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’s results for 2004 were among the strongest in the industry despite a challenging advertising environment. A similar environment is expected in 2005, they said.
The executives also will speak at the UBS Media Week Conference later today here.
Douglas H. McCorkindale, chairman, president and CEO, said: “For Gannett, 2004 will go down as another year of record revenues, earnings and operating cash flow. We are pleased with our results, particularly because we achieved them in an uneven and somewhat tepid economic recovery.”
Looking ahead to 2005, McCorkindale said: “It appears the economic environment will not change dramatically. However, we believe that we will continue to deliver superior top line growth, maintain our financial discipline and deliver solid results.”
Gary Watson, president of the Newspaper Division, noted the community newspapers “solid record.” He said: “Our domestic operations continued to enhance Gannett’s overall revenue results for the year. All major advertising categories, including all products, will show gains in 2004.”
Online operations at Gannett’s community newspapers continue to perform well, an indication that our local brands are trusted news sources, Watson said. He noted, in particular, the value and importance of Gannett’s online presence in communities affected by 2004’s hurricanes.
There has been consistent growth in the company’s non-daily publications, Watson said. Gannett now has more than 600 non-daily publications that are enhancing our reach in communities across the country.
Craig Dubow, president and CEO of Gannett Broadcasting, said: “Gannett television had a record performance with political and issue spending and was very successful with Olympics in August as well. Our stations were able to achieve these results due to the strength in local news.”
The just-released November 2004 ratings book on household rating performance covering Gannett’s 13 metered markets shows Gannett is No. 1 or No. 2 in late news in all 13 markets and No. 1 or No. 2 in morning news in 10 of the 13 markets.
He noted the progress of Captivate, the company Gannett acquired in 2004 that reaches 1.6 million high-end users through screens placed in office building elevators around the nation and in Canada.
Craig Moon, president and publisher of USA TODAY, said that despite changing consumer demographics and lifestyles, and expanding media options, “the USA TODAY brand continues to grow.”
Average daily circulation hit an all-time high of 2,311,954, according to our September Publishers Statement, which was prior to the impact of the 25-cent price increase, Moon said. Results since the increase have been “better than anticipated,” he said.
Also, he said: “USA TODAY.com had a solid year and is one of the fastest growing news and information sites according to Nielsen//NetRatings.”
Paul Davidson, chief executive of Newsquest, noted the strong results for Newsquest in 2004, particularly in employment and real estate. “Total revenues are up while costs continue to be well controlled,” 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 $1.45 to $1.49 per diluted share. Martore also reviewed the company’s operating assumptions for 2005.
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 2005.
Gannett Co., Inc. is a leading international news and information company that publishes 101 daily newspapers in the USA, including USA TODAY, the nation’s largest-selling daily newspaper. The company also owns more than 600 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 contain forward-looking information. The words “expect,” “intend,” “believe,” “anticipate,” “likely,” “will” and similar expressions generally identify forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties which could cause actual results and events to differ materially from those anticipated in the forward-looking statements.
Potential risks and uncertainties which 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.
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.
For investor inquiries contact:
Director, Investor Relations
For media inquiries contact:
Vice President, Corporate Communications
GANNETT CO., INC.
OPERATING ASSUMPTIONS – 2005
NEWSPAPERS (Excluding USA TODAY, USA WEEKEND and Newsquest)
Ad revenues will be up mid single digits.
Circulation revenues are expected to be flat to down slightly.
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 to down slightly with the addition of employees in revenue producing areas. 2. Pension expense will be up from 2004 but less than 2003. 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 mid single digits.
B. Circulation revenue is expected to be up in the low to mid single digits.
1. Advertising pages are expected to be flat to up low single digits. 2. Rates will be up in the mid single digit range.
1. Volume is expected to be flat. 2. There are no current plans to increase circulation prices in 2005, but 2005 revenues will benefit from the Fall 2004 single copy increase.
BROADCAST (Ex. Captivate)
A. Revenues expected to be down in low single digits because of the Olympic and political ad spending in 2004.
B. Costs are expected to be flat.
CONSOLIDATED GANNETT (Including Acquisitions)
A. Capital Expenditures
1. 2005 Plan $280,000,000 2. 2004 Estimate $275,000,000 - $285,000,000
1. 2005 Plan $245,000,000 2. 2004 Estimate $233,000,000
C. Amortization of Intangibles (Goodwill and Other)
1. 2005 Plan $12,700,000 2. 2004 Estimate $11,100,000
D. Interest Expense
We expect our debt at the beginning of the year to be about $5 billion. We have assumed that all of our free cash flow will be used to pay down debt.
E. Tax Rate
The tax rate for 2005 will be approximately 34.0%, consistent with 2004 though under review for impact of American Jobs Creation Act.
F. Stock Based Compensation
Will update prior to adoption.