Gannett, owner of USA TODAY, reported lower revenues on Thursday and a net loss in the fourth quarter after its merger with New Media Investment Group in November, an agreement that created the largest print media company and one of the most Great for digital audience.
The results came when the recently combined company registered an increase of more than 25% in digital subscriptions.
The company, which took the name of Gannett, generated total revenues of $ 1.05 billion in the quarter, 9.7% less than the previous year, due in large part to the decrease in revenue from printing.
New Media acquired the largest Gannett, changed its name and began combining the operations of the two companies.
The new company recorded a net loss of $ 115.7 million for the quarter, which included a reduction of $ 101 million due to “revaluation of intangibles” and $ 146 million in charges related to restructuring and transaction costs.
Adjusted earnings before interest, taxes, depreciation and amortization totaled $ 141.2 million for the quarter, which was 19% lower than the same period of the previous year.
Gannett shares fell 0.5% to $ 4.87 at 3:27 p.m. Thursday.
The company, whose more than 260 media properties include Arizona Republic, Columbus Dispatch, Detroit Free Press and Austin American-Statesman, also reported a 25.3% increase in digital subscriptions to 812,000 when their numbers are combined. Paid online subscriptions are considered critical for the success of media companies in the digital age, due to the decline in newspaper dollars.
Gannett executives have said the merger is designed to pave the way for a digital transformation of the company.
Revenue from print advertising totaled $ 334 million in the fourth quarter. By factoring the unique effects, Gannett’s print advertising revenue fell 18.4%. Those figures reflect the challenges of the industry as readers and advertisers change online.
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The company is reducing its dependence on printing and diversifying its revenues with investments in marketing services and other digital products. Revenue from digital advertising and marketing services totaled $ 150 million during the period.
The company said the publicity was weaker than expected mainly due to the interruption of the merger. But revenues from digital marketing services recorded strong gains for the old Gannett, while the old New Media event business almost doubled its revenue, compared to the previous year.
“We were pleased by the strong momentum we saw in our key growth areas, which positioned us for a solid start to 2020,” Gannett CEO Michael Reed said in a statement.
Print ads accounted for approximately 31% of the company’s combined revenue in 2019, down from 42% in 2018, according to a public presentation that Gannett executives made before the Needham Growth Conference on January 15. That figure is expected to fall below 20% in 2022, according to the presentation.
The merger’s success is linked to the company’s plan to shed $ 300 million in overlapping costs annually within 18 to 24 months after the combination. That is crucial to repay a $ 1.8 billion loan from private equity firm Apollo Global Management that New Media used to help finance the acquisition.
The savings come from a variety of areas, including the consolidation of printing plants, combined financial services and the elimination of other overlapping corporate functions. The company has closed about 14 printing plants so far, which is halfway through its plan, Reed told analysts in the company’s earnings call on Thursday.
Gannett said in a statement that he expects to reach $ 60 million in annualized savings by the end of the first quarter and “more than half” of his goal of $ 300 million by the end of 2020.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.