MCLEAN, Va.--(BUSINESS WIRE)--Gannett Co., Inc. ("Gannett", "we", "us", "our", or "the Company") (NYSE: GCI) today reported its financial results for the fourth quarter and full year ended December 31, 2019. Prior to November 19, 2019, our corporate name was New Media Investment Group Inc. ("New Media" or "Legacy New Media"), and Gannett Co., Inc. ("Legacy Gannett") was a separate publicly traded company. On November 19, 2019, New Media acquired Legacy Gannett (the "Acquisition"). In connection with the Acquisition, Legacy Gannett became a wholly owned subsidiary of New Media, and New Media changed its name to Gannett Co., Inc.
The discussion below presents “consolidated results” for the Company as a whole and “segment results” for our primary reporting segments: Publishing and Marketing Solutions. Within each of these categories, we provide (i) our actual GAAP results, which reflect a full quarter or year (as applicable) of Legacy New Media operations and six weeks of Legacy Gannett operations, (ii) same store revenue trends for Legacy Gannett and Legacy New Media, each on a stand-alone basis for the entire period, (iii) pro forma results, which reflect the consolidated operations, adjusted as if New Media had owned Legacy Gannett for the entire period presented, and (iv) Adjusted EBITDA, which is our non-GAAP measure of operating results, calculated based on actual results (with six weeks of Legacy Gannett results) and on a pro forma basis (assuming Legacy Gannett was owned for the entire period).
Financial Highlights
|
Fourth Quarter 2019 |
|
Full Year 2019 |
||||||||||||
in thousands |
Actual |
|
Pro Forma |
|
Actual |
|
Pro Forma |
||||||||
GAAP operating revenue |
$ |
699,274 |
|
|
$ |
1,054,253 |
|
|
$ |
1,867,909 |
|
|
$ |
4,182,220 |
|
GAAP net loss attributable to Gannett |
(95,088 |
) |
|
(115,694 |
) |
|
(119,842 |
) |
|
(114,983 |
) |
||||
Adjusted EBITDA(1) (non-GAAP) |
98,821 |
|
|
141,208 |
|
|
223,871 |
|
|
485,452 |
|
||||
Free cash flow(2) (non-GAAP) |
(79,692 |
) |
|
N/A |
|
|
11,557 |
|
|
N/A |
|
||||
(1) Refer to “Use of Non-GAAP Information” below for the Company’s definition of Adjusted EBITDA and the reconciliation to the most comparable GAAP measure included herein.
(2) Refer to “Use of Non-GAAP Information” below for the Company’s definition of Free cash flow and the reconciliation to the most comparable GAAP measure included herein. Free cash flow for the fourth quarter was negatively impacted by $87.8 million of pension benefits paid as a result of the Acquisition, $35.9 million of integration and reorganization costs, $19.3 million of acquisition costs, and $2.5 million of other one-time adjustments. Free cash flow for the full year was negatively impacted by $87.8 million of pension benefits paid as a result of the Acquisition, $45.4 million of integration and reorganization costs, $38.4 million of acquisition costs, and $11.3 million of other one-time adjustments.
Fourth Quarter 2019 Consolidated Results
-
Fourth quarter GAAP revenues of $699.3 million rose 68.1% as compared to the prior year quarter reflecting the Acquisition.
- Legacy Gannett fourth quarter same store revenues decreased 10.1% year-over-year.
- Legacy New Media fourth quarter same store revenues decreased 9.6% year-over-year.
- Pro forma digital advertising and marketing services revenues reached $231.8 million in the fourth quarter, or 22.0% of total pro forma revenues.
- GAAP net loss attributable to Gannett of $95.1 million in the fourth quarter reflects a one-time non-cash write-down of $100.7 million related to the revaluation of intangibles and $145.6 million one-time cash charges related to restructuring and transaction related costs.
- Adjusted EBITDA totaled $98.8 million and represented a 14.1% margin. On a pro forma basis, Adjusted EBITDA totaled $141.2 million and represented a 13.4% margin.
Full Year 2019 Consolidated Results
-
2019 GAAP revenues of $1.9 billion rose 22.4% as compared to the prior year reflecting the Acquisition.
- Legacy Gannett 2019 same store revenues decreased 9.4% year-over-year.
- Legacy New Media 2019 same store revenues decreased 8.0% year-over-year.
- Pro forma digital advertising and marketing services revenues reached $912.5 million in 2019, or 21.8% of total pro forma revenues.
- GAAP net loss attributable to Gannett of $119.8 million in 2019 reflects a one-time $100.7 million non-cash write-down related to the revaluation of intangibles and $182.9 million one-time cash charges related to restructuring and transaction related costs.
- Adjusted EBITDA totaled $223.9 million and represented a 12.0% margin. On a pro forma basis, Adjusted EBITDA reached $485.5 million and represented a 11.6% margin.
"We are pleased to announce our first earnings report since completing our acquisition of Legacy Gannett in November," said Michael Reed, Gannett Chairman and Chief Executive Officer. "Although we acquired Legacy Gannett only six weeks before the end of the quarter, we immediately began implementing our integration plan. By the end of the first quarter of 2020, we expect to have implemented measures that will result in over $60 million in annualized savings. As a result of these measures, we expect to realize $10 - $15 million of savings in the first quarter, and we expect the savings in subsequent quarters to increase as we continue to implement synergies throughout the year. We remain highly confident that we will complete the implementation of measures in 2020 corresponding to more than half of our $300 million synergy target related to the acquisition of Legacy Gannett."
"We are also happy to report that we are ahead of schedule in paying down debt. As announced earlier in January, we paid down $35.8 million in principal on our credit facility during the fourth quarter. Subsequent to the quarter, we have paid down an additional $9.4 million. Real estate sales have driven $8.9 million of the repayments, and we anticipate an additional $100 - $125 million in real estate sales by the end of 2021."
"As expected, same store trends weakened in the fourth quarter, in large part reflecting the runoff of more aggressive subscriber pricing initiatives that Legacy Gannett implemented in the fourth quarter of 2018. Beyond circulation revenue, same store advertising trends were a bit weaker than expected primarily due to disruption from the Acquisition. We have already seen trends improve in the first quarter and are confident in our ability to sustain these positive trends. In the fourth quarter, we saw strong gains in digital marketing services revenues at Legacy Gannett in our local markets, and the Legacy New Media events business nearly doubled its revenues compared to the prior year period. We were pleased with the strong momentum we saw in our key growth areas, which positioned us for a solid start to 2020."
"Our Adjusted EBITDA in the quarter was negatively impacted by both the revenue softness and higher than anticipated healthcare claims, while our Free cash flow reflects a significant amount of one-time costs related to the Acquisition. Adjusting for these one-time items, Free cash flow would have been $65.9 million. With integration efforts ongoing, we remain very optimistic about our ability to deliver on our synergy targets, pay down debt, and return capital to shareholders, while continuing to serve as a trusted source of high quality news to the communities we serve."
Fourth Quarter 2019 Publishing Segment
- Publishing segment revenues totaled $653.9 million in the fourth quarter; on a pro forma basis, Publishing segment revenues were $964.7 million.
-
Print advertising revenues totaled $240.9 million in the fourth quarter; on a pro forma basis, print advertising revenues were $334.1 million, reflecting continued secular pressures.
- Same store Legacy Gannett print advertising revenues decreased 20.1% as compared to the prior year quarter.
- Same store Legacy New Media print advertising revenue decreased 16.3%, as compared to the prior year quarter.
-
Digital advertising and marketing services revenues were $90.1 million in the fourth quarter; on a pro forma basis, digital advertising and marketing services revenues were $150.3 million.
- Legacy Gannett same store digital advertising and marketing services revenues decreased 1.6% as compared to the prior year quarter, an improvement from the third quarter trend, reflecting improved digital marketing services results.
- Legacy New Media same store digital advertising and marketing services revenues decreased 0.4% year-over-year.
-
Circulation revenues totaled $255.6 million in the fourth quarter; on a pro forma basis, circulation revenues were $384.4 million.
- Legacy Gannett same store circulation revenues decreased 10.3% year-over-year, as expected, reflecting the cycling of last year's more aggressive pricing initiatives.
- Legacy New Media same store circulation revenues decreased 7.2% from the prior year.
- Commercial printing and other revenues contributed $67.3 million to Publishing segment revenues in the fourth quarter.
- Paid digital-only subscriber volumes now total approximately 812,000, up 25.3% year-over-year on a pro forma basis.
- Publishing segment Adjusted EBITDA was $113.3 million, representing a margin of 17.3% for the quarter.
Fourth Quarter 2019 Marketing Solutions Segment
-
Marketing Solutions segment revenues were $69.3 million in the fourth quarter; on a pro forma basis, Marketing Solutions segment revenues were $122.7 million.
- Legacy Gannett same store digital marketing services revenues increased 1.8% as compared to the prior year, similar to the 2.5% gain in the third quarter. Revenues across the Legacy Gannett local markets achieved another quarter of robust growth, driven by an increase in the number of clients.
- Marketing Solutions segment Adjusted EBITDA was $4.0 million, representing a margin of 5.8% for the quarter.
Fourth Quarter 2019 Cash Flow
- Cash flow from operations was negative $73.0 million compared to positive $37.6 million for the prior year quarter, as net cash used in operating activities from Legacy Gannett of $72.4 million included additional pension and postretirement contributions of $92.4 million, most of which were related to an $87.8 million pay-out of pension benefits upon change-in-control. Additionally, cash flow from operations was reduced by $35.9 million of integration and reorganization costs, $19.3 million of acquisition costs, and $2.5 million of other one-time adjustments.
- Capital expenditures were $6.7 million, primarily for product development, technology investments, and maintenance projects.
- The Company repaid $35.8 million in principal under its credit facility.
- As of the end of the fourth quarter, the Company had a cash balance of $156.0 million.
2020 Dividend
We expect to resume paying a quarterly dividend with respect to the first quarter of 2020. Consistent with our past practice, any dividend declared with respect to the first quarter is expected to be announced and paid in May. We expect the amount of this dividend to be $0.19 per share.
Under the terms of the credit facility that we entered into on November 19, 2019 in connection with the Acquisition, we are prohibited from paying cash dividends until after April 2020 and thereafter will be permitted to pay cash dividends only in accordance with the limitations set forth in our credit facility. Accordingly, our Board of Directors did not declare a dividend with respect to the fourth quarter of 2019. In addition, our Board has not yet declared any dividend with respect to the first quarter of 2020 or any future quarter, and there can be no guarantee as to the amount and timing of any future dividend.
Integration Update
By the end of the first quarter of 2020, the Company expects to have implemented measures that will result in over $60 million in annualized savings. As a result of these measures, the Company expects to realize $10 - $15 million in savings in the first quarter and further savings in each subsequent quarter, as it continues to implement synergies throughout the year. Management remains highly confident in its ability to implement measures by the end of 2021 that are expected to result in $300 million in synergies, with more than half of such measures expected to be completed in 2020.
Earnings Conference Call
Management will host a conference call on Thursday, February 27, 2020 at 8:30 A.M. Eastern Time. A copy of the earnings release will be posted to the Investor Relations section of the Company's website, www.gannett.com. The conference call may be accessed by dialing 1-855-319-1124 (from within the U.S.) or 1-703-563-6359 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “Gannett Fourth Quarter Earnings Call” or access code “6790119”. A simultaneous webcast of the conference call will be available to the public on a listen-only basis at www.gannett.com. Please allow extra time prior to the call to visit the website and download any necessary software required to listen to the internet broadcast. A telephonic replay of the conference call will also be available approximately two hours following the call’s completion through 11:59 P.M. Eastern Time on Thursday, March 5, 2020 by dialing 1-855-859-2056 (from within the U.S.) or 1-404-537-3406 (from outside of the U.S.); please reference access code “6790119”.
About Gannett
Gannett Co., Inc. (NYSE: GCI) is an innovative, digitally focused media and marketing solutions company committed to fostering the communities in our network and helping them build relationships with their local businesses. With an unmatched reach at the national and local level, Gannett touches the lives of nearly 150 million people monthly with our Pulitzer-Prize winning content, consumer experiences and benefits, and advertiser products and services. Our portfolio includes the USA TODAY, local media organizations in 47 states in the U.S. and Guam, and Newsquest, a wholly owned subsidiary with over 140 local media brands operating in the United Kingdom. Gannett also owns the digital marketing services companies ReachLocal, Inc., UpCurve, Inc., and WordStream, Inc. and runs the largest media-owned events business in the U.S., GateHouse Live. Effective November 20, 2019, following the completion of its merger with Gannett, New Media Investment Group Inc. trades on the New York Stock Exchange under Gannett Co., Inc. and its ticker symbol has changed to “GCI”. To connect with us, visit www.gannett.com.
Same Store Revenues
Same store revenues are defined as GAAP revenues excluding (1) revenues related to 2019 acquisitions from the date of the acquisition through the end of the year, (2) revenues related to 2018 acquisitions from the beginning of 2019 through the first year anniversary of their applicable acquisition date, (3) exited operations, (4) currency impacts, and (5) deferred revenue impacts related to the Acquisition. As noted above, we have provided same store revenue trends for Legacy Gannett and Legacy New Media, each on a stand-alone basis for the entire period. This information is provided on a transitional basis, and management expects to provide same store results for the consolidated company in future periods.
Cautionary Statement Regarding Forward-Looking Statements
Certain items in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding measures expected to result in over $60 million in annualized savings, the timing of realizing those savings, including our expectation that $10 - $15 million will be realized in the first quarter, the potential to realize additional savings in future quarters, our ability to achieve $300 million of synergies through measures expected to be implemented by the end of 2021, our expectations, in terms of both amount and timing, with respect to debt repayment, real estate sales and debt refinancing, future revenue trends and our ability to influence trends, and the amount and timing of any future dividend, including our expectation that the Board will declare a $0.19 per share dividend with respect to the first quarter of 2020. These statements are based on management’s current expectations and beliefs and are subject to a number of risks and uncertainties. These and other risks and uncertainties could cause actual results to differ materially from those described in the forward-looking statements, many of which are beyond our control. The Company can give no assurance its expectations will be attained. Accordingly, you should not place undue reliance on any forward-looking statements contained in this press release. For a discussion of some of the risks and important factors that could cause actual results to differ from such forward-looking statements, see the risks and other factors detailed from time to time in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the Securities and Exchange Commission. Furthermore, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Such forward-looking statements speak only as of the date of this press release. The Company expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.
CONSOLIDATED BALANCE SHEETS
|
|||||||
Table No. 1 (1) |
|
|
|
||||
Assets |
December 31,
|
|
December 30,
|
||||
Current assets |
|
|
|
||||
Cash and cash equivalents |
$ |
156,042 |
|
|
$ |
48,651 |
|
Accounts receivable, net of allowance for doubtful accounts of $19,923 and $8,042 at December 31, 2019 and December 30, 2018, respectively |
438,523 |
|
|
174,274 |
|
||
Inventories |
55,090 |
|
|
25,022 |
|
||
Prepaid expenses and other current assets |
129,460 |
|
|
49,662 |
|
||
Total current assets |
779,115 |
|
|
297,609 |
|
||
Property, plant, and equipment, net of accumulated depreciation of $277,291 and $219,256 at December 31, 2019 and December 30, 2018, respectively |
815,807 |
|
|
339,608 |
|
||
Operating lease assets |
309,112 |
|
|
— |
|
||
Goodwill |
914,331 |
|
|
310,737 |
|
||
Intangible assets, net of accumulated amortization of $145,773 and $101,543 at December 31, 2019 and December 30, 2018, respectively |
1,012,564 |
|
|
486,054 |
|
||
Deferred income taxes |
76,297 |
|
|
— |
|
||
Other assets |
112,876 |
|
|
9,856 |
|
||
Total assets |
$ |
4,020,102 |
|
|
$ |
1,443,864 |
|
|
|
|
|
||||
Liabilities and equity |
|
|
|
||||
Current liabilities |
|
|
|
||||
Current portion of long-term debt |
$ |
3,300 |
|
|
$ |
12,395 |
|
Accounts payable |
146,995 |
|
|
16,612 |
|
||
Accrued expenses |
306,633 |
|
|
109,597 |
|
||
Deferred revenue |
218,823 |
|
|
105,187 |
|
||
Other current liabilities |
42,702 |
|
|
4,053 |
|
||
Total current liabilities |
718,453 |
|
|
247,844 |
|
||
Long-term debt |
1,636,335 |
|
|
428,180 |
|
||
Convertible debt |
3,300 |
|
|
— |
|
||
Deferred income taxes |
9,052 |
|
|
8,282 |
|
||
Pension and other postretirement benefit obligations |
235,906 |
|
|
24,326 |
|
||
Long-term operating lease liabilities |
297,662 |
|
|
— |
|
||
Other long-term liabilities |
136,188 |
|
|
16,462 |
|
||
Total noncurrent liabilities |
2,318,443 |
|
|
477,250 |
|
||
Total liabilities |
3,036,896 |
|
|
725,094 |
|
||
Redeemable noncontrolling interests |
1,850 |
|
|
1,547 |
|
||
Commitments and contingent liabilities |
|
|
|
||||
|
|
|
|
||||
Equity |
|
|
|
||||
Common stock, $0.01 par value, 2,000,000,000 shares authorized; 129,386,258 shares issued and 128,991,544 shares outstanding at December 31, 2019; 60,508,249 shares issued and 60,306,286 shares outstanding at December 30, 2018 |
1,294 |
|
|
605 |
|
||
Treasury stock, at cost, 394,714 and 201,963 shares at December 31, 2019 and December 30, 2018, respectively |
(2,876 |
) |
|
(1,873 |
) |
||
Additional paid-in capital |
1,090,694 |
|
|
721,605 |
|
||
Retained earnings |
(115,958 |
) |
|
3,767 |
|
||
Accumulated other comprehensive loss (income) |
8,202 |
|
|
(6,881 |
) |
||
Total equity |
981,356 |
|
|
717,223 |
|
||
Total liabilities and equity |
$ |
4,020,102 |
|
|
$ |
1,443,864 |
|
(1) Starting in 2019 and subsequent to our acquisition of Legacy Gannett, our fiscal year coincides with the Gregorian calendar. In 2018, our fiscal year ended on the last Sunday of the calendar year. Our fiscal year for 2018 was a 52-week year ending on December 30, 2018.
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|||||||||||||||
Table No. 2 (1) |
Three months ended |
|
Year ended |
||||||||||||
Fiscal year ended |
December 31, 2019 |
|
December 30,
|
|
December 31,
|
|
December 30,
|
||||||||
Operating revenues: |
|
|
|
|
|
|
|
||||||||
Advertising and marketing services |
$ |
370,324 |
|
|
$ |
217,687 |
|
|
$ |
952,644 |
|
|
$ |
786,577 |
|
Circulation |
255,574 |
|
|
154,503 |
|
|
704,842 |
|
|
574,963 |
|
||||
Commercial printing and other |
73,376 |
|
|
43,849 |
|
|
210,423 |
|
|
164,484 |
|
||||
Total operating revenues |
699,274 |
|
|
416,039 |
|
|
1,867,909 |
|
|
1,526,024 |
|
||||
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Operating costs |
398,322 |
|
|
230,299 |
|
|
1,079,593 |
|
|
865,234 |
|
||||
Selling, general and administrative expenses |
227,711 |
|
|
136,994 |
|
|
606,917 |
|
|
502,631 |
|
||||
Depreciation and amortization |
43,148 |
|
|
20,515 |
|
|
111,882 |
|
|
84,791 |
|
||||
Integration and reorganization costs |
37,899 |
|
|
1,768 |
|
|
47,401 |
|
|
15,011 |
|
||||
Acquisition costs |
45,300 |
|
|
762 |
|
|
60,618 |
|
|
2,651 |
|
||||
Impairment of long-lived assets |
540 |
|
|
417 |
|
|
3,009 |
|
|
1,538 |
|
||||
Goodwill and mastheads impairment |
100,743 |
|
|
— |
|
|
100,743 |
|
|
— |
|
||||
Net (gain) loss on sale or disposal of assets |
1,384 |
|
|
80 |
|
|
4,723 |
|
|
(3,971 |
) |
||||
Total operating expenses |
855,047 |
|
|
390,835 |
|
|
2,014,886 |
|
|
1,467,885 |
|
||||
Operating income (loss) |
(155,773 |
) |
|
25,204 |
|
|
(146,977 |
) |
|
58,139 |
|
||||
Non-operating (income) expense: |
|
|
|
|
|
|
|
||||||||
Interest expense |
33,283 |
|
|
9,606 |
|
|
63,660 |
|
|
36,072 |
|
||||
Loss on early extinguishment of debt |
6,058 |
|
|
2,886 |
|
|
6,058 |
|
|
2,886 |
|
||||
Other (income) expense |
(8,709 |
) |
|
452 |
|
|
(9,511 |
) |
|
(838 |
) |
||||
Non-operating expense |
30,632 |
|
|
12,944 |
|
|
60,207 |
|
|
38,120 |
|
||||
Income (loss) before income taxes |
(186,405 |
) |
|
12,260 |
|
|
(207,184 |
) |
|
20,019 |
|
||||
Provision (benefit) for income taxes |
(90,924 |
) |
|
(679 |
) |
|
(85,994 |
) |
|
1,912 |
|
||||
Net income (loss) |
$ |
(95,481 |
) |
|
$ |
12,939 |
|
|
$ |
(121,190 |
) |
|
$ |
18,107 |
|
Net loss attributable to redeemable noncontrolling interests |
(393 |
) |
|
(321 |
) |
|
(1,348 |
) |
|
(89 |
) |
||||
Net income (loss) attributable to Gannett |
$ |
(95,088 |
) |
|
$ |
13,260 |
|
|
$ |
(119,842 |
) |
|
$ |
18,196 |
|
Earnings (loss) per share attributable to Gannett - basic |
$ |
(1.05 |
) |
|
$ |
0.22 |
|
|
$ |
(1.77 |
) |
|
$ |
0.31 |
|
Earnings (loss) per share attributable to Gannett - diluted |
$ |
(1.05 |
) |
|
$ |
0.22 |
|
|
$ |
(1.77 |
) |
|
$ |
0.31 |
|
Dividends declared per share |
$ |
— |
|
|
$ |
0.38 |
|
|
$ |
1.52 |
|
|
$ |
1.49 |
|
(1) Starting in 2019 and subsequent to our acquisition of Legacy Gannett, our fiscal year coincides with the Gregorian calendar. In 2018, our fiscal year ended on the last Sunday of the calendar year. Our fiscal year for 2018 was a 52-week year ending on December 30, 2018.
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||
Table No. 3 (1) |
Year ended |
||||||
|
December 31,
|
|
December 30,
|
||||
Operating activities: |
|
|
|
||||
Net income (loss) |
$ |
(121,190 |
) |
|
$ |
18,107 |
|
Adjustments to reconcile net income (loss) to operating cash flows: |
|
|
|
||||
Depreciation and amortization |
111,882 |
|
|
84,791 |
|
||
Facility consolidation costs |
148 |
|
|
— |
|
||
Stock-based compensation - equity awards |
11,324 |
|
|
3,156 |
|
||
Non-cash interest expense |
3,851 |
|
|
1,996 |
|
||
Non-cash acquisition related costs |
26,411 |
|
|
— |
|
||
(Benefit) provision for deferred income taxes |
(87,765 |
) |
|
202 |
|
||
Net (gain) loss on sale or disposal of assets |
4,723 |
|
|
(3,971 |
) |
||
Non-cash charge to investments |
— |
|
|
505 |
|
||
Non-cash loss on early extinguishment of debt |
6,058 |
|
|
2,886 |
|
||
Impairment of long-lived assets |
3,009 |
|
|
1,538 |
|
||
Goodwill and mastheads impairment |
100,743 |
|
|
— |
|
||
Pension and other postretirement benefit obligations |
(100,452 |
) |
|
(2,575 |
) |
||
Change in assets and liabilities: |
|
|
|
||||
Accounts receivables, net |
12,608 |
|
|
15 |
|
||
Inventory |
5,150 |
|
|
(4,336 |
) |
||
Prepaid expenses |
7,016 |
|
|
3,338 |
|
||
Accounts payable |
3,958 |
|
|
(2,530 |
) |
||
Accrued expenses |
40,353 |
|
|
8,019 |
|
||
Deferred revenue |
(8,326 |
) |
|
(7,642 |
) |
||
Other assets and liabilities |
6,034 |
|
|
6,060 |
|
||
Net cash provided by operating activities |
25,535 |
|
|
109,559 |
|
||
Investing activities: |
|
|
|
||||
Acquisitions, net of cash acquired |
(796,502 |
) |
|
(204,877 |
) |
||
Purchases of property, plant, and equipment |
(13,978 |
) |
|
(11,639 |
) |
||
Proceeds from sale of publications, real estate and other assets, and insurance proceeds |
27,486 |
|
|
15,040 |
|
||
Change in other investing activities |
(2,066 |
) |
|
— |
|
||
Net cash used for investing activities |
(785,060 |
) |
|
(201,476 |
) |
||
Financing activities: |
|
|
|
||||
Payments of debt issuance costs |
(121,223 |
) |
|
(800 |
) |
||
Borrowings under term loans |
1,792,000 |
|
|
79,675 |
|
||
Borrowings under revolving credit facility |
153,900 |
|
|
20,000 |
|
||
Repayments under term loans |
(481,058 |
) |
|
(3,093 |
) |
||
Repayments under revolving credit facility |
(153,900 |
) |
|
(20,000 |
) |
||
Repayments of convertible debt |
(197,950 |
) |
|
— |
|
||
Payment of offering costs |
— |
|
|
(369 |
) |
||
Issuance of common stock, net of underwriters' discount |
— |
|
|
111,099 |
|
||
Purchase of treasury stock |
(1,002 |
) |
|
(792 |
) |
||
Repurchase of common stock |
— |
|
|
— |
|
||
Payments of dividends |
(91,936 |
) |
|
(87,195 |
) |
||
Change in other financing activities |
82 |
|
|
— |
|
||
Net cash provided by financing activities |
898,913 |
|
|
98,525 |
|
||
Effect of currency exchange rate change |
(3,494 |
) |
|
— |
|
||
Increase in cash, cash equivalents, and restricted cash |
135,894 |
|
|
6,608 |
|
||
Balance of cash, cash equivalents, and restricted cash at beginning of year |
52,770 |
|
|
46,162 |
|
||
Cash, cash equivalents, and restricted cash at end of year |
$ |
188,664 |
|
|
$ |
52,770 |
|
(1) Starting in 2019 and subsequent to our acquisition of Legacy Gannett, our fiscal year coincides with the Gregorian calendar. In 2018, our fiscal year ended on the last Sunday of the calendar year. Our fiscal year for 2018 was a 52-week year ending on December 30, 2018.
SEGMENT INFORMATION
|
|||||||||||||||
Table No. 4 (1) |
Three months ended |
|
Year ended |
||||||||||||
|
December 31,
|
|
December 30,
|
|
December 31,
|
|
December 30,
|
||||||||
Operating revenues: |
|
|
|
|
|
|
|
||||||||
Publishing |
$ |
653,877 |
|
|
$ |
406,966 |
|
|
$ |
1,792,652 |
|
|
$ |
1,495,124 |
|
Marketing Solutions |
69,336 |
|
|
26,878 |
|
|
149,242 |
|
|
95,871 |
|
||||
Corporate and Other |
2,018 |
|
|
675 |
|
|
4,554 |
|
|
3,118 |
|
||||
Intersegment eliminations |
(25,957 |
) |
|
(18,480 |
) |
|
(78,539 |
) |
|
(68,089 |
) |
||||
Total |
$ |
699,274 |
|
|
$ |
416,039 |
|
|
$ |
1,867,909 |
|
|
$ |
1,526,024 |
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA: |
|
|
|
|
|
|
|
||||||||
Publishing |
$ |
113,334 |
|
|
$ |
68,132 |
|
|
$ |
268,916 |
|
|
$ |
220,415 |
|
Marketing Solutions |
4,024 |
|
|
(1,896 |
) |
|
(3,279 |
) |
|
(6,404 |
) |
||||
Corporate and Other |
(18,537 |
) |
|
(10,267 |
) |
|
(41,766 |
) |
|
(33,718 |
) |
||||
Total |
$ |
98,821 |
|
|
$ |
55,969 |
|
|
$ |
223,871 |
|
|
$ |
180,293 |
|
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization: |
|
|
|
|
|
|
|
||||||||
Publishing |
$ |
37,442 |
|
|
$ |
18,787 |
|
|
$ |
101,881 |
|
|
$ |
78,075 |
|
Marketing Solutions |
3,714 |
|
|
1,263 |
|
|
6,534 |
|
|
5,003 |
|
||||
Corporate and Other |
1,992 |
|
|
465 |
|
|
3,467 |
|
|
1,713 |
|
||||
Total |
$ |
43,148 |
|
|
$ |
20,515 |
|
|
$ |
111,882 |
|
|
$ |
84,791 |
|
(1) Starting in 2019 and subsequent to our acquisition of Legacy Gannett, our fiscal year coincides with the Gregorian calendar. In 2018, our fiscal year ended on the last Sunday of the calendar year. Our fiscal year for 2018 was a 52-week year ending on December 30, 2018.
SAME STORE REVENUES
|
||||||||||
Table No. 5 |
Three months ended |
|||||||||
Legacy Gannett |
December 31, 2019 |
|
December 31, 2018 (1) |
|
% Change |
|||||
|
|
|
|
|
|
|||||
Pro forma total revenue |
$ |
654,132 |
|
|
$ |
751,405 |
|
|
(12.9 |
)% |
Currency impact |
401 |
|
|
— |
|
|
*** |
|||
Exited operations |
(15 |
) |
|
(11,157 |
) |
|
(99.9 |
)% |
||
Deferred revenue adjustment |
10,791 |
|
|
— |
|
|
*** |
|||
Same store total revenue |
$ |
665,309 |
|
|
$ |
740,248 |
|
|
(10.1 |
)% |
|
|
|
|
|
|
|||||
Pro forma advertising and marketing services revenue |
$ |
365,776 |
|
|
$ |
427,226 |
|
|
(14.4 |
)% |
Currency impact |
374 |
|
|
— |
|
|
*** |
|||
Exited operations |
(15 |
) |
|
(11,102 |
) |
|
(99.9 |
)% |
||
Deferred revenue adjustment |
1,262 |
|
|
— |
|
|
*** |
|||
Same store advertising and marketing services revenue |
$ |
367,397 |
|
|
$ |
416,124 |
|
|
(11.7 |
)% |
|
|
|
|
|
|
|||||
Pro forma circulation revenue |
$ |
236,128 |
|
|
$ |
273,757 |
|
|
(13.7 |
)% |
Currency impact |
26 |
|
|
— |
|
|
*** |
|||
Deferred revenue adjustment |
9,529 |
|
|
— |
|
|
*** |
|||
Same store circulation revenue |
$ |
245,683 |
|
|
$ |
273,757 |
|
|
(10.3 |
)% |
|
|
|
|
|
|
|||||
Pro forma other revenue |
$ |
52,228 |
|
|
$ |
50,422 |
|
|
3.6 |
% |
Currency impact |
1 |
|
|
— |
|
|
*** |
|||
Exited operations |
— |
|
|
(55 |
) |
|
(100.0 |
)% |
||
Same store other revenue |
$ |
52,229 |
|
|
$ |
50,367 |
|
|
3.7 |
% |
(1) Legacy Gannett's fourth quarter 2018 coincided with the Gregorian calendar and ended on December 31, 2018.
SAME STORE REVENUES
|
||||||||||
Table No. 5 (continued) |
Year ended |
|||||||||
Legacy Gannett |
December 31,
|
|
December 31,
|
|
% Change |
|||||
|
|
|
|
|
|
|||||
Pro forma total revenue |
$ |
2,613,463 |
|
|
$ |
2,916,838 |
|
|
(10.4 |
)% |
Acquired revenues |
(35,779 |
) |
|
— |
|
|
*** |
|||
Currency impact |
14,766 |
|
|
— |
|
|
*** |
|||
Exited operations |
(322 |
) |
|
(43,712 |
) |
|
(99.3 |
)% |
||
Deferred revenue adjustment |
10,791 |
|
|
— |
|
|
*** |
|||
Same store total revenue |
$ |
2,602,919 |
|
|
$ |
2,873,126 |
|
|
(9.4 |
)% |
|
|
|
|
|
|
|||||
Pro forma advertising and marketing services revenue |
$ |
1,444,562 |
|
|
$ |
1,661,075 |
|
|
(13.0 |
)% |
Acquired revenues |
(34,578 |
) |
|
— |
|
|
*** |
|||
Currency impact |
10,249 |
|
|
— |
|
|
*** |
|||
Exited operations |
(319 |
) |
|
(43,640 |
) |
|
(99.3 |
)% |
||
Deferred revenue adjustment |
1,262 |
|
|
— |
|
|
*** |
|||
Same store advertising and marketing services revenue |
$ |
1,421,176 |
|
|
$ |
1,617,435 |
|
|
(12.1 |
)% |
|
|
|
|
|
|
|||||
Pro forma circulation revenue |
$ |
976,538 |
|
|
$ |
1,063,022 |
|
|
(8.1 |
)% |
Acquired revenues |
(1,130 |
) |
|
— |
|
|
*** |
|||
Currency impact |
3,443 |
|
|
— |
|
|
*** |
|||
Exited operations |
— |
|
|
— |
|
|
*** |
|||
Deferred revenue adjustment |
9,529 |
|
|
— |
|
|
*** |
|||
Same store circulation revenue |
$ |
988,380 |
|
|
$ |
1,063,022 |
|
|
(7.0 |
)% |
|
|
|
|
|
|
|||||
Pro forma other revenue |
$ |
192,363 |
|
|
$ |
192,741 |
|
|
(0.2 |
)% |
Acquired revenues |
(71 |
) |
|
— |
|
|
*** |
|||
Currency impact |
1,074 |
|
|
— |
|
|
*** |
|||
Exited operations |
(3 |
) |
|
(72 |
) |
|
(95.8 |
)% |
||
Same store other revenue |
$ |
193,363 |
|
|
$ |
192,669 |
|
|
0.4 |
% |
(1) Legacy Gannett's 2018 fiscal year coincided with the Gregorian calendar and ended on December 31, 2018.
SAME STORE REVENUES
|
||||||||||
Table No. 5 (continued) |
Three months ended |
|||||||||
Legacy New Media |
December 31,
|
|
December 30,
|
|
% Change |
|||||
|
|
|
|
|
|
|||||
As reported total revenue |
$ |
400,121 |
|
|
$ |
416,039 |
|
|
(3.8 |
)% |
Acquired revenues |
(26,385 |
) |
|
— |
|
|
*** |
|||
Exited operations |
— |
|
|
(2,666 |
) |
|
(100.0 |
)% |
||
Same store total revenue |
$ |
373,736 |
|
|
$ |
413,373 |
|
|
(9.6 |
)% |
|
|
|
|
|
|
|||||
As reported advertising and marketing services revenue |
$ |
200,435 |
|
|
$ |
217,687 |
|
|
(7.9 |
)% |
Acquired revenues |
(11,622 |
) |
|
— |
|
|
*** |
|||
Exited operations |
— |
|
|
(1,632 |
) |
|
(100.0 |
)% |
||
Same store advertising and marketing services revenue |
$ |
188,813 |
|
|
$ |
216,055 |
|
|
(12.6 |
)% |
|
|
|
|
|
|
|||||
As reported circulation revenue |
$ |
148,248 |
|
|
$ |
154,503 |
|
|
(4.0 |
)% |
Acquired revenues |
(5,151 |
) |
|
— |
|
|
*** |
|||
Exited operations |
— |
|
|
(291 |
) |
|
(100.0 |
)% |
||
Same store circulation revenue |
$ |
143,097 |
|
|
$ |
154,212 |
|
|
(7.2 |
)% |
|
|
|
|
|
|
|||||
As reported other revenue |
$ |
51,438 |
|
|
$ |
43,849 |
|
|
17.3 |
% |
Acquired revenues |
(9,612 |
) |
|
— |
|
|
*** |
|||
Exited operations |
— |
|
|
(743 |
) |
|
(100.0 |
)% |
||
Same store other revenue |
$ |
41,826 |
|
|
$ |
43,106 |
|
|
(3.0 |
)% |
(1) Starting in 2019 and subsequent to our acquisition of Legacy Gannett, our fiscal year coincides with the Gregorian calendar. In 2018, our fiscal year ended on the last Sunday of the calendar year. Our fiscal year for 2018 was a 52-week year ending on December 30, 2018.
| SAME STORE REVENUES Gannett Co., Inc. and Subsidiaries Unaudited, in thousands |
||||||||||
Table No. 5 (continued) |
Year ended |
|||||||||
Legacy New Media |
December 31,
|
|
December 30,
|
|
% Change |
|||||
|
|
|
|
|
|
|||||
As reported total revenue |
$ |
1,568,757 |
|
|
$ |
1,526,024 |
|
|
2.8 |
% |
Acquired revenues |
(176,870 |
) |
|
— |
|
|
*** |
|||
Exited operations |
— |
|
|
(13,188 |
) |
|
(100.0 |
)% |
||
Same store total revenue |
$ |
1,391,887 |
|
|
$ |
1,512,836 |
|
|
(8.0 |
)% |
|
|
|
|
|
|
|||||
As reported advertising and marketing services revenue |
$ |
782,755 |
|
|
$ |
786,577 |
|
|
(0.5 |
)% |
Acquired revenues |
(97,742 |
) |
|
— |
|
|
*** |
|||
Exited operations |
— |
|
|
(8,282 |
) |
|
(100.0 |
)% |
||
Same store advertising and marketing services revenue |
$ |
685,013 |
|
|
$ |
778,295 |
|
|
(12.0 |
)% |
|
|
|
|
|
|
|||||
As reported circulation revenue |
$ |
597,517 |
|
|
$ |
574,963 |
|
|
3.9 |
% |
Acquired revenues |
(59,225 |
) |
|
— |
|
|
*** |
|||
Exited operations |
— |
|
|
(1,904 |
) |
|
(100.0 |
)% |
||
Same store circulation revenue |
$ |
538,292 |
|
|
$ |
573,059 |
|
|
(6.1 |
)% |
|
|
|
|
|
|
|||||
As reported other revenue |
$ |
188,485 |
|
|
$ |
164,484 |
|
|
14.6 |
% |
Acquired revenues |
(19,903 |
) |
|
— |
|
|
*** |
|||
Exited operations |
— |
|
|
(3,002 |
) |
|
(100.0 |
)% |
||
Same store other revenue |
$ |
168,582 |
|
|
$ |
161,482 |
|
|
4.4 |
% |
(1) Starting in 2019 and subsequent to our acquisition of Legacy Gannett, our fiscal year coincides with the Gregorian calendar. In 2018, our fiscal year ended on the last Sunday of the calendar year. Our fiscal year for 2018 was a 52-week year ending on December 30, 2018.
USE OF NON-GAAP INFORMATION
The Company uses non-GAAP financial performance and liquidity measures to supplement the financial information presented on a GAAP basis. These non-GAAP financial measures, which may not be comparable to similarly titled measures reported by other companies, should not be considered in isolation from or as a substitute for the related GAAP measures and should be read together with financial information presented on a GAAP basis.
The Company defines its non-GAAP measures as follows:
- Adjusted EBITDA is a non-GAAP financial performance measure the Company believes offers a useful view of the overall operation of our business. The Company defines Adjusted EBITDA as net income (loss) attributable to Gannett before (1) income tax expense (benefit), (2) interest expense, (3) gains or losses on early extinguishment of debt, (4) non-operating items, primarily pension costs, (5) depreciation and amortization, (6) integration and reorganization costs, (7) impairment of long-lived assets, (8) goodwill and intangible impairments, (9) net loss (gain) on sale or disposal of assets, (10) non-cash compensation, (11) acquisition costs, and (12) certain other non-recurring charges. The most directly comparable GAAP financial measure is net income (loss) attributable to Gannett.
- Free cash flow is a non-GAAP liquidity measure that adjusts our reported GAAP results for items we believe are critical to the ongoing success of our business. The Company defines Free cash flow as net cash provided by operating activities as reported on the statement of cash flows less capital expenditures, which results in a figure representing Free cash flow available for use in operations, additional investments, debt obligations, and returns to shareholders. The most directly comparable GAAP financial measure is net cash from operating activities.
Management’s Use of Non-GAAP Measures
Adjusted EBITDA and Free cash flow are not measurements of financial performance under GAAP and should not be considered in isolation or as an alternative to income from operations, net income (loss), cash flow from continuing operating activities, or any other measure of performance or liquidity derived in accordance with GAAP. We believe our non-GAAP measures as we have defined them are helpful in identifying trends in our day-to-day performance because the items excluded have little or no significance on our day-to-day operations. These measures provide an assessment of controllable expenses and afford management the ability to make decisions which are expected to facilitate meeting current financial goals as well as achieve optimal financial performance.
Adjusted EBITDA provides us with a measure of financial performance, independent of items that are beyond the control of management in the short-term such as depreciation and amortization, taxation, non-cash impairments, and interest expense associated with our capital structure. This metric measures our financial performance based on operational factors that management can impact in the short-term, namely the cost structure or expenses of the organization. Adjusted EBITDA is one of the metrics we use to review the financial performance of our business on a monthly basis.
We use Adjusted EBITDA as a measure of our day-to-day operating performance, which is evidenced by the publishing and delivery of news and other media and excludes certain expenses that may not be indicative of our day-to-day business operating results. We consider the unrealized (gain) loss on derivative instruments and the (gain) loss on early extinguishment of debt to be financing related costs associated with interest expense or amortization of financing fees. Accordingly, we exclude financing related costs such as the early extinguishment of debt because they represent the write-off of deferred financing costs, and we believe these non-cash write-offs are similar to interest expense and amortization of financing fees, which by definition are excluded from Adjusted EBITDA. Additionally, the non-cash gains (losses) on derivative contracts, which are related to interest rate swap agreements to manage interest rate risk, are financing costs associated with interest expense. Such charges are incidental to, but not reflective of, our day-to-day operating performance, and it is appropriate to exclude charges related to financing activities such as the early extinguishment of debt and the unrealized (gain) loss on derivative instruments which, depending on the nature of the financing arrangement, would have otherwise been amortized over the period of the related agreement and does not require a current cash settlement. Such charges are incidental to, but not reflective of our day-to-day operating performance of the business that management can impact in the short term.
Limitations of Non-GAAP Measures
Each of our non-GAAP measures has limitations as an analytical tool. They should not be viewed in isolation or as a substitute for GAAP measures of earnings or cash flows. Material limitations in making the adjustments to our earnings to calculate Adjusted EBITDA and using this non-GAAP financial measure as compared to GAAP net income (loss) include: the cash portion of interest / financing expense, income tax (benefit) provision, and charges related to impairment of long-lived assets, which may significantly affect our financial results.
A reader of our financial statements may find this item important in evaluating our performance, results of operations, and financial position. We use non-GAAP financial measures to supplement our GAAP results in order to provide a more complete understanding of the factors and trends affecting our business.
Adjusted EBITDA and Free cash flow are not alternatives to net income, income from operations, or cash flows provided by or used in operations as calculated and presented in accordance with GAAP. Readers of our financial statements should not rely on Adjusted EBITDA or Free cash flow as a substitute for any such GAAP financial measure. We strongly urge readers of our financial statements to review the reconciliation of income (loss) from continuing operations to Adjusted EBITDA and the reconciliation of net cash from operating activities to Free cash flow, along with our consolidated financial statements included elsewhere in this report. We also strongly urge readers of our financial statements to not rely on any single financial measure to evaluate our business. In addition, because Adjusted EBITDA and Free cash flow are not measures of financial performance under GAAP and are susceptible to varying calculations, the Adjusted EBITDA and Free cash flow measures as presented in this report may differ from and may not be comparable to similarly titled measures used by other companies.
NON-GAAP FINANCIAL INFORMATION
|
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Table No. 6 (1) |
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three months ended December 31, 2019 |
||||||||||||||
|
Publishing |
|
Marketing
|
|
Corporate and
|
|
Consolidated
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to Gannett |
$ |
(52,036 |
) |
|
$ |
(1,392 |
) |
|
$ |
(41,660 |
) |
|
$ |
(95,088 |
) |
Income tax expense (benefit) |
— |
|
|
— |
|
|
(90,924 |
) |
|
(90,924 |
) |
||||
Interest expense |
24 |
|
|
— |
|
|
33,259 |
|
|
33,283 |
|
||||
Loss on early extinguishment of debt |
— |
|
|
— |
|
|
6,058 |
|
|
6,058 |
|
||||
Other non-operating items, net |
(6 |
) |
|
(775 |
) |
|
(7,928 |
) |
|
(8,709 |
) |
||||
Depreciation and amortization |
37,442 |
|
|
3,714 |
|
|
1,992 |
|
|
43,148 |
|
||||
Integration and reorganization costs |
13,777 |
|
|
950 |
|
|
23,172 |
|
|
37,899 |
|
||||
Acquisition costs |
— |
|
|
— |
|
|
45,300 |
|
|
45,300 |
|
||||
Impairment of long-lived assets |
540 |
|
|
— |
|
|
— |
|
|
540 |
|
||||
Goodwill and mastheads impairment |
100,743 |
|
|
— |
|
|
— |
|
|
100,743 |
|
||||
Net (gain) loss on sale or disposal of assets |
1,289 |
|
|
(8 |
) |
|
103 |
|
|
1,384 |
|
||||
Non-cash compensation |
— |
|
|
— |
|
|
8,790 |
|
|
8,790 |
|
||||
Other items |
11,561 |
|
|
1,535 |
|
|
3,301 |
|
|
16,397 |
|
||||
Adjusted EBITDA (non-GAAP basis) |
$ |
113,334 |
|
|
$ |
4,024 |
|
|
$ |
(18,537 |
) |
|
$ |
98,821 |
|
|
|
|
|
|
|
|
|
||||||||
|
Three months ended December 30, 2018 |
||||||||||||||
|
Publishing |
|
Marketing
|
|
Corporate and
|
|
Consolidated
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to Gannett |
$ |
45,631 |
|
|
$ |
(3,866 |
) |
|
$ |
(28,505 |
) |
|
$ |
13,260 |
|
Income tax expense (benefit) |
— |
|
|
— |
|
|
(679 |
) |
|
(679 |
) |
||||
Interest expense |
56 |
|
|
— |
|
|
9,549 |
|
|
9,605 |
|
||||
Loss on early extinguishment of debt |
— |
|
|
— |
|
|
2,886 |
|
|
2,886 |
|
||||
Other non-operating items, net |
(467 |
) |
|
— |
|
|
580 |
|
|
113 |
|
||||
Depreciation and amortization |
18,787 |
|
|
1,263 |
|
|
465 |
|
|
20,515 |
|
||||
Integration and reorganization costs |
1,541 |
|
|
— |
|
|
227 |
|
|
1,768 |
|
||||
Acquisition costs |
— |
|
|
15 |
|
|
747 |
|
|
762 |
|
||||
Impairment of long-lived assets |
417 |
|
|
— |
|
|
— |
|
|
417 |
|
||||
Goodwill and mastheads impairment |
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
Net (gain) loss on sale or disposal of assets |
51 |
|
|
— |
|
|
29 |
|
|
80 |
|
||||
Non-cash compensation |
— |
|
|
— |
|
|
657 |
|
|
657 |
|
||||
Other items |
2,116 |
|
|
692 |
|
|
3,777 |
|
|
6,585 |
|
||||
Adjusted EBITDA (non-GAAP basis) |
$ |
68,132 |
|
|
$ |
(1,896 |
) |
|
$ |
(10,267 |
) |
|
$ |
55,969 |
|
(1) Starting in 2019 and subsequent to our acquisition of Legacy Gannett, our fiscal year coincides with the Gregorian calendar. In 2018, our fiscal year ended on the last Sunday of the calendar year. Our fiscal year for 2018 was a 52-week year ending on December 30, 2018.
NON-GAAP FINANCIAL INFORMATION
|
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Table No. 6 (continued) (1) |
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Year ended December 31, 2019 |
||||||||||||||
|
Publishing |
|
Marketing
|
|
Corporate and
|
|
Consolidated
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to Gannett |
$ |
22,523 |
|
|
$ |
(14,006 |
) |
|
$ |
(128,359 |
) |
|
$ |
(119,842 |
) |
Income tax expense (benefit) |
— |
|
|
— |
|
|
(85,994 |
) |
|
(85,994 |
) |
||||
Interest expense |
123 |
|
|
— |
|
|
63,537 |
|
|
63,660 |
|
||||
Loss on early extinguishment of debt |
— |
|
|
— |
|
|
6,058 |
|
|
6,058 |
|
||||
Other non-operating items, net |
(969 |
) |
|
(775 |
) |
|
(7,767 |
) |
|
(9,511 |
) |
||||
Depreciation and amortization |
101,881 |
|
|
6,534 |
|
|
3,467 |
|
|
111,882 |
|
||||
Integration and reorganization costs |
21,336 |
|
|
1,937 |
|
|
24,128 |
|
|
47,401 |
|
||||
Acquisition costs |
— |
|
|
(38 |
) |
|
60,656 |
|
|
60,618 |
|
||||
Impairment of long-lived assets |
3,009 |
|
|
— |
|
|
— |
|
|
3,009 |
|
||||
Goodwill and mastheads impairment |
100,743 |
|
|
— |
|
|
— |
|
|
100,743 |
|
||||
Net (gain) loss on sale or disposal of assets |
4,036 |
|
|
(5 |
) |
|
692 |
|
|
4,723 |
|
||||
Non-cash compensation |
— |
|
|
— |
|
|
11,324 |
|
|
11,324 |
|
||||
Other items |
16,234 |
|
|
3,074 |
|
|
10,492 |
|
|
29,800 |
|
||||
Adjusted EBITDA (non-GAAP basis) |
$ |
268,916 |
|
|
$ |
(3,279 |
) |
|
$ |
(41,766 |
) |
|
$ |
223,871 |
|
|
|||||||||||||||
|
Year ended December 30, 2018 |
||||||||||||||
|
Publishing |
|
Marketing
|
|
Corporate and
|
|
Consolidated
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to Gannett |
$ |
122,392 |
|
|
$ |
(14,047 |
) |
|
$ |
(90,149 |
) |
|
$ |
18,196 |
|
Income tax expense (benefit) |
— |
|
|
— |
|
|
1,912 |
|
|
1,912 |
|
||||
Interest expense |
400 |
|
|
— |
|
|
35,672 |
|
|
36,072 |
|
||||
Loss on early extinguishment of debt |
— |
|
|
— |
|
|
2,886 |
|
|
2,886 |
|
||||
Other non-operating items, net |
(1,554 |
) |
|
— |
|
|
— |
|
|
(1,554 |
) |
||||
Depreciation and amortization |
78,075 |
|
|
5,003 |
|
|
1,713 |
|
|
84,791 |
|
||||
Integration and reorganization costs |
14,487 |
|
|
— |
|
|
524 |
|
|
15,011 |
|
||||
Acquisition costs |
— |
|
|
85 |
|
|
2,566 |
|
|
2,651 |
|
||||
Impairment of long-lived assets |
1,538 |
|
|
— |
|
|
— |
|
|
1,538 |
|
||||
Goodwill and mastheads impairment |
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
Net (gain) loss on sale or disposal of assets |
(3,109 |
) |
|
34 |
|
|
(896 |
) |
|
(3,971 |
) |
||||
Non-cash compensation |
— |
|
|
— |
|
|
3,156 |
|
|
3,156 |
|
||||
Other items |
8,186 |
|
|
2,521 |
|
|
8,898 |
|
|
19,605 |
|
||||
Adjusted EBITDA (non-GAAP basis) |
$ |
220,415 |
|
|
$ |
(6,404 |
) |
|
$ |
(33,718 |
) |
|
$ |
180,293 |
|
(1) Starting in 2019 and subsequent to our acquisition of Legacy Gannett, our fiscal year coincides with the Gregorian calendar. In 2018, our fiscal year ended on the last Sunday of the calendar year. Our fiscal year for 2018 was a 52-week year ending on December 30, 2018.
NON-GAAP FINANCIAL INFORMATION
|
|||||||
|
|
|
|
||||
Table No. 7 |
|
|
|
||||
|
|
|
|
||||
|
Three months
|
|
Year ended
|
||||
|
|
|
|
||||
Net cash flow provided by operating activities (GAAP basis) |
$ |
(72,995 |
) |
|
$ |
25,535 |
|
Capital expenditures |
(6,697 |
) |
|
(13,978 |
) |
||
Free cash flow (non-GAAP basis)(1) |
$ |
(79,692 |
) |
|
$ |
11,557 |
|
(1) Free cash flow for the fourth quarter was negatively impacted by $87.8 million of pension benefits paid as a result of the Acquisition, $35.9 million of integration and reorganization costs, $19.3 million of acquisition costs, and $2.5 million of other one-time adjustments. Free cash flow for the full year was negatively impacted by $87.8 million of pension benefits paid as a result of the Acquisition, $45.4 million of integration and reorganization costs, $38.4 million of acquisition costs, and $11.3 million of other one-time adjustments.
