Without Providing Financial Statement, American Media Unable to Sell Mira!
American Media recently filed financial restatements at the Securities and Exchange Commission (SEC). The filing sheds light on the status of the sale of Spanish-language tabloid Mira! (Spanish, biweekly, circ. 120,000, mostly newsstand sales).
According to the statement, American Media has been unable to move forward with plans to sell Mira! (as well as Muscle & Fitness, Muscle & Fitness Hers, Flex and Country Weekly because it has not been able to provide financial statements for the titles due to its long-delayed restatement efforts. American Media says the titles have total revenues of $67.6 million and operating incomes of $24.9 million. American Media’s management considers these titles “non core publications.” For a Portada estimate of Mira!’s value, read: How Much will Mira! be Sold For? (June 26, 2006).
On March 23, American Media filed its Annual Report on Form 10-K for the fiscal year ended March 31, 2006, as well as its Quarterly Report on Form 10-Q for the third quarter of the fiscal year ended March 31, 2006.
The lengthy filing, in addition to highlighting the finances of the company and its magazines, also shows that revenue and operating income for the company declined between 2004 and 2006.
The company says in the filing that its financial statements for fiscal years 2004, 2005, and 2006 contained errors and that the SEC is conducting an investigation of its operations. The company said it had to subtract $16.6 million in revenue from its 2004 earnings for the improper crediting of newsstand rack costs, and had to subtract another $19.3 million from its 2005 earnings for incorrect circulation revenue.
The company’s total annual revenues increased from $486.1 million in 2004 to $496.1 in 2006. But its operating income fell from $100.9 million in 2004 to a loss of $108.7 million in 2006.
Last week, American Media announced that it is now preparing to reduce Star, a weekly celebrity magazine, average guaranteed paid circulation by 10%, or 150,000 copies, to 1.35 million.
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