Second Quarter 1997 Earnings
ARLINGTON, Va. — Gannett announced today that earnings per share from continuing operations advanced 41 percent in the second quarter to $1.38 per share, a new record. In the second quarter of 1996, earnings per share from continuing operations were 98 cents per share.
Income from continuing operations increased 42 percent in the quarter to $194,733,000 from $137,239,000 in the year-earlier quarter. Operating revenues from continuing operations gained 7 percent in the quarter to $1,187,827,000, compared to $1,109,294,000 in 1996’s second quarter. Operating income from continuing operations grew 27 percent to $357,520,000 from $280,674,000 in the second quarter of 1996. Operating cash flow from continuing operations advanced to $432,394,000 in the quarter from $353,189,000 in the prior year reflecting continued strong advertising demand at our local newspapers and at USA TODAY, a healthy broadcasting environment and significantly lower newsprint costs year over year.
Average shares outstanding in the quarter totaled 141,621,000, compared with 140,845,000 in 1996’s second quarter.
For the first six months of 1997, earnings per share from continuing operations advanced 47 percent to $2.33, compared to $1.59 in 1996. Income from continuing operations gained 47 percent to $329,797,000 from $223,687,000 in the year earlier interval. Operating income from continuing operations grew 31 percent to $618,340,000. Operating cash flow from continuing operations was $767,838,000 compared to $617,850,000 in 1996. Operating revenues from continuing operations increased 6 percent to $2,264,584,000 for the six months.
In a statement the company said each of its business segments posted record operating results for the quarter. Newspaper earnings increased reflecting strong advertising demand, particularly in classified, a 26 percent reduction in newsprint expense compared to the year earlier quarter, continued strong operating results at USA TODAY and a favorable comparison year to year at The Detroit News. The Broadcasting group also achieved record results for the second quarter.
Operating cash flow from newspapers jumped 25 percent in the quarter to $304,947,000, and revenues in the quarter were 7 percent higher than last year. Pro forma advertising revenues grew 9 percent, including an 11 percent gain in classified, a 5 percent gain in local and a 16 percent gain in national advertising revenues. Newspaper advertising volume advanced 7 percent for the quarter.
At USA TODAY, advertising revenues grew 14 percent. Paid advertising pages advanced 11 percent to 1,397 compared to 1,253 in the second quarter of 1996. For the year to date, USA TODAY’s advertising revenues are up 12 percent, and paid pages numbered 2,526, compared to 2,333 last year, an 8 percent increase.
Broadcasting cash flow advanced 18 percent in the quarter to $111,673,000 as revenues gained 7 percent to $189,245,000. On a pro forma basis, revenues advanced 9 percent, including an 8 percent gain in television revenues and a 17 percent increase in radio revenues.
Cable and Security operating cash flow grew 8 percent to $30,543,000 in the second quarter of 1997. Revenues gained 12 percent to $64,363,000. Basic cable subscribers totaled 468,958 at the end of the quarter, equal to 61 percent of homes passed. Pay units numbered 323,950 at June 30, 1997.
In May, Gannett announced that its commercial printing division, Gannett Offset, had acquired Printed Media Companies, a full-service heat set printer based in Minneapolis, Minn. On June 13, the company announced that it had entered into an agreement to purchase Army Times Publishing. Closing is expected to occur in the third quarter.
Gannett is a nationwide news and information company that publishes 89 daily newspapers, including USA TODAY, and USA WEEKEND, a newspaper magazine. Gannett also operates 18 television stations, five radio stations, cable television systems in five states and alarm security services.
SECOND-QUARTER 1997 FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF INCOME
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)
Quarter Ended % Inc
June 29, 1997 June 30, 1996 (Dec)
Net Operating Revenues:
Newspaper advertising $ 656,306 $ 604,980 8.5
Newspaper circulation 232,237 227,260 2.2
Broadcasting 189,245 176,306 7.3
Cable & Security 64,363 57,732 11.5
Other 45,676 43,016 6.2
___________ ___________ _______
Total 1,187,827 1,109,294 7.1
Operating Expenses:
Cost of sales and operating expenses,
exclusive of depreciation 575,646 587,515 (2.0)
Selling, general and administrative
expenses, exclusive of depreciation 179,787 168,590 6.6
Depreciation 49,976 49,034 1.9
Amortization of intangible assets 24,898 23,481 6.0
___________ ___________ _______
Total 830,307 828,620 0.2
___________ ___________ _______
Operating income 357,520 280,674 27.4
Non-operating income (expense):
Interest expense (24,783) (38,403) (35.5)
Other (1,004) (657) 52.8
___________ ___________ _______
Total (25,787) (39,060) (34.0)
___________ ___________ _______
Income before income taxes 331,733 241,614 37.3
Provision for income taxes 137,000 104,375 31.3
___________ ___________ _______
Income from continuing operations 194,733 137,239 41.9
Discontinued operations:
Income from discontinued operations,
net of income tax 12,777 (100.0)
___________ ___________ _______
Net income $ 194,733 $ 150,016 29.8
=========== =========== =======
Earnings per share:
Earnings from continuing operations $1.38 $0.98 40.8
Earnings from discontinued operations,
net of tax 0.09 (100.0)
___________ ___________ _______
Net income per share $1.38 $1.07 29.0
=========== =========== =======
Dividends per share $0.36 $0.35 2.9
CONSOLIDATED STATEMENTS OF INCOME
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)
Year-to-Date Ended % Inc
June 29, 1997 June 30, 1996 (Dec)
Net Operating Revenues:
Newspaper advertising $ 1,249,858 $ 1,161,865 7.6
Newspaper circulation 465,607 456,677 2.0
Broadcasting 339,851 317,994 6.9
Cable & Security 125,909 114,344 10.1
Other 83,359 82,297 1.3
___________ ___________ _______
Total 2,264,584 2,133,177 6.2
Operating Expenses:
Cost of sales and operating expenses,
exclusive of depreciation 1,142,168 1,178,030 (3.0)
Selling, general and administrative
expenses, exclusive of depreciation 354,578 337,297 5.1
Depreciation 99,758 97,871 1.9
Amortization of intangible assets 49,740 46,996 5.8
___________ ___________ _______
Total 1,646,244 1,660,194 (0.8)
___________ ___________ _______
Operating income 618,340 472,983 30.7
Non-operating income (expense):
Interest expense (50,401) (77,931) (35.3)
Other (6,092) (2,240) ***
___________ ___________ _______
Total (56,493) (80,171) (29.5)
___________ ___________ _______
Income before income taxes 561,847 392,812 43.0
Provision for income taxes 232,050 169,125 37.2
___________ ___________ _______
Income from continuing operations 329,797 223,687 47.4
Discontinued operations:
Income from discontinued operations,
net of income tax 15,679 (100.0)
___________ ___________ _______
Net income $ 329,797 $ 239,366 37.8
=========== =========== =======
Earnings per share:
Earnings from continuing operations $2.33 $1.59 46.5
Earnings from discontinued operations,
net of tax 0.11 (100.0)
___________ ___________ _______
Net income per share $2.33 $1.70 37.1
=========== =========== =======
Dividends per share $0.72 $0.70 2.9
BUSINESS SEGMENT INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Quarter Ended % Inc
June 29, 1997 June 30, 1996
Operating Revenues:
Newspaper publishing $ 934,219 $ 875,256 6.7
Broadcasting 189,245 176,306 7.3
Cable and Security 64,363 57,732 11.5
---------- ---------- -------
Total $ 1,187,827 $ 1,109,294 7.1
========== ========== =======
Operating Income (net of depreciation and amortization):
Newspaper publishing $ 263,584 $ 203,079 29.8
Broadcasting 96,991 82,109 18.1
Cable and Security 13,884 12,072 15.0
Corporate (16,939) (16,586) (2.1)
---------- ---------- -------
Total $ 357,520 $ 280,674 27.4
========== ========== =======
Depreciation and Amortization:
Newspaper publishing $ 41,363 $ 40,743 1.5
Broadcasting 14,682 12,899 13.8
Cable and Security 16,659 16,317 2.1
Corporate 2,170 2,556 (15.1)
---------- ---------- -------
Total $ 74,874 $ 72,515 3.3
========== ========== =======
Operating Cash Flow:
Newspaper publishing $ 304,947 $ 243,822 25.1
Broadcasting 111,673 95,008 17.5
Cable and Security 30,543 28,389 7.6
Corporate (14,769) (14,030) (5.3)
---------- ---------- -------
Total $ 432,394 $ 353,189 22.4
========== ========== =======
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 dollars
Year-to-Date Ended % Inc
June 29, 1997 June 30, 1996Operating Revenues:
Newspaper publishing $ 1,798,824 $ 1,700,839 5.8
Broadcasting 339,851 317,994 6.9
Cable and Security 125,909 114,344 10.1
__________ __________ _______
Total $ 2,264,584 $ 2,133,177 6.2
========== ========== =======Operating Income (net of depreciation and amortization):
Newspaper publishing $ 470,778 $ 350,050 34.5
Broadcasting 154,391 132,148 16.8
Cable and Security 27,249 23,789 14.5
Corporate (34,078) (33,004) (3.3)
__________ __________ _______
Total $ 618,340 $ 472,983 30.7
========== ========== =======Depreciation and Amortization:
Newspaper publishing $ 82,512 $ 81,459 1.3
Broadcasting 29,494 26,018 13.4
Cable and Security 33,152 32,278 2.7
Corporate 4,340 5,112 (15.1)
__________ __________ _______
Total $ 149,498 $ 144,867 3.2
========== ========== =======Operating Cash Flow:
Newspaper publishing $ 553,290 $ 431,509 28.2
Broadcasting 183,885 158,166 16.3
Cable and Security 60,401 56,067 7.7
Corporate (29,738) (27,892) (6.6)
__________ __________ _______
Total $ 767,838 $ 617,850 24.3
========== ========== =======NOTE:
Operating Cash Flow represents operating income for each of the Company's
business segments plus related depreciation and amortization expense.