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.
|GANNETT CO., INC.|
|REVENUE & STATISTICAL SUMMARY|
|Period 1 (December 31, 2007 - February 3, 2008)|
|NET PAID CIRCULATION:|
|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 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|
|Net operating revenues|
Cost of sales and operating expenses, exclusive of depreciation
Selling, general and administrative expenses, exclusive of depreciation
|Amortization of intangible assets||8,855||8,855||8,852||9,524||36,086|
|Intangible asset impairment||-||-||-||72,030||72,030|
|Non-operating (expense) income|
Equity income in unconsolidated investees, net
|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|
Income from the operation of discontinued operations, net of tax
Gain on disposal of newspaper businesses, net of tax
|Per share computations (1)|
Earnings from continuing operations per share - basic
|Earnings from discontinued operations|
Discontinued operations per share - basic
Gain on disposal of newspaper businesses per share - basic
|Net income per share - basic||$0.90||$1.56||$1.01||$1.06||$4.53|
Earnings from continuing operations per share - diluted
|Earnings from discontinued operations|
Discontinued operations per share - diluted
Gain on disposal of newspaper businesses per share - diluted
|Net income per share - diluted||$0.90||$1.56||$1.01||$1.06||$4.52|
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.
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.
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.