Gannett (GCI)

Q3 2011 Earnings Call

October 17, 2011 10:00 am ET

Executives

Jeffrey Heinz - Director of Investor Relations

Gracia C. Martore - Chief Executive Officer, President and Director

Paul N. Saleh - Chief Financial Officer and Senior Vice President

Analysts

Douglas M. Arthur - Evercore Partners Inc., Research Division

Alexia S. Quadrani - JP Morgan Chase & Co, Research Division

James C. Goss - Barrington Research Associates, Inc., Research Division

Bishop Cheen - Wells Fargo Securities, LLC, Research Division

Christopher L. Ferris - Noble Financial Group, Inc., Research Division

John Janedis - UBS Investment Bank, Research Division

Edward J. Atorino - The Benchmark Company, LLC, Research Division

Craig A. Huber - Access 3:42, LLC

William G. Bird - Lazard Capital Markets LLC, Research Division

Presentation

Operator

Good day, everyone, and welcome to today's Gannett's Third Quarter 2011 Earnings Conference Call. This call is being recorded. [Operator Instructions] Our speakers for today will be Gracia Martore, President and CEO; Paul Saleh, Chief Financial Officer; and Jeff Heinz, Director, Investor Relations.

At this time, I'd like to turn the conference over to Mr. Heinz. Please go ahead.

Jeffrey Heinz

Thanks, Melanie. Good morning, and welcome to our conference call and webcast to review Gannett's third quarter results. Hopefully, you have had the opportunity to review this morning's press release. You can also find it at www.gannett.com.

Before we get started, however, I need to remind you that our conference call and webcast today may include forward-looking statements and our actual results may differ. Factors that might cause them to differ are outlined in our SEC filings. This presentation also includes certain non-GAAP financial measures. We have provided reconciliations of those measures to the most directly comparable GAAP measures in the press release and on the Investor Relations portion of our website.

With that, let me turn the call over to Gracia.

Gracia C. Martore

Thanks, Jeff, and good morning, everyone. Let me begin by acknowledging Craig Dubow, our former Chairman and CEO, who retired on October 6 due to disability from ongoing health issues. Craig and I worked hand-in-hand for many years, and on behalf of the entire management team and the board, we thank him for his leadership during an extremely challenging time for our industry and the economy more broadly.

Craig and the management team all maintained a steadfast commitment to serving our customers and their ever-changing media consumption preferences and created a solid foundation for the future. The management team and I share a common vision for the future of Gannett and are passionate about the opportunities ahead.

Now on today's call, I'm going to update you on some of our strategic initiatives, and we'll discuss some financial highlights for the quarter. Paul Saleh, our Chief Financial Officer, will then review our quarterly results in more detail, including the special items we noted in the release, as well as some balance sheet items. We'll then open up the call for your questions.

At Gannett, we continue to focus on 2 fronts: meeting the demands of the changing media landscape while further solidifying our role as the leading source of local news and information through our unique, relevant and highly valued and engaging content. It's our mission to be the destination for consumers however, whenever and wherever they want to be informed and entertained. And to put it even simpler, we want to be there for our consumers anytime and on any device. Our strong, trusted relationships within our communities have been built over decades through an unwavering dedication to serving our consumers and businesses in these communities.

As a result, we are participants in and advocates for our communities. These deep, long-term relationships are rare in media, and we will safeguard and build upon them as we continue to evolve our businesses to be more digitally focused. It is through this deep, rich engagement at the local level that we are also able to help our advertisers because we leverage the strength and reach of our tremendous local and national brands to provide effective solutions.

We are operating from a position of strength with unique assets and attributes, and we recognize that we must continue to accelerate our evolution to fully leverage those strengths. To that end, we have advanced on a number of fronts during the quarter, and I want to highlight some of these efforts.

At the end of September, we launched Gannett Publishing Services, which combines and centralizes all of our domestic print production and distribution functions into one organizational structure. This new structure combines several functions, such as imaging, ad production, printing, packaging and a variety of other things. These have traditionally been managed divisionally and reflected the autonomy of our divisional market management teams. This change creates efficiencies within the company, but more importantly, allows us to focus on attracting additional revenues by leveraging our expertise in areas like single-copy sales, home delivery and third-party sales. This move will help us better utilize our print capacity and our distribution capabilities nationwide, not just for our own properties but for third parties as well. We expect to create some efficiencies through the centralization as we eliminate some duplicate operations beginning later this year and into the next couple of years. We will certainly keep you posted as that effort progresses.

And we are working toward a similar goal with the Cincinnati Enquirer. During the quarter, we signed a letter of intent with The Columbus Dispatch for the possible printing of the Cincinnati Enquirer and the Kentucky Enquirer in a new, more compact format that will be brighter, more engaging and easier to read. The change provides convenience for consumers and new opportunities for advertisers. This new approach would enhance the user experience by allowing for fuller use of color and photographs and improved readability, while covering the same amount of news as the previous format.

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