American Community Newspapers Inc
American Community Newspapers — ThinkEquity Partners LLC 5th Annual Growth Conference 2007
32 slides from American Community Newspapers's conference presentation, Sep 13, 2007
Slide 1: American Community Newspapers Inc.
American Community Newspapers Inc. In the community, With the community, For the community. ThinkEquity Partners LLC 5th Annual Growth Conference September 17, 2007
Slide 2: Safe Harbor
Safe Harbor This presentation may contain forward–looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about American Community Newspapers Inc. (formerly known as Courtside Acquisition Corp.) (“ACN Inc.”), American Community Newspapers LLC (“ACN LLC”) and the
Slide 3: Investment Rationale
Investment Rationale Differentiated and proven business model Best in class assets Multiple growth opportunities Strong financial profile - outperforming the industry and solid free cash flow generation Experienced, dedicated management team and workforce American Community Newspapers Inc. 2
Slide 4: Newspaper Industry – What You Are Hearing
Newspaper Industry – What You Are Hearing Old media industry whose business model is crumbling Continued weakness in advertising environment Shrinking circulation and reach Operating margins under pressure – cost cutting not enough Internet initiatives too little, too late No near-term story: what i
Slide 5: Why ACN is Different
Why ACN is Different Outperforming the industry Strategically clustered, pure-play platform with market-leading positions Affluent, desirable and high growth demographics in each market Controlled direct to home distribution to highly penetrated targeted markets Virtually exclusive source of intense
Slide 6: Highlights of the Power of the Community Newspaper Platform
Highlights of the Power of the Community Newspaper Platform(1) Study results Statistical highlights for ACN’s Readers (2) 86% of adults are interested in community news Readers in suburban communities 60% of adults turn to community have strong interests in community newspapers first for local news,
Slide 7: ACN is a Best-in-Class Asset
ACN is a Best-in-Class Asset An industry leader in profitability metrics Operates in affluent, desirable, high growth demographics Tight cluster strategy provides opportunity to realize synergies from cross-selling opportunities and significant cost efficiencies Solidified a leading position in deli
Slide 8: Who We Are
Who We Are American Community Newspapers Inc. Northern Total Minneapolis Columbus Dallas Virginia Daily newspapers: 3 1 — 2 — Weekly newspapers: 83 43 22 14 4 Niche publications: 14 — 4 6 4 Circulation: 1,386,000 457,000 412,000 298,000 219,000 2006 Revenue(1): $76.8mm 2006 NCF (1): $18.4mm 2006 NCF
Slide 9: Among the Fastest Growing and Most Affluent Markets in the U.S.
Among the Fastest Growing and Most Affluent Markets in the U.S. Key Market Statistics (1) Median Household Income (2) Minneapolis Cluster (Minneapolis – St. Paul MSA) $144,900 12th highest median household effective buying income (EBI) nationally 12th largest retail market with $74.2 billion in reta
Slide 10: ACN’s Newspapers are Local Community Focused
ACN’s Newspapers are Local Community Focused ACN focuses on local news that is consistently overlooked by metro newspapers, radio stations and television including: Local city council and government School districts, high school sports and youth sports Special editorial sections relevant to the comm
Slide 11: ACN is an Integral Part of the Communities it Serves
ACN is an Integral Part of the Communities it Serves American Community Newspapers Inc. 10
Slide 12: ACN has Aggressively Built its Internet Presence
ACN has Aggressively Built its Internet Presence ACN’s Internet portal provides unique, localized content that effectively increases “editions” through online breaking news, while increasing reach beyond printed products Successful implementation of new online features: Video news and sports coverag
Slide 13: New Media / Internet Portal
New Media / Internet Portal American Community Newspapers Inc. 12
Slide 14: Experienced, Industry-Leading Management Team
Experienced, Industry-Leading Management Team Gene Carr Dan Wilson Jeff Coolman Chairman and Chief Financial Officer VP of Sales and Group Chief Executive Officer Publisher of Minneapolis Joined ACN in May 2002 Joined ACN in August 2001 Newspaper Group 20 years of financial / media 28 years of publi
Slide 15: Multi-Faceted Growth Strategy
Multi-Faceted Growth Strategy Organic Growth Strategic Add-on Acquisitions New Cluster Acquisitions American Community Newspapers Inc. 14
Slide 16: Multi-Faceted Growth Strategy – Organic Growth
Multi-Faceted Growth Strategy – Organic Growth Continue to strengthen position as a leading provider of local print and online content Capture a larger number of local and major national advertisers through increased calls, training and territory staffing Continue to develop new products and enhance
Slide 17: Multi-Faceted Growth Strategy - Acquisitions
Multi-Faceted Growth Strategy - Acquisitions Large and fragmented marketplace = acquisition opportunities Expansion opportunities in contiguous markets to further leverage clustered platform Strategic Leverage scale and clustering advantage to increase revenue and Add-ons EBITDA growth Available cap
Slide 18: Successful Track Record of Acquisitions
Successful Track Record of Acquisitions Minneapolis Dallas Northern Virginia Columbus Monticello Times, May 2005 McKinney Courier-Gazette, Suburban Washington CM Media, Inc. Group of one paid July 2005 Newspapers / Sun Gazette, Group of 22 weekly weekly and one free Group of one daily, one August 20
Slide 19: Historical Financial Overview
Historical Financial Overview (1) ($ in thousands) 2003 2004 2005 2006 (2) CAGR (03-06) Revenue $43,703 $46,606 $49,805 $53,506 7.0% % Growth 6.6% 6.9% 7.4% Newspaper Cash Flow $8,940 $9,919 $11,258 $14,405 17.2% Margin 20.5% 21.3% 22.6% 26.9% % Growth 11.0% 13.5% 28.0% Adjusted EBITDA $7,735 $8,886
Slide 20: Long-Standing Client Relationships Drive Revenue
Long-Standing Client Relationships Drive Revenue Over 40,000(1) individuals and businesses advertise in ACN’s publications ACN top 20 advertisers contributed 7.3% of 2006A(1) revenues Limited reliance on circulation revenue 2006A Revenue Breakdown (1) Print Circulation Advertising 4% 92% Internet 2%
Slide 21: First Half 2007 Financial Results
First Half 2007 Financial Results Six Months Ended Y/Y Percent Change ($000s) July 1, 2007 July 2, 2006 GAAP Same Property (1) Revenues: Advertising $ 28,852 $ 23,793 Circulation 1,081 950 Commercial printing and other 717 428 Total revenue 30,650 25,171 21.8% 1.2% Operating costs and expenses: Oper
Slide 22: Summary
Summary Pure-play community newspaper platform Strategically clustered market-leading positions in attractive markets, offering a tremendous value proposition for advertisers Successful track record of acquiring and integrating new assets as well as growing organically Strong financial profile - out
Slide 23: American Community Newspapers Inc.
American Community Newspapers Inc. In the community, With the community, For the community. ThinkEquity Partners LLC 5th Annual Growth Conference September 17, 2007
Slide 24: Appendix
Appendix American Community Newspapers Inc. 23
Slide 25: Detailed Market Profile - Minneapolis
Detailed Market Profile - Minneapolis Minneapolis Note: Map does not show two newspaper operations in Albany and Melrose, MN, which are located northwest of St. Cloud, MN American Community Newspapers Inc. 24
Slide 26: Detailed Market Profile - Dallas
Detailed Market Profile - Dallas Dallas The Celina Record Main office Production Celina Sales/Editorial DENTON COUNTY Little Elm Journal A Dallas Fort Worth McKinney Courier-Gazette COLLIN U International Airport COUNTY Little Elm The Frisco Enterprise U McKinney Penny Saver Major Universities Frisc
Slide 27: Detailed Market Profile – Northern Virginia
Detailed Market Profile – Northern Virginia Northern Virginia Leesburg Today Loudoun Magazine Leesburg Ashburn Today LOUDOUN COUNTY Great Falls / McLean / Oakton / Vienna Sun Gazette Ashburn Dulles Great Falls Middleburg Herndon Tysons Loudoun Business South Riding Reston Corner Washington, Vienna D
Slide 28: Detailed Market Profile - Columbus
Detailed Market Profile - Columbus Columbus Delaware News Production & Administration Big Walnut News Delaware Mount Liberty Olentangy Valley News Dublin News Orange Westerville News & Public Opinion Worthington News Powell Westerville Northwest Columbus News Northland News New Albany Dublin New Alb
Slide 29: ACN’s Publications by Region
ACN’s Publications by Region Minneapolis Minneapolis (Cont’d) Northern Virginia www.mnsun.com Norwood Young America Times Leesburg Today - www.leesburgtoday.com Apple Valley / Rosemount Sun Current The Laker Ashburn Today - www.ashburntoday.com Bloomington Sun Current The Pioneer Loudoun Magazine -
Slide 30: The Courtside/ACN Transaction
The Courtside/ACN Transaction Asset purchase agreement signed January 24, 2007 and closed on July 2, 2007 ACN acquired certain assets of CM Media, Inc. – new ACN Columbus Cluster – on April 30, 2007 Terms of the transaction: Purchase of assets for $206.8 million, including working capital adjustment
Slide 31: 2006 Financial Overview Pro Forma for Columbus
2006 Financial Overview Pro Forma for Columbus ($ in thousands) ACN Columbus 2006A 2006A 2006PF (1) Revenue $53,506 $23,252 $76,758 % Growth Newspaper Cash Flow $14,405 $4,025 $18,430 Margin 26.9% 17.3% 24.0% % Growth Adjusted EBITDA $12,923 $4,025 $16,948 Margin 24.2% 17.3% 22.1% % Growth 31.1% (1)
Slide 32: Reconciliations
Reconciliations Reconciliation of Net Income to EBITDA - Unaudited ($000s) Six Months Ended July 1, 2007 July 2, 2006 Net income $ 2,235 $ 1,731 State taxes (non income) - 45 Interest expense 3,308 2,461 Depreciation and amortization 1,984 1,682 EBITDA $ 7,527 $ 5,919 Reconciliation of Net Income to
American Community Newspapers — ThinkEquity Partners LLC 5th Annual Growth Conference 2007 on 6ix