Usa Today Co., Inc. · NYSE:TDAY
Usa Today — Gannett — Q3 2023 Earnings Presentation
33 slides from Usa Today's earnings presentation, Nov 2, 2023
Slide 1: Q3 2023 Earnings
Q3 2023 Earnings November 2, 2023 1
Slide 2: Disclaimer and Notes
Disclaimer and Notes In General. This disclaimer applies to this document and the verbal or written comments of any person presenting it. This document, taken together with any such verbal or written comments, is referred to herein as the “Presentation.” Gannett Co., Inc. is referred to in this Pres
Slide 3: Scalable, data-driven digital media platform
Gannett operates a scalable, data-driven digital media platform that aligns with consumer and digital marketing trends. We are a subscription-led and digitally-focused media and marketing solutions company that is committed to empowering communities to thrive. Our strategy is focused on driving audi
Slide 4: Key Stats and Value Drivers
Key Stats and Value Drivers Executed on Growth Segments and Investment Strategy in Q3 2023 Drive Digital Subscription Drive Digital Marketing Value Drivers Growth Solutions (DMS) Growth $40.0M $120.8M $65.3M (4) Digital-only Subscription Revenues DMS Core Platform Revenues Total Debt Paydown 16.1% Y
Slide 5: Q3 2023 Results and Non-GAAP Highlights
Q3 2023 Results and Non-GAAP Highlights(1) Significant Improvement in Key Financial Metrics Revenues Adjusted EBITDA o $652.9M Total Operating Revenues o $59.5M Adjusted EBITDA o Same store revenues(1) improved to down 8.4% compared to o Adjusted EBITDA up $7.6 million, or 14.7%, compared to the the
Slide 6: Balance Sheet and Liquidity
Balance Sheet and Liquidity Q3 2023 Significant Debt Repayment Q3 2023 Cash on the balance sheet of $109.2 million at the end of Q3 2023 $1,759M Total debt principal outstanding at September 30, 2023 of $1,154.5 million $1,575M Net leverage ratio(1) of 3.68x $1,369M $1,272M − First Lien Net leverage
Slide 7: Business Outlook
Business Outlook The Company’s Updated Full Year 2023 Outlook Full Year 2023 Outlook(1) Full Year 2022 Results Revenues $2.65B to $2.67B $2.95B Same store total revenues Year-over-Year(2)(4)(5)(non-GAAP basis) (9%) to (8%) (7%) Net income (loss) attributable to Gannett ($20M) to $0M ($78M) Cash prov
Slide 8: Key Operating Pillars
Key Operating Pillars Third Quarter 2023 Update 8
Slide 9: Key Operating Pillars
Key Operating Pillars Strong opportunities for creating stakeholder value Maximize audience Drive Digital Optimize our Prioritize Build ESG efforts, monetization and Marketing traditional investments including ID&E, drive digital Solutions businesses in growth to foster culture subscription growth (
Slide 10: Gannett's Operating Segments
Gannett’s Operating Segments Our two distinct reportable segments(1) align well with our strategic pillars and are consistent with our long- term transformation to a subscription-led and digitally-focused media and marketing solutions company Gannett’s top fiscal priorities: Revenue, Adjusted EBITDA
Slide 11: Gannett Media: Drive Digital Subscription Growth
Gannett Media: Drive Digital Subscription Growth Driving growth through trusted and unbiased content, data analytics, and improved product experience Digital-only Subscription(1) Growth Digital-only Subscription Revenue Growth $2,500,000.00 $14.00 $45.00 1.98M $40.0M 2.03M 2.02M 1.95M 1.96M $12.00 $
Slide 12: Digital Marketing Solutions: Drive DMS Growth
Digital Marketing Solutions: Drive DMS Growth Digital Marketing Solutions – Driving Growth and Further Value for our Shareholders Our DMS business is focused on: Helping SMBs (1) Build their online presence, (2) Drive awareness & leads, (3) Manage & nurture leads and (4) Measure what works While gro
Slide 13: Digital Marketing Solutions: Drive DMS Growth
Digital Marketing Solutions: Drive DMS Growth Digital Marketing Solutions - Core Platform Revenues (M) (1) Average Customer Count (K)(2) $118.7 $119.7 $121.6 $120.8 15.8 15.3 15.3 15.3 14.7 $111.4 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q3 2023 – 1.8% growth YOY ARPU(2) Customer
Slide 14: Appendix
Appendix 14
Slide 15: Diversified Revenues
Gannett Diversified Revenues(1) Q3 2023 ($ in millions) Q3 2023 % of Total Print Advertising Revenues(2) $137.2 21.0% Digital Marketing Services $121.9 18.7% Digital Media $67.6 10.4% Digital Classified $13.1 2.0% Total Digital Advertising and Marketing Services $202.6 31.0% Revenues(2) Digital-only
Slide 16: Debt and Leverage Overview
Debt and Leverage Overview Balance as of September 30, ($ in millions) Rate 2023 2024 Notes 4.75% $3.3 2027 Notes 6.0% $485.3 Senior Secured Term Loan (due 2026)(1) 10.45%(2) $360.3 2026 Senior Notes 6.0% $305.6 Total Debt Outstanding 7.39% Blended Rate $1,154.5 Q3 2023 LTM Adjusted EBITDA(3) $283.9
Slide 17: Same Store Year-over-Year Revenues Metrics
Same Store Year-over-Year Revenues Metrics(1) FY 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 FY 2022 Q1 2023 Q2 2023 Q3 2023 Print Advertising -8.9% -7.0% -11.3% -12.1% -16.8% -11.9% -10.7% -8.9% -11.1% Digital Advertising and Marketing 7.1% 4.4% -3.5% -7.8% -4.3% -3.0% -3.7% -2.3% 0.0% Services Advertisin
Slide 18: Non-GAAP Reconciliation
Non-GAAP Reconciliation The Company uses non-GAAP financial performance and liquidity measures to supplement the financial information presented on a U.S. GAAP basis. These non-GAAP financial measures, which may not be comparable to similarly titled measures reported by other companies, should not b
Slide 19: Key Performance Indicators
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 Digi
Slide 20: Same Store Non-GAAP Revenues Reconciliation
Gannett Same Store Non-GAAP Revenues Reconciliation(1) Total Digital and Digital-only Subscription Revenues 3 months ended 3 months ended (in thousands) $ Change % Change September 30, 2023 September 30, 2022 Total Digital Revenues $263,644 $256,434 $7,210 2.8% Acquired revenues - - Currency impact
Slide 21: Non-GAAP Reconciliation
Gannett Non-GAAP Reconciliation(1) Adjusted EBITDA Total Company Total Company 3 months ended 3 months ended (in thousands) (in thousands) September 30, 2023 September 30, 2022 Net loss attributable to Gannett ($2,566) Net loss attributable to Gannett ($54,114) Provision for income taxes 16,144 Prov
Slide 22: Non-GAAP Reconciliation
Gannett Non-GAAP Reconciliation(1) Adjusted EBITDA Digital Marketing Solutions Segment Digital Marketing Solutions Segment 3 months ended 3 months ended (in thousands) (in thousands) September 30, 2023 September 30, 2022 Net income attributable to Gannett $5,902 Net income attributable to Gannett $5
Slide 23: Non-GAAP Reconciliation
Gannett Non-GAAP Reconciliation(1) LTM Adjusted EBITDA Gannett Media Segment Digital Marketing Solutions Segment LTM ended LTM ended (in thousands) (in thousands) September 30, 2023 September 30, 2023 Net income attributable to Gannett $166,282 Net income attributable to Gannett $32,769 Non-operatin
Slide 24: Non-GAAP Reconciliation
Gannett Non-GAAP Reconciliation(1) LTM Adjusted EBITDA Corporate and Other LTM ended September 30, (in thousands) 2023 Net loss attributable to Gannett ($171,183) Benefit for income taxes (31,152) Interest expense 113,333 Gain on early extinguishment of debt (5,876) Depreciation and amortization 18,
Slide 25: Non-GAAP Reconciliation
Gannett Non-GAAP Reconciliation(1) Adjusted Net Income attributable to Gannett and Free Cash Flow 3 months ended 3 months ended (in thousands) (in thousands) September 30, 2023 September 30, 2023 Net loss attributable to Gannett ($2,566) Cash provided by operating activities (GAAP basis) $20,631 Gai
Slide 26: Same Store Non-GAAP Revenues Reconciliation
Gannett Same Store Non-GAAP Revenues Reconciliation(1) Q3 2023 Same Store Year-over-Year Revenues Metrics 3 months ended 3 months ended $ % (in thousands) September 30, 2023 September 30, 2022 Variance Variance Print Advertising Revenues $137,154 $159,324 ($22,170) -13.9% Acquired revenues - - Curre
Slide 27: Same Store Non-GAAP Revenues Reconciliation
Gannett Same Store Non-GAAP Revenues Reconciliation(1) Q2 2023 and Q1 2023 Same Store Year-over-Year Revenues Metrics 3 months ended 3 months ended $ % 3 months ended 3 months ended $ % (in thousands) (in thousands) June 30, 2023 June 30, 2022 Variance Variance March 31, 2023 March 30, 2022 Variance
Slide 28: Same Store Non-GAAP Revenues Reconciliation
Gannett Same Store Non-GAAP Revenues Reconciliation(1) Full Year 2022 and Full Year 2021 Same Store Year-over-Year Revenues Metrics 12 months ended 12 months ended 12 months ended 12 months ended (in thousands) $ Variance % Variance (in thousands) $ Variance % Variance December 31, 2022 December 31,
Slide 29: Same Store Non-GAAP Revenues Reconciliation
Gannett Same Store Non-GAAP Revenues Reconciliation(1) Q4 2022 and Q3 2022 Same Store Year-over-Year Revenues Metrics 3 months ended 3 months ended 3 months ended 3 months ended $ % (in thousands) $ Variance % Variance (in thousands) December 31, 2022 December 31, 2021 September 30, 2022 September 3
Slide 30: Same Store Non-GAAP Revenues Reconciliation
Gannett Same Store Non-GAAP Revenues Reconciliation(1) Q2 2022 and Q1 2022 Same Store Year-over-Year Revenues Metrics 3 months ended 3 months ended 3 months ended 3 months ended $ % (in thousands) $ Variance % Variance (in thousands) June 30, 2022 June 30, 2021 March 31, 2022 March 31, 2021 Variance
Slide 31: Non-GAAP Reconciliation – Business Outlook
(1)(2) Gannett Non-GAAP Reconciliation – Business Outlook Adjusted EBITDA and Adjusted Net income (loss) attributable to Gannett 12 months ended December 31, 2023 (Est.) Net income (loss) attributable to Gannett ($20M) to $0M Provision for income taxes $10M to $30M Interest expense $105M to $115M No
Slide 32: Same Store Non-GAAP Revenues Reconciliation
Gannett Same Store Non-GAAP Revenues Reconciliation(1)(2) Business Outlook(3) 12 months ended 12 months ended December 31, 2022 (Est.) December 31, 2023 (Est.) Total Revenues $2.95B(4) $2.65B(4) to $2.67B Acquired revenues - ~($9M) Currency impact - ~($1M) Exited operations ~($42M) - Same Store Reve
Slide 33: Non-GAAP Reconciliation – Business Outlook
(1)(2) Gannett Non-GAAP Reconciliation – Business Outlook Free Cash Flow 12 months ended December 31, 2023 (Est.) Cash provided by operating activities (GAAP basis) $105M to $125M Capital Expenditures ~$40M Free cash flow (non-GAAP basis) $65M to $85M 1. Projections are based on Company estimates as