The 9.8 percent decline is mentioned, as well as the fact that overall revenue dropped 4.2 percent. The big ticket item stressed by GateHouse, which owns the Carthage Press, Neosho Daily News, Pittsburg Morning Sun and more than 300 newspapers, is the increase in digital advertising and money coming from the new pay walls that have been established.
I imagine the company will be able to save even more money now that it is implementing its brilliant plan of having the copy editing and layout of the local newspapers done in Boston. The news release is printed below.
Second Quarter Highlights
- Total digital revenue increased 32.3% versus the prior year.
- Total revenues for the second quarter were $128.8 million, down 4.2% from the prior year.
- As Adjusted EBITDA decreased 3.6% versus the prior year to $24.3 million. Excluding investments in new strategic growth initiatives, As Adjusted EBITDA was up slightly versus the prior year.
- Operating costs and SG&A expense declined $4.5 million from the prior year, or 4.1%, to $106.2 million. Adjusting for one-time items, operating costs and SG&A expense declined 4.7% from the prior year.
- Levered Free Cash Flow per share was $0.15 versus $0.17 for the prior year.
GateHouse Media, Inc. (the "Company" or "GateHouse Media") (OTC Pink Sheets: GHSE), a leading multi-media company providing news and information to local communities, today reported financial results for the second quarter ended July 1, 2012. Total revenues were $128.8 million, a decrease of 4.2%. On a same store basis total revenues declined 4.5% compared to the prior year and As Adjusted EBITDA was $24.3 million, a decrease of 3.6% compared to the prior year.
Commenting on GateHouse Media's results, Michael E. Reed, Chief Executive Officer of GateHouse Media, said, "While we saw a softening in the economy during the second quarter that weighed on our results, particularly print advertising, we were pleased with the progress we continue to make on our transformational strategy for our business. Digital revenues grew by 32.3% in the quarter versus prior year. Our digital products extend across web, mobile and tablet products and led to 28.1% growth in average monthly page views during the quarter to 98.0 million. Our average monthly uniques increased 4.0% to 14.1 million.
"Another important area of focus in our transformational plan is growth in consumer revenues. Circulation revenue grew 0.6% in the quarter. We rolled out meters for digital subscriptions in 15 new markets in the quarter and now have them in 80 markets. Our attention is focused on aggressively testing and refining meter thresholds to determine the best approach within specific markets.
"In the quarter we began rolling out our new content management system across the company and we now have two central desks in place. This new technology along with our central desks allow our newsrooms to create content in a single system and maximizes the placement of that content across multiple platforms, while also creating efficiencies in many of the processes.
"We invested $1.1 million in strategic growth initiatives in the quarter, one of which is Propel Marketing, our local digital solutions provider to small and medium sized businesses. We have enjoyed a successful launch of this business in the Boston market and we are very excited to extend this solution across the rest of GateHouse Media throughout the remainder of 2012. Another initiative is our private advertising exchange, adhance media, which is currently servicing 16 media companies including GateHouse Media. adhance media is filling ads for 484 websites across the country and we expect more companies to come on board throughout the rest of 2012.
"Our transformational business strategy also continues to include identifying efficiency and cost reduction opportunities. After adjusting for one-time items, our operating expenses declined 4.7% in the quarter, even with our investments in strategic growth initiatives. As Adjusted EBITDA declined 3.6% in the quarter but remained positive year to date at 5.5%. Additionally, when excluding our investments in strategic growth initiatives, As Adjusted EBITDA increased slightly for the quarter and 10.4% year-to-date."
Second Quarter 2012
Total revenues were $128.8 million for the quarter, a decline of 4.2% compared to the prior year and a decline of 4.5% from the prior year on a same store basis. The same store results were driven by strong digital revenue growth of 32.3% offset by declines in print advertising. The improvement in digital revenue was driven primarily by a 28.2% increase in digital advertising, along with strong growth in our SEO/SEM services and digital subscription programs. Total advertising revenue declined 6.4% on a same store basis as growth in digital advertising was more than offset by a 9.8% decline in local print advertising. Classified print revenue declined 8.8% due to softening in the employment and real estate categories. Circulation revenue increased 0.6% driven by price increases and new digital subscriptions.
Total operating and SG&A expenses in the quarter were $106.2 million, down 4.1% compared to the prior year. The expense declines were primarily from lower compensation.
Operating income for the quarter was $11.5 million, an increase of $1.7 million as compared to the prior year. As Adjusted EBITDA for the quarter was $24.3 million, a decrease of $0.9 million or 3.6% from the prior year.
Levered Free Cash Flow for the quarter declined $1.1 million, or 11.7%, to $8.5 million as compared to $9.7 millionfor the prior year.
One-time costs incurred and other non-cash expenses in the quarter were $2.7 million, related primarily to reorganization efforts and initiatives introduced to realize permanent expense reductions.