AMI - more bad news

[240 is Back]

October 26, 2006 --

For the third time, American Media has blown a deadline for restating its earnings, and David Pecker's tattered tabloid publisher now won't issue cleaned up financial numbers until early 2007, the company said yesterday.

At the same time, in an 8K filing with the Securities and Exchange Commission on Tuesday, American Media warned that its cash flow - or bank EBITDA (earnings before interest, taxes, depreciation and amortization) - for fiscal 2006 is now estimated to be $110.9 million, about 5 percent lower than expected.

CEO Pecker had an emergency conference call with his bankers yesterday morning to try to explain the reasons for the third blown deadline and dwindling cash flow.

Pecker's biggest test may come Friday, when he is expected to address restless bondholders in a conference call.

The company warned in its 8K filing that it "may not be able to successfully develop its magazine operations so that they continue to generate sufficient cash flow to meet its obligations under its senior credit facility and bond indentures."

AMI has about $1 billion in debt.
In its August conference call, the company revised its estimates downward to $506.4 million in revenue and $117.3 in cash flow for the 2006 fiscal year.

Now it estimates the revenues will be even lower - $504.9 million - and cash flow of only $110.9 million, a 5.4 percent drop from the latest revision.

"That includes one-time adjustments that will be added back over time," said AMI President John Miller. "Each time we go through this, the numbers change a little - that's what we're going through right now."

AMI now says it won't be ready to restate the 2006 fiscal results until Feb. 15, 2007 - a delay from the most recent missed deadline of Oct. 31, 2006. Three subsequent quarterly restatements won't happen until next March 15.

[24KT]

They can expect to get hit with a class action.

[Ron]

A class action suit??? I dont think they are a public company?

As with many magazine and newspaper companies, the industry is going through an adjustment period. The question is where it will end up. But does this affect Flex Magazine, Muscle & Fitness Magazine and the Olympia? Not at the moment.

[Livewire]

we talked about AMI today in one of my univ study groups. man i wouldn't wanna own that  LOL

[onlyme]

A class action suit??? I dont think they are a public company?

As with many magazine and newspaper companies, the industry is going through an adjustment period. The question is where it will end up. But does this affect Flex Magazine, Muscle & Fitness Magazine and the Olympia? Not at the moment.

DOn't have to be a public company to have a class action suit agaisnt do they.  You get more than one person to sure the same company for the same reason constitutes a class action. The more the merrier though.  But I didn't know it had to be a public comapny.