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Nature of the Business | 12 Months Ended
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Mar. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Nature of the Business | Nature of the Business Description of the Business American Media, Inc. and its subsidiaries (collectively, the "Company", "AMI", "we", "our" or "us") owns and operates the leading celebrity and health and fitness media brands in the United States. AMI was incorporated under the laws of the State of Delaware in 1990 and is headquartered in Boca Raton, Florida. The Company is a wholly-owned subsidiary of AMI Parent Holdings, LLC, a Delaware limited liability company (the "Parent"), which is controlled by certain investors of the Company (collectively, the "Investors") pursuant to the merger consummated in August 2014 (the "Merger"). As a result of the Merger, the Parent acquired 100% of the issued and outstanding shares of common stock of the Company. See Note 14, "Capital Structure" for further information. As of March 31, 2016, we own and operate a diversified portfolio of 10 publications; National Enquirer, Star, Globe, National Examiner, OK! and Soap Opera Dige st are published weekly; Men's Fitness, Muscle & Fitness and Flex; are published 10 times per year and Muscle & Fitness Hers is published bi-monthly. Our fiscal year ended on March 31, 2016 and may be referred to herein as fiscal 2016. During fiscal 2015, we sold our Shape, Fit Pregnancy and Natural Health publications, which comprised our Women's Active Lifestyle segment, for approximately $60 million in cash plus an earnout of up to $60 million. See Note 10, "Dispositions" for further information. After giving effect to the divestiture of our Women's Active Lifestyle segment, the Company operates and reports financial and operating information in the following two segments: Celebrity Brands and Men's Active Lifestyle. The Company also provides general corporate services to its segments which is reported as a third, non-operating segment, Corporate and Other. See Note 13, "Business Segment Information" for further information regarding the Company's reporting segments. Liquidity and Operations The Company is highly leveraged. As of March 31, 2016, the Company had approximately $393.9 million of outstanding indebtedness, consisting of $378.7 million of senior secured notes and $15.2 million under the revolving credit facility. The Company has been adversely impacted by weak economic conditions and has experienced declines in circulation revenue and to a lesser extent advertising revenues. If these conditions persist, the Company’s financial condition and results of operations may continue to be adversely affected. Historically, the Company has been able to offset declines in circulation revenues, in part, through cover price increases, cost reductions and increases in digital advertising revenue. During fiscal 2017, the Company anticipates continued declines in circulation revenues. There can be no assurance that the Company will be successful in continuing to reduce costs and increase digital advertising revenue to offset the expected circulation revenue declines. Over the next year, the cash interest payments due under the Company's debt agreements are approximately $40.2 million and there are no scheduled principal payments due. As of March 31, 2016, the Company has $1.4 million of cash and $15.4 million available for borrowing pursuant to the revolving credit facility. The Company's revolving credit facility matures in June 2017. The Company plans to refinance all or a portion of its indebtedness on or before maturity. The Company cannot assure that it will be able to refinance any of its indebtedness on commercially reasonable terms or at all. As further described in Note 4, "Revolving Credit Facility," in February 2016 the terms of the revolving credit facility were amended and restated to, among other things, extend the maturity date to June 2017 and modify the financial covenants in effect through the date of maturity. As further described in Note 5, "Senior Secured Notes," in March 2016, the Company entered into an exchange agreement with the Investors pursuant to which the Investors exchanged approximately $58.9 million in aggregate principal amount of 11.5% first lien notes, due December 2017 for approximately $76.0 million in aggregate principal amount of 7.0% new second lien notes, due July 2020. The Company also issued, in March 2016, additional 7.0% new second lien notes for approximately $76.2 million in aggregate principal amount in a distribution to certain holders of equity interests in the Parent and issued approximately $7.3 million aggregate principal amount of additional 7.0% new second lien notes to an affiliate of the Investors for cash. The Company's substantial indebtedness could adversely affect the business, financial condition and results of operations. Specifically, the Company's level of indebtedness could have important consequences for the business and operations, including the following:
• | requiring the Company to dedicate a substantial portion of its cash flows from operations for payments on indebtedness, thereby reducing the availability of such cash flow to fund working capital, capital expenditures and general corporate requirements or to carry out other aspects of the business;
• | placing the Company at a potential disadvantage compared to its competitors that have less debt;
• | increasing the Company's vulnerability to general adverse economic and industry conditions;
• | limiting the Company's ability to make material acquisitions or take advantage of business opportunities that may arise;
• | limiting the Company's flexibility in planning for, or reacting to, changes in the industry;
• | limiting the Company's ability to obtain additional financing to fund future working capital, capital expenditures and other general corporate requirements or to carry out other aspects of the business; and
• | exposing the Company to fluctuations in interest rates as the revolving credit facility has a variable rate of interest.
Several of our smaller wholesalers and our second-largest wholesaler, Source Interlink Distribution ("Source"), ceased operations during fiscal 2015. Since then we have transitioned the previous wholesalers' newsstand distribution to the two remaining major wholesalers. This transition had an immediate adverse impact on single copy newsstand sales and liquidity during fiscal 2015 and into the first half of fiscal 2016. As a result of declining operating results and cash flow from operations, the Company implemented management action plans during fiscal 2016 that reduced expenses and capital expenditures. The management action plans included outsourcing technology and operation functions, digital content renegotiations, print order efficiencies and editorial and advertising sales staff consolidation. Although the Company is significantly leveraged, it expects that the current cash balances, liquidity provided in connection with the revolving credit facility, and cash generated from operations, should be sufficient to meet working capital, capital expenditures, debt service, and other cash needs for the next year.

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- Definition The entire disclosure for the business description and basis of presentation concepts. Business description describes the nature and type of organization including but not limited to organizational structure as may be applicable to holding companies, parent and subsidiary relationships, business divisions, business units, business segments, affiliates and information about significant ownership of the reporting entity. Basis of presentation describes the underlying basis used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS). + References No definition available. + Details
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