American Media, Inc. Reports Results For Third Quarter Of Fiscal Year 2013

  American Media, Inc. Reports Results For Third Quarter Of Fiscal Year 2013

-- Revenue Decreases Slightly to $85 Million, Partially Offset by Decline in
Expenses Resulting in Adjusted EBITDA for the Quarter of $26 million, up 22%
from prior year --

PR Newswire

NEW YORK, Feb. 14, 2013

NEW YORK, Feb. 14, 2013 /PRNewswire/ --American Media, Inc. (AMI), the
leading content centric media company specializing in celebrity journalism and
health and fitness in the U.S., today reported its financial results for the
third fiscal quarter ended December 31, 2012.

Revenue

Revenue for the third quarter of fiscal year 2013 was $85 million, compared to
$88 million in the third quarter of fiscal year 2012, representing a 3%
decrease. For the nine months ended December 31, 2012, revenue was $262
million, as compared to $286 million, an 8% decrease, compared to prior year.
The decrease in revenue during both the quarter and nine-month periods
primarily reflected the negative impact of Superstorm Sandy, the shift of
print advertising dollars to broadcast for the 2012 Summer Olympics and the
overall general market weakness for advertising spending due to the continued
downturn in the U.S. economy.

Operating Income

Operating income before impairment charges for the third quarter of fiscal
year 2013 was $12 million, or $0.8 million higher than the prior year's third
quarter. For the nine months ended December 31, 2012, operating income before
impairment charges was $38 million, or $7 million lower than the prior-year
period. The decrease in operating income during the nine-month period was
primarily due to the above-mentioned decrease in revenue, as well as
duplicative expenses incurred in connection with Superstorm Sandy, partially
offset by cost reductions generated by the Company as it implemented its
management action plans.

Non-cash Impairment of Goodwill and Intangibles

As a result of the Company's interim impairment testing, the operating results
for the third quarter of fiscal year 2013 reflect non-cash goodwill impairment
charges of $47 million and non-cash tradename impairment charges of $7
million. These non-cash impairment charges impacted the Celebrity Brands
segment ($42 million), the Women's Active Lifestyle segment ($4 million) and
the Men's Active Lifestyle segment ($8 million).

Earnings Before Interest, Taxes, Depreciation, Amortization and Other
Non-Recurring Items (Adjusted EBITDA)

Adjusted EBITDA for the third quarter of fiscal year 2013 was $26 million,
compared to $21 million for the third quarter of fiscal year 2012,
representing a 22% increase. Adjusted EBITDA for the twelve months ended
December 31, 2012 was basically flat to the prior-year period at $106 million.

For a reconciliation of Net Income (Loss) to Adjusted EBITDA and additional
information regarding Adjusted EBITDA, please refer to the Sections below
titled "Reconciliation of Non-GAAP Financial Measures to GAAP Financial
Measures" and "Rationale for Use of Non-GAAP Financial Measures".

Cash

At December 31, 2012, the Company had cash and cash equivalents of $10
million, as well as $20 million outstanding on its revolving credit facility.

Comments By Senior Management

AMI Chairman and Chief Executive Officer David Pecker said, "For Calendar Year
2012, the consumer magazine advertising market was down 8% versus 2011. This
general market decline, coupled with the impact of Superstorm Sandy, impacted
AMI's third fiscal quarter advertising revenue, which was down $2 million, or
9%."

"The revenue shortfall was totally offset by the management action plans we
implemented in fiscal year 2012 and fiscal year 2013," continued Mr. Pecker.
"These revenue enhancements and expense reductions more than offset the
revenue shortfalls and resulted in a 22% increase in Adjusted EBITDA for the
quarter to $26 million."

AMI Executive Vice President and Chief Financial Officer Chris Polimeni said,
"We will continue to operate our business in a disciplined fashion for the
balance of fiscal 2013, targeting the opportunities outlined in our management
action plans, and project to realize $13 million of cost savings related to
SG&A, staff and production, as well as revenue enhancements of $8 million from
publishing special edition magazines under the Star, OK!, National Enquirer,
Shape, Men's Fitness and other key AMI brands."

Quarterly Earnings Call

AMI will hold an earnings conference call on February 14, 2013 at 11:00 am EST
to discuss its fiscal 2013 third quarter results. Conference call details are
as follows:

Date: Thursday, February 14, 2013

Time: 11:00 am EST

Call-In Number:(877) 293-9442/ (630) 343-1248

Reservation Number:4419

A telephonic replay of the conference call has been arranged to be available
from Thursday, February 14, 2013 at5:00 pm EST, through 5:00 pm EST on
Thursday, February 28, 2013. To access the replay, please call: (866)
873-8511/ (630) 343-1245 and reference reservation number: 4419.

Safe Harbor

This press release contains "forward-looking statements," within the meaning
of the Private Securities Litigation Reform Act of 1995 that involve risks and
uncertainties. All statements herein that address activities, events or
developments that the Company expects or anticipates will or may occur in the
future, including the Company's estimates of financial performance and such
things as business strategy, measures to implement strategy (including
management action plans), competitive strengths, goals, references to future
success and other events, are generally forward-looking statements.

The Company's actual results may differ materially from its estimates.
Whether actual results, events and developments will conform to the Company's
expectations is subject to a number of risks and uncertainties and important
factors, many of which are beyond the control of the Company. For information
regarding certain risk factors that could cause the Company's results to vary
from any forward-looking statements made by the Company, please see the
Company's Exchange Offer Registration Statement on Form S-4/A and other
periodic reports filed with the Securities and Exchange Commission.
Consequently, all forward-looking statements made herein are qualified by
these cautionary statements and there can be no assurance that the results,
events or developments referenced herein will occur or be realized.

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures

The following table reconciles the differences between net loss as determined
under generally accepted accounting practices in the U.S. (GAAP) and Adjusted
EBITDA for the three months and twelve months ended December 31, 2012 and
2011.

                                   For the Three Months  For the Twelve Months
                                   Ended December 31,    Ended December 31,
in millions                        2012        2011      2012         2011
Net loss attributable to American  $  (57.9)   $ (2.5)   $  (38.9)    $ (2.9)
Media, Inc. and subsidiaries
Add (deduct):
Interest expense                   15.2        14.4      59.6         58.8
(Benefit) provision for income     (0.1)       (0.7)     (18.8)       13.1
taxes
Depreciation and amortization      2.4         2.0       9.4          8.0
Impairment of goodwill and         54.5        —         54.5         —
intangible assets
Amortization of deferred debt      0.4         0.3       1.4          1.6
costs
Amortization of deferred rack      1.9         2.9       9.1          9.7
costs
Amortization of short-term racks   1.9         2.6       8.3          8.8
Restructuring costs and severance  0.8         1.5       3.8          5.2
Costs related to launches and      0.4         —         4.3          —
closures of publications
Impact of Superstorm Sandy         4.0         —         4.0          —
Other                              2.4         0.8       9.3          3.2
Adjusted EBITDA                    $  25.9     $ 21.3    $  106.0     $ 105.5

Rationale for Use of Non-GAAP Financial Measures

Adjusted EBITDA, a measure we use to gauge our operating performance, is
defined as net income or loss attributable to AMI, plus interest expense,
provision (benefit) for income taxes, depreciation of property and equipment,
amortization of intangible assets, deferred debt costs and deferred rack
costs, provision for impairment of intangible assets and goodwill, adjusted
for gains or costs related to closures, launches or re-launches of
publications, restructuring, severance and certain other costs. We believe
that Adjusted EBITDA is helpful in highlighting trends because Adjusted EBITDA
excludes the impact of certain items that can differ significantly from
company to company depending on long-term strategic decisions regarding
capital structure, the tax jurisdictions in which companies operate and
capital investments.

We also believe our investors use Adjusted EBITDA as a gauge to measure the
performance of their investment in AMI. Management compensates for
limitations of using non-GAAP financial measures by using them to supplement
GAAP results to provide a more complete understanding of the factors and
trends affecting our business than GAAP results alone indicate. Adjusted
EBITDA is not a recognized term under GAAP and does not purport to be an
alternative to income from continuing operations as a measure of operating
performance or cash flows from operating activities as a measure of
liquidity. Additionally, Adjusted EBITDA is not intended to be a measure of
free cash flow available for management's discretionary use as it does not
consider certain cash requirements such as interest payments, tax payments and
debt service requirements. The presentation of Adjusted EBITDA has
limitations as an analytical tool, and you should not consider it in
isolation, or as a substitute for analysis of our results as reported under
GAAP. Because not all companies use identical calculations, our presentation
of Adjusted EBITDA may not be comparable to other similarly titled measures of
other companies. We believe that the inclusion of Adjusted EBITDA is
appropriate to evaluate our operating performance compared to our operating
plans and/or prior years and to value prospective acquisitions.

About American Media, Inc.

American Media, Inc. (AMI) owns and operates the leading print and digital
celebrity and health and fitness media brands in the United States. AMI's
titles include Star, OK!, National Enquirer, Globe, Country Weekly, Soap Opera
Digest, Shape, Men's Fitness, Muscle & Fitness, Flex, Muscle & Fitness Hers,
Fit Pregnancy and Natural Health. AMI also manages 18 different digital sites
including RadarOnline.com, OKmagazine.com, CountryWeekly.com, Shape.com,
MensFitness.com, MuscleandFitness.com and FitPregnancy.com. AMI's magazines
have a combined total circulation of 7.4 million and reach more than 61
million men and women each month. AMI's digital properties reach an average
of 34 million unique visitors and 169 million page views monthly.

AMI also provides Publishing Services which includes Distribution Services,
Inc. (DSI), the No. 1 in-store magazine sales and merchandising marketing
company in the U.S. and Canada. DSI places and monitors AMI's publications
and third-party publications to ensure proper displays in major retail chains
and national and regional supermarket chains. DSI also provides marketing,
merchandising and information gathering services to third parties including
non-magazine clients. Publishing Services also provides print and digital
advertising sales and strategic management direction in the following areas:
manufacturing, subscription circulation, logistics, event marketing and full
back office financial functions.





SOURCE American Media, Inc.

Contact: Chris Polimeni, Executive Vice President and Chief Financial Officer,
American Media, Inc., +1-561-989-1009
 
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