Tronc, Inc. Reports 2016 Third Quarter Results

CHICAGO, Nov. 01, 2016 (GLOBE NEWSWIRE) -- tronc, Inc. (NASDAQ:TRNC) today reported financial results for its third quarter ended September 25, 2016.

"Notwithstanding the distractions our Company has faced over the past several months and the fact that our Board and management team have been engaged in substantive discussions and due diligence with Gannett, our third quarter results reflect the important progress we have made in our efforts to transform our business," said CEO Justin Dearborn.  "While we are still in the early stages of executing our strategy, we remain confident in the strength of our core brands and assets and committed to our go-forward plans."

Dearborn continued, "We are disappointed, that in the face of challenges surrounding its financing, Gannett's Board unilaterally determined it could not complete the transaction that it began. The parties agreed to a purchase price in mid-September and subsequently finalized all material transaction terms. Given the market's reaction to Gannett's third quarter financial report, which showed a significant year-over-year decline in Adjusted EBITDA, we are not surprised that their board has decided to refocus their attention to operating the assets they currently own. We have repeatedly acknowledged that we must all undertake significant change to our business to address the challenging environment facing our industry.  We believe we must all remain united in support of the publishing industry, and to that end we will continue to be a good partner to Gannett across our many existing business relationships."

2016 THIRD QUARTER RESULTS

Total Revenues in the third quarter of 2016 were $378 million, down 6.8% compared to $406 million in the third quarter of 2015.  This is the initial quarter which is comparable to the prior year as a full quarter of revenue from The San Diego Union-Tribune is included in both years.  Advertising revenue was down 10.9% from the prior-year period as we experienced declines in print advertising in line with industry trends.

Total Operating Expenses, including depreciation and amortization, for the third quarter of 2016 were $377 million, down $36 million or 8.7% compared to $413 million in the third quarter of 2015.  Compensation was down by $17 million or 10.8% and outside services was down over $9 million or 7.4% from prior year.  Total operating expenses for the nine months ended September 25, 2016, adjusted to exclude expenses relating to The San Diego Union-Tribune and other restructuring and related costs, resulted in a total savings of $95 million from the prior-year period (as set forth in the Non-GAAP reconciliations below).

Net Loss for the third quarter of 2016 was $10 million, which included a $7 million non-cash charge to tax expense for the pass-through of tax basis adjustments from Tribune Media related to its settlement with the IRS and $17 million of pre-tax restructuring and transaction costs (including $8.5 million related to office space vacated at the Chicago Tribune and Los Angeles Times buildings in the third quarter of 2016).  Adjusted net income for the third quarter was $8 million or an increase of $10 million from the third quarter of 2015. 

Net Loss per share for the 2016 third quarter, on a fully diluted basis, was $0.29 compared to a net loss per share of $0.33 for the third quarter of 2015.  The net loss per share was impacted by the previously mentioned restructuring and transaction costs.  Before the impact of these charges, Adjusted Diluted earnings per share (or EPS) increased to $0.22 for the quarter.

Adjusted EBITDA for the third quarter of 2016 was $37 million, or an increase of $8 million from the third quarter of 2015 primarily due to the cost reductions discussed above.

Segment reportingBeginning in the second quarter of 2016, the Company was realigned under its new management team into two distinct segments: troncM, which is comprised of the Company's media groups excluding their digital revenues and related expenses, and troncX, which includes all the digital revenues and related expenses of the Company including Tribune Content Agency ("TCA") and Forsalebyowner.com ("FSBO").

Included in tables below is segment reporting for troncM and troncX for the three and nine months ended September 25, 2016 and September 27, 2015.  Corresponding information for earlier periods has been restated to reflect the change in reportable segments.

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