tronc, Inc. (NASDAQ:TRNC) today announced financial results for the
fourth quarter and full year ended December 31, 2017. Please
note, the Company’s fiscal year 2017 consisted of 53 weeks with 13
weeks in each of the first three quarters and 14 weeks in the
fourth quarter, compared to fiscal year 2016 which consisted of a
52-week year with 13 weeks in each quarter.
Fourth Quarter 2017 and Year-to-Date 2018
Highlights:
- Strong fourth quarter 2017 digital advertising revenue growth
of 19% compared to fourth quarter 2016
- Digital only subscribers were 320,000 in fourth quarter 2017,
up 100% year-over-year
- Average monthly unique visitors of 79.3 million in fourth
quarter 2017, up 40% from fourth quarter 2016
- Entered into a definitive agreement to sell the Los
Angeles Times, The San Diego Union-Tribune and various other
California properties
- Acquired a majority ownership stake in BestReviews, an online
product review company
“The actions we took throughout the year brought solid digital
growth along with our continuing commitment to deliver excellence
in journalism,” said tronc CEO Justin Dearborn. “Looking
ahead, we remain focused on the consistent execution of our growth
strategy.”
Fourth Quarter and Full Year 2017 ResultsFourth
quarter 2017 total revenues were $435.0 million, up 2.3% compared
to $425.4 million for fourth quarter 2016. Total revenues for the
full year 2017 were $1.52 billion, down 5.1% from full year
2016. Revenue for the fourth quarter 2017 includes $32.6
million attributable to the New York Daily News (NYDN), which was
acquired on September 3, 2017, and an additional $24.1 million of
revenue relating to the extra week in 2017 generated by our other
properties. Full year 2017 revenues include these amounts as
well as an additional $7.6 million generated by the NYDN for the
portion of the third quarter 2017 during which we owned it.
Fourth quarter 2017 advertising revenue was down 5.0%, compared
to fourth quarter 2016, and decreased 11.7% for full year 2017 on a
year-over-year basis. Digital Advertising showed growth of
18.8% in the fourth quarter 2017 compared to fourth quarter
2016. Circulation revenue for fourth quarter 2017 was up
17.3%, compared to the same period of 2016, and was up 6.8% for
full year 2017 over full year 2016.
Total operating expenses, including depreciation and
amortization, for fourth quarter 2017 were $405.7 million, up 5.8%,
compared to $383.6 million for fourth quarter of 2016. The
increase was mainly due to the impact of including NYDN and the
additional week, partially offset by continued cost
reductions. Full year 2017 total operating expenses of $1.46
billion were down 6.2% compared to $1.55 billion for full year
2016.
Net loss for fourth quarter 2017 was $0.4 million, or $0.01 per
share, compared to net income $19.4 million, or $0.53 per share,
for fourth quarter of 2016. Full year 2017 net income was
$5.5 million, or $0.16 per share, compared to $6.5 million, or
$0.19 per share, for full year 2016. Adjusted diluted EPS for
fourth quarter 2017 was $0.30, compared to $0.88 for fourth quarter
2016. Full year 2017 adjusted diluted EPS was $1.08, compared
to $1.71 for full year 2016. Fourth quarter and full year
2017 net income was impacted by the introduction of the Tax Cuts
and Jobs Act of 2017 in that there was a $10.8 million, one-time
reduction in deferred tax assets as a direct result of the federal
statutory tax rate declining from 35% to 21%.
Adjusted EBITDA for fourth quarter 2017 was $65.4 million, down
2.1% on a year-over-year basis. Full year 2017 adjusted
EBITDA was $178.8 million, compared to $180.5 million for full year
2016.
Net cash provided by operating activities was $26.2 million for
fourth quarter 2017. Capital expenditures totaled $10.9
million for the quarter. Debt was reduced by $8.5 million and
pension liabilities decreased by $1.8 million during the quarter,
compared to third quarter 2017. Cash balance grew to $189.7
million, which translated into a net debt decrease of $13.0 million
in fourth quarter 2017 compared to third quarter 2017.
Segment ResultsThe Company operates in two
segments: troncM, 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 troncX, which includes all digital revenues and
related expenses of the Company from local tronc websites, third
party websites, mobile applications, digital only subscriptions,
Tribune Content Agency, The Daily Meal and forsalebyowner.com.
troncMIncluded in the tables below is segment reporting for
troncM and troncX for the fourth quarters of 2017 and 2016. Fourth
quarter 2017 troncM total revenues were nearly flat at $366.0
million, compared to fourth quarter 2016. Full year 2017
total revenues were $1.29 billion, down 6.6% compared to full year
2016. Advertising revenue for fourth quarter 2017 declined by
11.2% on a year-over-year basis, which was partially offset by an
increase of 15.5% in circulation revenues. Full year 2017
advertising revenue of $577.4 was down 15.2% compared to full year
2016.
Fourth quarter 2017 operating expenses for troncM increased 4.8%
compared to the prior-year quarter, driven primarily by the
inclusion of NYDN. Full year 2017 operating expenses were
down 5.3% on a year-over-year basis. Fourth quarter 2017
income from operations for troncM was $39.8 million or a 29.3%
decline from the prior-year quarter. Income from operations
for full year 2017 was $96.1 million, compared to $120.8 million in
the prior year period.
troncXTotal revenues for troncX for the fourth quarter of 2017
were $69.8 million, up 15.8% from prior-year quarter, and were
$240.0 million for full year 2017, compared to $236.2 million for
full year 2016. Fourth quarter 2017 advertising revenues for
troncX increased 18.8%, while content revenues, which includes
digital only subscriptions and content syndication, increased by
4.4%. For the full year 2017, advertising and content
revenues were up 0.1% and 8.5%, respectively, on a year-over-year
basis. Fourth quarter 2017 income from operations for troncX
was $6.8 million, a decrease of 22.7% from the prior-year period.
Income from operations for full year was $24.8 million, down
2.8% from full year 2016.
Total fourth quarter 2017 average monthly unique visitors were
79.3 million, up 40% from the prior-year quarter. Digital
only subscribers grew to 320,000, up 100% from the prior year and
up 21% sequentially.
Notable ActivitySubsequent to the close of full
year 2017, the Company announced the following items:
- A definitive agreement to sell the Los Angeles
Times, The San Diego Union-Tribune and various other
California properties (the Portfolio) to Nant Capital, LLC, a
private investment vehicle of Dr. Patrick Soon-Shiong,
for $500 million in cash plus the assumption
of approximately $90 million in pension liabilities.
- The acquisition of a majority ownership stake in BestReviews,
an online product review company based in San Francisco,
California, and Reno, Nevada.
2018 OutlookThe company is planning on
providing a 2018 outlook on its first quarter 2018 earnings
conference call.
Conference Call Detailstronc will host a
conference call to discuss the Company’s fourth quarter and full
year 2017 results at 5 p.m. Eastern Time (4 p.m. Central
Time) on Wednesday, March 7, 2018. The conference call
may be accessed via tronc’s Investor Relations website at
investor.tronc.com or by dialing 844.494.0195 (508.637.5599 for
international callers) and entering conference ID 1638119. An
archived version of the webcast will also be available for one year
on the tronc website. To access the replay via telephone,
available until November 8, 2017, dial
855.859.2056 (404.537.3406 for international callers),
conference ID 1638119.
Non-GAAP Financial InformationTo provide
investors with additional information regarding tronc’s financial
results, this press release includes references to Adjusted EBITDA,
AEBITDA Margin, Adjusted total operating expenses, Adjusted Net
Income, Adjusted Diluted EPS and Net Debt. These are not measures
presented in accordance with generally accepted accounting
principles in the United States (US GAAP) and tronc’s use of the
terms Adjusted EBITDA, AEBITDA Margin, Adjusted total operating
expenses, Adjusted Net Income, Adjusted Diluted EPS and Net Debt
may vary from that of others in the Company’s industry.
Adjusted EBITDA, AEBITDA Margin, Adjusted total operating
expenses, Adjusted Net Income, Adjusted Diluted EPS and Net Debt
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 tronc’s presentation
of these measures, including a reconciliation of Adjusted EBITDA,
AEBITDA Margin, 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; factors impacting the ability to close our recently
announced agreement to sell our California properties; 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 interest may differ from those of other stockholders; and
other events beyond our control that may result in unexpected
adverse operating results. The Company’s actual results could also
be impacted by the other risks detailed from time to time in its
publicly filed documents, including in Item 1A (Risk Factors) of
its most recent Annual Report on Form 10-K, in its Quarterly
Reports on Form 10-Q and in 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 Annual Report on Form 10-K. 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 tronc, Inc.tronc, Inc. (NASDAQ:TRNC) is a
media company rooted in award-winning journalism.
Headquartered in Chicago, tronc operates newsrooms in ten
markets with titles including the Chicago
Tribune, Los Angeles Times, New York Daily News, The
Baltimore Sun, Orlando Sentinel, South
Florida's Sun-Sentinel, Virginia’s Daily Press, The
Morning Call of Allentown, Pennsylvania, Hartford Courant,
and The San Diego Union-Tribune. Our legacy of brands
has earned a combined 105 Pulitzer Prizes and is committed
to informing, inspiring and engaging local communities.
Our brands 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:Aaron Miles tronc
Investor Relations 312.222.4345 amiles@tronc.com
Media Contact: Marisa Kollias tronc Corporate
Communications 312.222.3308 mkollias@tronc.com
Source: tronc, Inc.
Exhibits:Condensed Consolidated Statements of Income
(Loss)Segment Income, Expenses and Non-GAAP
ReconciliationsCondensed Consolidated Balance SheetsNon-GAAP
Reconciliations – Net Income (Loss) to Adjusted EBITDA Non-GAAP
Reconciliations – Total Operating Expenses to Adjusted Total
Operating ExpensesNon-GAAP Reconciliations – Net Income (Loss) to
Adjusted Net Income and Adjusted Diluted EPSNon-GAAP
Reconciliations – Total Debt to Net Debt
|
TRONC, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(LOSS) |
(In thousands, except per share
data) |
(Unaudited) |
Preliminary |
|
|
|
Three months ended |
|
Year Ended |
|
|
December 31,2017 |
|
December 25,2016 |
|
December 31,2017 |
|
December 25,2016 |
|
|
|
|
|
|
|
|
|
Operating
revenues |
|
$ |
435,020 |
|
|
$ |
425,422 |
|
|
$ |
1,524,018 |
|
|
$ |
1,606,378 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
405,651 |
|
|
383,572 |
|
|
1,457,429 |
|
|
1,553,265 |
|
|
|
|
|
|
|
|
|
|
Income from
operations |
|
29,369 |
|
|
41,850 |
|
|
66,589 |
|
|
53,113 |
|
|
|
|
|
|
|
|
|
|
Interest expense,
net |
|
(7,056 |
) |
|
(6,587 |
) |
|
(26,481 |
) |
|
(26,703 |
) |
Premium on stock
buyback |
|
— |
|
|
— |
|
|
(6,031 |
) |
|
— |
|
Loss on equity
investments, net |
|
(582 |
) |
|
(203 |
) |
|
3,139 |
|
|
(690 |
) |
Reorganization items,
net |
|
— |
|
|
(23 |
) |
|
— |
|
|
(259 |
) |
Income before
income taxes |
|
21,731 |
|
|
35,037 |
|
|
37,216 |
|
|
25,461 |
|
Income tax expense |
|
22,104 |
|
|
15,621 |
|
|
31,681 |
|
|
18,924 |
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
|
$ |
(373 |
) |
|
$ |
19,416 |
|
|
$ |
5,535 |
|
|
$ |
6,537 |
|
|
|
|
|
|
|
|
|
|
Net income
(loss) per common share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.01 |
) |
|
$ |
0.53 |
|
|
$ |
0.16 |
|
|
$ |
0.19 |
|
Diluted |
|
$ |
(0.01 |
) |
|
$ |
0.53 |
|
|
$ |
0.16 |
|
|
$ |
0.19 |
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
33,610 |
|
|
36,428 |
|
|
33,996 |
|
|
33,788 |
|
Diluted |
|
33,610 |
|
|
36,677 |
|
|
34,285 |
|
|
33,935 |
|
|
|
|
|
|
|
|
|
|
The tables below show the segmentation of income and expenses
for the three and twelve months ended December 31, 2017 as compared
to the three and twelve months ended December 25, 2016. 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. For the three and twelve months ended
December 25, 2016, the three-month period consists of 13 weeks and
the twelve-month period consists of 52 weeks.
|
|
|
|
|
|
|
|
|
troncM |
|
troncX |
|
Corporate andEliminations |
|
Consolidated |
|
Three months ended |
|
Three months ended |
|
Three months ended |
|
Three months ended |
|
Dec. 31,2017 |
|
Dec. 25,2016 |
|
Dec. 31,2017 |
|
Dec. 25,2016 |
|
Dec. 31,2017 |
|
Dec. 25,2016 |
|
Dec. 31,2017 |
|
Dec. 25,2016 |
Total revenues |
$ |
366,015 |
|
|
$ |
367,463 |
|
|
$ |
69,753 |
|
|
$ |
60,227 |
|
|
$ |
(748 |
) |
|
$ |
(2,268 |
) |
|
$ |
435,020 |
|
|
$ |
425,422 |
|
Operating expenses |
326,182 |
|
|
311,148 |
|
|
62,916 |
|
|
51,387 |
|
|
16,553 |
|
|
21,037 |
|
|
405,651 |
|
|
383,572 |
|
Income (loss) from
operations |
39,833 |
|
|
56,315 |
|
|
6,837 |
|
|
8,840 |
|
|
(17,301 |
) |
|
(23,305 |
) |
|
29,369 |
|
|
41,850 |
|
Depreciation and
amortization |
5,506 |
|
|
6,170 |
|
|
4,620 |
|
|
3,030 |
|
|
4,574 |
|
|
5,500 |
|
|
14,700 |
|
|
14,700 |
|
Adjustments |
11,019 |
|
|
1,677 |
|
|
614 |
|
|
561 |
|
|
9,686 |
|
|
8,031 |
|
|
21,319 |
|
|
10,269 |
|
Adjusted EBITDA |
$ |
56,358 |
|
|
$ |
64,162 |
|
|
$ |
12,071 |
|
|
$ |
12,431 |
|
|
$ |
(3,041 |
) |
|
$ |
(9,774 |
) |
|
$ |
65,388 |
|
|
$ |
66,819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
troncM |
|
troncX |
|
Corporate andEliminations |
|
Consolidated |
|
Year Ended |
|
Year Ended |
|
Year Ended |
|
Year Ended |
|
Dec. 31,2017 |
|
Dec. 25,2016 |
|
Dec. 31,2017 |
|
Dec. 25,2016 |
|
Dec. 31,2017 |
|
Dec. 25,2016 |
|
Dec. 31,2017 |
|
Dec. 25,2016 |
Total revenues |
$ |
1,287,217 |
|
|
$ |
1,378,028 |
|
|
$ |
239,979 |
|
|
$ |
236,171 |
|
|
$ |
(3,178 |
) |
|
$ |
(7,821 |
) |
|
$ |
1,524,018 |
|
|
$ |
1,606,378 |
|
Operating expenses |
1,191,072 |
|
|
1,257,265 |
|
|
215,149 |
|
|
210,620 |
|
|
51,208 |
|
|
85,380 |
|
|
1,457,429 |
|
|
1,553,265 |
|
Income (loss) from
operations |
96,145 |
|
|
120,763 |
|
|
24,830 |
|
|
25,551 |
|
|
(54,386 |
) |
|
(93,201 |
) |
|
66,589 |
|
|
53,113 |
|
Depreciation and
amortization |
23,727 |
|
|
23,656 |
|
|
15,560 |
|
|
11,563 |
|
|
17,409 |
|
|
22,280 |
|
|
56,696 |
|
|
57,499 |
|
Adjustments |
28,740 |
|
|
15,147 |
|
|
4,067 |
|
|
3,978 |
|
|
22,719 |
|
|
50,804 |
|
|
55,526 |
|
|
69,929 |
|
Adjusted EBITDA |
$ |
148,612 |
|
|
$ |
159,566 |
|
|
$ |
44,457 |
|
|
$ |
41,092 |
|
|
$ |
(14,258 |
) |
|
$ |
(20,117 |
) |
|
$ |
178,811 |
|
|
$ |
180,541 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
troncM
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, 2017 |
|
December 25, 2016 |
|
%Change |
|
December 31, 2017 |
|
December 25, 2016 |
|
%Change |
Operating
revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Advertising |
|
$ |
166,565 |
|
|
$ |
187,609 |
|
|
(11.2 |
%) |
|
$ |
577,380 |
|
|
$ |
680,842 |
|
|
(15.2 |
%) |
Circulation |
|
145,550 |
|
|
126,046 |
|
|
15.5 |
% |
|
508,247 |
|
|
482,877 |
|
|
5.3 |
% |
Other |
|
53,900 |
|
|
53,808 |
|
|
0.2 |
% |
|
201,590 |
|
|
214,309 |
|
|
(5.9 |
%) |
Total
revenues |
|
366,015 |
|
|
367,463 |
|
|
(0.4 |
%) |
|
1,287,217 |
|
|
1,378,028 |
|
|
(6.6 |
%) |
Operating
expenses |
|
326,182 |
|
|
311,148 |
|
|
4.8 |
% |
|
1,191,072 |
|
|
1,257,265 |
|
|
(5.3 |
%) |
Income from
operations |
|
39,833 |
|
|
56,315 |
|
|
(29.3 |
%) |
|
96,145 |
|
|
120,763 |
|
|
(20.4 |
%) |
Depreciation and
amortization |
|
5,506 |
|
|
6,170 |
|
|
(10.8 |
%) |
|
23,727 |
|
|
23,656 |
|
|
0.3 |
% |
Adjustments |
|
11,019 |
|
|
1,677 |
|
|
* |
|
28,740 |
|
|
15,147 |
|
|
89.7 |
% |
Adjusted
EBITDA |
|
$ |
56,358 |
|
|
$ |
64,162 |
|
|
(12.2 |
%) |
|
$ |
148,612 |
|
|
$ |
159,566 |
|
|
(6.9 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
* Represents positive or negative change in excess of 100%
troncX
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, 2017 |
|
December 25, 2016 |
|
%Change |
|
December 31, 2017 |
|
December 25, 2016 |
|
%Change |
Operating
revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Advertising |
|
$ |
56,525 |
|
|
$ |
47,560 |
|
|
18.8 |
% |
|
$ |
194,237 |
|
|
$ |
193,997 |
|
|
0.1 |
% |
Content |
|
13,228 |
|
|
12,667 |
|
|
4.4 |
% |
|
45,742 |
|
|
42,174 |
|
|
8.5 |
% |
Total
revenues |
|
69,753 |
|
|
60,227 |
|
|
15.8 |
% |
|
239,979 |
|
|
236,171 |
|
|
1.6 |
% |
Operating
expenses |
|
62,916 |
|
|
51,387 |
|
|
22.4 |
% |
|
215,149 |
|
|
210,620 |
|
|
2.2 |
% |
Income from
operations |
|
6,837 |
|
|
8,840 |
|
|
(22.7 |
%) |
|
24,830 |
|
|
25,551 |
|
|
(2.8 |
%) |
Depreciation and
amortization |
|
4,620 |
|
|
3,030 |
|
|
52.5 |
% |
|
15,560 |
|
|
11,563 |
|
|
34.6 |
% |
Adjustments |
|
614 |
|
|
561 |
|
|
9.4 |
% |
|
4,067 |
|
|
3,978 |
|
|
2.2 |
% |
Adjusted
EBITDA |
|
$ |
12,071 |
|
|
$ |
12,431 |
|
|
(2.9 |
%) |
|
$ |
44,457 |
|
|
$ |
41,092 |
|
|
8.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRONC, INC. |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(In thousands) |
(Unaudited) |
Preliminary |
|
|
|
December 31,2017 |
|
December 25,2016 |
Assets |
|
|
|
|
Current
Assets: |
|
|
|
|
Cash |
|
$ |
189,653 |
|
|
$ |
198,349 |
|
Accounts
receivable |
|
180,679 |
|
|
195,519 |
|
Inventories |
|
10,798 |
|
|
10,950 |
|
Prepaid
expenses |
|
22,389 |
|
|
12,879 |
|
Other |
|
3,186 |
|
|
5,984 |
|
Total
current assets |
|
406,705 |
|
|
423,681 |
|
Net Properties,
Plant and Equipment |
|
107,040 |
|
|
67,866 |
|
Other
Assets |
|
|
|
|
Goodwill |
|
121,907 |
|
|
122,469 |
|
Intangible assets, net |
|
125,178 |
|
|
132,161 |
|
Software,
net |
|
42,793 |
|
|
54,565 |
|
Investments and other assets |
|
52,284 |
|
|
88,024 |
|
Total
other assets |
|
342,162 |
|
|
397,219 |
|
Total assets |
|
$ |
855,907 |
|
|
$ |
888,766 |
|
|
|
|
|
|
Liabilities and
Equity |
|
|
|
|
Current
Liabilities |
|
|
|
|
Current
portion of long-term debt |
|
$ |
21,857 |
|
|
$ |
21,617 |
|
Accounts
payable |
|
78,365 |
|
|
70,148 |
|
Other |
|
157,376 |
|
|
173,122 |
|
Total
current liabilities |
|
257,598 |
|
|
264,887 |
|
Non-Current
Liabilities |
|
|
|
|
Long-term
debt |
|
331,881 |
|
|
349,128 |
|
Other
non-current liabilities |
|
197,266 |
|
|
166,870 |
|
Total
non-current liabilities |
|
529,147 |
|
|
515,998 |
|
|
|
|
|
|
Equity |
|
|
|
|
Total
stockholders' equity |
|
69,162 |
|
|
107,881 |
|
Total liabilities and
equity |
|
$ |
855,907 |
|
|
$ |
888,766 |
|
|
|
|
|
|
|
|
|
|
|
TRONC, INC. |
NON-GAAP RECONCILIATIONS |
(In thousands) (Unaudited) |
Preliminary |
|
Reconciliation of Net Income (Loss) to Adjusted
EBITDA: |
|
|
|
Three months ended |
|
Year Ended |
|
|
December 31, 2017 |
|
December 25, 2016 |
|
%Change |
|
December 31, 2017 |
|
December 25, 2016 |
|
%Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
|
$ |
(373 |
) |
|
$ |
19,416 |
|
|
* |
|
$ |
5,535 |
|
|
$ |
6,537 |
|
|
(15.3 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
22,104 |
|
|
15,621 |
|
|
41.5 |
% |
|
31,681 |
|
|
18,924 |
|
|
67.4 |
% |
Interest expense,
net |
|
7,056 |
|
|
6,587 |
|
|
7.1 |
% |
|
26,481 |
|
|
26,703 |
|
|
(0.8 |
%) |
Premium on stock
buyback |
|
— |
|
|
— |
|
|
* |
|
6,031 |
|
|
— |
|
|
* |
(Gain) loss on equity
investments, net |
|
582 |
|
|
203 |
|
|
* |
|
(3,139 |
) |
|
690 |
|
|
* |
Reorganization items,
net |
|
— |
|
|
23 |
|
|
* |
|
— |
|
|
259 |
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations |
|
29,369 |
|
|
41,850 |
|
|
(29.8 |
%) |
|
66,589 |
|
|
53,113 |
|
|
25.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
14,700 |
|
|
14,700 |
|
|
* |
|
56,696 |
|
|
57,499 |
|
|
(1.4 |
%) |
Restructuring and
transaction costs(1) |
|
14,370 |
|
|
5,796 |
|
|
* |
|
40,897 |
|
|
45,916 |
|
|
(10.9 |
%) |
Litigation
settlement(2) |
|
3,000 |
|
|
— |
|
|
* |
|
3,000 |
|
|
— |
|
|
* |
Stock-based
compensation |
|
3,949 |
|
|
2,424 |
|
|
62.9 |
% |
|
11,228 |
|
|
8,424 |
|
|
33.3 |
% |
Employee voluntary
separation program |
|
— |
|
|
2,049 |
|
|
* |
|
401 |
|
|
15,589 |
|
|
(97.4 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
|
$ |
65,388 |
|
|
$ |
66,819 |
|
|
(2.1 |
%) |
|
$ |
178,811 |
|
|
$ |
180,541 |
|
|
(1.0 |
%) |
* Represents positive or negative change in excess of 100%
(1) - Restructuring and transaction costs include costs related
to tronc'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.(2) -
Adjustment to litigation settlement reserve.
Adjusted EBITDA and Adjusted EBITDA margin
The Company defines Adjusted EBITDA as net income before equity
in earnings of unconsolidated affiliates, income taxes, interest
expense, other (expense) income, realized gain (loss) on
investments, reorganization items, depreciation and amortization,
and other items that the Company does not consider in the
evaluation of ongoing operating performance. These items
include stock-based compensation expense, restructuring charges,
transaction expenses, and certain other charges and gains that the
Company does not believe reflects the underlying business
performance (including spin-related costs). Adjusted EBITDA
margin is defined as Adjusted EBITDA divided by Revenue.
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, 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, is
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 and Adjusted EBITDA
margin 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 GAAP.
Instead, management believes Adjusted EBITDA and Adjusted EBITDA
margin should be used to supplement the Company’s financial
measures derived in accordance with 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.
|
TRONC, INC. |
NON-GAAP RECONCILIATIONS |
(In thousands) |
(Unaudited) |
Preliminary |
|
Reconciliation of Total Operating Expenses to Adjusted
Total Operating Expenses: |
|
|
|
Three Months Ended
December 31, 2017 |
|
Three Months Ended December 25,
2016 |
|
|
GAAP |
|
Adjustments |
|
Adjusted |
|
GAAP |
|
Adjustments |
|
Adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation |
|
$ |
154,704 |
|
|
$ |
(12,203 |
) |
|
$ |
142,501 |
|
|
$ |
143,940 |
|
|
$ |
(7,340 |
) |
|
$ |
136,600 |
|
Newsprint and ink |
|
27,027 |
|
|
(25 |
) |
|
27,002 |
|
|
26,732 |
|
|
— |
|
|
26,732 |
|
Outside services |
|
127,746 |
|
|
(3,621 |
) |
|
124,125 |
|
|
125,745 |
|
|
(2,998 |
) |
|
122,747 |
|
Other |
|
81,474 |
|
|
(5,470 |
) |
|
76,004 |
|
|
72,455 |
|
|
69 |
|
|
72,524 |
|
Depreciation and
amortization |
|
14,700 |
|
|
(14,700 |
) |
|
— |
|
|
14,700 |
|
|
(14,700 |
) |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses |
|
$ |
405,651 |
|
|
$ |
(36,019 |
) |
|
$ |
369,632 |
|
|
$ |
383,572 |
|
|
$ |
(24,969 |
) |
|
$ |
358,603 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
2017 |
|
Year Ended December 25,
2016 |
|
|
GAAP |
|
Adjustments |
|
Adjusted |
|
GAAP |
|
Adjustments |
|
Adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation |
|
$ |
549,363 |
|
|
$ |
(34,505 |
) |
|
$ |
514,858 |
|
|
$ |
597,293 |
|
|
$ |
(43,503 |
) |
|
$ |
553,790 |
|
Newsprint and ink |
|
94,340 |
|
|
(25 |
) |
|
94,315 |
|
|
103,906 |
|
|
— |
|
|
103,906 |
|
Outside services |
|
468,044 |
|
|
(10,743 |
) |
|
457,301 |
|
|
494,478 |
|
|
(16,785 |
) |
|
477,693 |
|
Other |
|
288,986 |
|
|
(10,253 |
) |
|
278,733 |
|
|
300,089 |
|
|
(9,641 |
) |
|
290,448 |
|
Depreciation and
amortization |
|
56,696 |
|
|
(56,696 |
) |
|
— |
|
|
57,499 |
|
|
(57,499 |
) |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses |
|
$ |
1,457,429 |
|
|
$ |
(112,222 |
) |
|
$ |
1,345,207 |
|
|
$ |
1,553,265 |
|
|
$ |
(127,428 |
) |
|
$ |
1,425,837 |
|
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 and expenses relating to The San Diego
Union-Tribune. 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.
|
TRONC, INC. |
NON-GAAP RECONCILIATIONS |
(In thousands) |
(Unaudited) |
Preliminary |
|
Reconciliation of Net Income (Loss) to Adjusted Net Income
and Adjusted Diluted EPS: |
|
|
|
Three months ended |
|
|
December 31, 2017 |
|
December 25, 2016 |
|
|
|
|
|
|
|
|
|
|
|
Earnings |
|
DilutedEPS |
|
Earnings |
|
DilutedEPS |
|
|
|
|
|
|
|
|
|
Net income
(loss) - GAAP |
$ |
(373 |
) |
|
$ |
(0.01 |
) |
|
$ |
19,416 |
|
|
$ |
0.53 |
|
|
|
|
|
|
|
|
|
|
Pre-spin
tax adjustment from TCO |
— |
|
|
— |
|
|
7,063 |
|
|
0.19 |
|
Adjustments
to operating expenses, net of 27.8% tax: |
|
|
|
|
|
|
|
|
Restructuring and
transaction costs |
10,375 |
|
|
0.31 |
|
|
4,185 |
|
|
0.11 |
|
|
Employee voluntary
separation program |
— |
|
|
— |
|
|
1,479 |
|
|
0.04 |
|
|
|
|
|
|
|
|
|
|
Adjusted
net income - Non-GAAP |
$ |
10,002 |
|
|
$ |
0.30 |
|
|
$ |
32,143 |
|
|
$ |
0.88 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
|
December 31, 2017 |
|
December 25, 2016 |
|
|
|
|
|
|
|
|
|
|
|
Earnings |
|
DilutedEPS |
|
Earnings |
|
DilutedEPS |
|
|
|
|
|
|
|
|
|
Net income
- GAAP |
$ |
5,535 |
|
|
$ |
0.16 |
|
|
$ |
6,537 |
|
|
$ |
0.19 |
|
|
|
|
|
|
|
|
|
|
Premium on
stock buyback |
6,031 |
|
|
0.18 |
|
|
— |
|
|
— |
|
Pre-spin
tax adjustment from TCO |
— |
|
|
— |
|
|
7,063 |
|
|
0.21 |
|
Adjustments
to operating expenses, net of 27.8% tax: |
|
|
|
|
|
|
|
|
Restructuring and
transaction costs |
29,528 |
|
|
0.86 |
|
|
33,151 |
|
|
0.98 |
|
|
Gain on sale of
investments |
(4,357 |
) |
|
(0.13 |
) |
|
— |
|
|
— |
|
|
Employee voluntary
separation program |
290 |
|
|
0.01 |
|
|
11,255 |
|
|
0.33 |
|
|
|
|
|
|
|
|
|
|
Adjusted
net income - Non-GAAP |
$ |
37,027 |
|
|
$ |
1.08 |
|
|
$ |
58,006 |
|
|
$ |
1.71 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net income and Adjusted Diluted
EPS
Adjusted net income is defined as Net income - GAAP excluding
the following adjustments: Restructuring and transaction
costs and Employee voluntary separation program, net of the impact
of income taxes and pre-spin allocated tax adjustments from Tribune
Media Company ("TCO").
Adjusted Diluted EPS computes Adjusted net income divided by
diluted weighted average shares outstanding.
Management believes Adjusted Net income 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.
|
TRONC, INC. |
NON-GAAP RECONCILIATIONS |
(In thousands) (Unaudited) |
|
Reconciliation of Total Debt to Net Debt: |
|
|
|
As of |
|
|
December 31,2017 |
|
December 25,2016 |
|
% Change |
|
|
|
|
|
|
|
Current portion of
long-term debt |
|
$ |
21,857 |
|
|
$ |
21,617 |
|
|
1.1 |
% |
Long-term debt |
|
331,881 |
|
|
349,128 |
|
|
(4.9 |
%) |
Total
debt |
|
353,738 |
|
|
370,745 |
|
|
(4.6 |
%) |
Less: Cash |
|
189,653 |
|
|
198,349 |
|
|
(4.4 |
%) |
Net
debt |
|
$ |
164,085 |
|
|
$ |
172,396 |
|
|
(4.8 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt
Net Debt is defined as Total Debt less Cash. The Company's
management believes that the presentation of Net Debt provides
useful information to investors as management reviews Net Debt as
part of its management of our overall liquidity, financial
flexibility, capital structure and leverage.
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