<html> <head><title>2016 VS 2015 Q1 Newsstand Sales Results</title> <style type="text/css"> #VWPLINK, #permissionReminderContainer, #footerContainer { display: none; } </style> </head> <body topmargin="0" leftmargin="0" rightmargin="0"> <div id="rootDiv"> <div align="center"> <div align="center" style="max-width: 602px; margin-left: auto; margin-right: auto;"> <table width="100%" cellpadding="0" cellspacing="0" border="0" style="margin-left: auto; margin-right: auto;"> <tr> <td> <img alt="" width="1" height="5" hspace="0" vspace="0" border="0" src="https://imgssl.constantcontact.com/letters/images/1101116784221/S.gif" /></td> <td align="center" valign="top" width="600"> </td> <td> <img alt="" width="1" height="5" hspace="0" vspace="0" border="0" src="https://imgssl.constantcontact.com/letters/images/1101116784221/S.gif" /></td> </tr> </table> </div> </div> <img src="http://r20.rs6.net/on.jsp?a=1103718504563&r=3&c=&d=1124886881825&ch=&ca=b2cf20b0-44b0-4452-8a7e-a606d7c76360&o=https://imgssl.constantcontact.com/ui/images1/s.gif" height="1" width="1" /> <div align="center"> <table class="OuterBGColor" style="background-color: #ffffff;" bgcolor="#ffffff" border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="Body" style="padding: 14px 14px 14px 14px;" valign="top" rowspan="1" colspan="1" align="center"> <table class="TopMarginBGColor" style="background: transparent;" border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td valign="top" width="100%" rowspan="1" colspan="1" align="center"> <table class="TopMarginWidth" style="width: 640px;" border="0" width="1" cellspacing="0" cellpadding="0"> <tr> <td class="TopMargin" style="padding: 0px 0px 0px 0px;" valign="top" width="100%" rowspan="1" colspan="1" align="center"></td> </tr> </table> </td> </tr> </table> <table class="MainWidth" style="width: 640px;" border="0" width="1" cellspacing="0" cellpadding="0"> <tr> <td class="OuterBorderBGColor OuterBorder" style="background-color: #EE5624; 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font-size: 28pt;"><b> <div style="text-align: center;" align="center"><span style="text-decoration: underline;">INDUSTRY INSIGHTS</span></div> </b></span> </div> </td> </tr> </table> <table class="CC_Divider" style="margin: 0px 0px 0px 0px;" border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDividerPadding" style="padding: 0px 0px 0px 0px; height: 1px; line-height: 1px;" rowspan="1" colspan="1"> <table border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDivider SectionDividerColor" style="padding-bottom: 9px; background-color: #000000; height: 1px; line-height: 1px;" height="1" bgcolor="#000000" rowspan="1" colspan="1" align="center"> <img height="1" vspace="0" border="0" hspace="0" width="5" style="display: block;" alt="" src="http://img.constantcontact.com/letters/images/1101116784221/S.gif" /></td> </tr> </table> </td> </tr> </table> </td> </tr> </table> <table border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="TopFullColumn" style="padding: 0px 0px 0px 0px;" valign="top" width="100%" rowspan="1" colspan="1" align="center"> <a name="LETTER.BLOCK3"></a> <table style="background-color: #800000;" bgcolor="#800000" border="0" width="100%" cellspacing="0" cellpadding="0" id="content_LETTER.BLOCK3"> <tr> <td class="Subtitle" style="padding: 0px 32px 0px 32px; font-family: Arial, Helvetica, sans-serif; color: rgb(255, 255, 255); font-size: 18pt;" valign="top" rowspan="1" colspan="1" align="center"> <div> <strong> <p style="margin-top: 0px; margin-bottom: 0px; color: #ffffff;"><span style="text-decoration: underline;"><b>2016 VS 2015 Q1 NEWSSTAND SALES OVERVIEW</b></span></p> </strong> </div> </td> </tr> </table> <table class="CC_Divider" style="margin: 0px 0px 0px 0px;" border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDividerPadding" style="padding: 0px 0px 0px 0px; height: 1px; line-height: 1px;" rowspan="1" colspan="1"> <table border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDivider SectionDividerColor" style="padding-bottom: 9px; background-color: #000000; height: 1px; line-height: 1px;" height="1" bgcolor="#000000" rowspan="1" colspan="1" align="center"> <img height="1" vspace="0" border="0" hspace="0" width="5" style="display: block;" alt="" src="http://img.constantcontact.com/letters/images/1101116784221/S.gif" /></td> </tr> </table> </td> </tr> </table> <a name="LETTER.BLOCK5"></a> <table style="background-color: #ffffff;" bgcolor="#ffffff" border="0" width="100%" cellpadding="0" cellspacing="0" id="content_LETTER.BLOCK5"> <tr> <td class="Content" style="padding: 8px 32px 9px 32px; color: rgb(0, 0, 0); text-align: left;" valign="top" rowspan="1" colspan="1" align="left"> <div style="margin-bottom: 12.0pt;">The newsstand sales decline continues to lessen, as dollar sales fell 5.1% during the first quarter of 2016. This follows a decline of 7.6% in the fourth quarter of 2015. The total dollar sales decline over the last two calendar quarters was 6.3%, a sizable improvement from the double digit declines the industry experienced in 2014 and 2015. Based on the sample of retailer POS data that MagNet compiles and includes in our sales trending reports, 2<sup>nd</sup> quarter, 2016 sales at least initially, appear to be stronger than first quarter numbers. While unit and dollar newsstand magazine sales are still in decline, the fact that the drop is mitigating is a positive sign for every entity in the newsstand business.</div> <div style="margin-bottom: 12.0pt;">As was the case in the fourth quarter, 2015, higher priced specials continue to lead the charge. Titles ranked in sales between 101 and 500 increased their aggregated sales in both units and dollars during the first quarter, with the average cover price per unit sold for this title grouping increasing by 8.7% compared to last year, same quarter. Even in these tough economic times, in general, there appears to be inelastic demand as many publishers raise their newsstand cover prices. Many of these higher priced titles sell well, as long as the consumer sees value in the publications being purchased. Being able to sell higher priced magazines improves the economics of all newsstand trading partners. We continue to see new titles being launched on the newsstand as well as many new bookazine title releases each quarter. The adult coloring book category continues to grow in both titles and sales, with many releases selling over 125,000 copies on the newsstand at high cover prices. No advertising or subscriptions, but the publishers in this segment of the business are prospering. Certainly plenty of positive news for the newsstand business in the first quarter of 2016.</div> <span style="font-size: 12.0pt; font-family: 'Times New Roman',serif;">You will note the differences in sales totals in both the chain and class of trade charts below compared to all of the other segments of data presented. The chain and class of trade totals are estimated to include the few retailers whose sales are not included in MagNet's database. All other information is derived from the data presented to us by the wholesalers in the US and Canada.</span><br /> </td> </tr> </table> <table class="CC_Divider" style="margin: 0px 0px 0px 0px;" border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDividerPadding" style="padding: 0px 0px 0px 0px; height: 1px; line-height: 1px;" rowspan="1" colspan="1"> <table border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDivider SectionDividerColor" style="padding-bottom: 9px; background-color: #000000; height: 1px; line-height: 1px;" height="1" bgcolor="#000000" rowspan="1" colspan="1" align="center"> <img height="1" vspace="0" border="0" hspace="0" width="5" style="display: block;" alt="" src="http://img.constantcontact.com/letters/images/1101116784221/S.gif" /></td> </tr> </table> </td> </tr> </table> <a name="LETTER.BLOCK7"></a> <table style="background-color: #0a74db;" bgcolor="#0A74DB" border="0" width="100%" cellspacing="0" cellpadding="0" id="content_LETTER.BLOCK7"> <tr> <td class="Subtitle" style="padding: 0px 32px 0px 32px; font-family: Arial, Helvetica, sans-serif; color: rgb(255, 255, 255); font-size: 18pt;" valign="top" rowspan="1" colspan="1" align="center"> <div><strong>US & CDN COMPARISON Q1 2016 VS 2015</strong></div> </td> </tr> </table> <table class="CC_Divider" style="margin: 0px 0px 0px 0px;" border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDividerPadding" style="padding: 0px 0px 0px 0px; height: 1px; line-height: 1px;" rowspan="1" colspan="1"> <table border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDivider SectionDividerColor" style="padding-bottom: 9px; background-color: #000000; height: 1px; line-height: 1px;" height="1" bgcolor="#000000" rowspan="1" colspan="1" align="center"> <img height="1" vspace="0" border="0" hspace="0" width="5" style="display: block;" alt="" src="http://img.constantcontact.com/letters/images/1101116784221/S.gif" /></td> </tr> </table> </td> </tr> </table> <a name="LETTER.BLOCK9"></a> <table class="FeatureBGColor" style="background-color: #FFFFFF; display: table;" bgcolor="#FFFFFF" border="0" width="100%" cellspacing="0" cellpadding="0" id="content_LETTER.BLOCK9"> <tr> <td class="FeatureContent" style="padding: 8px 32px 18px 32px; color: rgb(0, 0, 0);" valign="top" rowspan="1" colspan="1" align="left"> <div> <div style="text-align: left;" align="left"> <span style="font-family: arial, helvetica, sans-serif; color: #000000; font-size: 9pt;"> <div style="font-size: 12pt; font-family: 'Times New Roman', Times, serif; color: #000000;"> <img vspace="5" border="0" name="ACCOUNT.IMAGE.469" hspace="5" width="766" src="http://files.ctctcdn.com/378dfbaf001/56c69c7f-2b0d-47a0-89be-21c855b49864.png"> <br /> </img> </div> <div style="font-size: 12pt; font-family: 'Times New Roman', Times, serif; color: #000000;"> <br /> <div>The average cover price of a unit sold in the first quarter, 2015 was $5.32. In 2016, the number was $5.60. While units declined by 9.7%, the higher average cover price per unit sold helped lessen the dollar sales decline during the first quarter, 2016.</div> </div> </span> </div> </div> </td> </tr> </table> <table class="CC_Divider" style="margin: 0px 0px 0px 0px;" border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDividerPadding" style="padding: 0px 0px 0px 0px; height: 1px; line-height: 1px;" rowspan="1" colspan="1"> <table border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDivider SectionDividerColor" style="padding-bottom: 9px; background-color: #000000; height: 1px; line-height: 1px;" height="1" bgcolor="#000000" rowspan="1" colspan="1" align="center"> <img height="1" vspace="0" border="0" hspace="0" width="5" style="display: block;" alt="" src="http://img.constantcontact.com/letters/images/1101116784221/S.gif" /></td> </tr> </table> </td> </tr> </table> <a name="LETTER.BLOCK11"></a> <table style="background-color: #0a74db;" bgcolor="#0A74DB" border="0" width="100%" cellspacing="0" cellpadding="0" id="content_LETTER.BLOCK11"> <tr> <td class="Subtitle" style="padding: 0px 32px 0px 32px; font-family: Arial, Helvetica, sans-serif; color: rgb(255, 255, 255); font-size: 18pt;" valign="top" rowspan="1" colspan="1" align="center"> <div><strong>US & CDN TITLE RANK Q1 2016 VS 2015</strong></div> </td> </tr> </table> <table class="CC_Divider" style="margin: 0px 0px 0px 0px;" border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDividerPadding" style="padding: 0px 0px 0px 0px; height: 1px; line-height: 1px;" rowspan="1" colspan="1"> <table border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDivider SectionDividerColor" style="padding-bottom: 9px; background-color: #000000; height: 1px; line-height: 1px;" height="1" bgcolor="#000000" rowspan="1" colspan="1" align="center"> <img height="1" vspace="0" border="0" hspace="0" width="5" style="display: block;" alt="" src="http://img.constantcontact.com/letters/images/1101116784221/S.gif" /></td> </tr> </table> </td> </tr> </table> <a name="LETTER.BLOCK13"></a> <table class="FeatureBGColor" style="background-color: #FFFFFF; display: table;" bgcolor="#FFFFFF" border="0" width="100%" cellspacing="0" cellpadding="0" id="content_LETTER.BLOCK13"> <tr> <td class="FeatureContent" style="padding: 8px 32px 18px 32px; color: rgb(0, 0, 0);" valign="top" rowspan="1" colspan="1" align="left"> <div> <div style="text-align: left;" align="left"> <span style="font-family: arial, helvetica, sans-serif; color: #000000; font-size: 9pt;"> <div style="font-size: 8pt; text-align: center;" align="center"> <img style="font-family: 'Times New Roman', Times, serif; font-size: 12pt; text-align: left;" vspace="5" border="0" name="ACCOUNT.IMAGE.468" hspace="5" width="766" src="http://files.ctctcdn.com/378dfbaf001/e5eeadea-a4a0-47fc-8977-7b690ceb416e.png" /></div> <div style="font-size: 12pt; font-family: 'Times New Roman', Times, serif; text-align: left; color: #000000;" align="left"> <div> <img vspace="5" border="0" name="ACCOUNT.IMAGE.467" hspace="5" width="766" src="http://files.ctctcdn.com/378dfbaf001/fa56ba29-8ff3-402a-824a-fe2afbc5378b.png"> <br /> </img> </div> <span style="font-size: 12pt; font-family: 'Times New Roman', serif;"> <div style="font-size: 12pt; font-family: 'Times New Roman', Times, serif; text-align: left; color: #000000;" align="left"><span style="font-size: 12pt; font-family: 'Times New Roman', serif;"> <br /> </span></div> As mentioned in the overview, titles ranked in sales between 101 and 500 performed very well during the first quarter, increasing in both units and dollars. Many of those titles were specials with higher cover prices, illustrated by the fact that the average cover price per unit sold in that title grouping was $6.95. That number is $1.35 higher than the average cover price sold on all units during the first quarter. Even titles ranked between 501 and 1,000 only saw a sales decline of $3 million in total during this period. The top fifty titles, which represent 43% of total sales had a dollar sales decline of 7.8%, spurring the overall decline. However, considering the fact that titles in that same grouping had an overall sales decline of 10.7% in the fourth quarter, 2015, their sales improvement in the first quarter of this year, helped reduce the overall dollar sales decline.</span> </div> </span> </div> </div> </td> </tr> </table> <table class="CC_Divider" style="margin: 0px 0px 0px 0px;" border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDividerPadding" style="padding: 0px 0px 0px 0px; height: 1px; line-height: 1px;" rowspan="1" colspan="1"> <table border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDivider SectionDividerColor" style="padding-bottom: 9px; background-color: #000000; height: 1px; line-height: 1px;" height="1" bgcolor="#000000" rowspan="1" colspan="1" align="center"> <img height="1" vspace="0" border="0" hspace="0" width="5" style="display: block;" alt="" src="http://img.constantcontact.com/letters/images/1101116784221/S.gif" /></td> </tr> </table> </td> </tr> </table> <a name="LETTER.BLOCK15"></a> <table style="background-color: #004db4;" bgcolor="#004DB4" border="0" width="100%" cellpadding="0" cellspacing="0" id="content_LETTER.BLOCK19"> <tr> <td class="Subtitle" style="padding: 0px 32px 0px 32px; font-family: Arial, Helvetica, sans-serif; color: rgb(255, 255, 255); font-size: 18pt;" valign="top" rowspan="1" colspan="1" align="center"> <div><strong>NATIONAL DISTRIBUTOR COMPARISON Q1 2016 VS 2015</strong></div> </td> </tr> </table> <table class="CC_Divider" style="margin: 0px 0px 0px 0px;" border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDividerPadding" style="padding: 0px 0px 0px 0px; height: 1px; line-height: 1px;" rowspan="1" colspan="1"> <table border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDivider SectionDividerColor" style="padding-bottom: 9px; background-color: #000000; height: 1px; line-height: 1px;" height="1" bgcolor="#000000" rowspan="1" colspan="1" align="center"> <img height="1" vspace="0" border="0" hspace="0" width="5" style="display: block;" alt="" src="http://img.constantcontact.com/letters/images/1101116784221/S.gif" /></td> </tr> </table> </td> </tr> </table> <a name="LETTER.BLOCK17"></a> <table style="display: table;" border="0" width="100%" cellpadding="0" cellspacing="0" id="content_LETTER.BLOCK17"> <tr> <td class="Content" style="padding: 8px 32px 9px 32px; font-family: arial, helvetica, sans-serif; color: rgb(0, 0, 0);" valign="top" rowspan="1" colspan="1" align="left"> <img vspace="5" name="ACCOUNT.IMAGE.464" border="0" hspace="5" width="766" src="http://files.ctctcdn.com/378dfbaf001/99d5200d-35e7-4830-a69f-fc8a8f01406c.png"><br /> <img vspace="5" name="ACCOUNT.IMAGE.463" border="0" hspace="5" width="766" src="http://files.ctctcdn.com/378dfbaf001/331aa7de-793c-4687-b1db-6a6fa26e31a6.png"> <br /> <div style="text-align: left;" align="left"> <span style="color: #454545; font-size: 9pt;" color="#454545" size="2"> <div style="text-align: left; margin-top: 0px; margin-bottom: 0px;" align="left"><span style="font-family: 'arial', 'sans-serif'; font-size: 10pt;">&nbsp; </span></div> <div style="text-align: left; margin-top: 0px; margin-bottom: 0px; font-size: 12pt; font-family: 'Times New Roman', Times, serif; color: #000000;" align="left"><span style="font-size: 12pt;">These numbers are based on which national distributor is currently billing titles to the wholesalers.&nbsp;</span></div> </span> </div> </img> </img> </td> </tr> </table> <table class="CC_Divider" style="margin: 0px 0px 0px 0px;" border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDividerPadding" style="padding: 0px 0px 0px 0px; height: 1px; line-height: 1px;" rowspan="1" colspan="1"> <table border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDivider SectionDividerColor" style="padding-bottom: 9px; background-color: #000000; height: 1px; line-height: 1px;" height="1" bgcolor="#000000" rowspan="1" colspan="1" align="center"> <img height="1" vspace="0" border="0" hspace="0" width="5" style="display: block;" alt="" src="http://img.constantcontact.com/letters/images/1101116784221/S.gif" /></td> </tr> </table> </td> </tr> </table> <a name="LETTER.BLOCK19"></a> <table style="background-color: #004db4;" bgcolor="#004DB4" border="0" width="100%" cellpadding="0" cellspacing="0" id="content_LETTER.BLOCK23"> <tr> <td class="Subtitle" style="padding: 0px 32px 0px 32px; font-family: Arial, Helvetica, sans-serif; color: rgb(255, 255, 255); font-size: 18pt;" valign="top" rowspan="1" colspan="1" align="center"> <div><strong>PUBLISHER COMPARISON Q1 2016 VS 2015</strong></div> </td> </tr> </table> <table class="CC_Divider" style="margin: 0px 0px 0px 0px;" border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDividerPadding" style="padding: 0px 0px 0px 0px; height: 1px; line-height: 1px;" rowspan="1" colspan="1"> <table border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDivider SectionDividerColor" style="padding-bottom: 9px; background-color: #000000; height: 1px; line-height: 1px;" height="1" bgcolor="#000000" rowspan="1" colspan="1" align="center"> <img height="1" vspace="0" border="0" hspace="0" width="5" style="display: block;" alt="" src="http://img.constantcontact.com/letters/images/1101116784221/S.gif" /></td> </tr> </table> </td> </tr> </table> </td> </tr> </table> <table border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="BottomFullColumn" style="padding: 0px 0px 0px 0px;" valign="top" width="100%" rowspan="1" colspan="1" align="center"> <table class="CC_Divider" style="margin: 0px 0px 0px 0px;" border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="ContentDividerPadding" style="padding: 0px 0px 0px 0px; height: 1px; line-height: 1px;" valign="top" rowspan="1" colspan="1" align="left"> <table border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="ContentDividerColor ContentDivider" style="background-color: #A6A22D; padding-bottom: 0px; height: 1px; line-height: 1px;" height="1" bgcolor="#A6A22D" valign="top" rowspan="1" colspan="1" align="center"> <img height="1" vspace="0" border="0" hspace="0" width="5" style="display: block;" alt="" src="http://img.constantcontact.com/letters/images/1101116784221/S.gif" /></td> </tr> </table> </td> </tr> </table> </td> </tr> </table> <table border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="Bottom" style="padding: 0px 0px 0px 0px;" valign="middle" width="100%" rowspan="1" colspan="1" align="center"> <a name="LETTER.BLOCK22"></a> <table style="background-color: #ffffff;" bgcolor="rgb(255,255,255)" border="0" width="100%" cellspacing="0" cellpadding="0" id="content_LETTER.BLOCK22"> <tr> <td class="Content" style="padding: 8px 32px 9px 32px; font-family: arial, helvetica, sans-serif; color: rgb(0, 0, 0);" valign="top" rowspan="1" colspan="1" align="left"> <div> <div style="text-align: center;" align="center"> <img vspace="5" name="ACCOUNT.IMAGE.466" border="0" hspace="5" width="766" src="http://files.ctctcdn.com/378dfbaf001/2813fcdb-0ff6-4df2-8bfd-1728c1a4a09b.png"> <br /> </img> </div> <div style="text-align: center;" align="center"> <img vspace="5" name="ACCOUNT.IMAGE.465" border="0" hspace="5" width="766" src="http://files.ctctcdn.com/378dfbaf001/ab9047c7-bf3c-4455-aa1b-5077f959d416.png"> <br /> </img> </div> <div style="text-align: left;" align="left"> <div><span style="font-family: 'Arial',sans-serif;"> <br /> </span></div> <div style="font-family: 'Times New Roman', Times, serif; font-size: 12pt;"><span>The top ten publishers, most of which provide large subscription discounts off of their newsstand cover prices, continued to under-perform the total market. The fact that they still represent a majority of newsstand sales will make it difficult for the industry to approach positive sales increases as long as the practice of steeply discounted subscription prices continues. Some of the top ten publishers who performed better than the average in the first quarter were Time, Inc., Conde Nast, Harris Publications (now defunct), Penny Press and Kappa. Time Inc. benefited from their many releases of high priced bookazines, while the puzzle category continues to perform well compared to many other subject categories.</span></div> </div> </div> </td> </tr> </table> <table class="CC_Divider" style="margin: 0px 0px 0px 0px;" border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDividerPadding" style="padding: 0px 0px 0px 0px; height: 1px; line-height: 1px;" rowspan="1" colspan="1"> <table border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDivider SectionDividerColor" style="padding-bottom: 9px; background-color: #000000; height: 1px; line-height: 1px;" height="1" bgcolor="#000000" rowspan="1" colspan="1" align="center"> <img height="1" vspace="0" border="0" hspace="0" width="5" style="display: block;" alt="" src="http://img.constantcontact.com/letters/images/1101116784221/S.gif" /></td> </tr> </table> </td> </tr> </table> <a name="LETTER.BLOCK24"></a> <table style="background-color: #004db4;" bgcolor="#004DB4" border="0" width="100%" cellpadding="0" cellspacing="0" id="content_LETTER.BLOCK28"> <tr> <td class="Subtitle" style="padding: 0px 32px 0px 32px; font-family: Arial, Helvetica, sans-serif; color: rgb(255, 255, 255); font-size: 18pt;" valign="top" rowspan="1" colspan="1" align="center"> <div><strong>CATEGORY COMPARISON Q1 2016 VS 2015</strong></div> </td> </tr> </table> <table class="CC_Divider" style="margin: 0px 0px 0px 0px;" border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDividerPadding" style="padding: 0px 0px 0px 0px; height: 1px; line-height: 1px;" rowspan="1" colspan="1"> <table border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDivider SectionDividerColor" style="padding-bottom: 9px; background-color: #000000; height: 1px; line-height: 1px;" height="1" bgcolor="#000000" rowspan="1" colspan="1" align="center"> <img height="1" vspace="0" border="0" hspace="0" width="5" style="display: block;" alt="" src="http://img.constantcontact.com/letters/images/1101116784221/S.gif" /></td> </tr> </table> </td> </tr> </table> <a name="LETTER.BLOCK26"></a> <table style="background-color: #ffffff;" bgcolor="rgb(255,255,255)" border="0" width="100%" cellspacing="0" cellpadding="0" id="content_LETTER.BLOCK26"> <tr> <td class="Content" style="padding: 8px 32px 9px 32px; font-family: arial, helvetica, sans-serif; color: rgb(0, 0, 0); text-align: left;" valign="top" rowspan="1" colspan="1" align="left"> <img vspace="5" border="0" name="ACCOUNT.IMAGE.458" hspace="5" width="766" src="http://files.ctctcdn.com/378dfbaf001/551c1c79-26c0-4132-9612-8d6d3f8e1a37.png"><br /> <div><span style="font-size: 12pt; font-family: Arial, sans-serif;"> <br /> <span style="font-family: 'Times New Roman', Times, serif;">Many of the categories that performed well had bookazine titles that help stimulate sales. In general, the celebrity and women's titles continued to perform poorly. Many of the titles in these categories are heavy subscription titles.</span></span><br /> </div> </img> </td> </tr> </table> <table class="CC_Divider" style="margin: 0px 0px 0px 0px;" border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDividerPadding" style="padding: 0px 0px 0px 0px; height: 1px; line-height: 1px;" rowspan="1" colspan="1"> <table border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDivider SectionDividerColor" style="padding-bottom: 9px; background-color: #000000; height: 1px; line-height: 1px;" height="1" bgcolor="#000000" rowspan="1" colspan="1" align="center"> <img height="1" vspace="0" border="0" hspace="0" width="5" style="display: block;" alt="" src="http://img.constantcontact.com/letters/images/1101116784221/S.gif" /></td> </tr> </table> </td> </tr> </table> <a name="LETTER.BLOCK28"></a> <table style="background-color: #004db4;" bgcolor="#004DB4" border="0" width="100%" cellpadding="0" cellspacing="0" id="content_LETTER.BLOCK32"> <tr> <td class="Subtitle" style="padding: 0px 32px 0px 32px; font-family: Arial, Helvetica, sans-serif; color: rgb(255, 255, 255); font-size: 18pt;" valign="top" rowspan="1" colspan="1" align="center"> <div><strong>TOP CHAINS COMPARISON Q1 2016 VS 2015</strong></div> </td> </tr> </table> <table class="CC_Divider" style="margin: 0px 0px 0px 0px;" border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDividerPadding" style="padding: 0px 0px 0px 0px; height: 1px; line-height: 1px;" rowspan="1" colspan="1"> <table border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDivider SectionDividerColor" style="padding-bottom: 9px; background-color: #000000; height: 1px; line-height: 1px;" height="1" bgcolor="#000000" rowspan="1" colspan="1" align="center"> <img height="1" vspace="0" border="0" hspace="0" width="5" style="display: block;" alt="" src="http://img.constantcontact.com/letters/images/1101116784221/S.gif" /></td> </tr> </table> </td> </tr> </table> <a name="LETTER.BLOCK30"></a> <table style="background-color: #ffffff;" bgcolor="rgb(255,255,255)" border="0" width="100%" cellpadding="0" cellspacing="0" id="content_LETTER.BLOCK30"> <tr> <td class="Content" style="padding: 8px 32px 9px 32px; font-family: arial, helvetica, sans-serif; color: rgb(0, 0, 0);" valign="top" rowspan="1" colspan="1" align="left"> <div> <div style="text-align: center;" align="center"> <img vspace="5" border="0" name="ACCOUNT.IMAGE.460" hspace="5" width="766" src="http://files.ctctcdn.com/378dfbaf001/27da61b5-1f6f-42eb-842a-c54a585a3816.png"> <br /> </img> </div> <div style="text-align: center;" align="center"> <img vspace="5" border="0" name="ACCOUNT.IMAGE.459" hspace="5" width="766" src="http://files.ctctcdn.com/378dfbaf001/94c32afd-c4aa-44ea-973d-439fd5da5a3f.png"> <br /> </img> </div> <div style="text-align: left;" align="left"><span style="font-size: 12pt; font-family: Arial, sans-serif;"> <br /> </span></div> <div style="text-align: left; font-family: 'Times New Roman', Times, serif;" align="left"><span style="font-size: 12pt;">The top 100 chains had only a 3.9% dollar sales loss during the first quarter, 2016 and represented 90% of the business. It was the smaller chains and independent stores that experienced a major drop in sales, falling nearly $10 million compared to first quarter last year, a 14% dollar decline. As the smaller stores either deemphasize the newsstand business or exit it completely, the percentage of total sales that the top ten chains represent continued to increase, now representing 53.7% of total newsstand sales. In 2013, the top ten chains had 48% of the total market.&nbsp;</span></div> </div> </td> </tr> </table> <table class="CC_Divider" style="margin: 0px 0px 0px 0px;" border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDividerPadding" style="padding: 0px 0px 0px 0px; height: 1px; line-height: 1px;" rowspan="1" colspan="1"> <table border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDivider SectionDividerColor" style="padding-bottom: 9px; background-color: #000000; height: 1px; line-height: 1px;" height="1" bgcolor="#000000" rowspan="1" colspan="1" align="center"> <img height="1" vspace="0" border="0" hspace="0" width="5" style="display: block;" alt="" src="http://img.constantcontact.com/letters/images/1101116784221/S.gif" /></td> </tr> </table> </td> </tr> </table> <a name="LETTER.BLOCK32"></a> <table style="background-color: #004db4;" bgcolor="#004DB4" border="0" width="100%" cellpadding="0" cellspacing="0" id="content_LETTER.BLOCK36"> <tr> <td class="Subtitle" style="padding: 0px 32px 0px 32px; font-family: Arial, Helvetica, sans-serif; color: rgb(255, 255, 255); font-size: 18pt;" valign="top" rowspan="1" colspan="1" align="center"> <div><strong>CLASS OF TRADE COMPARISON Q1 2016 VS 2015</strong></div> </td> </tr> </table> <table class="CC_Divider" style="margin: 0px 0px 0px 0px;" border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDividerPadding" style="padding: 0px 0px 0px 0px; height: 1px; line-height: 1px;" rowspan="1" colspan="1"> <table border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDivider SectionDividerColor" style="padding-bottom: 9px; background-color: #000000; height: 1px; line-height: 1px;" height="1" bgcolor="#000000" rowspan="1" colspan="1" align="center"> <img height="1" vspace="0" border="0" hspace="0" width="5" style="display: block;" alt="" src="http://img.constantcontact.com/letters/images/1101116784221/S.gif" /></td> </tr> </table> </td> </tr> </table> <a name="LETTER.BLOCK34"></a> <table style="background-color: #ffffff;" bgcolor="rgb(255,255,255)" border="0" width="100%" cellspacing="0" cellpadding="0" id="content_LETTER.BLOCK34"> <tr> <td class="Content" style="padding: 8px 32px 9px 32px; font-family: arial, helvetica, sans-serif; color: rgb(0, 0, 0);" valign="top" rowspan="1" colspan="1" align="left"> <div> <div style="text-align: center; font-size: 14pt;" align="center"> <img vspace="5" border="0" name="ACCOUNT.IMAGE.470" hspace="5" width="766" src="http://files.ctctcdn.com/378dfbaf001/c7633285-1765-46b8-9c4c-a5c72309265f.png"> <br /> </img> </div> <div style="text-align: left; font-size: 14pt;" align="left"> <div><span style="font-family: Arial, sans-serif;"> <br /> </span></div> <div style="font-family: 'Times New Roman', Times, serif; font-size: 12pt;"><span>Convenience stores continued to deemphasize the magazine category, while we saw more independent newsstands close. The terminal business was impacted by the largest airport retailer having a service interruption in some markets for a period of time during the first quarter. Overall, the discount store COT had positive sales increases, continuing their recent pattern of performing well. The supercenter, bookstore, mass merchandiser and club store COTs did better than the total market.</span></div> </div> </div> </td> </tr> </table> <table class="CC_Divider" style="margin: 0px 0px 0px 0px;" border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDividerPadding" style="padding: 0px 0px 0px 0px; height: 1px; line-height: 1px;" rowspan="1" colspan="1"> <table border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="SectionDivider SectionDividerColor" style="padding-bottom: 9px; background-color: #000000; height: 1px; line-height: 1px;" height="1" bgcolor="#000000" rowspan="1" colspan="1" align="center"> <img height="1" vspace="0" border="0" hspace="0" width="5" style="display: block;" alt="" src="http://img.constantcontact.com/letters/images/1101116784221/S.gif" /></td> </tr> </table> </td> </tr> </table> <table class="CC_Divider" style="margin: 0px 0px 0px 0px;" border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="ContentDividerPadding" style="padding: 0px 0px 0px 0px; height: 1px; line-height: 1px;" valign="top" rowspan="1" colspan="1" align="left"> <table border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td class="ContentDividerColor ContentDivider" style="background-color: #A6A22D; padding-bottom: 0px; height: 1px; line-height: 1px;" height="1" bgcolor="#A6A22D" valign="top" rowspan="1" colspan="1" align="center"> <img height="1" vspace="0" border="0" hspace="0" width="5" style="display: block;" alt="" src="http://img.constantcontact.com/letters/images/1101116784221/S.gif" /></td> </tr> </table> </td> </tr> </table> </td> </tr> </table> </td> </tr> </table> </td> </tr> </table> <table class="BottomMarginBGColor" style="background: transparent;" border="0" width="100%" cellspacing="0" cellpadding="0"> <tr> <td valign="top" width="100%" rowspan="1" colspan="1" align="center"> <table class="BottomMarginWidth" style="width: 640px;" border="0" width="1" cellspacing="0" cellpadding="0"> <tr> <td class="BottomMargin" style="padding: 0px 0px 0px 0px;" valign="top" width="100%" rowspan="1" colspan="1" align="center"> <table class="FooterBGColor" style="background-color: #395a5e;" bgcolor="#395a5e" border="0" width="100%" cellpadding="0" cellspacing="0" id="content_LETTER.BLOCK45"> <tr> <td class="FooterText FooterLeft" style="color: #FFFFFF; font-family: Arial,Helvetica,sans-serif; font-size: 10pt; padding: 25px 25px 25px 50px;" valign="top" width="100%" rowspan="1" colspan="1" align="left"> <div><span style="font-size: 10pt;">All sales are based on issues off-sale in the period described. All data expressed in millions. All data is based on actual wholesale O&R records and reflect all returns processed through 05/12/2016. 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