Gannett Co., Inc. Reports Non-GAAP Earnings per Diluted Share of $0.43, Earnings per Diluted Share of $0.34 on GAAP basis
- Company-wide digital revenue growth of 12 percent, now comprising 30 percent of total revenue
- Digital Segment revenue up 5 percent
- Broadcasting revenues almost 14 percent higher excluding cyclical impact of Olympic and political advertising
- Belo shareholders approve definitive merger agreement on
September 25, 2013
In June, the company entered into a definitive merger agreement with
Martore added, "We are also pleased that during the quarter, Belo shareholders approved the pending acquisition, and we continue to anticipate bringing the transaction to a close following the attainment of regulatory approvals. We are working towards a seamless integration that will accelerate our transformation and create an even stronger
CONTINUING OPERATIONS
Operating revenues for the company were
Net income attributable to
On
Special items in the third quarter of 2013 totaled
The table below details third quarter results on a GAAP and non-GAAP basis:
Dollars in thousands, except per share amounts |
|||||||||||||||||||
GAAP |
Special Items |
Non-GAAP Measure |
|||||||||||||||||
Thirteen weeks ended Sept. 29, 2013 |
Workforce restructuring |
Transformation costs |
Other non-operating items |
Thirteen weeks ended Sept. 29, 2013 |
|||||||||||||||
Operating income |
$ |
171,698 |
$ |
9,246 |
$ |
5,880 |
$ |
— |
$ |
186,824 |
|||||||||
Total non-operating (expense) income |
(47,497) |
— |
4,412 |
16,613 |
(26,472) |
||||||||||||||
Income before income taxes |
124,201 |
9,246 |
10,292 |
16,613 |
160,352 |
||||||||||||||
Provision for income taxes |
26,700 |
3,600 |
4,100 |
8,400 |
42,800 |
||||||||||||||
Net income |
97,501 |
5,646 |
6,192 |
8,213 |
117,552 |
||||||||||||||
Net income attributable to Gannett Co., Inc. |
79,748 |
5,646 |
6,192 |
8,213 |
99,799 |
||||||||||||||
Net income per share - diluted |
$ |
0.34 |
$ |
0.02 |
$ |
0.03 |
$ |
0.04 |
$ |
0.43 |
Additional information on the special items can be found in the "Use of Non-GAAP Information" section below.
Operating income was
Operating expenses including special charges and
Corporate expenses on a non-GAAP basis were up
During the third quarter, the company repurchased approximately 1.5 million of its shares for
PUBLISHING
Publishing Segment revenues were
Circulation revenue was down just 0.6 percent in the quarter driven by an increase in circulation revenue of over 1 percent at local domestic publishing operations that were impacted by the All Access Content Subscription Model. The benefit to circulation revenue of the All Access Content Subscription Model was tempered in the quarter as the model was rolled out to over 85 percent of local domestic publishing sites at the end of the third quarter last year. Circulation revenue at USA TODAY was lower in the quarter reflecting, in part, progress to digital platforms with its hotel partners. At Newsquest in the
Publishing Segment digital revenues were up 20.9 percent in the quarter reflecting growth associated with the All Access Content Subscription Model as well as digital advertising and marketing solutions. Digital revenues at all publishing operations were higher in the quarter. Local domestic publishing operations increased 22.0 percent, USA TODAY and its associated businesses were up 12.6 percent and Newsquest's digital revenues were 13.3 percent higher, in pounds.
Publishing Segment operating expenses, which include
Publishing Segment operating income totaled
BROADCASTING
Reported Broadcast Segment revenues (which include Captivate through
Television revenues were
Based on current trends and reflecting a record level of political revenues achieved in the fourth quarter in 2012, we expect the percentage decrease in total television revenues for the fourth quarter of 2013 to be in the high teens compared to the fourth quarter of 2012 (excluding the extra week in the period). Record political advertising totaling
Broadcasting Segment operating expenses were
DIGITAL
Operating revenues in the Digital Segment totaled
Digital revenues company-wide, including the Digital Segment and all digital revenues generated by the other business segments, was
At the end of the quarter,
NON-OPERATING ITEMS
The company's equity earnings include its share of operating results from unconsolidated investees including the
Equity income in unconsolidated investees totaled
Interest expense totaled
Other non-operating items reflect primarily the
Net cash flow from operating activities was
USE OF NON-GAAP INFORMATION
The company uses non-GAAP financial performance and liquidity measures to supplement the financial information presented on a GAAP basis. These non-GAAP financial measures are not to be considered in isolation from or as a substitute for the related GAAP measures, and should be read only in conjunction with financial information presented on a GAAP basis.
In this earnings report, the company discusses non-GAAP financial performance measures that exclude from its reported GAAP results the impact of special items consisting of workforce restructuring charges, transformation costs, pension settlement charges, a loss related to a change in control and sale of interests in a business, charges for accelerated depreciation recognized by an equity method investee, non-cash impairment charges, a currency-related loss recognized in other non-operating items and certain credits to its income tax provision. The company believes that such expenses and credits are not indicative of normal, ongoing operations and their inclusion in results makes for more difficult comparisons between periods and with peer group companies. Workforce restructuring expenses primarily relate to incremental expenses the company has incurred to consolidate or outsource production processes and centralize other functions. These expenses include payroll and related benefit costs. Transformation costs include incremental expenses incurred by the company to execute on its transformation and growth plan. Transformation costs also include incremental expenses associated with optimizing
The company also discusses operating cash flow, a non-GAAP financial performance measure that it believes offers a useful view of the overall operation of its businesses. This non-GAAP measure is calculated by adding amounts associated with the special expense items described above, as well as depreciation and amortization, to operating income as reported on a GAAP basis. This earnings report also discusses free cash flow, a non-GAAP liquidity measure. Free cash flow is defined as "net cash flow from operating activities" as reported on the statement of cash flows reduced by "purchase of property, plant and equipment" as well as "payments for investments" and increased by "proceeds from investments" and voluntary pension contributions, net of related tax benefit. The company believes that free cash flow is a useful measure for management and investors to evaluate the level of cash generated by operations and the ability of its operations to fund investments in new and existing businesses, return cash to shareholders under the company's capital program, repay indebtedness, add to the company's cash balance, or use in other discretionary activities. Management uses free cash flow to monitor cash available for repayment of indebtedness and in its discussions with the investment community.
Management uses non-GAAP financial performance measures for purposes of evaluating business unit and consolidated company performance. The company therefore believes that each of the non-GAAP measures presented provides useful information to investors by allowing them to view the company's businesses through the eyes of management and the Board of Directors, facilitating comparison of results across historical periods and providing a focus on the underlying ongoing operating performance of its businesses. In addition, many of the company's peer group companies present similar non-GAAP measures so the presentation of such measures facilitates industry comparisons. Tabular reconciliations for the non-GAAP financial measures are contained in Tables 6 through 11 attached to this news release.
As previously announced, the company will hold an earnings conference call at
About
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
CONDENSED CONSOLIDATED STATEMENTS OF INCOME Gannett Co., Inc. and Subsidiaries Unaudited, in thousands (except per share amounts) |
|||||||||||
Table No. 1 |
|||||||||||
Thirteen weeks ended Sept. 29, 2013 |
Thirteen weeks ended Sept. 23, 2012 |
% Increase (Decrease) |
|||||||||
Net operating revenues: |
|||||||||||
Publishing advertising |
$ |
520,189 |
$ |
552,676 |
(5.9) |
||||||
Publishing circulation |
274,999 |
276,655 |
(0.6) |
||||||||
Broadcasting |
203,364 |
237,039 |
(14.2) |
||||||||
Digital |
191,447 |
182,022 |
5.2 |
||||||||
All other |
62,891 |
60,869 |
3.3 |
||||||||
Total |
1,252,890 |
1,309,261 |
(4.3) |
||||||||
Operating expenses: |
|||||||||||
Cost of sales and operating expenses, exclusive of depreciation |
713,369 |
720,941 |
(1.1) |
||||||||
Selling, general and administrative expenses, exclusive of depreciation |
315,677 |
318,385 |
(0.9) |
||||||||
Depreciation |
38,195 |
40,460 |
(5.6) |
||||||||
Amortization of intangible assets |
8,071 |
8,045 |
0.3 |
||||||||
Facility consolidation charges |
5,880 |
4,231 |
39.0 |
||||||||
Total |
1,081,192 |
1,092,062 |
(1.0) |
||||||||
Operating income |
171,698 |
217,199 |
(20.9) |
||||||||
Non-operating (expense) income: |
|||||||||||
Equity income in unconsolidated investees, net |
11,711 |
3,005 |
*** |
||||||||
Interest expense |
(41,628) |
(35,829) |
16.2 |
||||||||
Other non-operating items |
(17,580) |
2,933 |
*** |
||||||||
Total |
(47,497) |
(29,891) |
58.9 |
||||||||
Income before income taxes |
124,201 |
187,308 |
(33.7) |
||||||||
Provision for income taxes |
26,700 |
38,700 |
(31.0) |
||||||||
Net income |
97,501 |
148,608 |
(34.4) |
||||||||
Net income attributable to noncontrolling interests |
(17,753) |
(15,525) |
14.4 |
||||||||
Net income attributable to Gannett Co., Inc. |
$ |
79,748 |
$ |
133,083 |
(40.1) |
||||||
Net income per share - basic |
$ |
0.35 |
$ |
0.58 |
(39.7) |
||||||
Net income per share - diluted |
$ |
0.34 |
$ |
0.56 |
(39.3) |
||||||
Weighted average number of common shares outstanding: |
|||||||||||
Basic |
228,587 |
230,556 |
(0.9) |
||||||||
Diluted |
234,438 |
235,550 |
(0.5) |
||||||||
Dividends declared per share |
$ |
0.20 |
$ |
0.20 |
— |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME Gannett Co., Inc. and Subsidiaries Unaudited, in thousands (except per share amounts) |
|||||||||||
Table No. 2 |
|||||||||||
Thirty-nine weeks ended Sept. 29, 2013 |
Thirty-nine weeks ended Sept. 23, 2012 |
% Increase (Decrease) |
|||||||||
Net operating revenues: |
|||||||||||
Publishing advertising |
$ |
1,609,164 |
$ |
1,698,376 |
(5.3) |
||||||
Publishing circulation |
840,626 |
803,929 |
4.6 |
||||||||
Broadcasting |
606,906 |
618,593 |
(1.9) |
||||||||
Digital |
552,875 |
531,700 |
4.0 |
||||||||
All other |
183,753 |
182,290 |
0.8 |
||||||||
Total |
3,793,324 |
3,834,888 |
(1.1) |
||||||||
Operating expenses: |
|||||||||||
Cost of sales and operating expenses, exclusive of depreciation |
2,159,962 |
2,164,070 |
(0.2) |
||||||||
Selling, general and administrative expenses, exclusive of depreciation |
950,407 |
943,005 |
0.8 |
||||||||
Depreciation |
115,588 |
120,320 |
(3.9) |
||||||||
Amortization of intangible assets |
26,567 |
24,002 |
10.7 |
||||||||
Facility consolidation charges |
15,163 |
14,116 |
7.4 |
||||||||
Total |
3,267,687 |
3,265,513 |
0.1 |
||||||||
Operating income |
525,637 |
569,375 |
(7.7) |
||||||||
Non-operating (expense) income: |
|||||||||||
Equity income in unconsolidated investees, net |
28,929 |
15,980 |
81.0 |
||||||||
Interest expense |
(113,207) |
(111,542) |
1.5 |
||||||||
Other non-operating items |
(28,954) |
2,688 |
*** |
||||||||
Total |
(113,232) |
(92,874) |
21.9 |
||||||||
Income before income taxes |
412,405 |
476,501 |
(13.5) |
||||||||
Provision for income taxes |
71,700 |
116,500 |
(38.5) |
||||||||
Net income |
340,705 |
360,001 |
(5.4) |
||||||||
Net income attributable to noncontrolling interests |
(42,772) |
(38,806) |
10.2 |
||||||||
Net income attributable to Gannett Co., Inc. |
$ |
297,933 |
$ |
321,195 |
(7.2) |
||||||
Net income per share - basic |
$ |
1.30 |
$ |
1.38 |
(5.8) |
||||||
Net income per share - diluted |
$ |
1.27 |
$ |
1.35 |
(5.9) |
||||||
Weighted average number of common shares outstanding: |
|||||||||||
Basic |
228,940 |
233,390 |
(1.9) |
||||||||
Diluted |
234,724 |
237,699 |
(1.3) |
||||||||
Dividends declared per share |
$ |
0.60 |
$ |
0.60 |
— |
BUSINESS SEGMENT INFORMATION Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars |
|||||||||||
Table No. 3 |
|||||||||||
Thirteen weeks ended Sept. 29, 2013 |
Thirteen weeks ended Sept. 23, 2012 |
% Increase (Decrease) |
|||||||||
Net operating revenues: |
|||||||||||
Publishing |
$ |
858,079 |
$ |
890,200 |
(3.6) |
||||||
Broadcasting |
203,364 |
237,039 |
(14.2) |
||||||||
Digital |
191,447 |
182,022 |
5.2 |
||||||||
Total |
$ |
1,252,890 |
$ |
1,309,261 |
(4.3) |
||||||
Operating income (net of depreciation, amortization and facility consolidation charges): |
|||||||||||
Publishing |
$ |
62,744 |
$ |
73,731 |
(14.9) |
||||||
Broadcasting |
83,810 |
118,672 |
(29.4) |
||||||||
Digital |
42,050 |
39,912 |
5.4 |
||||||||
Corporate |
(16,906) |
(15,116) |
11.8 |
||||||||
Total |
$ |
171,698 |
$ |
217,199 |
(20.9) |
||||||
Depreciation, amortization and facility consolidation charges: |
|||||||||||
Publishing |
$ |
32,183 |
$ |
33,276 |
(3.3) |
||||||
Broadcasting |
7,059 |
6,879 |
2.6 |
||||||||
Digital |
8,309 |
8,391 |
(1.0) |
||||||||
Corporate |
4,595 |
4,190 |
9.7 |
||||||||
Total |
$ |
52,146 |
$ |
52,736 |
(1.1) |
||||||
Operating cash flow: |
|||||||||||
Publishing |
$ |
94,927 |
$ |
107,007 |
(11.3) |
||||||
Broadcasting |
90,869 |
125,551 |
(27.6) |
||||||||
Digital |
50,359 |
48,303 |
4.3 |
||||||||
Corporate |
(12,311) |
(10,926) |
12.7 |
||||||||
Total |
$ |
223,844 |
$ |
269,935 |
(17.1) |
||||||
Operating cash flow represents operating income from each of the company's business segments plus related depreciation, amortization and facility consolidation charges. See Table No. 10 for reconciliation of amounts to the Condensed Consolidated Statements of Income. |
BUSINESS SEGMENT INFORMATION Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars |
|||||||||||
Table No. 4 |
|||||||||||
Thirty-nine weeks ended Sept. 29, 2013 |
Thirty-nine weeks ended Sept. 23, 2012 |
% Increase (Decrease) |
|||||||||
Net operating revenues: |
|||||||||||
Publishing |
$ |
2,633,543 |
$ |
2,684,595 |
(1.9) |
||||||
Broadcasting |
606,906 |
618,593 |
(1.9) |
||||||||
Digital |
552,875 |
531,700 |
4.0 |
||||||||
Total |
$ |
3,793,324 |
$ |
3,834,888 |
(1.1) |
||||||
Operating income (net of depreciation, amortization and |
|||||||||||
Publishing |
$ |
208,073 |
$ |
239,982 |
(13.3) |
||||||
Broadcasting |
265,578 |
285,873 |
(7.1) |
||||||||
Digital |
100,931 |
92,706 |
8.9 |
||||||||
Corporate |
(48,945) |
(49,186) |
(0.5) |
||||||||
Total |
$ |
525,637 |
$ |
569,375 |
(7.7) |
||||||
Depreciation, amortization and facility consolidation charges: |
|||||||||||
Publishing |
$ |
95,834 |
$ |
100,226 |
(4.4) |
||||||
Broadcasting |
20,968 |
21,113 |
(0.7) |
||||||||
Digital |
26,799 |
24,626 |
8.8 |
||||||||
Corporate |
13,717 |
12,473 |
10.0 |
||||||||
Total |
$ |
157,318 |
$ |
158,438 |
(0.7) |
||||||
Operating cash flow: |
|||||||||||
Publishing |
$ |
303,907 |
$ |
340,208 |
(10.7) |
||||||
Broadcasting |
286,546 |
306,986 |
(6.7) |
||||||||
Digital |
127,730 |
117,332 |
8.9 |
||||||||
Corporate |
(35,228) |
(36,713) |
(4.0) |
||||||||
Total |
$ |
682,955 |
$ |
727,813 |
(6.2) |
||||||
Operating cash flow represents operating income from each of the company's business segments plus related depreciation, amortization and facility consolidation charges. See Table No. 10 for reconciliation of amounts to the Condensed Consolidated Statements of Income. |
PUBLISHING SEGMENT REVENUE COMPARISONS Gannett Co., Inc. and Subsidiaries Unaudited |
|||||||
Table No. 5 |
|||||||
The percentage changes for the Publishing segment advertising and classified revenue categories were as follows: |
|||||||
Third quarter 2013 year-over-year advertising comparisons: |
|||||||
U.S. Publishing (including USA TODAY) |
Newsquest (in pounds) |
Total Publishing segment (constant currency) |
Total Publishing segment |
||||
Retail |
(4.7%) |
0.6% |
(4.2%) |
(4.3%) |
|||
National |
(9.7%) |
(12.3%) |
(9.9%) |
(10.1%) |
|||
Classified |
(5.1%) |
(8.1%) |
(5.9%) |
(6.2%) |
|||
Total advertising |
(5.7%) |
(5.4%) |
(5.7%) |
(5.9%) |
|||
Year-to-date 2013 year-over-year advertising comparisons: |
|||||||
U.S. Publishing (including USA TODAY) |
Newsquest (in pounds) |
Total Publishing segment (constant currency) |
Total Publishing segment |
||||
Retail |
(4.5%) |
(3.0%) |
(4.4%) |
(4.6%) |
|||
National |
(4.2%) |
(17.3%) |
(5.3%) |
(5.4%) |
|||
Classified |
(5.2%) |
(7.7%) |
(5.9%) |
(6.3%) |
|||
Total advertising |
(4.7%) |
(6.9%) |
(5.0%) |
(5.3%) |
|||
Third quarter 2013 year-over-year classified comparisons: |
|||||||
U.S. Publishing (including USA TODAY) |
Newsquest (in pounds) |
Total Publishing segment (constant currency) |
Total Publishing segment |
||||
Automotive |
(0.3%) |
(7.3%) |
(1.1%) |
(1.3%) |
|||
Employment |
(8.6%) |
(6.9%) |
(8.1%) |
(8.5%) |
|||
Real Estate |
(3.2%) |
(9.3%) |
(5.5%) |
(6.1%) |
|||
Legal |
(10.9%) |
—% |
(10.9%) |
(10.9%) |
|||
Other |
(7.4%) |
(8.5%) |
(7.8%) |
(8.3%) |
|||
Total classified |
(5.1%) |
(8.1%) |
(5.9%) |
(6.2%) |
|||
Year-to-date 2013 year-over-year classified comparisons: |
|||||||
U.S. Publishing (including USA TODAY) |
Newsquest (in pounds) |
Total Publishing segment (constant currency) |
Total Publishing segment |
||||
Automotive |
(1.4%) |
(9.7%) |
(2.4%) |
(2.7%) |
|||
Employment |
(8.7%) |
(4.7%) |
(7.5%) |
(8.0%) |
|||
Real Estate |
(3.7%) |
(8.5%) |
(5.5%) |
(6.2%) |
|||
Legal |
(9.3%) |
—% |
(9.3%) |
(9.3%) |
|||
Other |
(5.7%) |
(8.5%) |
(6.6%) |
(7.2%) |
|||
Total classified |
(5.2%) |
(7.7%) |
(5.9%) |
(6.3%) |
NON-GAAP FINANCIAL INFORMATION Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars (except per share amounts) |
|||||||||||||||||||||||
The company uses non-GAAP financial performance and liquidity measures to supplement the financial information presented on a GAAP basis. These non-GAAP financial measures are not to be considered in isolation from or as a substitute for the related GAAP measures and should be read only in conjunction with financial information presented on a GAAP basis. |
|||||||||||||||||||||||
Tables No. 6 through No. 11 reconcile these non-GAAP measures to the most directly comparable GAAP measure. |
|||||||||||||||||||||||
Table No. 6 |
|||||||||||||||||||||||
GAAP Measure |
Special Items |
Non-GAAP Measure |
|||||||||||||||||||||
Thirteen weeks ended Sept. 29, 2013 |
Workforce restructuring |
Transformation costs |
Other non-operating items |
Thirteen weeks ended Sept. 29, 2013 |
|||||||||||||||||||
Cost of sales and operating expenses, |
$ |
713,369 |
$ |
(7,162) |
$ |
— |
$ |
— |
$ |
706,207 |
|||||||||||||
Selling, general and administrative expenses, exclusive of depreciation |
315,677 |
(2,084) |
— |
— |
313,593 |
||||||||||||||||||
Facility consolidation charges |
5,880 |
— |
(5,880) |
— |
— |
||||||||||||||||||
Operating expenses |
1,081,192 |
(9,246) |
(5,880) |
— |
1,066,066 |
||||||||||||||||||
Operating income |
171,698 |
9,246 |
5,880 |
— |
186,824 |
||||||||||||||||||
Other non-operating items |
(17,580) |
— |
4,412 |
16,613 |
3,445 |
||||||||||||||||||
Total non-operating (expense) income |
(47,497) |
— |
4,412 |
16,613 |
(26,472) |
||||||||||||||||||
Income before income taxes |
124,201 |
9,246 |
10,292 |
16,613 |
160,352 |
||||||||||||||||||
Provision for income taxes |
26,700 |
3,600 |
4,100 |
8,400 |
42,800 |
||||||||||||||||||
Net income |
97,501 |
5,646 |
6,192 |
8,213 |
117,552 |
||||||||||||||||||
Net income attributable to Gannett Co., Inc. |
79,748 |
5,646 |
6,192 |
8,213 |
99,799 |
||||||||||||||||||
Net income per share - diluted |
$ |
0.34 |
$ |
0.02 |
$ |
0.03 |
$ |
0.04 |
$ |
0.43 |
|||||||||||||
GAAP Measure |
Special Items |
Non-GAAP Measure |
|||||||||||||||||||||
Thirteen weeks ended Sept. 23, 2012 |
Workforce restructuring |
Transformation costs |
Pension settlement charges |
Special tax benefits |
Thirteen weeks ended Sept. 23, 2012 |
||||||||||||||||||
Cost of sales and operating expenses, exclusive of depreciation |
$ |
720,941 |
$ |
(6,706) |
$ |
— |
$ |
— |
$ |
— |
$ |
714,235 |
|||||||||||
Selling, general and administrative expenses, exclusive of depreciation |
318,385 |
(1,244) |
— |
(2,523) |
— |
314,618 |
|||||||||||||||||
Facility consolidation charges |
4,231 |
— |
(4,231) |
— |
— |
— |
|||||||||||||||||
Operating expenses |
1,092,062 |
(7,950) |
(4,231) |
(2,523) |
— |
1,077,358 |
|||||||||||||||||
Operating income |
217,199 |
7,950 |
4,231 |
2,523 |
— |
231,903 |
|||||||||||||||||
Equity income in unconsolidated investees, net |
3,005 |
— |
3,220 |
— |
— |
6,225 |
|||||||||||||||||
Total non-operating (expense) income |
(29,891) |
— |
3,220 |
— |
— |
(26,671) |
|||||||||||||||||
Income before income taxes |
187,308 |
7,950 |
7,451 |
2,523 |
— |
205,232 |
|||||||||||||||||
Provision for income taxes |
38,700 |
3,000 |
3,000 |
1,000 |
13,100 |
58,800 |
|||||||||||||||||
Net income |
148,608 |
4,950 |
4,451 |
1,523 |
(13,100) |
146,432 |
|||||||||||||||||
Net income attributable to Gannett Co., Inc. |
133,083 |
4,950 |
4,451 |
1,523 |
(13,100) |
130,907 |
|||||||||||||||||
Net income per share - diluted (a) |
$ |
0.56 |
$ |
0.02 |
$ |
0.02 |
$ |
0.01 |
$ |
(0.06) |
$ |
0.56 |
|||||||||||
(a) Total per share amount does not sum due to rounding. |
NON-GAAP FINANCIAL INFORMATION Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars (except per share amounts) |
|||||||||||||||||||||||
Table No. 7 |
|||||||||||||||||||||||
GAAP Measure |
Special Items |
Non-GAAP Measure |
|||||||||||||||||||||
Thirty-nine weeks ended Sept. 29, 2013 |
Workforce restructuring |
Transformation costs |
Other non-operating items |
Special tax benefits |
Thirty-nine weeks ended Sept. 29, 2013 |
||||||||||||||||||
Cost of sales and operating expenses, |
$ |
2,159,962 |
$ |
(29,692) |
$ |
— |
$ |
— |
$ |
— |
$ |
2,130,270 |
|||||||||||
Selling, general and administrative expenses, exclusive of depreciation |
950,407 |
(6,647) |
— |
— |
— |
943,760 |
|||||||||||||||||
Facility consolidation charges |
15,163 |
— |
(15,163) |
— |
— |
— |
|||||||||||||||||
Operating expenses |
3,267,687 |
(36,339) |
(15,163) |
— |
— |
3,216,185 |
|||||||||||||||||
Operating income |
525,637 |
36,339 |
15,163 |
— |
— |
577,139 |
|||||||||||||||||
Equity income in unconsolidated investees, net |
28,929 |
— |
— |
731 |
— |
29,660 |
|||||||||||||||||
Other non-operating items |
(28,954) |
— |
14,811 |
18,690 |
— |
4,547 |
|||||||||||||||||
Total non-operating (expense) income |
(113,232) |
— |
14,811 |
19,421 |
— |
(79,000) |
|||||||||||||||||
Income before income taxes |
412,405 |
36,339 |
29,974 |
19,421 |
— |
498,139 |
|||||||||||||||||
Provision for income taxes |
71,700 |
14,300 |
11,900 |
8,700 |
27,800 |
134,400 |
|||||||||||||||||
Net income |
340,705 |
22,039 |
18,074 |
10,721 |
(27,800) |
363,739 |
|||||||||||||||||
Net income attributable to Gannett Co., Inc. |
297,933 |
22,039 |
18,074 |
10,721 |
(27,800) |
320,967 |
|||||||||||||||||
Net income per share - diluted |
$ |
1.27 |
$ |
0.09 |
$ |
0.08 |
$ |
0.05 |
$ |
(0.12) |
$ |
1.37 |
|||||||||||
GAAP Measure |
Special Items |
Non-GAAP Measure |
|||||||||||||||||||||
Thirty-nine weeks ended Sept. 23, 2012 |
Workforce restructuring |
Transformation costs |
Pension settlement charges |
Special tax benefits |
Thirty-nine weeks ended Sept. 23, 2012 |
||||||||||||||||||
Cost of sales and operating expenses, exclusive of depreciation |
$ |
2,164,070 |
$ |
(28,770) |
$ |
— |
$ |
— |
$ |
— |
$ |
2,135,300 |
|||||||||||
Selling, general and administrative expenses, exclusive of depreciation |
943,005 |
(5,205) |
— |
(7,946) |
— |
929,854 |
|||||||||||||||||
Facility consolidation charges |
14,116 |
— |
(14,116) |
— |
— |
— |
|||||||||||||||||
Operating expenses |
3,265,513 |
(33,975) |
(14,116) |
(7,946) |
— |
3,209,476 |
|||||||||||||||||
Operating income |
569,375 |
33,975 |
14,116 |
7,946 |
— |
625,412 |
|||||||||||||||||
Equity income in unconsolidated investees, net |
15,980 |
— |
3,220 |
— |
— |
19,200 |
|||||||||||||||||
Total non-operating (expense) income |
(92,874) |
— |
3,220 |
— |
— |
(89,654) |
|||||||||||||||||
Income before income taxes |
476,501 |
33,975 |
17,336 |
7,946 |
— |
535,758 |
|||||||||||||||||
Provision for income taxes |
116,500 |
13,500 |
6,900 |
3,200 |
13,100 |
153,200 |
|||||||||||||||||
Net income |
360,001 |
20,475 |
10,436 |
4,746 |
(13,100) |
382,558 |
|||||||||||||||||
Net income attributable to Gannett Co., Inc. |
321,195 |
20,475 |
10,436 |
4,746 |
(13,100) |
343,752 |
|||||||||||||||||
Net income per share - diluted (a) |
$ |
1.35 |
$ |
0.09 |
$ |
0.04 |
$ |
0.02 |
$ |
(0.06) |
$ |
1.45 |
|||||||||||
(a) Total per share amount does not sum due to rounding. |
NON-GAAP FINANCIAL INFORMATION Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars |
|||||||||||||||||||
Table No. 8 |
|||||||||||||||||||
GAAP Measure |
Special Items |
Non-GAAP Measure |
|||||||||||||||||
Thirteen weeks ended Sept. 29, 2013 |
Workforce restructuring |
Transformation costs |
Thirteen weeks ended Sept. 29, 2013 |
||||||||||||||||
Operating income: |
|||||||||||||||||||
Publishing |
$ |
62,744 |
$ |
8,607 |
$ |
5,741 |
$ |
77,092 |
|||||||||||
Broadcasting |
83,810 |
639 |
139 |
84,588 |
|||||||||||||||
Digital |
42,050 |
— |
— |
42,050 |
|||||||||||||||
Corporate |
(16,906) |
— |
— |
(16,906) |
|||||||||||||||
Total |
$ |
171,698 |
$ |
9,246 |
$ |
5,880 |
$ |
186,824 |
|||||||||||
Depreciation, amortization and facility consolidation charges: |
|||||||||||||||||||
Publishing |
$ |
32,183 |
$ |
— |
$ |
(5,741) |
$ |
26,442 |
|||||||||||
Broadcasting |
7,059 |
— |
(139) |
6,920 |
|||||||||||||||
Digital |
8,309 |
— |
— |
8,309 |
|||||||||||||||
Corporate |
4,595 |
— |
— |
4,595 |
|||||||||||||||
Total |
$ |
52,146 |
$ |
— |
$ |
(5,880) |
$ |
46,266 |
|||||||||||
Operating cash flow (a): |
|||||||||||||||||||
Publishing |
$ |
94,927 |
$ |
8,607 |
$ |
— |
$ |
103,534 |
|||||||||||
Broadcasting |
90,869 |
639 |
— |
91,508 |
|||||||||||||||
Digital |
50,359 |
— |
— |
50,359 |
|||||||||||||||
Corporate |
(12,311) |
— |
— |
(12,311) |
|||||||||||||||
Total |
$ |
223,844 |
$ |
9,246 |
$ |
— |
$ |
233,090 |
|||||||||||
GAAP Measure |
Special Items |
Non-GAAP Measure |
|||||||||||||||||
Thirteen weeks ended Sept. 23, 2012 |
Workforce restructuring |
Transformation costs |
Pension settlement charges |
Thirteen weeks ended Sept. 23, 2012 |
|||||||||||||||
Operating income: |
|||||||||||||||||||
Publishing |
$ |
73,731 |
$ |
7,950 |
$ |
4,231 |
$ |
— |
$ |
85,912 |
|||||||||
Broadcasting |
118,672 |
— |
— |
— |
118,672 |
||||||||||||||
Digital |
39,912 |
— |
— |
— |
39,912 |
||||||||||||||
Corporate |
(15,116) |
— |
— |
2,523 |
(12,593) |
||||||||||||||
Total |
$ |
217,199 |
$ |
7,950 |
$ |
4,231 |
$ |
2,523 |
$ |
231,903 |
|||||||||
Depreciation, amortization and facility consolidation charges: |
|||||||||||||||||||
Publishing |
$ |
33,276 |
$ |
— |
$ |
(4,231) |
$ |
— |
$ |
29,045 |
|||||||||
Broadcasting |
6,879 |
— |
— |
— |
6,879 |
||||||||||||||
Digital |
8,391 |
— |
— |
— |
8,391 |
||||||||||||||
Corporate |
4,190 |
— |
— |
— |
4,190 |
||||||||||||||
Total |
$ |
52,736 |
$ |
— |
$ |
(4,231) |
$ |
— |
$ |
48,505 |
|||||||||
Operating cash flow (a): |
|||||||||||||||||||
Publishing |
$ |
107,007 |
$ |
7,950 |
$ |
— |
$ |
— |
$ |
114,957 |
|||||||||
Broadcasting |
125,551 |
— |
— |
— |
125,551 |
||||||||||||||
Digital |
48,303 |
— |
— |
— |
48,303 |
||||||||||||||
Corporate |
(10,926) |
— |
— |
2,523 |
(8,403) |
||||||||||||||
Total |
$ |
269,935 |
$ |
7,950 |
$ |
— |
$ |
2,523 |
$ |
280,408 |
|||||||||
(a) Refer to Table No. 10 |
NON-GAAP FINANCIAL INFORMATION Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars |
|||||||||||||||||||
Table No. 9 |
|||||||||||||||||||
GAAP Measure |
Special Items |
Non-GAAP Measure |
|||||||||||||||||
Thirty-nine weeks ended Sept. 29, 2013 |
Workforce restructuring |
Transformation costs |
Thirty-nine weeks ended Sept. 29, 2013 |
||||||||||||||||
Operating income: |
|||||||||||||||||||
Publishing |
$ |
208,073 |
$ |
35,700 |
$ |
15,024 |
$ |
258,797 |
|||||||||||
Broadcasting |
265,578 |
639 |
139 |
266,356 |
|||||||||||||||
Digital |
100,931 |
— |
— |
100,931 |
|||||||||||||||
Corporate |
(48,945) |
— |
— |
(48,945) |
|||||||||||||||
Total |
$ |
525,637 |
$ |
36,339 |
$ |
15,163 |
$ |
577,139 |
|||||||||||
Depreciation, amortization and facility consolidation charges: |
|||||||||||||||||||
Publishing |
$ |
95,834 |
$ |
— |
$ |
(15,024) |
$ |
80,810 |
|||||||||||
Broadcasting |
20,968 |
— |
(139) |
20,829 |
|||||||||||||||
Digital |
26,799 |
— |
— |
26,799 |
|||||||||||||||
Corporate |
13,717 |
— |
— |
13,717 |
|||||||||||||||
Total |
$ |
157,318 |
$ |
— |
$ |
(15,163) |
$ |
142,155 |
|||||||||||
Operating cash flow (a): |
|||||||||||||||||||
Publishing |
$ |
303,907 |
$ |
35,700 |
$ |
— |
$ |
339,607 |
|||||||||||
Broadcasting |
286,546 |
639 |
— |
287,185 |
|||||||||||||||
Digital |
127,730 |
— |
— |
127,730 |
|||||||||||||||
Corporate |
(35,228) |
— |
— |
(35,228) |
|||||||||||||||
Total |
$ |
682,955 |
$ |
36,339 |
$ |
— |
$ |
719,294 |
|||||||||||
GAAP Measure |
Special Items |
Non-GAAP Measure |
|||||||||||||||||
Thirty-nine weeks ended Sept. 23, 2012 |
Workforce restructuring |
Transformation costs |
Pension settlement charges |
Thirty-nine weeks ended Sept. 23, 2012 |
|||||||||||||||
Operating income: |
|||||||||||||||||||
Publishing |
$ |
239,982 |
$ |
35,631 |
$ |
14,116 |
$ |
— |
$ |
289,729 |
|||||||||
Broadcasting |
285,873 |
— |
— |
— |
285,873 |
||||||||||||||
Digital |
92,706 |
— |
— |
— |
92,706 |
||||||||||||||
Corporate |
(49,186) |
(1,656) |
— |
7,946 |
(42,896) |
||||||||||||||
Total |
$ |
569,375 |
$ |
33,975 |
$ |
14,116 |
$ |
7,946 |
$ |
625,412 |
|||||||||
Depreciation, amortization and facility consolidation charges: |
|||||||||||||||||||
Publishing |
$ |
100,226 |
$ |
— |
$ |
(14,116) |
$ |
— |
$ |
86,110 |
|||||||||
Broadcasting |
21,113 |
— |
— |
— |
21,113 |
||||||||||||||
Digital |
24,626 |
— |
— |
— |
24,626 |
||||||||||||||
Corporate |
12,473 |
— |
— |
— |
12,473 |
||||||||||||||
Total |
$ |
158,438 |
$ |
— |
$ |
(14,116) |
$ |
— |
$ |
144,322 |
|||||||||
Operating cash flow (a): |
|||||||||||||||||||
Publishing |
$ |
340,208 |
$ |
35,631 |
$ |
— |
$ |
— |
$ |
375,839 |
|||||||||
Broadcasting |
306,986 |
— |
— |
— |
306,986 |
||||||||||||||
Digital |
117,332 |
— |
— |
— |
117,332 |
||||||||||||||
Corporate |
(36,713) |
(1,656) |
— |
7,946 |
(30,423) |
||||||||||||||
Total |
$ |
727,813 |
$ |
33,975 |
$ |
— |
$ |
7,946 |
$ |
769,734 |
|||||||||
(a) Refer to Table No. 10 |
NON-GAAP FINANCIAL INFORMATION Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars |
|||||||||||||||||||
Table No. 10 |
|||||||||||||||||||
"Operating cash flow", a non-GAAP measure, is defined as operating income plus depreciation, amortization and facility consolidation charges. Management believes that use of this measure allows investors and management to measure, analyze and compare the performance of its business segment operations at a more detailed level and in a meaningful and consistent manner. |
|||||||||||||||||||
Reconciliations of these non-GAAP amounts to the company's operating income, which the company believes is the most directly comparable financial measure calculated and presented in accordance with GAAP on the company's condensed consolidated statements of income, follow: |
|||||||||||||||||||
Thirteen weeks ended Sept. 29, 2013: |
|||||||||||||||||||
Publishing |
Broadcasting |
Digital |
Corporate |
Consolidated Total |
|||||||||||||||
Operating cash flow |
$ |
94,927 |
$ |
90,869 |
$ |
50,359 |
$ |
(12,311) |
$ |
223,844 |
|||||||||
Less: |
|||||||||||||||||||
Depreciation |
(22,300) |
(6,747) |
(4,553) |
(4,595) |
(38,195) |
||||||||||||||
Amortization |
(4,142) |
(173) |
(3,756) |
— |
(8,071) |
||||||||||||||
Facility consolidation charges |
(5,741) |
(139) |
— |
— |
(5,880) |
||||||||||||||
Operating income as reported (GAAP basis) |
$ |
62,744 |
$ |
83,810 |
$ |
42,050 |
$ |
(16,906) |
$ |
171,698 |
|||||||||
Thirteen weeks ended Sept. 23, 2012: |
|||||||||||||||||||
Publishing |
Broadcasting |
Digital |
Corporate |
Consolidated Total |
|||||||||||||||
Operating cash flow |
$ |
107,007 |
$ |
125,551 |
$ |
48,303 |
$ |
(10,926) |
$ |
269,935 |
|||||||||
Less: |
|||||||||||||||||||
Depreciation |
(25,165) |
(6,697) |
(4,408) |
(4,190) |
(40,460) |
||||||||||||||
Amortization |
(3,880) |
(182) |
(3,983) |
— |
(8,045) |
||||||||||||||
Facility consolidation charges |
(4,231) |
— |
— |
— |
(4,231) |
||||||||||||||
Operating income as reported (GAAP basis) |
$ |
73,731 |
$ |
118,672 |
$ |
39,912 |
$ |
(15,116) |
$ |
217,199 |
|||||||||
Thirty-nine weeks ended Sept. 29, 2013: |
|||||||||||||||||||
Publishing |
Broadcasting |
Digital |
Corporate |
Consolidated Total |
|||||||||||||||
Operating cash flow |
$ |
303,907 |
$ |
286,546 |
$ |
127,730 |
$ |
(35,228) |
$ |
682,955 |
|||||||||
Less: |
|||||||||||||||||||
Depreciation |
(68,301) |
(20,294) |
(13,276) |
(13,717) |
(115,588) |
||||||||||||||
Amortization |
(12,509) |
(535) |
(13,523) |
— |
(26,567) |
||||||||||||||
Facility consolidation charges |
(15,024) |
(139) |
— |
— |
(15,163) |
||||||||||||||
Operating income as reported (GAAP basis) |
$ |
208,073 |
$ |
265,578 |
$ |
100,931 |
$ |
(48,945) |
$ |
525,637 |
|||||||||
Thirty-nine weeks ended Sept. 23, 2012: |
|||||||||||||||||||
Publishing |
Broadcasting |
Digital |
Corporate |
Consolidated Total |
|||||||||||||||
Operating cash flow |
$ |
340,208 |
$ |
306,986 |
$ |
117,332 |
$ |
(36,713) |
$ |
727,813 |
|||||||||
Less: |
|||||||||||||||||||
Depreciation |
(74,785) |
(20,569) |
(12,493) |
(12,473) |
(120,320) |
||||||||||||||
Amortization |
(11,325) |
(544) |
(12,133) |
— |
(24,002) |
||||||||||||||
Facility consolidation charges |
(14,116) |
— |
— |
— |
(14,116) |
||||||||||||||
Operating income as reported (GAAP basis) |
$ |
239,982 |
$ |
285,873 |
$ |
92,706 |
$ |
(49,186) |
$ |
569,375 |
NON-GAAP FINANCIAL INFORMATION Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars |
||||||||
Table No. 11 |
||||||||
"Free cash flow" is a non-GAAP liquidity measure used in addition to and in conjunction with results presented in accordance with GAAP. Free cash flow should not be relied upon to the exclusion of GAAP financial measures. |
||||||||
Free cash flow is a non-GAAP liquidity measure that is defined as "Net cash flow from operating activities" as reported on the statement of cash flows reduced by "Purchase of property, plant and equipment" as well as "Payments for investments" and increased by "Proceeds from investments" and voluntary pension contributions, net of related tax benefit. The company believes that free cash flow is a useful measure for management and investors to evaluate the level of cash generated by operations and the ability of its operations to fund investments in new and existing businesses, return cash to shareholders under the company's capital program, repay indebtedness, add to the company's cash balance, or to use in other discretionary activities. Management uses free cash flow to monitor cash available for repayment of indebtedness and in its discussions with the investment community. |
||||||||
Thirteen weeks ended Sept. 29, 2013 |
Thirty-nine weeks ended Sept. 29, 2013 |
|||||||
Net cash flow from operating activities |
$ |
125,017 |
$ |
348,958 |
||||
Purchase of property, plant and equipment |
(23,770) |
(72,668) |
||||||
Voluntary pension employer contributions |
— |
15,507 |
||||||
Tax benefit for voluntary pension employer contributions |
— |
(6,125) |
||||||
Payments for investments |
(1,001) |
(3,380) |
||||||
Proceeds from investments |
5,414 |
34,779 |
||||||
Free cash flow |
$ |
105,660 |
$ |
317,071 |
TAX RATE CALCULATION Gannett Co., Inc. and Subsidiaries Unaudited, in thousands of dollars |
|||||||||||||||
Table No. 12 |
|||||||||||||||
The calculations of the company's effective tax rate on a GAAP and non-GAAP basis are below: |
|||||||||||||||
GAAP |
Non-GAAP |
||||||||||||||
Thirteen |
Thirteen |
Thirteen |
Thirteen |
||||||||||||
Income before taxes (per Table 6) |
$ |
124,201 |
$ |
187,308 |
$ |
160,352 |
$ |
205,232 |
|||||||
Noncontrolling interests (per Table 1) |
(17,753) |
(15,525) |
(17,753) |
(15,525) |
|||||||||||
Income before taxes attributable to Gannett Co., Inc. |
$ |
106,448 |
$ |
171,783 |
$ |
142,599 |
$ |
189,707 |
|||||||
Provision for income taxes (per Table 6) |
$ |
26,700 |
$ |
38,700 |
$ |
42,800 |
$ |
58,800 |
|||||||
Effective tax rate |
25.1% |
22.5% |
30.0% |
31.0% |
|||||||||||
GAAP |
Non-GAAP |
||||||||||||||
Thirty-nine |
Thirty-nine |
Thirty-nine |
Thirty-nine |
||||||||||||
Income before taxes (per Table 7) |
$ |
412,405 |
$ |
476,501 |
$ |
498,139 |
$ |
535,758 |
|||||||
Noncontrolling interests (per Table 2) |
(42,772) |
(38,806) |
(42,772) |
(38,806) |
|||||||||||
Income before taxes attributable to Gannett Co., Inc. |
$ |
369,633 |
$ |
437,695 |
$ |
455,367 |
$ |
496,952 |
|||||||
Provision for income taxes (per Table 7) |
$ |
71,700 |
$ |
116,500 |
$ |
134,400 |
$ |
153,200 |
|||||||
Effective tax rate |
19.4% |
26.6% |
29.5% |
30.8% |
(Logo: http://photos.prnewswire.com/prnh/20120103/PH28972LOGO)
SOURCE
For investor inquiries, contact: Jeffrey Heinz, Vice President, Investor Relations, 703-854-6917, jheinz@gannett.com; For media inquiries, contact: Jeremy Gaines, Vice President, Corporate Communications, 703-854-6049, jmgaines@gannett.com