Gannett Releases January Statistical Report
McLEAN, VA – Gannett Co., Inc. (NYSE: GCI) reported today that total pro forma
operating revenues for the first period ended February 3, 2008 declined 7.5
percent compared with the same period in 2007. The exchange rate of the British
pound was virtually flat with last year and therefore had no meaningful impact
on results.
Pro forma newspaper advertising revenues in the first period were 9.2 percent
lower compared with a year ago. Pro forma assumes all properties presently owned
were owned in both periods.
Pro forma retail advertising revenues declined 7.2 percent in January. While
the department store and restaurant categories were relatively unchanged year-over-year,
the furniture, consumer electronics, financial, telecommunications and home
improvement categories lagged last year’s results.
Pro forma classified revenues declined 16.1 percent in the first period. Real
estate revenues were 25.3 percent lower, employment revenues were down 19.1
percent, and automotive revenues declined 14.9 percent. At our U.S. community
newspapers, pro forma classified revenues were down 19.4 percent in January
reflecting declines of 29.5 percent in real estate revenues, 24.6 percent in
employment revenues and 12.6 percent in automotive revenues. Classified revenues
at Newsquest in the UK were 9.7 percent lower, in pounds. Real estate revenues
declined 16.1 percent, employment revenues were 7.0 percent lower and automotive
revenues were down 22.6 percent. For comparison purposes, classified revenues
at Newsquest were up 19.4 percent in pounds in 2007’s first period comprised
of increases in real estate and employment of 36.5 percent and 21.7 percent,
respectively, and a 2.1 percent decline in automotive.
Pro forma national advertising revenues in January were 5.9 percent higher.
At USA TODAY, advertising revenues advanced 7.3 percent on paid ad pages of
294 versus 310 last year. In the first period of 2008 at USA TODAY, strong growth
in the entertainment, financial, travel, packaged goods and pharmaceutical categories
was partially offset by declines in the technology, automotive, advocacy and
telecommunications categories. Strong results for USA WEEKEND also contributed
to the revenue growth.
Pro forma broadcasting revenues, which include Captivate, were 6.0 percent
lower in the period. Television revenues were down 5.9 percent in January as
local and national revenues were 7.8 percent and 4.2 percent lower, respectively.
Significantly higher political advertising was offset by the absence of ad demand
related to the Super Bowl that benefited our CBS affiliates in 2007 and a softer
economic environment.
Based on results to date and current pacings, television revenues for the
first quarter of 2008 would lag last year’s first quarter on a percentage
basis in the mid single digits.
Based on figures from Nielsen//Net ratings, in January, Gannett’s domestic
Web sites had 25.8 million unique visitors reaching 15.9 percent of the Internet
audience.
On May 7, 2007, the company completed its sale of the Norwich (CT) Bulletin,
the Rockford (IL) Register Star, the Observer-Dispatch in Utica, NY, and The
Herald-Dispatch in Huntington, WV. In addition, the Chronicle-Tribune in Marion,
IN, was contributed to the Gannett Foundation on May 21, 2007. The revenue and
statistical data related to these properties has been excluded from all periods
presented. For comparison purposes, a schedule of the company’s quarterly
statements of income for 2007 reflecting the reclassification of results from
these properties to discontinued operations is attached.
To conform with current year presentation, the company’s equity share of operating
results for 2007 from its newspaper partnerships, including Tucson, which participates
in a joint operating agency, the California Newspapers Partnership and the Texas-New
Mexico Newspapers Partnership have been reclassified from “Other revenue”
and are reflected in a separate line in the Non-Operating section of the Statement
of Income titled “Equity income in unconsolidated investees, net.”
Other revenue is now comprised principally of commercial printing revenues and
revenue from PointRoll.
Due to the increasing contribution to revenue from online advertising as well
as publications for which volume is not tracked, ad volume statistics are less
meaningful and therefore, beginning with this period, will no longer be included
in the monthly release. 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 85 daily newspapers in the USA, including USA TODAY, the nation’s
largest-selling daily newspaper. The company also owns nearly 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 nearly 300 titles, including 17 daily newspapers,
and a network of prize-winning Web sites. Gannett also operates 23 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 1 (December 31, 2007 - February 3, 2008)
%
2008 2007 CHANGE CHANGE
REVENUES:
Advertising:
Retail $ 159,935,000 $ 172,411,000 $ (12,476,000) (7.2)
National 62,533,000 59,045,000 3,488,000 5.9
Classified 148,930,000 177,574,000 (28,644,000) (16.1)
-------------- ------------- -------------- -----
Total Advertising $ 371,398,000 $ 409,030,000 $ (37,632,000) (9.2)
============== ============= ============== =====
Circulation 112,799,000 114,898,000 (2,099,000) (1.8)
Other revenue 33,996,000 37,212,000 (3,216,000) (8.6)
Broadcasting 57,218,000 60,872,000 (3,654,000) (6.0)
-------------- ------------- -------------- -----
Total Revenue $ 575,411,000 $ 622,012,000 $ (46,601,000) (7.5)
============== ============= ============== =====
NET PAID CIRCULATION:
Morning (w/USAT) 6,519,030 6,774,034 (255,004) (3.8)
Evening 807,444 846,717 (39,273) (4.6)
-------------- ------------- -------------- -----
Total Daily 7,326,474 7,620,751 (294,277) (3.9)
============== ============= ============== =====
Sunday 5,711,090 6,048,570 (337,480) (5.6)
============== ============= ============== =====
Note: To conform with current year presentation, the company’s equity share
of operating results for 2007 from its newspaper partnerships,
including Tucson, which participates in a joint operating agency, the
California Newspapers Partnership and the Texas-New Mexico Newspapers
Partnership have been reclassified from “Other revenue” above and are
reflected in a separate line in the Non-Operating section of the
Statement of Income titled “Equity income in unconsolidated
investees, net.” Other revenue is now comprised principally of
commercial printing revenues and revenue from PointRoll.
The above revenue amounts and statistics have been restated to include
all companies presently owned. In May 2007, Gannett sold the Norwich (CT) Bulletin,
the Rockford (IL) Register Star, the Observer-Dispatch in Utica, NY, and The Herald-Dispatch
in Huntington, WV. In May 2007, Gannett contributed the Chronicle-Tribune in Marion,
IN to the Gannett Foundation. All revenue amounts and statistics related to the
sold and donated properties are excluded from all periods presented.
Circulation volume statistics from the company’s newspaper in Tucson,
which participates in a joint operating agency, are included above.
Newsquest is a regional newspaper publisher in the United Kingdom
with nearly 300 titles, including paid and unpaid daily and
non-daily products. Circulation volume statistics for Newsquest’s
17 paid-for daily newspapers are included above. Circulation volume
statistics for the 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.
Circulation volume statistics for non-daily products, including Gannett Healthcare
Group and Clipper Magazine are not reflected above.
Gannett Co., Inc. and Subsidiaries
Quarterly statements of income (Unaudited)
In thousands of dollars (except per share amounts)
Fiscal year ended December 30, 2007 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total
(2) (2) (2) (3)
Net operating revenues
Newspaper advertising $1,221,627 $1,281,555 $1,187,744 $1,246,233 $4,937,159
Newspaper circulation 317,535 312,506 309,143 313,172 1,252,356
Broadcasting 183,059 204,666 189,540 212,032 789,297
All other 108,993 113,908 112,266 125,481 460,648
---------- ---------- ---------- ---------- ----------
Total 1,831,214 1,912,635 1,798,693 1,896,918 7,439,460
---------- ---------- ---------- ---------- ----------
Operating expenses
Cost of sales and operating expenses,
exclusive of depreciation 1,057,936 1,052,476 1,026,041 1,027,630 4,164,083
Selling, general and administrative
expenses, exclusive of depreciation 320,521 320,636 313,654 315,279 1,270,090
Depreciation 62,185 62,677 61,017 60,396 246,275
Amortization of intangible assets 8,855 8,855 8,852 9,524 36,086
Intangible asset impairment - - - 72,030 72,030
---------- ---------- ---------- ---------- ----------
Total 1,449,497 1,444,644 1,409,564 1,484,859 5,788,564
---------- ---------- ---------- ---------- ----------
Operating income 381,717 467,991 389,129 412,059 1,650,896
---------- ---------- ---------- ---------- ----------
Non-operating (expense) income
Equity income in unconsolidated
investees, net (1,480) 17,470 15,332 9,371 40,693
Interest expense (72,945) (66,400) (63,010) (57,470) (259,825)
Other (38) 10,324 4,173 2,654 17,113
---------- ---------- ---------- ---------- ----------
Total (74,463) (38,606) (43,505) (45,445) (202,019)
---------- ---------- ---------- ---------- ----------
Income before income taxes 307,254 429,385 345,624 366,614 1,448,877
Provision for income taxes 100,900 139,500 111,600 121,300 473,300
---------- ---------- ---------- ---------- ----------
Income from continuing operations 206,354 289,885 234,024 245,314 975,577
---------- ---------- ---------- ---------- ----------
Discontinued operations
Income from the operation of
discontinued operations, net of tax 4,258 1,963 - - 6,221
Gain on disposal of newspaper
businesses, net of tax - 73,814 - - 73,814
---------- ---------- ---------- ---------- ----------
Net Income $ 210,612 $ 365,662 $ 234,024 $ 245,314 $1,055,612
========== ========== ========== ========== ==========
Per share computations (1)
Earnings from continuing operations
per share - basic $0.88 $1.24 $1.01 $1.06 $4.18
Earnings from discontinued operations
Discontinued operations per
share - basic .02 .01 - - .03
Gain on disposal of newspaper
businesses per share - basic - .32 - - .32
---------- ---------- ---------- ---------- ----------
Net income per share - basic $0.90 $1.56 $1.01 $1.06 $4.53
========== ========== ========== ========== ==========
Earnings from continuing operations
per share - diluted $0.88 $1.24 $1.01 $1.06 $4.17
Earnings from discontinued operations
Discontinued operations per share
- diluted .02 .01 - - .03
Gain on disposal of newspaper
businesses per share - diluted - .31 - - .32
---------- ---------- ---------- ---------- ----------
Net income per share - diluted $0.90 $1.56 $1.01 $1.06 $4.52
========== ========== ========== ========== ==========
(1) As a result of rounding and the required method of computing shares in interim periods, the total of
the quarterly earnings per share amounts may not equal the earnings per share amount for the year.
In addition, the sum of the individual per share amounts in each period may not equal the total per
share amounts due to rounding.
(2) Certain amounts differ from amounts previously reported on Form 10-Q due to the reclassification of
equity income in unconsolidated investees and due to the reclassification of discontinued operations.
(3) Results for the fourth quarter of 2007 include a pre-tax non-cash intangible asset impairment charge
of $72.0 million ($50.8 million after tax or $0.22 per share). This charge did not affect the
company's operations or cash flow.