Gannett Reports Third Quarter 2017 Results of Operations

Gannett Co., Inc. (NYSE: GCI) (“Gannett” or “company” or “we”) today reported third quarter 2017 financial results for the period ended September 24, 2017.

“Throughout the quarter, we enhanced audience growth and engagement, expanded our marketing services capabilities and added new offerings to our portfolio,” said Robert J. Dickey, president and chief executive officer. “Specifically, we reached record audiences via our USA TODAY NETWORK, completed the migration of remaining properties to the ReachLocal digital marketing platform, and announced a majority investment in Grateful Ventures which provides us with an increased presence in attractive lifestyle categories.”

Mr. Dickey continued, “We delivered strong year-over-year earnings growth in the third quarter, despite challenging print advertising trends. Profitability gains were driven by improved digital performance, most notably at ReachLocal, as well as the continued realization of synergies from our 2016 local market acquisitions and other cost saving initiatives.”

Third Quarter 2017 Consolidated Results
Third quarter operating revenues were $744.3 million, including a $1.4 million negative impact from hurricanes Harvey and Irma, compared to $772.3 million in the prior year quarter. There was no material impact on revenues related to currency changes in the quarter. The year-over-year performance reflected lower print advertising and circulation revenues offset partially by higher digital advertising revenues and the contribution from acquired operations (1). On a same store basis, operating revenues in the third quarter declined 9.4% (or 10.2% when excluding $6.7 million related to the 2016 third quarter revaluation of acquired deferred revenue), an improvement compared to a decline in the 2017 second quarter of 10.6%, as a result of digital revenue growth. Total digital revenues in the third quarter increased to $245.0 million, or approximately 33% of total revenue, including the contribution from ReachLocal which was acquired in August 2016.

GAAP net income for the third quarter was $23.0 million, including a $20.1 million tax benefit offset partially by $15.4 million of after-tax severance, acquisition, asset impairment, facility consolidation and other costs; approximately $10.3 million of these charges were non-cash. Adjusted EBITDA (2) for the third quarter increased 27.3% to $73.9 million compared to $58.0 million in the prior year quarter with a 240 basis point margin improvement year-over-year, which includes the favorable comparison related to the aforementioned deferred revenue revaluation.
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