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 January 29, 2006 were down 0.6 percent reflecting higher ad demand at its domestic community newspapers offset by lower ad demand at its UK properties. For comparison purposes, the exchange rate of Sterling year-over-year affected results for the company’s UK operations. If the exchange rate had remained constant year-over-year, total pro forma operating revenues would have increased 0.4 percent.
Pro forma (assuming that all properties presently owned were owned in both periods) newspaper advertising revenues in January were 0.6 percent lower compared with the same period in 2005 on a
1.3 percent decline in ROP volume and a 2.6 percent increase in preprint distribution. If the exchange rate had remained constant year-over-year, total pro forma newspaper advertising revenues would have been
0.6 percent higher.
Pro forma local advertising revenues were almost 1.0 percent higher on a slight decline in ROP ad volume. The performance of the company’s small and medium-sized advertisers in its domestic newspapers outpaced the revenue performance of its largest advertisers in January. In the U.S., local ad revenue gains were achieved in the consumer electronics, financial and home improvement categories. However, the department stores, furniture, entertainment and telecommunications categories declined compared to the same period a year ago. On a constant currency basis, pro forma local advertising would have been up
1.5 percent.
Pro forma classified revenues decreased 2.3 percent in the first period on a 2.1 decline in ROP ad volume. On a constant currency basis, pro forma classified revenues would have been down slightly. Classified real estate revenues rose 6.8 percent from the same period last year. Employment revenues were down 4.0 percent while automotive revenues were 15.5 percent lower. On a constant currency basis, real estate revenues would have been up 9.0 percent, employment and automotive revenues would have been down 1.7 percent and 14.0 percent, respectively. Overall, the company’s domestic classified results were better than its UK results. In the U.S., pro forma classified revenues increased 3.6 percent reflecting a
12.6 percent increase in real estate revenues and a 6.1 percent increase in employment revenues while automotive revenues were 11.0 percent lower.
Pro forma national advertising revenues increased 0.5 percent on a 0.6 increase in ad volume. National volume at the company’s local domestic newspapers was 2.3 percent higher in the period compared with the same interval in 2005. At USA TODAY, advertising revenues declined 2.5 percent on a
10.4 percent decline in paid ad pages to 328 from 366. For the first period, at USA TODAY, results from the technology and telecommunications categories were strong while the entertainment, automotive, travel and financial categories lagged last year’s results. On a constant currency basis, pro forma national advertising would have been up almost 1 percent.
Pro forma broadcasting revenues were down 0.6 percent in the first period. Compared to the same period in 2005, local television revenues were up 4.7 percent while national revenues were 8.6 percent lower. Based on results to date and current pacings for the remainder of the quarter, television revenues are ahead of last year’s first quarter results in the high single digits reflecting primarily the impact of ad demand related to the Winter Olympics on our NBC affiliates in February.
In addition to the revenue and statistical summary, attached is a chart which shows the consolidated Gannett Online audience share for January from Nielsen//NetRatings. In January, Gannett’s domestic Websites had approximately 23.4 million unique visitors reaching over 15 percent of the Internet audience.
On December 1, 2005, Gannett Co., Inc., and MediaNews Group, Inc. announced an agreement to expand their Texas-New Mexico Newspapers Partnership to include four newspapers in Pennsylvania. The transaction closed on December 25, 2005. Gannett contributed the Public Opinion of Chambersburg, PA to the partnership. MediaNews Group contributed the York Daily Record and York Sunday News, the Lebanon Daily News of Lebanon and the Evening Sun of Hanover. The York Daily Record and York Sunday News continue to operate under the terms of a JOA which includes the York Dispatch. As a result of this transaction, the company’s ownership interest was reduced and Media News became the managing partner. The Texas-New Mexico Newspapers Partnership is no longer fully consolidated in the company’s financial statements. Rather, the company’s 40.6 percent interest in the partnership is included in other operating revenues.
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. Detroit’s results have been fully consolidated in the financial statements of Gannett along with a minority interest charge for MediaNews Group’s interest.
In a separate transaction on August 29, 2005, 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 have been reclassified to income from discontinued operations. For comparison purposes, a schedule of the company’s quarterly statements of income for 2005 reflecting the reclassification is attached. The schedule is also posted on the Investor Relations portion of our website, www.gannett.com.
The pro forma advertising and circulation revenue statistics include the results for Exchange & Mart and Auto Exchange (acquired in September 2005), Tallahassee (acquired August 29, 2005), 100 percent of the Detroit Newspaper Partnership (established August 2005), Mint Magazine (acquired in July 2005) and HomeTown Communications (acquired in late March 2005). 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. The revenue and statistical data related to the former Gannett owned newspapers in Bellingham (WA), Olympia (WA) and Boise (ID) has been excluded from all periods presented.
Gannett Co., Inc. is a leading international news and information company that publishes 91 daily newspapers in the USA, including USA TODAY, the nation’s largest-selling daily newspaper. The company also owns nearly 1,000 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 1 and Year to Date (Dec. 26, 2005 - Jan. 29 2006)
%
2006 2005 CHANGE CHANGE
REVENUES:
Advertising:
Local $ 173,783,000 $ 172,466,000 $ 1,317,000 0.8
National 69,410,000 69,096,000 314,000 0.5
Classified 172,411,000 176,391,000 (3,980,000) (2.3)
------------- ------------- ------------ ----
Total Advertising $ 415,604,000 $ 417,953,000 $ (2,349,000) (0.6)
Circulation 116,040,000 119,704,000 (3,664,000) (3.1)
Other revenue 35,181,000 32,878,000 2,303,000 7.0
Broadcasting 55,316,000 55,656,000 (340,000) (0.6)
------------- ------------- ------------ ----
Total Revenue $ 622,141,000 $ 626,191,000 $ (4,050,000) (0.6)
============= ============= ============ ====
VOLUME:
Newspaper Inches:
Local 2,886,966 2,896,865 (9,899) (0.3)
National 348,306 346,267 2,039 0.6
Classified 4,807,936 4,909,151 (101,215) (2.1)
------------- ------------- ------------ ----
Total ROP 8,043,208 8,152,283 (109,075) (1.3)
============= ============= ============ ====
Preprint Distribution
(in thousands) 1,041,635 1,014,861 26,774 2.6
============= ============= ============ ====
NET PAID CIRCULATION:
Morning (w/USAT) 6,932,263 6,990,851 (58,588) (0.8)
Evening 902,531 943,150 (40,619) (4.3)
------------- ------------- ------------ ----
Total Daily 7,834,794 7,934,001 (99,207) (1.3)
============= ============= ============ ====
Sunday 6,387,586 6,520,090 (132,504) (2.0)
============= ============= ============ ====
Note: The above revenue amounts and statistics have been restated to include all companies presently owned, including the Exchange & Mart and Auto Exchange (non-daily publications acquired in September 2005), the Tallahassee Democrat (acquired August 29, 2005), 100% of the Detroit Newspaper Partnership (established August 2005), Mint Magazine (acquired in July 2005), PointRoll, Inc. (acquired in June 2005) and HomeTown Communications (acquired in late March 2005). 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. The Tallahassee (FL) Democrat is published in the morning and has an average daily paid circulation of 52,000 (Sunday – 68,000). 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. The revenue and statistical data related to the former Gannett owned newspapers in Bellingham (WA), Olympia (WA) and Boise (ID) has been excluded from all periods presented.
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 January 2006Nielsen//NetRatings Home/Work Panel Combined Unique Visitors Percentage Reach of Per Month Internet Audience Gannett Online 23,390,000 15.2%
--------------------------------------------------------------------------Gannett Co., Inc. and SubsidiariesQuarterly statements of income (Unaudited)
In thousands of dollars (except per share amounts)Fiscal year ended December 25, 2005 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total
Net operating revenues
Newspaper advertising $1,198,692 $1,293,992 $1,274,323 $1,394,201 $5,161,208
Newspaper circulation 308,978 310,061 316,242 328,750 1,264,031
Broadcasting 164,557 197,888 166,358 207,649 736,452
All other 96,223 108,691 107,980 124,354 437,248
---------- ---------- ---------- ---------- ----------
Total 1,768,450 1,910,632 1,864,903 2,054,954 7,598,939
========== ========== ========== ========== ==========
Operating expenses
Cost of sales and operating expenses,
exclusive of depreciation 962,722 989,008 1,020,307 1,089,209 4,061,246
Selling, general and admin. expenses,
exclusive of depreciation 294,141 297,913 303,651 319,551 1,215,256
Depreciation 60,222 69,379 60,954 60,575 251,130
Amortization of intangible assets 3,805 4,696 6,783 7,952 23,236
---------- ---------- ---------- ---------- ----------
Total 1,320,890 1,360,996 1,391,695 1,477,287 5,550,868
---------- ---------- ---------- ---------- ----------
Operating income 447,560 549,636 473,208 577,667 2,048,071
========== ========== ========== ========== ==========
Non-operating (expense) income
Interest expense (44,938) (48,424) (54,993) (62,270) (210,625)
Other (10,919) (3,040) (5,700) 68 (19,591)
---------- ---------- ---------- ---------- ----------
Total (55,857) (51,464) (60,693) (62,202) (230,216)
---------- ---------- ---------- ---------- ----------
Income before income taxes 391,703 498,172 412,515 515,465 1,817,855
Provision for income taxes 130,900 165,600 137,900 172,200 606,600
---------- ---------- ---------- ---------- ----------
Income from continuing operations 260,803 332,572 274,615 343,265 1,211,255
---------- ---------- ---------- ---------- ----------Discontinued operations
Income from the operation of
discontinued operations, net of tax 4,934 6,071 3,639 14,644
Gain on disposal of newspaper businesses,
net of tax 18,755 18,755
---------- ---------- ---------- ---------- ----------
Net Income 265,737 338,643 297,009 343,265 1,244,654
========== ========== ========== ========== ==========
Earnings from continuing operations
per share - basic $1.03 $1.35 $1.13 $1.44 $4.94
---------- ---------- ---------- ---------- ----------
Earnings from discontinued operations
Discontinued operations per share - basic .02 .02 .01 .06
Gain on disposal of newspaper businesses
per share - basic .08 .08
---------- ---------- ---------- ---------- ----------
Net income per share - basic $1.05 $1.37 $1.22 $1.44 $5.08
---------- ---------- ---------- ---------- ----------
Earnings from continuing operations
per share - diluted $1.03 $1.34 $1.13 $1.44 $4.92
---------- ---------- ---------- ---------- ----------
Earnings from discontinued operations
Discontinued operations per share
- diluted .02 .02 .01 .06
Gain on disposal of newspaper
businesses per share - diluted .08 .08
---------- ---------- ---------- ---------- ----------
Net income per share - diluted $1.05 $1.37 $1.22 $1.44 $5.05
---------- ---------- ---------- ---------- ----------(1) As a result of rounding, the total of the four quarters' earnings per share
does not equal the earnings per share for the year.The company disposed of The (Boise) Idaho Statesman and two newspapers in
the state of Washington, The (Olympia) Olympian and The Bellingham Herald,in an
asset exchange on August 29, 2005. The results for the former Gannett properties are
therefore excluded from continuing operations reflected above and instead are reflected
separately as discontinued operations on a one-line, net of tax basis.