February 25, 2016 Last Updated 11:01 am

New Media Investment Group reports full year earnings, complicated by acquisitions and sale of Las Vegas paper

The newspaper company New Media Investment Group, which publishes papers under the GateHouse Media name, reported its fourth quarter earnings today. With the company both acquiring papers, and also selling off the Las Vegas Review Journal, its earnings report presents quite a complicated picture.

During the last quarter New Media was busy:

  • The company completed the sale of the Las Vegas Review Journal for $140.0 million, reporting a net gain of 69 percent over its purchase of just earlier in the year
  • The company acquired the Business Information Division of Dolan LLC for $35.0 million,
  • And it completed the acquisition of the Erie Times-News and related publications for $11.5 million

“Q4 was a very busy and exciting quarter for the Company, and marks a solid finish to a successful year for New Media,” said Michael E. Reed, New Media President and Chief Executive Officer.

“Today, our core business continues to produce strong cash flows and healthy profit margins. We believe New Media is well positioned to remain a disciplined buyer while consolidating the fragmented local media market. As we grow free cash flow through organic and inorganic initiatives, we see an opportunity to increase our dividend while simultaneously lowering our payout ratio. Given our increased liquidity, established track record of sourcing deals, success at growing digital revenue, and stable free cash flow, we believe New Media remains an attractive total return vehicle that will drive substantial returns for our shareholders.”

As the publisher has added properties over the past year, total revenue grew tremendously, up 78.6 percent when compared to the prior year. Same property sales, though, decreased 10.5 percent – driven, the company said, by lower local print advertising and preprint inserts. Classified print revenue also fell, down 7 percent.

Digital revenue grew, up 11.3 percent.

All this is what other newspaper chains are experiencing as few publishers are pursuing much different than what other publishers are doing. The outlier is probably News Corp, which continues to pursue a diversification strategy by acquiring digital brands such as Move, which publishes Realtor.com.

New Media Investment Group owns 78 daily newspapers, mostly smaller papers as its total circulation of daily papers is around 550,000. The company also owns and 235 weekly newspapers.


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