New Media Investment Group Inc. (NEWM)

[Enterprising Investor]

New Media Announces First Quarter 2015 Results and a 10.0% Increase in its Dividend to $0.33 per Common Share (4/30/15)

NEW YORK--(BUSINESS WIRE)--New Media Investment Group Inc. (“New Media” or the “Company”, NYSE:NEWM) today reported its financial results for the first quarter ended March 29, 2015.

Financial Summary

• New Media declares a cash dividend of $0.33 per share of common stock for the first quarter 2015, a 10.0% increase vs. Q4 2014

• Total revenues of $250.6 million, an increase of 76.4% to prior year, and a decrease of 0.1% on a same store basis*

• Digital revenue of $21.3 million, an increase of 7.5% to the prior year on a same store basis*

• Operating income of $2.6 million

• Net (loss) of $(6.1) million, an improvement of 9.3% to the prior year

• As Adjusted EBITDA of $25.3 million, an increase of 177.8% to the prior year*

• Free cash flow of $19.1 million, or $0.45 per share, an increase of $0.31 per share to the prior year*

• Liquidity, consisting of cash on the balance sheet and undrawn revolver, was $37.9 million as of March 29, 2015

Business Highlights

• Closed two acquisitions, Halifax Media and Stephens Media, for a combined purchase price of $382.5 million

• Completed an equity offering raising gross proceeds of $151.9 million, increasing our liquidity position and ability to execute on our acquisition strategy

• Added a net balance of $102.0 million of incremental debt through our existing term loan and assumed $18.0 million of debt from Halifax

• Increased the revolver capacity in our credit facility by $15.0 million to $40.0 million

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“New Media’s strong first quarter results position the Company for another solid year,” said New Media President and Chief Executive Officer, Michael E. Reed. “Despite the severe winter weather that negatively impacted our publications in the Northeast, we closed the first quarter with total revenues of $250.6 million, As Adjusted EBITDA of $25.3 million, and free cash flow of $19.1 million, an increase of 76.4%, 177.8%, and 349.9% vs. the prior year, respectively. This growth is being driven by the investments we are making in our digital and print initiatives, such as Propel, BestRide, and the Center for News and Design, our accretive acquisition strategy, and our continued focus on centralizing services to efficiently manage expenses. We are particularly proud of our free cash flow per share growing to $0.45 in Q1 2015, from $0.14 in Q1 2014, demonstrating the success of our organic and inorganic strategies.

“During the first quarter, we closed our two largest acquisitions to date, Halifax Media and Stephens Media, for $280.0 and $102.5 million, respectively. Both companies’ publications are well-established, leading providers of local news in the communities they serve, and present a tremendous opportunity for New Media to expand its digital businesses, as well as realize future synergies. As our operations team continues to integrate the new acquisitions, our separate sourcing team continues to work to identify quality, local media assets that fit our financial and operational criteria. With a strong and growing pipeline of potential tuck-in acquisitions, and significant recurring cash flow from our core newspaper business, we believe New Media remains well positioned to create substantial value for our shareholders.”

First Quarter 2015 Financial Results

New Media recorded total revenues of $250.6 million for the quarter, an increase of 76.4% when compared to the prior year, and a decrease of 0.1% on a same store basis.

Total Print Advertising decreased 0.9% on a same store basis driven by Preprints and Local Display which decreased 3.3% and 2.8%, respectively. The declines in Preprint revenue reflect modest circulation volume losses combined with retail store consolidations in some of our markets. The decline in total Print Advertising was partially offset by Classified Print revenue which increased 4.7% on a same store basis. Within Classified Print, we are seeing year over year improvement in obituaries revenue and legals advertising, which now represent over a third of our total Classified Print revenue.

New Media’s Digital category also contributed to the Company’s overall strong revenue performance increasing 7.5% on a same store basis. Revenue from Propel, our digital marketing services business, increased 51.0% to the prior year on a same store basis.

Circulation, our largest individual revenue category at 32% of total revenues, continues to be a stable category with revenue increasing 0.7% on a same store basis. Finally, Commercial Print and Other revenue decreased 5.2% to the prior year on a same store basis, partially driven by recent acquisitions shifting from external print relationships to internal, as they are now part of New Media. This has no impact on As Adjusted EBITDA or income.

Total expenses in the quarter remained flat to the prior year, on a same store basis, totaling $225.3 million, after adjusting for non-recurring and non-cash items. As the Company continues to grow through acquisitions, we are able to leverage our scale to increase our buying power and offset our continued investments in corporate infrastructure, digital initiatives and tuck-in acquisitions.

Though our publications in the Northeast were impacted by the severe winter weather, both on the revenue and expense side, As Adjusted EBITDA for the quarter totaled $25.3 million, an increase of $16.2 million, or 177.8%, over the prior year. Net (loss) of $(6.1) million was impacted by approximately $3.4 million of acquisition related costs, $2.1 million of costs related to the debt fundraising and amendments, and $1.9 million of severance. Free cash flow of $19.1 million increased 349.9% over the prior year to $0.45 per share.

First Quarter 2015 Dividend

New Media’s Board of Directors declared a first quarter 2015 cash dividend of $0.33 per share of common stock. The dividend is payable on May 21, 2015 to shareholders of record as of the close of business on May 13, 2015.

The declaration and payment of any dividends are at the sole discretion of the Board of Directors, which may decide to change the Company’s dividend policy at any time.

Additional Information

For additional information that management believes to be useful for investors, please refer to the presentation posted on the Investor Relations section of New Media’s website, www.newmediainv.com and the Company’s Quarterly Report on Form 10-Q, which will be available on the Company’s website. Nothing on our website is included or incorporated by reference herein.

Earnings Conference Call

New Media’s management will host a conference call on Thursday, April 30, 2015 at 10:00 A.M. Eastern Time. A copy of the earnings release will be posted to the Investor Relations section of New Media’s website, www.newmediainv.com.

All interested parties are welcome to participate on the live call. The conference call may be accessed by dialing 1-877-601-8827 (from within the U.S.) or 1-918-534-8645 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “New Media First Quarter Earnings Call.”

A simultaneous webcast of the conference call will be available to the public on a listen-only basis at www.newmediainv.com. Please allow extra time prior to the call to visit the website and download any necessary software required to listen to the internet broadcast.

A telephonic replay of the conference call will also be available approximately two hours following the call’s completion through 11:59 P.M. Eastern Time on Thursday, May 14, 2015 by dialing 1-855-859-2056 (from within the U.S.) or 1-404-537-3406 (from outside of the U.S.); please reference access code “23403995.”

About New Media Investment Group Inc.

New Media is focused primarily on investing in a high quality, diversified portfolio of local media assets, and on growing existing advertising and digital marketing businesses. The Company is one of the largest publishers of locally based print and online media in the United States as measured by our 126 daily publications. As of April 30, 2015, the Company operates in over 460 markets across 32 states. New Media’s portfolio of products, as of April 30, 2015, include over 550 community publications and over 460 related websites, serve more than 200,000 business advertising accounts and reach over 19 million people on a weekly basis.

For more information regarding New Media and to be added to our email distribution list, please visit www.newmediainv.com.

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