Gannett Executives Speak at Media Week Conferences
NEW YORK, NY – Gannett executives at the Credit Suisse First Boston Media Conference here today said the company will generate record revenues in 2005 despite a challenging advertising environment.
The executives also will speak at the UBS Media Week Conference later today.
Craig Dubow, president and CEO, said: “I am encouraged by the opportunity I see in our business. At Gannett, we no longer operate just in the newspaper or television business. We are a vital part of the ever-expanding news and information business and it presents a substantial opportunity for us.”
Sue Clark-Johnson, president of the Newspaper Division, noted the daily newspaper remains the centerpiece of our family of print products with our online and non-daily products filling gaps in our audience reach. “The aggregated reach of audiences attracted to all of our products is clearly having an increasing impact on our share and our ability to produce results for advertisers,” she said.
Online revenue growth at Gannett’s community newspapers was significant during the year and solid growth is expected in 2006 as well. The company’s non-dailies grew both in terms of revenue and number of products. Gannett now has more than 1,000 non-daily publications.
Roger Ogden, president and CEO of Gannett Broadcasting, said: “This year has been one of the most challenging for us as we faced over $120 million of political and Olympic spending. However, both our online revenue and audiences grew during the year.” Customers are coming to Gannett’s local sites and watching more online video content while visiting more pages, he said.
Looking to 2006, he noted that the company expects significant political revenue as most of its major market stations will see heavily contested senatorial and gubernatorial races. They also anticipate good demand for the Winter Olympics on their NBC stations.
Craig Moon, president and publisher of USA TODAY, said: “USA TODAY remains one of the most widely read and emulated national publications.”
Despite an increase in its single copy price in 2004, circulation volume has held up during the past two Publisher’s Statements. In fact, audience composition has improved as we now deliver to more affluent readers, Moon said.
Also, he said: “USA TODAY.com had a solid year and the company expects to grow users, page views and revenues faster than the online marketplace in 2006.”
Paul Davidson, chief executive of Newsquest, noted the slowdown in the UK economy and its impact on ad demand at Newsquest this year, particularly in employment and auto. “We have, however, continued to manage our cost base and we expect to achieve modest ad revenue growth in the latter part of next year,” he said.
Gracia Martore, senior vice president and chief financial officer, said the company expects fourth quarter earnings to fall within the range of most analysts’ estimates of $1.40 to $1.44 per diluted share. Martore also reviewed the company’s operating assumptions for 2006 saying: “The company expects modest growth in newspaper ad demand based on current conditions.” She also reviewed other operating assumptions for 2006 for the company.
Speeches by the Gannett executives will be available by Webcast for 30 days at www.gannett.com.
Attached to this release and posted on the company’s Web site under Investor Relations are Gannett’s operating assumptions for 2006.
Gannett Co., Inc. is a leading international news and information company that publishes 99 daily newspapers in the USA, including USA TODAY, the nation’s largest-selling daily newspaper. The company also owns more than 1,000 non-daily publications in the USA and USA WEEKEND, a weekly newspaper magazine. Gannett subsidiary Newsquest is the United Kingdom’s second largest regional newspaper company. Newsquest publishes more than 300 titles, including 17 daily newspapers, and a network of prize-winning Web sites. Gannett also operates 21 television stations in the United States and is an Internet leader with sites sponsored by its TV stations and newspapers including USATODAY.com, one of the most popular news sites on the Web.
Certain statements in this press release, including the operating assumptions for 2006, may be deemed “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. The forward-looking statements contained in this press release, including the operating assumptions, are subject to a number of risks and uncertainties that could adversely affect the company’s ability to obtain these results include, without limitation, the following factors: (a) increased consolidation among major retailers or other events which may adversely affect business operations of major customers and depress the level of local and national advertising; (b) an economic downturn in some or all of the company’s principal newspaper or television markets leading to decreased circulation or local, national or classified advertising; (c) a decline in general newspaper readership patterns as a result of competitive alternative media or other factors; (d) an increase in newsprint or syndication programming costs over the levels anticipated; (e) labor disputes which may cause revenue declines or increased labor costs; (f) acquisitions of new businesses or dispositions of existing businesses; (g) a decline in viewership of major networks and local news programming; (h) rapid technological changes and frequent new product introductions prevalent in electronic publishing; (i) an increase in interest rates; (j) a weakening in the British-pound-to-U.S. dollar exchange rate; and (k) general economic, political and business conditions. Other risk factors that could cause actual results to differ materially from these forward-looking statements are disclosed from time to time in the Company’s current and periodic SEC reports. Any forward-looking statements in this press release should be evaluated in light of these important risk factors.
Gannett is not responsible for updating the information contained in the press release beyond the published date, or for changes made to the press release by wire services, Internet service providers or other media.
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GANNETT CO., INC. OPERATING ASSUMPTIONS - 2006 (Based on 52 weeks in 2005 and 2006)NEWSPAPERS (Excluding USA TODAY, USA Weekend and Newsquest) A. Advertising Ad revenues will be up low to mid single digits. B. Circulation Circulation revenues are expected to be up slightly. C. Newsprint 1. Consumption is expected to be flat to down a few percent. 2. Prices - They are budgeted to be up in the low teens. D. Other Expenses 1. Total head count will be flat with the addition of employees in revenue producing areas. 2. Pension expense will be up from 2005. 3. Health care costs will be up in the mid single digits. 4. All other costs will increase modestly. NEWSQUEST (in Sterling) A. Advertising revenues are expected to be up low single digits. B. Circulation revenue is expected to be up in the low to mid single digits. USA TODAY A. Advertising 1. Advertising pages are expected to be flat to down slightly. 2. Rates will be up in the mid single digit range. B. Circulation 1. Volume is expected to be flat. 2. There are no current plans to increase circulation prices in 2006. BROADCAST (Ex. Captivate) A. Revenues expected to be up in the low to mid teens due to Olympic and political ad spending in 2006. B. Costs are expected to be up in the mid single digits. CONSOLIDATED GANNETT (Including Acquisitions) A. Capital Expenditures 1. 2006 Plan $240,000,000 2. 2005 Estimate $270,000,000 - $275,000,000 B. Depreciation 1. 2006 Plan $246,000,000 2. 2005 Estimate $241,000,000 C. Amortization of Intangibles (Goodwill and Other) 1. 2006 Plan $30,300,000 2. 2005 Estimate $23,200,000 D. Interest Expense We expect our debt at the beginning of the year to be about $5.6 billion. For budget purposes, we have assumed that all of our free cash flow will be used to pay down debt. E. Tax Rate The tax rate for 2006 will be approximately 33.4%, depending on the mix of earnings. F. Stock Based Compensation Assuming adoption at the beginning of 2006, stock option expensing would be in the $45 million to $50 million pre-tax range.
Certain factors affecting forward-looking statements