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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM 10-Q

(Mark One)

For the Quarterly Period Ended September 27, 2004

OR

Commission file number(s) – 1-11112

AMERICAN MEDIA OPERATIONS, INC.

(Exact name of the registrant as specified in its charter)

Registrant’s telephone number, including area code (561) 997-7733

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of November 10, 2004 there were 7,507 shares of common stock outstanding.

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AMERICAN MEDIA OPERATIONS, INC. AND SUBSIDIARIES

INDEX TO FORM 10-Q

September 27, 2004

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AMERICAN MEDIA OPERATIONS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in 000’s, except share information)

The accompanying notes to condensed consolidated financial statements are an integral part of these condensed consolidated statements.

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AMERICAN MEDIA OPERATIONS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(IN 000’s)

The accompanying notes to condensed consolidated financial statements are an integral part of these condensed consolidated statements.

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AMERICAN MEDIA OPERATIONS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(IN 000’s)

The accompanying notes to condensed consolidated financial statements are an integral part of these condensed consolidated statements.

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AMERICAN MEDIA OPERATIONS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME

(IN 000’s)

The accompanying notes to condensed consolidated financial statements are an integral part of these condensed consolidated statements.

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AMERICAN MEDIA OPERATIONS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME

(IN 000’s)

The accompanying notes to condensed consolidated financial statements are an integral part of these condensed consolidated statements.

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AMERICAN MEDIA OPERATIONS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN 000’s)

The accompanying notes to condensed consolidated financial statements are an integral part of these condensed consolidated statements.

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AMERICAN MEDIA OPERATIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 27, 2004

(000’s omitted in all tables)

(unaudited)

(1) BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP (accounting principles generally accepted in the United States of America) for interim financial information and with the instructions to Form 10-Q. There has been no material change in the information disclosed in the notes to consolidated financial statements included in the Annual Report on Form 10-K of American Media Operations, Inc. (a wholly-owned subsidiary of American Media, Inc.) and subsidiaries (the “Company”) for the fiscal year ended March 29, 2004.

In the opinion of management, all adjustments considered necessary for a fair presentation have been included herein. Operating results for the fiscal period ended September 27, 2004, are not necessarily indicative of the results that may be expected for future periods.

The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(2) ACQUISITIONS

On January 23, 2003, the Company and EMP Group LLC, the owner of 100% of the common stock of American Media, Inc. (“Media”), acquired Weider Publications LLC (the “Weider Acquisition”), a newly formed company to which the magazine business of Weider Publications, Inc. and Weider Interactive Networks, Inc. had been contributed by Weider Health and Fitness LLC and Weider Interactive Networks, Inc. The aggregate purchase price was $357.3 million, which includes a post-closing working capital adjustment of $7.3 million.

(3) REVENUE RECOGNITION

Substantially all publication sales, except subscriptions, are made through unrelated distributors. Issues, other than special topic issues, are placed on sale approximately one week prior to the issue date for our weekly publications. Revenues and related expenses for our weekly publications and special topic issues are recognized for financial statement purposes after delivery has occurred and all services have been rendered, which coincides with the on-sale date. Monthly issues revenue and related expenses are recognized at the date the copies are received by our third party wholesalers. On or about the date each issue is placed on sale, we receive a percentage of the issue’s estimated newsstand sales proceeds for our publications as an advance from the distributors. All of our publications are sold with full return privileges.

The two fiscal quarters ended September 27, 2004 include 27 issues of our weekly publications versus 26 issues for the prior year’s comparable two fiscal quarters due to a change in the scheduled delivery dates of the weekly publications. The delivery of these publications generally moved to a pre-weekend schedule during the quarter ended September 27, 2004. Revenues from this additional issue of the Company’s weekly publications were partially offset by one less issue of Men’s Fitness and Muscle and Fitness Hers in the current fiscal quarter. The net impact on operating revenues was an increase of $4.6 million.

Revenues from copy sales are net of reserves provided for expected sales returns, which are established in accordance with GAAP, after considering such factors as sales history and available market information. We continually monitor the adequacy of the reserves and make adjustments when necessary. Revenues are also net of product placement costs (“retail display allowances”) paid to the retailers.

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Subscriptions received in advance of the issue date are recognized as income over the term of the subscription as they are fulfilled and mailed to the subscriber.

Deferred revenues are comprised of the following:

Other revenues, primarily from marketing services performed for third parties by Distribution Services, Inc. (“DSI”), a wholly-owned subsidiary, are recognized when the service is performed.

(4) INVENTORIES

Inventories are stated at the lower of cost or market. We use the first-in, first-out (FIFO) cost method of valuation. Inventories are comprised of the following:

(5) SUBSCRIPTION ACQUISITION COSTS

Subscription acquisition costs are expensed the first time the advertising takes place, except for certain direct-response advertising, the primary purpose of which is to elicit sales from customers who can be shown to have responded specifically to the advertising and that result in probable future economic benefits. Direct-response advertising consists of television advertising for subscriptions, product promotional mailings, magazine insert cards, telemarketing and subscription promotions. These direct-response advertising costs are capitalized as assets and amortized over the estimated period of future benefit. The direct-response advertising costs are amortized over the related one-year subscription period. At September 27, 2004 and March 29, 2004, $3,775,000 and $1,786,000, respectively, of subscription acquisition advertising was reported as assets. Amortization expense related to subscription acquisition advertising for the two quarters ended September 27, 2004, was $3,294,000.

(6) GOODWILL AND OTHER INTANGIBLE ASSETS

Intangible assets not subject to amortization had a carrying value of $557,365,000 as of March 29, 2004 and September 27, 2004, and consist of tradenames with indefinite lives.

Intangible assets subject to amortization after the adoption of SFAS No. 142 consist of the following:

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Amortization expense of intangible assets for the two fiscal quarters ended September 29, 2003 and September 27, 2004, was $7.1 million and $7.1 million, respectively.

Goodwill and intangibles with indefinite lives are tested for impairment annually or more frequently when events or circumstances indicate that an impairment may have occurred. The Company uses the beginning of its fiscal fourth quarter as the date for its annual impairment tests. The Company performed its annual impairment test for fiscal 2004 as of the beginning of the fourth quarter of fiscal 2004 and found no impairment.

Based on the carrying value of identified intangible assets recorded at September 27, 2004, and assuming no subsequent impairment of the underlying assets, annual amortization expense for the next five fiscal years is expected to be as follows:

(7) INCOME TAXES

The Company accounts for income taxes under the liability method in accordance with SFAS No. 109, “Accounting for Income Taxes”. The provision for income taxes includes deferred income taxes resulting from items reported in different periods for income tax and financial statement purposes. Deferred tax assets and liabilities represent the expected future tax consequences of the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The effects of changes in tax rates on deferred tax assets and liabilities are recognized in the period that includes the enactment date.

(8) CREDIT AGREEMENT

The Company’s bank credit agreement (the “Credit Agreement”), which was comprised of a $340 million term loan commitment, has been amended a number of times since inception. On November 1, 1999, the Credit Agreement was amended to increase the term loan amount to $430 million and provide a $60 million revolving credit commitment. We also amended the Credit Agreement on February 14, 2002, in connection with the subordinated notes. The amendment included changes to the interest rates discussed below, as well as changes to certain financial covenants. The Company amended the Credit Agreement on May 22, 2002. This amendment restructured the marginal interest rate on the Company’s term loans. Additionally, the Company amended the Credit Agreement on January 23, 2003, in connection with the Weider Acquisition to increase the term loan amount by $140 million. The Company also amended the Credit Agreement on February 17, 2004, which changed the total leverage ratio covenant from 6.25 to 6.50 for the December 2003 and March 2004 quarters. Additionally, the Credit Agreement was amended on June 25, 2004, which changed the Company’s total leverage ratio covenant and certain interest coverage ratio covenants through June 2006. As a result of the amendment, the total leverage ratio covenant is 6.95 through March 2005, 6.75 from June 2005 to March 2006 and 6.50 from June 2006 and thereafter. The interest coverage ratio remains at 1.75 from March 2004 and thereafter.

(a) Borrowings under the term loan commitments are payable in varying quarterly installments from July 2001 through April 2007. We are required to make Excess Cash Flow payments (as defined), which will be applied ratably to the then outstanding term loans. There was no required Excess Cash Flow payment for fiscal 2004.

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(b) Revolving Credit Commitment — The Credit Agreement also provides for additional borrowings up to a maximum of $60 million. This commitment, which expires in April 2006, allows funds to be borrowed and repaid from time to time with permanent reductions in the revolving credit commitment permitted at our option. As of September 27, 2004, no amounts were outstanding under the revolving credit facility.

(c) Commitment Fees — We are required to pay a commitment fee ranging from 3/8% to 1/2% of the unused portion of the revolving commitment.

(d) Guarantees, Collateral and Financial Covenants — Our obligations under the Credit Agreement are guaranteed by all of our subsidiaries and by Media. The obligations and such guarantees are secured by (i) a pledge by the Company of all of the capital stock of its subsidiaries, (ii) a pledge of all of the capital stock of the Company and (iii) a security interest in substantially all of the assets of the Company’s subsidiaries.

In addition to the above, the Credit Agreement also contains certain covenants that, among others, restrict paying cash dividends, incurring additional indebtedness, entering into certain mergers or consolidations, making capital expenditures and selling or otherwise disposing of assets. We are also required to satisfy certain financial tests relating to operating cash flow and debt coverage ratios.

The effective interest rate under the Credit Agreement, including amounts borrowed under the term loan commitments and revolving credit commitment, as of September 27, 2004 was 4.4% and the weighted average effective interest rates for the two fiscal quarters ended September 29, 2003 and September 27, 2004 were 4.1% and 4.2%, respectively.

American Media Operations, Inc. has no material assets or operations other than the investments in our subsidiaries. The subordinated notes are unconditionally guaranteed, on a senior subordinated basis, by all of our domestic subsidiaries. Each domestic subsidiary that will be organized in the future by us, unless such subsidiary is designated as an unrestricted subsidiary, will jointly, severally, fully and unconditionally guarantee the subordinated notes on a senior subordinated basis. Subordinated note guarantees are joint and several, full and unconditional and general unsecured obligations of the note guarantors. The note guarantors are our subsidiaries. At present, the note guarantors comprise all of our direct and indirect domestic subsidiaries. Note guarantees are subordinated in right of payment to all existing and future senior debt of the note guarantors, including the credit facility, and are also effectively subordinated to all secured obligations of note guarantors to the extent of the assets securing such obligations, including the credit facility. Furthermore, the subordinated note indentures permit note guarantors to incur additional indebtedness, including senior debt, subject to certain limitations. We have not presented separate financial statements and other disclosures concerning each of the note guarantors, as these disclosures are not applicable under SEC rules and regulations.

(9) FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair value of our financial instruments is as follows:

The fair value of our financial instruments is estimated based on the quoted market prices for the same or similar issues or on the current rate offered to us for financial instruments of the same remaining maturities. The carrying amount for cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximates fair value because of the short maturity of those instruments.

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Effective August 20, 2003, we entered into an interest rate swap agreement, which effectively converted a portion of our fixed-rate debt to variable rate debt. The agreement is scheduled to expire in January 2007 and has a notional amount of $150 million. Under this agreement, we received a fixed rate of 8.875% and pay LIBOR in arrears plus a spread of 5.38% subject to a collar adjustment. As of September 27, 2004, the fair value of this swap was a receivable of $311,000. The change in the fair value of the swap has been recognized as an addition to interest expense for the two fiscal quarters ended September 27, 2004. On January 15, 2004, we received $1,635,000 in connection with the interim settlement of this swap agreement. Additionally, on July 15, 2004, we received $1,166,000 in connection with the interim settlement of this swap agreement. The next reset date for this swap agreement is January 15, 2005. At each reset date the Company either receives or pays money based on the fair value of the swap as of that date.

(10) FRONTLINE MARKETING

On November 27, 2000, the Company sold its 80% owned subsidiary, Frontline Marketing Inc. (“FMI”), to the minority shareholder for a $2.5 million note receivable (the “FMI Note”). The FMI Note initially had a short-term component of $500,000, which amount has been paid in full, and a long-term component of $2,000,000 which is payable to us based on defined cash flow of FMI. The FMI Note bears interest at 9%. No gain or loss was initially recognized on this transaction. As of September 27, 2004, the FMI Note’s balance is $1.4 million.

(11) LITIGATION

Various suits and claims arising in the ordinary course of business have been instituted against us. We have insurance policies available to recover potential legal costs. We periodically evaluate and assess the risks and uncertainties associated with litigation independent from those associated with our potential claim for recovery from third party insurance carriers. During the two fiscal quarters ended September 27, 2004, the Company provided $4 million related to significant legal charges. In the opinion of management, none of the suits and claims currently pending will have a material adverse effect on the Company’s financial statements.

(12) DEFERRED DEBT COSTS

Certain costs incurred in connection with the issuance of our long-term debt have been deferred and are amortized as part of interest expense over periods from 1 to 10 years. For the two fiscal quarters ended September 29, 2003 and September 27, 2004, amortization of deferred debt costs, which is included in interest expense in the accompanying consolidated statements of income, totaled approximately $3.2 million and $3.2 million, respectively.

In connection with the Company’s issuance of $150 million of 10.25% Series B Senior Subordinated Notes due 2009 on February 14, 2002, $7.0 million of issuance costs have been deferred and are being amortized as part of interest expense over the life of the notes. In connection with our issuance of $150 million of 8.875% Senior Subordinated Notes due 2011 on January 23, 2003, $7.9 million of issuance costs have been deferred and are being amortized as part of interest expense over the life of the notes. In connection with our increase in the Credit Agreement of $140 million on January 23, 2003, $3.5 million of debt costs have been deferred and are being amortized as part of interest expense over the life of the Credit Agreement. In connection with our Credit Agreement amendment on February 17, 2004, $260,000 of debt costs have been deferred and were amortized as part of interest expense over the life of the amendment. This amendment provided for an increase in the leverage ratio from 6.25 to 6.50 for the fiscal quarters ended December 29, 2003 and March 29, 2004. Additionally, in connection with our Credit Agreement amendment on June 25, 2004, $1.3 million of

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debt costs have been deferred and are being amortized as part of interest expense over the life of the amendment. This amendment changed the Company’s total leverage ratio covenant and certain interest coverage ratio covenants through June 2006. As a result of the amendment, the total leverage ratio covenant is 6.95 through March 2005, 6.75 from June 2005 to March 2006 and 6.50 from June 2006 and thereafter. The interest coverage ratio remains at 1.75 from March 2004 and thereafter.

(13) SUBORDINATED INDEBTEDNESS

On May 7, 1999, the Company issued $250,000,000 in aggregate principal amount of 10.25% Senior Subordinated Notes, which mature on May 1, 2009. Interest on these notes is payable in semi-annual installments on May 1st and November 1st of each year. These notes are redeemable at our option at prices ranging from 105.125% to 100% of their face amount after April 2004. The indenture under which the notes were issued includes certain restrictive covenants that prohibit payment of dividends and limit, among other things, our ability to incur indebtedness, give guarantees, make investments, sell assets and merge or consolidate.

On February 14, 2002, the Company issued $150,000,000 in aggregate principal amount of 10.25% Series B Senior Subordinated Notes due 2009 through a private placement. The gross proceeds from the offering were $150,750,000 including a premium on the notes of $750,000. The Company used the gross proceeds of the offering (a) to make a $75,375,000 distribution to EMP Group LLC, (b) to prepay $68,375,000 of the term loans under the Credit Agreement and (c) to pay transaction costs. The notes are unsecured and subordinated in right of payment to all our existing and future senior indebtedness. The notes rank equally with all our existing and future senior subordinated indebtedness. The notes are guaranteed on a senior subordinated basis by all our current subsidiaries.

On January 23, 2003, the Company issued $150,000,000 in aggregate principal amount of 8.875% Senior Subordinated Notes due 2011 through a private placement. The net proceeds from the offering were $145,875,000, including a discount on the notes of $4,125,000. We used the net proceeds of the offering to (a) fund the acquisition of Weider Publications LLC, and (b) pay the transaction costs. These notes are unsecured and subordinated in right of payment to all our existing and future senior indebtedness. The notes rank equally with all our existing and future senior subordinated indebtedness. The notes are guaranteed on a senior subordinated basis by all our current subsidiaries.

(14) RECAPITALIZATION OF EQUITY

On April 17, 2003, the Company completed a series of transactions whereby principals and affiliates of Evercore Partners LLP (“Evercore”) and Thomas H. Lee Company (“T.H. Lee”), David J. Pecker, the Chief Executive Officer of the Company, other members of management and certain other investors contributed approximately $434.6 million in cash and existing ownership interests, valued at approximately $73.3 million, of EMP Group LLC, our ultimate parent, to a merger entity which was then merged with and into EMP Group LLC in exchange for newly issued ownership interests of EMP Group LLC.

Upon completion of the merger, EMP Group LLC’s existing limited liability company agreement was amended and restated in its entirety. Under the new agreement, the board of managers of EMP Group LLC consists of three designees of Evercore, three designees of T.H. Lee, one of whom is subject to Evercore’s prior approval, and the Chief Executive Officer of American Media, Inc., who is subject to the approval of Evercore and T.H. Lee. While Evercore and T.H. Lee jointly control EMP Group LLC, the new limited liability company agreement requires that certain significant actions of EMP Group LLC be approved by David J. Pecker and a majority of the other investors of EMP Group LLC.

In addition, in connection with the merger, David J. Pecker and American Media, Inc. entered into a new employment agreement, which governs the terms of David J. Pecker’s employment as Chief Executive Officer

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of American Media, Inc. for a term of five years. Also, American Media, Inc., THL Managers V, L.L.C., an affiliate of T.H. Lee, and Evercore Advisors L.P., an affiliate of Evercore, have entered into a Management Agreement pursuant to which THL Managers V, L.L.C. and Evercore Advisors L.P. will provide certain management and advisory services to American Media, Inc. for an annual fee of $1.0 million each. The fee of this Management Agreement is amortized to expense by the Company over the annual period. Additionally, $2.3 million of management bonuses were granted as part of the recapitalization. These bonuses were charged to expense by the Company during the fiscal quarter ended June 30, 2003. Additionally, the intercompany payable to American Media, Inc. was eliminated as a result of the recapitalization.

(15) RESTRUCTURING ACTIVITIES

During the fiscal year ended March 29, 2004, the Company initiated a plan to relocate the Star and Mira! publications to New York City. The Company’s relocation plan involved the termination of 94 employees. This activity resulted in a charge of $2,600,000 for termination benefits and $139,000 for costs associated with the relocation of existing employees. Through September 27, 2004, the Company has paid all termination benefits and all costs associated with relocation of existing employees. The Company has completed this restructuring plan.

The following summarizes the cumulative activity in the Company’s reserve related to this activity as of September 27, 2004 (in thousands):

In connection with the relocation of Star magazine, the Company entered into an agreement to lease an additional 33,000 square feet in its One Park Avenue building in New York City. The lease term for this additional space is from November 2003 to March 2010. The annual base rent for this additional space is approximately $940,000.

(16) NEW ACCOUNTING PRONOUNCEMENTS

In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities” (“FIN 46”), which was amended in December 2003. This Interpretation requires variable interest entities (commonly referred to as SPEs) to be consolidated by the primary beneficiary of the entity if certain criteria are met. FIN 46 is effective immediately for all new variable interest entities created or acquired after January 31, 2003. For variable interest entities created or acquired prior to February 1, 2003, the provisions of FIN 46 must be applied for the first interim or annual period beginning after June 15, 2003. The adoption of this Interpretation did not have a material effect on our consolidated financial statements.

In April 2003, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities”. This Statement amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives) and for hedging activities under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”. This Statement is effective for contracts entered into or modified after June 30, 2003. The adoption of SFAS No. 149 did not have a material impact on our consolidated financial statements.

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity”. This Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It

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requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). This Statement is effective for financial instruments entered into or modified after May 30, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. The adoption of SFAS No. 150 did not have a material impact on our consolidated financial statements.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Executive Summary

We are a leading publisher in the fields of weekly celebrity journalism and health and fitness magazines. We publish the following magazines: Star, Shape, Men’s Fitness, Muscle & Fitness, Flex, Muscle & Fitness Hers, Fit Pregnancy, Natural Health, Shape en Espanol, National Enquirer, Globe, National Examiner, Weekly World News, Sun, Country Weekly and MIRA!, as well as other special topic magazines.

Results of Operations

Fiscal Quarter Ended September 27, 2004 vs. Fiscal Quarter Ended September 29, 2003

Please note that our fiscal quarter ended September 27, 2004 includes 14 issues of our weekly publications versus 13 issues for the prior year’s comparable fiscal quarter due to a change in the scheduled delivery dates of the weekly publications. The delivery of these publications generally moved up to a pre-weekend schedule during the quarter ended September 27, 2004. Revenues from this additional issue of our weekly publications were partially offset by one less issue of Men’s Fitness and Muscle and Fitness Hers in the current fiscal quarter. The net impact on operating revenues was an increase of $4.6 million.

Revenues

Total operating revenues were $136,562,000 for the current fiscal quarter. Operating revenues increased by $9,689,000, or 7.6%, from the prior year’s comparable fiscal quarter. This increase is primarily due to an increase in circulation revenues of $6.5 million and an increase in advertising revenues of $3.9 million. The increase in circulation revenues is primarily related to an increase in the cover price for the Star and the net impact of the issue delivery changes as discussed above. These increases were partially offset by an 8.8% decline in circulation unit sales for AMI’s weekly publications, which was in-line with other checkout titles’ performance. Contributing to the decline in unit sales were factors including recent strong competition in the weekly magazine market.

Advertising revenues increased $3.9 million or 10.1% from the prior year’s comparable fiscal quarter. This increase in advertising revenues is primarily related to Star and Shape. Advertising revenue for Star is up 57% from the prior year’s comparable fiscal quarter. Advertising revenue for Shape is up 34% from the prior year’s comparable fiscal quarter.

Operating Expenses

Total operating expenses for the current fiscal quarter increased by $14,481,000, or 14.5% versus the prior year. This increase was primarily due to increased operating expenses related to Star in the current fiscal quarter ($9.2 million), significantly increased legal charges ($3.6 million), an increase in depreciation expense ($0.8 million) and the net impact of the issue delivery changes ($2.4 million). These increases were offset by $2.7 million of restructuring expenses that were charged to expense during the prior year’s comparable fiscal quarter. Upgraded paper for Star contributed approximately $4.2 million and one-time promotional cost contributed $0.9 million of the $9.2 million in incremental expenses.

Interest Expense

Interest expense decreased for the current fiscal quarter by $100,000 to $17,539,000 compared to the prior year’s comparable fiscal quarter. Included in interest expense for the current fiscal quarter was a decrease in interest expense of $2.5 million related to our interest rate swap agreement. Included in interest expense for the prior year’s comparable fiscal quarter was a decrease in interest expense of $1.5 million related to our interest swap agreement. Additionally, there was a higher effective interest rate during the current fiscal quarter of 4.4% as compared to 4.0% in the prior year’s comparable fiscal quarter.

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Income Taxes

The provision for income taxes decreased for the current fiscal quarter by $1,595,000 to $1,981,000 compared to the prior year’s comparable fiscal quarter. This decrease was primarily due to the overall decrease in pre-tax income. The effective tax rate for the fiscal quarters ended September 27, 2004 and September 29, 2003 was 42% and 38%, respectively.

Two Fiscal Quarters Ended September 27, 2004 vs. Two Fiscal Quarters Ended September 29, 2003

Please note that our two fiscal quarters ended September 27, 2004 include 27 issues of our weekly publications versus 26 issues for the prior year’s comparable two fiscal quarters due to a change in the scheduled delivery dates of the weekly publications. The delivery of these publications generally moved to a pre-weekend schedule during the quarter ended September 27, 2004. Revenues from this additional issue of our weekly publications were partially offset by one less issue of Men’s Fitness (five issues versus six) and Muscle and Fitness Hers (four issues versus five) in the two quarters ended September 27, 2004. The net impact on operating revenues was an increase of $4.6 million.

Revenues

Total operating revenues were $270,009,000 for the first six months. Operating revenues increased by $18,162,000, or 7.2%, from the prior year. This increase is primarily due to an increase in circulation revenues of $9.3 million and an increase in advertising revenues of $9.3 million, which includes the net impact of the issue delivery changes of $4.6 million as discussed above. The increase in circulation revenues is primarily related to the Star. In addition, the new Star has increased single copy sales since its April 2004 national launch by 9.2%, even at the higher $3.29 cover price. This increase was partially offset by an 11.0% decline in circulation unit sales for AMI’s weekly publications, which was in-line with other checkout titles’ performance. Contributing to the decline in unit sales were factors including recent strong competition in the weekly magazine market.

Advertising revenues increased $9.3 million or 12.2% from the prior year. This increase in advertising revenues is primarily related to the Star and Shape. Star’s advertising revenues increased 42% versus the prior year. Advertising revenues for Shape has increased 30% from the prior year.

Operating Expenses

Total operating expenses for the first six months increased by $27,042,000, or 13.8%, when compared to the prior year. This increase was primarily due to operating expenses related to Star in the first six months ($19.7 million), significantly increased legal charges ($3.1 million), an increase in depreciation expense ($1.9 million) and the net impact of the issue delivery changes ($2.4 million). These increases were offset by $2.7 million of restructuring expenses that were charged to expense during the prior year’s comparable two fiscal quarters. Upgraded paper for the Star contributed approximately $7.9 million and one-time promotional costs contributed $3.9 million of the $19.7 million in incremental expenses.

Interest Expense

Interest expense increased for the two current fiscal quarters by $3,286,000 to $40,975,000 compared to the prior year. This increase in interest expense relates to increased interest expense of $1.3 million for the two current fiscal quarters related to our interest rate swap agreement versus a decline of $1.5 million in the prior year’s results.

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Income Taxes

The provision for income taxes decreased for the two current fiscal quarters by $4,308,000 to $2,571,000 compared to the prior year’s comparable two fiscal quarters. This decrease was primarily due to lowered pre-tax income. The effective tax rate for the six months ended September 27, 2004 and September 29, 2003 was 43% and 38%, respectively.

LIQUIDITY AND CAPITAL RESOURCES

We have substantially increased our indebtedness in connection with the Weider Acquisition. Our liquidity requirements have been significantly increased, primarily due to increased interest and principal payment obligations under the Credit Agreement and our subordinated notes. We believe that the net cash generated from operating activities and amounts available under the $60.0 million revolving credit facility will be sufficient to fund our debt service requirements under the Credit Agreement and the subordinated notes, to make capital expenditures and to cover working capital requirements. As of September 27, 2004, there were no amounts outstanding on the revolving credit facility. We believe, however, that based upon our current level of operations and anticipated growth, it will be necessary to refinance the subordinated notes upon their maturity. To the extent we make future acquisitions, we may require new sources of funding, including additional debt, equity financing or some combination thereof. There can be no assurances that such additional sources of funding will be available to us on acceptable terms.

Our ability to make scheduled payments of principal and interest under the Credit Agreement and the subordinated notes, as well as our other obligations and liabilities, is subject to our future operating performance which is dependent upon general economic, financial, competitive, legislative, regulatory, business and other factors beyond our control.

At September 27, 2004, we had cash and cash equivalents of $15.6 million and a working capital deficiency of $7.8 million. We do not consider our working capital deficiency to be a true measure of our liquidity position as our working capital needs typically are met by cash generated by our business. Our working capital deficiency resulted principally from our policy of using available cash to reduce borrowings which are recorded as noncurrent liabilities, thereby reducing current assets without a corresponding reduction in current liabilities.

Historically, our primary sources of liquidity have been cash generated from operations and amounts available under our credit agreements, which have been used to fund shortfalls in available cash.

We made capital expenditures in the two fiscal quarters ended September 29, 2003 and September 27, 2004 totaling $12.5 million and $11.4 million, respectively.

At September 27, 2004, our outstanding indebtedness totaled $978.0 million, of which $426.8 million represented borrowings under the credit agreement and $0.5 million represents unamortized bond premium. At November 10, 2004, our outstanding indebtedness totaled $976.6 million, of which $425.4 million represented borrowings under the credit agreement. As of September 27, 2004, the Company’s effective interest rate on borrowings under the credit agreement was 4.4%. The effective rate for borrowings under the credit agreement averaged 4.2% for the two fiscal quarters ended September 27, 2004. The effective rate for borrowings under the credit agreement averaged 4.1% for the two fiscal quarters ended September 29, 2003.

American Media Operations, Inc. has no material assets or operations other than the investments in our subsidiaries. The subordinated notes are unconditionally guaranteed, on a senior subordinated basis, by all of our domestic subsidiaries. Each domestic subsidiary that will be organized in the future by us, unless such subsidiary is designated as an unrestricted subsidiary, will jointly, severally, fully and unconditionally guarantee the subordinated notes on a senior subordinated basis. Subordinated note guarantees are joint and several, full and unconditional and general unsecured obligations of the note guarantors. The note guarantors are our subsidiaries. At present, the note guarantors comprise all of our direct and indirect domestic

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subsidiaries. Note guarantees are subordinated in right of payment to all existing and future senior debt of the note guarantors, including the credit facility, and are also effectively subordinated to all secured obligations of note guarantors to the extent of the assets securing such obligations, including the credit facility. Furthermore, the subordinated note indentures permit note guarantors to incur additional indebtedness, including senior debt, subject to certain limitations. We have not presented separate financial statements and other disclosures concerning each of the note guarantors, as these disclosures are not applicable under SEC rules and regulations.

Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”)

The following table and discussion summarizes EBITDA for the three months and six months ended September 29, 2003 and September 27, 2004 (dollars in 000’s):

We define EBITDA as net income (loss) before extraordinary charges, interest expense, income taxes, depreciation and amortization and other income (expense). EBITDA is not a measure of performance defined by GAAP. EBITDA should not be considered in isolation or as a substitute for net income or cash flows from operating activities, which have been prepared in accordance with GAAP or as a measure of our operating performance, profitability or liquidity. We believe EBITDA provides useful information regarding our ability to service our debt, and we understand that such information is considered by certain investors to be an additional basis for evaluating a company’s ability to pay interest and repay debt. EBITDA is a widely used performance measure for publishing companies and is provided here as a supplemental measure of operating performance to operating income calculated in accordance with GAAP.

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New Accounting Pronouncements

In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities” (“FIN 46”), which was amended in December 2003. This Interpretation requires variable interest entities (commonly referred to as SPEs) to be consolidated by the primary beneficiary of the entity if certain criteria are met. FIN 46 is effective immediately for all new variable interest entities created or acquired after January 31, 2003. For variable interest entities created or acquired prior to February 1, 2003, the provisions of FIN 46 must be applied for the first interim or annual period beginning after June 15, 2003. The adoption of this Interpretation did not have a material effect on our consolidated financial statements.

In April 2003, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities”. This Statement amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives) and for hedging activities under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”. This Statement is effective for contracts entered into or modified after June 30, 2003. The adoption of SFAS No. 149 did not have a material impact on our consolidated financial statements.

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity”. This Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). This Statement is effective for financial instruments entered into or modified after May 30, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. The adoption of SFAS No. 150 did not have a material impact on our consolidated financial statements.

Critical Accounting Policies and Estimates

During the fiscal quarter ended September 27, 2004, there were no significant changes related to the Company’s critical accounting policies and estimates as disclosed in the Company’s annual report on Form 10-K for the fiscal year ended March 29, 2004.

Forward-Looking Statements

Some of the information presented in this Form 10-Q constitutes forward-looking statements, including, in particular, the statements about our plans, strategies and prospects under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. We have based these forward-looking statements on our current assumptions, expectations and projections about future events. We caution you that a variety of factors could cause business conditions and results to differ materially from what is contained in the forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions about us, including, among other things:

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to certain market risks that are inherent in our financial statements. We are subject to interest risk on our credit facilities and any future financing requirements. Our fixed rate debt consists primarily of senior subordinated notes.

Interest rate changes result in increases or decreases in our income before taxes and cash provided from operating activities. A 1% change in our weighted interest rate on our variable debt would have resulted in a change of $1.4 million in our interest expense for the fiscal quarter ended September 27, 2004.

Effective August 20, 2003, we entered into an interest rate swap agreement, which effectively converted a portion of our fixed-rate debt to variable rate debt. The agreement is scheduled to expire in January 2007 and has a notional amount of $150 million. Under this agreement, we received a fixed rate of 8.875% and pay LIBOR in arrears plus a spread of 5.38% subject to a collar adjustment. As of September 27, 2004, the fair value of this swap was a receivable of $311,000. The change in the fair value of the swap has been recognized as an addition to interest expense for the fiscal quarter ended September 27, 2004. On January 15, 2004, we received $1,635,000 in connection with the interim settlement of this swap agreement. Additionally, on July 15, 2004, we received $1,166,000 in connection with the interim settlement of this swap agreement. The next reset date for this swap agreement is January 15, 2005. At each reset date the Company either receives or pays money based on the fair value of the swap as of that date.

Our primary market risk exposures relate to (1) the interest rate risk on long-term and short-term borrowings, (2) our ability to refinance our senior subordinated notes at maturity at market rates, (3) the impact of interest rate movements on our ability to meet interest expense requirements and comply with financial covenants and (4) the impact of interest rate movements on our ability to obtain adequate financing to fund acquisitions. We manage the interest rate risk on our outstanding long-term and short-term debt through our use of fixed and variable rate debt. While we cannot predict or manage our ability to refinance existing debt or the impact interest rate movements will have on our ability to refinance existing debt, we continue to evaluate our financial position on an ongoing basis.

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ITEM 4. CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures:

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended.

(b) Internal Control Over Financial Reporting:

During the three month period ended September 27, 2004, there have not been any changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

See footnote 11 of Part I, Item I.

Item 6. Exhibits

Exhibit 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.

Exhibit 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.

Exhibit 32 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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Exhibit Index

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