Gannett Co., Inc. ("Gannett", "we", "us", "our", or the
"Company") (NYSE: GCI) today reported its financial results for the
first quarter ended March 31, 2024.
"Our first quarter results reflect an excellent start to the
year. Year-over-year revenue trends were a bright spot in the
quarter, reflecting the most pronounced sequential improvement in
nearly three years. This top line momentum gives us confidence in
our belief that we'll exit 2024 with total revenues growing over
the prior year. Equally important, we continued to expand our
audience, improve engagement, and grow digital revenues through
diversified channels. As a result, total digital revenues increased
8% year-over-year and accounted for over 42% of total revenues,
representing an all-time high," said Michael Reed, Gannett Chairman
and Chief Executive Officer.
"We continued to execute on our expanded monetization strategy,
and in the first quarter, each of our digital revenue streams grew
over the prior year period. Digital-only subscription revenues and
average revenue per user reached new highs, with growth rates
exceeding 20% compared to the prior year period. Digital
advertising continued to grow year-over-year, and as expected, our
digital marketing solutions business returned to growth versus the
prior year period. Finally, our partnership revenue continues to
scale, nearly doubling over the prior year period."
"We drove free cash flow growth over the prior year period,
along with improved sequential year-over-year trends in Adjusted
EBITDA, which we believe positions us well for full year Adjusted
EBITDA and free cash flow growth as outlined in our business
outlook."
First Quarter 2024 Digital
Highlights:
- Total digital revenues of $267.5 million, or 42.1% of total
revenues, up 8.1% versus the same period of the prior year
- Digital-only subscription revenues of $43.5 million grew 21.3%
year-over-year
- Digital-only average revenue per user(1) of $7.22 increased
22.4% year-over-year
- Total digital-only paid subscriptions(1) surpassed 2.0 million,
representing sequential growth of 1.1%
- 187 million(2) global average monthly unique visitors in the
first quarter of 2024, up 0.6% year-over-year
- Digital advertising revenues of $84.5 million grew 5.3%
year-over-year
- Digital Marketing Solutions segment core platform revenues(1)
of $116.1 million increased 4.2% year-over year
- Record high core platform average revenue per user(1) of
$2,697, up 6.4% year-over-year
Additional First Quarter 2024
Highlights:
- Total revenues of $635.8 million decreased 5.0% compared to the
first quarter of 2023, reflecting improvement on revenue declines
of 8.4% in the fourth quarter of 2023 compared to the prior year
fourth quarter
- Same store revenues(3) decreased 5.1% compared to the first
quarter of 2023, reflecting improvement on revenue declines of 8.0%
in the fourth quarter of 2023 compared to the prior year fourth
quarter
- Net loss attributable to Gannett of $84.8 million includes an
impairment charge of approximately $46.0 million related to the
exit of our leased facility in McLean, Virginia during the first
quarter of 2024
- Adjusted Net loss attributable to Gannett(3) of $36.4
million
- Adjusted EBITDA(3) totaled $57.6 million, a decrease of 8.4%
compared to the first quarter of 2023
- Cash provided by operating activities of $22.5 million, an
increase of $15.7 million year-over-year
- Free cash flow(3) of $9.5 million, an improvement of $11.5
million year-over-year
____________________
(1)
See "Key Performance Indicators"
("KPIs") below for information about our use of KPIs.
(2)
187 million average monthly
unique visitors in the first quarter of 2024 with approximately 134
million average monthly unique visitors coming from our USA TODAY
NETWORK (based on March 2024 Comscore Media Metrix®) and
approximately 53 million average monthly unique visitors resulting
from our U.K. digital properties (based on Adobe Analytics).
(3)
Adjusted EBITDA, Adjusted Net
income (loss) attributable to Gannett, Free cash flow, Same store
revenues, and Free cash flow CAGR are non-GAAP measures. See "Use
of Non-GAAP Information" below for information about these non-GAAP
measures.
First Quarter 2024 Capital Structure
Highlights:
- As of March 31, 2024, the Company had cash and cash equivalents
of $93.3 million
- Total principal amount of debt outstanding at Q1 end was
$1,114.2 million, including $625.6 million in first lien debt
- First lien net leverage(4) was 2.0x, a decrease of 21.6%
compared to the same period of the prior year
- The Company repaid $16.3 million of debt in the first quarter
of 2024
Full Year 2024 and Mid-Term 2025-2026
Business Outlook(5)
The Company reiterates its full year 2024 outlook and its
mid-term outlook over the course of 2025 and 2026.
- Full Year 2024 Business Outlook(5)
- Total digital revenues are expected to grow approximately
10%
- Total revenues are expected to be down in the low to mid-single
digits on a reported and same store basis(3)
- Net income attributable to Gannett is expected to improve,
after excluding an impairment charge of approximately $46.0 million
related to the exit of our McLean, Virginia office during the first
quarter of 2024
- Adjusted EBITDA(3) is expected to grow versus the prior
year
- Cash provided by operating activities is expected to grow
versus the prior year
- Free cash flow(3) is expected to grow in excess(6) of the
expected growth in Adjusted EBITDA(3)
- Real estate and non-strategic asset sales are expected to be in
the range of $45 million and $50 million
- Full Year 2025 and Full Year 2026 Business Outlook(5)
- Total digital revenues are expected to accelerate with growth
exceeding 10% year-over-year
- Total digital revenues are expected to make up 50% of total
revenues in 2025 and exceed 55% of total revenues in 2026
- Total revenues are expected to grow in the low single digits on
a reported basis and same store basis(3)
- Net income attributable to Gannett is expected to improve to
positive
- Adjusted EBITDA(3) is expected to exhibit ongoing growth
- Cash provided by operating activities is expected to grow with
an estimated CAGR(7) of 30%
- Free cash flow(3) is expected to grow at an accelerated rate
with an estimated CAGR(3)(7) of 40%
____________________
(4)
As of March 31, 2024, the First Lien Net
Leverage ratio was calculated by subtracting cash on the balance
sheet from the sum of both our five-year senior secured term loan
facility (the "Senior Secured Term Loan") and 6% first lien notes
due November 1, 2026 (the "2026 Senior Notes") and dividing that by
Q1 2024 LTM Adjusted EBITDA. Our 6% Senior Secured Convertible
Notes due 2027 are second lien as of the completion of the Senior
Secured Term Loan refinancing in October 2021.
(5)
Projections are based on Company estimates
as of May 2, 2024 and are provided solely for illustrative
purposes. Actual results may vary. The Company undertakes no
obligation to update this information. Additionally, the Company's
estimates do not factor in the impact of any future acquisitions or
dispositions. The Company’s future financial results could differ
materially from the Company’s current estimates.
(6)
Capital expenditures are expected to
increase as a result of investments in technology and products.
(7)
Cash provided by operating
activities CAGR and Free cash flow CAGR are based on 2023 to 2026
estimated growth rates.
Financial Highlights
In thousands
First Quarter 2024
Revenues
$
635,761
Net loss attributable to Gannett
(84,768
)
Adjusted EBITDA(8) (non-GAAP basis)
57,589
Adjusted net loss attributable to
Gannett(8) (non-GAAP basis)
(36,425
)
Cash provided by operating activities
22,451
Free cash flow(8) (non-GAAP basis)
9,452
___________________ (8)
Refer to "Use of Non-GAAP Information"
below for the Company’s definition of Adjusted EBITDA, Adjusted net
loss attributable to Gannett, and Free cash flow, as well as the
reconciliation of such measures to the most comparable GAAP
measure.
Earnings Conference Call
Management will host a conference call on Thursday, May 2, 2024
at 8:30 A.M. Eastern Time to review the financial and operating
results for the period. A copy of the earnings release will be
posted to the Investor Relations section of Gannett’s website,
investors.gannett.com. The conference call may be accessed by
dialing 1-888-506-0062 (from within the U.S.) or 1-973-528-0011
(from outside of the U.S.) ten minutes prior to the scheduled start
of the call; please reference "Gannett First Quarter Earnings Call"
or access code "207142". We use our website as a channel of
distribution for important Company information and we use the
investors.gannett.com website as a means of disclosing material
non-public information and for complying with our disclosure
obligations under Regulation FD. A simultaneous webcast of the
conference call will be available to the public on a listen-only
basis at investors.gannett.com. Please allow extra time prior to
the call to visit the website and download any necessary software
required to listen to the internet broadcast. A telephonic replay
of the conference call will also be available approximately two
hours following the call’s completion through 11:59 P.M. Eastern
Time on Thursday, May 16, 2024 by dialing 1-877-481-4010 (from
within the U.S.) or 1-919-882-2331 (from outside of the U.S.);
please reference access code "13742832". A transcript of our
earnings call held today also will be posted to the
investors.gannett.com website.
About Gannett
Gannett Co., Inc. (NYSE: GCI) is a diversified media company
with expansive reach at the national and local level dedicated to
empowering and enriching communities. We seek to inspire, inform,
and connect audiences as a sustainable, growth focused media and
digital marketing solutions company. We endeavor to deliver
essential content, marketing solutions, and experiences for curated
audiences, advertisers, consumers, and stakeholders by leveraging
our diverse teams and suite of products to enrich the local
communities and businesses we serve. Our current portfolio of
trusted media brands includes the USA TODAY NETWORK, comprised of
the national publication, USA TODAY, and local media organizations
in the United States, and Newsquest, a wholly-owned subsidiary
operating in the United Kingdom. Our digital marketing solutions
brand, LocaliQ, uses innovation and software to enable small and
medium-sized businesses to grow, and USA TODAY NETWORK Ventures,
our events division, creates impactful consumer engagements,
promotions, and races.
Cautionary Statement Regarding
Forward-Looking Statements
Certain items in this press release may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including, but not
limited to, our full year 2024 business outlook, our mid-term
2025-2026 business outlook, statements regarding our business
outlook, digital revenue performance and growth, growth in our
Digital Marketing Solutions segment, growth of and demand for our
digital-only subscriptions and audience, digital marketing and
advertising services, digital revenues, monetization of our
audience, print advertising trends and revenues, expected results
of our targeting and pricing models, expectations regarding our
cash from operating activities, free cash flows, compound annual
growth rates ("CAGR"), revenues, net income (loss) attributable to
Gannett, Adjusted EBITDA, same-store revenues and cash flows,
expectations regarding our long-term growth, sustainable growth,
and inflection in our revenue, our ability to create long-term
stockholder value, our expectations, in terms of both amount and
timing, with respect to debt repayment, our expected capital
expenditures, expectations regarding real estate and non-strategic
asset sales, the impact from changes at our McLean, Virginia
property, our strategy, our partnerships, our ability to generate
affiliate revenues, our ability to achieve our operating
priorities, our long-term opportunities, economic impacts, our
ability to navigate volatility, achieve our financial goals,
optimize our capital structure and achieve optimal financial
performance, our cost structure, future revenue and expense trends,
and our ability to influence trends. Words such as "expect(s)",
believe(s)", "will", "outlook", "guidance", "estimate(s)",
"project(s)", "focus", and similar expressions are intended to
identify such forward-looking statements. These statements are
based on management’s current expectations and beliefs and are
subject to a number of risks and uncertainties. These and other
risks and uncertainties could cause actual results to differ
materially from those described in the forward-looking statements,
many of which are beyond our control. The Company can give no
assurance its expectations will be attained. Accordingly, you
should not place undue reliance on any forward-looking statements
contained in this press release. For a discussion of some of the
risks and important factors that could cause actual results to
differ from such forward-looking statements, see the risks and
other factors detailed from time to time in the Company's most
recent Annual Report on Form 10-K, our quarterly reports on Form
10-Q, and our other filings with the Securities and Exchange
Commission. Furthermore, new risks and uncertainties emerge from
time to time, and it is not possible for the Company to predict or
assess the impact of every factor that may cause its actual results
to differ from those contained in any forward-looking statements.
Such forward-looking statements speak only as of the date of this
press release. Except to the extent required by law, the Company
expressly disclaims any obligation to release publicly any updates
or revisions to any forward-looking statements contained herein to
reflect any change in the Company’s expectations with regard
thereto or change in events, conditions or circumstances on which
any statement is based.
GANNETT CO., INC. CONDENSED CONSOLIDATED BALANCE
SHEETS
Table No. 1
In thousands, except share data
March 31, 2024
December 31, 2023
Assets
(Unaudited)
Current assets:
Cash and cash equivalents
$
93,334
$
100,180
Accounts receivable, net of allowance of
$15,543 and $16,338 as of March 31, 2024 and December 31, 2023,
respectively
244,082
266,096
Inventories
23,622
26,794
Prepaid expenses
44,386
36,210
Other current assets
20,344
14,957
Total current assets
425,768
444,237
Property, plant and equipment, net of
accumulated depreciation of $330,747 and $336,408 as of March 31,
2024 and December 31, 2023, respectively
238,902
239,087
Operating lease assets
166,911
221,733
Goodwill
533,743
533,876
Intangible assets, net
501,640
524,350
Deferred tax assets
34,243
37,125
Pension and other assets
187,959
180,839
Total assets
$
2,089,166
$
2,181,247
Liabilities and equity
Current liabilities:
Accounts payable and accrued
liabilities
$
300,340
$
293,444
Deferred revenue
119,509
120,502
Current portion of long-term debt
64,263
63,752
Operating lease liabilities
43,586
45,763
Other current liabilities
9,303
10,052
Total current liabilities
537,001
533,513
Long-term debt
550,044
564,836
Convertible debt
419,671
416,036
Deferred tax liabilities
6,604
2,028
Pension and other postretirement benefit
obligations
41,121
42,661
Long-term operating lease liabilities
192,293
203,871
Other long-term liabilities
109,451
100,989
Total noncurrent liabilities
1,319,184
1,330,421
Total liabilities
1,856,185
1,863,934
Commitments and contingent
liabilities
Equity
Preferred stock, $0.01 par value per
share, 300,000 shares authorized, none of which were issued and
outstanding at March 31, 2024 and December 31, 2023
—
—
Common stock, $0.01 par value per share,
2,000,000,000 shares authorized, 158,564,950 shares issued and
147,585,710 shares outstanding at March 31, 2024; 158,554,705
shares issued and 148,939,463 shares outstanding at December 31,
2023
1,586
1,586
Treasury stock, at cost, 10,979,240 shares
and 9,615,242 shares at March 31, 2024 and December 31, 2023,
respectively
(19,927
)
(17,393
)
Additional paid-in capital
1,429,137
1,426,325
Accumulated deficit
(1,111,960
)
(1,027,192
)
Accumulated other comprehensive loss
(65,383
)
(65,541
)
Total Gannett stockholders'
equity
233,453
317,785
Noncontrolling interests
(472
)
(472
)
Total equity
232,981
317,313
Total liabilities and equity
$
2,089,166
$
2,181,247
GANNETT CO., INC. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited)
Table No. 2
Three months ended March
31,
In thousands, except per share amounts
2024
2023
Digital
$
267,499
$
247,478
Print and commercial
368,262
421,439
Total revenues
635,761
668,917
Operating costs
402,399
430,188
Selling, general and administrative
expenses
180,489
180,390
Depreciation and amortization
38,298
43,698
Integration and reorganization costs
17,881
12,127
Asset impairments
45,989
5
Loss (gain) on sale or disposal of assets,
net
552
(17,681
)
Other operating expenses
39
229
Total operating expenses
685,647
648,956
Operating (loss) income
(49,886
)
19,961
Interest expense
26,565
28,330
Gain on early extinguishment of debt
(617
)
(496
)
Non-operating pension income
(3,146
)
(1,815
)
Equity loss (income) in unconsolidated
investees, net
185
(210
)
Other non-operating expense, net
1,817
1,221
Non-operating expenses
24,804
27,030
Loss before income taxes
(74,690
)
(7,069
)
Provision (benefit) for income taxes
10,078
(17,329
)
Net (loss) income
(84,768
)
10,260
Net loss attributable to noncontrolling
interests
—
(84
)
Net (loss) income attributable to
Gannett
$
(84,768
)
$
10,344
(Loss) income per share attributable to
Gannett - basic
$
(0.60
)
$
0.07
(Loss) income per share attributable to
Gannett - diluted
$
(0.60
)
$
0.07
GANNETT CO., INC. CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (Unaudited)
Table No. 3
Three months ended March
31,
In thousands
2024
2023
Operating activities
Net (loss) income
$
(84,768
)
$
10,260
Adjustments to reconcile net (loss) income
to operating cash flows:
Depreciation and amortization
38,298
43,698
Share-based compensation expense
2,826
3,736
Non-cash interest expense
5,260
5,267
Loss (gain) on sale or disposal of assets,
net
552
(17,681
)
Gain on early extinguishment of debt
(617
)
(496
)
Asset impairments
45,989
5
Pension and other postretirement benefit
obligations
(11,211
)
(3,725
)
Equity loss (income) in unconsolidated
investees, net
185
(210
)
Change in other assets and liabilities,
net
25,937
(34,136
)
Cash provided by operating
activities
22,451
6,718
Investing activities
Purchase of property, plant and
equipment
(12,999
)
(8,798
)
Proceeds from sale of real estate and
other assets
575
29,502
Change in other investing activities
(2
)
—
Cash (used for) provided by investing
activities
(12,426
)
20,704
Financing activities
Repayments of long-term debt
(15,290
)
(36,178
)
Treasury stock
(2,532
)
(2,139
)
Changes in other financing activities
(423
)
(323
)
Cash used for financing
activities
(18,245
)
(38,640
)
Effect of currency exchange rate change on
cash
984
38
Decrease in cash, cash equivalents and
restricted cash
(7,236
)
(11,180
)
Cash, cash equivalents and restricted cash
at beginning of period
110,612
104,804
Cash, cash equivalents and restricted
cash at end of period
$
103,376
$
93,624
GANNETT CO., INC. SEGMENT INFORMATION
(Unaudited)
Table No. 4
Three months ended March
31,
In thousands
2024
2023
Revenues:
Domestic Gannett Media
$
495,719
$
529,937
Newsquest
60,198
59,158
Digital Marketing Solutions
117,045
112,817
Corporate and other
1,604
1,398
Intersegment eliminations
(38,805
)
(34,393
)
Total
$
635,761
$
668,917
USE OF NON-GAAP INFORMATION
The Company uses non-GAAP financial performance and liquidity
measures to supplement the financial information presented on a
U.S. generally accepted accounting principles ("U.S. GAAP") basis.
These non-GAAP financial performance and liquidity measures, which
may not be comparable to, and may be defined differently than,
similarly titled measures used or reported by other companies,
should not be considered in isolation from or as a substitute for
the related U.S. GAAP measures and should be read together with
financial information presented on a U.S. GAAP basis.
We define our non-GAAP financial performance and liquidity
measures as follows:
- Adjusted EBITDA is a non-GAAP financial performance measure we
believe offers a useful view of the overall and segment operations
of our business. We define Adjusted EBITDA as Net income (loss)
attributable to Gannett before (1) Income tax expense (benefit),
(2) Interest expense, (3) Gains or losses on the early
extinguishment of debt, (4) Non-operating pension income, (5) Loss
on convertible notes derivative, (6) Depreciation and amortization,
(7) Integration and reorganization costs, (8) Third-party debt
expenses and acquisition costs, (9) Asset impairments, (10)
Goodwill and intangible impairments, (11) Gains or losses on the
sale or disposal of assets, (12) Share-based compensation, (13)
Other non-operating (income) expense, net, and (14) Non-recurring
items. The most directly comparable U.S. GAAP financial performance
measure is Net income (loss) attributable to Gannett.
- Adjusted EBITDA margin is a non-GAAP financial performance
measure we believe offers a useful view of the overall and segment
operations of our business. We define Adjusted EBITDA margin as
Adjusted EBITDA divided by total Revenues.
- Adjusted Net income (loss) attributable to Gannett is a
non-GAAP financial performance measure we believe offers a useful
view of the overall operations of our business and is useful to
analysts and investors in evaluating the results of operations and
operational trends. We define Adjusted Net income (loss)
attributable to Gannett as Net income (loss) attributable to
Gannett before (1) Gains or losses on the early extinguishment of
debt, (2) Loss on convertible notes derivative, (3) Integration and
reorganization costs, (4) Third-party debt expenses and acquisition
costs, (5) Asset impairments, (6) Goodwill and intangibles
impairments, (7) Gains or losses on the sale or disposal of assets,
(8) Other items, including (Gain) loss on sale of investments, and
(9) the tax impact of the above items.
- Free cash flow is a non-GAAP liquidity measure that adjusts our
reported U.S. GAAP results for items we believe are critical to the
ongoing success of our business. We define Free cash flow as Cash
provided by (used for) operating activities as reported on the
condensed consolidated statements of cash flows less capital
expenditures, which results in a figure representing Free cash flow
available for use in operations, additional investments, debt
obligations, and returns to stockholders. The most directly
comparable U.S. GAAP financial liquidity measure is Cash provided
by (used for) operating activities.
- Same store revenues is a non-GAAP financial performance measure
based on our U.S. GAAP revenues for the current period, excluding
(1) acquired revenues, (2) currency impact, and (3) exited
operations.
Management’s Use of Non-GAAP Measures
Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net income
(loss) attributable to Gannett, Free cash flow and Same store
revenues are not measurements of financial performance or liquidity
under U.S. GAAP and should not be considered in isolation or as an
alternative to net income (loss), margin, income (loss) from
operations, cash flow provided by (used for) operating activities,
revenues, or any other measure of performance or liquidity derived
in accordance with U.S. GAAP. We believe these non-GAAP financial
performance and liquidity measures, as we have defined them, are
helpful in identifying trends in our day-to-day performance because
the items excluded have little or no significance on our day-to-day
operations. These measures provide an assessment of core expenses
and afford management the ability to make decisions which are
expected to facilitate meeting current financial goals as well as
achieve optimal financial performance.
We use Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net
income (loss) attributable to Gannett, Free cash flow and Same
store revenues as measures of our day-to-day operating performance,
which is evidenced by the publishing and delivery of news and other
media and excludes certain expenses that may not be indicative of
our day-to-day business operating results.
Limitations of Non-GAAP Measures
Each of our non-GAAP measures have limitations as analytical
tools. They should not be viewed in isolation or as a substitute
for U.S. GAAP measures of earnings or cash flows. Material
limitations in making the adjustments to our earnings to calculate
Adjusted EBITDA and Adjusted Net income (loss) attributable to
Gannett using these non-GAAP financial measures as compared to U.S.
GAAP net income (loss) include: the cash portion of interest /
financing expense, income tax (benefit) provision, and charges
related to asset impairments, which may significantly affect our
financial results.
Management believes these items are important in evaluating our
performance, results of operations, and financial position. We use
non-GAAP financial performance and liquidity measures to supplement
our U.S. GAAP results in order to provide a more complete
understanding of the factors and trends affecting our business.
Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net income
(loss) attributable to Gannett, Free cash flow and Same store
revenues are not alternatives to net income (loss), margin, income
(loss) from operations, cash flow provided by (used for) operating
activities, revenues, or any other measure of performance or
liquidity derived in accordance with U.S. GAAP. As such, they
should not be considered or relied upon as substitutes or
alternatives for any such U.S. GAAP financial measures. We strongly
urge you to review the reconciliations of Net income (loss)
attributable to Gannett to Adjusted EBITDA, Adjusted EBITDA margin,
Net income (loss) attributable to Gannett to Adjusted Net income
(loss) attributable to Gannett, Cash provided by (used for)
operations to Free cash flow and Revenues to Same Store revenues
along with our condensed consolidated financial statements included
elsewhere in this report. We also strongly urge you not to rely on
any single financial performance or liquidity measure to evaluate
our business. In addition, because Adjusted EBITDA, Adjusted EBITDA
margin, Adjusted Net income (loss) attributable to Gannett, Free
cash flow and Same store revenues are not measures of financial
performance under U.S. GAAP and are susceptible to varying
calculations, the Adjusted EBITDA, Adjusted EBITDA margin, Adjusted
Net income (loss) attributable to Gannett, Free cash flow and Same
store revenues measures as presented in this release may differ
from and may not be comparable to similarly titled measures used by
other companies.
Non-GAAP Outlook
Our 2024 business outlook and our mid-term 2024-2025 outlook
included in this release include certain non-GAAP financial
performance and liquidity measures, including Same store revenues,
Adjusted EBITDA, Free cash flow, and Free cash flow CAGR. CAGR is a
compound annual growth rate over the time period noted for Free
cash flow. We believe providing expected Free cash flow CAGR as
part of our outlook is meaningful to share with investors and an
indication of what management believes is an important measure of
growth. The outlook for each of these non-GAAP items does not
factor in the impact of any future acquisitions or dispositions. We
have provided these non-GAAP measures for future guidance for the
same reasons that were outlined above for historical non-GAAP
measures. We have not reconciled non-GAAP forward-looking Same
store revenues, Adjusted EBITDA, Free cash flow, and Free cash flow
CAGR to their most directly comparable U.S. GAAP measure, as
permitted by Item 10(e)(1)(i)(B) of Regulation S-K. Such
reconciliations would require unreasonable efforts to estimate and
quantify various necessary U.S. GAAP components largely because
forecasting or predicting our future operating results is subject
to many factors or future events out of our control, is
unavailable, or is not readily predictable, and could significantly
impact, either individually or in the aggregate, our comparable
U.S. GAAP measures. Accordingly, we are unable to provide a full
reconciliation of the non-GAAP measures used in our outlook without
unreasonable efforts.
GANNETT CO., INC. NON-GAAP FINANCIAL INFORMATION
ADJUSTED EBITDA (Unaudited)
Table No. 5
Three months ended March 31,
2024
In thousands
Domestic Gannett Media
Newsquest
Digital Marketing
Solutions
Corporate and other
Consolidated Total
Net income (loss) attributable to
Gannett
$
5,463
$
14,544
$
609
$
(105,384
)
$
(84,768
)
Provision for income taxes
—
—
—
10,078
10,078
Interest expense
—
—
—
26,565
26,565
Gain on early extinguishment of debt
—
—
—
(617
)
(617
)
Non-operating pension income
(1,306
)
(1,840
)
—
—
(3,146
)
Depreciation and amortization
24,877
2,035
5,880
5,506
38,298
Integration and reorganization costs
14,889
169
25
2,798
17,881
Third-party debt expenses and acquisition
costs
—
—
—
178
178
Asset impairments
—
—
—
45,989
45,989
Loss (gain) on sale or disposal of assets,
net
904
(445
)
89
4
552
Share-based compensation expense
—
—
—
2,826
2,826
Other non-operating (income) expense,
net
(347
)
(300
)
1,546
918
1,817
Non-recurring items
—
—
630
1,306
1,936
Adjusted EBITDA (non-GAAP basis)
$
44,480
$
14,163
$
8,779
$
(9,833
)
$
57,589
Net income (loss) attributable to Gannett
margin
1.1
%
24.2
%
0.5
%
NM
(13.3
)%
Adjusted EBITDA margin (non-GAAP
basis)
9.0
%
23.5
%
7.5
%
NM
9.1
%
NM indicates not meaningful.
Three months ended March 31,
2023
In thousands
Domestic Gannett Media
Newsquest
Digital Marketing
Solutions
Corporate and other
Consolidated Total
Net income (loss) attributable to
Gannett
$
23,009
$
12,018
$
5,623
$
(30,306
)
$
10,344
Benefit for income taxes
—
—
—
(17,329
)
(17,329
)
Interest expense
—
—
—
28,330
28,330
Gain on early extinguishment of debt
—
—
—
(496
)
(496
)
Non-operating pension income
303
(2,118
)
—
—
(1,815
)
Depreciation and amortization
31,751
1,758
5,860
4,329
43,698
Integration and reorganization costs
4,049
600
20
7,458
12,127
Third-party debt expenses and acquisition
costs
—
—
—
229
229
Asset impairments
5
—
—
—
5
(Gain) loss on sale or disposal of assets,
net
(16,271
)
3
35
(1,448
)
(17,681
)
Share-based compensation expense
—
—
—
3,736
3,736
Other non-operating expense (income),
net
1,567
502
145
(993
)
1,221
Non-recurring items
4
83
—
446
533
Adjusted EBITDA (non-GAAP basis)
$
44,417
$
12,846
$
11,683
$
(6,044
)
$
62,902
Net income attributable to Gannett
margin
4.3
%
20.3
%
5.0
%
NM
1.5
%
Adjusted EBITDA margin (non-GAAP
basis)
8.4
%
21.7
%
10.4
%
NM
9.4
%
NM indicates not meaningful.
GANNETT CO., INC. NON-GAAP FINANCIAL INFORMATION
ADJUSTED NET INCOME (LOSS) ATTRIBUTABLE TO GANNETT
(Unaudited)
Table No. 6
Three months ended March
31,
In thousands
2024
2023
Net (loss) income attributable to
Gannett
$
(84,768
)
$
10,344
Gain on early extinguishment of debt
(617
)
(496
)
Integration and reorganization costs
17,881
12,127
Third-party debt expenses and acquisition
costs
178
229
Asset impairments
45,989
5
Loss (gain) on sale or disposal of assets,
net
552
(17,681
)
Other items
(14
)
(121
)
Subtotal
(20,799
)
4,407
Tax impact of above items
(15,626
)
1,428
Adjusted net (loss) income attributable to
Gannett (non-GAAP basis)
$
(36,425
)
$
5,835
GANNETT CO., INC. NON-GAAP FINANCIAL INFORMATION
FREE CASH FLOW (Unaudited)
Table No. 7
Three months ended March
31,
In thousands
2024
2023
Cash provided by operating activities
(GAAP basis)
$
22,451
$
6,718
Capital expenditures
(12,999
)
(8,798
)
Free cash flow (non-GAAP basis)(1)
$
9,452
$
(2,080
)
(1)
For the three months ended March 31, 2024
and 2023, free cash flow was negatively impacted by interest paid
of $9.6 million and $10.5 million, respectively, integration and
reorganization costs of $5.8 million and $21.3 million,
respectively, and other costs of $6.1 million and $1.0 million,
respectively.
GANNETT CO., INC. NON-GAAP FINANCIAL INFORMATION
SAME STORE REVENUES - CONSOLIDATED (Unaudited)
Table No. 8
Three months ended March
31,
In thousands
2024
2023
% Change
Revenues
$
635,761
$
668,917
(5.0
)%
Currency impact
(2,343
)
—
Exited operations(1)
—
(1,648
)
Same store revenues
$
633,418
$
667,269
(5.1
)%
(1)
Exited operations include (i) businesses
divested and (ii) the elimination of stand-alone print products
discontinued within the media markets.
KEY PERFORMANCE INDICATORS
A key performance indicator ("KPI") is generally defined as a
quantifiable measurement or metric used to gauge performance,
specifically to help determine strategic, financial, and
operational achievements, especially compared to those of similar
businesses.
We define Digital-only average revenue per user ("ARPU") as
digital-only subscription average monthly revenues divided by the
average digital-only paid subscriptions within the respective
period. We define Core platform ARPU as core platform average
monthly revenues divided by average monthly customer count within
the period. We define Core platform revenues as revenue derived
from customers utilizing our proprietary digital marketing services
platform that are sold by either our direct or local market
teams.
Management believes Digital-only ARPU, Core platform ARPU,
digital-only paid subscriptions, core platform revenues and core
platform average customer count are KPIs that offer useful
information in understanding consumer behavior, trends in our
business, and our overall operating results. Management utilizes
these KPIs to track and analyze trends across our segments.
GANNETT CO., INC. KEY PERFORMANCE INDICATORS
(Unaudited)
Table No. 9
Three months ended March
31,
In thousands, except ARPU
2024
2023
Change
% Change
Domestic Gannett Media:
Digital-only ARPU
$
7.28
$
5.88
$
1.40
24
%
Newsquest:
Digital-only ARPU
$
6.03
$
6.41
$
(0.38
)
(6
)%
Total Gannett:
Digital-only ARPU
$
7.22
$
5.90
$
1.32
22
%
DMS:
Core platform revenues
$
116,050
$
111,407
$
4,643
4
%
Core platform ARPU
$
2,697
$
2,535
$
162
6
%
Core platform average customer count
14.3
14.7
(0.4
)
(3
)%
Table No. 10
As of March 31,
In thousands
2024
2023
% Change
Digital-only paid
subscriptions:
Domestic Gannett Media
1,927
1,962
(2
)%
Newsquest
90
61
48
%
Total Gannett
2,017
2,023
—
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240502079995/en/
For investor inquiries, contact: Matt Esposito Investor
Relations 703-854-3000 investors@gannett.com
For media inquiries, contact: Lark-Marie Anton Corporate
Communications 646-906-4087 lark@gannett.com
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