Employee rightsizing helps GateHouse Media cut costs, but revenues continue to plummet

In its quarterly report. filed Thursday with the Securities and Exchange Commission, GateHouse Media reported more losses, but thanks to "employee right-sizing", the company was able to reduce costs.

They can call it "employee right-sizing," the rest of us call it laying off or firing workers.

From the quarterly report:

Revenue. Total revenue for the three months ended March 27, 2011 decreased by $13.3 million, or 10.0%, to $119.8 million from $133.1 million for the three months ended March 31, 2010. The difference between same store revenue and GAAP revenue for the current quarter is immaterial, therefore, further revenue discussions will be limited to GAAP results. The decrease in total revenue was comprised of a $10.8 million, or 11.7%, decrease in advertising revenue, a $1.9 million, or 5.6%, decrease in circulation revenue and a $0.6 million, or 9.1%, decrease in commercial printing and other revenue. Advertising revenue declines were primarily driven by declines on the print side of our business in the local retail and classified categories which were partially offset by growth in online. The print declines reflect an uncertain economic environment, which continued to put pressure on our local advertisers. These economic conditions have also led to a decline in our circulation volumes which have been partially offset by price increases in select locations. The advertising and circulation categories were also negatively impacted by severe weather in certain markets and the timing of Easter. The decrease in commercial printing and other revenue was due to declines in printing projects as a result of continued weak economic conditions and the strategic closure of certain print facilities.


Operating Costs. Operating costs for the three months ended March 27, 2011 decreased by $4.6 million, or 5.9%, to $72.4 million from $77.0 million for the three months ended March 31, 2010. The decrease in operating costs was primarily due to a decrease in compensation, delivery and postage of $2.8 million, $1.1 million, and $0.7 million, respectively. The majority of these decreases was the result of permanent cost reductions and were implemented as we continue to work to consolidate operations and improve the productivity of our labor force. The declines were slightly offset by increases in newsprint expense due to pricing.

GateHouse Media owns The Carthage Press, Neosho Daily News, Pittsburg Morning Sun, and more than 300 newspapers across the United States.