Bloomberg News

GateHouse Media Suspends Dividend, Will Reduce Debt (Update2)

August 08, 2008

GateHouse Media Inc., the owner of 97 newspapers and online publications, suspended its quarterly dividend and said it will use the savings to reduce debt.

The Fairport, New York-based company will also issue $11.5 million of preferred stock to a fund managed by an affiliate of Fortress Investment Group, the publisher's largest shareholder, GateHouse said today in a statement. The company has $1.22 billion of long-term debt, according to today's report.

GateHouse cut its quarterly dividend (GHS:US) to 20 cents from 40 cents in March after newspaper writedowns led to a fourth-quarter loss of $214.6 million. Rising paper prices and declining classified advertising are pressuring GateHouse to reduce expenses and free up cash.

The second-quarter net loss widened to $443.3 million, or $7.77 a share, from $2 million, or 5 cents, a year earlier. The loss reflected a $443 million writedown of assets, triggered by a drop in the shares.

Revenue rose 17 percent to $184.1 million from $158 million a year ago, GateHouse said.

GateHouse fell 5 cents to 64 cents at 4:15 p.m. in New York Stock Exchange composite trading (GHS:US). The shares have tumbled 93 percent this year.

To contact the reporter on this story: James Callan in New York at Jcallan2@bloomberg.net

To contact the editor responsible for this story: Jennifer Sondag at jsondag@bloomberg.net.


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