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AMERICAN MEDIA OPERATIONS, INC. REPORTS RESULTS
FOR FIRST QUARTER OF FISCAL YEAR 2009
Revenue Decreases Slightly to $119 Million, Offset by Decline in Expenses
New York, NY, August 14, 2008 American Media, Inc. (AMI), the leading publisher of celebrity journalism and health and fitness magazines in the U.S., said that its subsidiary American Media Operations, Inc. (AMOI) today reported its financial results for the first quarter ended June 30, 2008.
Revenue for the first quarter of fiscal year 2009 was $119 million, compared to $121 million in the first quarter of fiscal year 2008, representing a 2% decrease. The decrease in revenue in the first quarter of fiscal year 2009 primarily reflected the general market weakness for advertising spending due to the current U.S. economic slowdown, which led to a decline in the Companys total advertising revenue.
Operating income for the first quarter of fiscal year 2009 was $26 million, or $744,000 lower than the prior years first quarter. The slight decrease in operating income in the first quarter ended June 30, 2008 was primarily due to the above-mentioned decrease in revenue, partially offset by cost reductions generated by the Company as it implemented its management action plans.
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Bank EBITDA
EBITDA for the first quarter of fiscal year 2009 was $32 million, compared to $34 million in the first quarter of fiscal year 2008, representing a 6% decrease. Bank EBITDA for the first quarter of fiscal year 2009 was $33 million, as compared to $36 million in the first quarter of fiscal year 2008, representing an 8% decrease. The decrease in EBITDA and Bank EBITDA resulted from the reasons mentioned above.
For a reconciliation of EBITDA and Bank EBITDA to Net Income (Loss), please refer to the table below.
At June 30, 2008, the Company had cash and cash equivalents of $20 million, as well as $26 million outstanding on its revolving credit facility.
Comments By Senior Management
AMOI Chairman and Chief Executive Officer David Pecker said, Publishers Information Bureau (PIB) shows that industry advertising pages were down 8.7% for the period January 1 through July 31, 2008. AMOIs advertising pages were down only 3.2%, which was the smallest decline of any publisher with more than 3,000 advertising pages.
In addition, the Audit Bureau of Circulations (ABC) reported that industry sales at the newsstand declined 6.3% in the first six months of calendar 2008, as compared to the same period last year. Despite this, AMOIs circulation revenue increased by 2% in our fiscal 2009 first quarter, continued Mr. Pecker. When our total results are considered in light of what is occurring in the industry, our Companys unique balance between advertising and circulation revenue stands out as one of its greatest strengths.
AMOI Executive Vice President and Chief Financial Officer Dean Durbin said, We will continue to operate our business in a disciplined fashion in fiscal 2009, targeting the opportunities outlined in our management action plan, and project $21 million of cost savings related to SG&A, staff and production, as well as revenue enhancements of $5 million.
The following information was filed by American Media Operations Inc on Thursday, August 14, 2008 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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