Usa Today Co., Inc. · NYSE:TDAY
Usa Today — Gannett — Q1 2022 Earnings Presentation
35 slides from Usa Today's earnings presentation, May 5, 2022
Slide 1: Q1 2022 Earnings
Q1 2022 Earnings May 5, 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 Q1 2022 Drive digital marketing solutions (DMS) Accelerate digital-only subscriber growth Optimize traditional print business growth 1.75M $107.3M 1.8M Quarter End Digital-Only Subscribers DMS Core Platform Revenues (1) T
Slide 6: Q1 2022 Results and Non-GAAP Highlights
Q1 2022 Results and Non-GAAP Highlights(1) GAAP Results Non-GAAP Results(1) Total Operating Revenues Adjusted EBITDA o $748.1M Total Operating Revenues o $64.2M Adjusted EBITDA (1) o Same store revenues decreased 2.5% o Adjusted EBITDA fell $36.3M compared to prior year quarter due to secular pressu
Slide 7: Balance Sheet and Liquidity
Balance Sheet and Liquidity Q1 2022 Significant Debt Repayment Q1 2022 Cash on the balance sheet of $152.2 million at the end of Q1 2022 $2,000 Total debt principal outstanding at March 31, 2022 of $1.371 billion $1,759M $1,800 − Net leverage ratio(1) of 3.07x $1,575M $1,537M $1,600 $1,491M $1,400M
Slide 8: Business Outlook
Business Outlook(1) Q2 2022 Outlook Full Year 2022 Outlook Revenues $780 to $790M $3.1B to $3.2B Same store total revenues year- (3%) to (1%) (2%) to +1% over-year(2)(4)(5) Net income (loss) attributable to ~$0 $50M to $70M Gannett Cash provided by operating ~$5M $205M to $225M activities Free cash
Slide 9: Key Operating Pillars
Key Operating Pillars First Quarter 2022 Update 9
Slide 10: 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 11: 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 2,000,000 1,800,000 1.75M 1.63M 1,600,000 1.54M 1.38M 1,400,000 1.22M 1,200,000 1.10M 1,000,000 800,000 600,000 400,000
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 ARPU(1) Digital-Only Sequential Net Adds(2) $6.67 160K 164K $6.16 $5.93 $5.87 $5.79 120K 118K 90K Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q1 21 Q2 21
Slide 13: 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 (4) Measure what works While growing a predictable
Slide 14: Pillar Two: Driving DMS Growth
Pillar Two: Driving DMS Growth Digital Marketing Solutions - Core Platform(1) Revenue (M) Customer Count (K)(2) $112.7 $110.1 $107.3 15.4 15.4 15.4 $104.7 15.3 15.2 $95.7 $93.9 13.3 13.6 $89.6 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q1 2022 - 14% growth YO
Slide 15: Pillar Three: Optimizing Traditional Print Business
Pillar Three: Optimizing Traditional Print Business Evolving experience to embrace digital future while benefitting audience and customers (1) We launched our Digital Saturday initiative in 136 markets The recent rollout allows subscribers to receive access to the full portfolio of e-Editions across
Slide 16: Pillar Four: Prioritize Investments in Growth Businesses
Pillar Four: Prioritize Investments in Growth Businesses USA TODAY NETWORK Ventures Ventures revenue of $11.7 million in Q1 2022 grew 83.3% year-over-year driven by increased attendance at in-person events and endurance races Hosted 115K attendees across 25 in-person events during Q1 2022 versus 60K
Slide 17: Pillar Five: Build on Inclusive and Diverse Culture
Pillar Five: Build on Inclusive and Diverse Culture Workforce Transparency & Regularly Measuring Progress Gannett 2021 Inclusion Report – We released our second annual Inclusion Report via a new web platform documenting our progress and accomplishments in 2021, including in-depth workplace diversity
Slide 18: Pillar Five: Build on Inclusive and Diverse Culture
Pillar Five: Build on Inclusive and Diverse Culture Published our inaugural Environmental, Social, & Governance (ESG) report in March 2022 Goals and Targets Reduced Inequalities Achieve year-over-year improvement in our workforce diversity breakdowns by functional area, with the goal of achieving ge
Slide 19: Appendix
Appendix 19
Slide 20: Debt and Leverage Overview
Debt and Leverage Overview ($ in millions) Rate Balance as of March 31, 2022 2024 Notes 4.75% $3.3 2027 Notes 6.0% $485.3 New Senior Secured Term Loan(1) 5.50%(2) $504.6 2026 Senior Notes 6.0% $377.5 Total Debt Outstanding 5.81% Blended Rate $1,370.7 Q1 2022 LTM Adjusted EBITDA(3) $397.4 Cash on the
Slide 21: Pillar Two: Driving DMS Growth
Pillar Two: Driving DMS Growth (2) Digital Marketing Solutions Revenue Digital Marketing Solutions Customer Count (K) Core system integration / product 140.0 alignment 25.0 120.0 $116.8 $107.3 $110.0 $113.2 $109.7 $105.4 21.2 20.8 $102.3 20.2 20.0 100.0 20.0 18.3 17.7 17.2 80.0 15.0 60.0 $112.7 $110
Slide 22: Gannett Diversified Revenue
Gannett Diversified Revenue(1) Q1 2022 ($ in millions) Q1 2022 % of Total Print Advertising Revenue(2) $173.5 23.2% Digital Marketing Services $109.0 14.6% Digital Media $78.8 10.5% Digital Classified $13.8 1.8% Total Digital Advertising and Marketing Services Revenue(2) $201.6 26.9% Digital Circula
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 Year-over-Year Revenue Metrics
Same Store Year-over-Year Revenue Metrics(1) FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 2019 2020 2020 2020 2020 2020 2021 2021 2021 2021 2021 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% Digital Advertising and Marketing -2.8% 2.1% -26.2% -13.8% -3.2%
Slide 25: Gannett Same Store Non-GAAP Revenue Reconciliation
Gannett Same Store Non-GAAP Revenue Reconciliation(1) Total Revenues 3 months ended 3 months ended (in thousands) $ Variance % Variance March 31, 2022 March 31, 2021 Total Revenues $748,077 $777,084 ($29,007) -3.7% Acquired revenues (2,541) - Currency impact 1,954 - Exited operations - (10,797) Same
Slide 26: Gannett Same Store Non-GAAP Revenue Reconciliation
Gannett Same Store Non-GAAP Revenue Reconciliation(1) Total Digital Revenues 3 months ended 3 months ended (in thousands) $ Variance % Variance March 31, 2022 March 31, 2021 Total Digital Revenues $251,144 $231,013 $20,131 8.7% Acquired revenues (600) - Currency impact 940 - Exited operations - (1,7
Slide 27: Gannett Same Store Non-GAAP Revenue Reconciliation
Gannett Same Store Non-GAAP Revenue Reconciliation(1) Total Publishing Segment 3 months ended 3 months ended (in thousands) $ Variance % Variance March 31, 2022 March 31, 2021 Total Revenue $670,419 $699,585 ($29,166) -4.2% Acquired revenues (2,541) - Currency impact 1,532 - Exited operations - (10,
Slide 28: 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) March 31, 2022 March 31, 2022 Net loss attributable to Gannett ($2,967) Net income attributable to Gannett $5,257 Benefit for income taxes
Slide 29: 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) March 31, 2022 March 31, 2022 Net loss attributable to Gannett ($2,967) Cash provided by operating activities (GAAP basis) $32,429 Loss on ear
Slide 30: Gannett Same Store Non-GAAP Revenue Reconciliation
Gannett Same Store Non-GAAP Revenue Reconciliation(1) Publishing Segment – Digital Advertising and Marking Services 3 months ended 3 months ended (in thousands) $ Variance % Variance March 31, 2022 March 31, 2021 Digital Media Revenue $78,771 $79,557 ($786) -1.0% Acquired revenues (139) - Currency i
Slide 31: Gannett Same Store Non-GAAP Revenue Reconciliation
Gannett Same Store Non-GAAP Revenue Reconciliation(1) Publishing Segment – Advertising and Marketing Services 3 months ended 3 months ended (in thousands) $ Variance % Variance March 31, 2022 March 31, 2021 Print Advertising Revenue $173,518 $193,196 ($19,678) -10.2% Acquired revenues (1,208) - Curr
Slide 32: Gannett Same Store Non-GAAP Revenue Reconciliation
Gannett Same Store Non-GAAP Revenue Reconciliation(1) Publishing Segment – Circulation 3 months ended 3 months ended (in thousands) $ Variance % Variance March 31, 2022 March 31, 2021 Print Circulation Revenue $258,476 $302,257 ($43,781) -14.5% Acquired revenues (517) - Currency impact 420 - Exited
Slide 33: 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 June 30, 2021 December 31, June 30, 2022 December 31, (Est.) 2021 (Est.) (Est.) 2022 (Est.) $3,110M to Total Revenues $804M(4) $3,208M(4) $780M to $790M $3,200M
Slide 34: 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 June 30, 2022 (Est.) December 31, 2022 (Est.) Net income (loss) attributable to Gannett ~$0M $50M to $70M Provision (benefit) for income tax
Slide 35: Gannett Non-GAAP Reconciliation – Business Outlook
(1)(2) Gannett Non-GAAP Reconciliation – Business Outlook Free Cash Flow 3 months ended 12 months ended June 30, 2022 (Est.) December 31, 2022 (Est.) Cash provided by operating activities (GAAP basis) ~$5M $205M to $225M Capital Expenditures ~$12M $40 to $45M Free cash flow (non-GAAP basis) ($10M to