New Media Investment Group Inc. (NYSE:NEWM) Q2 2018 Earnings Conference Call - Final Transcript
Aug 02, 2018 • 10:00 am ET
Good morning. My name is Imani and I will be your conference operator today. At this time, I would like to welcome everyone to the New Media Second Quarter 2018 Earnings Call. At this time, all participants are in a listen-only mode. Following the speakers' remarks, there will be a question-and-answer session. (Operator Instructions)
Thank you. I would now like to turn today's call over to Ms. Ashley Higgins. You may begin.
Great, thank you, Imani, and good morning, everyone. I'd like to welcome you to New Media's second quarter 2018 earnings call. Joining us today are Mike Reed, New Media's CEO and President; Greg Freiberg, our CFO; Kirk Davis and Peter Newton.
I would like to call your attention to the earnings supplement that was posted to New Media's website this morning. If you have not already done so, I would suggest that you download it now.
(Forward-Looking Cautionary Statements)
With that, I'd like to turn the call over to Mike.
Thanks Ashley and good morning everyone. Thanks for joining our Q2 earnings call today. And as Ashley mentioned, throughout the call, I'll be referencing the supplement that we posted on our website this morning.
Overall, I think we had a very solid quarter. Financial results were in line with our expectations, led by solid revenue results, particularly our new business initiatives, which saw significant growth this quarter. We also had a very active quarter on the acquisition front, moving into some great markets. We made some key personnel changes that strengthened the senior management team and our capital structure remains very sound.
One headwind for us in the quarter, however, was the impact we saw from the rapid rise in newsprint costs. That was a bit of a setback. And this was driven by the new tariffs and we'll touch on this a bit later on the call. So, I think we have a very good report to share with you this morning and to begin, I'm going to jump to slide two of that presentation.
In the second quarter, we grew revenue 20.4% over the prior year to $388.8 million. This was driven by our acquisitions and the continued investment we have made in our new business lines, primarily UpCurve and GateHouse Live. Our top line organic same-store revenue trend of negative 4.9%, however, was slightly behind our first quarter trend, which was down 4.5%. This very slight decline was caused by a slip in traditional print advertising which declined 13.3% in Q2 as opposed to 12.3% in Q1. Importantly, however, our Q2 trend was still materially improved from our 2017 performance, increasing 70 basis points over Q4 2017 and 150 basis points over Q3 2017. So, we still feel very good about the direction our revenue trends are heading in 2018.
Digital revenue in the quarter totaled $45.6 million and grew 35.5% to the prior year, excluding the impact of ASC Topic 606. As a reminder, this accounting rule change went into effect at the beginning of