Revenues Increase 10% Year-Over-Year
117 Million Unique Domestic Digital
Visitors
Digital-only Subscriptions Grow 45%
Gannett Co., Inc. (NYSE:GCI) ("Gannett" or "company" or "we")
today reported third quarter 2016 results of operations.
Recent highlights include:
- National digital advertising revenue up
18.5% (16.6% excluding acquisitions).
- Digital-only subscriptions grew 45%;
digital-only plus Sunday grew 40%.
- Total third quarter digital revenues
(advertising and circulation) of $205 million.
- Initiated incremental cost cutting
actions totaling $30 million annually.
- Completed acquisitions of:
- North Jersey Media Group, Inc. ("North
Jersey Media Group"),
- Digital marketing solutions leader
ReachLocal, Inc. (NASDAQ: RLOC) ("ReachLocal"),
- Leading golf publication,
Golfweek.
- Invested in digital content curation
and news aggregation company Digg, Inc.
- Released first weekly virtual reality
news show "VRtually There."
Operating revenues for the third quarter were $772.3 million
compared to $701.2 million in the prior year third quarter, an
increase of $71.1 million or 10.1%. Excluding $14.3 million of
unfavorable foreign currency exchange rate changes and $7.4 million
of selected exited operations, revenues increased $92.8 million, or
13.2%, compared to the third quarter of 2015. The increase in
revenues was primarily attributable to the acquisitions of Journal
Media Group, Inc. ("JMG"), North Jersey Media Group and ReachLocal
and continued improvements in national digital advertising
revenues. Revenue increases were partially offset by declines in
print advertiser demand and a negative impact on classified
employment revenues from an unfavorable affiliate agreement change
with CareerBuilder. On a same-store basis, excluding the impact on
revenues from acquisitions, foreign currency exchange rate changes
and selected exited operations, operating revenues decreased
8.6%.
Net loss for the third quarter was $24.2 million primarily due
to $31.6 million of after-tax restructuring, acquisition costs,
severance and other related items. Adjusted EBITDA for the quarter
was $55.3 million compared to $97.0 million in the prior year, a
decrease of $41.7 million. Of this decrease, 42.9% or $17.9 million
was due to $5.4 million of reduced EBITDA contribution from the
August 2015 change to the CareerBuilder affiliate agreement, $3.0
million in unfavorable foreign currency exchange rate changes and
$2.8 million related to the cost of certain labor litigation and
other matters. In addition, third quarter adjusted EBITDA was
negatively impacted by $6.7 million due to the opening balance
sheet revaluation of ReachLocal deferred revenues as required by
U.S. GAAP. The remaining adjusted EBITDA declines are a result of
declines in print advertising and circulation revenues, primarily
in U.S. and U.K. local markets. These declines were partially
offset by ongoing cost reductions and efficiency gains in operating
expenses, increases in national digital advertising revenues and
selective subscription price optimization strategies.
Robert J. Dickey, president and chief executive officer, said,
"We have made solid progress integrating our recent acquisitions,
which we expect will be strong contributors to our performance as
we drive toward a digital future. While we saw signs of improvement
late in the third quarter, we were disappointed with our
performance, and as we expected, it was our most challenging period
in 2016. We have implemented initiatives that will result in $10
million of additional cost savings in the fourth quarter to align
our cost structure with the current industry environment. We are
taking these actions to ensure we can remain nimble in the face of
ongoing industry challenges while we continue our digital
transformation."
In connection with the ReachLocal acquisition, Gannett
established a newly formed reportable segment. Our separate
reportable segments are now Publishing, ReachLocal and
Corporate.
Publishing Segment
Operating revenues in the publishing segment were $736.6
million, an increase of $35.4 million or 5.0% compared to the prior
year third quarter. Excluding $14.3 million of unfavorable foreign
currency exchange rate changes and $7.4 million of selected exited
operations, revenues increased $57.1 million, or 8.2%, compared to
the third quarter of 2015. This increase was primarily attributable
to the continued improvements in national digital advertising
revenues as well as the addition of revenues from JMG and the North
Jersey Media Group beginning April 8, 2016 and July 6, 2016,
respectively. These increases were partially offset by a 14.8%
reduction in print advertising revenues led by a 35.1% reduction in
national print advertising and a 19.1% reduction in preprints.
Digital advertising revenues of $98.8 million were up 6.2%
compared to the year ago quarter, due primarily to the addition of
JMG and North Jersey Media Group. Excluding acquisitions and the
impact of a 46.2% reduction in the U.S. employment category
(primarily CareerBuilder), digital advertising revenues increased
4.4%. The increase was driven by a 53.1% increase in video and
mobile display and a 26.4% increase in other sources of digital
advertising revenues from affiliates. After adjusting for acquired
revenues, foreign currency exchange rate changes and selected
exited operations, on a same-store basis, advertising revenues were
down 11.7% and circulation revenues were down 6.4%.
Adjusted EBITDA for the quarter was $87.5 million compared to
$124.8 million in the prior year third quarter, a decrease of $37.3
million. The decrease in third quarter adjusted EBITDA was due to
$5.4 million of reduced EBITDA contribution from the August 2015
changes to the CareerBuilder affiliate agreement, $3.0 million in
unfavorable foreign currency exchange rate changes and
approximately $2.8 million related to the cost of certain labor
litigation and other matters. The remaining adjusted EBITDA
declines are a result of declines in print advertising and
circulation revenues, primarily in U.S. and U.K. local markets.
These declines were partially offset by ongoing cost reductions and
efficiency gains in operating expenses, increases in national
digital advertising revenues and selective subscription price
optimization strategies.
"To combat the continuing challenges in print advertising
trends, the company is implementing cost saving initiatives, which
include reductions throughout our operations as well as in
corporate support and related functions," said John Zidich,
president of Domestic Publishing. "We expect to recognize
approximately $6 million of payroll related savings and $4 million
of non-payroll savings in the fourth quarter of 2016. On an annual
basis, we expect the payroll related savings to total $30 million
and impact approximately 2% of our workforce."
ReachLocal Segment
Operating revenues for the quarter were $35.0 million and
adjusted EBITDA was a loss of $6.7 million, representing the
partial period from the date of acquisition, August 9, 2016 through
the end of the third quarter. Revenues and adjusted EBITDA were
reduced by the $6.7 million estimated fair value adjustment to
deferred revenue obligations required by U.S. GAAP. Overall,
ReachLocal continued to track to its plan for sequential revenue
growth and adjusted EBITDA margin expansion, absent purchase
accounting adjustments if measured on its historic calendar quarter
reporting basis.
Sharon Rowlands, chief executive officer of ReachLocal, said,
"The acquisition of ReachLocal will accelerate Gannett's digital
growth strategy, enabling Gannett to offer premier digital
marketing services to its customers. ReachLocal's focus on local
small- and medium-sized businesses also aligns with Gannett's
local-to-national strategy and extends the company's reach into new
local markets. We are seeing strong traction from new ReachLocal
products like ReachSocial AdsTM, our new Facebook marketing
solution, and we are looking forward to
bringing our innovative offerings across the USA TODAY
NETWORK."
As previously announced, Gannett expects to begin to fully
leverage ReachLocal across all of the company's 109 local markets
in the U.S. by mid-2017.
Acquisitions and Integration
On July 6, 2016, Gannett completed the acquisition of
substantially all of the assets of North Jersey Media Group,
including The Record (Bergen County), the Herald News,
and their affiliated digital and other properties. Gannett expects
the transaction to contribute approximately $90 million in annual
revenues and that the business will approach approximately
corporate-average margins by the end of the first full year of
operations.
On August 9, 2016, Gannett completed the acquisition of
ReachLocal, Inc. ReachLocal, a leader in powering online marketing,
helps local businesses grow and operate better with leading
technology and expert service providing digital lead generation,
advertising, marketing, web presence and other digital solutions.
The acquisition of ReachLocal accelerates Gannett’s digital growth
strategy, adding more than $320 million of annual digital revenue,
the best digital marketing solutions technology in the market, and
an outstanding and well-respected management team to Gannett’s
digital business.
On October 5, 2016, Gannett completed the acquisition of
Golfweek. The acquisition of Golfweek will add value to Gannett’s
suite of audience-focused, content-driven sports businesses, as
well as an unmatched relationship with golf’s core demographic
community. Golfweek has been the leading producer of event programs
for some of golf’s biggest tournaments across the PGA TOUR, LPGA,
PGA of America and United States Golf Association.
Cash Flow
Net cash flow from operating activities for the quarter was
approximately $24.1 million. In addition, the company generated
approximately $6.6 million in cash from the disposition of certain
real property resulting from its efficiency and consolidation
efforts. Capital expenditures were approximately $18.9 million,
primarily for capacity maintenance, technology investments and real
estate projects. During the quarter, the company paid dividends of
$18.7 million.
At the end of the third quarter of 2016, the company's
underfunded pension liabilities were $442.5 million, compared to
$612.4 million as of December 27, 2015, a reduction of $169.9
million or 27.7%. Contributing to this reduction are cash
contributions of $82.5 million made to the U.S. and U.K. Gannett
pension plans during 2016.
Outlook
For the fourth quarter, the company expects revenues to be up
14% to 16% compared to the fourth quarter of the prior year. This
range includes the additional contributions from our recent
acquisitions, the impact of ReachLocal deferred revenue purchase
accounting of approximately $2 million as well as the further
unfavorable foreign currency exchange rate changes.
Adjusted EBITDA margins are expected to meaningfully increase
sequentially, reflecting the fact that the fourth quarter is
generally the strongest revenue and earnings quarter of the year,
but nevertheless remain below prior year levels. During the quarter
we expect to begin to realize the benefit of cost saving
initiatives discussed above offset by approximately $4 million of
foreign currency exchange rate changes, $4 million of incremental
pension expense, $2 million of ReachLocal deferred revenue and $3
million of investments in projects supporting our digital
transformation.
Additionally for the fourth quarter of 2016, the company expects
the following:
Capital expenditures of $20-$25 million, not
including real estate projects.Depreciation and amortization of
approximately $36 million.Effective tax rate of 26-28%.
* * * *
Conference Call Information
The company will hold a conference call at 10:00 a.m. ET today
to discuss these results. The call can be accessed via a live
webcast through the company's investor site,
http://investors.gannett.com/, or listen-only conference lines.
U.S. callers should dial 855-462-1958 and international callers
should dial 503-343-6635 at least 10 minutes prior to the scheduled
start of the call. The confirmation code for the conference call is
99499250.
Forward Looking Statements
This press release contains certain forward-looking statements
regarding business strategies, market potential, future financial
performance and other matters. Forward-looking statements include
all statements that are not historical facts. The words “believe,”
“expect,” “estimate,” “could,” “should,” “intend,” “may,” “plan,”
“seek,” “anticipate,” “project” and similar expressions, among
others, generally identify forward-looking statements, which speak
only as of the date the statements were made and are not guarantees
of future performance. Where, in any forward-looking statement, an
expectation or belief as to future results or events is expressed,
such expectation or belief is based on the current plans and
expectations of our management and expressed in good faith and
believed to have a reasonable basis, but there can be no assurance
that the expectation or belief will result or be achieved or
accomplished. Whether or not any such forward-looking statements
are in fact achieved will depend on future events, some of which
are beyond our control.
The matters discussed in these forward-looking statements are
subject to a number of risks, trends, uncertainties and other
factors that could cause actual results to differ materially from
those projected, anticipated or implied in the forward-looking
statements. These factors include, among other things:
- competitive pressures in the markets in
which we operate;
- increased consolidation among major
retailers or other events which may adversely affect business
operations of major customers and depress the level of local and
national advertising;
- macroeconomic trends and
conditions;
- economic downturns leading to a
continuing or accelerated decrease in circulation or local,
national or classified advertising;
- potential disruption or interruption of
our operations due to accidents, extraordinary weather events,
civil unrest, political events, terrorism or cyber security
attacks;
- an accelerated decline in general print
readership and/or advertiser patterns as a result of competitive
alternative media or other factors;
- our inability to adapt to technological
changes or grow our online business;
- an increase in newsprint costs over the
levels anticipated;
- labor relations, including, but not
limited to, labor disputes which may cause revenue declines or
increased labor costs;
- risks and uncertainties related to our
ability to successfully integrate ReachLocal and JMG’s operations
and employees with our existing business;
- an inability to realize benefits or
synergies from acquisitions of new businesses or dispositions of
existing businesses, or to operate businesses effectively following
acquisitions or divestitures;
- our ability to attract and retain key
employees;
- rapid technological changes and
frequent new product introductions prevalent in electronic
publishing;
- a weakening in the Sterling compared to
the U.S. dollar exchange rate;
- volatility in financial and credit
markets, which could affect our ability to raise funds through debt
or equity issuances and otherwise affect our ability to access the
credit and capital markets at the times and in the amounts needed
and on acceptable terms;
- changes in the regulatory environment,
which could encumber or impede our efforts to improve operating
results or the value of assets;
- credit rating downgrades, which could
affect the availability and cost of future financing;
- adverse outcomes in proceedings with
governmental authorities or administrative agencies;
- an other than temporary decline in
operating results and enterprise value that could lead to non-cash
goodwill, other intangible asset, investment or property, plant and
equipment impairment charges;
- our dependence on our former parent and
other third parties to perform important services for us following
the separation;
- our inability to engage in certain
corporate transactions following the separation;
- any failure to realize expected
benefits from, or the possibility that we may be required to incur
unexpected costs as a result of, the separation; and
- other uncertainties relating to general
economic, political, business, industry, regulatory and market
conditions.
A further description of these and other important risks,
trends, uncertainties and other factors is provided in the
company’s filings with the U.S. Securities and Exchange Commission,
including the company’s annual report on Form 10-K for fiscal year
2015 and subsequent quarterly reports on Form 10-Q. Any
forward-looking statements should be evaluated in light of these
important risk factors. The company is not responsible for updating
or revising any forward-looking statements, whether as a result of
new information, future events or otherwise, except as required by
law.
Non-GAAP Financial Measures
This press release also contains a discussion of certain
non-GAAP financial measures that the company presents to allow
investors and analysts to measure, analyze and compare its
financial condition and results of operations in a meaningful and
consistent manner. A reconciliation of these non-GAAP financial
measures to the most directly comparable GAAP measures can be found
in the tables accompanying this press release.
About Gannett
Gannett Co., Inc. (NYSE: GCI) is a next-generation media
company committed to strengthening communities across our network.
Through trusted, compelling content and unmatched local-to-national
reach, Gannett touches the lives of more than 100 million people
monthly. With more than 120 markets internationally, it is known
for Pulitzer Prize-winning newsrooms, powerhouse brands such as USA
TODAY and specialized media properties. To connect with us, visit
www.gannett.com.
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF INCOME
(LOSS)
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands (except per share
amounts)
Table No. 1 Three months ended
Nine months ended Sept. 25, 2016 Sept. 27, 2015 Sept. 25, 2016
Sept. 27, 2015
Operating revenues: Advertising $
429,053 $ 384,149 $ 1,190,108 $ 1,191,902 Circulation 285,583
265,227 835,872 802,389 Other 57,685 51,860 154,500
151,377
Total operating revenues 772,321
701,236 2,180,480 2,145,668
Operating expenses: Cost of sales and operating expenses
517,141 446,358 1,423,551 1,394,733 Selling, general and
administrative expenses 219,456 173,035 589,017 528,248
Depreciation 30,638 25,291 83,889 73,677 Amortization 5,003 3,096
7,961 10,103 Facility consolidation and asset impairment charges
28,673 1,343 33,160 7,989
Total
operating expenses 800,911 649,123 2,137,578
2,014,750
Operating income (loss) (28,590 )
52,113 42,902 130,918
Non-operating
income (expense): Equity income (loss) in unconsolidated
investees, net (766 ) 609 844 11,411 Interest expense (3,652 )
(1,582 ) (8,509 ) (1,760 ) Other non-operating items (176 ) (1,833
) (2,964 ) 19,782
Total non-operating income
(expense) (4,594 ) (2,806 ) (10,629 ) 29,433
Income (loss) before income taxes (33,184 ) 49,307 32,273
160,351 Provision (benefit) for income taxes (8,942 ) 10,141
12,949 34,611
Net income (loss) $ (24,242 ) $
39,166 $ 19,324 $ 125,740
Earnings
(loss) per share - basic $ (0.21 ) $ 0.34 $ 0.17 $ 1.09
Earnings (loss) per share - diluted $ (0.21 ) $ 0.33 $ 0.16
$ 1.08
Weighted average number of common shares
outstanding: Basic 116,556 115,186 116,461 115,035 Diluted
116,556 118,168 118,786 116,029
SEGMENT
INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands
Table No. 2 Three months
ended Nine months ended Sept. 25, 2016 Sept. 27, 2015 Sept. 25,
2016 Sept. 27, 2015
Operating revenues: Publishing $
736,570 $ 701,198 $ 2,142,621 $ 2,145,630 ReachLocal 34,977 —
34,977 — Corporate and Other 774 38 2,882 38
Total $ 772,321 $ 701,236 $ 2,180,480 $
2,145,668
Adjusted EBITDA: Publishing $ 87,490
$ 124,806 $ 301,229 $ 312,339 ReachLocal (6,744 ) — (6,744 ) —
Corporate and Other (25,469 ) (27,796 ) (71,887 ) (47,171 ) Total $
55,277 $ 97,010 $ 222,598 $ 265,168
Depreciation and amortization: Publishing $ 27,766 $
27,038 $ 76,519 $ 81,152 ReachLocal 3,924 — 3,924 — Corporate and
Other 3,951 1,349 11,407 2,628 Total $
35,641 $ 28,387 $ 91,850 $ 83,780
Capital expenditures: Publishing $ 13,424 $ 5,588 $
25,089 $ 24,481 ReachLocal 1,196 — 1,196 — Corporate and Other
4,245 4,740 18,716 6,464 Total $ 18,865
$ 10,328 $ 45,001 $ 30,945
REVENUE DETAIL
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands
Table No. 3 Three months ended
Sept. 25, 2016 Sept. 27, 2015 % Change
Reported
revenue $ 772,321 $ 701,236 10.1 % Acquired revenue (152,171 )
— Currency impact 14,293 — Exited operations — (7,394 )
Same store revenue $ 634,443 $ 693,842
(8.6 %)
Reported advertising revenue $ 429,053 $
384,149 11.7 % Acquired revenue (99,134 ) — Currency impact 9,357
—
Same store advertising revenue $
339,276 $ 384,149 (11.7 %)
Reported
circulation revenue $ 285,583 $ 265,227 7.7 % Acquired revenue
(41,143 ) — Currency impact 3,815 —
Same
store circulation revenue $ 248,255 $ 265,227
(6.4 %)
Table No. 4 Three months
ended Sept. 25, 2016 Sept. 27, 2015 % Change
Publishing
revenue detail Print advertising $ 298,434 $ 291,126 2.5 %
Digital advertising 98,780 93,023 6.2 % Total
advertising 397,214 384,149 3.4 % Circulation 285,583 265,227 7.7 %
Other 53,773 51,822 3.8 % Total Publishing revenue $
736,570 $ 701,198 5.0 %
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 should not be
considered in isolation from or as a substitute for the related
GAAP measures, and should be read together with financial
information presented on a GAAP basis.
Adjusted EBITDA is a non-GAAP financial performance measure that
the company believes offers a useful view of the overall operation
of our business. The company defines adjusted EBITDA, which may not
be comparable to a similarly titled measure reported by other
companies, as net income before (1) income taxes, (2) interest
expense, (3) equity income, (4) other non-operating
items, (5) severance related charges (including early
retirement programs), (6) facility consolidation and asset
impairment charges, (7) depreciation and
(8) amortization. The most directly comparable GAAP financial
measure is net income.
Adjusted diluted earnings per share ("EPS") is a non-GAAP
financial performance measure that the company believes offers a
useful view of the overall operation of our business. The company
defines adjusted EPS, which may not be comparable to a similarly
titled measure reported by other companies, as EPS before
tax-effected (1) severance related charges (including early
retirement programs), (2) facility consolidation
and asset impairment charges and (3) acquisition related
expenses (gains). The tax impact on these non-GAAP tax deductible
adjustments is based on the estimated statutory tax rate for the
United Kingdom of 20% and the United States of 38.7%. In addition,
tax is adjusted for the impact of nondeductible acquisition costs.
The most directly comparable GAAP financial measure is diluted
EPS.
Adjusted net income is a non-GAAP financial performance measure
that the company uses for the purpose of calculating adjusted EPS.
Adjusted net income is defined as net income before the adjustments
we apply in calculating adjusted EPS, as described above. We
believe that presenting adjusted net income is useful to enable
investors to understand how we calculate adjusted EPS, which
provides a useful view of the overall operation of the company's
business. The most directly comparable GAAP financial measure is
net income.
Free cash flow is a non-GAAP liquidity measure that adjusts our
reported GAAP results for items that we believe are critical to the
ongoing success of our business. The company defines free cash
flow, which may not be comparable to a similarly titled measure
reported by other companies, as net cash flow from (used for)
operating activities as reported on the statement of cash flows
less capital expenditures, which results in a figure representing
free cash flow available for use in operations, additional
investments and returns to shareholders. The most directly
comparable GAAP financial measure is net cash from operating
activities.
The company uses non-GAAP financial measures for purposes of
evaluating its performance and liquidity. Therefore, the company
believes that each of the non-GAAP measures presented provides
useful information to investors by allowing them to view our
businesses through the eyes of our management and Board of
Directors, facilitating comparison of results across historical
periods, and providing a focus on the underlying ongoing operating
performance of our business. Many of our peer group companies
present similar non-GAAP measures to better facilitate industry
comparisons.
NON-GAAP FINANCIAL INFORMATION ADJUSTED EBITDA
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands
Table No. 5 Three months
ended Sept. 25, 2016 Publishing ReachLocal
Corporate andOther
ConsolidatedTotal
Net loss (GAAP basis) $ (24,242 ) Provision (benefit) for
income taxes (8,942 ) Equity income in unconsolidated investees,
net 766 Interest expense 3,652 Other non-operating items 176
Operating income (loss) (GAAP basis) $ 26,340 $ (11,230 ) $ (43,700
) $ (28,590 ) Early retirement program 2 — — 2 Severance related
charges 4,573 562 — 5,135 Acquisition related items 136 — 14,280
14,416 Facility consolidation and asset impairment charges 28,673 —
— 28,673 Depreciation 25,926 761 3,951 30,638 Amortization 1,840
3,163 — 5,003 Adjusted EBITDA (non-GAAP
basis) $ 87,490 $ (6,744 ) $ (25,469 ) $ 55,277
Three months ended Sept. 27, 2015 Publishing
ReachLocal
Corporate andOther
ConsolidatedTotal
Net income (GAAP basis) $ 39,166 Provision for income taxes
10,141 Equity income in unconsolidated investees, net (609 )
Interest expense 1,582 Other non-operating items 1,833
Operating income (loss) (GAAP basis) $ 83,008 $ — $ (30,895 ) $
52,113 Early retirement program 8,822 — 1,750 10,572 Severance
related charges 5,872 — — 5,872 Facility consolidation and asset
impairment charges 66 — — 66 Depreciation 23,942 — 1,349 25,291
Amortization 3,096 — — 3,096 Adjusted
EBITDA (non-GAAP basis) $ 124,806 $ — $ (27,796 ) $
97,010
NON-GAAP FINANCIAL INFORMATION
ADJUSTED EBITDA
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands
Table No. 5 (continued)
Nine months ended Sept. 25, 2016 Publishing ReachLocal
Corporate andOther
ConsolidatedTotal
Net income (GAAP basis) $ 19,324 Provision for income taxes
12,949 Equity income in unconsolidated investees, net (844 )
Interest expense 8,509 Other non-operating items 2,964
Operating income (loss) (GAAP basis) $ 166,345 $ (11,230 ) $
(112,213 ) $ 42,902 Early retirement program 837 — — 837 Severance
related charges 25,432 562 — 25,994 Acquisition related items 136 —
28,919 29,055 Facility consolidation and asset impairment charges
31,960 — — 31,960 Depreciation 71,721 761 11,407 83,889
Amortization 4,798 3,163 — 7,961
Adjusted EBITDA (non-GAAP basis) $ 301,229 $ (6,744 ) $
(71,887 ) $ 222,598 Nine months ended
Sept. 27, 2015 Publishing ReachLocal
Corporate andOther
ConsolidatedTotal
Net income (GAAP basis) $ 125,740 Provision for income taxes
34,611 Equity income in unconsolidated investees, net (11,411 )
Interest expense 1,760 Other non-operating items (19,782 )
Operating income (loss) (GAAP basis) $ 182,467 $ — $ (51,549 ) $
130,918 Early retirement program 16,623 — 1,750 18,373 Severance
related charges 25,386 — — 25,386 Facility consolidation and asset
impairment charges 6,711 — — 6,711 Depreciation 71,049 — 2,628
73,677 Amortization 10,103 — — 10,103
Adjusted EBITDA (non-GAAP basis) $ 312,339 $ — $
(47,171 ) $ 265,168
NON-GAAP FINANCIAL
INFORMATION ADJUSTED DILUTED EPS
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands (except per share
amounts)
Table No. 6 Three months
ended Nine months ended Sept. 25, 2016 Sept. 27, 2015 Sept. 25,
2016 Sept. 27, 2015 Early retirement program $ 2 $ 10,572 $
837 $ 18,373 Severance related charges 5,135 5,872 25,994 25,386
Acquisition related items 14,416 1,022 29,055 (19,599 ) Facility
consolidation and asset impairment charges 29,761 66
33,111 6,711 Pretax impact 49,314 17,532 88,997
30,871 Income tax impact of above items (17,757 ) (6,373 ) (30,414
) (10,337 ) Impact of items affecting comparability on net income $
31,557 $ 11,159 $ 58,583 $ 20,534
Net income (loss) (GAAP basis) $ (24,242 ) $ 39,166 $ 19,324
$ 125,740 Impact of items affecting comparability on net income
(loss) 31,557 11,159 58,583 20,534
Adjusted net income (non-GAAP basis) $ 7,315 $ 50,325
$ 77,907 $ 146,274 Earnings (loss) per share -
diluted (GAAP basis) $ (0.21 ) $ 0.33 $ 0.16 $ 1.08 Impact of items
affecting comparability on net income (loss) 0.27 0.10
0.50 0.18 Adjusted earnings per share -
diluted (non-GAAP basis) $ 0.06 $ 0.43 $ 0.66
$ 1.26 Diluted weighted average number of common
shares outstanding 116,556 118,168 118,786 116,029
NON-GAAP FINANCIAL INFORMATION FREE CASH FLOW
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands
Table No. 7 Three months endedSept. 25,
2016 Nine months endedSept. 25, 2016 Net cash flow from
operating activities (GAAP basis) $ 24,069 $ 105,216 Capital
expenditures (18,865 ) (45,001 ) Free cash flow (non-GAAP basis) $
5,204 $ 60,215
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version on businesswire.com: http://www.businesswire.com/news/home/20161027005866/en/
Gannett Co., Inc.For investor inquiries:Michael P. Dickerson,
703-854-6185Vice President, Investor Relations & Real
Estatemdickerson@gannett.comorFor media inquiries:Amber Allman,
703-854-5358Vice President, Corporate
Communicationsaallman@gannett.com
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