New Media Investment Group (NEWM) Misses Q3 EPS by 22c

New Media Investment Group (NYSE: NEWM) reported Q3 EPS of ($0.10), $0.22 worse than the analyst estimate of $0.12. Revenue for the quarter came in at $380.42 million.

• New Media declares a cash dividend of $0.38 per common share for the third quarter of 2018, an increase of $0.01 per common share from the prior quarter
• Total revenues of $380.4 million, an increase of 19.9% to prior year on a reported basis, and down 4.8% on an organic same store basis excluding, for comparability, the impact of ASC Topic 606º
• Digital revenue of $46.6 million, an increase of 31.3% to prior year on a reported basis
• Operating income of $2.6 million
• Net loss attributable to New Media of $6.1 million
• As Adjusted EBITDA of $44.1 million*
• Free Cash Flow of $31.0 million*
• Liquidity, consisting of cash on the balance sheet and undrawn revolver, of $96.2 million at the close of Q3 2018

“We had solid performance in the third quarter despite the impact to our southeast properties from Hurricane Florence,” said Michael E. Reed, New Media President and Chief Executive Officer. “Despite the hurricane impact in the quarter, we delivered strong As Adjusted EBITDA and Free Cash Flow growth of 18.9% and 13.6%, respectively. Revenue performed well also, with a small, but important, improvement in same store trend versus the second quarter. We continued to see exceptional growth within our newer business initiatives. The strong performance against our stated strategy led our board to declare an increase to the dividend, bringing our third quarter dividend to $0.38 per share, or $1.52 when annualized. This marks the fifth consecutive year that the dividend has been increased since our inception as a public company.”

“We were particularly pleased with the performance in this quarter from our new business initiatives. UpCurve revenue grew 50.6% to prior year, excluding the impact of ASC 606. Both ThriveHive and UpCurve Cloud saw significant growth of 45.1% and 74.3%, respectively, excluding the impact of ASC 606. GateHouse Live revenue grew 55.0% and Promotions grew 83.3% to the prior year, largely driven by our “Best of the Best” event concept, which exceeded our expectations in a number of markets. Our acquisition of a majority interest in Rugged Events during the quarter has uniquely positioned GateHouse Live as a national media events company that also owns and operates a network of endurance events across the country. We now host over 460 events across 300 markets with 650,000 annual attendees.”

“Subsequent to the quarter, we also closed the acquisition of The Oklahoman, which is based in the capital Oklahoma City and has over 102,000 in daily circulation. We have closed over $156 million in acquisitions during 2018 and over $275 million in acquisitions over the last twelve months. We continue to see opportunities for further investment and remain well positioned to take advantage of them, having ended the quarter with $96.2 million in liquidity.”

“We are optimistic about the fourth quarter and closing the year strong. As most of you know, the fourth quarter is typically our strongest quarter of the year and we expect to see continued great contributions from UpCurve and GateHouse Live, combined with continued tight cost controls. We believe we remain well positioned to create value for our shareholders.”

For earnings history and earnings-related data on New Media Investment Group (NEWM) click here.

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