This summary is based on the fourth quarter fiscal 2007 earnings call conducted by Primedia Inc. (PRM: chart) on March 5, 2008.
Chairman of the Board: Dean B. Nelson
President & Chief Executive Officer: Robert C. Metz
Chief Financial Officer: Kim Payne
Investor Relations: Kate Messmer
Key Investors Issues
- The net loss increased to 37 cents per share versus 31 cents per share in last year.
- Quarterly revenue increased to $79.1 million from $76.8 million in prior year.
- For fiscal 2007, net income was $487.6 million, on revenue of $314.8 million
Fourth Quarter Fiscal 2007 Financial Highlights
Total net revenue increased 3% to $79.1 million from $76.8 million in the prior year.
This reflects growth in Apartment Guide, DistribuTech, Rentals.com, and New Home Guide. Total advertising revenue increased 2.2% to $64.6 million from $63.2 million for the comparable period last year.
Total Adjusted EBITDA increased 7.8% to $18 million from $16.7 million for the comparable period last year.
This was due to:
- Higher revenue and tight controls on non-revenue generating expenses, partially offset by increases in compensation costs, as a result of additional staffing in Apartment Guide and Rentals.com, and distribution costs as a result of the company’s expansion of its retail distribution network; and
- Reductions in corporate overhead, partially offset by duplicate staffing as the company continues to transition corporate functions from New York to Atlanta.
Operating income was $12.6 million versus $11.3 million in prior year.
This was due to all of the factors described above with respect to Adjusted EBITDA and lower non-cash compensation expense, partially offset by higher amortization and restructuring costs.
Net loss was $16.5 million compared to $13.8 million for the comparable period last year.
This was due to the absence of the operations of Enthusiast Media sold in the third quarter of 2007 and the Provision for Income Tax, partially offset by increased operating income and reduction in interest expense from the company’s lower debt level.
As of December 31, 2007, the Company’s cash and cash equivalent balance was $14.7 million versus $5.8 million as of December 31, 2006.
The Company had debt, net of cash, of $238.1 million at December 31, 2007, compared to net debt of $1.32 billion at December 31, 2006. The incremental cash is expected to be used for general corporate purposes, including post-Enthusiast Media sale obligations for severance, bonuses, and cash taxes, for Consumer Source general operating purposes, including retail distribution expense prepayments, and to fund the dividend payment.
The free cash flow was negative $16.4 million compared to negative $2.9 million for the fourth quarter 2006.
Free cash flow decreased primarily due to the sale of Enthusiast Media, a discontinued operation, and increased cash taxes paid, primarily related to divestitures, partially offset by strong cash flow generation from Consumer Source’s continuing operations and the Company’s lower debt service.
Through December 31, 2007, the Company invested $14.5 million in Consumer Source capital expenditures compared to $12.9 million in 2006.
Consumer Source change in operating assets and liabilities generated cash of $3.4 million in 2007 compared to a cash usage of $0.9 million in 2006.
The Board of Directors has authorized the Company’s first regular quarterly cash dividend of 7 cents per share of common stock, payable on March 31, 2008, to stockholders of record on March 17, 2008.
