Gannett Co., Inc. ("Gannett", "we", "us", "our", or the
"Company") (NYSE: GCI) today reported its financial results for the
third quarter ended September 30, 2024.
"We continued to make solid progress on our key priorities in
the third quarter while delivering another quarter of
year-over-year Adjusted EBITDA growth. Three out of four digital
revenue categories experienced further trend improvement
year-over-year, and as a result, total digital revenues surpassed
45% of total revenues, representing an all-time high. These results
reinforce our belief that we have created a sustainable pathway for
ongoing growth moving forward. We also significantly increased our
free cash flow by 168% year-over-year. Additionally, within the
quarter, we repaid approximately $29 million of debt, which
combined with our Adjusted EBITDA growth, reduced our first lien
net leverage to 1.76x. It is also important to note that some of
our strategic decisions impacted total reported revenue in the
third quarter, such as the intentional closure or divestiture of
certain businesses in our portfolio. These actions were in-line
with our long-term strategy and did not materially impact Adjusted
EBITDA," said Michael Reed, Gannett Chairman and Chief Executive
Officer.
"In the third quarter, our audience surpassed 200 million
average monthly unique visitors for the first time in our history,
reflecting growth of over 7% compared to the prior year period.
Furthermore, in the third quarter, we announced an additional
partnership with BetMGM, which is expected to enhance the
monetization of our content platform."
"On October 15, 2024, we completed our debt refinancing
transactions which extended our maturities, reduced potential share
dilution by approximately 46%, and simplified our capital
structure. This refinancing is an important milestone in our
long-term strategic plan. With our continued strong performance, we
are pleased to reiterate nearly all of our 2024 full year outlook,
with the exception of slight adjustments to total digital revenues
and free cash flow, which was impacted by our refinancing efforts.
Beyond 2024, we continue to believe we are well-positioned to drive
sustainable growth across all of our key financial metrics, and as
a result, we reiterated our 2025-2026 business outlook."
"We continue to execute on our strategy and have made great
progress on our key priorities in the third quarter. We expect to
see further improvement to trends in the fourth quarter as well.
Importantly, we believe we are well-positioned to realize 2025 full
year total revenue growth, as well as continued growth in Adjusted
EBITDA and free cash flow. With the completion of our debt
refinancing transactions, combined with anticipated revenue and
cash flow growth in 2025 and 2026, we believe we are
well-positioned to create significant value for our
shareholders."
Third Quarter 2024 Digital Highlights
(Year-Over-Year):
- Total digital revenues of $277.4 million increased 5.2%, or
5.8% on a same store basis(1)
- Digital-only subscription revenues of $50.1 million grew
25.0%
- Digital-only average revenue per user(2) of $8.16 increased
19.6%
- Total digital-only paid subscriptions(2) of 2.06 million
increased 4.7%
- Record 203 million(3) average monthly unique visitors, an
increase of 7.4%
- Digital advertising revenues of $84.7 million grew 4.9%
- Digital Marketing Solutions ("DMS") segment core platform
revenues(2) of $119.2 million decreased 1.4% driven primarily by
the third quarter home improvement sector performance
- DMS core platform average revenue per user(2) of $2,777
increased 5.3%
______________
(1)
Adjusted EBITDA, Adjusted EBITDA margin, 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.
(2)
See "Key Performance Indicators" ("KPIs") below for information
about our use of KPIs.
(3)
203 million average monthly unique visitors in the third quarter of
2024 with approximately 147 million average monthly unique visitors
coming from our USA TODAY NETWORK (based on September 2024 Comscore
Media Metrix®) and approximately 56 million average monthly unique
visitors resulting from our U.K. digital properties (based on Adobe
Analytics).
Additional Third Quarter 2024
Highlights (Year-Over-Year):
- Total revenues of $612.4 million decreased 6.2%
- Total revenues were impacted by the decision to sell or shut
down certain properties
- Same store revenues(1) decreased 5.3%, reflecting an
improvement of 310 basis points
- Net loss attributable to Gannett of $19.7 million, a loss
margin of 3.2%
- Adjusted Net loss attributable to Gannett(1) of $6.1 million
improved by $16.6 million
- Adjusted EBITDA(1) totaled $62.9 million, an increase of
5.6%
- Adjusted EBITDA(1) margin of 10.3% improved by 120 basis
points
- Cash provided by operating activities of $33.7 million, an
increase of $13.1 million
- Free cash flow(1) of $19.8 million, an increase of 168%
Third Quarter 2024 Capital Structure
Highlights:
- As of September 30, 2024, the Company had cash and cash
equivalents of $101.8 million
- Total principal debt outstanding at September 30, 2024 was
$1,061.4 million, including $576.1 million in first lien debt
- First lien net leverage(4) was 1.76x, a decrease of 10.2%
compared to the prior year period
- The Company repaid approximately $28.5 million of debt
Full Year 2024 and 2025-2026 Business
Outlook(5)
- Full Year 2024 Business Outlook(5)
- Total digital revenues are expected to grow approximately 6%-7%
on a same store basis(1)
- Total revenues are expected to be down in the low to mid-single
digits on a reported and same store basis(1)
- 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(1) is expected to grow versus the prior
year
- Cash provided by operating activities is expected to grow
versus the prior year
- Free cash flow(1) is expected to grow in excess(6) of the
expected growth in Adjusted EBITDA(1) after excluding the estimated
$7 million impact of the debt refinancing
- 2025-2026 Business Outlook(5)
- 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(1)
- Net income attributable to Gannett is expected to improve to
positive
- Adjusted EBITDA(1) 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(1) is expected to grow at an accelerated rate
with an estimated CAGR(1)(7) of 40%
Financial Highlights
In thousands
Third Quarter 2024
Revenues
$
612,439
Net loss attributable to Gannett
(19,653
)
Adjusted EBITDA(8) (non-GAAP basis)
62,880
Adjusted net loss attributable to
Gannett(8) (non-GAAP basis)
(6,054
)
Cash provided by operating activities
33,745
Free cash flow(8) (non-GAAP basis)
19,762
_____________
(4)
As of September 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 Q3 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 October 31, 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.
(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, October 31,
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 Third Quarter Earnings Call"
or access code "926379". 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, November 14, 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 "50822". 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 expectations with
respect to the effects of our refinancing transaction, 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)", "suggest", "trend", "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
September 30, 2024
December 31, 2023
Assets
(Unaudited)
Current assets:
Cash and cash equivalents
$
101,801
$
100,180
Accounts receivable, net of allowance of
$15,170 and $16,338 as of September 30, 2024 and December 31, 2023,
respectively
244,011
266,096
Inventories
22,423
26,794
Prepaid expenses
43,166
36,210
Other current assets
21,319
14,957
Total current assets
432,720
444,237
Property, plant and equipment, net of
accumulated depreciation of $344,789 and $336,408 as of September
30, 2024 and December 31, 2023, respectively
247,733
239,087
Operating lease assets
151,604
221,733
Goodwill
531,112
533,876
Intangible assets, net
453,052
524,350
Deferred tax assets
49,722
37,125
Pension and other assets
197,437
180,839
Total assets
$
2,063,380
$
2,181,247
Liabilities and equity
Current liabilities:
Accounts payable and accrued
liabilities
$
334,356
$
293,444
Deferred revenue
108,306
120,502
Current portion of long-term debt
60,452
63,752
Operating lease liabilities
40,447
45,763
Other current liabilities
7,604
10,052
Total current liabilities
551,165
533,513
Long-term debt
504,369
564,836
Convertible debt
427,238
416,036
Deferred tax liabilities
—
2,028
Pension and other postretirement benefit
obligations
39,123
42,661
Long-term operating lease liabilities
176,152
203,871
Other long-term liabilities
125,386
100,989
Total noncurrent liabilities
1,272,268
1,330,421
Total liabilities
1,823,433
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 September 30, 2024 and December 31, 2023
—
—
Common stock, $0.01 par value per share,
2,000,000,000 shares authorized, 158,821,732 shares issued and
147,430,592 shares outstanding at September 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, 11,391,140 shares
and 9,615,242 shares at September 30, 2024 and December 31, 2023,
respectively
(20,539
)
(17,393
)
Additional paid-in capital
1,435,879
1,426,325
Accumulated deficit
(1,117,865
)
(1,027,192
)
Accumulated other comprehensive loss
(58,612
)
(65,541
)
Total Gannett stockholders'
equity
240,451
317,785
Noncontrolling interests
(504
)
(472
)
Total equity
239,947
317,313
Total liabilities and equity
$
2,063,380
$
2,181,247
GANNETT CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
Table No. 2
Three months ended September
30,
In thousands, except per share amounts
2024
2023
Digital
$
277,386
$
263,644
Print and commercial
335,053
389,227
Total revenues
612,439
652,871
Operating costs
375,912
416,103
Selling, general and administrative
expenses
183,857
184,914
Depreciation and amortization
40,398
40,644
Integration and reorganization costs
(reversal)
17,307
(955
)
Asset impairments
87
188
Loss (gain) on sale or disposal of assets,
net
784
(23,334
)
Other operating expenses
117
370
Total operating expenses
618,462
617,930
Operating (loss) income
(6,023
)
34,941
Interest expense
25,959
27,918
Loss (gain) on early extinguishment of
debt
176
(2,717
)
Non-operating pension income
(3,193
)
(2,929
)
Equity loss (income) in unconsolidated
investees, net
97
(510
)
Other non-operating income, net
(2,979
)
(397
)
Non-operating expenses
20,060
21,365
(Loss) income before income
taxes
(26,083
)
13,576
(Benefit) provision for income taxes
(6,429
)
16,144
Net loss
(19,654
)
(2,568
)
Net loss attributable to noncontrolling
interests
(1
)
(2
)
Net loss attributable to
Gannett
$
(19,653
)
$
(2,566
)
Loss per share attributable to Gannett -
basic
$
(0.14
)
$
(0.02
)
Loss per share attributable to Gannett -
diluted
$
(0.14
)
$
(0.02
)
GANNETT CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
Table No. 3
Nine months ended September
30,
In thousands
2024
2023
Operating activities
Net loss
$
(90,705
)
$
(4,998
)
Adjustments to reconcile net loss to
operating cash flows:
Depreciation and amortization
116,954
124,126
Share-based compensation expense
9,243
12,727
Non-cash interest expense
15,905
15,942
Loss (gain) on sale or disposal of assets,
net
1,572
(40,869
)
Gain on early extinguishment of debt
(354
)
(3,213
)
Asset impairments
46,076
1,370
Pension and other postretirement benefit
obligations
(20,047
)
(10,765
)
Equity income in unconsolidated investees,
net
(277
)
(1,341
)
Change in other assets and liabilities,
net
12,954
(19,562
)
Cash provided by operating
activities
91,321
73,417
Investing activities
Purchase of property, plant and
equipment
(36,708
)
(29,707
)
Proceeds from sale of real estate and
other assets
19,257
83,799
Change in other investing activities
386
(24
)
Cash (used for) provided by investing
activities
(17,065
)
54,068
Financing activities
Repayments of long-term debt
(68,116
)
(111,894
)
Treasury stock
(3,141
)
(2,642
)
Changes in other financing activities
(1,251
)
1,593
Cash used for financing
activities
(72,508
)
(112,943
)
Effect of currency exchange rate change on
cash
(681
)
688
Increase in cash, cash equivalents and
restricted cash
1,067
15,230
Cash, cash equivalents and restricted cash
at beginning of period
110,612
104,804
Cash, cash equivalents and restricted
cash at end of period
$
111,679
$
120,034
GANNETT CO., INC.
SEGMENT INFORMATION
(Unaudited)
Table No. 4
Three months ended September
30,
In thousands
2024
2023
Revenues:
Domestic Gannett Media
$
468,511
$
508,505
Newsquest
59,548
59,035
Digital Marketing Solutions
119,929
121,919
Corporate and other
1,431
1,532
Intersegment eliminations
(36,980
)
(38,120
)
Total
$
612,439
$
652,871
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 exclusion of the cash portion
of interest / financing expense, income tax (benefit) provision,
and charges related to asset impairments, which are items that 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 September
30, 2024
In thousands
Domestic Gannett Media
Newsquest
Digital Marketing
Solutions
Corporate and other
Consolidated Total
Net income (loss) attributable to
Gannett
$
9,639
$
14,279
$
5,685
$
(49,256
)
$
(19,653
)
Benefit for income taxes
—
—
—
(6,429
)
(6,429
)
Interest expense
—
—
—
25,959
25,959
Loss on early extinguishment of debt
—
—
—
176
176
Non-operating pension income
(1,307
)
(1,886
)
—
—
(3,193
)
Depreciation and amortization
23,872
2,114
6,434
7,978
40,398
Integration and reorganization costs
13,362
84
1,030
2,831
17,307
Third-party debt expenses and acquisition
costs
—
—
—
247
247
Asset impairments
87
—
—
—
87
Loss (gain) on sale or disposal of assets,
net
1,032
(443
)
4
191
784
Share-based compensation expense
—
—
—
2,905
2,905
Other non-operating income, net
(266
)
(231
)
(1,410
)
(1,072
)
(2,979
)
Non-recurring items
(117
)
—
—
7,388
7,271
Adjusted EBITDA (non-GAAP basis)
$
46,302
$
13,917
$
11,743
$
(9,082
)
$
62,880
Net income (loss) attributable to Gannett
margin
2.1
%
24.0
%
4.7
%
NM
(3.2
)%
Adjusted EBITDA margin (non-GAAP
basis)
9.9
%
23.4
%
9.8
%
NM
10.3
%
NM indicates not meaningful.
Three months ended September
30, 2023
In thousands
Domestic Gannett Media
Newsquest
Digital Marketing
Solutions
Corporate and other
Consolidated Total
Net income (loss) attributable to
Gannett
$
41,544
$
12,993
$
5,902
$
(63,005
)
$
(2,566
)
Provision for income taxes
—
—
—
16,144
16,144
Interest expense
—
—
—
27,918
27,918
Gain on early extinguishment of debt
—
—
—
(2,717
)
(2,717
)
Non-operating pension income
(719
)
(2,210
)
—
—
(2,929
)
Depreciation and amortization
27,099
2,845
6,015
4,685
40,644
Integration and reorganization (reversal)
costs
(3,649
)
110
630
1,954
(955
)
Third-party debt expenses and acquisition
costs
139
—
—
231
370
Asset impairments
188
—
—
—
188
(Gain) loss on sale or disposal of assets,
net
(23,446
)
(19
)
131
—
(23,334
)
Share-based compensation expense
—
—
—
3,944
3,944
Other non-operating (income) expense,
net
(422
)
(297
)
897
(575
)
(397
)
Non-recurring items
15
89
—
3,110
3,214
Adjusted EBITDA (non-GAAP basis)
$
40,749
$
13,511
$
13,575
$
(8,311
)
$
59,524
Net income (loss) attributable to Gannett
margin
8.2
%
22.0
%
4.8
%
NM
(0.4
)%
Adjusted EBITDA margin (non-GAAP
basis)
8.0
%
22.9
%
11.1
%
NM
9.1
%
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 September
30,
In thousands
2024
2023
Net loss attributable to Gannett
$
(19,653
)
$
(2,566
)
Loss (gain) on early extinguishment of
debt
176
(2,717
)
Integration and reorganization costs
(reversal)
17,307
(955
)
Third-party debt expenses and acquisition
costs
247
370
Asset impairments
87
188
Loss (gain) on sale or disposal of assets,
net
784
(23,334
)
Other items
(610
)
42
Subtotal
(1,662
)
(28,972
)
Tax impact of above items
(4,392
)
6,353
Adjusted net loss attributable to Gannett
(non-GAAP basis)
$
(6,054
)
$
(22,619
)
GANNETT CO., INC.
NON-GAAP FINANCIAL INFORMATION
FREE CASH FLOW
(Unaudited)
Table No. 7
Three months ended September
30,
In thousands
2024
2023
Cash provided by operating activities
(GAAP basis)
$
33,745
$
20,631
Capital expenditures
(13,983
)
(13,259
)
Free cash flow (non-GAAP basis)(1)
$
19,762
$
7,372
(1) For the three months ended September
30, 2024 and 2023, free cash flow was negatively impacted by
interest paid of $8.7 million and $10.4 million, respectively,
integration and reorganization costs of $7.3 million and $9.6
million, respectively, and other costs of $12.4 million and $4.1
million, respectively.
GANNETT CO., INC.
NON-GAAP FINANCIAL INFORMATION
SAME STORE REVENUES - CONSOLIDATED
& DIGITAL
(Unaudited)
Table No. 8
Three months ended September
30,
In thousands
2024
2023
% Change
Total revenues
$
612,439
$
652,871
(6.2
)%
Currency impact
(1,585
)
—
Exited operations(1)
(2,152
)
(10,345
)
Same store total revenues
$
608,702
$
642,526
(5.3
)%
(1) Exited operations include (i)
businesses divested and (ii) the elimination of stand-alone print
products discontinued within the media markets.
Three months ended September
30,
In thousands
2024
2023
% Change
Digital revenues
$
277,386
$
263,644
5.2
%
Currency impact
(587
)
—
Exited operations(1)
(2,123
)
(4,065
)
Same store digital revenues
$
274,676
$
259,579
5.8
%
(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 September
30,
In thousands, except ARPU
2024
2023
Change
% Change
Domestic Gannett Media:
Digital-only ARPU
$
8.24
$
6.83
$
1.41
21
%
Newsquest:
Digital-only ARPU
$
6.49
$
6.46
$
0.03
—
%
Total Gannett:
Digital-only ARPU
$
8.16
$
6.82
$
1.34
20
%
DMS:
Core platform revenues
$
119,158
$
120,836
$
(1,678
)
(1
)%
Core platform ARPU
$
2,777
$
2,636
$
141
5
%
Core platform average customer count
14.3
15.3
(1.0
)
(7
)%
Table No. 10
As of September 30,
In thousands
2024
2023
% Change
Digital-only paid
subscriptions:
Domestic Gannett Media
1,953
1,889
3
%
Newsquest
103
75
37
%
Total Gannett
2,056
1,964
5
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241031042049/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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