Seeking Alpha

More on New Media's first post-spinoff results

  • In its initial earnings report after being spun out of Newcastle Investment (NCT), New Media (NEWM) shows Q4 revenue of $160.4M and adjusted EBITDA of $34.1M, an increase of 11.3% on a same-store basis. Digital revenue of $13.4M up 11.9%, with Propel Marketing contributing $2.1M to digital.
  • Operating expenses of $9.9M fell 7.3% on a same-store basis.
  • Distributable cash flow per share for Q4 of $0.90; full year of $2.17.
  • CEO Michael Reed notes $26.2M of operating expense savings for the full year. "We hope to continue to acquire strategic media assets. Most recently, on March 3, we announced the acquisition of a community newspaper group in Victorville, CA. We believe there will be many similar compelling acquisition opportunities in the future."
  • CC at 10 ET
  • Press release, Q4 results
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Comments (5)
  • Len Friedman
    , contributor
    Comments (54) | Send Message
     
    There appears to be greater efficiency with new leadership in control, explaining the lower operating expenses. I'm pleased that management is embracing the moment they view as filled with promise, due---obviously--- to increasing cash flow. Thus we can see a legitimate basis for acquisitions in addition to the one just announced. After all, "more is better" ONLY when you're holding a goose capable of laying golden eggs. Momentum is always going to be welcome when it demonstrates increasing value.

     

    My take-away: There are moves afoot, now that we can see visible positive proofs underlying the business model and recently revised plan. None of this could happen without aggressive leadership at the helm. I look forward to keying in to more specifics as the company sees fit to share a developing business plan.
    19 Mar 2014, 01:26 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (5657) | Send Message
     
    I see (NEWM) as greatly undervalued.
    19 Mar 2014, 08:52 PM Reply Like
  • fire0nice228
    , contributor
    Comments (35) | Send Message
     
    Is this one going to start a dividend like NCT and NRZ?
    20 Mar 2014, 04:43 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (5657) | Send Message
     
    From what I heard, or think I heard, (NEWM) plans to offer a 20% dividend yield. When will it happen, I don't know. In general, companies that don't grow fast, like (NEWM) offers a high dividend to attract investors. So as a growth stock slows, it starts to offer a dividend to keep investors. That's what is happening to (AAPL).
    20 Mar 2014, 07:44 PM Reply Like
  • Len Friedman
    , contributor
    Comments (54) | Send Message
     
    We all may have read of expectations that NEWM would produce a ROI in the 20% range. I've not seen anything pointing (around the corner) to a percentage-based yield on the horizon nor even a Board decision to begin a dividend program. NCT offers its high yield largely due to its REIT status requiring that it divest itself of at least 90% of its net. I don't connect this with a attempt to prevent investors from going elsewhere. This sort of behavior was more common among the old Canadian gas & oil royalty trusts which depended very heavily on US sponsorship but, sadly, they are now largely a thing of the past due to legislation passed a half dozen or so years ago.

     

    Thus far, I've not seen anything regarding the implementation of a board decision to give back to us shareholders. Frankly, I'd prefer this not happen near term so that the company can apply cash flow more meaningfully..... building a broader and stronger base of operations. My position is small---663 shares awarded, thanks to my NCT position prior to the spin. If I were to receive a 6% yield, it would amount to about $600 per year or $50/mo. equivalent. That wouldn't change my life one way or another but---cumulatively speaking---it could provide the company with greater flex power with which to continue developing its business model. This is where the shareholder's support becomes very important.

     

    Meanwhile, I've added several thousand shares of NCT over the last two weeks. I like the 9% yield. Also appreciated is the steadiness of their payout scheme. More than anything, though, I want to be in position to reap a harvest when & if they do decide to unlock value for the benefit of unit holders by spinning off the senior housing assets. I see a possible windfall in this. So I continue to build my position seeing little potential for alarming erosion of unit value. And I'm receiving 9% to park some cash. I'm a happy camper!
    23 Mar 2014, 11:53 AM Reply Like
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