Gannett Releases August Statistical Report
McLEAN, VA – Gannett Co., Inc. (NYSE: GCI) reported today that total pro forma operating revenues for the eighth period ended August 28, 2005 decreased 4.5 percent, resulting from the absence of Summer Olympics-related advertising that benefited the company’s NBC stations and USA TODAY last August, significantly lower political ad spending, and lower ad demand at its UK properties. Olympics and political-related ad spending totaled $37 million in August 2004. For comparison purposes, the drop in the exchange rate of Sterling year-over-year also affected the company’s revenue comparisons. If the exchange rate had remained constant year-over-year, total pro forma operating revenues would have declined 4.1 percent for the period.
In addition, beginning this period, the company consolidated the results of the Detroit Newspaper Partnership for all periods presented.
Pro forma (assuming that all properties presently owned were owned in both periods) newspaper advertising revenues in August declined less than one percent compared with the eighth period in 2004 on a 3.7 percent decline in ROP volume and 1.1 percent decrease in preprint distribution. If the exchange rate had remained constant year-over-year, total newspaper advertising revenues would have declined slightly for the period.
Pro forma local advertising revenues were 1.2 percent lower on a 4.6 percent decline in ROP ad volume in August. The performance of the company’s small and medium-sized advertisers in its domestic newspapers outpaced the revenue performance of its largest advertisers. In the U.S., across all products, local ad revenue gains were achieved in the financial, telecommunications, grocery and health categories while the department store, furniture, consumer electronics and restaurant categories lagged last year’s comparable period results. On a constant currency basis, pro forma local advertising would have declined almost 1.0 percent.
Pro forma classified revenues rose 2.5 percent in the eighth period on a 3.1 percent decline in ROP in ad volume. On a constant currency basis, classified revenues would have been
3.3 percent higher. Employment revenues were up 3.9 percent, real estate revenues increased
2.7 percent while automotive revenues were 9.8 percent lower compared to last year’s eighth period. On a constant currency basis, employment revenues would have been up 4.8 percent, real estate revenues would have increased 3.6 percent and automotive revenues would have been
9.4 percent lower. Overall, the company’s domestic classified results were stronger than its UK results. In the U.S., employment revenues increased 15.7 percent and real estate revenues were up 6.0 percent.
Pro forma national advertising revenues in August declined 8.2 percent on a 5.1 percent decline in ad volume. National volume at the company’s local domestic newspapers was down 2.7 percent in the period. At USA TODAY, advertising revenues were 16.8 percent lower on a
21.7 percent decline in paid ad pages to 250 from 319, reflecting primarily the absence of Summer Olympics-related ad demand. For comparison purposes, USA TODAY’s ad revenues were up almost 23 percent in August of 2004. For the eighth period, at USA TODAY, the automotive, entertainment and telecommunications categories increased while the technology, financial, packaged goods, travel, and retail categories declined compared to Period 8 in 2004. For the year-to-date, USA TODAY’s advertising revenues declined less than 1 percent while paid advertising pages totaled 2,897 versus 3,075 last year.
Pro forma broadcasting revenues, which include Captivate, decreased 34.9 percent in the period. Television revenues were 35.7 percent lower reflecting the absence of Summer Olympics-related ad demand and significantly lower political advertising. Local revenues declined
27.2 percent while national revenues were 48.6 percent lower. Based on current pacings, television revenues for the third quarter of 2005 would be below last year’s comparable period in the very high teens. This is due principally to the absence of over $50 million of political and Olympic advertising that benefited the third quarter of 2004.
In addition to the revenue and statistical summary, attached is a chart which shows the consolidated Gannett Online audience share from Nielsen//Net Ratings. In August, Gannett’s consolidated domestic Internet audience share totaled 22.5 million unique visitors reaching approximately 15 percent of the Internet audience.
On August 3, 2005, the company and MediaNews Group announced the reorganization of the Detroit Newspaper Agency. As part of the transaction, Knight Ridder sold its newspaper interests in Detroit to Gannett and MediaNews Group and the two newspaper publishers formed the Detroit Newspaper Partnership, L.P. MediaNews Group acquired The Detroit News from Gannett and Gannett acquired the Detroit Free Press. Beginning with this period, Detroit’s results have been fully consolidated in the financial statements of Gannett along with a minority interest charge to operations for MediaNews Group’s interest.
In a separate transaction on August 29th, the company completed an exchange of assets with Knight Ridder, Inc. in which Knight Ridder received from Gannett The (Boise) Idaho Statesman, and two newspapers in the state of Washington: The (Olympia) Olympian, and The Bellingham Herald. In return, Gannett received the Tallahassee (FL) Democrat and cash consideration. Therefore, all previously reported results for the former Gannett properties will be reclassified to income from discontinued operations. In addition, a gain resulting from the exchange will be included in discontinued operations.
The pro forma advertising and circulation revenue statistics include the results for
100 percent of the Detroit Newspaper Partnership (established August 2005), Mint Magazine (acquired in July 2005), HomeTown Communications (acquired in late March 2005), Captivate (acquired in April 2004) and NurseWeek (acquired in February 2004). The pro forma other revenue statistics include the results for PointRoll, Inc. (acquired in June 2005). Ad linage for Newsquest, Clipper and NurseWeek are not included in the ad volume statistics. Circulation volume numbers for Newsquest’s paid daily newspapers are included in the enclosed statistics, but volume from unpaid daily and non-daily publications is not included in the circulation volume statistics.
Gannett Co., Inc. is a leading international news and information company that publishes 99 daily newspapers in the USA, including USA TODAY, the nation’s largest-selling daily newspaper. The company also owns more than 900 non-daily publications in the USA and USA WEEKEND, a weekly newspaper magazine. Gannett subsidiary Newsquest is the United Kingdom’s second largest regional newspaper company. Newsquest publishes more than 300 titles, including 17 daily newspapers, and a network of prize-winning Web sites. Gannett also operates 21 television stations in the United States and is an Internet leader with sites sponsored by its TV stations and newspapers including USATODAY.com, one of the most popular news sites on the Web.
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.
Contact:
Jeff Heinz
Director, Investor Relations
703-854-6917
jheinz@gannett.com
GANNETT CO., INC.
REVENUE & STATISTICAL SUMMARY
Period 8 (Aug. 1, 2005 - Aug. 28, 2005)
%
2005 2004 CHANGE CHANGE
REVENUES:
Advertising:
Local $ 168,849,000 $ 170,861,000 $ (2,012,000) (1.2)
National 54,840,000 59,754,000 (4,914,000) (8.2)
Classified 177,062,000 172,756,000 4,306,000 2.5
-------------- -------------- -------------- ----
Total Advertising $ 400,751,000 $ 403,371,000 $ (2,620,000) (0.6)
Circulation 101,733,000 101,717,000 16,000 0.0
Other revenue 33,728,000 31,852,000 1,876,000 5.9
Broadcasting 50,085,000 76,960,000 (26,875,000) (34.9)
-------------- -------------- -------------- ----
Total Revenue $ 586,297,000 $ 613,900,000 $ (27,603,000) (4.5)
============== ============== ============== ====
VOLUME:
Newspaper Inches:
Local 2,690,227 2,819,031 (128,804) (4.6)
National 281,025 296,282 (15,257) (5.1)
Classified 4,810,629 4,962,595 (151,966) (3.1)
-------------- -------------- -------------- ----
Total ROP 7,781,881 8,077,908 (296,027) (3.7)
============== ============== ============== ====
Preprint Distribution
in thousands 959,375 969,831 (10,456) (1.1)
============== ============== ============== ====
NET PAID CIRCULATION:
Morning (w/USAT) 7,094,119 7,298,896 (204,777) (2.8)
Evening 913,688 958,094 (44,406) (4.6)
-------------- -------------- -------------- ----
Total Daily 8,007,807 8,256,990 (249,183) (3.0)
============== ============== ============== ====
Sunday 6,586,912 6,819,957 (233,045) (3.4)
============== ============== ============== ====
Year-to-Date through Aug. 28, 2005
%
2005 2004 CHANGE CHANGE
REVENUES:
Advertising:
Local $ 1,499,505,000 $ 1,457,924,000 $ 41,581,000 2.9
National 538,760,000 538,676,000 84,000 0.0
Classified 1,512,961,000 1,456,379,000 56,582,000 3.9
-------------- -------------- -------------- ----
Total Advertising $ 3,551,226,000 $ 3,452,979,000 $ 98,247,000 2.8
Circulation 897,787,000 894,730,000 3,057,000 0.3
Other revenue 284,172,000 259,859,000 24,313,000 9.4
Television 470,873,000 527,258,000 (56,385,000) (10.7)
-------------- -------------- -------------- ----
Total Revenue $ 5,204,058,000 $ 5,134,826,000 $ 69,232,000 1.3
============== ============== ============== ====
VOLUME:
Newspaper Inches:
Local 24,388,451 25,014,502 (626,051) (2.5)
National 2,737,916 2,914,377 (176,461) (6.1)
Classified 40,897,598 41,672,787 (775,189) (1.9)
-------------- -------------- -------------- ----
Total ROP 68,023,965 69,601,666 (1,577,701) (2.3)
============== ============== ============== ====
Preprint Distribution
in thousands 8,254,796 8,061,230 193,566 2.4
============== ============== ============== ====
NET PAID CIRCULATION:
Morning (w/USAT) 7,274,707 7,451,908 (177,201) (2.4)
Evening 948,227 988,915 (40,688) (4.1)
-------------- -------------- -------------- ----
Total Daily 8,222,934 8,440,823 (217,889) (2.6)
============== ============== ============== ====
Sunday 6,688,319 6,901,165 (212,846) (3.1)
============== ============== ============== ====
Note: The above revenue amounts and statistics have been restated to include all companies presently owned, including 100% of the Detroit Newspaper Partnership (established August 2005), Mint Magazine (acquired in July 2005), PointRoll, Inc. (acquired in June 2005), HomeTown Communications acquired in late March 2005), Captivate (acquired in April 2004) and NurseWeek (acquired in February 2004). PointRoll is a marketing services company with a suite of media products that delivers enhanced online marketing opportunities for advertisers, agencies and online publishers. PointRoll is included above in Other revenue. HomeTown is a community publishing company with one daily newspaper, 62 non-daily community newspapers, 24 community telephone directories and other specialty and niche publications. Captivate is a national news and entertainment network that delivers programming and full motion video advertising through wireless digital video screens in elevators of premier office towers. Captivate is included above in Broadcasting revenue. NurseWeek is a multimedia company with print publications focused on the recruitment, recognition and education of nurses.
Operating results from the company’s newspaper in Tucson, which participates in a joint operating agency, are accounted for under the equity method of accounting and are reported as a single amount in other operating revenues. Advertising linage statistics from this newspaper are not included above, however, circulation volume statistics are included.
Newsquest is a regional newspaper publisher in the United Kingdom with more than 300 titles, including paid and unpaid daily and non-daily products. Circulation volume statistics for Newsquest’s 17 paid daily newspapers are included above. Circulation volume statistics for Sunday Herald are included above in the Sunday statistics. Circulation volume statistics for Newsquest’s unpaid daily and non-daily publications are not reflected above. Advertising linage for Newsquest publications is not reflected above.
Circulation volume statistics for Detroit Free Press, a morning newspaper, are reflected above. Circulation volume statistics for The Detroit News, an evening newspaper, are not reflected above. Circulation volume and advertising linage statistics for non-daily products, including NurseWeek and Clipper Magazine are not reflected above.
--------------------------------------------------------------------------Gannett Online Internet Audience
August 2005Nielsen//NetRatings
Home/Work Panel CombinedUnique Visitors Percentage Reach of
Per Month Internet AudienceGannett Online 22,494,000 14.9%