New Media Investment Group Inc. (NYSE:NEWM) Q1 2018 Earnings Conference Call Transcript

May 03, 2018 • 10:00 am ET

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New Media Investment Group Inc. (NYSE:NEWM) Q1 2018 Earnings Conference Call Transcript

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Q & A
Operator
Operator

(Operator Instructions) The first question will come from Kyle Evans with Stephens.

Analyst
Kyle Evans

Hi, good morning. Thanks for taking my questions.

Executive
Michael E. Reed

Hey, Kyle.

Analyst
Kyle Evans

You guys have made pretty good progress on the consolidation front and as one of your analysts, I have to make a lot of assumptions kind of on that bucket of M&A as we model quarters. Can you talk about some of the fundamental differences between Palm Beach or Austin size deal and the smaller markets like Eugene and Akron and maybe there are material differences there and the seller multiple, buyer multiple, top-line margins. What print ads look like in circulation? And I've got some follow-ups.

Executive
Michael E. Reed

Kyle, there really aren't any material differences. I mean all the deals we've done this year fall within our guidelines of 3.5 times to 4.5 times the sellers EBITDA. Synergies remain pretty consistent with past performance as well. These are essentially family owned businesses whether it's Eugene or the Cox family. So there's there really isn't. I mean the past performance of our deals is a good indicator of these deals and how they will perform.

Analyst
Kyle Evans

Okay. Circulation was off a little bit more versus hit the brackets that you guys laid out a plus or minus 1, your release is referring to the potential for growth in circulation this year and next. You mentioned some promotion in marketing that you're doing. Can you give us a little bit more tactical detail on that, how you think that'll phase across the quarters of the year and give us some specifics on unit pricing and unit volume in that segment?

Executive
Michael E. Reed

Look, it's hard to -- I mean Kyle, it's hard to give specifics because -- we're not going to guide specifically other than the range we have on the spreadsheet here on page 5, which is kind of down one to up one that's our guidance for the category for the year. It's hard to give specifics because we have almost 150 daily newspapers and a couple of hundred paid weekly newspapers. So the revenue trend is the best specific metric you can use to look at it all at down 1.6%.

It's a little bit worse than the fourth quarter. We're not worried about the year which I stated on my remarks today because of all the initiatives we have in place. I will tell you the one thing we're doing that that is a little bit different is, we're not as aggressive on pricing right now as maybe we've been in the past and we've always been less aggressive than most all of our peers across the country in terms of pricing and circulation. And that's because we are actually more focused on volume than we are on pricing.

And so I would say right now in 2018, we're even less aggressive on pricing because we're more focused on protecting current volumes and figuring out ways to grow new volumes. And that's a major focus for us and it hurt the