Gannett Co., Inc. Reports Second Quarter Results
Operating Cash Flow was $252.2 million
Jul 15, 2009 8:11:00 AM
Copyright Business Wire 2009
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View Additional ProfilesMCLEAN, Va.--(BUSINESS WIRE)-- Gannett Co., Inc. (NYSE: GCI) reported today that 2009 second quarter earnings per diluted share were $0.30 compared to a net loss per share of $10.03 for the second quarter of 2008. Results for both quarters included several special items noted below. Earnings per diluted share for the second quarter of 2009, excluding those items, were $0.46. Earnings per diluted share for the second quarter of 2008 on a comparable basis were $1.04.
Results for the second quarter of 2009 include: a $42.7 million pre-tax gain related to the company's debt exchange ($26.1 million after-tax or $0.11 per share); $16.6 million in pre-tax costs related to workforce restructuring and facility consolidations ($10.3 million after-tax or $0.04 per share); $47.4 million of pre-tax non-cash charges related primarily to asset impairments in the company's publishing segment ($29.6 million after-tax or $0.13 per share); and a $28.0 million non-cash charge for asset write-downs ($24.2 million after-tax or $0.10 per share).
Results for the second quarter of 2008 included: a pre-tax curtailment gain for its domestic pension plans of $46.5 million ($28.9 million after tax or $0.13 per share); $39.9 million in pre-tax costs related to workforce restructuring and facility consolidations ($26.4 million after tax or $0.12 per share); and certain non-cash impairment charges totaling approximately $2.8 billion pre-tax ($2.5 billion after-tax or $11.08 per share).
The Non-GAAP Financial Information section which follows provides details of these special items and their effect on the Statements of Income.
"We continue to position the company for the eventual rebound in the economy and the evolving media landscape as we navigate through this unprecedented economic storm. The economic headwinds, which continued to constrain advertising demand, masked several important achievements in the quarter. In our digital segment, pro forma operating profits rose almost 84 percent. Total digital revenues across all of our segments were over $225 million. Retransmission revenues in our Broadcasting segment rose three-fold partially offsetting weak auto advertising demand and lower political spending. In our publishing segment, while advertising revenue comparisons remain difficult, second quarter year-over- year comparisons improved versus first quarter comparisons and June was our best comparison month thus far this year," said Executive Vice President and Chief Financial Officer Gracia Martore.
"The decline in our operating expenses reflects our efforts to achieve efficiencies and further consolidations company-wide, furloughs in the current quarter and significantly lower newsprint expense. We continue to opportunistically manage our capital structure and successfully extended the maturities of over 25 percent of our outstanding bonds to 2015 and 2016 through a debt exchange offer. As a result of our debt exchange and our substantial operating cash flow of $252 million, debt was $223 million lower and totaled $3.5 billion at quarter end."
Weakness in the economies of the U.S. and UK resulted in continued downward pressure on revenues. Total reported operating revenues for the company were $1.4 billion in the second quarter compared to $1.7 billion in the second quarter of 2008. The consolidation of CareerBuilder and ShopLocal for the full quarter in 2009 drove the significant increase in digital segment revenues.
Reported operating expenses totaled $1.3 billion, representing a decline of 67.0 percent, primarily due to the significant non-cash impairment charges in 2008. However, several other important factors impacted year-over-year reported operating expense comparisons. In addition to the impact of the special items previously mentioned and presented in the Non-GAAP section of this report, efforts to more efficiently operate our businesses, including workforce restructuring and facility consolidations in prior periods as well as furloughs and salary adjustments in the current period and lower newsprint expense, contributed to a sharp decline in operating expenses. The consolidation of CareerBuilder and ShopLocal for the full quarter this year partially offset the year-over-year operating expense declines. Therefore, on a pro forma basis operating expenses, excluding special items in both quarters, were 19.7 percent lower. Corporate expenses were higher in 2009 due principally to the allocation of a portion of the pension curtailment gain in 2008. Corporate expenses adjusted for several items actually declined 11.3 percent.
Operating cash flow (defined as operating income plus depreciation, amortization and non-cash asset impairment and other charges) was $252.2 million for the quarter and net income was $70.5 million.
Average diluted shares outstanding in the second quarter totaled 234,745,000 compared with 228,325,000 in 2008's second quarter.