Gannett Co., Inc. ("Gannett", "we", "us", "our", or the
"Company") (NYSE: GCI) today reported its financial results for the
second quarter ended June 30, 2024.
"We are pleased to report another strong quarter of financial
results. In fact, our operational execution led to year-over-year
growth in Adjusted EBITDA and further improvement to our same store
revenue trends. Same store revenue trends improved sequentially for
the sixth consecutive quarter, and we remain on track and expect to
hit the revenue growth inflection point as we exit 2024. Each of
our digital revenue streams continued to grow over the prior year,
and as a result, total digital revenues now account for 44% of
total revenues."
"As part of our strategy, we continued to further optimize our
capital structure. During the second quarter, we repaid $24.3
million of debt, which combined with our Adjusted EBITDA growth,
reduced our first lien net leverage below 2.0x. Equally important,
our total net debt fell under $1.0 billion for the first time since
the 2019 acquisition of legacy Gannett, and we continued to
maintain a strong liquidity position with approximately $99 million
in cash on the balance sheet."
"Midway through 2024 we are on track with our operating plans
and believe we are well-positioned to continue this positive
momentum for the balance of the year. Our operational performance
in the second quarter reinforces the confidence we have in our
strategic direction, and as such, we are reiterating our business
outlook," said Michael Reed, Gannett Chairman and Chief Executive
Officer.
Second Quarter 2024 Digital
Highlights:
- Total digital revenues of $278.4 million, or 43.5% of total
revenues, up 6.2% versus the same period of the prior year
- Digital-only subscription revenues of $46.3 million grew 22.3%
year-over-year
- Digital-only average revenue per user(1) of $7.62 increased
20.0% year-over-year
- Total digital-only paid subscriptions(1) of 2.03 million
increased 4.2% year-over-year
- 185 million(2) average monthly unique visitors in the second
quarter of 2024
- Digital advertising revenues of $84.5 million grew 3.6%
year-over-year
- Digital Marketing Solutions segment core platform revenues(1)
of $122.8 million increased 1.0% year-over year
- Record high core platform average revenue per user(1) of
$2,777, up 5.1% year-over-year
- Core platform average customer count(1) of 14.7 thousand, a
2.8% increase from the first quarter of 2024
Additional Second Quarter 2024
Highlights:
- Total revenues of $639.8 million decreased 4.8% compared to the
second quarter of 2023
- Same store revenues(3) decreased 4.6%, reflecting a sequential
improvement of 50 basis points
- Net income attributable to Gannett of $13.7 million improved by
$26.4 million year-over-year
- Adjusted Net income attributable to Gannett(3) of $29.1
million
- Adjusted EBITDA(3) totaled $74.6 million, a $17.0 million
increase from the first quarter of 2024
- Cash provided by operating activities of $35.1 million, a $12.7
million increase from the first quarter of 2024
- Free cash flow(3) of $25.4 million, a sequential improvement of
$15.9 million compared to the first quarter of 2024
(1)
See "Key Performance Indicators" ("KPIs")
below for information about our use of KPIs.
(2)
185 million average monthly unique
visitors in the second quarter of 2024 with approximately 132
million average monthly unique visitors coming from our USA TODAY
NETWORK (based on June 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.
Second Quarter 2024 Capital Structure
Highlights:
- As of June 30, 2024, the Company had cash and cash equivalents
of $98.9 million
- Total principal debt outstanding at June 30, 2024 was $1,089.9
million, including $604.6 million in first lien debt
- Total net debt outstanding(4) at June 30, 2024 of $991.0
million
- First lien net leverage(5) was 1.9x, a decrease of 15.9%
compared to the same period of the prior year
- The Company repaid $24.3 million of debt in the second quarter
of 2024
Full Year 2024 and 2025-2026 Business
Outlook(6)
The Company reiterates its full year 2024 outlook and its
outlook over the course of 2025 and 2026.
- Full Year 2024 Business Outlook(6)
- 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(7) 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
- 2025-2026 Business Outlook(6)
- Total digital revenues are expected to accelerate with growth
exceeding 10% year-over-year and 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(8) of 30%
- Free cash flow(3) is expected to grow at an accelerated rate
with an estimated CAGR(3)(8) of 40%
Financial Highlights
In thousands
Second Quarter 2024
Revenues
$
639,840
Net income attributable to Gannett
13,748
Adjusted EBITDA(9) (non-GAAP basis)
74,562
Adjusted net income attributable to
Gannett(9) (non-GAAP basis)
29,129
Cash provided by operating activities
35,125
Free cash flow(9) (non-GAAP basis)
25,399
(4)
Total net debt outstanding is calculated
by subtracting cash on the balance sheet from the total principal
value of debt.
(5)
As of June 30, 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
Q2 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.
(6)
Projections are based on Company estimates
as of August 1, 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.
(7)
Capital expenditures are expected to
increase as a result of investments in technology and products.
(8)
Cash provided by operating activities CAGR
and Free cash flow CAGR are based on 2023 to 2026 estimated growth
rates.
(9)
Refer to "Use of Non-GAAP Information" below for the Company’s
definition of Adjusted EBITDA, Adjusted net income 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, August 1,
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 Second Quarter Earnings
Call" or access code "598135". 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, August 15, 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 "50820". 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 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 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
June 30, 2024
December 31, 2023
Assets
(Unaudited)
Current assets:
Cash and cash equivalents
$
98,886
$
100,180
Accounts receivable, net of allowance of
$14,514 and $16,338 as of June 30, 2024 and December 31, 2023,
respectively
241,649
266,096
Inventories
22,427
26,794
Prepaid expenses
39,426
36,210
Other current assets
15,647
14,957
Total current assets
418,035
444,237
Property, plant and equipment, net of
accumulated depreciation of $342,821 and $336,408 as of June 30,
2024 and December 31, 2023, respectively
233,892
239,087
Operating lease assets
157,980
221,733
Goodwill
533,687
533,876
Intangible assets, net
478,697
524,350
Deferred tax assets
40,166
37,125
Pension and other assets
191,029
180,839
Total assets
$
2,053,486
$
2,181,247
Liabilities and equity
Current liabilities:
Accounts payable and accrued
liabilities
$
304,882
$
293,444
Deferred revenue
112,259
120,502
Current portion of long-term debt
60,452
63,752
Operating lease liabilities
41,694
45,763
Other current liabilities
8,361
10,052
Total current liabilities
527,648
533,513
Long-term debt
531,211
564,836
Convertible debt
423,370
416,036
Deferred tax liabilities
—
2,028
Pension and other postretirement benefit
obligations
40,391
42,661
Long-term operating lease liabilities
183,137
203,871
Other long-term liabilities
98,459
100,989
Total noncurrent liabilities
1,276,568
1,330,421
Total liabilities
1,804,216
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 June 30, 2024 and December 31, 2023
—
—
Common stock, $0.01 par value per share,
2,000,000,000 shares authorized, 158,817,284 shares issued and
147,653,745 shares outstanding at June 30, 2024; 158,554,705 shares
issued and 148,939,463 shares outstanding at December 31, 2023
1,588
1,586
Treasury stock, at cost, 11,163,539 shares
and 9,615,242 shares at June 30, 2024 and December 31, 2023,
respectively
(20,499
)
(17,393
)
Additional paid-in capital
1,432,682
1,426,325
Accumulated deficit
(1,098,212
)
(1,027,192
)
Accumulated other comprehensive loss
(65,786
)
(65,541
)
Total Gannett stockholders'
equity
249,773
317,785
Noncontrolling interests
(503
)
(472
)
Total equity
249,270
317,313
Total liabilities and equity
$
2,053,486
$
2,181,247
GANNETT CO., INC. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited)
Table No. 2
Three months ended June
30,
In thousands, except per share amounts
2024
2023
Digital
$
278,378
$
262,103
Print and commercial
361,462
410,254
Total revenues
639,840
672,357
Operating costs
391,474
426,096
Selling, general and administrative
expenses
183,019
184,127
Depreciation and amortization
38,258
39,784
Integration and reorganization costs
19,775
7,287
Asset impairments
—
1,177
Loss on sale or disposal of assets,
net
236
146
Other operating expenses
112
229
Total operating expenses
632,874
658,846
Operating income
6,966
13,511
Interest expense
26,270
28,559
Loss on early extinguishment of debt
87
—
Non-operating pension income
(3,137
)
(2,263
)
Equity income in unconsolidated investees,
net
(559
)
(621
)
Other non-operating income, net
(2,609
)
(807
)
Non-operating expenses
20,052
24,868
Loss before income taxes
(13,086
)
(11,357
)
(Benefit) provision for income taxes
(26,803
)
1,333
Net income (loss)
13,717
(12,690
)
Net loss attributable to noncontrolling
interests
(31
)
(13
)
Net income (loss) attributable to
Gannett
$
13,748
$
(12,677
)
Income (loss) per share attributable to
Gannett - basic
$
0.10
$
(0.09
)
Income (loss) per share attributable to
Gannett - diluted
$
0.09
$
(0.09
)
GANNETT CO., INC. CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (Unaudited)
Table No. 3
Six months ended June
30,
In thousands
2024
2023
Operating activities
Net loss
$
(71,051
)
$
(2,430
)
Adjustments to reconcile net loss to
operating cash flows:
Depreciation and amortization
76,556
83,482
Share-based compensation expense
6,338
8,783
Non-cash interest expense
10,513
10,567
Loss (gain) on sale or disposal of assets,
net
788
(17,535
)
Gain on early extinguishment of debt
(530
)
(496
)
Asset impairments
45,989
1,182
Pension and other postretirement benefit
obligations
(15,399
)
(6,792
)
Equity income in unconsolidated investees,
net
(374
)
(831
)
Change in other assets and liabilities,
net
4,746
(23,144
)
Cash provided by operating
activities
57,576
52,786
Investing activities
Purchase of property, plant and
equipment
(22,725
)
(16,448
)
Proceeds from sale of real estate and
other assets
6,073
31,465
Change in other investing activities
386
(12
)
Cash (used for) provided by investing
activities
(16,266
)
15,005
Financing activities
Repayments of long-term debt
(39,575
)
(51,291
)
Treasury stock
(3,103
)
(2,622
)
Changes in other financing activities
(846
)
(647
)
Cash used for financing
activities
(43,524
)
(54,560
)
Effect of currency exchange rate change on
cash
386
98
(Decrease) increase in cash, cash
equivalents and restricted cash
(1,828
)
13,329
Cash, cash equivalents and restricted cash
at beginning of period
110,612
104,804
Cash, cash equivalents and restricted
cash at end of period
$
108,784
$
118,133
GANNETT CO., INC. SEGMENT INFORMATION
(Unaudited)
Table No. 4
Three months ended June
30,
In thousands
2024
2023
Revenues:
Domestic Gannett Media
$
491,909
$
528,194
Newsquest
61,252
57,609
Digital Marketing Solutions
123,798
122,789
Corporate and other
1,258
1,673
Intersegment eliminations
(38,377
)
(37,908
)
Total
$
639,840
$
672,357
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 2025-2026 business 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 June 30,
2024
In thousands
Domestic Gannett Media
Newsquest
Digital Marketing
Solutions
Corporate and other
Consolidated Total
Net income (loss) attributable to
Gannett
$
16,043
$
14,058
$
5,514
$
(21,867
)
$
13,748
Benefit for income taxes
—
—
—
(26,803
)
(26,803
)
Interest expense
—
—
—
26,270
26,270
Loss on early extinguishment of debt
—
—
—
87
87
Non-operating pension income
(1,306
)
(1,831
)
—
—
(3,137
)
Depreciation and amortization
24,309
2,043
6,065
5,841
38,258
Integration and reorganization costs
14,693
243
887
3,952
19,775
Third-party debt expenses and acquisition
(income) costs
—
(22
)
—
270
248
Loss on sale or disposal of assets,
net
233
1
—
2
236
Share-based compensation expense
—
—
—
3,512
3,512
Other non-operating income, net
(1,118
)
(354
)
(697
)
(440
)
(2,609
)
Non-recurring items
75
—
4
4,898
4,977
Adjusted EBITDA (non-GAAP basis)
$
52,929
$
14,138
$
11,773
$
(4,278
)
$
74,562
Net income attributable to Gannett
margin
3.3
%
23.0
%
4.5
%
NM
2.1
%
Adjusted EBITDA margin (non-GAAP
basis)
10.8
%
23.1
%
9.5
%
NM
11.7
%
NM indicates not meaningful.
Three months ended June 30,
2023
In thousands
Domestic Gannett Media
Newsquest
Digital Marketing
Solutions
Corporate and other
Consolidated Total
Net income (loss) attributable to
Gannett
$
22,786
$
13,139
$
9,273
$
(57,875
)
$
(12,677
)
Provision for income taxes
—
—
—
1,333
1,333
Interest expense
—
—
—
28,559
28,559
Non-operating pension income
(80
)
(2,183
)
—
—
(2,263
)
Depreciation and amortization
27,630
2,126
5,927
4,101
39,784
Integration and reorganization costs
(reversal)
1,934
376
(48
)
5,025
7,287
Third-party debt expenses and acquisition
costs
—
—
—
229
229
Asset impairments
1,177
—
—
—
1,177
Loss on sale or disposal of assets,
net
77
3
66
—
146
Share-based compensation expense
—
—
—
5,047
5,047
Other non-operating (income) expense,
net
(157
)
(1,110
)
252
208
(807
)
Non-recurring items
10
91
—
3,235
3,336
Adjusted EBITDA (non-GAAP basis)
$
53,377
$
12,442
$
15,470
$
(10,138
)
$
71,151
Net income (loss) attributable to Gannett
margin
4.3
%
22.8
%
7.6
%
NM
(1.9
)%
Adjusted EBITDA margin (non-GAAP
basis)
10.1
%
21.6
%
12.6
%
NM
10.6
%
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 June
30,
In thousands
2024
2023
Net income (loss) attributable to
Gannett
$
13,748
$
(12,677
)
Loss on early extinguishment of debt
87
—
Integration and reorganization costs
19,775
7,287
Third-party debt expenses and acquisition
costs
248
229
Asset impairments
—
1,177
Loss on sale or disposal of assets,
net
236
146
Other items
7
(18
)
Subtotal
34,101
(3,856
)
Tax impact of above items
(4,972
)
(2,122
)
Adjusted net income (loss) attributable to
Gannett (non-GAAP basis)
$
29,129
$
(5,978
)
GANNETT CO., INC. NON-GAAP FINANCIAL
INFORMATION FREE CASH FLOW (Unaudited)
Table No. 7
Three months ended June
30,
In thousands
2024
2023
Cash provided by operating activities
(GAAP basis)
$
35,125
$
46,068
Capital expenditures
(9,726
)
(7,650
)
Free cash flow (non-GAAP basis)(1)
$
25,399
$
38,418
(1) For the three months ended June 30,
2024 and 2023, free cash flow was negatively impacted by interest
paid of $32.1 million and $35.2 million, respectively, integration
and reorganization costs of $10.3 million and $16.2 million,
respectively, and other costs of $3.8 million and $2.5 million,
respectively.
GANNETT CO., INC. NON-GAAP FINANCIAL INFORMATION
SAME STORE REVENUES - CONSOLIDATED (Unaudited)
Table No. 8
Three months ended June
30,
In thousands
2024
2023
% Change
Revenues
$
639,840
$
672,357
(4.8
)%
Currency impact
(344
)
—
Exited operations(1)
—
(2,348
)
Same store revenues
$
639,496
$
670,009
(4.6
)%
(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 June
30,
In thousands, except ARPU
2024
2023
Change
% Change
Domestic Gannett Media:
Digital-only ARPU
$
7.70
$
6.34
$
1.36
21
%
Newsquest:
Digital-only ARPU
$
5.94
$
6.61
$
(0.67
)
(10
)%
Total Gannett:
Digital-only ARPU
$
7.62
$
6.35
$
1.27
20
%
DMS:
Core platform revenues
$
122,843
$
121,574
$
1,269
1
%
Core platform ARPU
$
2,777
$
2,642
$
135
5
%
Core platform average customer count
14.7
15.3
(0.6
)
(4
)%
Table No. 10
As of June 30,
In thousands
2024
2023
% Change
Digital-only paid
subscriptions:
Domestic Gannett Media
1,938
1,886
3
%
Newsquest
96
66
45
%
Total Gannett
2,034
1,952
4
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240801224878/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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