I know; enough already with the Strib bankruptcy. Isn’t it all but over?
It is. But before the private company exits court supervision Monday, I still have a final month of public operating reports to chew over, and I’ll be damned if I’m going to let that opportunity pass.
So: August. Not a great month at 425 Portland. Ad sales fell below $10 million; the lowest level in seven monthly reports. That’s not shocking, because the third quarter isn’t strong traditionally, and continued ad-sales erosion is a fact of media life everywhere.
Based on its own financial projections, the Strib is counting on a substantial sales rebound in the holiday season — roughly $13 million per month in October, November and December.
Overall, the paper posted a whopping $12.3 million operating loss from Aug. 3 to Aug. 30, but that’s a bit misleading. The paper took $12.4 million amortization charge; $10 million of that was a catch-up from delayed “impairment tests.” Amortization is a write-down of intangible assets, which aren’t specified in the filing.
Take away that non-cash charge and the Strib netted $68,000 in EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), a common measure of cash a business spins off. That’s puny for a company that forecasts $20.8 million next year.
However, even in bankruptcy, the Strib overall has produced $6.1 million in EBITDA since its Jan. 15 filing. Due to big depreciation and amortization expenses, the company’s net operating loss totals $17 million over the same period.
In other details, the paper’s newsprint costs ($1.4 million) sunk to their lowest levels in bankruptcy, which likely mean smaller papers with fewer ads, though I haven’t checked pulp prices lately. Compensation costs ($8.3 million) remained roughly constant.
The Strib also reported $1 million in “professional fees directly related to reorganization.” That monthly spending has more often been $1.5 million, but should diminish with Sept. 28’s bankruptcy exit dead ahead.