Gannett’s Debt Reduction Efforts Free Up Cash For Possible Investments

Craig Dubow, Gannett CEO

While cost-cutting helped Gannett (NYSE: GCI) return to profit last quarter, the cash freed up by reducing its debt has Gannett ready to start investing in other companies again, executives said during the company’s Q4 earnings call. The McClean, VA., company lowered its debt by roughly $250 million in Q4 and by $755 million for the full year. As a result, Gannett’s debt leverage ratio was reduced substantially to 2.6 times, well below the 3.5 times ceiling, said Craig Dubow (image, left), chairman, president and CEO.

After going over that, both he and CFO Gracia Martore, whose promotion to president and COO was announced during the call, said that the company has realized more than just breathing room during tough times. After a series of acquisitions and investments over the past few years in companies like rich media provider PointRoll and social net platform Ripple6, Gannett slowed things down last year after the financial crisis. But now that some cash has been freed up after clearing away a large chunk of debt, Dubow and Martore say that company is in a good position to start looking for investments.

The two didn’t say what sort of investments Gannett would be interested in. But it’s a safe bet that it will likely be in the digital space, which has otherwise been a bright spot except for CareerBuilder, which Gannett has a majority stake in. While total job ads across Gannett were down nearly 40 percent during Q4, both PointRoll ShopLocal were up double digits, Dubow said.

As for other digital platforms, such as e-readers, Dubow said he was taking a wait-and-see attitude as to how the market would shake out. He sounded particularly impressed by Apple’s forthcoming iPad release, especially the part that publishers would be able to set the pricing, which is the opposite approach that Amazon (NSDQ: AMZN) has taken with the Kindle. “That said, I haven’t see the iPad up close, but we remain platform agnostic,” Dubow told listeners. “History has told us that the prices come down on these devices fairly quickly. We will watch the marketplace very closely and when they’re ready for it, we’ll be ready as well.”

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