GateHouse Media 1Q loss widens with rising costs, expenses

FAIRPORT, N.Y. - Newspaper publisher GateHouse Media Inc. said Friday that its first-quarter loss widened as rising costs and expenses overshadowed increases in advertising and circulation revenues.

For the quarter that ended March 31, GateHouse reported a loss of $28.8 million, or 50 cents per share, compared with a loss of $6.1 million, or 16 cents per share, in the year-ago quarter.

The company used a significantly larger number of shares to calculate its per-share results in the more recent quarter.

GateHouse said its revenue rose 78.4 percent to $168.9 million.

Analysts polled by Thomson Financial expected a loss of 3 cents per share on $169.9 million in revenue. The estimates generally exclude special items.

The company's revenue included advertising revenue which rose 72.1 percent to $122.3 million, and circulation revenue which more than doubled to $36.3 million.

GateHouse said that on a same-store basis its adjusted revenue fell 4.2 percent in the quarter, due mostly to weakness in classified ad spending.

The company also said operating costs and expenses climbed, with operating costs rising 86.3 percent to $97.5 million and selling, general and administrative costs climbing 59.7 percent to $48.9 million.

The company reported a $24.4 million interest expense, too, compared with an interest expense of $10.2 million in the year-ago period.

"While the first quarter operating environment remained very challenging, our business strategy remains sound and continues to yield performance significantly better than the newspaper industry at large and positions us very well for growth with an economic recovery," Chief Executive Michael E. Reed said in a statement.

GateHouse shares fell 13 cents to $4.97.

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