“The reorganized company is well positioned for success,” stated Michael C. Bush, president and chief executive officer. “Even throughout the Chapter 11 process, Heartland’s performance has continued to improve as our dedicated employees have remained focused on serving our communities and advertisers. In fact, Heartland’s operating profit for the first quarter of 2010 is up more than 10 percent over the first quarter of the prior year. March revenues exceeded revenue year-over-year, and we expect full-year 2010 to exceed 2009.”
The company’s Plan of Reorganization exchanges $70 million of existing first-lien debt into two term loans of $60 million and $10 million, respectively, plus an additional $2 million revolving credit facility. Equity in the company will be dedicated primarily to the first-lien lenders, with smaller percentages reserved for the second-lien claimholders and certain management. These shares are being distributed immediately and replace any prior shares, which are cancelled.
The Plan also calls for the payment in full to general, unsecured claims, which are primarily trade-related claims. These disbursements are scheduled to be made within the next two weeks and completed within 60 days on undisputed claims. Management of the company continues as before and Michael Bush will remain a member of the new five-member board of directors.
With the debt restructuring now completed, management can turn its attention solidly to the future. “We continue to enhance our role in our communities and respond to the requests of our newspapers’ readers and advertisers,” Bush said. “We are moving forward with
Our Community Directories, which provide community specific telephone listings, important
town information and data and support local charitable giving. We intend to expand this service into markets where Heartland does not currently operate newspapers. We are also creating community news websites in communities that are not currently served or are underserved by any newspaper. Finally, we will be re-launching our advertising Stimulus Program with even greater offers for advertisers.”
Bush went on to confirm that “with a stronger balance sheet, we also intend to pursue growth
opportunities through acquisitions. Specifically, we will be reviewing opportunities in communities adjacent to our existing operations.”
During the reorganization process, Heartland ensured a high level of attention to its readers, advertisers and vendor partners. Reed Brown, CEO of Matchbin Inc., pointed out that “Heartland Publications has been a very strong partner for Matchbin, and we are very confident that Heartland will be a very successful community media company. Michael Bush and his executive team have tremendous experience and leadership skills that will be critical in expanding their content delivery and advertising solutions from print into the new online, digital, and mobile media platforms.”
Brown further noted that Matchbin is working closely with Heartland’s publishers to launch “new digital advertising solutions for small and medium businesses to help these companies
find new customers and grow their businesses. These newspapers provide a very important service to local readers and businesses. By delivering great content and advertising solutions in each of their communities, Heartland is positioned for a very bright and successful future.”
Ken Freedman, vice president of sales and marketing for MediaSpan, a leading provider of software solutions for the publishing industry, concurred. “We believe strongly in the continuance and growth of the publishing space, and companies like Heartland with their strong leadership and vision are a shining example of what can be done in today’s challenging market. We look forward to working with Heartland in the years to come as they continue to perfect their business model.”
One of the company’s largest vendors, White Birch Paper Company, a major newsprint supplier, summed up the position of many vendors: “We are proud and thankful to be a major supplier to Heartland Publications,” affirmed Leighton Jordan, regional sales manager.
The company reaches more than 250,000 print subscribers each week and many others via interactive websites. The company currently employs approximately 700 people.
www.heartlandpublications.com.
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