Usa Today Co., Inc. · NYSE:TDAY
Usa Today — Gannett — Q2 2022 Earnings Presentation
34 slides from Usa Today's earnings presentation, Aug 4, 2022
Slide 1: Q2 2022 Earnings
Q2 2022 Earnings August 4, 2022 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 is fully aligned 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 dr
Slide 4: Key Stats and Value Drivers
Key Stats and Value Drivers Executing on Growth Segments and Investment Strategy in Q2 2022 Accelerate digital-only Drive Digital Marketing Value Drivers subscriber growth Solutions (DMS) growth 1.87M $116.4M $26.9M Quarter End Digital-Only Subscribers DMS Core Platform Revenues(1) Total Debt Paydow
Slide 5: Q2 2022 Results and Non-GAAP Highlights
Q2 2022 Results and Non-GAAP Highlights(1) GAAP Results Non-GAAP Results(1) Revenues Adjusted EBITDA o $748.7M Total Operating Revenues o $50.9M Adjusted EBITDA (1) o Same store revenues decreased 6.3% compared to the same o Adjusted EBITDA declines of 56.1% year-over-year due a period in the prior
Slide 6: Balance Sheet and Liquidity
Balance Sheet and Liquidity Q2 2022 Significant Debt Repayment Q2 2022 Cash on the balance sheet of $87.3 million at the end of Q2 2022 $2,000 Total debt principal outstanding at June 30, 2022 of $1.344 billion $1,759M $1,800 $1,575M − Net leverage ratio(1) of 3.78x $1,600 $1,537M $1,491M $1,400M $1
Slide 7: Business Outlook
Business Outlook(1) Full Year 2022 Outlook Factors Impacting Updated Outlook: Revenues $2.95B to $3.0B Inflation Same store total revenues year-over-year (non-GAAP)(2)(4)(5) (7% to 6%) Rising Interest Rates Tightening Digital Advertising Net income (loss) attributable to Gannett ($70M to $60M) Marke
Slide 8: Key Operating Pillars
Key Operating Pillars Second Quarter 2022 Update 8
Slide 9: Key Operating Pillars
Key Operating Pillars Strong Opportunity for Creating Stakeholder Value Drive Digital Prioritize Accelerate digital Marketing Optimize traditional Build on inclusive & investments in subscriber growth Solutions (DMS) print business diverse culture growth businesses growth 2025 outlook of 6 Significa
Slide 10: Strategic Organizational Restructuring
Strategic Organizational Restructuring Gannett Gannett’s two distinct business units(1) align well with our strategic pillars and is consistent with our long- term transformation to a subscription-led and digitally-focused media and marketing solutions company (2) Gannett Media DMS $2.8B $458M LTM R
Slide 11: Gannett Media
Gannett Media 11
Slide 12: Pillar One: Accelerating Digital Subscriptions
Pillar One: Accelerating Digital Subscriptions Driving growth through trusted and unbiased content, data analytics, and improved product experience Digital-only Subscription Growth Key Pillars for Growth in 2022 1.87M 1.75M 1.63M 1.54M 1.38M 1.22M Amplify Premium Content 1.1M Optimize Subscriber Fun
Slide 13: Pillar One: Accelerating Digital Subscriptions
Pillar One: Accelerating Digital Subscriptions Driving growth through trusted and unbiased content, data analytics, and improved product experience Digital-Only ARPU(1) Digital-Only Sequential Net Adds(2) $6.16 $5.98 164K $5.87 $5.79 $5.93 160K 118K 115K 90K Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q2 21 Q3 21
Slide 14: Pillar One: Accelerating Digital Subscriptions
Pillar One: Accelerating Digital Subscriptions Registered Users(1) And Newsletter Subscribers(2) See Impressive Growth Rates +37% Annual growth of +44% Annual growth of total registered users(1) newsletter subscribers(2) from 3.6M to 4.9M from 5.9M to 8.5M(3) at the end of Q2 2022. at the end of Q2
Slide 15: Digital Marketing Solutions
Digital Marketing Solutions 15
Slide 16: Pillar Two: Driving DMS Growth
Pillar Two: Driving 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 predict
Slide 17: Pillar Two: Driving DMS Growth
Pillar Two: Driving DMS Growth Digital Marketing Solutions - Core Platform(1) Revenues (M)(1) Customer Count (K)(2) 16.2 15.4 15.3 15.4 15.2 15.4 $116.4 $112.7 $110.1 $107.3 13.3 13.6 $104.7 $95.7 $93.9 $89.6 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q
Slide 18: Pillar Two: Driving DMS Growth
Pillar Two: Driving DMS Growth Digital Marketing Solutions Revenues Digital Marketing Solutions Customer Count (K)(2) Core system integration / 140.0 product alignment $116.8 $118.0 25.0 120.0 $113.2 $107.3 $110.0 $109.7 20.8 $102.3 20.2 20.0 100.0 20.0 18.3 17.7 17.2 16.5 80.0 15.0 60.0 $112.7 $110
Slide 19: Diversified Revenues
Gannett Diversified Revenues(1) Q2 2022 ($ in millions) Q2 2022 % of Total Print Advertising Revenues(2) $173.5 23.2% Digital Marketing Services $117.5 15.7% Digital Media $77.3 10.3% Digital Classified $15.4 2.1% Total Digital Advertising and Marketing Services $210.2 28.1% Revenues(2) Digital Circ
Slide 20: Debt and Leverage Overview
Debt and Leverage Overview Balance as of June 30, ($ in millions) Rate 2022 2024 Notes 4.75% $3.3 2027 Notes 6.0% $485.3 New Senior Secured Term Loan(1) 5.50%(2) $485.2 2026 Senior Notes 6.0% $370.0 Total Debt Outstanding 5.82% Blended Rate $1,343.8 Q2 2022 LTM Adjusted EBITDA(3) $332.5 Cash on the
Slide 21: 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 22: Same Store Year-over-Year Revenues Metrics
Same Store Year-over-Year Revenues Metrics(1) FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 2019 2020 2020 2020 2020 2020 2021 2021 2021 2021 2021 2022 2022 Print Advertising 17.6% -21.1% -45% -31.0% -26.9% -31.1% -24.9% 10.5% -4.2% -10.2 -8.9% -7.0% -11.3% Digital Advertising and Marketing -2.8% 2.1% -26.
Slide 23: Same Store Non-GAAP Revenues Reconciliation
Gannett Same Store Non-GAAP Revenues Reconciliation(1) Total Revenues 3 months 3 months $ % (in thousands) ended ended Variance Variance June 30, 2022 June 30, 2021 Total Revenues $748,660 $804,275 ($55,615) -6.9% Acquired revenues (14,565) - Currency impact 6,008 - Exited operations - (14,621) Same
Slide 24: Same Store Non-GAAP Revenues Reconciliation
Gannett Same Store Non-GAAP Revenues Reconciliation(1) Total Digital Revenues 3 months 3 months $ % (in thousands) ended ended Variance Variance June 30, 2022 June 30, 2021 Total Digital Revenues $261,768 $259,307 $2,461 0.9% Acquired revenues (2,352) - Currency impact 2,572 - Exited operations - (1
Slide 25: Same Store Non-GAAP Revenues Reconciliation
Gannett Same Store Non-GAAP Revenues Reconciliation(1) Total Gannett Media Segment 3 months 3 months $ % (in thousands) ended ended Variance Variance June 30, 2022 June 30, 2021 Total Revenues $664,844 $724,545 ($59,701) -8.2% Acquired revenues (14,565) - Currency impact 5,345 - Exited operations -
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) June 30, 2022 June 30, 2022 Net loss attributable to Gannett ($53,688) Net income attributable to Gannett $4,306 Provision for income taxes
Slide 27: Non-GAAP Reconciliation
Gannett Non-GAAP Reconciliation(1) LTM Adjusted EBITDA Gannett Media Unit Digital Marketing Solutions Unit LTM ended LTM ended (in thousands) (in thousands) June 30, 2022 June 30, 2022 Net income attributable to Gannett $235,403 Net income attributable to Gannett $22,020 Non-operating pension income
Slide 28: Non-GAAP Reconciliation
Gannett Non-GAAP Reconciliation(1) Adjusted Net Loss attributable to Gannett and Free cash flow 3 months ended 3 months ended (in thousands) (in thousands) June 30, 2022 June 30, 2022 Net loss attributable to Gannett ($53,688) Cash used for operating activities (GAAP basis) ($30,741) Loss on early e
Slide 29: Same Store Non-GAAP Revenues Reconciliation
Gannett Same Store Non-GAAP Revenues Reconciliation(1) Gannett Media Segment – Digital Advertising and Marking Services 3 months 3 months ended (in thousands) ended $ Variance % Variance June 30, 2021 June 30, 2022 Digital Media Revenues $77,259 $94,549 ($17,290) -18.3% Acquired revenues (867) - Cur
Slide 30: Same Store Non-GAAP Revenues Reconciliation
Gannett Same Store Non-GAAP Revenues Reconciliation(1) Gannett Media Segment – Advertising and Marketing Services 3 months 3 months ended (in thousands) ended $ Variance % Variance June 30, 2021 June 30, 2022 Print Advertising Revenues $173,453 $200,925 ($27,472) -13.7% Acquired revenues (6,814) - C
Slide 31: 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) $ Variance % Variance June 30, 2022 June 30, 2021 Print Circulation Revenues $242,151 $286,252 ($44,101) -15.4% Acquired revenues (4,141) - Currency impact 1,518 -
Slide 32: 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, 2021 (Est.) December 31, 2022 (Est.) Total Revenues $3,208M(4) $2,950M to $3,000M Acquired revenues - ($45M - $40M) Currency impact - $20M to $25M Exited operations ($60M to $55
Slide 33: 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, 2022 (Est.) Net loss attributable to Gannett ($70M to $60M) Provision for income taxes $20M to $25M Interest expense $105M to $110M Non-operat
Slide 34: Non-GAAP Reconciliation – Business Outlook
(1)(2) Gannett Non-GAAP Reconciliation – Business Outlook Free Cash Flow 12 months ended December 31, 2022 (Est.) Cash provided by operating activities (GAAP basis) $45M to $65M Capital Expenditures ~$45M Free cash flow (non-GAAP basis) $0M to $20M 1. Projections are based on Company estimates as of