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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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|
47-2390983
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(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
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7950 Jones Branch Drive, McLean, Virginia
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|
22107-0910
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(Address of principal executive offices)
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(Zip Code)
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Large Accelerated Filer
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ý
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Accelerated Filer
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¨
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Non-Accelerated Filer
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¨
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Smaller Reporting Company
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¨
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Emerging Growth Company
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¨
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Item No.
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Page
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1
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2
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3
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4
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1
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||
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|
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1A
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||
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2
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||
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|
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3
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||
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|
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4
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||
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5
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||
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|
|
6
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September 30, 2018
|
|
December 31, 2017
|
||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
108,563
|
|
|
$
|
120,589
|
|
Accounts receivable, net of allowance for doubtful accounts of $11,377 and $11,588
|
319,300
|
|
|
352,546
|
|
||
Other current assets
|
148,095
|
|
|
116,713
|
|
||
Total current assets
|
575,958
|
|
|
589,848
|
|
||
Property, plant and equipment, at cost, net of accumulated depreciation of $1,409,385 and $1,429,515
|
837,869
|
|
|
933,334
|
|
||
Goodwill
|
798,721
|
|
|
737,716
|
|
||
Intangible assets, net
|
197,780
|
|
|
139,654
|
|
||
Deferred income taxes
|
42,054
|
|
|
102,492
|
|
||
Pension assets
|
74,734
|
|
|
2,103
|
|
||
Investments and other assets
|
53,817
|
|
|
64,830
|
|
||
Total assets
|
$
|
2,580,933
|
|
|
$
|
2,569,977
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
389,153
|
|
|
$
|
387,406
|
|
Deferred revenue
|
125,504
|
|
|
122,791
|
|
||
Other current liabilities
|
51,050
|
|
|
—
|
|
||
Total current liabilities
|
565,707
|
|
|
510,197
|
|
||
Postretirement medical and life insurance liabilities
|
81,242
|
|
|
83,344
|
|
||
Pension liabilities
|
267,038
|
|
|
421,876
|
|
||
Long-term portion of revolving credit facility
|
170,000
|
|
|
355,000
|
|
||
Convertible debt
|
168,011
|
|
|
—
|
|
||
Other noncurrent liabilities
|
187,146
|
|
|
182,165
|
|
||
Total liabilities
|
1,439,144
|
|
|
1,552,582
|
|
||
Equity
|
|
|
|
||||
Preferred stock of $0.01 par value per share, 5,000,000 shares authorized, none issued
|
—
|
|
|
—
|
|
||
Common stock of $0.01 par value per share, 500,000,000 shares authorized, 118,789,317 shares issued at September 30, 2018 and 117,547,116 shares issued at December 31, 2017
|
1,188
|
|
|
1,175
|
|
||
Treasury stock at cost, 5,750,000 shares at September 30, 2018 and December 31, 2017
|
(50,046
|
)
|
|
(50,046
|
)
|
||
Additional paid-in capital
|
1,816,354
|
|
|
1,786,941
|
|
||
Accumulated deficit
|
(89,094
|
)
|
|
(64,158
|
)
|
||
Accumulated other comprehensive loss
|
(536,613
|
)
|
|
(656,517
|
)
|
||
Total equity
|
1,141,789
|
|
|
1,017,395
|
|
||
Total liabilities and equity
|
$
|
2,580,933
|
|
|
$
|
2,569,977
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
September 30, 2018
|
|
September 24, 2017
|
|
September 30, 2018
|
|
September 24, 2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Operating revenues:
|
|
|
|
|
|
|
|
||||||||
Advertising and marketing services
|
$
|
403,374
|
|
|
$
|
429,911
|
|
|
$
|
1,233,849
|
|
|
$
|
1,326,499
|
|
Circulation
|
258,873
|
|
|
264,413
|
|
|
789,265
|
|
|
821,375
|
|
||||
Other
|
49,467
|
|
|
49,950
|
|
|
142,319
|
|
|
144,364
|
|
||||
Total operating revenues
|
711,714
|
|
|
744,274
|
|
|
2,165,433
|
|
|
2,292,238
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of sales and operating expenses
|
446,423
|
|
|
471,986
|
|
|
1,355,460
|
|
|
1,452,630
|
|
||||
Selling, general and administrative expenses
|
200,093
|
|
|
203,418
|
|
|
612,235
|
|
|
619,659
|
|
||||
Depreciation and amortization
|
38,427
|
|
|
49,786
|
|
|
117,057
|
|
|
148,453
|
|
||||
Restructuring costs
|
11,535
|
|
|
5,789
|
|
|
33,445
|
|
|
28,167
|
|
||||
Asset impairment charges
|
1,701
|
|
|
1,517
|
|
|
15,940
|
|
|
20,014
|
|
||||
Total operating expenses
|
698,179
|
|
|
732,496
|
|
|
2,134,137
|
|
|
2,268,923
|
|
||||
Operating income
|
13,535
|
|
|
11,778
|
|
|
31,296
|
|
|
23,315
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Non-operating income (expenses):
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(7,135
|
)
|
|
(4,613
|
)
|
|
(17,548
|
)
|
|
(12,322
|
)
|
||||
Other non-operating items, net
|
9,800
|
|
|
(922
|
)
|
|
18,153
|
|
|
(10,110
|
)
|
||||
Total non-operating income (expenses)
|
2,665
|
|
|
(5,535
|
)
|
|
605
|
|
|
(22,432
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income before income taxes
|
16,200
|
|
|
6,243
|
|
|
31,901
|
|
|
883
|
|
||||
Provision (benefit) for income taxes
|
2,848
|
|
|
(16,801
|
)
|
|
2,620
|
|
|
(19,595
|
)
|
||||
Net income
|
$
|
13,352
|
|
|
$
|
23,044
|
|
|
$
|
29,281
|
|
|
$
|
20,478
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share – basic
|
$
|
0.12
|
|
|
$
|
0.20
|
|
|
$
|
0.26
|
|
|
$
|
0.18
|
|
Earnings per share – diluted
|
$
|
0.11
|
|
|
$
|
0.20
|
|
|
$
|
0.25
|
|
|
$
|
0.18
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
September 30, 2018
|
|
September 24, 2017
|
|
September 30, 2018
|
|
September 24, 2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
13,352
|
|
|
$
|
23,044
|
|
|
$
|
29,281
|
|
|
$
|
20,478
|
|
Other comprehensive income, before tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
(4,016
|
)
|
|
30,718
|
|
|
(17,952
|
)
|
|
44,675
|
|
||||
Pension and other postretirement benefit items:
|
|
|
|
|
|
|
|
||||||||
Prior service cost:
|
|
|
|
|
|
|
|
||||||||
Change in prior service cost
|
—
|
|
|
—
|
|
|
103,416
|
|
|
—
|
|
||||
Amortization of prior service cost
|
(1,308
|
)
|
|
756
|
|
|
(2,113
|
)
|
|
2,267
|
|
||||
Actuarial gain (loss):
|
|
|
|
|
|
|
|
||||||||
Actuarial gain (loss) arising during the period
|
—
|
|
|
—
|
|
|
13,240
|
|
|
(500
|
)
|
||||
Amortization of actuarial loss
|
15,756
|
|
|
18,222
|
|
|
48,109
|
|
|
54,445
|
|
||||
Other
|
1,819
|
|
|
(27,582
|
)
|
|
8,598
|
|
|
(42,807
|
)
|
||||
Pension and other postretirement benefit items
|
16,267
|
|
|
(8,604
|
)
|
|
171,250
|
|
|
13,405
|
|
||||
Other comprehensive income, before tax
|
12,251
|
|
|
22,114
|
|
|
153,298
|
|
|
58,080
|
|
||||
Income tax effect related to components of other comprehensive income
|
(3,945
|
)
|
|
(1,514
|
)
|
|
(33,394
|
)
|
|
(11,894
|
)
|
||||
Other comprehensive income, net of tax
|
8,306
|
|
|
20,600
|
|
|
119,904
|
|
|
46,186
|
|
||||
Comprehensive income
|
$
|
21,658
|
|
|
$
|
43,644
|
|
|
$
|
149,185
|
|
|
$
|
66,664
|
|
|
Nine months ended
|
||||||
|
September 30, 2018
|
|
September 24, 2017
|
||||
|
|
|
|
||||
Operating activities:
|
|
|
|
||||
Net income
|
$
|
29,281
|
|
|
$
|
20,478
|
|
Adjustments to reconcile net income to net cash flow from operating activities:
|
|
|
|
||||
Depreciation and amortization
|
117,057
|
|
|
148,453
|
|
||
Facility consolidation and asset impairment charges
|
29,805
|
|
|
22,799
|
|
||
Pension and other postretirement expenses, net of contributions
|
(66,508
|
)
|
|
(36,360
|
)
|
||
Stock-based compensation
|
13,498
|
|
|
14,897
|
|
||
Change in other assets and liabilities, net
|
18,313
|
|
|
(6,172
|
)
|
||
Net cash provided by operating activities
|
141,446
|
|
|
164,095
|
|
||
Investing activities:
|
|
|
|
||||
Capital expenditures
|
(43,863
|
)
|
|
(46,884
|
)
|
||
Payments for acquisitions, net of cash acquired
|
(131,150
|
)
|
|
(36,540
|
)
|
||
Payments for investments
|
(2,882
|
)
|
|
(2,709
|
)
|
||
Proceeds from sale of certain assets
|
28,422
|
|
|
17,293
|
|
||
Changes in other investing activities
|
—
|
|
|
1,277
|
|
||
Net cash used for investing activities
|
(149,473
|
)
|
|
(67,563
|
)
|
||
Financing activities:
|
|
|
|
||||
Dividends paid
|
(54,217
|
)
|
|
(54,427
|
)
|
||
Cost of common shares repurchased
|
—
|
|
|
(17,379
|
)
|
||
Payments for employee taxes withheld from stock awards
|
(3,295
|
)
|
|
(3,903
|
)
|
||
Proceeds from borrowings under revolving credit agreement
|
170,000
|
|
|
35,000
|
|
||
Repayments of borrowings under revolving credit agreement
|
(355,000
|
)
|
|
(60,000
|
)
|
||
Proceeds from convertible debt
|
195,321
|
|
|
—
|
|
||
Proceeds from sale and leaseback transactions
|
41,791
|
|
|
—
|
|
||
Changes in other financing activities
|
(90
|
)
|
|
101
|
|
||
Net cash used for financing activities
|
(5,490
|
)
|
|
(100,608
|
)
|
||
Effect of currency exchange rate change on cash
|
1,868
|
|
|
117
|
|
||
Decrease in cash, cash equivalents and restricted cash
|
(11,649
|
)
|
|
(3,959
|
)
|
||
Balance of cash, cash equivalents, and restricted cash at beginning of period
|
144,032
|
|
|
138,212
|
|
||
Balance of cash, cash equivalents, and restricted cash at end of period
|
$
|
132,383
|
|
|
$
|
134,253
|
|
|
|
|
|
||||
Supplemental cash flow information:
|
|
|
|
||||
Cash paid for taxes, net of refunds
|
$
|
5,720
|
|
|
$
|
(15,554
|
)
|
Cash paid for interest
|
$
|
5,437
|
|
|
$
|
12,056
|
|
Non-cash investing and financing activities:
|
|
|
|
||||
Accrued capital expenditures
|
$
|
255
|
|
|
$
|
307
|
|
in thousands
|
September 30, 2018
|
|
December 31, 2017
|
|
September 24, 2017
|
||||||
Cash and cash equivalents
|
$
|
108,563
|
|
|
$
|
120,589
|
|
|
$
|
109,961
|
|
Restricted cash included in other current assets
|
4,615
|
|
|
2,942
|
|
|
3,726
|
|
|||
Restricted cash included in investments and other assets
|
19,205
|
|
|
20,501
|
|
|
20,566
|
|
|||
Total cash, cash equivalents, and restricted cash
|
$
|
132,383
|
|
|
$
|
144,032
|
|
|
$
|
134,253
|
|
in thousands
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
September 30, 2018
|
|
September 24, 2017
(1)
|
|
September 30, 2018
|
|
September 24, 2017
(1)
|
||||||||
Print advertising
|
$
|
204,023
|
|
|
$
|
244,843
|
|
|
$
|
657,744
|
|
|
$
|
788,745
|
|
Digital advertising and marketing services
|
199,351
|
|
|
185,068
|
|
|
576,105
|
|
|
537,754
|
|
||||
Total advertising and marketing services
|
403,374
|
|
|
429,911
|
|
|
1,233,849
|
|
|
1,326,499
|
|
||||
Circulation
|
258,873
|
|
|
264,413
|
|
|
789,265
|
|
|
821,375
|
|
||||
Other
|
49,467
|
|
|
49,950
|
|
|
142,319
|
|
|
144,364
|
|
||||
Total revenues
|
$
|
711,714
|
|
|
$
|
744,274
|
|
|
$
|
2,165,433
|
|
|
$
|
2,292,238
|
|
in thousands
|
Nine months ended September 30, 2018
|
||||||||||
|
Advertising, Marketing Services, and Other
|
|
Circulation
|
|
Total
|
||||||
Beginning balance
|
$
|
33,986
|
|
|
$
|
88,805
|
|
|
$
|
122,791
|
|
Acquired deferred revenue
|
2,676
|
|
|
—
|
|
|
2,676
|
|
|||
Cash receipts
|
218,602
|
|
|
620,965
|
|
|
839,567
|
|
|||
Revenue recognized
|
(216,782
|
)
|
|
(622,748
|
)
|
|
(839,530
|
)
|
|||
Ending balance
|
$
|
38,482
|
|
|
$
|
87,022
|
|
|
$
|
125,504
|
|
In thousands
|
|
||
Cash and restricted cash acquired
|
$
|
20,954
|
|
Other current assets
|
9,159
|
|
|
Property, plant and equipment
|
1,072
|
|
|
Developed technology
|
63,030
|
|
|
Customer relationships
|
21,420
|
|
|
Trade names
|
1,105
|
|
|
Goodwill
|
67,483
|
|
|
Total assets acquired
|
184,223
|
|
|
Current liabilities
|
3,987
|
|
|
Noncurrent liabilities
|
17,303
|
|
|
Total liabilities assumed
|
21,290
|
|
|
Net assets acquired
|
$
|
162,933
|
|
In thousands
|
Severance Activities
|
||
Balance at December 31, 2017
|
$
|
10,562
|
|
Expense
|
19,580
|
|
|
Payments
|
(24,055
|
)
|
|
Balance at September 30, 2018
|
$
|
6,087
|
|
In thousands
|
Three months ended
|
||||||||||||||
|
September 30, 2018
|
|
September 24, 2017
|
||||||||||||
|
Pension
|
|
Postretirement
|
|
Pension
|
|
Postretirement
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Service cost - benefits earned during the period
|
$
|
589
|
|
|
$
|
42
|
|
|
$
|
610
|
|
|
$
|
83
|
|
Non-operating expenses:
|
|
|
|
|
|
|
|
||||||||
Interest cost on benefit obligation
|
24,669
|
|
|
742
|
|
|
27,935
|
|
|
902
|
|
||||
Expected return on plan assets
|
(42,073
|
)
|
|
—
|
|
|
(42,657
|
)
|
|
—
|
|
||||
Amortization of prior service cost
|
(424
|
)
|
|
(884
|
)
|
|
1,668
|
|
|
(912
|
)
|
||||
Amortization of actuarial loss (gain)
|
15,846
|
|
|
(90
|
)
|
|
18,197
|
|
|
25
|
|
||||
Total non-operating expenses (credit)
|
(1,982
|
)
|
|
(232
|
)
|
|
5,143
|
|
|
15
|
|
||||
Total expense (benefit) for retirement plans
|
$
|
(1,393
|
)
|
|
$
|
(190
|
)
|
|
$
|
5,753
|
|
|
$
|
98
|
|
In thousands
|
Nine months ended
|
||||||||||||||
|
September 30, 2018
|
|
September 24, 2017
|
||||||||||||
|
Pension
|
|
Postretirement
|
|
Pension
|
|
Postretirement
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Service cost - benefits earned during the period
|
$
|
1,767
|
|
|
$
|
130
|
|
|
$
|
1,830
|
|
|
$
|
161
|
|
Non-operating expenses:
|
|
|
|
|
|
|
|
||||||||
Interest cost on benefit obligation
|
76,688
|
|
|
2,224
|
|
|
83,309
|
|
|
2,706
|
|
||||
Expected return on plan assets
|
(131,098
|
)
|
|
—
|
|
|
(127,035
|
)
|
|
—
|
|
||||
Amortization of prior service cost
|
538
|
|
|
(2,651
|
)
|
|
5,003
|
|
|
(2,736
|
)
|
||||
Amortization of actuarial loss (gain)
|
48,379
|
|
|
(270
|
)
|
|
54,368
|
|
|
77
|
|
||||
Total non-operating expenses (credit)
|
(5,493
|
)
|
|
(697
|
)
|
|
15,645
|
|
|
47
|
|
||||
Total expense (benefit) for retirement plans
|
$
|
(3,726
|
)
|
|
$
|
(567
|
)
|
|
$
|
17,475
|
|
|
$
|
208
|
|
In thousands
|
Three months ended
|
|
Nine months ended
|
||||||||
|
September 30, 2018
|
|
September 24, 2017
|
|
September 30, 2018
|
|
September 24, 2017
|
||||
Pre-tax net income
|
16,200
|
|
|
6,243
|
|
|
31,901
|
|
|
883
|
|
Income tax expense (benefit)
|
2,848
|
|
|
(16,801
|
)
|
|
2,620
|
|
|
(19,595
|
)
|
Effective tax rate
|
17.6
|
%
|
|
***
|
|
|
8.2
|
%
|
|
***
|
|
In thousands
|
Nine months ended
|
||||||
|
September 30, 2018
|
|
September 24, 2017
|
||||
Balance at beginning of period
|
$
|
1,017,395
|
|
|
$
|
856,761
|
|
Comprehensive income:
|
|
|
|
||||
Net income
|
29,281
|
|
|
20,478
|
|
||
Other comprehensive income
|
119,904
|
|
|
46,186
|
|
||
Total comprehensive income
|
149,185
|
|
|
66,664
|
|
||
Dividends declared
|
(54,217
|
)
|
|
(54,427
|
)
|
||
Convertible debt conversion feature
|
21,534
|
|
|
—
|
|
||
Stock-based compensation
|
13,498
|
|
|
14,897
|
|
||
Other activity
|
(5,606
|
)
|
|
(20,226
|
)
|
||
Balance at end of period
|
$
|
1,141,789
|
|
|
$
|
863,669
|
|
In thousands
|
Retirement Plans
|
|
Foreign Currency Translation
|
|
Total
|
||||||
Balance at December 31, 2017
|
$
|
(1,000,790
|
)
|
|
$
|
344,273
|
|
|
$
|
(656,517
|
)
|
Other comprehensive income (loss) before reclassifications
|
103,227
|
|
|
(17,952
|
)
|
|
85,275
|
|
|||
Amounts reclassified from accumulated other comprehensive loss
|
34,629
|
|
|
—
|
|
|
34,629
|
|
|||
Other comprehensive income
|
137,856
|
|
|
(17,952
|
)
|
|
119,904
|
|
|||
Balance at September 30, 2018
|
$
|
(862,934
|
)
|
|
$
|
326,321
|
|
|
$
|
(536,613
|
)
|
|
|
|
|
|
|
||||||
Balance at December 25, 2016
|
$
|
(1,183,196
|
)
|
|
$
|
300,284
|
|
|
$
|
(882,912
|
)
|
Other comprehensive income (loss) before reclassifications
|
(34,980
|
)
|
|
44,675
|
|
|
9,695
|
|
|||
Amounts reclassified from accumulated other comprehensive loss
|
36,491
|
|
|
—
|
|
|
36,491
|
|
|||
Other comprehensive income
|
1,511
|
|
|
44,675
|
|
|
46,186
|
|
|||
Balance at September 24, 2017
|
$
|
(1,181,685
|
)
|
|
$
|
344,959
|
|
|
$
|
(836,726
|
)
|
In thousands
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
September 30, 2018
|
|
September 24, 2017
|
|
September 30, 2018
|
|
September 24, 2017
|
||||||||
Amortization of prior service credit, net
|
$
|
(1,308
|
)
|
|
$
|
756
|
|
|
$
|
(2,113
|
)
|
|
$
|
2,267
|
|
Amortization of actuarial loss
|
15,756
|
|
|
18,222
|
|
|
48,109
|
|
|
54,445
|
|
||||
Total reclassifications, before tax
|
14,448
|
|
|
18,978
|
|
|
45,996
|
|
|
56,712
|
|
||||
Income tax effect
|
(3,600
|
)
|
|
(6,755
|
)
|
|
(11,367
|
)
|
|
(20,221
|
)
|
||||
Total reclassifications, net of tax
|
$
|
10,848
|
|
|
$
|
12,223
|
|
|
$
|
34,629
|
|
|
$
|
36,491
|
|
In thousands, except per share data
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
September 30, 2018
|
|
September 24, 2017
|
|
September 30, 2018
|
|
September 24, 2017
|
||||||||
Net income
|
$
|
13,352
|
|
|
$
|
23,044
|
|
|
$
|
29,281
|
|
|
$
|
20,478
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares outstanding - basic
|
113,047
|
|
|
113,253
|
|
|
112,916
|
|
|
113,467
|
|
||||
Effect of dilutive securities
|
|
|
|
|
|
|
|
||||||||
Restricted stock units
|
2,354
|
|
|
1,657
|
|
|
2,282
|
|
|
1,418
|
|
||||
Performance share units
|
802
|
|
|
757
|
|
|
837
|
|
|
643
|
|
||||
Stock options
|
68
|
|
|
107
|
|
|
78
|
|
|
127
|
|
||||
Weighted average number of shares outstanding - diluted
|
116,271
|
|
|
115,774
|
|
|
116,113
|
|
|
115,655
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings per share - basic
|
$
|
0.12
|
|
|
$
|
0.20
|
|
|
$
|
0.26
|
|
|
$
|
0.18
|
|
Earnings per share - diluted
|
$
|
0.11
|
|
|
$
|
0.20
|
|
|
$
|
0.25
|
|
|
$
|
0.18
|
|
•
|
Publishing, which consists of our portfolio of local, regional, national, and international newspaper publishers. The results of this segment include local, classified, and national advertising revenues consisting of both print and digital advertising, circulation revenues from the distribution of our publications on our digital platforms, home delivery of our publications, single copy sales, and other revenues from commercial printing and distribution arrangements. The publishing reportable segment is an aggregation of
two
operating segments: domestic publishing and the U.K.
|
•
|
ReachLocal, which consists of our digital marketing solutions subsidiaries ReachLocal, SweetIQ, and WordStream. The results of this segment include advertising and marketing services revenues from our search and display services and web presence and software solutions provided by ReachLocal.
|
in thousands
|
|
Publishing
|
|
ReachLocal
|
|
Corporate and Other
|
|
Intersegment Eliminations
|
|
Consolidated
|
||||||||||
Three months ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Advertising and marketing services - external sales
|
|
$
|
293,808
|
|
|
$
|
109,566
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
403,374
|
|
Advertising and marketing services - intersegment sales
|
|
15,967
|
|
|
—
|
|
|
—
|
|
|
(15,967
|
)
|
|
—
|
|
|||||
Circulation
|
|
258,873
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
258,873
|
|
|||||
Other
|
|
47,736
|
|
|
—
|
|
|
1,731
|
|
|
—
|
|
|
49,467
|
|
|||||
Total revenues
|
|
$
|
616,384
|
|
|
$
|
109,566
|
|
|
$
|
1,731
|
|
|
$
|
(15,967
|
)
|
|
$
|
711,714
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA
|
|
$
|
72,739
|
|
|
$
|
17,340
|
|
|
$
|
(19,987
|
)
|
|
$
|
—
|
|
|
$
|
70,092
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three months ended September 24, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Advertising and marketing services - external sales
|
|
$
|
336,094
|
|
|
$
|
93,817
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
429,911
|
|
Advertising and marketing services - intersegment sales
|
|
11,219
|
|
|
—
|
|
|
—
|
|
|
(11,219
|
)
|
|
—
|
|
|||||
Circulation
|
|
264,413
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
264,413
|
|
|||||
Other
|
|
48,612
|
|
|
—
|
|
|
1,338
|
|
|
—
|
|
|
49,950
|
|
|||||
Total revenues
|
|
$
|
660,338
|
|
|
$
|
93,817
|
|
|
$
|
1,338
|
|
|
$
|
(11,219
|
)
|
|
$
|
744,274
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA
|
|
$
|
87,451
|
|
|
$
|
5,229
|
|
|
$
|
(18,827
|
)
|
|
$
|
—
|
|
|
$
|
73,853
|
|
in thousands
|
|
Publishing
|
|
ReachLocal
|
|
Corporate and Other
|
|
Intersegment Eliminations
|
|
Consolidated
|
||||||||||
Nine months ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Advertising and marketing services - external sales
|
|
$
|
927,360
|
|
|
$
|
306,489
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,233,849
|
|
Advertising and marketing services - intersegment sales
|
|
46,167
|
|
|
—
|
|
|
—
|
|
|
(46,167
|
)
|
|
—
|
|
|||||
Circulation
|
|
789,265
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
789,265
|
|
|||||
Other
|
|
136,803
|
|
|
—
|
|
|
5,516
|
|
|
—
|
|
|
142,319
|
|
|||||
Total revenues
|
|
$
|
1,899,595
|
|
|
$
|
306,489
|
|
|
$
|
5,516
|
|
|
$
|
(46,167
|
)
|
|
$
|
2,165,433
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA
|
|
$
|
244,855
|
|
|
$
|
33,820
|
|
|
$
|
(67,916
|
)
|
|
$
|
—
|
|
|
$
|
210,759
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nine months ended September 24, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Advertising and marketing services - external sales
|
|
$
|
1,069,244
|
|
|
$
|
257,308
|
|
|
$
|
(53
|
)
|
|
$
|
—
|
|
|
$
|
1,326,499
|
|
Advertising and marketing services - intersegment sales
|
|
15,859
|
|
|
—
|
|
|
—
|
|
|
(15,859
|
)
|
|
—
|
|
|||||
Circulation
|
|
821,375
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
821,375
|
|
|||||
Other
|
|
140,964
|
|
|
—
|
|
|
3,400
|
|
|
—
|
|
|
144,364
|
|
|||||
Total revenues
|
|
$
|
2,047,442
|
|
|
$
|
257,308
|
|
|
$
|
3,347
|
|
|
$
|
(15,859
|
)
|
|
$
|
2,292,238
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA
|
|
$
|
283,235
|
|
|
$
|
9,592
|
|
|
$
|
(65,639
|
)
|
|
$
|
—
|
|
|
$
|
227,188
|
|
In thousands
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
September 30, 2018
|
|
September 24, 2017
|
|
September 30, 2018
|
|
September 24, 2017
|
||||||||
Net income (GAAP basis)
|
$
|
13,352
|
|
|
$
|
23,044
|
|
|
$
|
29,281
|
|
|
$
|
20,478
|
|
Provision (benefit) for income taxes
|
2,848
|
|
|
(16,801
|
)
|
|
2,620
|
|
|
(19,595
|
)
|
||||
Interest expense
|
7,135
|
|
|
4,613
|
|
|
17,548
|
|
|
12,322
|
|
||||
Other non-operating items, net
|
(9,800
|
)
|
|
922
|
|
|
(18,153
|
)
|
|
10,110
|
|
||||
Operating income (GAAP basis)
|
13,535
|
|
|
11,778
|
|
|
31,296
|
|
|
23,315
|
|
||||
Depreciation and amortization
|
38,427
|
|
|
49,786
|
|
|
117,057
|
|
|
148,453
|
|
||||
Restructuring costs
|
11,535
|
|
|
5,789
|
|
|
33,445
|
|
|
28,167
|
|
||||
Asset impairment charges
|
1,701
|
|
|
1,517
|
|
|
15,940
|
|
|
20,014
|
|
||||
Acquisition-related items
|
3,185
|
|
|
2,059
|
|
|
7,131
|
|
|
4,652
|
|
||||
Other items
|
1,709
|
|
|
2,924
|
|
|
5,890
|
|
|
2,587
|
|
||||
Adjusted EBITDA (non-GAAP basis)
|
$
|
70,092
|
|
|
$
|
73,853
|
|
|
$
|
210,759
|
|
|
$
|
227,188
|
|
In thousands, except per share data
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||
|
September 30, 2018
|
|
September 24, 2017
|
|
Change
|
|
September 30, 2018
|
|
September 24, 2017
|
|
Change
|
||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Publishing
|
$
|
616,384
|
|
|
$
|
660,338
|
|
|
(7
|
%)
|
|
$
|
1,899,595
|
|
|
$
|
2,047,442
|
|
|
(7
|
%)
|
ReachLocal
|
109,566
|
|
|
93,817
|
|
|
17
|
%
|
|
306,489
|
|
|
257,308
|
|
|
19
|
%
|
||||
Corporate and other
|
1,731
|
|
|
1,338
|
|
|
29
|
%
|
|
5,516
|
|
|
3,347
|
|
|
65
|
%
|
||||
Intersegment eliminations
|
(15,967
|
)
|
|
(11,219
|
)
|
|
42
|
%
|
|
(46,167
|
)
|
|
(15,859
|
)
|
|
***
|
|
||||
Total operating revenues
|
711,714
|
|
|
744,274
|
|
|
(4
|
%)
|
|
2,165,433
|
|
|
2,292,238
|
|
|
(6
|
%)
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Publishing
|
$
|
571,375
|
|
|
$
|
616,699
|
|
|
(7
|
%)
|
|
$
|
1,766,383
|
|
|
$
|
1,908,078
|
|
|
(7
|
%)
|
ReachLocal
|
107,083
|
|
|
98,024
|
|
|
9
|
%
|
|
308,668
|
|
|
274,176
|
|
|
13
|
%
|
||||
Corporate and other
|
35,688
|
|
|
28,992
|
|
|
23
|
%
|
|
$
|
105,253
|
|
|
$
|
102,528
|
|
|
3
|
%
|
||
Intersegment eliminations
|
(15,967
|
)
|
|
(11,219
|
)
|
|
42
|
%
|
|
(46,167
|
)
|
|
(15,859
|
)
|
|
***
|
|
||||
Total operating expenses
|
698,179
|
|
|
732,496
|
|
|
(5
|
%)
|
|
2,134,137
|
|
|
2,268,923
|
|
|
(6
|
%)
|
||||
Operating income
|
13,535
|
|
|
11,778
|
|
|
15
|
%
|
|
31,296
|
|
|
23,315
|
|
|
34
|
%
|
||||
Non-operating income (expense)
|
2,665
|
|
|
(5,535
|
)
|
|
***
|
|
|
605
|
|
|
(22,432
|
)
|
|
***
|
|
||||
Income before income taxes
|
16,200
|
|
|
6,243
|
|
|
***
|
|
|
31,901
|
|
|
883
|
|
|
***
|
|
||||
Provision (benefit) for income taxes
|
2,848
|
|
|
(16,801
|
)
|
|
***
|
|
|
2,620
|
|
|
(19,595
|
)
|
|
***
|
|
||||
Net income
|
$
|
13,352
|
|
|
$
|
23,044
|
|
|
(42
|
%)
|
|
$
|
29,281
|
|
|
$
|
20,478
|
|
|
43
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings per share
|
$
|
0.11
|
|
|
$
|
0.20
|
|
|
(45
|
%)
|
|
$
|
0.25
|
|
|
$
|
0.18
|
|
|
39
|
%
|
In thousands
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||
|
September 30, 2018
|
|
September 24, 2017
|
|
Change
|
|
September 30, 2018
|
|
September 24, 2017
|
|
Change
|
||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Advertising and marketing services
|
$
|
309,775
|
|
|
$
|
347,313
|
|
|
(11
|
%)
|
|
$
|
973,527
|
|
|
$
|
1,085,103
|
|
|
(10
|
%)
|
Circulation
|
258,873
|
|
|
264,413
|
|
|
(2
|
%)
|
|
789,265
|
|
|
821,375
|
|
|
(4
|
%)
|
||||
Other
|
47,736
|
|
|
48,612
|
|
|
(2
|
%)
|
|
136,803
|
|
|
140,964
|
|
|
(3
|
%)
|
||||
Total operating revenues
|
616,384
|
|
|
660,338
|
|
|
(7
|
%)
|
|
1,899,595
|
|
|
2,047,442
|
|
|
(7
|
%)
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cost of sales
|
402,292
|
|
|
424,833
|
|
|
(5
|
%)
|
|
1,220,997
|
|
|
1,308,032
|
|
|
(7
|
%)
|
||||
Selling, general, and administrative expenses
|
141,352
|
|
|
149,203
|
|
|
(5
|
%)
|
|
435,286
|
|
|
449,950
|
|
|
(3
|
%)
|
||||
Depreciation and amortization
|
21,382
|
|
|
35,053
|
|
|
(39
|
%)
|
|
71,828
|
|
|
106,116
|
|
|
(32
|
%)
|
||||
Restructuring costs
|
4,919
|
|
|
6,093
|
|
|
(19
|
%)
|
|
22,603
|
|
|
23,966
|
|
|
(6
|
%)
|
||||
Asset impairment charges
|
1,430
|
|
|
1,517
|
|
|
(6
|
%)
|
|
15,669
|
|
|
20,014
|
|
|
(22
|
%)
|
||||
Total operating expenses
|
571,375
|
|
|
616,699
|
|
|
(7
|
%)
|
|
1,766,383
|
|
|
1,908,078
|
|
|
(7
|
%)
|
||||
Operating income
|
$
|
45,009
|
|
|
$
|
43,639
|
|
|
3
|
%
|
|
$
|
133,212
|
|
|
$
|
139,364
|
|
|
(4
|
%)
|
In thousands
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||
|
September 30, 2018
|
|
September 24, 2017
|
|
Change
|
|
September 30, 2018
|
|
September 24, 2017
|
|
Change
|
||||||||||
Operating income (GAAP basis)
|
$
|
45,009
|
|
|
$
|
43,639
|
|
|
3
|
%
|
|
$
|
133,212
|
|
|
$
|
139,364
|
|
|
(4
|
%)
|
Depreciation and amortization
|
21,382
|
|
|
35,053
|
|
|
(39
|
%)
|
|
71,828
|
|
|
106,116
|
|
|
(32
|
%)
|
||||
Restructuring costs
|
4,919
|
|
|
6,093
|
|
|
(19
|
%)
|
|
22,603
|
|
|
23,966
|
|
|
(6
|
%)
|
||||
Asset impairment charges
|
1,430
|
|
|
1,517
|
|
|
(6
|
%)
|
|
15,669
|
|
|
20,014
|
|
|
(22
|
%)
|
||||
Other items
|
(1
|
)
|
|
1,149
|
|
|
***
|
|
|
1,543
|
|
|
(6,225
|
)
|
|
***
|
|
||||
Adjusted EBITDA (non-GAAP basis)
|
$
|
72,739
|
|
|
$
|
87,451
|
|
|
(17
|
%)
|
|
$
|
244,855
|
|
|
$
|
283,235
|
|
|
(14
|
%)
|
In thousands
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||
|
September 30, 2018
|
|
September 24, 2017
|
|
Change
|
|
September 30, 2018
|
|
September 24, 2017
|
|
Change
|
||||||||||
Advertising and marketing services
|
$
|
109,566
|
|
|
$
|
93,817
|
|
|
17
|
%
|
|
$
|
306,489
|
|
|
$
|
257,308
|
|
|
19
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
56,019
|
|
|
54,939
|
|
|
2
|
%
|
|
168,624
|
|
|
149,834
|
|
|
13
|
%
|
||||
Selling, general, and administrative expenses
|
37,538
|
|
|
34,048
|
|
|
10
|
%
|
|
105,564
|
|
|
98,324
|
|
|
7
|
%
|
||||
Depreciation and amortization
|
12,096
|
|
|
8,846
|
|
|
37
|
%
|
|
29,505
|
|
|
25,504
|
|
|
16
|
%
|
||||
Restructuring costs
|
1,159
|
|
|
191
|
|
|
***
|
|
|
4,704
|
|
|
514
|
|
|
***
|
|
||||
Asset impairment charges
|
271
|
|
|
—
|
|
|
***
|
|
|
271
|
|
|
—
|
|
|
***
|
|
||||
Total operating expenses
|
107,083
|
|
|
98,024
|
|
|
9
|
%
|
|
308,668
|
|
|
274,176
|
|
|
13
|
%
|
||||
Operating income (loss)
|
$
|
2,483
|
|
|
$
|
(4,207
|
)
|
|
***
|
|
|
$
|
(2,179
|
)
|
|
$
|
(16,868
|
)
|
|
(87
|
)%
|
As of date
|
September 30, 2018
|
|
December 31, 2017
|
||
Active Clients
(a)
|
21,600
|
|
|
18,800
|
|
Active Product Units
(b)
|
42,300
|
|
|
37,500
|
|
In thousands
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||
|
September 30, 2018
|
|
September 24, 2017
|
|
Change
|
|
September 30, 2018
|
|
September 24, 2017
|
|
Change
|
||||||||||
Operating income (loss) (GAAP basis)
|
$
|
2,483
|
|
|
$
|
(4,207
|
)
|
|
***
|
|
|
$
|
(2,179
|
)
|
|
$
|
(16,868
|
)
|
|
(87
|
)%
|
Depreciation and amortization
|
12,096
|
|
|
8,846
|
|
|
37
|
%
|
|
29,505
|
|
|
25,504
|
|
|
16
|
%
|
||||
Restructuring costs
|
1,159
|
|
|
191
|
|
|
***
|
|
|
4,704
|
|
|
514
|
|
|
***
|
|
||||
Asset impairment charges
|
271
|
|
|
—
|
|
|
***
|
|
|
271
|
|
|
—
|
|
|
***
|
|
||||
Other items
|
1,331
|
|
|
399
|
|
|
***
|
|
|
1,519
|
|
|
442
|
|
|
***
|
|
||||
Adjusted EBITDA (non-GAAP basis)
|
$
|
17,340
|
|
|
$
|
5,229
|
|
|
***
|
|
|
$
|
33,820
|
|
|
$
|
9,592
|
|
|
***
|
|
In thousands
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
September 30, 2018
|
|
September 24, 2017
|
|
September 30, 2018
|
|
September 24, 2017
|
||||||||
Pre-tax net income
|
$
|
16,200
|
|
|
$
|
6,243
|
|
|
$
|
31,901
|
|
|
$
|
883
|
|
Income tax expense (benefit)
|
2,848
|
|
|
(16,801
|
)
|
|
2,620
|
|
|
(19,595
|
)
|
||||
Effective tax rate
|
17.6
|
%
|
|
***
|
|
|
8.2
|
%
|
|
***
|
|
In thousands
|
Year-to-date
|
||||||
|
2018
|
|
2017
|
||||
Net cash provided by operating activities
|
$
|
141,446
|
|
|
$
|
164,095
|
|
Net cash used for investing activities
|
(149,473
|
)
|
|
(67,563
|
)
|
||
Net cash used for financing activities
|
(5,490
|
)
|
|
(100,608
|
)
|
||
Effect of currency exchange rate change on cash
|
1,868
|
|
|
117
|
|
||
Net decrease in cash
|
$
|
(11,649
|
)
|
|
$
|
(3,959
|
)
|
•
|
Adjusted EBITDA
is a non-GAAP financial performance measure we believe offers a useful view of the overall operation of our businesses. Adjusted EBITDA is defined as net income before (1) income taxes, (2) interest expense, (3) equity income, (4) other non-operating items, (5) restructuring costs, (6) acquisition-related expenses (including certain integration expenses), (7) asset impairment charges, (8) other items (including certain business transformation costs, litigation expenses, multi-employer pension withdrawals, and gains or losses on certain investments), (9) depreciation, and (10) amortization. When adjusted EBITDA is discussed in this report, the most directly comparable GAAP financial measure is net income.
|
•
|
Adjusted net income
is a non-GAAP financial performance measure we use for the purpose of calculating adjusted EPS. Adjusted net income is defined as net income before the adjustments we apply in calculating adjusted EPS as described below. We believe presenting adjusted net income is useful to enable investors to understand how we calculate adjusted EPS, which provides a useful view of the overall operation of our business. When adjusted net income is described in this report, the most directly comparable GAAP financial measure is net income.
|
•
|
Adjusted EPS
is a non-GAAP financial performance measure we believe offers a useful view of the overall operation of our business. We define adjusted EPS as EPS before tax-effected (1) restructuring costs, (2) asset impairment charges, (3) acquisition-related expenses (including certain integration expenses), (4) non-operating gains and losses, and (5) other items (including certain business transformation expenses, litigation expenses, multi-employer pension withdrawals, and gains or losses on certain investments). The tax impact on these non-GAAP tax deductible adjustments is based on the estimated statutory tax rates for the U.K. of 19% and the U.S. of 25.5%. In addition, tax is adjusted for the impact of non-deductible
|
•
|
Free cash flow
is a non-GAAP liquidity measure that adjusts our reported GAAP results for items we believe are critical to the ongoing success of our business. We define free cash flow as cash flow from operating activities less capital expenditures, which results in a figure representing free cash flow available for use in operations, additional investments, debt obligations, and returns to shareholders. When free cash flow is discussed in this report, the most directly comparable GAAP financial measure is net cash from operating activities.
|
In thousands
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||
|
September 30, 2018
|
|
September 24, 2017
|
|
Change
|
|
September 30, 2018
|
|
September 24, 2017
|
|
Change
|
||||||||||
Net income (GAAP basis)
|
$
|
13,352
|
|
|
$
|
23,044
|
|
|
(42
|
%)
|
|
$
|
29,281
|
|
|
$
|
20,478
|
|
|
43
|
%
|
Provision (benefit) for income taxes
|
2,848
|
|
|
(16,801
|
)
|
|
***
|
|
|
2,620
|
|
|
(19,595
|
)
|
|
***
|
|
||||
Interest expense
|
7,135
|
|
|
4,613
|
|
|
55
|
%
|
|
17,548
|
|
|
12,322
|
|
|
42
|
%
|
||||
Other non-operating items, net
|
(9,800
|
)
|
|
922
|
|
|
***
|
|
|
(18,153
|
)
|
|
10,110
|
|
|
***
|
|
||||
Operating income (loss) (GAAP basis)
|
13,535
|
|
|
11,778
|
|
|
15
|
%
|
|
31,296
|
|
|
23,315
|
|
|
34
|
%
|
||||
Depreciation and amortization
|
38,427
|
|
|
49,786
|
|
|
(23
|
%)
|
|
117,057
|
|
|
148,453
|
|
|
(21
|
%)
|
||||
Restructuring costs
|
11,535
|
|
|
5,789
|
|
|
99
|
%
|
|
33,445
|
|
|
28,167
|
|
|
19
|
%
|
||||
Asset impairment charges
|
1,701
|
|
|
1,517
|
|
|
12
|
%
|
|
15,940
|
|
|
20,014
|
|
|
(20
|
%)
|
||||
Acquisition-related items
|
3,185
|
|
|
2,059
|
|
|
55
|
%
|
|
7,131
|
|
|
4,652
|
|
|
53
|
%
|
||||
Other items
|
1,709
|
|
|
2,924
|
|
|
(42
|
%)
|
|
5,890
|
|
|
2,587
|
|
|
***
|
|
||||
Adjusted EBITDA (non-GAAP basis)
|
$
|
70,092
|
|
|
$
|
73,853
|
|
|
(5
|
%)
|
|
$
|
210,759
|
|
|
$
|
227,188
|
|
|
(7
|
%)
|
In thousands, except per share data
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||
|
September 30, 2018
|
|
September 24, 2017
|
|
Change
|
|
September 30, 2018
|
|
September 24, 2017
|
|
Change
|
||||||||||
Restructuring costs (including accelerated depreciation)
|
$
|
13,665
|
|
|
$
|
19,841
|
|
|
(31
|
%)
|
|
$
|
41,722
|
|
|
$
|
65,798
|
|
|
(37
|
%)
|
Asset impairment charges
|
1,701
|
|
|
1,517
|
|
|
12
|
%
|
|
15,940
|
|
|
20,014
|
|
|
(20
|
%)
|
||||
Acquisition-related items
|
3,186
|
|
|
2,059
|
|
|
55
|
%
|
|
7,131
|
|
|
4,652
|
|
|
53
|
%
|
||||
(Gains) losses from non-operating activities
|
(5,510
|
)
|
|
857
|
|
|
***
|
|
|
(5,002
|
)
|
|
1,015
|
|
|
***
|
|
||||
Other items
|
1,522
|
|
|
19
|
|
|
***
|
|
|
3,508
|
|
|
(3,179
|
)
|
|
***
|
|
||||
Pretax impact
|
14,564
|
|
|
24,293
|
|
|
(40
|
%)
|
|
63,299
|
|
|
88,300
|
|
|
(28
|
%)
|
||||
Income tax impact of above items
|
(4,062
|
)
|
|
(8,863
|
)
|
|
(54
|
%)
|
|
(16,161
|
)
|
|
(33,295
|
)
|
|
(51
|
%)
|
||||
Tax benefit
|
(529
|
)
|
|
(20,086
|
)
|
|
(97
|
%)
|
|
(2,623
|
)
|
|
(20,086
|
)
|
|
(87
|
%)
|
||||
Impact of items affecting comparability on net income
|
$
|
9,973
|
|
|
$
|
(4,656
|
)
|
|
***
|
|
|
$
|
44,515
|
|
|
$
|
34,919
|
|
|
27
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) (GAAP basis)
|
$
|
13,352
|
|
|
$
|
23,044
|
|
|
(42
|
%)
|
|
$
|
29,281
|
|
|
$
|
20,478
|
|
|
43
|
%
|
Impact of items affecting comparability on net income (loss)
|
9,973
|
|
|
(4,656
|
)
|
|
***
|
|
|
44,515
|
|
|
34,919
|
|
|
27
|
%
|
||||
Adjusted net income (non-GAAP basis)
|
$
|
23,325
|
|
|
$
|
18,388
|
|
|
27
|
%
|
|
$
|
73,796
|
|
|
$
|
55,397
|
|
|
33
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income per share - diluted (GAAP basis)
|
$
|
0.11
|
|
|
$
|
0.20
|
|
|
(45
|
%)
|
|
$
|
0.25
|
|
|
$
|
0.18
|
|
|
39
|
%
|
Impact of items affecting comparability on net income (loss)
|
0.09
|
|
|
(0.04
|
)
|
|
***
|
|
|
0.39
|
|
|
0.30
|
|
|
30
|
%
|
||||
Adjusted earnings per share - diluted (non-GAAP basis)
|
$
|
0.20
|
|
|
$
|
0.16
|
|
|
25
|
%
|
|
$
|
0.64
|
|
|
$
|
0.48
|
|
|
33
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted weighted average number of common shares outstanding (GAAP basis)
|
116,271
|
|
|
115,774
|
|
|
—
|
%
|
|
116,113
|
|
|
115,655
|
|
|
—
|
%
|
||||
Diluted weighted average number of common shares outstanding (non-GAAP basis)
|
116,271
|
|
|
115,774
|
|
|
—
|
%
|
|
116,113
|
|
|
115,655
|
|
|
—
|
%
|
In thousands
|
Three months ended
|
|
Nine months ended
|
||||||||
|
September 30, 2018
|
|
September 24, 2017
|
|
September 30, 2018
|
|
September 24, 2017
|
||||
Weighted average number of shares outstanding - basic (GAAP basis)
|
113,047
|
|
|
113,253
|
|
|
112,916
|
|
|
113,467
|
|
Effect of dilutive securities (GAAP basis)
|
|
|
|
|
|
|
|
||||
Restricted stock units
|
2,354
|
|
|
1,657
|
|
|
2,282
|
|
|
1,418
|
|
Performance share units
|
802
|
|
|
757
|
|
|
837
|
|
|
643
|
|
Stock options
|
68
|
|
|
107
|
|
|
78
|
|
|
127
|
|
Weighted average number of shares outstanding - diluted (GAAP and non-GAAP basis)
|
116,271
|
|
|
115,774
|
|
|
116,113
|
|
|
115,655
|
|
In thousands
|
Year-to-Date
|
||||||
|
2018
|
|
2017
|
||||
Net cash flow provided by operating activities (GAAP basis)
|
$
|
141,446
|
|
|
$
|
164,095
|
|
Capital expenditures
|
(43,863
|
)
|
|
(46,884
|
)
|
||
Free cash flow (non-GAAP basis)
|
$
|
97,583
|
|
|
$
|
117,211
|
|
•
|
An accelerated decline in general print readership and/or advertiser patterns as a result of competitive alternative media or other factors;
|
•
|
An inability to adapt to technological changes or grow our digital businesses;
|
•
|
Risks associated with the operation of an increasingly digital business, such as rapid technological changes, frequent new product introductions, declines in web traffic levels, technical failures and proliferation of ad blocking technologies;
|
•
|
Competitive pressures in the markets in which we operate;
|
•
|
Increases in newsprint costs over the levels anticipated or declines in newsprint supply;
|
•
|
Potential disruption or interruption of our IT systems due to accidents, extraordinary weather events, civil unrest, political events, terrorism or cyber security attacks;
|
•
|
Variability in the exchange rate relative to the U.S. dollar of currencies in foreign jurisdictions in which we operate;
|
•
|
Risks and uncertainties related to strategic acquisitions or investments, including distraction of management attention, incurrence of additional debt, integration challenges, and failure to realize expected benefits or synergies or to operate businesses effectively following acquisitions;
|
•
|
Risks and uncertainties associated with our ReachLocal segment, including its significant reliance on Google for media purchases, its international operations and its ability to develop and gain market acceptance for new products or services;
|
•
|
Our ability to protect our intellectual property or defend successfully against infringement claims;
|
•
|
Our ability to attract and retain employees;
|
•
|
Labor relations, including, but not limited to, labor disputes which may cause business interruptions, revenue declines or increased labor costs;
|
•
|
Risks associated with our underfunded pension plans;
|
•
|
Adverse outcomes in litigation or proceedings with governmental authorities or administrative agencies, or changes in the regulatory environment, any of which could encumber or impede our efforts to improve operating results or the value of assets;
|
•
|
Volatility in financial and credit markets which could affect the value of retirement plan assets and our ability to raise funds through debt or equity issuances and otherwise affect our ability to access the credit and capital markets at the times and in the amounts needed and on acceptable terms;
|
•
|
Risks to our liquidity related to the redemption, conversion, and similar features of our convertible notes; and
|
•
|
Other uncertainties relating to general economic, political, business, industry, regulatory and market conditions.
|
10-1
|
|
Gannett Co., Inc. 2015 Deferred Compensation Plan Rules for Post-2004 Deferrals, Amendment No. 3, effective as of July 31, 2018
|
|
|
|
|
|
|
|
10-2
|
|
Gannett Co., Inc. 2015 Deferred Compensation Plan Rules for Post-2004 Deferrals, Amendment No. 4, effective as of October 17, 2018
|
|
|
|
|
|
|
|
10-3
|
|
Gannett Co., Inc. 2015 Deferred Compensation Plan Rules for Pre-2005 Deferrals, Amendment No. 2, effective as of July 31, 2018
|
|
|
|
|
|
|
|
10-4
|
|
Gannett Co., Inc. 2015 Deferred Compensation Plan Rules for Pre-2005 Deferrals, Amendment No. 3, effective as of October 17, 2018
|
|
|
|
|
|
|
|
31-1
|
|
Rule 13a-14(a) Certification of CEO
|
|
|
|
|
|
|
|
31-2
|
|
Rule 13a-14(a) Certification of CFO
|
|
|
|
|
|
|
|
32-1
|
|
Section 1350 Certification of CEO
|
|
|
|
|
|
|
|
32-2
|
|
Section 1350 Certification of CFO
|
|
|
|
|
|
|
|
101
|
|
The following financial information from Gannett Co., Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, formatted in XBRL: (i) Unaudited Condensed Consolidated Balance Sheets at September 30, 2018 and December 31, 2017, (ii) Unaudited Condensed Consolidated Statements of Income (Loss) for the fiscal quarters and nine months ended September 30, 2018 and September 24, 2017, (iii) Unaudited Condensed Consolidated Statements of Comprehensive Income for the fiscal quarters and nine months ended September 30, 2018 and September 24, 2017, (iv) Unaudited Condensed Consolidated Cash Flow Statements for the nine months ended September 30, 2018 and September 24, 2017, and (v) Unaudited Notes to Condensed Consolidated Financial Statements
|
|
Attached.
|
Date: November 8, 2018
|
GANNETT CO., INC.
|
|
|
|
/s/ Alison K. Engel
|
|
Alison K. Engel
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
|
(on behalf of Registrant and as Principal Financial Officer)
|
1.
|
Effective as of the date of this amendment, Section 2.6(b) is amended by deleting the last sentence of such Section.
|
2.
|
As a clarifying amendment, Section 2.9(f)(ii) is amended by replacing the reference to “the prescribed mandatory retirement age from the Board (i.e., age 70 for outside Directors and age 65 for Directors who were former Company executives)” with “age 70 for outside Directors and age 65 for Directors who were former Company executives”.
|
3.
|
Effective as of the date of this amendment, Section 3.5(a) is amended by adding the following provision to the end thereof:
|
4.
|
Effective as of the date of this amendment, Section 3.8 is amended replacing such Section in its entirety with the following:
|
5.
|
Effective for Plan years commencing on January 1, 2019 and thereafter, Section 5.2 is amended by deleting the reference to “and/or Employer Contributions” in such Section.
|
6.
|
Effective for Plan years commencing on January 1, 2019 and thereafter, Section 5.3 is amended by deleting the definition of “Employer Contribution” in such Section.
|
7.
|
Effective for Plan years commencing on January 1, 2019 and thereafter, Section 5.4 is amended by deleting the first paragraph of such Section.
|
8.
|
Effective for Plan years commencing on January 1, 2019 and thereafter, the first sentence of Section 5.5 is amended by replacing the reference to “on the first business day of the second month” with “on or before the last day of the third month”.
|
9.
|
Effective for Plan years commencing on January 1, 2019 and thereafter, Section 5.5 is amended by deleting the reference to “; provided that all Company contributions credited under this Article 5 shall initially deemed to be invested in the Gannett stock fund”.
|
1.
|
Effective as of the date of this amendment, Section 2.6(b) is amended by deleting the last sentence of such Section.
|
2.
|
Section 3.5(a) is amended by adding the following provision to the end thereof:
|
3.
|
Section 3.8 is amended replacing such Section in its entirety with the following:
|
I,
|
Robert J. Dickey, certify that:
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Gannett Co., Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 8, 2018
|
|
/s/ Robert J. Dickey
|
Robert J. Dickey
|
President and Chief Executive Officer
|
(principal executive officer)
|
I,
|
Alison K. Engel, certify that:
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Gannett Co., Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 8, 2018
|
|
/s/ Alison K. Engel
|
Alison K. Engel
|
Senior Vice President, Chief Financial Officer and Treasurer
|
(principal financial officer)
|
(1)
|
the Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Gannett.
|
/s/ Robert J. Dickey
|
Robert J. Dickey
|
President and Chief Executive Officer
|
(principal executive officer)
|
November 8, 2018
|
(1)
|
the Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Gannett.
|
/s/ Alison K. Engel
|
Alison K. Engel
|
Senior Vice President, Chief Financial Officer and Treasurer
|
(principal financial officer)
|
November 8, 2018
|