Open Letter To Michael Reed, CEO, Gatehouse Media (GHS)

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Dear Mr. Reed,

It is time to eliminate the Gatehouse (GHS) dividend. With the company’s stock at a 52-week low, and down 86% from the period high, Wall St. does not believe that Gatehouse has the cash to pay its tremendous yield and make it debt service.

Most other public newspaper companies announced drops in advertising revenue of between 10% and 15% in May. Based on the last quarter, Gatehouse had razor thin operating margins, and debt service of over $24 million.

With long-term debt at $1.2 billion, Gatehouse may not make it even with the dividend gone. It certainly has almost no chance if the payments continue.

Douglas A. McIntyre