Strong revenue and Adjusted EBITDA performance
despite COVID-19 impact
Implemented $75 million in annualized synergies
during the first quarter
Ended the quarter with $200 million of cash and
cash equivalents
Gannett Co., Inc. ("Gannett", "we", "us", "our", or "the
Company") (NYSE: GCI) today reported its financial results for the
first quarter ended March 31, 2020. Prior to November 19, 2019, our
corporate name was New Media Investment Group Inc. ("New Media" or
"Legacy New Media"), and Gannett Co., Inc. ("Legacy Gannett") was a
separate publicly traded company. On November 19, 2019, New Media
acquired Legacy Gannett (the "Acquisition"). In connection with the
Acquisition, Legacy Gannett became a wholly owned subsidiary of New
Media, and New Media changed its name to Gannett Co., Inc.
“We are pleased to announce solid first quarter financial
results this morning,” said Michael Reed, Gannett Chairman and
Chief Executive Officer. “Revenue and EBITDA performance were
strong, despite the disruption experienced over the last two weeks
of March from the COVID-19 pandemic. The impact on our business
from the pandemic came fast and is significant. However, we
continue to execute on our operating and integration plans from the
Acquisition of Legacy Gannett last year. The realization of
synergies remains on track and debt pay down remains ahead of
schedule. We have also moved aggressively to manage through the
current economic crisis by taking measures to preserve and increase
liquidity and financial performance, including further cost
reductions, limits on capital expenditures, and the suspension of
our quarterly dividend. We continue to evaluate additional options
to strengthen our company as we navigate through this crisis.”
“A major part of our COVID-19 response was to protect the safety
of our employees and their families, while also continuing to
deliver vital news and information to our customers and our
markets. The importance of our local presence has never been more
apparent than over the past two months. We are incredibly proud of
the work of all our colleagues across the company during this very
challenging time, which is a testament to their commitment to serve
local communities with high quality, vital news and information.
The pandemic has undoubtedly created some challenges. Nevertheless,
we remain committed to our operational and integration plans and we
are highly confident that we will emerge from this crisis as an
even stronger company.”
Financial Highlights
in thousands
Q1 2020
GAAP operating revenue
$
948,682
GAAP net loss attributable to Gannett
(80,152
)
Adjusted EBITDA(1) (non-GAAP)
99,069
Free cash flow(1) (non-GAAP)
46,706
(1) Refer to “Use of Non-GAAP Information”
below for the Company’s definition of Adjusted EBITDA and Free Cash
Flow, and reconciliations to the most comparable GAAP measures.
First Quarter 2020 Consolidated
Results
- First quarter revenues of $948.7 million rose 144.8% as
compared to the prior year, reflecting the Acquisition.
- Same store pro forma revenues (as defined and reconciled below)
decreased 10.0%, approximately in line with Q4 2019 performance,
including the negative impact of approximately $17.0 million
related to the COVID-19 pandemic.
- Digital advertising and marketing services revenues were $219.2
million in the first quarter, or 23.1% of total revenues.
- Over $75 million in annualized synergy measures were
implemented in the first quarter, with approximately $19 million in
savings recognized in the quarter.
- GAAP net loss attributable to Gannett of $80.2 million in the
first quarter reflects $78.0 million of depreciation and
amortization, $34.2 million of cash charges related to integration,
reorganization and transaction related costs, $18.5 million related
to non-operating pension income and $9.0 million of tax provision,
the majority of which is non-cash.
- Adjusted EBITDA totaled $99.1 million, despite the negative
revenue impact related to the COVID-19 pandemic. Margins in the
quarter reached 10.4%.
Balance Sheet & Cash
Flow
- As of the end of the first quarter, the Company had cash and
cash equivalents of $199.7 million.
- During the quarter, the Company repaid $12.7 million in
principal under its credit facility.
- Sold $10.3 million of real estate in the first quarter and used
the net proceeds to pay down debt.
- Approximately $50.0 million in real estate sales under contract
expected to close during the second quarter; and on track to sell
$100 - $125 million of real estate by the end of 2021, which we
expect will enable us to accelerate debt repayment.
- Capital expenditures were $13.8 million, primarily for product
development, technology investments, and maintenance projects.
- Cash flow provided by operations was $60.5 million compared to
$31.7 million for the prior year quarter, primarily attributable to
the Acquisition, offset by an increase in severance payments of
$22.5 million.
- Expect $140 million in annualized synergy measures to be
implemented by the end of the second quarter; expect $35 - $40
million of synergies savings to be recorded in the second
quarter.
COVID-19 Response
- Strengthened balance sheet and continue to preserve liquidity:
- Reducing expenses for the second quarter by $100 - $125 million
through implementation of furloughs, significant pay reductions,
reductions in force, and cancellation of non-essential travel and
spending.
- Reduced planned capital expenditures for 2020 by approximately
20%.
- Suspended quarterly dividend until conditions improve.
- Implemented NOL Rights Plan to protect approximately $435
million in tax assets.
- Promoted the health and safety of our employees while
continuing operations:
- Transitioned 95% of our non-production and delivery employees
to work from home by late March.
- Implemented social distancing measures and hygiene best
practices in line with CDC and WHO guidelines for all facilities
and employees in product and delivery roles.
- Maintained consistent operations across all properties, with no
significant disruptions.
- Supported our communities by providing high quality journalism
and by creating innovative solutions to support small businesses:
- Created new tailored content for readers and their communities,
which has received more than 650 million views since mid-February,
nearly all of which is available for free:
- Nation’s Health daily COVID-19 specific section runs in USA
TODAY in print and digital and is available in all local
e-editions; real-time updates online.
- The USA TODAY coronavirus newsletter reaches nearly 160,000
subscribers and led to an additional 35 local market coronavirus
newsletters launching across the country.
- Launched Support Local platform to provide communities with an
easy way to discover opportunities to help their favorite local
businesses.
- Free business listings providing special services, such as
enabling gift cards and delivery services.
Publishing Segment
- Publishing segment revenues totaled $858.2 million in the first
quarter.
- Print advertising revenues totaled $267.6 million in the first
quarter.
- Same store pro forma print advertising revenues decreased 21.2%
to the prior year.
- Digital advertising and marketing services revenues were $136.0
million in the first quarter.
- Same store pro forma digital advertising and marketing services
revenues rose 1.7% versus the prior year period, reflecting strong
national digital media trends and continued strength with our local
digital marketing services.
- Circulation revenues totaled $374.7 million in the first
quarter.
- Same store pro forma circulation revenues decreased 7.5% in the
first quarter, an improvement over the fourth quarter 2019 trend of
160bps due to increases from our strategic pricing programs,
partially offset by declines stemming from a reduction in volume of
our single copy and home delivery sales, reflecting general
industry trends.
- Commercial printing and other revenues contributed $79.8
million in the first quarter.
- Paid digital-only subscriber volumes now total approximately
863,000, up 29.0% year-over-year on a pro forma basis.
- Publishing segment Adjusted EBITDA was $110.9 million,
representing a margin of 12.9% for the quarter.
- During May 2020, the Louisville Courier Journal was awarded a
Pulitzer Prize in Breaking News for its aggressive reporting on the
flurry of pardons and commutations given by Kentucky Gov. Matt
Bevin during his final days in office.
Marketing Solutions
Segment
- Marketing Solutions segment revenues were $121.3 million in the
first quarter.
- Same store pro forma Marketing Solutions segment revenues
increased by 3.8% to the prior year, in part reflecting continued
strong growth from Legacy Gannett local markets.
- Marketing Solutions segment Adjusted EBITDA was $7.9 million,
representing a margin of 6.5% for the quarter.
Dividend Suspension
As previously announced, the Board has suspended the quarterly
dividend. 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.
Integration Update
The Company implemented measures during the first quarter that
will result in over $75 million in annualized savings. As a result
of these measures, the Company realized $19 million in savings in
the first quarter. By the end of the second quarter, the Company
expects to have implemented measures that will result in over $140
million in annualized savings, with $35 - $40 million in savings
expected to be realized during the second quarter. Management
remains highly confident in its ability to implement measures by
the end of 2021 that are expected to result in $300 million in
synergies, with more than half of such measures expected to be
completed in 2020.
Earnings Conference Call
Management will host a conference call on Thursday, May 7, 2020
at 8:30 A.M. Eastern Time. A copy of the earnings release will be
posted to the Investor Relations section of Gannett’s website,
www.gannett.com. All interested parties are welcome to participate
on the live call. The conference call may be accessed by dialing
1-855-319-1124 (from within the U.S.) or 1-703-563-6359 (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 “1333947”. A simultaneous webcast of the conference
call will be available to the public on a listen-only basis at
www.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
21, 2020 by dialing 1-855-859-2056 (from within the U.S.) or
1-404-537-3406 (from outside of the U.S.); please reference access
code “1333947”.
About Gannett
Gannett Co., Inc. (NYSE: GCI) is an innovative, digitally
focused media and marketing solutions company committed to
fostering the communities in our network and helping them build
relationships with their local businesses. With an unmatched reach
at the national and local level, Gannett touches the lives of over
170 million people monthly with our Pulitzer-Prize winning content,
consumer experiences and benefits, and advertiser products and
services. Our portfolio includes the USA TODAY, local media
organizations in 46 states in the U.S. and Guam, and Newsquest, a
wholly owned subsidiary with over 140 local media brands operating
in the United Kingdom. Gannett also owns the digital marketing
services companies ReachLocal, Inc., UpCurve, Inc., and WordStream,
Inc. and runs the largest media-owned events business in the U.S.,
GateHouse Live. Effective November 20, 2019, following the
completion of its merger with Gannett, 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.
Same Store Pro Forma
Revenues
Same store pro forma revenues are based on GAAP revenues for New
Media Investment Group Inc. and Legacy Gannett prior to the
Acquisition and GAAP revenues for Gannett for the current period,
excluding (1) revenues related to 2019 acquisitions from the
beginning of 2020 through the first year anniversary of the
applicable acquisition date, (2) exited operations, (3) currency
impacts, and (4) deferred revenue impacts related to the
Acquisition.
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 statements
regarding measures expected to result in over $140 million in
annualized savings, the timing of realizing those savings,
including our expectation that $35 - $40 million will be realized
in the second quarter, the potential to realize additional savings
in future quarters, our ability to achieve $300 million of
synergies through measures expected to be implemented by the end of
2021, our expectations, in terms of both amount and timing, with
respect to debt repayment, real estate sales and debt refinancing,
future revenue trends and our ability to influence trends, and the
amount and timing of any future dividend. 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 Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q, and 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. 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.
CONSOLIDATED BALANCE SHEETS
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands (except per share
amounts)
Table No. 1
March 31,
December 31,
Assets
2020
2019
Current assets
Cash and cash equivalents
$
199,651
$
156,042
Accounts receivable, net of allowance for
doubtful accounts of $20,486 and $19,923
379,862
438,523
Inventories
47,775
55,090
Prepaid expenses and other current
assets
135,608
129,460
Total current assets
762,896
779,115
Property, plant and equipment, at cost net
of accumulated depreciation of $323,934 and $277,291
764,000
815,807
Operating lease assets
306,491
309,112
Goodwill
909,741
914,331
Intangible assets, net
981,966
1,012,564
Deferred income tax assets
64,387
76,297
Other assets
121,730
112,876
Total assets
$
3,911,211
$
4,020,102
Liabilities and equity
Current liabilities
Accounts payable and accrued
liabilities
$
449,833
$
453,628
Deferred revenue
225,609
218,823
Current portion of long-term debt
—
3,300
Other current liabilities
48,832
42,702
Total current liabilities
724,274
718,453
Long-term debt
1,633,468
1,636,335
Convertible debt
3,300
3,300
Deferred tax liabilities
10,406
9,052
Pension and other postretirement benefit
obligations
219,803
235,906
Long-term operating lease liabilities
293,144
297,662
Other long-term liabilities
135,864
136,188
Total noncurrent liabilities
2,295,985
2,318,443
Total liabilities
3,020,259
3,036,896
Redeemable noncontrolling interests
1,396
1,850
Commitments and contingent
liabilities
Equity
Common stock of $0.01 par value per share,
2,000,000,000 shares authorized, 132,715,532 issued and 132,058,367
shares outstanding at March 31, 2020; 129,386,258 issued and
128,991,544 shares outstanding at December 31, 2019
1,327
1,294
Treasury stock at cost, 657,165 and
394,714 shares at March 31, 2020 and December 31, 2019,
respectively
(4,491
)
(2,876
)
Additional paid-in capital
1,093,705
1,090,694
Accumulated deficit
(196,110
)
(115,958
)
Accumulated other comprehensive income
(loss)
(4,875
)
8,202
Total equity
889,556
981,356
Total liabilities and equity
$
3,911,211
$
4,020,102
CONSOLIDATED STATEMENTS OF
OPERATIONS
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands (except per share
amounts)
Table No. 2
Three months ended
Fiscal year ended
March 31, 2020
March 31, 2019
Operating revenues:
Advertising and marketing services
$
487,010
$
193,544
Circulation
374,723
152,165
Other
86,949
41,890
Total operating revenues
948,682
387,599
Operating expenses:
Operating costs
566,463
229,495
Selling, general and administrative
expenses
299,137
129,050
Depreciation and amortization
78,024
20,923
Integration and reorganization costs
28,254
5,798
Acquisition costs
5,969
772
Impairment of long-lived assets
—
1,207
Loss on sale or disposal of assets
657
1,789
Total operating expenses
978,504
389,034
Operating loss
(29,822
)
(1,435
)
Non-operating (income) expense:
Interest expense
57,899
10,134
Loss on early extinguishment of debt
805
—
Other income
(16,899
)
(260
)
Non-operating expense
41,805
9,874
Net loss before income taxes
(71,627
)
(11,309
)
Provision (benefit) for income taxes
8,979
(1,954
)
Net loss
$
(80,606
)
$
(9,355
)
Net loss attributable to redeemable
noncontrolling interests
(454
)
(249
)
Net loss attributable to
Gannett
$
(80,152
)
$
(9,106
)
Loss per share attributable to Gannett -
basic
$
(0.61
)
$
(0.15
)
Loss per share attributable to Gannett -
diluted
$
(0.61
)
$
(0.15
)
Dividends declared per share
$
—
$
0.38
CONSOLIDATED STATEMENTS OF CASH
FLOWS
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands
Table No. 3
Three months ended
March 31, 2020
March 31, 2019
Cash flows from operating activities:
Net loss
$
(80,606
)
$
(9,355
)
Adjustments to reconcile net loss to
operating cash flows:
Depreciation and amortization
78,024
20,923
Facility consolidation cost
484
—
Equity-based compensation expense
11,577
1,136
Non-cash interest expense
56,160
344
Loss on sale or disposal of assets
657
1,789
Loss on early extinguishment of debt
805
—
Impairment of long-lived assets
—
1,207
Pension and other postretirement benefit
obligations, net of contributions
(30,545
)
(276
)
Change in other assets and liabilities,
net
23,933
15,974
Net cash provided by operating
activities
60,489
31,742
Cash flows from investing activities:
Acquisitions, net of cash acquired
—
(37,953
)
Purchase of property, plant, and
equipment
(13,783
)
(2,242
)
Proceeds from sale of real estate and
other assets
10,400
2,465
Change in other investing activities
(36
)
—
Net cash used for investing
activities
(3,419
)
(37,730
)
Cash flows from financing activities:
Repayment under term loans
(12,701
)
(2,197
)
Borrowing under revolving credit
facility
—
54,400
Repayments under revolving credit
facility
—
(46,400
)
Payments for employee taxes withheld from
stock awards
(1,615
)
(689
)
Payment of dividends
—
(23,245
)
Changes in other financing activities
(363
)
—
Net cash used for financing
activities
(14,679
)
(18,131
)
Effect of currency exchange rate change on
cash
1,554
—
Increase (decrease) in cash, cash
equivalents, and restricted cash
43,945
(24,119
)
Balance of cash, cash equivalents, and
restricted cash at beginning of period
188,664
52,770
Balance of cash, cash equivalents, and
restricted cash at end of period
$
232,609
$
28,651
SEGMENT INFORMATION
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands
Table No. 4
Three months ended
March 31, 2020
March 31, 2019
Operating revenues:
Publishing
$
858,150
$
378,080
Marketing Solutions
121,281
25,887
Corporate and Other
3,009
672
Intersegment eliminations
(33,758
)
(17,040
)
Total
$
948,682
$
387,599
Adjusted EBITDA:
Publishing
$
110,928
$
41,693
Marketing Solutions
7,887
(3,230
)
Corporate and Other
(19,746
)
(5,616
)
Total
$
99,069
$
32,847
Depreciation and amortization:
Publishing
$
66,957
$
18,830
Marketing Solutions
7,331
1,277
Corporate and Other
3,736
816
Total
$
78,024
$
20,923
PRO FORMA SAME STORE REVENUES
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands
Table No. 5
Three months ended
March 31,
2020
March 31,
2019
% Change
Pro forma total revenue
$
948,682
$
1,051,024
(9.7
)%
Acquired revenues
(12,553
)
—
***
Currency impact
1,275
—
***
Exited operations
(6
)
(6,888
)
(99.9
)%
Deferred revenue adjustment
1,834
—
***
Same store total revenue
$
939,232
$
1,044,136
(10.0
)%
Pro forma advertising and marketing
services revenue
$
487,010
$
558,780
(12.8
)%
Acquired revenues
(2,997
)
—
***
Currency impact
932
—
***
Exited operations
(6
)
(6,437
)
(99.9
)%
Deferred revenue adjustment
594
—
***
Same store advertising and marketing
services revenue
$
485,533
$
552,343
(12.1
)%
Pro forma circulation revenue
$
374,723
$
404,891
(7.5
)%
Acquired revenues
(1,803
)
—
***
Currency impact
264
—
***
Exited operations
—
(252
)
(100.0
)%
Deferred revenue adjustment
1,240
—
***
Same store circulation revenue
$
374,424
$
404,639
(7.5
)%
Pro forma other revenue
$
86,949
$
87,353
(0.5
)%
Acquired revenues
(7,753
)
—
***
Currency impact
79
—
***
Exited operations
—
(199
)
(100.0
)%
Same store other revenue
$
79,275
$
87,154
(9.0
)%
*** Indicates an absolute value percentage
change greater than 100
USE OF NON-GAAP
INFORMATION
The Company uses non-GAAP financial performance and liquidity
measures to supplement the financial information presented on a
GAAP basis. These non-GAAP financial measures, which may not be
comparable to similarly titled measures reported by other
companies, should not be considered in isolation from or as a
substitute for the related GAAP measures and should be read
together with financial information presented on a GAAP basis.
The Company defines its non-GAAP measures as follows:
- Adjusted EBITDA is a non-GAAP financial performance
measure the Company believes offers a useful view of the overall
operation of our business. The Company defines Adjusted EBITDA as
net income (loss) attributable to Gannett before (1) income tax
expense (benefit), (2) interest expense, (3) gains or losses on
early extinguishment of debt, (4) non-operating items, primarily
pension costs, (5) depreciation and amortization, (6) integration
and reorganization costs, (7) impairment of long-lived assets, (8)
goodwill and intangible impairments, (9) net loss (gain) on sale or
disposal of assets, (10) equity-based compensation, (11)
acquisition costs, and (12) certain other non-recurring charges.
The most directly comparable GAAP financial measure is net income
(loss) attributable to Gannett.
- Free cash flow is a non-GAAP liquidity measure that
adjusts our reported GAAP results for items we believe are critical
to the ongoing success of our business. The Company defines Free
cash flow as net cash provided by operating activities as reported
on the statement 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 shareholders. The most directly comparable GAAP
financial measure is net cash from operating activities.
Management’s Use of Non-GAAP Measures
Adjusted EBITDA and Free cash flow are not measurements of
financial performance under GAAP and should not be considered in
isolation or as an alternative to income from operations, net
income (loss), cash flow from continuing operating activities, or
any other measure of performance or liquidity derived in accordance
with GAAP. We believe our non-GAAP 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
controllable 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.
Adjusted EBITDA provides us with a measure of financial
performance, independent of items that are beyond the control of
management in the short-term such as depreciation and amortization,
taxation, non-cash impairments, and interest expense associated
with our capital structure. This metric measures our financial
performance based on operational factors that management can impact
in the short-term, namely the cost structure or expenses of the
organization. Adjusted EBITDA is one of the metrics we use to
review the financial performance of our business on a monthly
basis.
We use Adjusted EBITDA as a measure 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. We
consider the unrealized (gain) loss on derivative instruments and
the (gain) loss on early extinguishment of debt to be financing
related costs associated with interest expense or amortization of
financing fees. Accordingly, we exclude financing related costs
such as the early extinguishment of debt because they represent the
write-off of deferred financing costs, and we believe these
non-cash write-offs are similar to interest expense and
amortization of financing fees, which by definition are excluded
from Adjusted EBITDA. Additionally, the non-cash gains (losses) on
derivative contracts, which are related to interest rate swap
agreements to manage interest rate risk, are financing costs
associated with interest expense. Such charges are incidental to,
but not reflective of, our day-to-day operating performance, and it
is appropriate to exclude charges related to financing activities
such as the early extinguishment of debt and the unrealized (gain)
loss on derivative instruments which, depending on the nature of
the financing arrangement, would have otherwise been amortized over
the period of the related agreement and does not require a current
cash settlement. Such charges are incidental to, but not reflective
of our day-to-day operating performance of the business that
management can impact in the short term.
Limitations of Non-GAAP Measures
Each of our non-GAAP measures has limitations as an analytical
tool. They should not be viewed in isolation or as a substitute for
GAAP measures of earnings or cash flows. Material limitations in
making the adjustments to our earnings to calculate Adjusted EBITDA
and using this non-GAAP financial measure as compared to GAAP net
income (loss) include: the cash portion of interest / financing
expense, income tax (benefit) provision, and charges related to
impairment of long-lived assets, which may significantly affect our
financial results.
A reader of our financial statements may find this item
important in evaluating our performance, results of operations, and
financial position. We use non-GAAP financial measures to
supplement our GAAP results in order to provide a more complete
understanding of the factors and trends affecting our business.
Adjusted EBITDA and Free cash flow are not alternatives to net
income, income from operations, or cash flows provided by or used
in operations as calculated and presented in accordance with GAAP.
Readers of our financial statements should not rely on Adjusted
EBITDA or Free cash flow as a substitute for any such GAAP
financial measure. We strongly urge readers of our financial
statements to review the reconciliation of income (loss) from
continuing operations to Adjusted EBITDA and the reconciliation of
net cash from operating activities to Free cash flow, along with
our consolidated financial statements included elsewhere in this
report. We also strongly urge readers of our financial statements
to not rely on any single financial measure to evaluate our
business. In addition, because Adjusted EBITDA and Free cash flow
are not measures of financial performance under GAAP and are
susceptible to varying calculations, the Adjusted EBITDA and Free
cash flow measures as presented in this report may differ from and
may not be comparable to similarly titled measures used by other
companies.
NON-GAAP FINANCIAL INFORMATION
ADJUSTED EBITDA
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands
Table No. 6
Three months ended March 31,
2020
Publishing
Marketing Solutions
Corporate and Other
Consolidated Total
Net income (loss) attributable to
Gannett
$
33,840
$
(5,073
)
$
(108,919
)
$
(80,152
)
Income tax expense (benefit)
—
—
8,979
8,979
Interest expense
18
—
57,881
57,899
Loss on early extinguishment of debt
—
—
805
805
Other non-operating items, net
(5,784
)
3,624
(14,739
)
(16,899
)
Depreciation and amortization
66,957
7,331
3,736
78,024
Integration and reorganization costs
13,309
1,388
13,557
28,254
Acquisition costs
—
—
5,969
5,969
Impairment of long-lived assets
—
—
—
—
Net (gain) loss on sale or disposal of
assets
592
23
42
657
Equity-based compensation
—
—
11,577
11,577
Other items
1,996
594
1,366
3,956
Adjusted EBITDA (non-GAAP basis)
$
110,928
$
7,887
$
(19,746
)
$
99,069
Three months ended March 31,
2019
Publishing
Marketing Solutions
Corporate and Other
Consolidated Total
Net income (loss) attributable to
Gannett
$
18,754
$
(5,626
)
$
(22,234
)
$
(9,106
)
Income tax expense (benefit)
—
—
(1,954
)
(1,954
)
Interest expense
55
—
10,079
10,134
Loss on early extinguishment of debt
—
—
—
—
Other non-operating items, net
(310
)
—
50
(260
)
Depreciation and amortization
18,830
1,277
816
20,923
Integration and reorganization costs
2,384
556
2,858
5,798
Acquisition costs
—
—
772
772
Impairment of long-lived assets
—
—
1,207
1,207
Net (gain) loss on sale or disposal of
assets
19
2
1,768
1,789
Equity-based compensation
—
—
1,136
1,136
Other items
1,961
561
(114
)
2,408
Adjusted EBITDA (non-GAAP basis)
$
41,693
$
(3,230
)
$
(5,616
)
$
32,847
NON-GAAP FINANCIAL INFORMATION
FREE CASH FLOW
Gannett Co., Inc. and Subsidiaries
Unaudited, in thousands
Table No. 7
Three months
ended March 31,
2020
Net cash flow provided by operating
activities (GAAP basis)
$
60,489
Capital expenditures
(13,783
)
Free cash flow (non-GAAP basis)(1)
$
46,706
(1) Free cash flow for the first quarter
was negatively impacted by $28.3 million of integration and
reorganization costs, $6.0 million of acquisition costs, and $2.6
million of other one-time adjustments.
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version on businesswire.com: https://www.businesswire.com/news/home/20200507005313/en/
For investor inquiries: Ashley Higgins Investor Relations
212-479-3160 investors@gannett.com For media inquiries:
Stephanie Tackach Director, Public Relations 212-715-5490
stackach@gannett.com
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