New acquisitions drove stronger revenue in the first quarter for the Las Vegas Review-Journal’s new parent company.
New Media Investment Group of New York on Thursday reported revenue of $250.6 million in the period that ended March 29. That was up 76.4 percent from the same period in 2014.
Much of the gain came from the company’s purchase of two regional owners of daily newspapers. The company closed on its $102.5 million acquisition of former Review-Journal parent Stephens Media in March, as well as the $280 million buy of Halifax Media in January. The two acquisitions added 33 daily newspapers to New Media’s portfolio, taking it to 126 dailies.
Include niche and community publications, and New Media now has more than 550 publications in more than 460 markets in 32 states.
Among publications it already owned, New Media’s earnings were essentially flat, declining 0.1 percent year over year.
The company posted a quarterly net loss of $6.1 million, or 14 cents per share, a 9.3 percent improvement over the prior year. Executives traced the loss to $3.4 million in acquisition-related costs, $2.1 million in expenses related to debt fundraising and $1.9 million of severance.
In a morning conference call to discuss earnings, New Media executives said the acquisitions enabled them to boost the first-quarter dividend by 10 percent, to 33 cents a share. That would be $1.32 per share annualized.
Subscription revenue was mostly flat though classified revenue was up thanks to higher spending on legal notices and obituaries. Digital revenue was up 7.5 percent on a same-store basis year over year, to $21.3 million. Much of that gain was driven by the company’s Propel, a digital marketing service for small businesses.
Company officials also made special note in their conference call of the company’s real estate holdings, which include nearly 160 publication offices and production facilities nationwide worth an estimated $175 million to $200 million. An earnings supplement released Thursday morning listed the Review-Journal’s plant at 1111 W. Bonanza Road as New Media’s highest-valued property.
Clark County Assessor records show New Media’s newspaper-operating arm, GateHouse Media, paid $16 million for the 11.8-acre Review-Journal property. The building was built in 1970, records say.
New Media’s top 25 properties make up 80 percent of the real estate portfolio’s value.
Chief Financial Officer Greg Freiberg said in the earnings call that the company is looking at options to “create value or better monetize” real estate holdings. One option might be sale-leaseback, in which the company sells its buildings and leases them back from the new owner.
New Media also said it would consider an “opco/propco” structure, a type of real estate investment trust (REIT) formation in which the company would divide itself into two businesses — one that owns the real estate and one that operates the publications.
Shares of New Media gained $1.22, or 5.57 percent, to close at $23.13. Nearly 600,000 shares traded hands, roughly twice the normal volume.