Time Inc Plans To Sell Several Assets; Warns On Q3 Print And Advertising Revenue

(RTTNews) - Time Inc. (TIME) disclosed in a regulatory filing that it was looking to sell several assets, including Time Inc UK, and warned it experienced more-than-anticipated softness in both print and advertising revenue during the third quarter.

The company noted that the assets identified for potential divestiture at this time are: Time Inc. UK; Time Customer Service, the Company's Tampa, Florida-based subscription management and fulfillment services center, which may also include entering into outsourcing arrangements following any sale; a majority stake in Essence; and the Sunset, Coastal Living and Golf brands. The Company estimates that these assets represent, in the aggregate, approximately $488 million, or 17%, of its total revenues for the twelve-month period ended June 30, 2017.

The company noted that it did not enter into any definitive agreements for the assets at this time. The Company may announce a transaction as early as the fourth quarter of 2017.

The company re-affirmed its 2017 Adjusted OIBDA outlook of at least $400 million with a plan to be flat year-over-year. During the third quarter of 2017, the company has experienced softness in both print & other advertising revenues and digital advertising revenues relative to the expectations communicated on its second quarter earnings call. However, the Company continued to see strong digital advertising performance in the key growth areas of native and branded content and video.

In addition, the company expects its cost savings and efficiency initiatives will offset the advertising softness in the third quarter.

In August 2017, the company announced the launch of its Strategic Transformation Program through which it intends to accelerate the optimization of cost savings and revenue opportunities. The company has identified new revenue opportunities and it has also targeted more than $400.0 million of run-rate cost savings. The majority of the initiatives under the Strategic Transformation Program are expected to be implemented within the first 18 months.

In July 2017, the company received a subpoena from the Enforcement Division of the staff of the SEC requiring it to provide documents relating to certain goodwill and asset impairments and to certain restructuring and severance costs.