 |
|
|
$ |
(0.14 |
) |
|
$ |
(1.15 |
) |
|
$ |
(0.88 |
) |
Income
(loss) from discontinued operations |
|
(0.03 |
) |
|
0.13 |
|
|
8.20 |
|
|
1.04 |
|
Net
income (loss) attributable to Tribune per common share - Basic |
|
$ |
0.07 |
|
|
$ |
(0.01 |
) |
|
$ |
7.05 |
|
|
$ |
0.16 |
|
|
|
|
|
|
|
|
|
|
Net income
(loss) attributable to Tribune per common share -
Diluted |
|
|
|
|
|
|
|
|
Income
(loss) from continuing operations |
|
$ |
0.10 |
|
|
$ |
(0.14 |
) |
|
$ |
(1.15 |
) |
|
$ |
(0.88 |
) |
Income
(loss) from discontinued operations |
|
(0.03 |
) |
|
0.13 |
|
|
8.20 |
|
|
1.04 |
|
Net
income (loss) attributable to Tribune per common share -
Diluted |
|
$ |
0.07 |
|
|
$ |
(0.01 |
) |
|
$ |
7.05 |
|
|
$ |
0.16 |
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
35,575 |
|
|
33,610 |
|
|
35,268 |
|
|
33,996 |
|
Diluted |
|
35,880 |
|
|
33,610 |
|
|
35,268 |
|
|
33,996 |
|
|
|
|
|
|
|
|
|
|
The tables below show the segmentation of income and expenses
for the three and twelve months ended December 30, 2018 as compared
to the three and twelve months ended December 31, 2017. For
the three and twelve months ended December 30, 2018, the
three-month period consists of 13 weeks and the twelve-month period
consists of 52 weeks. For the three and twelve months ended
December 31, 2017, the three-month period consists of 14 weeks and
the twelve-month period consists of 53 weeks
|
M |
|
X |
|
Corporate and Eliminations |
|
Consolidated |
|
Three months ended |
|
Three months ended |
|
Three months ended |
|
Three months ended |
|
Dec. 30, 2018 |
|
Dec. 31, 2017 |
|
Dec. 30, 2018 |
|
Dec. 31, 2017 |
|
Dec. 30, 2018 |
|
Dec. 31, 2017 |
|
Dec. 30, 2018 |
|
Dec. 31, 2017 |
Total revenues |
$ |
227,176 |
|
|
$ |
247,843 |
|
|
$ |
49,423 |
|
|
$ |
48,832 |
|
|
$ |
6,897 |
|
|
$ |
(787 |
) |
|
$ |
283,496 |
|
|
$ |
295,888 |
|
Operating expenses |
226,661 |
|
|
222,613 |
|
|
43,150 |
|
|
49,781 |
|
|
17,581 |
|
|
17,898 |
|
|
287,392 |
|
|
290,292 |
|
Income (loss) from
operations |
515 |
|
|
25,230 |
|
|
6,273 |
|
|
(949 |
) |
|
(10,684 |
) |
|
(18,685 |
) |
|
(3,896 |
) |
|
5,596 |
|
Depreciation and
amortization |
5,306 |
|
|
3,815 |
|
|
6,491 |
|
|
4,551 |
|
|
3,898 |
|
|
3,835 |
|
|
15,695 |
|
|
12,201 |
|
Impairment |
1,872 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,872 |
|
|
— |
|
Adjustments |
25,550 |
|
|
7,261 |
|
|
1,535 |
|
|
437 |
|
|
5,701 |
|
|
9,686 |
|
|
32,786 |
|
|
17,384 |
|
Adjusted EBITDA |
$ |
33,243 |
|
|
$ |
36,306 |
|
|
$ |
14,299 |
|
|
$ |
4,039 |
|
|
$ |
(1,085 |
) |
|
$ |
(5,164 |
) |
|
$ |
46,457 |
|
|
$ |
35,181 |
|
|
M |
|
X |
|
Corporate and Eliminations |
|
Consolidated |
|
Year Ended |
|
Year Ended |
|
Year Ended |
|
Year Ended |
|
Dec. 30, 2018 |
|
Dec. 31, 2017 |
|
Dec. 30, 2018 |
|
Dec. 31, 2017 |
|
Dec. 30, 2018 |
|
Dec. 31, 2017 |
|
Dec. 30, 2018 |
|
Dec. 31, 2017 |
Total revenues. |
$ |
851,069 |
|
|
$ |
854,840 |
|
|
$ |
165,612 |
|
|
$ |
163,977 |
|
|
$ |
13,988 |
|
|
$ |
(3,364 |
) |
|
$ |
1,030,669 |
|
|
$ |
1,015,453 |
|
Operating
expenses. |
846,122 |
|
|
792,665 |
|
|
152,698 |
|
|
161,783 |
|
|
78,061 |
|
|
52,075 |
|
|
1,076,881 |
|
|
1,006,523 |
|
Income (loss) from
operations |
4,947 |
|
|
62,175 |
|
|
12,914 |
|
|
2,194 |
|
|
(64,073 |
) |
|
(55,439 |
) |
|
(46,212 |
) |
|
8,930 |
|
Depreciation and
amortization |
17,419 |
|
|
16,415 |
|
|
19,819 |
|
|
15,299 |
|
|
16,024 |
|
|
15,592 |
|
|
53,262 |
|
|
47,306 |
|
Impairment |
1,872 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,872 |
|
|
— |
|
Adjustments |
41,476 |
|
|
17,227 |
|
|
9,272 |
|
|
3,612 |
|
|
34,186 |
|
|
22,707 |
|
|
84,934 |
|
|
43,546 |
|
Adjusted EBITDA. |
$ |
65,714 |
|
|
$ |
95,817 |
|
|
$ |
42,005 |
|
|
$ |
21,105 |
|
|
$ |
(13,863 |
) |
|
$ |
(17,140 |
) |
|
$ |
93,856 |
|
|
$ |
99,782 |
|
Segment M
|
|
Three Months Ended |
|
Year Ended |
|
|
December 30, 2018 |
|
December 31, 2017 |
|
% Change |
|
December 30, 2018 |
|
December 31, 2017 |
|
% Change |
Operating
revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Advertising. |
|
$ |
101,258 |
|
|
$ |
111,079 |
|
|
(8.8 |
%) |
|
$ |
355,790 |
|
|
$ |
380,214 |
|
|
(6.4 |
%) |
Circulation. |
|
89,089 |
|
|
94,096 |
|
|
(5.3 |
%) |
|
349,975 |
|
|
319,727 |
|
|
9.5 |
% |
Other |
|
36,829 |
|
|
42,668 |
|
|
(13.7 |
%) |
|
145,304 |
|
|
154,899 |
|
|
(6.2 |
%) |
Total
revenues. |
|
227,176 |
|
|
247,843 |
|
|
(8.3 |
%) |
|
851,069 |
|
|
854,840 |
|
|
(0.4 |
%) |
Operating
expenses |
|
226,661 |
|
|
222,613 |
|
|
1.8 |
% |
|
846,122 |
|
|
792,665 |
|
|
6.7 |
% |
Income from
operations. |
|
515 |
|
|
25,230 |
|
|
(98.0 |
%) |
|
4,947 |
|
|
62,175 |
|
|
(92.0 |
%) |
Depreciation and
amortization |
|
5,306 |
|
|
3,815 |
|
|
39.1 |
% |
|
17,419 |
|
|
16,415 |
|
|
6.1 |
% |
Impairment |
|
1,872 |
|
|
— |
|
|
* |
|
1,872 |
|
|
— |
|
|
* |
Adjustments |
|
25,550 |
|
|
7,261 |
|
|
* |
|
41,476 |
|
|
17,227 |
|
|
* |
Adjusted
EBITDA |
|
$ |
33,243 |
|
|
$ |
36,306 |
|
|
(8.4 |
%) |
|
$ |
65,714 |
|
|
$ |
95,817 |
|
|
(31.4 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
* Represents positive or negative change in excess of 100%
Segment X
|
|
Three Months Ended |
|
Year Ended |
|
|
December 30, 2018 |
|
December 31, 2017 |
|
% Change |
|
December 30, 2018 |
|
December 31, 2017 |
|
% Change |
Operating
revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Advertising. |
|
$ |
26,239 |
|
|
$ |
39,361 |
|
|
(33.3 |
%) |
|
$ |
98,023 |
|
|
$ |
130,376 |
|
|
(24.8 |
%) |
Content. |
|
23,184 |
|
|
9,471 |
|
|
* |
|
67,589 |
|
|
33,601 |
|
|
* |
Total
revenues. |
|
49,423 |
|
|
48,832 |
|
|
1.2 |
% |
|
165,612 |
|
|
163,977 |
|
|
1.0 |
% |
Operating
expenses |
|
43,150 |
|
|
49,781 |
|
|
(13.3 |
%) |
|
152,698 |
|
|
161,783 |
|
|
(5.6 |
%) |
Income from
operations. |
|
6,273 |
|
|
(949 |
) |
|
* |
|
12,914 |
|
|
2,194 |
|
|
* |
Depreciation and
amortization |
|
6,491 |
|
|
4,551 |
|
|
42.6 |
% |
|
19,819 |
|
|
15,299 |
|
|
29.5 |
% |
Adjustments |
|
1,535 |
|
|
437 |
|
|
* |
|
9,272 |
|
|
3,612 |
|
|
* |
Adjusted
EBITDA |
|
$ |
14,299 |
|
|
$ |
4,039 |
|
|
* |
|
$ |
42,005 |
|
|
$ |
21,105 |
|
|
99.0 |
% |
TRIBUNE PUBLISHING
COMPANYCONDENSED CONSOLIDATED BALANCE
SHEETS(In
thousands)(Unaudited)Preliminary
|
|
December 30, 2018 |
|
December 31, 2017 |
Assets |
|
|
|
|
Current
Assets: |
|
|
|
|
Cash |
|
$ |
97,560 |
|
|
$ |
185,351 |
|
Accounts
receivable |
|
145,463 |
|
|
122,501 |
|
Inventories |
|
9,587 |
|
|
7,412 |
|
Prepaid
expenses and other. |
|
18,197 |
|
|
29,663 |
|
Assets
related to discontinued operations |
|
— |
|
|
61,778 |
|
Total
current assets. |
|
270,807 |
|
|
406,705 |
|
Net Properties,
Plant and Equipment. |
|
144,963 |
|
|
94,498 |
|
Other
Assets |
|
|
|
|
Goodwill |
|
132,146 |
|
|
45,348 |
|
Intangible assets, net. |
|
77,229 |
|
|
64,996 |
|
Software,
net. |
|
27,117 |
|
|
40,700 |
|
Restricted cash. |
|
43,947 |
|
|
— |
|
Deferred
income taxes. |
|
2,414 |
|
|
1,124 |
|
Other
long-term assets |
|
28,004 |
|
|
31,163 |
|
Assets
related to discontinued operations |
|
— |
|
|
180,599 |
|
Total
other assets. |
|
310,857 |
|
|
363,930 |
|
Total assets |
|
$ |
726,627 |
|
|
$ |
865,133 |
|
|
|
|
|
|
Liabilities and
Equity |
|
|
|
|
Current
Liabilities |
|
|
|
|
Accounts
payable |
|
$ |
70,555 |
|
|
$ |
65,724 |
|
Employee
compensation and benefits |
|
61,001 |
|
|
49,262 |
|
Deferred
revenue |
|
51,114 |
|
|
50,314 |
|
Current
portion of long-term debt. |
|
405 |
|
|
21,486 |
|
Other
current liabilities. |
|
21,203 |
|
|
18,453 |
|
Liabilities associated with discontinued operations |
|
6,249 |
|
|
55,665 |
|
Total
current liabilities |
|
210,527 |
|
|
260,904 |
|
Non-Current
Liabilities |
|
|
|
|
Pension
and postretirement benefits payable |
|
20,150 |
|
|
23,438 |
|
Deferred
revenue |
|
2,856 |
|
|
4,818 |
|
Long-term
debt. |
|
6,799 |
|
|
331,065 |
|
Workers'
compensation, general liability and auto insurance payable |
|
30,606 |
|
|
33,452 |
|
Other
obligations |
|
42,621 |
|
|
25,119 |
|
Liabilities associated with discontinued operations |
|
— |
|
|
117,175 |
|
Total
non-current liabilities. |
|
103,032 |
|
|
535,067 |
|
Noncontrolling
interest |
|
39,756 |
|
|
— |
|
Equity |
|
|
|
|
Total
stockholders' equity |
|
373,312 |
|
|
69,162 |
|
Total liabilities and
equity |
|
$ |
726,627 |
|
|
$ |
865,133 |
|
TRIBUNE PUBLISHING
COMPANYNON-GAAP
RECONCILIATIONS(In thousands)
(Unaudited)Preliminary
Reconciliation of Net Income (Loss) from Continuing
Operations to Adjusted EBITDA:
|
|
Three months ended |
|
Year Ended |
|
|
December 30, 2018 |
|
December 31, 2017 |
|
% Change. |
|
December 30, 2018 |
|
December 31, 2017 |
|
% Change |
Income (loss)
from continuing operations |
|
$ |
3,958 |
|
|
$ |
(4,823 |
) |
|
* |
|
$ |
(39,863 |
) |
|
$ |
(29,813 |
) |
|
33.7 |
% |
Income tax
expense. |
|
(4,004 |
) |
|
5,576 |
|
|
* |
|
(12,723 |
) |
|
7,188 |
|
|
* |
Interest expense,
net |
|
(320 |
) |
|
7,024 |
|
|
* |
|
11,353 |
|
|
26,334 |
|
|
(56.9 |
%) |
Loss on early
extinguishment of debt |
|
— |
|
|
— |
|
|
* |
|
7,666 |
|
|
— |
|
|
* |
Premium on stock
buyback |
|
— |
|
|
— |
|
|
* |
|
— |
|
|
6,031 |
|
|
* |
Loss on equity
investments, net |
|
40 |
|
|
701 |
|
|
(94.3 |
%) |
|
1,868 |
|
|
2,725 |
|
|
(31.4 |
%) |
Other income, net
(1). |
|
(3,570 |
) |
|
(2,882 |
) |
|
23.9 |
% |
|
(14,513 |
) |
|
(3,535 |
) |
|
* |
Income (loss)
from operations |
|
(3,896 |
) |
|
5,596 |
|
|
*. |
|
(46,212 |
) |
|
8,930 |
|
|
* |
Depreciation and
amortization. |
|
15,695 |
|
|
12,201 |
|
|
28.6 |
% |
|
53,262 |
|
|
47,306 |
|
|
12.6 |
% |
Impairment. |
|
1,872 |
|
|
— |
|
|
*. |
|
1,872 |
|
|
— |
|
|
*. |
Restructuring and
transaction costs(2) |
|
29,846 |
|
|
11,436 |
|
|
*. |
|
74,481 |
|
|
30,890 |
|
|
* |
Litigation
settlement(3) |
|
— |
|
|
3,000 |
|
|
*. |
|
— |
|
|
3,000 |
|
|
* |
Stock-based
compensation. |
|
2,940 |
|
|
2,624 |
|
|
12.0 |
% |
|
10,453 |
|
|
9,255 |
|
|
12.9 |
% |
Employee voluntary
separation program. |
|
— |
|
|
324 |
|
|
*. |
|
— |
|
|
401 |
|
|
* |
Adjusted
EBITDA. |
|
$ |
46,457 |
|
|
$ |
35,181 |
|
|
32.1 |
% |
|
$ |
93,856 |
|
|
$ |
99,782 |
|
|
(5.9 |
%) |
* 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 related to the IT outsourcing efforts, charges associated
with vacated space and costs related to completed and potential
acquisitions.(3) - Adjustment to litigation settlement reserve.
Adjusted EBITDA and Adjusted EBITDA
marginAdjusted 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.
TRIBUNE PUBLISHING
COMPANYNON-GAAP
RECONCILIATIONS(In
thousands)(Unaudited)Preliminary
Reconciliation of Total Operating Expenses to Adjusted
Total Operating Expenses:
|
|
Three Months Ended
December 30, 2018 |
|
Three Months Ended December 31,
2017 |
|
|
GAAP |
|
Adjustments |
|
Adjusted |
|
GAAP |
|
Adjustments |
|
Adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation |
|
$ |
118,102 |
|
|
$ |
(50,405 |
) |
|
$ |
67,697 |
|
|
$ |
119,971 |
|
|
$ |
(39,061 |
) |
|
$ |
80,910 |
|
Newsprint and ink. |
|
17,786 |
|
|
(4,799 |
) |
|
12,987 |
|
|
17,842 |
|
|
(4,684 |
) |
|
13,158 |
|
Outside services |
|
86,455 |
|
|
(19,607 |
) |
|
66,848 |
|
|
91,609 |
|
|
(22,424 |
) |
|
69,185 |
|
Other. |
|
47,482 |
|
|
(15,711 |
) |
|
31,771 |
|
|
48,669 |
|
|
(7,546 |
) |
|
41,123 |
|
Depreciation and
amortization |
|
15,695 |
|
|
(15,695 |
) |
|
— |
|
|
12,201 |
|
|
(12,201 |
) |
|
— |
|
Impairment |
|
1,872 |
|
|
(1,872 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses |
|
$ |
287,392 |
|
|
$ |
(108,089 |
) |
|
$ |
179,303 |
|
|
$ |
290,292 |
|
|
$ |
(85,916 |
) |
|
$ |
204,376 |
|
|
|
Year Ended December 30,
2018 |
|
Year Ended December 31,
2017 |
|
|
GAAP |
|
Adjustments |
|
Adjusted |
|
GAAP |
|
Adjustments |
|
Adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation |
|
$ |
443,084 |
|
|
$ |
(135,935 |
) |
|
$ |
307,149 |
|
|
$ |
406,279 |
|
|
$ |
(60,048 |
) |
|
$ |
346,231 |
|
Newsprint and ink. |
|
66,134 |
|
|
(17,317 |
) |
|
48,817 |
|
|
59,241 |
|
|
(5,538 |
) |
|
53,703 |
|
Outside services |
|
348,827 |
|
|
(76,002 |
) |
|
272,825 |
|
|
331,202 |
|
|
(56,047 |
) |
|
275,155 |
|
Other. |
|
163,702 |
|
|
(49,152 |
) |
|
114,550 |
|
|
162,495 |
|
|
(11,954 |
) |
|
150,541 |
|
Depreciation and
amortization |
|
53,262 |
|
|
(53,262 |
) |
|
— |
|
|
47,306 |
|
|
(47,306 |
) |
|
— |
|
Impairment |
|
1,872 |
|
|
(1,872 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses |
|
$ |
1,076,881 |
|
|
$ |
(333,540 |
) |
|
$ |
743,341 |
|
|
$ |
1,006,523 |
|
|
$ |
(180,893 |
) |
|
$ |
825,630 |
|
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, the additional expenses related to the 2018 and
2017 acquisitions (e.g. same-store), the impact of the TSA expenses
in 2018, the impact of the Cars.com conversion in 2018 and the
impact of the 53rd week in the fourth quarter of 2017.
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 Net Income (Loss) to Adjusted Net
Income and Adjusted Diluted EPS:
|
Three months ended |
|
December 30, 2018 |
|
December 31, 2017 |
|
Earnings |
|
Diluted
EPS |
|
Earnings |
|
Diluted
EPS |
Income (loss) from
continuing operations - GAAP |
$ |
3,958 |
|
|
$ |
0.1 |
|
|
$ |
(4,823 |
) |
|
$ |
(0.14 |
) |
Adjustments to
operating expenses, net of 27.8% tax: |
|
|
|
|
|
|
|
Restructuring and transaction costs |
21,549 |
|
|
0.6 |
|
|
8,257 |
|
|
0.25 |
|
Employee
voluntary separation program |
— |
|
|
— |
|
|
234 |
|
|
0.01 |
|
Adjusted income from
continuing operations - Non-GAAP |
$ |
25,507 |
|
|
$ |
0.71 |
|
|
$ |
3,668 |
|
|
$ |
0.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
December 30, 2018 |
|
December 31, 2017 |
|
Earnings |
|
Diluted
EPS |
|
Earnings |
|
Diluted
EPS |
Loss from continuing
operations - GAAP |
$ |
(39,863 |
) |
|
$ |
(1.15 |
) |
|
$ |
(29,813 |
) |
|
$ |
(0.88 |
) |
Premium on stock
buyback |
— |
|
|
— |
|
|
6,031 |
|
|
0.18 |
|
Adjustments to
operating expenses, net of 27.8% tax: |
|
|
|
|
|
|
|
Restructuring and transaction costs |
53,775 |
|
|
1.52 |
|
|
22,303 |
|
|
0.66 |
|
Employee
voluntary separation program |
— |
|
|
— |
|
|
290 |
|
|
0.01 |
|
Adjusted income (loss)
from continuing operations - Non-GAAP |
$ |
19,447 |
|
|
$ |
0.55 |
|
|
$ |
(1,189 |
) |
|
$ |
(0.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
Tribune Publishing (NASDAQ:TPCO)
Historical Stock Chart
From Jun 2024 to Jul 2024
Tribune Publishing (NASDAQ:TPCO)
Historical Stock Chart
From Jul 2023 to Jul 2024