Penton Media Reports Third-Quarter 2002 Results

Penton reported a net loss of $299.2 million for the nine months ended September 30, 2002, compared with a net loss of $36.3 million for the same period in 2001. The net loss applicable to common stockholders was $344.7 million, or $10.71 per diluted share, for the year-to-date period, compared with $36.3 million, or $1.14 per diluted share, for the same nine-month period in 2001.

Year-to-date results for 2002 included:

  • A non-cash goodwill impairment charge of $39.7 million, or $1.23 per diluted share, related to the adoption of SFAS 142 as of January 1, 2002.
  • A non-cash impairment charge of $203.3 million, or $6.32 per diluted share after tax, related to an additional impairment review required under SFAS 142 as of September 30, 2002. In addition, Penton recorded a non-cash impairment charge related to other intangibles assets of approximately $20.0 million, or $0.62 per diluted share after tax.
  • Restructuring charges of $10.9 million, or $0.34 per diluted share after tax, related primarily to staff reductions and facility closings.
  • A one-time, pre-tax gain of $1.5 million, or $0.05 per diluted share after tax, on the sale of investments.
  • A one-time, non-cash charge to capital in excess of par and as a reduction of income available to common stockholders of $42.1 million, or $1.31 per share, to recognize the unamortized beneficial conversation feature of preferred stock.

Year-to-date results for 2001 included:

  • Restructuring charges of $15.0 million, or $0.28 per diluted share after tax, related to the discontinuation of certain media properties, staff reductions and facility closings.
  • A non-cash charge of $9.7 million, or $0.18 per diluted share after tax, for goodwill write-downs and asset impairments.

Excluding non-cash and one-time items for the nine months ended September 30, 2002 and 2001, as well as the amortization of goodwill in 2001, Penton would have recorded a net loss of $25.2 million, or $0.78 per diluted share, for the nine months ended September 30, 2002, compared with a net loss of $3.3 million, or $0.10 per diluted share, for the same period in 2001.

BUSINESS OUTLOOK AND GUIDANCE

Kemp said the Company is experiencing challenging business conditions in the fourth quarter, particularly in its core technology and manufacturing sectors.

"Our business in the technology and manufacturing sectors has continued to be sluggish as customers conserve cash while recovery in their markets remains elusive. Uncertainty about the economic recovery and geopolitical events hangs over our markets," said Kemp.

Penton's global portfolio of Internet/broadband trade shows is expected to experience significant declines in revenue and EBITDA from last year's fourth-quarter events as a result of continuing depressed market conditions. These events are coming in slightly below reduced expectations, primarily because cancellations have outpaced new sales. However, two of the Company's largest fourth-quarter events, Natural Products Expo East and Leisure Industry Week in the United Kingdom, were very successful, with very strong exhibit floors and record attendance levels and re-sign rates for next year.

Penton had expected at least a modest improvement in publishing results over last year's post-September 11 fourth quarter. However, fourth-quarter Publishing revenues are forecasted to be below year-ago levels. The Company expects that the rate of quarterly year-on-year decline will be less than that experienced in the first two quarters of 2002. Publishing revenues in the fourth quarter are expected to remain sequentially stable against previous 2002 quarters, with continuing improvement in adjusted EBITDA and margins over 2001.

Sluggish economic conditions are expected to result in a rate of total-company revenue decline consistent with the third-quarter year-on-year decline, and adjusted EBITDA will likely perform modestly below last year's $11.5 million in the fourth quarter. As a result, the Company will not achieve its adjusted EBITDA guidance of $25 million to $35 million for 2002, and revenues will be near the low end of earlier guidance of $245 million to $270 million.

Kemp said Penton's planning does not forecast any real revenue recovery in 2003 because of the uncertainty of the global economy and a lack of visibility in key markets. The Company anticipates a stabilization of business, consistent with recent trending in its portfolio, as well as with trends in the business-to-business advertising industry. However, the Company is expecting to benefit from the full-year impact of its aggressive cost reductions executed during 2002, which should result in improved adjusted EBITDA and margins for 2003 even without the benefit of any revenue recovery.

Liquidity

Penton anticipates adequate liquidity for operations, and expects to meet all interest payment obligations on its bonds. It has no principal repayment requirements until its senior secured notes mature in October 2007. Penton has no bank debt and no maintenance covenants on its existing bond debt. In addition to cash on hand at September 30 of $20.7 million, the Company has access to an asset-based, maintenance covenant-free revolver of up to $40.0 million. The revolver is currently undrawn, and the current borrowing base is approximately $23 million.

Kemp said that, as another possible means of enhancing liquidity, Penton is considering strategic alternatives for a few small, non-core assets, which could generate cash through the combination of sale proceeds and/or tax benefits. The Company cannot be assured of its ability to execute asset sales in the existing merger and acquisition environment for business-to-business media properties.

The Company believes it has the potential capacity available to carry back its net tax loss for 2002 of up to $153.1 million, for a total tax refund capacity of approximately $53.5 million. Penton expects that it will receive a tax refund in excess of $20.0 million as a result of its updated estimate for its net operating loss for 2002. The Company cannot, however, guarantee the amount of any tax benefits it will actually realize. Receipt of the tax refund is expected in the first quarter of 2003.

CONFERENCE CALL ON THE WEB

Penton will host a conference call to discuss its third-quarter and year-to-date results and its business outlook at 10 a.m. Eastern time today, November 1. The dial-in number for the conference call is 973-633-1010. A taped replay of the call will be available beginning the afternoon of November 1 until 6 p.m. Eastern time, Friday, November 8, by calling 402-220-1156 (no access code is needed). The live call will also be accessible via the Investors section of Penton's Web site, www.penton.com, and will be archived on the site.

ABOUT PENTON MEDIA

Penton Media is a leading, global business-to-business media company that produces market-focused magazines, trade shows and conferences, and a broad offering of online media products. Penton's integrated media portfolio serves 12 industries: Internet/broadband; information technology; electronics; natural products; food/retail; manufacturing; design/engineering; supply chain; aviation; government/compliance; mechanical systems/construction; and leisure/hospitality.

The statements contained in the above guidance and other statements in this document that are not historical in nature are forward-looking statements that involve risks and uncertainties. Although management of Penton believes that its expectations are based upon reasonable assumptions within the bounds of its knowledge of Penton's business, there can be no assurance that the Company's financial goals will be realized. Numerous factors may affect the Company's actual results and may cause results to differ materially from those expressed in forward-looking statements made by or on behalf of the Company. Factors that could cause actual results to differ materially include: fluctuations in advertising revenue with general economic cycles; the performance of Internet/broadband trade shows and conferences; the seasonality of revenue from publishing and trade shows and conferences; the success of new products; increases in paper and postage cost; the infringement or invalidation of Penton's intellectual property rights; the inability to dispose of assets on acceptable terms or to realize the full benefits of its disposition strategy; and other such factors listed from time to time in Penton's reports filed with the Securities and Exchange Commission. Penton does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

                          PENTON MEDIA, INC.
                 CONSOLIDATED STATEMENTS OF OPERATIONS
  (Unaudited; dollars and shares in thousands, except per share data)

                         Three Months Ended      Nine Months Ended
                            September 30,                      September  30,
                                                      2002                2001                2002                2001
                                                      ----                ----                ----                ----
REVENUES                                $    48,609      $    61,523      $  177,793      $  280,993
                                                ----------    ----------    ----------    ----------

OPERATING  EXPENSES:
    Editorial,  production
      and  circulation                  23,888            33,148            78,545          117,160
    Selling,  general  and
      administrative                    26,483            36,655            92,389          136,291
    Impairment  of
      assets                                  223,288              9,663          223,424              9,663
    Restructuring  charges          3,354              9,468            10,860            15,035
    Depreciation  and
      amortization                          5,351            11,211            15,491            33,925
                                                ----------    ----------    ----------    ----------
                                                    282,364          100,145          420,709          312,074
                                                ----------    ----------    ----------    ----------

OPERATING  LOSS                      (233,755)        (38,622)      (242,916)        (31,081)
                                                ----------    ----------    ----------    ----------

OTHER  INCOME  (EXPENSE):
    Interest  expense                  (9,532)          (8,772)        (28,452)        (21,841)
    Interest  income                          133                  509                  593              1,328
    Gain  on
      sale  of  investments                    -                      -              1,491                      -
    Miscellaneous,  net                    162                (794)              (179)          (2,244)
                                                ----------    ----------    ----------    ----------
                                                      (9,237)          (9,057)        (26,547)        (22,757)
                                                ----------    ----------    ----------    ----------

LOSS  BEFORE  INCOME  TAXES,
  EXTRAORDINARY  ITEM  AND
  CUMULATIVE  EFFECT  OF
  ACCOUNTING  CHANGE              (242,992)        (47,679)      (269,463)        (53,838)

BENEFIT  (PROVISION)
  FOR  INCOME  TAXES                        (172)          18,184              9,842            17,582
                                                ----------    ----------    ----------    ----------

LOSS  BEFORE
  EXTRAORDINARY  ITEM
  AND  CUMULATIVE  EFFECT
  OF  ACCOUNTING  CHANGE        (243,164)        (29,495)      (259,621)        (36,256)

EXTRAORDINARY  ITEM,
  net  of  tax                                          -                      -                  166                      -

CUMULATIVE  EFFECT  OF
  ACCOUNTING  CHANGE,
  net  of  tax                              (39,700)                    -          (39,700)                    -
                                                ----------    ----------    ----------    ----------
      NET  LOSS                            (282,864)        (29,495)      (299,155)        (36,256)

AMORTIZATION  OF  DEEMED
  DIVIDEND  AND  ACCRETION
  OF  PREFERRED  STOCK                    (652)                    -          (45,513)                    -
                                                ----------    ----------    ----------    ----------

NET  LOSS
  APPLICABLE  TO
  COMMON  STOCKHOLDERS        $(283,516)    $  (29,495)    $(344,668)    $  (36,256)
                                                ==========    ==========    ==========    ==========

ADJUSTED  EBITDA                  $    (1,531)    $    (7,837)    $      8,634      $    29,430
                                                ==========    ==========    ==========    ==========

NET  LOSS
  PER  COMMON
  SHARE  -  Basic  and
  Diluted
    Loss  from  operations    $      (7.49)    $      (0.92)    $      (9.48)    $      (1.14)
    Extraordinary  item,
      net  of  tax                                      -                      -                      -                      -
    Cumulative  effect  of
      Accounting  Change,
      net  of  tax                              (1.22)                    -              (1.23)                    -
                                                ----------    ----------    ----------    ----------
    Net  loss
      per  common  share          $      (8.71)    $      (0.92)    $    (10.71)    $      (1.14)
                                                ==========    ==========    ==========    ==========
WEIGHTED  AVERAGE  NUMBER
  OF  SHARES  OUTSTANDING
  -  Basic  and  Diluted              32,548            31,935            32,179            31,914
                                                ==========    ==========    ==========    ==========


                                                    PENTON  MEDIA,  INC.
                                              SUPPLEMENTAL  INFORMATION
                                                              SEGMENTS
                                  (Unaudited;  all  amounts  in  thousands)

                                                      Three  Months  Ended          Nine  Months  Ended
                                                            September  30,                    September  30,
                                                        2002                2001              2002                2001
                                                        ----                ----              ----                ----
Revenues

    Industry  Media                $    23,435      $    26,899      $    72,645      $    95,521

    Technology  Media                  16,321            25,536            68,594          148,897

    Lifestyle  Media                      3,294              3,920            22,049            22,060

    Retail  Media                            5,559              5,168            14,505            14,515
                                                ----------    ----------    ----------    ----------

Total  Revenues                    $    48,609      $    61,523      $  177,793      $  280,993
                                                ==========    ==========    ==========    ==========

Adjusted  EBITDA

    Industry  Media                $      3,735      $      2,638      $    11,330      $    15,314

    Technology  Media                  (3,594)          (5,942)          (1,554)          22,713

    Lifestyle  Media                        (305)              (151)            7,622              7,625

    Retail  Media                            1,887              1,305              4,165              3,303
                                                ----------    ----------    ----------    ----------

          Subtotal                              1,723            (2,150)          21,563            48,955

    Corporate  Costs                    (3,254)          (5,687)        (12,929)        (19,525)
                                                ----------    ----------    ----------    ----------

Total  Adjusted  EBITDA      $    (1,531)    $    (7,837)    $      8,634      $    29,430
                                                ==========    ==========    ==========    ==========


                                                    PENTON  MEDIA,  INC.
                                              SUPPLEMENTAL  INFORMATION
                                                              PRODUCTS
                                  (Unaudited;  all  amounts  in  thousands)

                                                      Three  Months  Ended          Nine  Months  Ended
                                                            September  30,                    September  30,
                                                        2002                2001              2002                2001
                                                        ----                ----              ----                ----
Revenues

    Publishing                        $    42,118      $    49,751      $  126,995      $  165,316

    Trade  Shows
      &  Conferences                        3,416              8,842            41,469          106,209

    Online  Media                            3,075              2,930              9,329              9,468
                                                ----------    ----------    ----------    ----------

Total  Revenues                    $    48,609      $    61,523      $  177,793      $  280,993
                                                ==========    ==========    ==========    ==========

Adjusted  EBITDA

    Publishing                        $      8,243      $      7,625      $    21,018      $    22,957

    Trade  Shows
      &  Conferences                      (5,868)          (6,083)            2,801            35,233

    Online  Media                                653                (777)            2,021            (2,707)
                                                ----------    ----------    ----------    ----------

          Subtotal                              3,028                  765            25,840            55,483

    General
      &  Administrative                (4,559)          (8,602)        (17,206)        (26,053)
                                                ----------    ----------    ----------    ----------

Total  Adjusted  EBITDA      $    (1,531)    $    (7,837)    $      8,634      $    29,430
                                                ==========    ==========    ==========    ==========


                                                      PENTON  MEDIA,  INC
                                              SUPPLEMENTAL  INFORMATION
                              RECONCILIATION  FOR  GOODWILL  AMORTIZATION
                    (Unaudited;  dollars  and  share  amounts  in  thousands,
                                            except  for  per  share  data)

                                                      Three  Months  Ended          Nine  Months  Ended
                                                            September  30,                    September  30,
                                                        2002                2001              2002                2001
                                                        ----                ----              ----                ----

Net  loss                                  (282,864)        (29,495)      (299,155)        (36,256)

Goodwill  amortization,
  net  of  tax                                          -              4,114                      -            12,478
                                                ----------    ----------    ----------    ----------

Adjusted  net  loss                (282,864)        (25,381)      (299,155)        (23,778)

Amortization  of  deemed
  dividend  and  accretion
  of  preferred  stock                    (652)                    -          (45,513)                    -
                                                ----------    ----------    ----------    ----------

Adjusted  net  loss
  applicable  to
  common  stockholders        $(283,516)    $  (25,381)    $(344,668)    $  (23,778)
                                                ==========    ==========    ==========    ==========

Basic  and  diluted
  earnings  per  share:
      Net  loss                          $      (8.69)    $      (0.92)    $      (9.30)    $      (1.14)
      Goodwill
        amortization,
        net  of  tax                                    -                0.13                      -                0.39
      Amortization  of
        deemed  dividend
        and  accretion                      (0.02)                    -              (1.41)                    -
                                                ----------    ----------    ----------    ----------

      Adjusted  net  loss
        applicable
        to  common
        stockholders                $      (8.71)    $      (0.79)    $    (10.71)    $      (0.75)
                                                ==========    ==========    ==========    ==========

Weighted  average
  shares  outstanding
  -  basic  and  diluted              32,548            31,935            32,179            31,914
                                                ==========    ==========    ==========    ==========


                                                      PENTON  MEDIA,  INC
                                              SUPPLEMENTAL  INFORMATION
                                      RECONCILIATION  TO  ADJUSTED  EBITDA
                                  (Unaudited;  all  amounts  in  thousands)

                                                      Three  Months  Ended          Nine  Months  Ended
                                                            September  30,                    September  30,
                                                        2002                2001              2002                2001
                                                        ----                ----              ----                ----

Net  loss                                $(282,864)    $  (29,495)    $(299,155)    $  (36,256)

Addbacks  (deductions)
  to  reconcile  to
  Adjusted  EBITDA:

    Interest  expense                    9,532              8,772            28,452            21,841

    Interest  income                        (133)              (509)              (593)          (1,328)

    Gain  on  sale
      of  investments                              -                      -            (1,491)                    -

    Restructuring  charges          3,354              9,468            10,860            15,035

    Impairment  of  assets        223,288              9,663          223,424              9,663

    Non-cash  compensation              231                  443              1,775              1,888

    (Benefit)  Provision
        from  income  taxes                  172          (18,184)          (9,842)        (17,582)

    Depreciation
      and  amortization                  5,351            11,211            15,491            33,925

    Extraordinary  item                        -                      -                (166)                    -

    Cumulative  effect  of
      accounting  change              39,700                      -            39,700                      -

    Miscellaneous,  net                  (162)                794                  179              2,244
                                                ----------    ----------    ----------    ----------

          Adjusted  EBITDA        $    (1,531)    $    (7,837)    $      8,634      $    29,430
                                                ==========    ==========    ==========    ==========


                                                      PENTON  MEDIA,  INC
                                              SUPPLEMENTAL  INFORMATION
                                                          BALANCE  SHEET
                                  (Unaudited;  all  amounts  in  thousands)

                                                                  September  30,  2002    December  31,  2001
                                                                  ------------------    -----------------
ASSETS
Current  assets                                                $    95,611                    $  107,243
Property,  plant
  and  equipment,  net                                            26,603                          30,176
Goodwill                                                                251,363                        493,141
Other  intangibles,  net                                      35,546                          56,800
Other  assets                                                                    -                          13,117
                                                                            ----------                  ----------
                                                                            $  409,123                    $  700,477
                                                                            ==========                  ==========

LIABILITIES  AND
  STOCKHOLDER  EQUITY  (DEFICIT)
Current  liabilities                                      $    93,928                    $  115,688
Long-term  debt                                                    328,546                        345,472
Other  long-term  liabilities                            16,414                          18,787
Mandatorily  redeemable
  convertible  preferred  stock                          45,513                                    -
Stockholders'  equity  (deficit)                    (75,278)                      220,530
                                                                            ----------                  ----------
                                                                            $  409,123                    $  700,477
                                                                            ==========                  ==========
 


Contact:
           Penton  Media,  Inc.
          Mary  Abood,  216/931-9551  or  216/696-7000  Ext.  9551
          
  http://www.penton.com  



Source: Penton Media, Inc.

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