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AMI GOES LATE: Leave it to American Media Inc. to issue a quarterly filing late on a Friday evening. The company reported results for its fiscal quarter ending Sept. 30, and said operating revenue was down 2.4 percent to $128.8 million, due to overall market weakness in ad spending from the current economic slowdown. Operating income was also down, to $28.9 million from $31.3 million, and the company reported net income of $623,000, compared to a $17.7 million loss the prior year.
AMI is currently in payment default on the 10.25 percent notes due in May 2009 and technical default on covenants on its term loan. To address this, there is a deal before bondholders revealed on Friday to offer approximately $21 million of 9 percent senior PIK (payment in kind) notes to mature in 2013, combined with $300 million of 14 percent senior subordinated notes due in 2013. In addition, bondholders could receive 5.7 million shares of AMI common stock. The company entered into a forbearance agreement with lenders and bondholders, preventing a potential bankruptcy filing until Feb. 4.
Not all was doom and gloom, though: AMI is increasing the frequency of its Country Weekly magazine to 52 times a year, from 26 times a year, and lowering the cover price to $2.49 from $3.49.
Meanwhile, Meredith Corp. wasn’t the only magazine publisher to issue pink slips last week; more layoffs took place at Wenner Media and American Media Inc. Sources said approximately a dozen staffers were let go from AMI’s Star magazine, including three from the art department. A spokesman declined to comment. Sources close to the company also said a few edit staffers from Fit Pregnancy were laid off; a spokeswoman did not comment by press time. Over at Wenner, a spokesman confirmed that “companywide” layoffs took place and 12 or so people were let go. — Amy Wicks
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