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| 8-K - FORM 8-K - TEGNA INC | c15664e8vk.htm |
Exhibit 99.1
| FOR IMMEDIATE RELEASE | Monday, April 18, 2011 |
Gannett Co., Inc. Reports First Quarter Results
Reported Earnings per Diluted Share of $0.37, Non-GAAP Earnings per Diluted Share of $0.41
Net Cash Flow from Operating Activities Totaled $224 million
Free Cash Flow Totaled $216 million
Net Cash Flow from Operating Activities Totaled $224 million
Free Cash Flow Totaled $216 million
McLEAN, VA – Gannett Co., Inc. (NYSE: GCI) reported today that earnings per diluted share from
continuing operations, on a GAAP (generally accepted accounting principles) basis, for the first
quarter of 2011 were $0.37 compared to $0.48 for the first quarter of 2010. Results for both
quarters included special items as noted below. Excluding these items, earnings per diluted share
were $0.41 compared to $0.49 for the same quarter last year on the same basis.
Results for the first quarter of 2011 include $7.7 million of non-cash charges primarily
associated with facility consolidations ($4.6 million after-tax or $0.02 per share) and $6.0
million in costs due to workforce restructuring ($3.9 million after-tax or $0.02 per share).
Results for the first quarter of 2010 included a
$2.2 million tax charge related to health care reform legislation and the resultant loss of tax
deductibility for retiree health care costs covered by Medicare retiree drug subsidies ($0.01 per
share).
“During the quarter, we continued to focus on enhancing content distribution on every platform
and sales across platforms. The success of those efforts resulted in a 12 percent increase in
company-wide digital revenue,” said Craig Dubow, chairman and chief executive officer. “Our
Publishing segment results for the quarter reflect the current state of the domestic economy with
strength in the auto and employment sectors. However, softness persists in certain sectors,
particularly the real estate market here, and more broadly in the UK. Core advertising in
Broadcasting continued the momentum seen in 2010. As a result, television revenues, when adjusted
for the positive impact of the Olympics, the Super Bowl, which moved from CBS to Fox, and political
spending in the first quarter last year, were up significantly. Our expenses were lower overall,
reflecting our ongoing efforts to increase efficiencies particularly in the Publishing segment. The
decline was offset, in part, by an increase in newsprint expense and higher Digital segment
expenses associated with the substantial increase in revenues there.”
“We accelerated the pace of our strategic transformation efforts to further strengthen and
position our company for growth,” he added. “During the quarter, we added two proven industry
leaders to our management team in the critical roles of chief marketing officer and chief digital
officer. We also launched our first corporate brand and advertising campaign which broadly
communicates the full range, value and reach our powerful portfolio of products offers to
consumers and business customers.”
As previously reported, the company completed the sale of The Honolulu Advertiser and its
related assets as well as a small directory publishing operation during the second quarter of 2010.
Results for the first quarter of 2010 exclude operating results from these former properties which
have been reclassified to discontinued operations.
Amounts reported in accordance with GAAP are contained in Tables 1 and 2. Certain amounts and
comparisons included in the following discussion of GAAP results are supplemented by discussions
which exclude the effect of special items. Details of these special items and their effect on GAAP
results are included on the Non-GAAP Financial Information Tables 3 through 6 attached to this news
release. The company’s basis for providing discussions of non-GAAP results is noted below.
(more)
CONTINUING OPERATIONS
Net income attributable to Gannett was $90.5 million in the first quarter while net income
attributable to Gannett on a non-GAAP basis totaled $98.9 million. Reported operating income was
$178.6 million and non-GAAP operating income totaled $192.2 million. Both amounts compared to
$217.0 million in the first quarter last year. Operating cash flow (a non-GAAP term defined as
operating income plus special items, depreciation and amortization) was $242.2 million in the
quarter compared to $272.3 million in last year’s first quarter.
Reported operating revenues for the company totaled $1.3 billion in the first quarter, a
decline of
3.7 percent compared to the first quarter last year. Digital segment growth was strong in the
quarter. Publishing segment revenue results were impacted by softer ad demand. The absence of
advertising associated with the Olympics, the Super Bowl and the elections that benefited the first
quarter last year resulted in lower revenue in the Broadcasting segment.
Operating expenses including facility consolidation and workforce restructuring costs in the
first quarter this year were down 0.9 percent compared to last year. Operating expenses on a
non-GAAP basis were 2.2 percent lower and totaled $1.1 billion. The declines reflect the impact of
efficiency efforts and facility consolidations in this and prior quarters. Cost reductions in the
Publishing segment were offset, in part, by higher costs in the Digital segment associated with
strong revenue growth and slightly higher expenses in the Broadcasting segment.
PUBLISHING
Publishing segment operating revenues totaled $929.8 million for the quarter compared to
$991.5 million in the same quarter last year, a decline of 6.2 percent. Although softer ad demand,
particularly in the UK, impacted revenue results in the quarter, digital advertising revenue
improved in virtually all categories and classified advertising year-over-year comparisons improved
sequentially within the quarter.
As noted, the company completed the sale of The Honolulu Advertiser and its related assets as
well as a small directory publishing operation during the second quarter of 2010. Revenue
associated with these businesses, now reflected as discontinued operations, totaled approximately
$23 million in the first quarter of 2010.
Advertising revenues were $601.7 million in the quarter, a 7.3 percent decline from $649.3
million in the first quarter last year. In the U.S., advertising revenues declined 6.9 percent and
at Newsquest, our operations in the UK, advertising revenues were 12.4 percent lower, in pounds.
Ad revenue percentage changes for the retail, national and classified categories for the
publishing segment for the quarter were as follows:
First Quarter 2011 Year-over-Year Comparisons
| Total | ||||||||||||||||
| Publishing | Total | |||||||||||||||
| U.S. Publishing | Newsquest | Segment | Publishing | |||||||||||||
| (including USA TODAY) | (in pounds) | (constant currency) | Segment | |||||||||||||
Retail |
(7.1 | %) | (8.2 | %) | (7.2 | %) | (7.0 | %) | ||||||||
National |
(11.1 | %) | (5.1 | %) | (10.6 | %) | (10.5 | %) | ||||||||
Classified |
(3.4 | %) | (15.8 | %) | (6.9 | %) | (6.3 | %) | ||||||||
| (6.9 | %) | (12.4 | %) | (7.7 | %) | (7.3 | %) | |||||||||
Retail advertising comparisons in the first quarter this year were better than comparisons a
year ago. Retail advertising was negatively impacted by severe weather conditions both here and in
the UK and a later Easter this year.
(more)
National advertising declined 10.5 percent in the quarter reflecting softer advertising demand
at USA TODAY that, although lower overall, was volatile within the quarter. There was strong growth
in the telecommunications and credit card categories in the quarter for USA TODAY, while several
key categories including the entertainment, travel and technology categories declined compared to
last year.
Publishing segment digital revenues, which are reflected in the retail, national and
classified categories above, were significantly higher in the quarter reflecting the focus on
cross-platform sales and the early success of the rollout of our Yahoo! initiative. U.S. Community
Publishing digital revenues increased
13.3 percent in the quarter. Digital revenues at USA TODAY were 19.2 percent higher.
Classified advertising at our domestic publishing operations continued to benefit from
strength in the automotive and employment categories which were up 6.1 percent and 7.3 percent,
respectively. Employment advertising improved sequentially within the quarter and increased over 13
percent in March. The year-over-year comparisons for the real estate category in the U.S. were
slightly better in the first quarter relative to the fourth quarter last year. Real estate ad
demand, however, continued to lag reflecting continued softness in the real estate market
nationwide.
The percentage changes in the classified categories for the first quarter of 2011 were as
follows:
First Quarter 2011 Year-over-Year Comparisons
| Total | ||||||||||||||||
| Publishing | Total | |||||||||||||||
| U.S. | Newsquest | Segment | Publishing | |||||||||||||
| Publishing | (in pounds) | (constant currency) | Segment | |||||||||||||
Automotive |
6.1 | % | (11.8 | %) | 2.9 | % | 3.4 | % | ||||||||
Employment |
7.3 | % | (29.8 | %) | (7.7 | %) | (6.7 | %) | ||||||||
Real Estate |
(18.5 | %) | (5.6 | %) | (14.2 | %) | (13.5 | %) | ||||||||
Legal |
(16.0 | %) | — | (16.0 | %) | (16.0 | %) | |||||||||
Other |
(5.1 | %) | (10.9 | %) | (7.1 | %) | (6.4 | %) | ||||||||
| (3.4 | %) | (15.8 | %) | (6.9 | %) | (6.3 | %) | |||||||||
Reported Publishing segment operating expenses totaled $812.2 million compared with $827.0
million in the first quarter last year. The decline was primarily the result of continuing
efficiency efforts and facility consolidations offset, in part, by a 12.5 percent increase in
newsprint expense and $13.6 million of special items described above. Substantially higher usage
prices in the quarter were offset partially by a 9.9 percent consumption decline. Newsprint usage
price comparisons in the second quarter of 2011 are expected to be unfavorable, however, less so
than in the first quarter, and consumption is expected to be lower.
Reported Publishing segment operating income totaled $117.6 million compared with $164.4
million in the first quarter of 2010. Publishing segment operating income on a non-GAAP basis was
$131.2 million in the quarter and operating cash flow totaled $162.5 million.
BROADCASTING
Broadcasting revenues (which include Captivate) were $163.9 million in the quarter, a decline
of only $3.6 million from $167.5 million in the first quarter last year which benefited from $24.1
million in advertising associated with the Olympics, the Super Bowl and politics.
(more)
Television revenues were $158.3 million compared to $161.3 million last year, a decline of
$3.0 million reflecting primarily the absence of $18.6 million in Olympic spending that benefitted
our NBC affiliated stations in the first quarter of 2010 as well as $3.3 million in politically
related advertising and
$2.2 million in ad demand related to the Super Bowl which moved from CBS to Fox. Total adjusted
television revenues, defined to exclude the incremental impact of these events, were up 7.3
percent. Retransmission revenues totaled $19.5 million in the quarter, an increase of 25.7 percent
from the first quarter last year. Based on current trends, we expect total television revenues for
the second quarter of 2011 to be flat compared to the second quarter of 2010. Television revenues
in 2010’s second quarter benefited from $11.7 million in politically related advertising. Excluding
the incremental impact of political spending, the percentage increase in total television revenues
in the second quarter this year compared to the second quarter last year is expected to be in the
mid-single digits.
Broadcasting segment operating expenses totaled $100.4 million in the quarter, up 1.4 percent
from $99.0 million in the first quarter last year. As a result, operating income was $63.5 million
and operating cash flow totaled $70.9 million.
DIGITAL
Digital segment operating revenues were $157.6 million in the quarter, up 12.1 percent from
the same quarter last year reflecting primarily higher employment advertising demand at
CareerBuilder. Operating expenses were just 3.1 percent higher and totaled $141.5 million. As a
result, Digital segment operating income was $16.1 million, an increase of $12.7 million compared
to the first quarter last year. Operating cash flow more than doubled to $23.5 million compared to
$11.4 million a year ago.
Digital revenues company-wide including the Digital segment and all digital revenues generated
by the other business segments increased 12.4 percent and totaled $251.3 million and were
approximately 20 percent of total operating revenues.
NON-OPERATING ITEMS
The company’s equity earnings include its share of operating results from unconsolidated
investees including the California Newspapers Partnership, Texas-New Mexico Newspapers Partnership,
Tucson newspaper partnership and other online/digital businesses including Classified Ventures.
The $2.9 million increase in equity income in unconsolidated investees reflects better results
for certain newspaper partnerships and certain digital investments.
Interest expense was $3.2 million higher in the quarter and totaled $46.6 million compared to
$43.5 million for the first quarter last year. The increase was due to significantly lower average
debt balances offset by higher average interest rates associated with longer term, fixed rate debt.
Net cash flow from operating activities was $224.1 million while free cash flow (a non-GAAP
measure) totaled $216.4 million in the quarter. The balance of long term debt at quarter end was
$2.2 billion, a reduction of $164 million from year end. Total cash at the end of the first quarter
was $142 million.
At the end of the quarter, Gannett had more than 100 domestic publishing web sites, including
USATODAY.com, one of the most popular newspaper sites on the Web and the iPad. The company also
had web sites in all of its 19 television markets. In March, Gannett’s consolidated domestic
Internet audience share was 52.6 million unique visitors reaching 24.7 percent of the Internet
audience, according to Comscore Media Metrix. Newsquest is also an Internet leader in the UK where
its network of web sites attracted over 85 million monthly page impressions from approximately 10.6
million unique users in March. CareerBuilder’s unique visitors in the first quarter averaged 24.4
million, an increase of 21 percent from the first quarter last year.
(more)
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 expense items consisting of workforce
restructuring expenses, facility consolidation expenses and a non-cash charge the company incurred
in the first quarter of 2010 related to the tax impact of health care reform legislation. The
company believes that such expenses are not indicative of normal, ongoing operating expenses and
their inclusion in results impacts performing meaningful comparisons between periods and with peer
group companies. Workforce restructuring and facility consolidation expenses primarily relate to
incremental expenses the company has incurred to consolidate production facilities and centralize
functions. These expenses include workforce restructuring and related benefit costs and
accelerated depreciation. Overall, the company incurred $14 million of expenses related to these
items during the first quarter of 2011. The $2 million tax charge incurred in the first quarter of
2010 relates to the impact of major healthcare reform legislation enacted in early 2010 that
resulted in the loss of tax deductibility of certain healthcare costs.
The company also discusses operating cash flow, a non-GAAP financial performance measure that
the company believes offers a useful view of the overall operation of its businesses. This
non-GAAP measure is calculated by adding the expenses 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.” The company uses free cash flow because it believes this measure
presents a useful business metric to evaluate the liquidity generated by its businesses.
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 3 through
6 attached to this news release.
As previously announced, the company will hold an earnings conference call at 10:00 a.m. ET
today. The call can be accessed via a live webcast through the Investor Relations section of the
company’s web site, www.gannett.com, or listen-only conference lines. U.S. callers should
dial 1-877-856-1962 and international callers should dial 719-325-4842 at least 10 minutes prior to
the scheduled start of the call. The confirmation code for the conference call is 3513321. To
access the replay, dial 1-888-203-1112 in the U.S. International callers should use the number
719-457-0820. The confirmation code for the replay is 3513321. Materials related to the call will
be available through the Investor Relations section of the company’s web site Monday morning.
About Gannett
Gannett Co., Inc. is an international media and marketing solutions company that informs and
engages more than 100 million people every month through its powerful network of broadcast,
digital, mobile and publishing properties. Our portfolio of trusted brands offers marketers
unmatched local-to-national reach and customizable, innovative marketing solutions across any
platform. Gannett is committed to connecting people – and the companies who want to reach them –
with their interests and communities. For more information, visit www.gannett.com.
(more)
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.
# # # #
For investor inquiries, contact:
|
For media inquiries, contact: | |
Jeffrey Heinz
|
Robin Pence | |
Director, Investor Relations
|
Vice President of Corporate Communications | |
703-854-6917 jheinz@gannett.com |
703-854-6049 rpence@gannett.com |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands (except per share amounts)
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands (except per share amounts)
Table No. 1
| Thirteen | Thirteen | |||||||||||
| weeks ended | weeks ended | % Inc | ||||||||||
| Mar. 27, 2011 | Mar. 28, 2010 | (Dec) | ||||||||||
Net Operating Revenues: |
||||||||||||
Publishing advertising |
$ | 601,736 | $ | 649,335 | (7.3 | ) | ||||||
Publishing circulation |
268,213 | 279,000 | (3.9 | ) | ||||||||
Digital |
157,594 | 140,638 | 12.1 | |||||||||
Broadcasting |
163,882 | 167,488 | (2.2 | ) | ||||||||
All other |
59,836 | 63,124 | (5.2 | ) | ||||||||
Total |
1,251,261 | 1,299,585 | (3.7 | ) | ||||||||
Operating Expenses: |
||||||||||||
Cost of sales and operating expenses, exclusive of depreciation |
717,515 | 732,109 | (2.0 | ) | ||||||||
Selling, general and administrative expenses, exclusive of
depreciation |
297,547 | 295,133 | 0.8 | |||||||||
Depreciation |
41,638 | 47,351 | (12.1 | ) | ||||||||
Amortization of intangible assets |
8,289 | 7,962 | 4.1 | |||||||||
Facility consolidation charges |
7,656 | — | * | ** | ||||||||
Total |
1,072,645 | 1,082,555 | (0.9 | ) | ||||||||
Operating income |
178,616 | 217,030 | (17.7 | ) | ||||||||
Non-operating (expense) income: |
||||||||||||
Equity income in unconsolidated investees, net |
3,458 | 533 | * | ** | ||||||||
Interest expense |
(46,629 | ) | (43,473 | ) | 7.3 | |||||||
Other non-operating items |
1,297 | (523 | ) | * | ** | |||||||
Total |
(41,874 | ) | (43,463 | ) | (3.7 | ) | ||||||
Income before income taxes |
136,742 | 173,567 | (21.2 | ) | ||||||||
Provision for income taxes |
38,600 | 54,813 | (29.6 | ) | ||||||||
Income from continuing operations |
98,142 | 118,754 | (17.4 | ) | ||||||||
Income from the operation of discontinued operations, net of tax |
— | 560 | * | ** | ||||||||
Net income |
98,142 | 119,314 | (17.7 | ) | ||||||||
Net income attributable to noncontrolling interest |
(7,649 | ) | (2,135 | ) | * | ** | ||||||
Net income attributable to Gannett Co., Inc. |
$ | 90,493 | $ | 117,179 | (22.8 | ) | ||||||
Income from continuing operations attributable to Gannett Co.,
Inc. |
$ | 90,493 | $ | 116,619 | (22.4 | ) | ||||||
Income from the operation of discontinued operations, net of tax |
— | 560 | * | ** | ||||||||
Net income attributable to Gannett Co., Inc. |
$ | 90,493 | $ | 117,179 | (22.8 | ) | ||||||
Earnings from continuing operations per share — basic |
$ | 0.38 | $ | 0.49 | (22.4 | ) | ||||||
Earnings from discontinued operations |
||||||||||||
Discontinued operations per share — basic |
— | — | * | ** | ||||||||
Net income per share — basic |
$ | 0.38 | $ | 0.49 | (22.4 | ) | ||||||
Earnings from continuing operations per share — diluted |
$ | 0.37 | $ | 0.48 | (22.9 | ) | ||||||
Earnings from discontinued operations |
||||||||||||
Discontinued operations per share — diluted |
— | 0.01 | * | ** | ||||||||
Net income per share — diluted |
$ | 0.37 | $ | 0.49 | (24.5 | ) | ||||||
Weighted average number of common shares outstanding |
||||||||||||
Basic |
239,712 | 237,447 | 1.0 | |||||||||
Diluted |
243,308 | 240,613 | 1.1 | |||||||||
Dividends per share |
$ | 0.04 | $ | 0.04 | — | |||||||
BUSINESS SEGMENT INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Table No. 2
| Thirteen weeks ended | Thirteen weeks ended | % Inc | ||||||||||
| Mar. 27, 2011 | Mar. 28, 2010 | (Dec) | ||||||||||
Net Operating Revenues: |
||||||||||||
Publishing |
$ | 929,785 | $ | 991,459 | (6.2 | ) | ||||||
Digital |
157,594 | 140,638 | 12.1 | |||||||||
Broadcasting |
163,882 | 167,488 | (2.2 | ) | ||||||||
Total |
$ | 1,251,261 | $ | 1,299,585 | (3.7 | ) | ||||||
Operating Income (net of depreciation, amortization and
facility consolidation charges): |
||||||||||||
Publishing |
$ | 117,597 | $ | 164,433 | (28.5 | ) | ||||||
Digital |
16,085 | 3,350 | * | ** | ||||||||
Broadcasting |
63,459 | 68,495 | (7.4 | ) | ||||||||
Corporate |
(18,525 | ) | (19,248 | ) | (3.8 | ) | ||||||
Total |
$ | 178,616 | $ | 217,030 | (17.7 | ) | ||||||
Depreciation, amortization and facility consolidation charges: |
||||||||||||
Publishing |
$ | 38,920 | $ | 35,028 | 11.1 | |||||||
Digital |
7,424 | 8,077 | (8.1 | ) | ||||||||
Broadcasting |
7,459 | 8,193 | (9.0 | ) | ||||||||
Corporate |
3,780 | 4,015 | (5.9 | ) | ||||||||
Total |
$ | 57,583 | $ | 55,313 | 4.1 | |||||||
Operating Cash Flow: |
||||||||||||
Publishing |
$ | 156,517 | $ | 199,461 | (21.5 | ) | ||||||
Digital |
23,509 | 11,427 | * | ** | ||||||||
Broadcasting |
70,918 | 76,688 | (7.5 | ) | ||||||||
Corporate |
(14,745 | ) | (15,233 | ) | (3.2 | ) | ||||||
Total |
$ | 236,199 | $ | 272,343 | (13.3 | ) | ||||||
Operating Cash Flow represents operating income for each of the company’s business segments
plus related depreciation, amortization and facility consolidation charges. See Table No. 5 for
reconciliation of amounts to the Condensed Consolidated Statements of Income.
NON-GAAP FINANCIAL INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars (except per share amounts)
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. 3 through No. 6 reconcile the non-GAAP financial measures to the most directly
comparable GAAP measure.
Table No. 3
| Non-GAAP | ||||||||||||||||
| GAAP Measure | Special Items | Measure | ||||||||||||||
| Thirteen | Facility | Thirteen | ||||||||||||||
| weeks ended | Workforce | consolidation | weeks ended | |||||||||||||
| Mar. 27, 2011 | restructuring | charges | Mar. 27, 2011 | |||||||||||||
Cost of sales and operating expenses,
exclusive of depreciation |
$ | 717,515 | $ | (4,795 | ) | $ | — | $ | 712,720 | |||||||
Selling, general and administrative expenses,
exclusive of depreciation |
297,547 | (1,172 | ) | — | 296,375 | |||||||||||
Facility consolidation charges |
7,656 | — | (7,656 | ) | — | |||||||||||
Operating expenses |
1,072,645 | (5,967 | ) | (7,656 | ) | 1,059,022 | ||||||||||
Operating income |
178,616 | 5,967 | 7,656 | 192,239 | ||||||||||||
Income before income taxes |
136,742 | 5,967 | 7,656 | 150,365 | ||||||||||||
Provision for income taxes |
38,600 | 2,100 | 3,100 | 43,800 | ||||||||||||
Net income |
98,142 | 3,867 | 4,556 | 106,565 | ||||||||||||
Net income attributable to Gannett Co., Inc. |
90,493 | 3,867 | 4,556 | 98,916 | ||||||||||||
Net income per share — diluted |
$ | 0.37 | $ | 0.02 | $ | 0.02 | $ | 0.41 | ||||||||
| Non-GAAP | ||||||||||||||||
| GAAP Measure | Special Items | Measure | ||||||||||||||
| Thirteen | Tax change | Thirteen | ||||||||||||||
| weeks ended | for health care | Discontinued | weeks ended | |||||||||||||
| Mar. 28, 2010 | legislation | operations | Mar. 28, 2010 | |||||||||||||
Cost of sales and operating expenses,
exclusive of depreciation |
$ | 732,109 | $ | — | $ | — | $ | 732,109 | ||||||||
Selling, general and administrative expenses,
exclusive of depreciation |
295,133 | — | — | 295,133 | ||||||||||||
Operating expenses |
1,082,555 | — | — | 1,082,555 | ||||||||||||
Operating income |
217,030 | — | — | 217,030 | ||||||||||||
Income before income taxes |
173,567 | — | — | 173,567 | ||||||||||||
Provision for income taxes |
54,813 | (2,200 | ) | — | 52,613 | |||||||||||
Net income |
119,314 | 2,200 | (560 | ) | 120,954 | |||||||||||
Net income attributable to Gannett Co., Inc. |
117,179 | 2,200 | (560 | ) | 118,819 | |||||||||||
Net income per share — diluted |
$ | 0.49 | $ | 0.01 | $ | (0.01 | ) | $ | 0.49 | |||||||
NON-GAAP FINANCIAL INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Table No. 4
| Non-GAAP | ||||||||||||||||
| GAAP Measure | Special Items | Measure | ||||||||||||||
| Thirteen | Facility | Thirteen | ||||||||||||||
| weeks ended | Workforce | consolidation | weeks ended | |||||||||||||
| Mar. 27, 2011 | restructuring | charges | Mar. 27, 2011 | |||||||||||||
Operating Income |
||||||||||||||||
Publishing |
$ | 117,597 | $ | 5,967 | $ | 7,656 | $ | 131,220 | ||||||||
Digital |
16,085 | — | — | 16,085 | ||||||||||||
Broadcasting |
63,459 | — | — | 63,459 | ||||||||||||
Corporate |
(18,525 | ) | — | — | (18,525 | ) | ||||||||||
Total Operating Income |
$ | 178,616 | $ | 5,967 | $ | 7,656 | $ | 192,239 | ||||||||
Depreciation, amortization and facility consolidation charges |
||||||||||||||||
Publishing |
$ | 38,920 | $ | — | $ | (7,656 | ) | $ | 31,264 | |||||||
Digital |
7,424 | — | — | 7,424 | ||||||||||||
Broadcasting |
7,459 | — | — | 7,459 | ||||||||||||
Corporate |
3,780 | — | — | 3,780 | ||||||||||||
Total depreciation, amortization and facility consolidation
charges |
$ | 57,583 | $ | — | $ | (7,656 | ) | $ | 49,927 | |||||||
Operating Cash Flow (a) |
||||||||||||||||
Publishing |
$ | 156,517 | $ | 5,967 | $ | — | $ | 162,484 | ||||||||
Digital |
23,509 | — | — | 23,509 | ||||||||||||
Broadcasting |
70,918 | — | — | 70,918 | ||||||||||||
Corporate |
(14,745 | ) | — | — | (14,745 | ) | ||||||||||
Total Operating Cash Flow |
$ | 236,199 | $ | 5,967 | $ | — | $ | 242,166 | ||||||||
| (a) | Refer to Table No. 5. |
| Non-GAAP | ||||||||||||||||
| GAAP Measure | Special Items | Measure | ||||||||||||||
| Thirteen | Facility | Thirteen | ||||||||||||||
| weeks ended | Workforce | consolidation | weeks ended | |||||||||||||
| Mar. 28, 2010 | restructuring | charges | Mar. 28, 2010 | |||||||||||||
Operating Income |
||||||||||||||||
Publishing |
$ | 164,433 | $ | — | $ | — | $ | 164,433 | ||||||||
Digital |
3,350 | — | — | 3,350 | ||||||||||||
Broadcasting |
68,495 | — | — | 68,495 | ||||||||||||
Corporate |
(19,248 | ) | — | — | (19,248 | ) | ||||||||||
Total Operating Income |
$ | 217,030 | $ | — | $ | — | $ | 217,030 | ||||||||
Depreciation and amortization |
||||||||||||||||
Publishing |
$ | 35,028 | $ | — | $ | — | $ | 35,028 | ||||||||
Digital |
8,077 | — | — | 8,077 | ||||||||||||
Broadcasting |
8,193 | — | — | 8,193 | ||||||||||||
Corporate |
4,015 | — | — | 4,015 | ||||||||||||
Total depreciation and
amortization |
$ | 55,313 | $ | — | $ | — | $ | 55,313 | ||||||||
Operating Cash Flow (a) |
||||||||||||||||
Publishing |
$ | 199,461 | $ | — | $ | — | $ | 199,461 | ||||||||
Digital |
11,427 | — | — | 11,427 | ||||||||||||
Broadcasting |
76,688 | — | — | 76,688 | ||||||||||||
Corporate |
(15,233 | ) | — | — | (15,233 | ) | ||||||||||
Total Operating Cash Flow |
$ | 272,343 | $ | — | $ | — | $ | 272,343 | ||||||||
| (a) | Refer to Table No. 5. |
NON-GAAP FINANCIAL INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands of dollars
Table No. 5
“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.
A reconciliation 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 consolidated statements of income, follows:
Thirteen weeks ended March 27, 2011
| Consolidated | ||||||||||||||||||||
| Publishing | Digital | Broadcasting | Corporate | Total | ||||||||||||||||
Operating cash flow |
$ | 156,517 | $ | 23,509 | $ | 70,918 | $ | (14,745 | ) | $ | 236,199 | |||||||||
Less: |
||||||||||||||||||||
Depreciation |
(27,114 | ) | (3,466 | ) | (7,278 | ) | (3,780 | ) | (41,638 | ) | ||||||||||
Amortization |
(4,150 | ) | (3,958 | ) | (181 | ) | — | (8,289 | ) | |||||||||||
Facility consolidation charges |
(7,656 | ) | — | — | — | (7,656 | ) | |||||||||||||
Operating income as reported (GAAP basis) |
$ | 117,597 | $ | 16,085 | $ | 63,459 | $ | (18,525 | ) | $ | 178,616 | |||||||||
Thirteen weeks ended March 28, 2010
| Consolidated | ||||||||||||||||||||
| Publishing | Digital | Broadcasting | Corporate | Total | ||||||||||||||||
Operating cash flow |
$ | 199,461 | $ | 11,427 | $ | 76,688 | $ | (15,233 | ) | $ | 272,343 | |||||||||
Less: |
||||||||||||||||||||
Depreciation |
(31,437 | ) | (3,920 | ) | (7,979 | ) | (4,015 | ) | (47,351 | ) | ||||||||||
Amortization |
(3,591 | ) | (4,157 | ) | (214 | ) | — | (7,962 | ) | |||||||||||
Operating income as reported (GAAP basis) |
$ | 164,433 | $ | 3,350 | $ | 68,495 | $ | (19,248 | ) | $ | 217,030 | |||||||||
Table No. 6
“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.” The
company uses free cash flow because it believes this measure presents a useful business metric to
evaluate the liquidity generated by its businesses.
| Thirteen | ||||
| weeks ended | ||||
| Mar. 27, 2011 | ||||
Net cash flow from operating activities |
$ | 224,082 | ||
Purchase of property, plant and equipment |
(12,628 | ) | ||
Payments for investments |
(475 | ) | ||
Proceeds from investments |
5,465 | |||
Free cash flow |
$ | 216,444 | ||