Gannett Co., Inc. Reports Third-Quarter Results
Gannett Co., Inc. Reports Third-Quarter Results
ARLINGTON, VA – Gannett Co., Inc. announced today that 2001 third-quarter diluted earnings per share from continuing operations were 66 cents compared with 79 cents for the third quarter of 2000. After-tax cash flow per diluted share (defined as after-tax income from continuing operations plus depreciation and amortization expense) was $1.08 in the 2001 third quarter versus $1.18 in 2000’s third quarter.
Results for the quarter include the properties acquired from Thomson Newspapers Inc. in July 2000, and the acquisition of Central Newspapers, Inc. in August 2000.
Total operating revenues for the company declined 3 percent to $1.52 billion in the third quarter of 2001 from $1.56 billion in 2000’s third quarter. If Gannett had owned the same group of properties in both quarters, revenues would have declined 7 percent. Operating cash flow was $448.8 million in the 2001 third quarter compared with $524.6 million in the corresponding period in 2000. Net income totaled $174.8 million in the third quarter of 2001 compared with $208.3 million in the same quarter of last year.
Average diluted shares outstanding in the quarter totaled 266,910,000 compared with 265,232,000 in 2000’s third quarter.
Commenting on the company’s performance, Douglas H. McCorkindale, Chairman, President and CEO said, “The events of September 11 once again confirmed the importance of our business: News and information are crucial to the well being of our readers and viewers and the communities we serve. But these same events accelerated declines in an already challenging domestic advertising environment.
“Television, facing very tough comparisons, did its job commercial-free in the days immediately following the attacks and then saw advertisers remain cautious in the midst of uncertainty. Our domestic newspapers, particularly USA TODAY, experienced a quick downturn in business following September 11 but have seen improvement since then. Overseas, our Newsquest properties continue to make solid contributions to cash flow and earnings. And stringent cost controls and significantly lower interest expense helped to mitigate the impact of the weak advertising environment.”
For the first nine months of 2001, total operating revenues from continuing operations rose 9 percent to $4.72 billion from $4.33 billion for the same interval in 2000. Operating cash flow, on the same basis, declined 1 percent to $1.49 billion from $1.5 billion. Diluted earnings per share from continuing operations were $2.19 for the nine-month period versus $2.51 in the corresponding period last year. After-tax cash flow per diluted share from continuing operations was $3.44 year-to-date in 2001 compared with $3.50 for the same period in 2000.
Newspapers
Total newspaper segment operating cash flow was $401.8 million in the third quarter of 2001, versus $446.5 million in 2000’s third quarter and operating revenues were flat year-over- year. If the same group of newspapers had been owned in both quarters, pro forma advertising revenues would have fallen 7 percent which includes a 4 percent decline in local, a 12 percent decrease in national and an 8 percent reduction in classified. Newsprint expense rose 7 percent in the quarter reflecting usage related to the previously highlighted acquisitions and higher year-over-year prices. On a pro forma basis, newsprint expense would have risen just 3 percent.
At USA TODAY, paid advertising pages declined 21 percent to 1,192 in the third quarter compared with 1,502 in 2000’s third quarter. Advertising revenues declined 19 percent. USA TODAY’s results in the quarter were adversely affected by the absence of year earlier Olympics-related ad spending. In the days following the terrorist attacks, there was little demand for travel-related advertising, an important category for USA TODAY. For the year-to-date, USA TODAY’s advertising revenues fell 19 percent and paid pages totaled 3,969, a 21 percent decline.
Television
In the 2001 third quarter, television revenues declined 19 percent to $148.2 million, down from $183.4 million in last year’s third quarter. The revenue decline reflected the challenging comparisons with 2000’s third quarter, which benefited from Olympic and strong political ad spending. Third quarter 2001 advertising revenues were also affected by several days of commercial-free coverage and uncertainty in the wake of the September 11 events. Television operating cash flow decreased to $60.8 million from $92.3 million in 2000’s third quarter.
Internet
At the end of the third quarter, Gannett had more than 100 domestic publishing-related Web sites, including USATODAY.com, one of the most popular newspaper sites on the Web. The company also has Web sites in all of its 19 television markets. In September, Gannett’s consolidated domestic Internet audience share was 12 million unique visitors reaching 11 percent of the Internet audience, according to Nielsen/NetRatings. In the first nine months of 2001, the company generated about $54 million in revenues from Internet activities.
Gannett Co., Inc. (NYSE: GCI) is an international news and information company that publishes 97 daily newspapers in the USA, including USA TODAY, the nation’s largest-selling daily newspaper. The company also owns in excess of 300 non-daily publications in the USA and USA WEEKEND, a weekly newspaper magazine. In the United Kingdom, Gannett subsidiary Newsquest plc publishes nearly 300 titles, including 15 daily newspapers. Gannett also operates 22 television stations in the United States and is an Internet leader with sites sponsored by most of its TV stations and newspapers.
Certain statements in this press release may be forward looking in nature or “forward looking statements” as defined in the Private Securities Litigation Reform Act of 1995. The forward looking statements contained in this press release are subject to a number of risks, trends and uncertainties that could cause actual performance to differ materially from these forward looking statements. A number of those risks, trends and uncertainties are discussed in the company’s SEC reports, including the company’s annual report on Form 10-K and quarterly reports on Form 10-Q. Any forward-looking statements in this press release should be evaluated in light of these important risk factors.
Gannett is not responsible for updating the information contained in this press release beyond the published date, or for changes made to this press release by wire services, Internet service providers or other media.
For investor inquiries, contact:
Gracia Martore
Gannett Co., Inc.
Treasurer and Vice President/Investor Relations
703-284-6918
or
For media inquiries, contact:
Tara Connell
Gannett Co., Inc.
Director of Public Affairs
703-284-6049
THIRD-QUARTER 2001 FINANCIAL STATEMENTS
Monday, Oct. 15, 2001
CONSOLIDATED STATEMENTS OF INCOME
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)Thirteen weeks ended % Inc
Sept. 30, 2001 Sept. 24, 2000 (Dec)Net Operating Revenues:
Newspaper advertising $ 988,045 $ 1,004,280 (1.6)
Newspaper circulation 306,139 286,890 6.7
Television 148,229 183,352 (19.2)
Other 75,515 83,998 (10.1)
------------- ------------- ------
Total 1,517,928 1,558,520 (2.6)
------------- ------------- ------Operating Expenses:
Cost of sales and operating
expenses, exclusive of
depreciation 824,839 788,209 4.6
Selling, general and
administrative expenses,
exclusive of depreciation 244,308 245,735 (0.6)
Depreciation 50,916 51,509 (1.2)
Amortization of intangible assets 61,267 52,082 17.6
------------- ------------- ------
Total 1,181,330 1,137,535 3.8
------------- ------------- ------
Operating income 336,598 420,985 (20.0)
------------- ------------- ------
Non-operating income (expense):
Interest expense (48,600) (75,962) (36.0)
Other 530 (260) ----
------------- ------------- ------
Total (48,070) (76,222) (36.9)
------------- ------------- ------Income before income taxes 288,528 344,763 (16.3)
Provision for income taxes 113,700 136,500 (16.7)
------------- ------------- ------
Net income $ 174,828 $ 208,263 (16.1)
============= ============= ======Net income per share-basic $0.66 $0.79 (16.5)
===== ===== ======Net income per share-diluted $0.66 $0.79 (16.5)
===== ===== ======Dividends per share $0.23 $0.22 4.5
===== ===== ======CONSOLIDATED STATEMENTS OF INCOME
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)Thirty-nine weeks ended % Inc
Sept. 30, 2001 Sept. 24, 2000 (Dec)Net Operating Revenues:
Newspaper advertising $ 3,066,878 $ 2,746,479 11.7
Newspaper circulation 925,167 792,560 16.7
Television 482,534 555,554 (13.1)
Other 245,529 233,054 5.4
------------- ------------- ------
Total 4,720,108 4,327,647 9.1
------------- ------------- ------
Operating Expenses:
Cost of sales and operating
expenses, exclusive of
depreciation 2,488,416 2,138,779 16.3
Selling, general and
administrative expenses,
exclusive of depreciation 745,370 689,270 8.1
Depreciation 155,256 145,187 6.9
Amortization of intangible assets 180,067 121,227 48.5
------------- ------------- ------
Total 3,569,109 3,094,463 15.3
------------- ------------- ------
Operating income 1,150,999 1,233,184 (6.7)
------------- ------------- ------Non-operating income (expense):
Interest expense (190,770) (118,803) 60.6
Other 1,506 6,361 (76.3)
------------- ------------- ------
Total (189,264) (112,442) 68.3
------------- ------------- ------Income before income taxes 961,735 1,120,742 (14.2)
Provision for income taxes 378,900 443,700 (14.6)
------------- ------------- ------
Income from continuing operations 582,835 677,042 (13.9)
------------- ------------- ------Discontinued Operations:
Income from the operation of
discontinued operations, net
of tax 2,437 --
Gain on sale of cable business,
net of tax 744,700 --
------------- ------------- ------
Net income $ 582,835 $ 1,424,179 (59.1)
============= ============= ======Earnings from continuing
operations per share-basic $2.20 $2.53 (13.0)Earnings from discontinued
operations:
Discontinued operations per
share-basic $0.01 --
Gain on sale of cable business
per share-basic $2.79 --
----- ----- -------
Net income per share-basic $2.20 $5.33 (58.7)
===== ===== =======Earnings from continuing
operations per share-diluted $2.19 $2.51 (12.7)Earnings from discontinued
operations:
Discontinued operations per
share-diluted $0.01 --
Gain on sale of cable business
per share-diluted $2.77 ------- ----- -------
Net income per share-diluted $2.19 $5.29 (58.6)
===== ===== =======Dividends per share $0.67 $0.64 4.7
===== ===== =======Earnings Summary Excluding
2000 Discontinued OperationsThirty-nine weeks ended % Inc
Sept. 30, 2001 Sept. 24, 2000 (Dec)------------- ------------- -------
Operating income $ 1,150,999 $ 1,233,184 (6.7)
------------- ------------- -------Non-operating income (expense):
Interest expense (190,770) (118,803) 60.6
Other 1,506 6,361 (76.3)
------------- ------------- -------
Total (189,264) (112,442) 68.3
------------- ------------- -------Income before income taxes 961,735 1,120,742 (14.2)
Provision for income taxes 378,900 443,700 (14.6)
------------- ------------- -------
Income from continuing operations $ 582,835 $ 677,042 (13.9)
============= ============= =======Earnings from continuing ----- ----- -------
operations per share-basic $2.20 $2.53 (13.0)
===== ===== =======Earnings from continuing ----- ----- -------
operations per share-diluted $2.19 $2.51 (12.7)
===== ===== =======----- ----- -------
Dividends per share $0.67 $0.64 4.7
===== ===== =======BUSINESS SEGMENT INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollarsThirteen weeks ended % Inc
Sept. 30, 2001 Sept. 24, 2000 (Dec)Operating Revenues:
Newspaper publishing $ 1,369,699 $ 1,375,168 (0.4)
Television 148,229 183,352 (19.2)
------------- ------------- -----
Total $ 1,517,928 $ 1,558,520 (2.6)
============= ============= =====Operating Income (net of
depreciation and amortization):
Newspaper publishing $ 308,199 $ 361,068 (14.6)
Television 43,743 76,047 (42.5)
Corporate (15,344) (16,130) 4.9
------------- ------------- -----
Total $ 336,598 $ 420,985 (20.0)
============= ============= =====Depreciation and Amortization:
Newspaper publishing $ 93,613 $ 85,405 9.6
Television 17,098 16,248 5.2
Corporate 1,472 1,938 (24.0)
------------- ------------- -----
Total $ 112,183 $ 103,591 8.3
============= ============= =====Operating Cash Flow:
Newspaper publishing $ 401,812 $ 446,473 (10.0)
Television 60,841 92,295 (34.1)
Corporate (13,872) (14,192) 2.3
------------- ------------- -----
Total $ 448,781 $ 524,576 (14.4)
============= ============= =====NOTE: Operating Cash Flow represents operating income for each of the company's
business segments plus related depreciation and amortization expense.BUSINESS SEGMENT INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollarsThirty-nine weeks ended % Inc
Sept. 30, 2001 Sept. 24, 2000 (Dec)Operating Revenues:
Newspaper publishing $ 4,237,574 $ 3,772,093 12.3
Television 482,534 555,554 (13.1)
------------- ------------- -----
Total $ 4,720,108 $ 4,327,647 9.1
============= ============= =====Operating Income (net of
depreciation and amortization):
Newspaper publishing $ 1,021,126 $ 1,037,734 (1.6)
Television 175,012 244,044 (28.3)
Corporate (45,139) (48,594) 7.1
------------- ------------- -----
Total $ 1,150,999 $ 1,233,184 (6.7)
============= ============= =====Depreciation and Amortization:
Newspaper publishing $ 279,681 $ 210,937 32.6
Television 51,181 49,283 3.9
Corporate 4,461 6,194 (28.0)
------------- ------------- -----
Total $ 335,323 $ 266,414 25.9
============= ============= =====Operating Cash Flow:
Newspaper publishing $ 1,300,807 $ 1,248,671 4.2
Television 226,193 293,327 (22.9)
Corporate (40,678) (42,400) 4.1
------------- ------------- -----
Total $ 1,486,322 $ 1,499,598 (0.9)
============= ============= =====NOTE: Operating Cash Flow represents operating income for each of the company's
business segments plus related depreciation and amortization expense.