American Media reports sharp decline in revenue in Q3 earnings report, reports net loss
Revenue falls 13.4 percent in quarter, net income loss of $12 million
The publisher The National Enquirer and Men’s Fitness, American Media Inc. (AMI), today reported its quarterly earnings. Revenue of the media company fell sharply, down 13.4 percent to $72.3 million from $90.4 million a year ago. As a result, the publisher reported a loss of $12 million versus a profit of $765K a year ago.
American Media is, as its filing admits, is highly leveraged, with approximately $509.9 million of outstanding indebtedness as of the end of June. As a result, the company restructured its debt in an attempt to reduce the interest payments it must pay. According to the company, interest payments amount to approximately $45.9 million over the next year. Meanwhile, the company has only $15.1 million in cash and “is fully drawn under the revolving credit facility,” the company reports.
In a restructuring agreement announced earlier this week, investors who recently acquired 100 percent of outstanding shares in the company agreed to convert $121.3 million in second lien notes due 2018 into equity.
“This is the dawn of a new and exciting period of growth for AMI,” David J. Pecker, CEO of AMI said in its announcement earlier this week. “Our ability to work with investors who share our strategic vision underscores our commitment to deleverage the balance sheet and focus on reducing the company’s interest expense which allows us to execute an aggressive strategy to transform American Media into a premier lifestyle brands company. My team and I are already moving assertively to execute this strategy with growth capital and we remain focused on continuing the investment in digital growth.”
The company is hoping digital revenue will pull it back from the brink. The company, which sold about $30 million in digital last year hopes to double that number by this time next year. But to succeed the company not only will have to reverse ad page declines, but become debt-free.