Projo parent reports $18.5M loss in Q3 largely on acquisition costs

THE PARENT COMPANY of the Providence Journal reported a loss of $18.5 million in the third quarter. / PBN FILE PHOTO/ARTISTIC IMAGES
THE PARENT COMPANY of the Providence Journal reported a loss of $18.5 million in the third quarter. / PBN FILE PHOTO/ARTISTIC IMAGES

PROVIDENCE – New Media Investment Group Inc. parent company of The Providence Journal, among many other local publications, reported a $18.5 million loss in the third quarter of 2019, largely due to $12.2 million in acquisition costs.

Loss per diluted share for the quarter was 31 cents, compared with 10 cents one year prior.

Company revenue declined 1% to $376.6 million. The company said revenues declined 7.9% year over year on an organic same-store basis.

Advertising revenue for the quarter totaled $167.4 million, a 5.1% decline year over year. Circulation revenue was $146.3 million, a slight increase year over year. Commercial printing and other revenue increased 8.5% year over year to $63 million.

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The company blamed some of its poor performance on “discussion of the Gannett transaction” which “caused some disruption for our employees during the quarter.” The company also noted that it plans on creating $275-$300 million in annualized savings following the merger, adding that the company has become more confident that it can “implement the synergies” it has planned between the Gannett and New Media teams over the next 18-24 months.

The company recorded $2.2 million in integration and reorganization costs in the quarter, compared with $9.1 million on year prior.

“During the third quarter, organic same store revenue trends were lower than expected, but we saw positive trends in subscriber growth and with revenue in our events business,” said company President and CEO Michael E. Reed. “Organic same store revenue was down 7.9% to prior year, reflecting some disruption among our employee base on account of the anticipation of the Gannett transaction, which was announced on August 5, 2019. However, performance improved toward the end of the quarter.”

The company paid roughly $22.8 million in dividends in the third quarter.

The company’s merger with Gannett still requires approval from both company’s shareholders. The company said that it had already received all regulatory approvals for the move. New Media’s purchase price of the company is $1.4 billion.

New Media Investment Group owns and operates several papers in the Rhode Island and Massachusetts market, including The Providence Journal, The Taunton Gazette, The Newport Daily News, The Cape Cod Times, Fall River Herald News, The Worcester Telegram and The New Bedford Standard-Times.

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