Usa Today Co., Inc. · NYSE:TDAY
Usa Today — Gannett — Q4 2022 Earnings Presentation
40 slides from Usa Today's earnings presentation, Feb 23, 2023
Slide 1: Q4 2022 Earnings
Q4 2022 Earnings February 23, 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: Gannett operates a 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 Q4 2022 Drive Digital Subscriptions Drive Digital Marketing Value Drivers Growth Solutions (DMS) Growth 2.03M $119.7M $47.3M (1) Quarter End Digital-Only DMS Core Platform Revenues Total Debt Paydown Subscribers 8.7%
Slide 5: Q4 2022 Results and Non-GAAP Highlights
Q4 2022 Results and Non-GAAP Highlights(1) Revenues Adjusted EBITDA o $730.7M Total Operating Revenues o $90.4M Adjusted EBITDA o Same store revenues(1) decreased 10.3% compared to the same o Adjusted EBITDA improvement of $38.4 million sequentially period in the prior year over the last quarter, bu
Slide 6: Full Year 2022 Results and Non-GAAP Highlights
Full Year 2022 Results and Non-GAAP Highlights(1) Revenues Adjusted EBITDA o $2.95B Total Operating Revenues o $257.3M Adjusted EBITDA o Same store revenues(1) decreased 7.0% compared to the prior o Adjusted EBITDA declined 40.7% year-over-year due to year continued headwinds in digital media and pr
Slide 7: Balance Sheet and Liquidity
Balance Sheet and Liquidity Q4 2022 Significant Debt Repayment Q4 2022 Cash on the balance sheet of $94.3 million at the end of Q4 2022 $1,759M Total debt principal outstanding at December 31, 2022 of $1,272.2 million $1,575M Net leverage ratio(1) of 4.58x $1,369M $1,371M $1,344M $1,319M − First Lie
Slide 8: Business Outlook
Business Outlook(1) The Company Presents its Full Year 2023 Outlook Full Year 2023 Outlook Revenues $2.75B to $2.80B Same store total revenues year-over-year (non-GAAP)(2)(4)(5) (5% to 3%) Net income (loss) attributable to Gannett ($20M) to $10M Cash provided by operating activities $120M to $140M F
Slide 9: Key Operating Pillars
Key Operating Pillars Fourth Quarter 2022 Update 9
Slide 10: Key Operating Pillars
Key Operating Pillars Strong opportunities for creating stakeholder value Drive digital Drive Digital Optimize Prioritize Build ESG efforts, subscriptions Marketing print and investments including ID&E, growth Solutions advertising in growth to foster culture (DMS) growth businesses businesses and c
Slide 11: 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 priorities: Adjusted EBITDA growth and Free
Slide 12: Gannett Media
Gannett Media 12
Slide 13: Pillar One: Drive Digital Subscriptions Growth
Pillar One: Drive Digital Subscriptions Growth Driving growth through trusted and unbiased content, data analytics, and improved product experience Digital-only Subscription Growth Key Pillars for Growth in 2023 1.98M 2.03M 1.87M 1.75M 1.63M Subscriber Profitability and ARPU(1) Growth Optimize Subsc
Slide 14: Pillar One: Drive Digital Subscriptions Growth
Pillar One: Drive Digital Subscriptions Growth Driving growth through trusted and unbiased content, data analytics, and improved product experience Digital-only ARPU(1) Digital-only Sequential Net Adds(2) $70.00 140,000 $5.79 $5.93 $5.98 $5.98 $5.90 120,000 118K 115K 116K $60.00 $50.00 100,000 90K $
Slide 15: Pillar One: Drive Digital Subscriptions Growth
Pillar One: Drive Digital Subscriptions Growth Registered Users(1) and Newsletter Subscribers(2) See Impressive Growth Rates +60% Annual growth of +25% Annual growth of total registered users(1) total newsletter subscribers(2) from 3.7M to 5.9M from 6.8M to 8.5M(3) at the end of Q4 2022. at the end
Slide 16: Digital Marketing Solutions
Digital Marketing Solutions 16
Slide 17: Pillar Two: Drive DMS Growth
Pillar Two: 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 growing a predictab
Slide 18: Pillar Two: Drive DMS Growth
Pillar Two: Drive DMS Growth Digital Marketing Solutions - Core Platform(1) Revenues (M)(1) Customer Count (K)(2) 16.2 15.3 15.4 15.2 15.4 15.8 15.3 $116.4 $118.7 $119.7 $112.7 $110.1 13.3 13.6 $104.7 $107.3 $95.7 $93.9 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q4 20 Q1 21 Q2 21 Q3 21 Q4
Slide 19: Appendix
Appendix 19
Slide 20: Diversified Revenues
Gannett Diversified Revenues(1) Q4 2022 ($ in millions) Q4 2022 % of Total Print Advertising Revenues(2) $164.6 22.5% Digital Marketing Services $121.7 16.7% Digital Media $75.9 10.4% Digital Classified $13.4 1.8% Total Digital Advertising and Marketing Services $211.0 28.9% Revenues(2) Digital-only
Slide 21: Debt and Leverage Overview
Debt and Leverage Overview Balance as of December 31, ($ in millions) Rate 2022 2024 Notes 4.75% $3.3 2027 Notes 6.0% $485.3 New Senior Secured Term Loan(1) 9.20%(2) $438.4 2026 Senior Notes 6.0% $345.2 Total Debt Outstanding 7.10% Blended Rate $1,272.2 Q4 2022 LTM Adjusted EBITDA(3) $257.3 Cash on
Slide 22: 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 Print Advertising -8.9% -7.0% -11.3% -12.1% -16.8% -11.9% Digital Advertising and Marketing Services 7.1% 4.4% -3.5% -7.8% -4.3% -3.0% Advertising and Marketing Services -1.2% -1.2% -7.1% -9.7% -10.2% -7.2%
Slide 23: 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 24: Same Store Non-GAAP Revenues Reconciliation
Gannett Same Store Non-GAAP Revenues Reconciliation(1) Total Digital Revenues 3 months ended 3 months ended % (in thousands) $ Variance December 31, 2022 December 31, 2021 Variance Total Digital Revenues $269,234 $272,643 ($3,409) -1.3% Acquired revenues (2,045) - Currency impact 3,306 - Exited oper
Slide 25: Same Store Non-GAAP Revenues Reconciliation
Gannett Same Store Non-GAAP Revenues Reconciliation(1) Full Year 2022 Digital-only Circulation Revenues Full Year ended Full Year ended (in thousands) $ Variance % Variance December 31, 2022 December 31, 2021 Digital-only Circulation Revenues $132,618 $100,488 $32,130 32.0% Acquired revenues (217) -
Slide 26: Non-GAAP Reconciliation
Gannett Non-GAAP Reconciliation(1) Adjusted EBITDA Total Company Digital Marketing Solutions Segment 3 months ended 3 months ended (in thousands) (in thousands) December 31, 2022 December 31, 2022 Net income attributable to Gannett $32,767 Net income attributable to Gannett $11,971 Benefit for incom
Slide 27: Non-GAAP Reconciliation
Gannett Non-GAAP Reconciliation(1) Full Year 2022 Adjusted EBITDA, Adjusted Net loss attributable to Gannett, and Free Cash Flow Full Year ended Full Year ended (in thousands) (in thousands) December 31, 2022 December 31, 2022 Net loss attributable to Gannett ($78,002) Net loss attributable to Ganne
Slide 28: Non-GAAP Reconciliation
Gannett Non-GAAP Reconciliation(1) Full Year 2022 Adjusted EBITDA Gannett Media Segment Digital Marketing Solutions Segment Full Year ended Full Year ended (in thousands) (in thousands) December 31, 2022 December 31, 2022 Net income attributable to Gannett $112,526 Net income attributable to Gannett
Slide 29: Non-GAAP Reconciliation
Gannett Non-GAAP Reconciliation(1) Full Year 2022 Adjusted EBITDA Corporate and Other Full Year ended (in thousands) December 31, 2022 Net loss attributable to Gannett ($217,447) Provision for income taxes 1,349 Interest expense 108,366 Gain on early extinguishment of debt (399) Depreciation and amo
Slide 30: 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) December 31, 2022 December 31, 2022 Net income attributable to Gannett $32,767 Cash provided by operating activities (GAAP basis) $7,794 Gain
Slide 31: Same Store Non-GAAP Revenues Reconciliation
Gannett Same Store Non-GAAP Revenues Reconciliation(1) Gannett Media Segment 3 months ended 3 months ended (in thousands) $ Variance % Variance December 31, 2022 December 31, 2021 Total Revenues $646,167 $746,798 ($100,631) -13.5% Acquired revenues (11,052) - Currency impact 6,755 - Exited operation
Slide 32: Same Store Non-GAAP Revenues Reconciliation
Gannett Same Store Non-GAAP Revenues Reconciliation(1) Gannett Media Segment – Digital Advertising and Marking Services 3 months ended 3 months ended (in thousands) December 31, December 31, $ Variance % Variance 2022 2021 Digital Media Revenues $75,859 $95,838 ($19,979) -20.8% Acquired revenues (1,
Slide 33: Same Store Non-GAAP Revenues Reconciliation
Gannett Same Store Non-GAAP Revenues Reconciliation(1) Gannett Media Segment – Advertising and Marketing Services 3 months ended 3 months ended (in thousands) December 31, December 31, $ Variance % Variance 2022 2021 Print Advertising Revenues $164,587 $208,121 ($43,534) -20.9% Acquired revenues (4,
Slide 34: Same Store Non-GAAP Revenues Reconciliation
Gannett Same Store Non-GAAP Revenues Reconciliation(1) Gannett Media Segment – Circulation 3 months ended 3 months ended (in thousands) December 31, December 31, $ Variance % Variance 2022 2021 Print Circulation Revenues $221,192 $279,692 ($58,500) -20.9% Acquired revenues (3,408) - Currency impact
Slide 35: 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 36: 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 37: 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 38: Same Store Non-GAAP Revenues Reconciliation
Gannett Same Store Non-GAAP Revenues Reconciliation(1)(3) Business Outlook(2) 12 months ended 12 months ended December 31, 2022 (Est.) December 31, 2023 (Est.) Total Revenues $2.95B(4) $2.75B to $2.80B Acquired revenues - ~($10M) Currency impact - ~$10M Exited operations ($46M) - Same Store Revenues
Slide 39: Gannett 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 $10M Provision for income taxes $0M to $20M Interest expense $100M to $110M No
Slide 40: Gannett 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) $120M to $140M Capital Expenditures ~$40M Free cash flow (non-GAAP basis) $80M to $100M 1. Projections are based on Company estimates a