Usa Today Co., Inc. · NYSE:TDAY
Usa Today — Gannett — Q4 2021 Earnings Presentation
35 slides from Usa Today's earnings presentation, Feb 24, 2022
Slide 1: Q4 2021 Earnings
Q4 2021 Earnings February 24, 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: Accelerate & Optimize
The Inflection Point Long-Term Growth Plan(1) Completed One to Two Years Three to Five Years • Create Scale • Improving free cash flow(2) • Revenue and Adjusted EBITDA(4) inflection • Expected to nearly double year-over-year in 2022 projected in 2024 Invest in Long Term Strategy • Reduce Cost of Deb
Slide 5: Topline Stats: Growth Drivers
Topline Stats: Growth Drivers Local and National reach across U.S. and U.K. in Q4 2021 Accelerate digital Drive digital marketing Optimize traditional print Prioritize investments in Build on inclusive & subscriber growth solutions (DMS) growth business growth businesses diverse culture 1.6M+ 15K+ 2
Slide 6: Topline Stats: Community Engagement
Topline Stats: Community Engagement Significant scale with Local and National reach across U.S. and U.K. in Q4 2021 183M 4.8B 563M 4.3M 11.2M Average Monthly Digital Total Quarterly Total Quarterly Total Quarterly U.S. Daily & U.K. Average Audience Page Views Video Views Event Attendees Weekly (Uniq
Slide 7: Q4 2021 Results and Non-GAAP Highlights
Q4 2021 Results and Non-GAAP Highlights(1) GAAP Results Non-GAAP Results(1) Total Operating Revenues Adjusted EBITDA $826.5M Same store total revenues(1) decreased $115.4M 4.3% Adjusted Net Income attributable to $22.4M Net Loss attributable to Gannett $42.8M Reflects $50M in depreciation and amorti
Slide 8: Performance Highlights: Financial Performance
Performance Highlights: Financial Performance Q4 2021 and FY 2021 Q4 2021 FY 2021 Revenues of $826.5 million for the quarter, down 4.3% compared to Q4 Revenues of $3.2 billion for the year, down 3.9% year-over-year on a 2020 on a same store basis(1) same store basis(1) Digital revenues(2) of $272.6
Slide 9: Balance Sheet and Liquidity
Balance Sheet and Liquidity Q4 2021 and subsequent events(1) Q4 2021 Cash on the balance sheet of $130.8 million at the end of Q4 Total debt principal outstanding at December 31, 2021 of $1.369 billion − Net leverage ratio(2) of 2.9x Significant Debt Repayment − First Lien Net leverage(3) of 1.7x $2
Slide 10: Business Outlook
Business Outlook(1) Full Year 2021 Full Year 2022 Q1 2022 Results Outlook Outlook Revenues $3.21B $3.07B to $3.16B $745 to 755M Same store total revenues (3.9%) (2%) to +1% (3%) to (1%) year-over-year(2)(4)(5) Net income (loss) attributable ($135M) $50M to $70M ~($5M) to Gannett Net cash flow provid
Slide 11: Long Range Business Outlook
Long Range Business Outlook(1) Projected digital growth expected to help propel increasing free cash flow (2) Digital-Only Subscriber Target Free Cash Flow Target(2) +70% FCF Conversion(3) 6M +40% CAGR(4) 40% CAGR 2020 2021 2022E 2023E 2024E 2025E 2020 2021 2022E 2023E 2024E 2025E 1. Projections are
Slide 12: Key Operating Pillars
Key Operating Pillars Fourth Quarter 2021 Update 12
Slide 13: Key Operating Pillars
Key Operating Pillars Strong Opportunity for Creating Stakeholder Value Accelerate digital Drive digital marketing Optimize traditional Prioritize investments Build on inclusive & subscriber growth services (DMS) growth print business in growth businesses diverse culture 2025 outlook of 6 million Si
Slide 14: Pillar One: Accelerating Digital Subscriptions
Pillar One: Accelerating Digital Subscriptions Believe Growth segments are well–positioned to capitalize on positive digital media tailwinds 1,800,000 Digital-only Subscription Growth 0.6 1.63M 1,600,000 1.54M 1.38M 0.5 48.7% 1,400,000 46.1% 1.22M 1,200,000 1.10M 40.9% 0.4 1.06M 37.2% 0.98M 1,000,00
Slide 15: Pillar Two: Driving DMS Growth
Pillar Two: Driving DMS Growth Digital Marketing Solutions - Core Platform(1) Revenue (M) Client Count (K) (2) $112.7 $110.4 $104.7 16.1 15.4 15.3 15.4 15.2 $95.7 $93.9 $89.6 13.3 13.6 $78.7 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q4 2021 - 15% growth YOY
Slide 16: Pillar Three: Optimizing Traditional Print Business
Pillar Three: Optimizing Traditional Print Business Evolving experience to embrace digital future while benefitting audience and customers Strategically evolve business model including: − Full electronic Saturday edition (e-Edition) in majority of markets expected in Q1 2022 − Expanded e-Edition ben
Slide 17: Pillar Four: Prioritize Investments in Growth Businesses
Pillar Four: Prioritize Investments in Growth Businesses USA TODAY NETWORK Ventures Ventures revenue of $16.2 million in Q4 grew 7.2% year-over-year despite limitations on ability to host in-person events. Hosted 4.3 million attendees across 91 in-person and virtual events during Q4 2021 − In Novemb
Slide 18: Pillar Five: Build on Inclusive & Diverse Culture
Pillar Five: Build on Inclusive & Diverse Culture Pride Forward Presents: Celebrating LGBTQ+ History Month| October 2021 Pride Forward hosted two events to celebrate LGBTQ+ history month through educational interactive LIVE discussions: ‒ LGBTQ+ History Time Travel with Eric Marcus: Eric Marcus, cre
Slide 19: Appendix
Appendix 19
Slide 20: Integration and Synergy Update
Integration and Synergy Update Annualized synergies target committed to achieve by the end of $300M 2021 $19.9M Implemented Q4 2021 synergies Met as of Q1 2021 Final annualized synergies implemented Expense savings from synergies $325M Met as of Q3 2021 $315M implemented to date 20
Slide 21: Debt and Leverage Overview
Debt and Leverage Overview Balance as of ($ in millions) Rate December 31, 2021 2024 Notes 4.75% $3.3 2027 Notes 6.0% $485.3 New Senior Secured Term Loan(1) 5.50%(2) $480.1 2026 Senior Notes 6.0% $400.0 Total Debt Outstanding 5.82% Blended Rate $1,368.7 Q4 2021 LTM Adjusted EBITDA(3) $433.7 Cash on
Slide 22: Pillar Two: Driving DMS Growth
Pillar Two: Driving DMS Growth (2) Digital Marketing Solutions Revenue Digital Marketing Solutions Client Count (K) Core system integration / product 140.0 alignment $116.8M 25.0 120.0 $110.0M $113.2M 22.1 $105.4M $107.3M 21.2 20.8 $102.3M 20.2 20.0 100.0 $94.6M 20.0 18.3 17.7 80.0 15.0 60.0 $112.7
Slide 23: Gannett Diversified Revenue
Gannett Diversified Revenue(1) Q4 2021 FY 2021 ($ in millions) Q4 2021 FY 2021 % of Total % of Total Print Advertising Revenue(2) $208.1 25.2% $792.3 24.7% Digital Marketing Services $113.9 13.8% $443.8 13.8% Digital Media $96.1 11.6% $363.1 11.3% Digital Classified $12.6 1.5% $52.0 1.6% Total Digit
Slide 24: 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 25: Same Store Year-over-Year Revenue Metrics
Same Store Year-over-Year Revenue Metrics(1) Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 FY 2021 Print Advertising -17.6% -16.8% -17.2% -18.4% 17.6% -21.1% -45% -31.0% -26.9% -31.1% -24.9% 10.5% -4.2% -10.2 -8.9% Digital Advertising
Slide 26: Gannett Same Store Non-GAAP Revenue Reconciliation
Gannett Same Store Non-GAAP Revenue Reconciliation(1) 3 months ended 3 months ended (in thousands) December 31, December 31, $ Variance % Variance 2021 2020 Total Revenue $826,539 $875,447 ($48,908) -5.6% Currency Impacts (1,204) - Exited Operations - (13,699) Deferred Revenue Adjustments(1) - 221 -
Slide 27: Gannett 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, 2021 December 31, 2021 Net loss attributable to Gannett ($22,448) Net income attributable to Gannett $7,452 Provision for inco
Slide 28: Gannett 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, 2021 December 31, 2021 Net loss attributable to Gannett ($22,448) Cash used for operating activities (GAAP basis) ($5,894) Loss o
Slide 29: Gannett Non-GAAP Reconciliation
Gannett Non-GAAP Reconciliation(1) Adjusted EBITDA and Adjusted Net income (loss) attributable to Gannett Full Year ended (in thousands) Full Year ended December 31, 2021 (in thousands) December 31, 2021 Net loss attributable to Gannett ($134,962) Net loss attributable to Gannett ($134,962) Provisio
Slide 30: Gannett Same Store Non-GAAP Revenue Reconciliation
Gannett Same Store Non-GAAP Revenue Reconciliation(1) Publishing Segment 3 months ended 3 months ended (in thousands) December 31, December 31, $ Variance % Variance 2021 2020 Total Revenue $746,798 $794,179 ($47,381) -6.0% Currency Impacts (1,111) - Exited Operations - (11,899) Deferred Revenue Adj
Slide 31: Gannett Same Store Non-GAAP Revenue Reconciliation
Gannett Same Store Non-GAAP Revenue Reconciliation(1) Publishing Segment 3 months ended 3 months ended (in thousands) December 31, December 31, $ Variance % Variance 2021 2020 Digital Media Revenue $95,838 $105,394 ($9,556) -9.1% Currency Impacts (205) - Exited Operations - (1,324) Deferred Revenue
Slide 32: Gannett Same Store Non-GAAP Revenue Reconciliation
Gannett Same Store Non-GAAP Revenue Reconciliation(1) Publishing Segment 3 months ended 3 months ended (in thousands) December 31, December 31, $ Variance % Variance 2021 2020 Print Advertising Revenue $208,121 $237,584 ($29,463) -12.4% Currency Impacts (349) - Exited Operations - (6,413) Deferred R
Slide 33: Gannett Same Store Non-GAAP Revenue Reconciliation
Gannett Same Store Non-GAAP Revenue Reconciliation(1) Publishing Segment 3 months ended 3 months ended (in thousands) $ Variance % Variance December 31, 2021 December 31, 2020 Print Circulation Revenue $279,692 $316,485 ($36,793) -11.6% Currency Impacts (320) - Exited Operations - (2,208) Deferred R
Slide 34: Gannett Same Store Non-GAAP Revenue Reconciliation
Gannett Same Store Non-GAAP Revenue Reconciliation(1) (3) Business Outlook(2) 3 months ended 12 months ended 3 months ended 12 months ended March 31, 2021 December 31, March 31, 2022 December 31, (Est.) 2021 (Est.) (Est.) 2022 (Est.) $3,070M to Total Revenue $777M $3,208M $745M to $750M $3,160M Curr
Slide 35: Gannett Non-GAAP Reconciliation – Business Outlook
(1)(2) Gannett Non-GAAP Reconciliation – Business Outlook Adjusted EBITDA and Adjusted Net income (loss) attributable to Gannett 3 months ended 12 months ended March 31, 2022 (Est.) December 31, 2022 (Est.) Net income (loss) attributable to Gannett ~($5M) $50M to $70M Provision (benefit) for income