Black Press, owner of the Honolulu Star-Advertiser, could be facing more financial headwinds, according to the rating agency Standard & Poors. Earlier this month, S&P dropped its outlook on Black Press from “stable” to “negative,” reflecting predicted “revenue and profitability declines given difficult industry fundamentals, as well as refinancing risk.”
Black Press experienced soft operating performance in the fiscal year ended Feb. 29, 2012, compared with fiscal 2011, which was in contrast to the improvement we were expecting year-over-year. While revenue declined 3.5% in fiscal 2012, reported EBITDA was down 6.3% during the year. Given the slow economic recovery and declining industry advertising sales, we expect the company’s performance to remain sluggish this year. Furthermore, Black Press faces refinancing risk with its senior secured bank facilities maturing in August 2013.
S&P said its assessment of the risk associated with Black Press operations is based on the company’s “weak credit protection measures, high debt leverage, and tight leverage covenant cushion.”
S&P’s decision to cut Black Press to “negative” was a turnaround in its assessment of the publisher. Previously, S&P had predicted an improved financial picture for the firm this year.
There’s no indication whether or how the rating change might impact the Star-Advertiser’s operations.
Meanwhile, I noted that another Black Press subsidiary, Sound Publishing, has managed to buy the Whidbey Examiner, which has been a feisty, locally-owned competitor.
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in sum, Black beat Goliath.
but even Black isn’t god.
Every business faces “headwinds” now days. So long as the corporate bonds are not rated as “junk”, there should be no impact locally. You may want to read this article: http://seekingalpha.com/article/520211-credit-corporate-bonds-still-attractive-but-headwinds-are-building
Don’t forget “Goliath” holds lots of paper on Mr., Black and Honolulu might see Gannetteers return.
the “impact” of the announcement is irrelevant; the critical point is further evidence that newspaper companies, including holy Black Press, continue to weaken.
Gannett returning to Honolulu? lol. It was just announced Gannett plans layoffs at the Detroit Free Press, which follow the company’s community paper layoffs last year. The only Virginia-based Gannetteers coming to Hawaii are top execs flying to Maui to discuss the future and chug pina coladas.
Sorry Hugh, Gannett is done forever in Honolulu. Local banks hold all the paper now.. You must have missed the memo.