New Media reports profit decline in 4Q, 2016

NEW MEDIA Investment Group Inc. reported a 74.3 percent drop in profit in the fourth quarter and a 53.2 percent drop in profit in 2016.
NEW MEDIA Investment Group Inc. reported a 74.3 percent drop in profit in the fourth quarter and a 53.2 percent drop in profit in 2016.

PROVIDENCE – New Media Investment Group Inc. reported a 74.3 percent drop in profit in the fourth quarter and a 53.2 percent drop in profit in 2016.

New Media, whose GateHouse Media owns the Providence Journal, said fourth quarter profit fell to $14.5 million, or 31 cents per diluted share, from $56.4 million, or $1.26 per diluted share, in the year-ago quarter. For the full year, profit dropped to $31.6 million, or 70 cents per diluted share, from $67.6 million, or $1.53 per diluted share.

Revenue was even in the fourth quarter compared with the prior-year period at $333.6 million. For the year, revenue grew 5 percent, to $1.3 billion from $1.2 billion in 2015.
For the year, digital revenue climbed 9.2 percent, to $123.9 million, on a same-store basis.
The company noted several business highlights, including:

  • The acquisition of Harris Enterprises in the fourth quarter for $20.4 million.
  • Propel Business Services, its small- and medium- business solutions platform, had a record quarter and year with $15.8 million and $53 million in revenue, respectively.
  • Acquired the Ohio-based publishing division of the Wooster Republican Printing Co. in January for $21.2 million.
  • Implemented a cost reduction program in the first quarter 2017 expected to save more than $3 million in the quarter and more than $27 million in 2017.
  • Fifty digital-only sales representatives will be hired.
  • The events business, GateHouse Live, hosted 120 events last year and expects 240 events this year; the company expects the division will generate approximately $15 million in revenue this year, doubling 2016 revenue.

“With over $200 million in liquidity, New Media is well positioned to take advantage of more great acquisition opportunities at attractive valuations in 2017,” Michael E. Reed, New Media president and CEO, said in a statement.

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“The further decline in traditional print we experienced in the fourth quarter has only reinforced the importance and speed with which we need to execute our stated strategy to diversify our revenue streams away from traditional print media. We continue to be very optimistic about our ability to grow our new revenue streams and we are particularly encouraged by our growth trends in Propel Business Services, GateHouse Live, our events division, and BridgeTower Media, our business publications division,” he said.

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