Posted by Bud on December 21, 2009 at 10:37:28:
In Reply to: Next Media Files for Bankruptcy posted by Matt on December 21, 2009 at 09:51:55:
TO: All NextMedia Group, Inc. Employees
FROM: Steven Dinetz
Eric Neumann
DATE: December 21, 2009
NextMedia Group, Inc. announced today that it has reached an agreement in principle with its lenders to restructure its debt, using a process that is called a pre-arranged Chapter 11 reorganization. This process will have NO impact on our day to day operations, will not affect payroll in any way, and will not result in any changes to senior management or any reduction to employee headcount.
While our revenue and operating profits were down only 3% and 9% respectively in 2008, the economic environment worsened in 2009 resulting in further declines in revenue and operating profits. This caused us to take action in addressing certain aspects of our business, including our balance sheet, with the goal of strengthening our financial position. NextMedia continues to generate millions of dollars in positive cash flow and has the cash on hand to pay all of our vendors and employees in the ordinary course of business.
This restructuring will bolster our financial position considerably, enhancing our ability to invest in our operations and execute our long-term strategy.
As you are aware, over the past year we have taken steps to reduce costs and increase efficiencies across our operations, while continuing to invest in our assets, content, sales, marketing and customer service. Our industry is expected to enter a phase of wide scale recapitalization, and today�s action puts NextMedia at the forefront in preparing our operations to fully capitalize on the anticipated recovery in the nation's out-of-home advertising markets. It is a process that will allow us to better serve our audiences and clients, while preparing our company to take full advantage of the economic recovery.
Pre-arranged reorganizations such as ours are common and have recently been used by a number of well-known companies, such as General Motors, Charter Communications and CIT Group, to name just a few. We anticipate that our restructuring plan will be approved in 90 to 120 days. Our lenders have agreed to a restructuring in principle, and we expect that our remaining creditors will support our reorganization.
During the reorganization, you will continue to be paid in the same manner as usual. There will be no change to your benefits, vacation policy or hours. For your convenience, we have attached a FAQ Sheet. If you need any additional information, please contact your department head or general manager.
We have communications materials and channels in place to reach out to clients, vendors and landlords - including materials that we have added to a special section of our corporate website at www.nextmediagroup.com.
While you can certainly share this news with family and friends, to ensure a coordinated response please make sure that inquiries from clients and vendors are referred to your department head or general manager, and that any inquiries from media are directed to the contacts who are helping us communicate about this process:
On behalf of our management team, I want to thank all of you for your hard work and the sacrifices you have made during this economic downturn.
We look forward to a successful 2010 and to our continued working relationship with you.