Tuesday, December 04, 2012

With eye toward buying, GCI's cash reserves jump

As companies pile up more cash abroad and in the U.S., Gannett's cash stockpile has climbed to nearly a quarter-billion dollars, the highest level since early 2009, according to a new review of regulatory documents.

Although dwarfed by giants such as Microsoft, which has $67 billion, GCI's cash in the bank has grown as Corporate boosted its dividend and stock buybacks while also casting a wider net for possible acquisitions.

Indeed, it appears likely Corporate will devote extra cash to buying more companies, such as the Boston-based advertising firm Rovion, a deal announced in mid-October, rather than sharing more with investors.

"We want to make sure we keep our powder dry to do some great acquisitions," CEO Gracia Martore told media stock analysts in September at a conference sponsored by Goldman Sachs.

Analysts may renew their questions about cash reserves tomorrow at 9 a.m. ET, when Martore leads senior management in a presentation at UBS' Global Media and Communications Conference. (Webcast details.)

Gannett had $237 million in cash and cash-equivalents at the end of the third quarter, according to Corporate's 10-Q filing for the period with the U.S. Securities and Exchange Commission. That was up from $196 million in the same quarter a year before. As recently as this year's first quarter, it stood at just $157 million.

That was the highest amount since the first quarter of 2009, when it briefly soared to $649 million after Corporate borrowed $563 million to pay down debt during the financial crisis roiling markets at the time. (Spreadsheet shows quarter-by-quarter figures.)

Other companies are flush with cash as they manage more conservatively during the choppy economic recovery. Many of those are holding vast stockpiles overseas, where it can only be spent on foreign investments and operations.

Microsoft, General Electric, Apple and others are reluctant to bring that cash home because it will be subject to a 35% tax rate on corporate profits, minus whatever tax they've paid overseas, The Wall Street Journal reported today.

GCI's overseas operations largely consist of its U.K. newspaper division, Newsquest, which publishes 17 dailies. But the company's regulatory filings do not indicate whether much of any cash is being held outside the U.S.


  1. How about:

    Raises for employees.
    Funding the pension plan.
    Ending furloughs and layoffs for 2013.

    Just sayin'

  2. Would anyone be surprised if they bought Groupon?

    Me either.

  3. This part of the 10-Q is more interesting: "Total average outstanding debt was $1.7 billion for the third quarter of 2012 compared to $2.0 billion last year."

  4. You're right, 11:52, due to the employee's giving up their salaries so this company can pay down some debt, not due to new revenue streams.

  5. Hey, Gracia. Good luck with all those new acquisitions. After Gannett purchased my former workplace and pulled every resource (and all cash) out of the business, I decided to leave. Five years later I'm a much happier person. I earn more money, have better insurance, got an excellent bonus -- and I'm working in an e-commerce environment with cutting-edge technology. I was an award-winning employee of Gannett in the under-40 crowd when I left, so I was not an older worker afraid of change. Here's a warning to those who suspect Gannett is interested in your company: get out fast, before your feelings and your career are ruined. There are opportunities out there, and you just have to work at them with your heart and soul. Most of the leaders at Gannett are heartless and without a soul, so they won't understand this message.

  6. What I love about folks like 2:19 is he/she thinks they work for Mother Teresa. Unless you work for a non profit your company watches the bottom line as well. I also love how they make more money, benefits are less expensive and they have the best boss ever. Oh golly, oh my! But they NEVER identify that great, fantastic company. Go figure

  7. This is 2:19. My current company is a profit-making business, and what I like about them is they acknowledge my participation in helping them make money. That never happened at Gannett! And I don't believe the owners of my company, along with my current boss, are comparable to Mother Teresa. They are honest, tough, fair and demanding people who push me to grow beyond my capabilities. I'm not going to identify my current employer because it's none of your business, 9:16. When I left the publishing world, I trained myself for a new industry. I had to start part-time, with no benefits, and at the bottom of the business ladder. But I worked hard (and smart) and made an opportunity for myself. And that's how you succeed in America at the end of 2012. (I also claimed to have better insurance, which is true, but I never said it was less expensive.)

  8. Gannett has scores of its own 1 percenters. Many in high faluting management positions at corporate and Usa Today. People would be blown away if they knew what founders, long time pet favorites and stars coasting on years-ago performances and unearned reputations were pulling in.

  9. it appears likely Corporate will devote extra cash to buying more companies, such as the Boston-based advertising firm Rovion.



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