GateHouse Media, Inc. (the “Company” or “GateHouse Media”) (OTC Pink Sheets: GHSE), a leading multi-media company providing news and information to local communities, today reported preliminary unaudited financial results for the fourth quarter and full year ended December 30, 2012. GateHouse Media has not finalized its financial closing process or the audit of its consolidated financial statements for the year ended December 30, 2012, and may identify items that would require adjustments to these preliminary financial results. GateHouse Media expects to release final results on March 7, 2013, after market hours.
For the fourth quarter, GateHouse Media expects total revenues of approximately $125.6 million, GAAP operating income of approximately $9.5 million to $10.5 million and As Adjusted EBITDA of approximately $22.3 million to $23.3 million. On a same store basis, adjusting for an extra week in the fourth quarter of 2011 and the sale of a group of weekly publications in Chicago on October 1, 2012, total revenue is expected to decline 6.1% in the fourth quarter of 2012.
For the full year, GateHouse Media expects total revenues of approximately $491.0 million, GAAP operating income of approximately $28.0 million to $29.0 million and As Adjusted EBITDA of approximately $80.0 million to $81.0 million. On a same store basis, adjusting for an extra week in the fourth quarter of 2011 and the sale of a group of weekly publications in Chicago on October, 1, 2012, total revenue is expected to decline 4.2% for the full year.
The same store fourth quarter results are expected to be driven by strong digital revenue growth of 22.4% offset by declines in print advertising. Total advertising revenue in the fourth quarter is expected to decline 9.1% on a same store basis as growth in digital advertising should be more than offset by an expected 11.4% decline in total print advertising. The print declines are expected to be primarily from local and classified advertising, down 8.2% and 16.7%, respectively. Circulation revenue is expected to be relatively flat compared to the prior year as price increases offset volume declines.
The expected revenue declines in the fourth quarter were slightly worse than recent quarterly reports and there were several factors that influenced the quarter that the Company believes are primarily temporary in nature. First, new Massachusetts legislation has altered and slowed the foreclosure process leading to large delays in the timing of foreclosure revenues, which has negatively impacted classified revenues. Second, a soft economic climate for small businesses in the quarter combined with uncertainty surrounding the fiscal cliff caused local small businesses to pull back on advertising spend, particularly in mid to late December. Finally, the Company continued to invest in opportunistic top line growth opportunities, including digital service offerings and audience extension products. These investments resulted in operating expense increases, particularly for sales force hiring and training. The Company believes it will be better positioned to capture future top line growth as a result of these investments and opportunities.