Gannett Reports First-Quarter Earnings
ARLINGTON, Va. – Gannett Co., Inc. announced today that diluted earnings per share from continuing operations were 66 cents for the first quarter of 2001. In the year-earlier quarter, diluted earnings per share from continuing operations, which excludes the after-tax gain from the sale of the assets of Multimedia Cablevision, Inc., were 74 cents. After-tax cash flow per diluted share (defined as after-tax income from continuing operations plus depreciation and amortization expense, per diluted share) was $1.08 in the first quarter of 2001, up from $1.03 in the prior year quarter.
Results for the quarter include the operations of: News Communications & Media PLC acquired in June 2000; 19 daily newspapers along with numerous weekly and niche publications acquired from Thomson Newspapers Inc. in July 2000; and Central Newspapers, Inc. acquired in August 2000.
Operating revenues from continuing operations gained 19 percent to $1,574,948,000 in the first quarter. If Gannett had owned the same complement of properties in both quarters, revenues from continuing operations would have declined 3 percent. During the quarter, reported revenues from our United Kingdom operations were unfavorably impacted by the decline in the exchange rate for Sterling. If the exchange rate had remained constant year-over-year, pro forma revenues would have declined 2 percent. Operating cash flow from continuing operations increased 10 percent to $480,663,000 in the quarter from $437,892,00 in the year earlier interval. Operating income from continuing operations advanced 3 percent in the first quarter to $368,039,000 from $357,518,000 in the prior year period.
Average diluted shares outstanding in the quarter totaled 266,415,000 compared to 276,207,000 in 2000’s first quarter. During the first half of 2000, the company repurchased approximately 14.7 million shares of common stock.
In a statement, the company said that its domestic newspaper advertising revenues, particularly in the help wanted classified category, and its television business revenues were impacted in the quarter by the reluctance of advertisers to spend in a softening and uncertain economic environment. The newspaper segment also was affected by the absence of millennium-related ad spending, significantly lower dot-com advertising spending, especially at USA TODAY and substantially higher newsprint expense. The company’s Newsquest properties, benefiting from strong advertising demand in the U.K., made solid contributions to cash flow and earnings per share. Acquisitions completed in 2000 boosted cash flow and after-tax cash flow per share, while incremental interest expense and goodwill amortization associated with these properties tempered reported earnings per share.
Operating cash flow from newspapers grew 14 percent in the first quarter to $422,928,000 and revenues rose 23 percent over the same period last year. If the same group of newspapers had been held in both quarters, pro forma advertising revenues would have declined 3 percent in the quarter. While local advertising was flat, there was a 3 percent decline in classified and an 11 percent decline in national. Pro forma newspaper advertising volume declined 4 percent. Newsprint expense rose 35 percent for the quarter as a result of higher usage related to recent acquisitions and substantially higher year-over-year prices. On a pro forma basis, newsprint expense would have risen 9 percent in the first quarter.
At USA TODAY, advertising revenues declined 20 percent in the first quarter. Paid advertising pages totaled 1,332 in the quarter compared with 1,684 in the same period of 2000.
Television revenues declined 7 percent to $155,613,000 in the first quarter from $166,789,000 in the same interval last year. Operating cash flow declined 13 percent to $71,249,000.
At the end of the first 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 February, Gannett’s consolidated domestic Internet audience share, according to Nielsen/Net Ratings, was 8.9 million unique visitors reaching 8.1 percent of the Internet audience. In addition, all of Newsquest’s newspapers have an Internet presence. In the first quarter, the company generated about $17 million in revenues from Internet activities.
Gannett Co., Inc. (NYSE: GCI) is an 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 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.
Contact:
Gracia Martore
Gannett Co., Inc.
Treasurer and Vice President/Investor Relations
703-284-6918
gmartore@gci1.gannett.com
CONSOLIDATED STATEMENTS OF INCOME
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)Thirteen weeks ended % Inc
April 1, 2001 March 26, 2000 (Dec)Net Operating Revenues:
Newspaper advertising $ 1,020,934 $ 830,250 23.0
Newspaper circulation 313,009 254,146 23.2
Television 155,613 166,789 (6.7)
Other 85,392 70,135 21.8
------------- ------------- ------
Total 1,574,948 1,321,320 19.2
------------- ------------- ------
Operating Expenses:
Cost of sales and operating
expenses, exclusive of
depreciation 839,547 667,486 25.8
Selling, general and
administrative expenses,
exclusive of depreciation 254,738 215,942 18.0
Depreciation 53,281 46,608 14.3
Amortization of intangible assets 59,343 33,766 75.7
------------- ------------- ------
Total 1,206,909 963,802 25.2
------------- ------------- ------
Operating income 368,039 357,518 2.9
------------- ------------- ------
Non-operating income (expense):
Interest expense (80,442) (20,175) 298.7
Other 448 (1,326) (133.8)
------------- ------------- ------
Total (79,994) (21,501) 272.0
------------- ------------- ------Income before income taxes 288,045 336,017 (14.3)
Provision for income taxes 113,500 133,000 (14.7)
------------- ------------- ------
Income from continuing operations 174,545 203,017 (14.0)
------------- ------------- ------
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 $ 174,545 $ 950,154 (81.6)
============= ============= ======Earnings from continuing
operations per share-basic $0.66 $0.74 (10.8)Earnings from discontinued
operations:
Discontinued operations per
share-basic $0.01 ----
Gain on sale of cable business
per share-basic $2.72 ----
----- ----- -------
Net income per share-basic $0.66 $3.47 (81.0)
===== ===== =======Earnings from continuing
operations per share-diluted $0.66 $0.74 (10.8)Earnings from discontinued
operations:
Discontinued operations per
share-diluted $0.01 ----
Gain on sale of cable business
per share-diluted $2.69 --------- ----- -------
Net income per share-diluted $0.66 $3.44 (80.8)
===== ===== =======Dividends per share $0.22 $0.21 4.8
===== ===== =======Earnings Summary Excluding
2000 Discontinued OperationsThirteen weeks ended % Inc
April 1, 2001 March 26, 2000 (Dec)------------- ------------- ------
Operating income $ 368,039 $ 357,518 2.9
------------- ------------- ------Non-operating income (expense):
Interest expense (80,442) (20,175) 298.7
Other 448 (1,326) (133.8)
------------- ------------- ------
Total (79,994) (21,501) 272.0
------------- ------------- ------Income before income taxes 288,045 336,017 (14.3)
Provision for income taxes 113,500 133,000 (14.7)
------------- ------------- ------
Income from continuing operations $ 174,545 $ 203,017 (14.0)
============= ============= ======Earnings from continuing ----- ----- -------
operations per share-basic $0.66 $0.74 (10.8)
===== ===== =======Earnings from continuing ----- ----- -------
operations per share-diluted $0.66 $0.74 (10.8)
===== ===== =======----- ----- -------
Dividends per share $0.22 $0.21 4.8
===== ===== =======BUSINESS SEGMENT INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollarsThirteen weeks ended % Inc
April 1, 2001 March 26, 2000 (Dec)Operating Revenues:
Newspaper publishing $ 1,419,335 $ 1,154,531 22.9
Television 155,613 166,789 (6.7)
------------- ------------- -----
Total $ 1,574,948 $ 1,321,320 19.2
============= ============= =====
Operating Income (net of
depreciation and amortization):
Newspaper publishing $ 328,785 $ 307,435 6.9
Television 54,266 66,127 (17.9)
Corporate (15,012) (16,044) 6.4
------------- ------------- -----
Total $ 368,039 $ 357,518 2.9
============= ============= =====
Depreciation and Amortization:
Newspaper publishing $ 94,143 $ 62,289 51.1
Television 16,983 16,126 5.3
Corporate 1,498 1,959 (23.5)
------------- ------------- -----
Total $ 112,624 $ 80,374 40.1
============= ============= =====
Operating Cash Flow:
Newspaper publishing $ 422,928 $ 369,724 14.4
Television 71,249 82,253 (13.4)
Corporate (13,514) (14,085) 4.1
------------- ------------- -----
Total $ 480,663 $ 437,892 9.8
============= ============= =====NOTE:
Operating Cash Flow represents operating income for each of the company's
business segments plus related depreciation and amortization expense.