The Basch Report: New businesses boost The Florida Times-Union owner

New Media Investment Group sees revenue jump 13.7 percent.

  • By
  • | 4:10 a.m. March 7, 2019
  • Columnists
  • Basch Report
  • Share

New Media Investment Group Inc., owner of The Florida Times-Union and 145 other daily newspapers, is growing revenue, but not because of its newspaper business.

New Media, which operates its newspapers through its GateHouse division, reported 2018 revenue rose by 13.7 percent to $1.526 billion.

“This was driven by a continued diversification of our revenue away from traditional print advertising,” CEO Michael Reed said last week in the company’s quarterly conference call with analysts.

“Print advertising made up only 41 percent of total revenue in 2018 and that compares to 48 percent just two years ago in 2016,” he said.

Reed said New Media’s revenue growth was driven by its GateHouse Live and Promotions division, an events and promotions business, and UpCurve, which provides technology solutions for small and medium-size businesses.

The company has been marketing those businesses in communities it also serves with newspapers. Reed said those businesses grew revenue by more than 30 percent last year.

“They have now grown into a meaningful revenue stream for us, and we believe we will continue to see similar growth going forward from them,” he said.

“Importantly, all of these new businesses are also cash flow positive with margin-expansion opportunity ahead.”

Meanwhile, print advertising dropped 13.7 percent on an organic same-store basis, meaning newspapers that were owned for more than one year.

Print advertising has been impacted by the struggles of some major retailers, Reed said.

“Retail sales continue to migrate away from brick-and-mortar stores to online retailers and that forces them to contract their advertising spend, and we saw that in the fourth quarter,” he said. 

Also, “we saw several high-profile bankruptcies among retailers during the quarter, which dampened preprint revenues,” he said.

Fourth-quarter print advertising revenue decreased 15 percent on a same-store basis.

Declining circulation also is impacting the print business. Same-store circulation revenue fell by 2.2 percent last year.

In its annual report filed last week, New Media said the Times-Union’s Sunday circulation fell 21 percent to 46,988, down from circulation of 59,275 in the 2017 annual report.

Another New Media newspaper, the St. Augustine Record, had Sunday circulation of 9,908, according to the 2018 annual report. The 2017 report did not give a figure for the Record.

The annual reports also show a decline in traffic on the newspapers’ web sites.

The 2017 annual report said had 10.4 million monthly page views and had 1.5 million. The 2018 report showed 5.8 million page views per month for the Times-Union site, a 44 percent drop, and 1 million for the Record,  a 33 percent decline.

New Media bought the Times-Union, the Record and nine other daily newspapers and other properties from Morris Publishing Group in 2017.

Publix results rise

Publix Super Markets Inc. on Friday reported that fourth-quarter adjusted earnings rose 21.7 percent to $660.3 million, or 92 cents a share.

Sales rose 3.8 percent to $9.3 billion and comparable-store sales rose 1.1 percent.

The Lakeland-based supermarket chain also said its stock price increased from $42.70 on Nov. 1 to $42.85 on March 1.

Publix’s stock is not publicly traded and is made available for sale only to employees. Its stock price is determined five time a year by the board of directors, based on an independent valuation.

Tegna helped by political ads

Another media company that operates major Northeast Florida properties, Tegna Inc., reported a big increase in fourth-quarter earnings last week.

The operator of 49 television stations, including WTLV TV-12 and WJXX TV-25 in Jacksonville, reported adjusted earnings of 74 cents a share, more than double the previous year’s earnings of 32 cents.

Like other companies operating TV stations, Tegna was helped by the November elections. Total revenue in the quarter jumped 31 percent to $642 million with political revenue reaching $140 million, a 51 percent increase from the 2014 mid-term election season.

Tegna’s stock rose as much as $2.41 to a 52-week high of $15.58 Friday after the report.

Tegna’s annual report filed last week also indicated concern about safety at its television stations.

“Several initiatives have been undertaken this year to enhance the physical security at local Tegna stations,” it said.

One of those initiatives was “improved access control and fencing at WTLV Jacksonville,” the report said.

WTLV and WJXX operate out of the same building near Jacksonville’s Downtown sports complex.

Interline Brands related charge hits Home Depot

The Home Depot Inc.’s fourth-quarter earnings were reduced by a one-time charge associated with its Jacksonville-based subsidiary, Interline Brands.

The Atlanta-based home improvement retailer said it incurred an after-tax charge of $184 million, or 16 cents a share, “due to an impairment loss related to certain trade names at Interline Brands.”

The company did not announce details on the trade names. However, Home Depot spokesman Stephen Holmes said by email the write-off is an accounting issue related to integration efforts, as it markets all of its products for maintenance professionals under the “Home Depot Pro” banner.

Interline markets and distributes maintenance, repair and operations products nationwide. It marketed those products under a number of brand names after several acquisitions when it was an independent company.

Home Depot acquired Interline for $1.625 billion in 2015.

Even with the Interline-related charge, Home Depot’s earnings for the fourth quarter ended Feb. 3 rose 32 percent to $2.3 billion, or $2.09 a share.

Total sales rose 10.9 percent to $26.49 billion and comparable-store sales (sales at stores open for more than one year) rose 3.2 percent.

However, sales were below the consensus forecast of $26.56 billion from analysts surveyed by Zacks Investment Research. Home Depot blamed bad winter weather, which tends to delay home improvement projects, for the lower-than-expected sales.

The sales miss and a gloomy outlook for the home buying market, which impacts Home Depot’s business, sent the company’s stock down as much as $9.53 to $182.86 last week. names a new CFO Group Inc. continues to shake up top management after a private equity buyout last year.

The Jacksonville-based provider of website development services for businesses Monday named Christina Clohecy as its new chief financial officer.

Clohecy had most recently been CFO of Stratus Technologies Inc., which was acquired by an affiliate of Siris Capital Group in 2014. was acquired by an affiliate of private equity firm Siris in October.

Clohecy succeeds Jennifer Lada, who joined in 2017 and had only been CFO since July.

Former Chief Executive Officer David Brown retired after the buyout and was succeeded by Sharon Rowlands, who joined the company as CEO in January.

Hurricane puts St. Joe in the red

The St. Joe Co. last week reported a fourth-quarter net loss of $66,000.

The real estate development company, which moved its headquarters from Jacksonville to WaterSound in the Florida Panhandle in 2010, said its results included $1.4 million in net expenses related to Hurricane Michael.

That major storm impacted the Panhandle region in October.

“Our 2019 strategic plan includes making investments that we believe will contribute towards our future growth, particularly in real estate projects that provide recurring revenue,” CEO Jorge Gonzalez said in a news release.

“The potential 2019 projects are in different stages of approval or design. Our team is working with planners, architects and engineers as well as, in some cases, potential joint venture partners to quickly initiate development or construction on these needed projects,” he said.