Gannett Co., Inc. (“Gannett”, the “Company” or “we”) (NYSE:GCI)
announced today proactive measures taken in response to the
COVID-19 crisis.
“We have worked swiftly and diligently over the past month to
support the health and safety of our employees and to preserve our
ability to deliver high quality journalism to the communities we
serve,” said Michael Reed, Chairman and Chief Executive Officer of
Gannett. “While business performance started the year strong, we
now expect our revenues to be significantly impacted by the
COVID-19 pandemic. Therefore, we have taken several measures
designed to mitigate the impact on our operating performance and to
strengthen the Company’s balance sheet and liquidity position. We
believe these measures are essential to protect the Company during
this challenging time. We continue to aggressively pursue
previously announced integration plans and remain optimistic about
our ability to emerge from this crisis as a stronger Company.”
Business Update
We expect operating performance to be adversely affected by the
widespread disruption caused by the COVID-19 pandemic. As a media
company, we are generally exempt from mandates requiring closures
of non-essential businesses and therefore have been able to
continue operations. However, we expect our advertising and events
revenues to decline as a result of widespread business closures and
social distancing measures.
In the current environment, a major priority is preserving
liquidity. We have identified measures that we expect to reduce
expenses in 2020 by an additional $100 - $125 million (in addition
to the merger-related expense reductions explained below), through
implementation of reductions in force and furloughs, significant
pay reductions for senior management, and cancellation of
non-essential travel and spending. We are also reviewing
opportunities to delay capital expenditures and working diligently
with vendors, creditors, and pension regulators to restructure or
postpone certain obligations.
With respect to post-merger integration, we remain highly
confident in our previously announced goal of implementing measures
by the end of 2021 to achieve $300 million in annualized synergies,
with more than half of such measures expected to be implemented in
2020.
In addition, we continue to target $100 - $125 million in real
estate sales by the end of 2021, the proceeds of which we intend to
use to pay down debt. Since reporting fourth quarter earnings, the
Company has paid down an additional $3.3 million of principal on
our term loan facility, reducing debt outstanding to $1.744
billion.
Dividend Update
Prior to the onset of the U.S. public health and economic crises
triggered by the pandemic we had announced the Board’s intention to
declare a quarterly dividend with respect to the first quarter of
2020. However, in light of the unprecedented economic disruption
and uncertainty caused by the pandemic, the Board has determined
that it is in the best interests of shareholders for the Company to
preserve liquidity by suspending the quarterly dividend until
conditions improve. The Board of Directors is committed to
reinstituting a quarterly dividend when it is appropriate to do
so.
Community Impact
With a portfolio of 261 local daily newspapers across 46 states
and Guam, plus our national publication, USA TODAY, we are uniquely
positioned to support local communities during the pandemic by
continuing to provide high quality journalism and by creating
innovative solutions to allow consumers to support small
businesses. To date, we have launched the following
initiatives:
In response to reader interest, USA TODAY launched “Nations
Health,” a special daily section dedicated to latest COVID-19 news
which runs in print and is updated in real time online and
available for all local digital editions. Additionally, USA TODAY
launched a coronavirus newsletter, which has become one of the
fastest growing newsletters in the history of the brand with nearly
145K subscribers in a month. These products, which are available
for free to all readers, bring together the best of our content on
the pandemic from all 50 states with updates on testing, confirmed
cases, mitigation, closures, cancellations and the “new normal” for
America. In the past 45 days, USA TODAY has had more than 400
million views of its coronavirus stories, videos, graphics and
photo galleries. To access “Nation’s Health” content, please visit
coronavirus.usatoday.com.
Gannett also launched “Support Local”, which provides
communities with an easy way to discover opportunities to help
their favorite local businesses and to access special services
provided by businesses during the crisis. The site provides free
business listings that are searchable by city, and it allows
readers to filter by type of business, such as restaurants, bars,
cafes and bakeries. The site currently enables the purchase of
restaurant gift cards and delivery service and will be adding
features such as announcements of special hours and remote access,
as well as special offers. To find or add a local business in your
community to “Support Local,” please visit
supportlocal.usatoday.com.
Protecting Our Employees
Our goal is to promote the health of our employees while
continuing operations. Over 95% of our employees who do not work in
production or delivery functions have been working from home since
March 20th. For our production and delivery workers, and in the
select instances where employees cannot work from home, we have
implemented social distancing measures and hygiene best practices
in line with the CDC and WHO guidelines. We wish to extend a
heartfelt thanks to our employees, who continue to provide
essential services to local communities and readers during this
crisis.
About Gannett
Gannett Co., Inc. (NYSE:GCI) is an innovative, digitally focused
media and marketing solutions company committed to strengthening
communities across our network. With an unmatched reach at the
national and local level, Gannett touches the lives of nearly 140
million people monthly with our Pulitzer-Prize winning content,
consumer experiences and benefits, and advertiser products and
services. Gannett brands include the USA TODAY and more than 260
daily local newspaper brands, digital marketing services companies
ReachLocal, WordStream, and ThriveHive and U.K. media company
Newsquest. Following the completion of their recent merger,
starting November 20, 2019, New Media Investment Group Inc. trades
on the New York Stock Exchange under Gannett Co., Inc. and its
ticker symbol has changed to “GCI”. To connect with us, visit
www.gannett.com.
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 statements
regarding the expected effects on our business, financial condition
and results of operations of the COVID-19 pandemic, the potential
impact of mitigation measures, future real estate sales, debt
repayment and the declaration and/or suspension of any dividend.
These statements are based on management’s current expectations and
beliefs and are subject to a number of evolving risks and
uncertainties, including the duration and scope of the COVID-19
pandemic, the impact of the pandemics on our business, financial
condition, or results of operations, the impact of the pandemic on
demand for print newspapers, and actions taken by governments,
businesses and individuals in response to the pandemic. 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 that 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 also the risk
factors described in the Company’s most recent Annual Report on
Form 10-K filed 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. 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20200401005168/en/
Ashley Higgins & Stacy Cunningham, Gannett Investor
Relations investors@gannett.com (212) 479-3160 or Media: Stephanie
Tackach, Gannett Public Relations stackach@gannett.com
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