Gannett Holds Investor Meeting to Present Growth Strategy and Cash Flow-Funded Capital Program and Expects to Return More Than $1.3 Billion to Shareholders by 2015
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Martore continued, "2012 is an inflection point for Gannett. We have always been committed to responsible capital stewardship and in the past three years, despite the impact of a global recession, this financial discipline allowed us to repay over
Growth Strategy
During the Investor Day,
Financial Outlook:
In connection with this strategy,
Capital Program:
- The Board has authorized a 150% increase in
Gannett 's dividend to$0.80 per share on an annual basis. The first$0.20 quarterly dividend under this policy will be payable onApril 2 to shareholders of record onMarch 9 . - The Board approved an acceleration of its share repurchases with a new
$300 million share repurchase program targeted to be completed over the next two years, which it anticipates making an ongoing part of cash return to shareholders. - The company will continue to evaluate opportunistic bolt-on acquisitions similar to
Fantasy Sports Ventures (owner of Big Lead Sports and related websites), but has no current plans to pursue sizeable acquisitions.
Also during the presentation,
- A new subscription model for
U.S. Community Publishing , which charges for content regardless of platform and limits non-subscriber access. The company expects this model to contribute an incremental$100 million in earnings to the publishing segment annually beginning in 2013. The company also expects to generate significant incremental advertising revenue from digital platforms launching with the new model. - The re-launch of all desktop, mobile and tablet products across
Gannett in the next 12-24 months, beginning withUSA TODAY. - The development of a new digital marketing services business targeted at small and medium size businesses, which is expected to generate between
$275 million and $350 million in annual revenue by 2015. - The expansion of
USA TODAY Sports Media Group , which is expected to be among the top five sports media companies in the country with over$300 million in annual revenue by 2015. - The continued growth of
Gannett 's broadcasting business, including the expectation of$90 million in retransmission revenues from distributors in 2012, a 13% increase year-over-year from 2011. - Cost management and other asset optimization initiatives with total annual incremental savings expected to reach
$100 million to $150 million by 2015. As part of those initiatives, Gannett Publishing Services (GPS) is expected to contribute approximately$40 million to the bottom line in 2012, with an increasing impact thereafter.
Guidance:
At the Investor Day,
Certain factors affecting forward-looking statements
Certain statements in this press release 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 are subject to certain risks and uncertainties that could cause actual results and events to differ materially from those anticipated in the forward-looking statements. The company is not responsible for updating or revising any forward-looking statements, whether the result of new information, future events or otherwise, except as required by law. Potential risks and uncertainties which could adversely affect the company's 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) a potential increase in competition for the company's digital segment businesses; (c) a decline in viewership of major networks and local news programming resulting from increased competition or other factors; (d) a continuance of the generally soft economic conditions in the U.S. and the U.K. or a further economic downturn leading to a continuing or accelerated decrease in circulation or local, national or classified advertising; (e) a further decline in general print readership and/or advertiser patterns as a result of competitive alternative media or other factors; (f) an increase in newsprint or syndication programming costs over the levels anticipated; (g) labor disputes which may cause revenue declines or increased labor costs; (h) acquisitions of new businesses or dispositions of existing businesses; (i) rapid technological changes and frequent new product introductions prevalent in electronic publishing; (j) an increase in interest rates; (k) a weakening in the British pound to U.S. dollar exchange rate; (l) volatility in financial and credit markets which could affect the value of retirement plan assets and the company's ability to raise funds through debt or equity issuances; (m) changes in the regulatory environment; (n) an other than temporary decline in operating results and enterprise value that could lead to further non-cash goodwill, other intangible asset, investment or property, plant and equipment impairment charges; (o) credit rating downgrades, which could affect the availability and cost of future financing; (p) adverse outcomes in proceedings with governmental authorities or administrative agencies; and (q) general economic, political and business conditions.
This press release discusses free cash flow, a non-GAAP liquidity measure. Free cash flow is defined as "net cash flow from operating activities" as reported on the statement of cash flows reduced by "purchase of property, plant and equipment" as well as "payments for investments" and increased by "proceeds from investments" and voluntary pension contributions, net of related tax benefit.
Webcast:
A webcast of today's presentations will be available at www.gannett.com through
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SOURCE
Media, Laura Dalton, Director, Corporate Communications, +1-703-854-6049, ljdalton@gannett.com, or Investors, Jeffrey Heinz, Director, Investor Relations, +1-703-854-6917, jheinz@gannett.com