New Media Investment Group pursued Florida Times-Union owner for years
Before agreeing in August to buy The Florida Times-Union and other newspapers owned by Morris Publishing Group, New Media Investment Group Inc. had been pursuing the company for several years, according to its CEO.
As New Media reported third-quarter earnings last week, Chief Executive Michael Reed said in a conference call with analysts that the company has been seeking acquisitions of family-owned newspaper companies like Morris.
“The Morris acquisition is one that we cultivated over several years, building trust with the family that we would be the appropriate steward of their portfolio into the future,” he said.
New Media on Oct. 2 closed the $120 million acquisition of the Morris properties, comprising 79 publications including the Times-Union, The St. Augustine Record, and nine other daily newspapers.
Reed said the Morris newspapers “are all very strong locally with well-known editors.”
Since the acquisition closed after the third quarter ended, New Media didn’t include results from Morris in its report. But its financial report shows the current state of the newspaper industry.
New Media said in a news release that “traditional print advertising” at its publications dropped 14 percent from last year on a same-store basis (meaning properties owned for more than one year), “reflecting the continued challenges we are experiencing in print advertising stemming primarily from the struggle of the brick and mortar retail sector.” But it didn’t give the revenue figure for print ads.
Meanwhile, digital revenue rose 11.1 percent to $35.6 million, it said.
Total revenue for the quarter fell 6.4 percent to $317.2 million on a same-store basis.
Reed gave some hints of his plans for the Morris newspapers. He said there are “significant synergies” that can be achieved at those properties and at other recent acquisitions, an indication of cost cuts.
Reed also said the company’s new newspaper markets could be prime locations for New Media’s UpCurve division, which provides technology solutions for small and medium-sized businesses.
Landstar reports strong quarter
As expected, Jacksonville-based trucking company Landstar System Inc. did get a financial benefit from relief services following the major hurricanes in August and September.
But even without that additional revenue, Landstar reported a strong third quarter.
Landstar’s earnings of $1.01 per share were 15 cents higher than the third quarter of 2016, with revenue rising almost 20 percent to $943.4 million.
The company received $23 million in revenue related to local, state and federal relief efforts in areas affected by hurricanes Harvey, Irma and Maria. That revenue increased earnings by 5 cents per share.
Landstar’s earnings also were lifted by 12 cents a share for a one-time tax credit.
However, the earnings gains were offset by increased insurance and bonus costs that reduced earnings by 11 cents.
Even without the net increase of 6 cents from those three items, Landstar still beat its earnings forecast of 88 to 93 cents for the quarter.
“Overall, the 2017 third quarter operating environment was outstanding for Landstar,” CEO James Gattoni said in Landstar’s conference call.
Landstar is not expecting any more gains from storm relief services, but it still is forecasting a strong fourth quarter.
The company projects revenue of $975 million to $1.025 billion and earnings of 98 cents to $1.03 per share.
Next Fidelity spinoff is Nov. 17
After completing the spinoff of its majority stake in mortgage technology firm Black Knight Inc. last month, Jacksonville-based Fidelity National Financial Inc. set a Nov. 17 date to complete the spinoff of its investment subsidiary into a new public company called Cannae Holdings Inc.
The subsidiary’s main holdings had been investments in several restaurant chains and human resources technology company Ceridian HCM Inc.
During a quarterly conference call last week on the Cannae businesses, Fidelity Chairman Bill Foley said the company expects to expand its reach once it becomes independent.
“Looking forward, we see health care, technology and business services as an exciting growth sector and an area of focus for investment,” he said.
Fidelity already completed an acquisition for Cannae this month of T-System Holdings, a provider of health care documentation and coding solutions, for $200 million.
Black Knight remained headquartered in Jacksonville at the same Riverside Avenue office complex as Fidelity after the spinoff. But Cannae will be headquartered in Las Vegas, where Foley relocated after getting his National Hockey League expansion franchise there.
During Fidelity’s quarterly conference call last week, one analyst suggested the company hold its next analyst conference in Las Vegas.
“That’s actually a great idea and we’ll work it around a game,” Foley said.
Fidelity reported adjusted third-quarter earnings of 71 cents a share, 2 cents higher than last year and in line with analysts’ forecasts, which ranged from 65 cents to 73 cents, according to Yahoo Finance.
Revenue for the title insurance company rose 2 percent to $1.99 billion.
Web.com reaches an agreement with shareholder
Web.com Group Inc.’s largest shareholder reduced his stake in the company in exchange for his assurance to support the Jacksonville-based company’s management, according to Securities and Exchange Commission filings.
Ahmet Okumus began buying shares in 2014 and eventually became the largest shareholder through his Okumus Fund Management, owning 18.9 percent of the stock, when Web.com filed its most recent proxy statement.
However, the recent filings show Web.com bought back 3 million of Okumus’ shares on Aug. 31, reducing his stake to 11.7 percent.
As part of the buyback agreement, Okumus agreed to “not engage in a proxy contest with the company” and not “seek to control or influence the management, board of directors or policies of the issuer.”
Okumus has never publicly stated intentions to lobby the board or management for anything, but in February 2015, Web.com agreed to add two directors supported by Okumus to its board. One of those two directors, John Giuliani, remains on the board.
Irma impacts ACFC earnings
Atlantic Coast Financial Corp. last week reported third-quarter earnings of 7 cents per share, 3 cents lower than the third quarter of 2016.
“Earnings for the period, while remaining strong, were affected somewhat by unforeseen timing issues surrounding loan sale activity as a result of Hurricane Irma,” CEO John Stephens said in a news release.
“We anticipate getting back on track with these transactions over the next few quarters,” he said.
The Jacksonville-based parent company of Atlantic Coast Bank also said earnings were impacted by lower gains on the sale of investment securities.
Non-interest income in the quarter (including gains from sales of loans and securities) fell 36 percent to $1.2 million.
Embraer building more planes in Jacksonville
Embraer Defense & Security last week said it received orders for six additional A-29 Super Tucano aircraft, which it builds at a facility at Jacksonville International Airport.
Brazil-based Embraer, which is building the aircraft in partnership with Sierra Nevada Corp., said the order brings the total number of A-29s in its program to 26.
The company opened its Jacksonville facility in 2013 to work on the program and began production in 2014.
Embraer says the A-29 is a turboprop aircraft capable of carrying out a range of light air support missions.
Rayonier AM loses sales in 4th quarter
Rayonier Advanced Materials Inc. said because of an “operational upset” at a major customer, sales for its cellulose specialties products will be lower than expected in the fourth quarter.
The Jacksonville-based company said based on information from the customer, the issue will reduce sales by $15 million to $30 million, or about 3 percent of expected revenue for all of 2017.
Rayonier AM said it expects the impact to be limited to the fourth quarter.
The company is scheduled to report third-quarter earnings this week and plans to update investors on its financial projections then.