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CST: 16/11/2019 20:58:47   

Tribune Publishing Reports Second Quarter 2019 Results

100 Days ago

Net income from continuing operations up more than $20 million year-over-year

Continued growth momentum in digital-only subscribers reaching 300,000

CHICAGO, Aug. 07, 2019 (GLOBE NEWSWIRE) -- Tribune Publishing Company (NASDAQ: TPCO) today announced financial results for the second quarter ended June 30, 2019.  Unless otherwise noted, amounts and disclosures throughout this earnings release relate to continuing operations and exclude all discontinued operations including the Los Angeles Times, the San Diego Union-Tribune and other assets of the California News Group (collectively, the “California properties”) and forsalebyowner.com.
                               
Second Quarter 2019 Highlights:

  • Total revenues were $250.3 million, down from $253.0 million in the second quarter of 2018
  • Net income from continuing operations was $5.3 million in the second quarter of 2019 compared to a net loss of $15.1 million in the second quarter of 2018
  • Due to the substantial gain from the sale of the California properties in June 2018, net income attributable to Tribune Publishing common stockholders decreased to $2.7 million, or $0.08 per share, in the second quarter of 2019 compared to $265.0 million, or $7.51 per share, in the second quarter of 2018
  • Adjusted EBITDA increased to $24.4 million, up $2.2 million year-over-year
  • Digital content revenues increased 32.1% compared to the second quarter of 2018
  • Digital-only subscribers increased 44% to 300,000 at the end of the second quarter 2019, up from 208,000 at the end of the second quarter 2018

Timothy P. Knight, Tribune Publishing Chief Executive Officer and President, said: “We are very pleased with our solid financial and operational performance in the second quarter 2019, as we delivered revenue and adjusted EBITDA above the high end of our guidance, reflecting our strong execution and the success of our ongoing cost management efforts.  We are also proud to report that we reached 300,000 digital-only subscribers this quarter as our initiatives to grow our digital subscription volume and revenue continue to gain traction.  In addition, the changes we made in 2018 to both our newsroom operations and sales strategies continue to drive operating momentum across the organization.”

Second Quarter 2019 Results
Second quarter 2019 total revenues were $250.3 million, down $2.7 million or 1.1% compared to $253.0 million for the second quarter 2018.  Revenues for the second quarter 2019 include $13.3 million attributable to two extra operating months in the quarter for the Virginian-Pilot Media Companies (“VPMC”) acquisition compared to the prior year period and revenue associated with the Company’s Transition Service Arrangement with the California properties.

Second quarter 2019 total advertising revenue and digital advertising revenue were $103.6 million and $23.7 million, respectively.

Total operating expenses, including depreciation and amortization, in the second quarter of 2019 were $242.2 million, down 4.7% compared to $254.3 million in the second quarter of 2018.  The decrease resulted from the Company’s ongoing disciplined cost management partially offset by the impact of VPMC.

Net income from continuing operations was $5.3 million in the second quarter of 2019, compared to a loss of $15.1 million in the second quarter of 2018.

Adjusted EBITDA was $24.4 million in the second quarter of 2019, which grew by $2.2 million versus the second quarter of 2018. The year-over-year increase is primarily driven by disciplined expense management and growth in digital content revenue.

For the quarter ended June 30, 2019, capital expenditures totaled $9.3 million.  Cash balance at June 30, 2019 was $139.9 million, which includes $37.3 million of restricted cash reflected in long-term assets.

Segment Results
The Company operates in two segments: M, which is comprised of the Company’s media groups excluding their digital revenues and related expenses (except digital subscription revenues when bundled with a print subscription) and X, which includes all digital revenues and related expenses of the Company from local Tribune Publishing websites, third-party websites, mobile applications, digital-only subscriptions, Tribune Content Agency and BestReviews.

Included in the tables below is segment reporting for M and X for the second quarters of 2019 and 2018.

M
Second quarter 2019 M total revenues were $199.8 million, down 5.9% compared to the second quarter of 2018.  Excluding the impact of VPMC, revenue was down 9.5% year-over-year.

Second quarter 2019 operating expenses for M decreased 8.0% compared to the prior-year quarter, driven primarily by cost reduction actions and shifting of costs from M to X partially offset by increased expenses related to the VPMC business.
               
Second quarter 2019 income from operations for M was $11.8 million and Adjusted EBITDA was $16.6 million, up from $7.9 million and $15.7 million, respectively, for the second quarter of 2018.

X
Total revenues for X for the second quarter of 2019 were $45.1 million, up 12.3%, primarily driven by the impact of the VPMC business, as well as core growth in digital-only subscription revenue.  Content revenues in the second quarter of 2019, which include digital-only subscription revenues, content syndication and e-commerce revenues, increased by 32.1% year-over-year.  Excluding the impact of the VPMC acquisition, organic content revenues were up 31.2%.

Second quarter 2019 operating expenses for X decreased 3.2% compared to the second quarter of 2018, driven primarily by a decrease in depreciation expenses associated with upgrades to our digital assets and a reduction in restructuring charges.  This decrease in depreciation expenses was partially offset by increased resources and associated costs shifting to X from M and increased expenses associated with the VPMC business.

Second quarter 2019 income from operations for X was $9.5 million, up from $3.5 million in the second quarter of 2018 and Adjusted EBITDA was $12.2 million, up $1.0 million compared to the second quarter of 2018.

Digital-only subscribers grew to 300,000, up 44% from the prior year and up 6% sequentially from the first quarter of 2019.

2019 Outlook
For the full year, the Company increases its Adjusted EBITDA guidance to a new range of $102 million to $106 million.
                               
For the third quarter of 2019, the Company expects total revenues to range from $235 million to $240 million and Adjusted EBITDA to range from $21 million to $23 million.

Conference Call Details
Tribune Publishing will host a conference call to discuss the Company’s second quarter 2019 results at 5:00 p.m. Eastern Time (4:00 p.m. Central Time) on Wednesday, August 7, 2019.  The conference call may be accessed via Tribune Publishing’s Investor Relations website at investor.tribpub.com or by dialing 844.494.0195 (508.637.5599 for international callers) and entering conference ID 6269986.  An archived version of the webcast will also be available for one year on the Tribune Publishing website.  You can also access this replay via telephone, until August 14, 2019, by dialing 855.859.2056 (404.537.3406 for international callers) and entering conference ID 6269986.

Non-GAAP Financial Information
Adjusted EBITDA, Adjusted same-business operating expenses, Adjusted Income (Loss) From Continuing Operations available to Tribune Publishing common stockholders, and Adjusted Diluted EPS are not measures presented in accordance with generally accepted accounting principles in the United States (U.S. GAAP) and Tribune Publishing’s use of the terms Adjusted EBITDA, Adjusted same-business operating expenses, Adjusted Income (Loss) From Continuing Operations available to Tribune Publishing common stockholders, and Adjusted Diluted EPS may vary from that of others in the Company’s industry.  Adjusted EBITDA, Adjusted same-business operating expenses, Adjusted Income (Loss) From Continuing Operations available to Tribune Publishing common stockholders, and Adjusted Diluted EPS should not be considered as an alternative to net income (loss), income from operations, operating expenses, net income (loss) per diluted share, revenues or any other performance measures derived in accordance with U.S. GAAP as measures of operating performance or liquidity.  Further information regarding Tribune Publishing’s presentation of these measures, including a reconciliation of Adjusted EBITDA, Adjusted same-business operating expenses, Adjusted Income (Loss) From Continuing Operations available to Tribune Publishing common stockholders and Adjusted Diluted EPS to the most directly comparable U.S. GAAP financial measure, is included below in this press release.

Cautionary Statements Regarding Forward-looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are based largely on our current expectations and reflect various estimates and assumptions by us.  Forward-looking statements are subject to certain risks, trends, and uncertainties that could cause actual results and achievements to differ materially from those expressed in such forward-looking statements.  Such risks, trends and uncertainties, which in some instances are beyond our control, include: changes in advertising demand, circulation levels and audience shares; competition and other economic conditions; economic and market conditions that could impact the level of our required contributions to the defined benefit pension plans to which we contribute; decisions by trustees under rehabilitation plans (if applicable) or other contributing employers with respect to multiemployer plans to which we contribute which could impact the level of our contributions; our ability to develop and grow our online businesses; changes in newsprint price; our ability to maintain effective internal control over financial reporting; concentration of stock ownership among our principal stockholders whose interests may differ from those of other stockholders; and other events beyond our control that may result in unexpected adverse operating results. For more information about these and other risks see Item 1A (Risk Factors) of the Company’s most recent Annual Report on Form 10-K and in the Company’s other reports filed with the Securities and Exchange Commission.

The words “believe,” “expect,” “anticipate,” “estimate,” “could,” “should,” “intend,” “may,” “will,” “plan,” “seek” and similar expressions generally identify forward-looking statements.  However, such words are not the exclusive means for identifying forward-looking statements, and their absence does not mean that the statement is not forward-looking.  Whether or not any such forward-looking statements, in fact, occur will depend on future events, some of which are beyond our control.  Readers are cautioned not to place undue reliance on such forward-looking statements, which are being made as of the date of this press release.  Except as required by law, we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

About Tribune Publishing Company
Tribune Publishing (NASDAQ: TPCO) is a media company rooted in award-winning journalism.  Headquartered in Chicago, Tribune Publishing operates local media businesses in eight markets with titles including the Chicago TribuneNew York Daily NewsThe Baltimore Sun,  Orlando Sentinel, South Florida's Sun-Sentinel, Virginia’s Daily Press and The Virginian-Pilot, The Morning Call of Lehigh Valley, Pennsylvania, and the Hartford Courant.

In addition to award-winning local media businesses, Tribune Publishing operates national and international brands such as Tribune Content Agency and The Daily Meal and is the majority owner of the product review website BestReviews.
                               
Our brands are committed to informing, inspiring and engaging local communities.  We create and distribute content across our media portfolio, offering integrated marketing, media, and business services to consumers and advertisers, including digital solutions and advertising opportunities.

Investor Relations Contact:
Michael Ferreter
Tribune Publishing Investor Relations
312.222.3225
mferreter@tribpub.com

Media Contact:
Tilden Katz
Tribune Publishing Corporate Communications
312.606.2614
tilden.katz@fticonsulting.com
Source: Tribune Publishing

Exhibits:
Condensed Consolidated Statements of Income (Loss)
Segment Income, Expenses, and Non-GAAP Reconciliations
Condensed Consolidated Balance Sheets
Non-GAAP Reconciliations - Income (Loss) from Continuing Operations to Adjusted EBITDA
Non-GAAP Reconciliations - Total Operating Expenses to Adjusted Same-Business Operating Expenses
Non-GAAP Reconciliations - Income (Loss) from Continuing Operations available to Tribune Publishing common stockholders to Adjusted Net Income (Loss) from continuing operations available to Tribune Publishing common stockholders and Adjusted Diluted EPS

TRIBUNE PUBLISHING COMPANY
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(In thousands, except per share data)
(Unaudited)

Preliminary

         
    Three Months Ended   Six Months Ended
    June 30,
 2019
  July 1,
 2018
  June 30,
 2019
  July 1,
 2018
                 
Operating revenues    $ 250,327     $ 253,037     $ 494,852     $ 491,576  
                 
Operating expenses    242,222     254,282     494,149     524,582  
                 
Income (loss) from operations    8,105     (1,245 )   703     (33,006 )
                 
Interest income (expense), net    315     (5,412 )   535     (11,976 )
Loss on early extinguishment of debt        (7,666 )       (7,666 )
Loss on equity investments, net    (555 )   (665 )   (1,042 )   (1,394 )
Other income (expense), net    (56 )   3,640     17     7,303  
Income (loss) from continuing operations before income taxes    7,809     (11,348 )   213     (46,739 )
Income tax expense (benefit)   2,465     3,753     (417 )   (2,926 )
Net income (loss) from continuing operations   5,344     (15,101 )   630     (43,813 )
Plus: Earnings (loss) from discontinued operations, net of taxes   (722 )   280,545     (722 )   294,745  
Net income (loss)    4,622     265,444     (92 )   250,932  
Less: Income attributable to noncontrolling interest   1,926     448     1,887     710  
Net income (loss) attributable to Tribune common stockholders    $ 2,696     $ 264,996     $ (1,979 )   $ 250,222  
                 
Net income (loss) attributable to Tribune per common share - Basic                
Continuing operations    $ 0.10     $ (0.44 )   $ (0.04 )   $ (1.27 )
Discontinued operations    (0.02 )   7.95     (0.02 )   8.41  
Net income (loss) attributable to Tribune per common share - Basic   $ 0.08     $ 7.51     $ (0.06 )   $ 7.14  
                 
Net income (loss) attributable to Tribune per common share - Diluted                
Continuing operations   $ 0.10     $ (0.44 )   $ (0.04 )   $ (1.27 )
Discontinued operations    (0.02 )   7.95     (0.02 )   8.41  
Net income (loss) attributable to Tribune per common share - Diluted   $ 0.08     $ 7.51     $ (0.06 )   $ 7.14  
                 
Weighted average shares outstanding:                
Basic   35,711     35,288     35,669     35,045  
Diluted   35,866     35,288     35,669     35,045  


TRIBUNE PUBLISHING COMPANY

SEGMENT INFORMATION
(In thousands)  (Unaudited)

Preliminary

The tables below show the segmentation of income and expenses for the three and six months ended June 30, 2019, as compared to the three and six months ended July 1, 2018.

  Three Months Ended
  M   X   Corporate and Eliminations   Consolidated
  June 30,
 2019
  July 1, 2018   June 30,
 2019
  July 1, 2018   June 30,
 2019
  July 1, 2018   June 30,
 2019
  July 1, 2018
Total revenues  $ 199,800     $ 212,297     $ 45,066     $ 40,141     $ 5,461     $ 599     $ 250,327     $ 253,037  
Operating expenses  188,030     204,410     35,520     36,691     18,672     13,181     242,222     254,282  
Income (loss) from operations  11,770     7,887     9,546     3,450     (13,211 )   (12,582 )   8,105     (1,245 )
Depreciation and amortization  4,941     3,990     2,388     4,505     4,319     4,447     11,648     12,942  
Adjustments (1)  (125 )   3,865     312     3,312     4,488     3,344     4,675     10,521  
Adjusted EBITDA  $ 16,586     $ 15,742     $ 12,246     $ 11,267     $ (4,404 )   $ (4,791 )   $ 24,428     $ 22,218  

(1)  See Reconciliation of Income (Loss) From Continuing Operations to Adjusted EBITDA for additional information on adjustments.

  Six Months Ended
  M   X   Corporate and Eliminations   Consolidated
  Jun 30, 2019   Jul 1, 2018   Jun 30, 2019   Jul 1, 2018   Jun 30, 2019   Jul 1, 2018   Jun 30, 2019   Jul 1, 2018
Total revenues $ 397,825     $ 416,508     $ 84,649     $ 75,285     $ 12,378     $ (217 )   $ 494,852     $ 491,576  
Operating expenses 372,374     408,821     80,413     72,453     41,362     43,308     494,149     524,582  
Income (loss) from operations 25,451     7,687     4,236     2,832     (28,984 )   (43,525 )   703     (33,006 )
Depreciation and amortization  11,227     7,962     4,565     9,054     7,940     8,943     23,732     25,959  
Adjustments (1) 3,561     8,744     5,867     5,262     11,857     23,687     21,285     37,693  
Adjusted EBITDA  $ 40,239     $ 24,393     $ 14,668     $ 17,148     $ (9,187 )   $ (10,895 )   $ 45,720     $ 30,646  

(1)  See Reconciliation of Income (Loss) From Continuing Operations to Adjusted EBITDA for additional information on adjustments.

Segment M   Three Months Ended   Six Months Ended
    Jun 30, 2019   Jul 1, 2018   % Change   Jun 30, 2019   Jul 1, 2018   % Change
Operating revenues:                        
Advertising    $ 79,827     $ 87,800     (9.1 %)   $ 155,759     $ 170,542     (8.7 %)
Circulation    84,809     88,616     (4.3 %)   171,479     173,242     (1.0 %)
Other    35,164     35,881     (2.0 %)   70,587     72,724     (2.9 %)
Total revenues    199,800     212,297     (5.9 %)   397,825     416,508     (4.5 %)
Operating expenses    188,030     204,410     (8.0 %)   372,374     408,821     (8.9 %)
Income from operations    11,770     7,887     49.2 %   25,451     7,687     *
Depreciation and amortization   4,941     3,990     23.8 %   11,227     7,962     41.0 %
Adjustments (1)    (125 )   3,865     *   3,561     8,744     (59.3 %)
Adjusted EBITDA   $ 16,586     $ 15,742     5.4 %   $ 40,239     $ 24,393     65.0 %

* Represents positive or negative change in excess of 100%
(1) See Reconciliation of Income (Loss) From Continuing Operations to Adjusted EBITDA for additional information on adjustments.

Segment X   Three Months Ended   Six Months Ended
    June 30,
 2019
  July 1,
2018
  % Change   June 30,
 2019
  July 1,
2018
  % Change
Operating revenues:                        
Advertising    $ 23,720     $ 23,987     (1.1 %)   $ 44,556     $ 46,037     (3.2 %)
Content    21,346     16,154     32.1 %   40,093     29,248     37.1 %
Total revenues    45,066     40,141     12.3 %   84,649     75,285     12.4 %
Operating expenses    35,520     36,691     (3.2 %)   80,413     72,453     11.0 %
Income from operations    9,546     3,450     *   4,236     2,832     49.6 %
Depreciation and amortization   2,388     4,505     (47.0 %)   4,565     9,054     (49.6 %)
Adjustments (1)   312     3,312     (90.6 %)   5,867     5,262     11.5 %
Adjusted EBITDA    $ 12,246     $ 11,267     8.7 %   $ 14,668     $ 17,148     (14.5 %)

* Represents positive or negative change in excess of 100%
(1)  See Reconciliation of Income (Loss) From Continuing Operations to Adjusted EBITDA for additional information on adjustments.


TRIBUNE PUBLISHING COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

Preliminary

    June 30, 2019   December 30, 2018
Assets        
Current Assets:        
Cash    $ 102,632     $ 97,560  
Accounts receivable    112,047     145,463  
Inventories   6,516     9,587  
Prepaid expenses and other    19,534     18,197  
Total current assets   240,729     270,807  
Net Properties, Plant and Equipment    131,883     144,963  
Other Assets        
Goodwill    132,172     132,146  
Intangible assets, net    72,896     77,229  
Software, net    23,270     27,117  
Lease right of use assets    106,851      
Restricted cash   37,290     43,947  
Other long-term assets    15,509     30,418  
Total other assets   387,988     310,857  
Total assets    $ 760,600     $ 726,627  
         
Liabilities and Equity        
Current Liabilities        
Accounts payable    $ 45,129     $ 70,555  
Employee compensation and benefits    42,896     61,001  
Deferred revenue    47,632     51,114  
Dividends payable to stockholders    53,845      
Current portion of long-term lease liability    21,558      
Current portion of long-term debt   100     405  
Other current liabilities    21,283     21,203  
Liabilities associated with assets held for sale        6,249  
Total current liabilities    232,443     210,527  
Non-Current Liabilities        
Long-term lease liability    108,416      
Workers’ compensation, general liability and auto insurance payable    25,703     30,606  
Pension and postretirement benefits payable    18,477     20,150  
Deferred rent        25,424  
Long-term debt   6,801     6,799  
Other obligations    8,218     20,053  
Total non-current liabilities    167,615     103,032  
Noncontrolling Equity Interest    38,243     39,756  
Equity        
Total stockholders' equity    322,299     373,312  
Total liabilities and equity    $ 760,600     $ 726,627  


TRIBUNE PUBLISHING COMPANY
NON-GAAP RECONCILIATIONS
(In thousands) (Unaudited)

Preliminary

Reconciliation of Income (Loss) From Continuing Operations to Adjusted EBITDA:

  Three Months Ended   Six Months Ended
  June 30,
 2019
  July 1,
 2018
  % Change   June 30,
 2019
  July 1,
 2018
  % Change
Net income (loss) from continuing operations $ 5,344     $ (15,101 )   *   $ 630     $ (43,813 )   *
Income tax expense (benefit) from continuing operations 2,465     3,753     (34.3 %)   (417 )   (2,926 )   (85.7 %)
Interest expense (income), net (315 )   5,412     *   (535 )   11,976     *
Loss on the early extinguishment of debt     7,666     *       7,666     *
Loss on equity investments, net 555     665     (16.5 %)   1,042     1,394     (25.3 %)
Other (income) expense, net 56     (3,640 )   *   (17 )   (7,303 )   (99.8 %)
Income (loss) from operations 8,105     (1,245 )   *   703     (33,006 )   *
Depreciation and amortization 11,648     12,942     (10.0 %)   23,732     25,959     (8.6 %)
Restructuring and transaction costs (1) 1,796     7,578     (76.3 %)   12,669     33,163     (61.8 %)
Stock-based compensation 2,879     2,943     (2.2 %)   8,616     4,530     90.2 %
Adjusted EBITDA from continuing operations  $ 24,428     $ 22,218     9.9 %   $ 45,720     $ 30,646     49.2 %

* Represents positive or negative change in excess of 100%

(1) - Restructuring and transaction costs include costs related to Tribune's internal restructuring, such as severance, charges associated with vacated space, costs related to completed and potential acquisitions and a one-time charge related to the Consulting Agreement.

Adjusted EBITDA

Adjusted EBITDA is a financial measure that is not calculated in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).  Management believes that because Adjusted EBITDA excludes (i) certain non-cash expenses (such as depreciation, amortization, stock-based compensation, and gain/loss on equity investments) and (ii) expenses that are not reflective of the Company’s core operating results over time (such as restructuring costs, including the employee voluntary separation program and gain/losses on employee benefit plan terminations, litigation or dispute settlement charges or gains, premiums on stock buyback and transaction-related costs), this measure provides investors with additional useful information to measure the Company’s financial performance, particularly with respect to changes in performance from period to period.  The Company’s management uses Adjusted EBITDA (a) as a measure of operating performance; (b) for planning and forecasting in future periods; and (c) in communications with the Company’s Board of Directors concerning the Company’s financial performance.  In addition, Adjusted EBITDA, or a similarly calculated measure, has been used as the basis for certain financial maintenance covenants that the Company is subject to in connection with certain credit facilities.  Since not all companies use identical calculations, the Company’s presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies and should not be used by investors as a substitute or alternative to net income or any measure of financial performance calculated and presented in accordance with U.S. GAAP.  Instead, management believes Adjusted EBITDA should be used to supplement the Company’s financial measures derived in accordance with U.S. GAAP to provide a more complete understanding of the trends affecting the business.

Although Adjusted EBITDA is frequently used by investors and securities analysts in their evaluations of companies, Adjusted EBITDA has limitations as an analytical tool, and investors should not consider it in isolation or as a substitute for, or more meaningful than, amounts determined in accordance with GAAP. Some of the limitations to using non-GAAP measures as an analytical tool are:  they do not reflect the Company’s interest income and expense, or the requirements necessary to service interest or principal payments on the Company’s debt;  they do not reflect future requirements for capital expenditures or contractual commitments; and although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and non-GAAP measures do not reflect any cash requirements for such replacements.

The Company does not provide a reconciliation of Adjusted EBITDA guidance due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including adjustments that could be made for restructuring and transaction costs, stock-based compensation amounts and other charges reflected in our reconciliation of historic numbers, the amount of which, based on historical experience, could be significant.

TRIBUNE PUBLISHING COMPANY
NON-GAAP RECONCILIATIONS
(In thousands)
(Unaudited)

Preliminary

Reconciliation of Total Operating Expenses to Adjusted Same-Business Operating Expenses

Adjusted same-business operating expenses consist of total operating expenses per the income statement, adjusted to exclude the impact of items listed in the Adjusted EBITDA non-GAAP reconciliation, the additional expenses related to the 2018 acquisitions (e.g. same-business) and the impact of the Transition Service Agreement expenses.  Management believes that adjusted same-business operating expenses is informative to investors as it enhances the investors' overall understanding of the financial performance of the Company's business as they analyze current results compared to prior periods.

    Three Months Ended June 30, 2019   Three Months Ended July 1, 2018
    GAAP   Adjustments   Adjusted
Same-
Business
  GAAP   Adjustments   Adjusted
Same-
Business
                         
Compensation    $ 95,808     $ (7,468 )   $ 88,340     $ 106,455     $ (11,640 )   $ 94,815  
Newsprint and ink    15,118     (952 )   14,166     16,770     (596 )   16,174  
Outside services    80,425     (6,230 )   74,195     81,818     (2,200 )   79,618  
Other operating expenses   39,223     (8,211 )   31,012     36,297     (2,584 )   33,713  
Depreciation and amortization   11,648     (11,648 )       12,942     (12,942 )    
                         
Total operating expenses   $ 242,222     $ (34,509 )   $ 207,713     $ 254,282     $ (29,962 )   $ 224,320  


    Six Months Ended June 30, 2019   Six Months Ended July 1, 2018
    GAAP   Adjustments   Adjusted
Same-
Business
  GAAP   Adjustments   Adjusted
Same-
Business
                         
Compensation    193,517     $ (26,109 )   $ 167,408     $ 217,293     $ (20,708 )   $ 196,585  
Newsprint and ink    31,221     (2,192 )   29,029     31,368     (596 )   30,772  
Outside services    164,238     (14,539 )   149,699     180,803     (23,226 )   157,577  
Other operating expenses    81,441     (25,548 )   55,893     69,159     (8,165 )   60,994  
Depreciation and amortization   23,732     (23,732 )       25,959     (25,959 )    
                         
Total operating expenses   $ 494,149     $ (92,120 )   $ 402,029     $ 524,582     $ (78,654 )   $ 445,928  


TRIBUNE PUBLISHING COMPANY

NON-GAAP RECONCILIATIONS
(In thousands)
(Unaudited)

Preliminary

Reconciliation of Income (Loss) From Continuing Operations available to Tribune common stockholders to Adjusted Income (Loss) From Continuing Operations available to Tribune common stockholders and Adjusted Diluted EPS:

Adjusted net income (loss) from continuing operations available to Tribune common stockholders is defined as net income (loss) from continuing operations available to Tribune common stockholders - GAAP excluding the adjustments for restructuring and transaction costs, net of the impact of income taxes.

Adjusted Diluted EPS computes Adjusted net income (loss) from continuing operations available to Tribune common stockholders divided by diluted weighted average shares outstanding.

Management believes Adjusted Net income (loss) from continuing operations available to Tribune common stockholders and Adjusted Diluted EPS are informative to investors as they enhance investors' overall understanding of the financial performance of the Company's business as they analyze current results compared to future recurring projections.

  Three Months Ended
  June 30, 2019   July 1, 2018
  Earnings   Diluted  EPS   Earnings   Diluted  EPS
Net income (loss) from continuing operations available to Tribune common stockholders - GAAP (1)  $ 3,418     $ 0.10     $ (15,549 )   $ (0.44 )
Adjustments to operating expenses, net of 27.8% tax:              
Restructuring and transaction costs 1,297     0.04     5,471     0.16  
Loss on early extinguishment of debt         5,535     0.16  
Adjusted income (loss) from continuing operations available to Tribune common stockholders - Non-GAAP $ 4,715     $ 0.13     $ (4,543 )   $ (0.13 )


  Six Months Ended
  June 30, 2019   July 1, 2018
  Earnings   Diluted  EPS   Earnings   Diluted  EPS
Net income (loss) from continuing operations available to Tribune common stockholders - GAAP (1) $ (1,257 )   $ (0.04 )   $ (44,523 )   $ (1.27 )
Adjustments to operating expenses, net of 27.8% tax:              
Restructuring and transaction costs 9,147     0.26     23,944     0.68  
Loss on early extinguishment of debt         5,535     0.16  
Adjusted income (loss) from continuing operations available to Tribune common stockholders - Non-GAAP $ 7,890     $ 0.22     $ (15,044 )   $ (0.43 )

(1)  In previous periods the Company used Net income (loss) from continuing operations.  The Company believes that using Net income (loss) from continuing operations available to Tribune common stockholders is a more accurate GAAP measure for calculating the impact of adjustments on EPS.

 

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