Question-and-Answer Session
Operator
(Operator Instructions) We’ll go first today to John Janedis of Wachovia.
John Janedis - Wachovia
Thank you. Mike, can you give more color on maybe some of the more regional trends and what you are seeing at the acquired properties like Morris, Copley, Gannett, and even looking further back, Boston?
Michael E. Reed
Sure, John. We are seeing trends pretty much in line with what you are seeing with the overall company in terms of revenue. The Copley, Gannett, and Morris properties performing better than, a little bit better than our overall trends and Massachusetts continuing to perform a little bit worse than our overall trends, pretty consistent with prior quarters.
What we are seeing though with the Gannett, Copley, and Morris acquisitions is tremendous cash flow growth as we realize the synergies that we anticipated going into those acquisitions and the cash flow improvement opportunities we had available to us with the lower margin properties we got from Morris and Copley. So from a cash flow perspective, those 2007 acquisitions are proving to be very successful and valuable for GateHouse.
John Janedis - Wachovia
And on Boston, I know we’ve talked about this before on calls but do you think we are near bottom yet? Or how do you think that is shaping up? Obviously the economy is still soft there.
Michael E. Reed
John, I can’t predict when the economy will bottom or trough but what I can tell you is two things; first, we fully expect much better results the remainder of this year as Q1 is our slowest and weakest quarter, and in addition to that in Boston, we are executing on initiatives internally that will both drive incremental new revenues and reduced expenses, so we are doing everything inside the company to improve performance.
John Janedis - Wachovia
Okay and just separately, Mike, given the weakness in the local ad environment broadly across all media, can you talk about the M&A market? And if you look at this as an opportunity to maybe get bigger on the cheap or do you wait until the economy improves?
Michael E. Reed
Certainly the capital markets right now are tight and liquidity is important in this environment, so we are very prudent with regard to how we invest our cash flows, internally generated cash flows and how we access the capital markets and debt markets.
Having said that, my belief is that the valuation declines we’ve seen in the general newspaper sector over the last year have spilled too far into the small market newspaper industry and that in fact small market newspapers right now have been hit too hard with regard to valuation declines.
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