Gannett (GCI, Financial) is an international media and marketing solutions company and one of the largest, most geographically diverse local content providers in the U.S. Through a vast network of broadcast, digital, mobile and print products, the company informs and engages more than 115 million people every month. The company is organized along three business segments: Broadcasting, Publishing and Digital. In 2014, management announced plans to create two publicly traded companies: one primarily focused on Gannett's Broadcasting and Digital businesses, and the other on its Publishing business. The expected timetable for achieving that separation is mid-2015.
Last month, Gannett reported strong fourth quarter and full year 2014 results reflecting the successful execution of its plans to move to higher growth, higher margin business. For the fourth quarter, the company's revenue increased 24% driven by strong performance in both broadcasting and digital segments. Organic revenue grew 4% while acquisition of Cars.com helped drive inorganic growth. The company's adjusted EBITDA for the fourth quarter also increased 57% over FY2013's fourth quarter. Adjusted EBITDA margins for the fourth quarter reached 30%, an improvement of six percentage points year over year. The company kept expenses in check and continued finding ways to create efficiencies. Even with the company's acquisition of Cars.com, operating expense growth was well below revenue growth, up only 18% on reported basis. On a pro-forma basis, non-GAAP operating expenses were actually about 3% lower than the fourth quarter in 2013.
Segmentwise, Digital revenues grew 77% year over year to $345 million primarily due to acquisition of Cars.com. On pro-forma basis Digital segment revenues were up about 10% due to strong organic growth at Cars.com as well as CareerBuilder, while operating expenses declined slightly. In addition to Cars.com and CareerBuilder, the company's local digital marketing services business GeoDigital also posted strong results. GeoDigital's revenues have more than tripled over the last two years. The success of Gannett's GeoDigital offering goes beyond the numbers, and in 2014 Yahoo named GeoDigital a strategic local ambassador based on its success in helping entrepreneurs grow their small and medium-sized businesses.
On the publishing front, the company continues to make key enhancements in its offerings that are helping it forge deeper connections with its audiences, advertisers and local communities on a broader scale. The company's USA TODAY local content additions were very successful beating management's projection on both revenues and profitability. Going forward, the company is focused on leveraging its team of journalists in a way that creates value for its audience, advertising partners and ultimately the entire company.
For the first quarter of 2015, the company is expecting low to mid-single-digits revenue growth despite challenging year-over-year comparisons. The company expects 2015 to be a very strong year for Cars.com which it believes will be accretive to cash flow by approximately $0.43 per share. The company has recently reinstated its share repurchase program which it expects to fund entirely from free cash flow from operations.
In addition to strong business fundamentals, the company is also on track to spin-off its broadcast/digital assets from print business. This spinoff will create additional value for the shareholders. Gannett is trading at a forward PE of 11.90x. I believe the company is a good buy at current levels given its strong fundamentals, low valuations and upcoming spinoff of Digital business.
