Gannett Announces Third Quarter 2020 Results

*Surpassed 1 million paid digital-only subscribers
*Generated nearly $100 million of asset sales to accelerate debt paydown, subsequent to quarter-end
*Ended the quarter with $189 million of cash and cash equivalents
*Implemented $218 million in annualized synergies year to date

Gannett Co., Inc. (“Gannett”, “we”, “us”, “our”, or “the Company”) (NYSE: GCI) today reported its financial results for the third quarter ended September 30, 2020.

“Our third quarter results showed a significant and rapid rebound from the second quarter impact of the COVID pandemic and economic shut down,” said Michael Reed, Gannett Chairman and Chief Executive Officer. “Our same store revenue trend, though down 19.6% year over year, improved meaningfully over our second quarter trend of down 28.0% year over year. Third quarter Adjusted EBITDA was $88 million, up from $78 million in the second quarter. These results are particularly encouraging given the seasonal drag that we usually experience in the third quarter. We also reached a major milestone in our digital subscription growth, surpassing 1 million digital subscriptions during the quarter, thanks to continued strong growth of more than 31% year over year. As we continue to focus on transitioning to a subscription-led business model, we expect to leverage this important milestone to accelerate growth in 2021 and beyond.”

“We are also pleased to announce substantial progress on debt repayment and a strong liquidity position. Since the beginning of the fourth quarter, we have sold approximately $100 million of non-core assets and real estate. We’ll apply the net proceeds of these sales to reduce our total debt outstanding to $1.633 billion. We are targeting another $100 million of debt repayment by early next year and remain focused on refinancing our credit agreement during the first half of 2021. In the meantime, our effective cost management and synergy implementation continue to bolster our liquidity; we ended the quarter with $189 million in cash on the balance sheet.”

During the comparable period in 2019 until November 19, 2019, our corporate name was New Media Investment Group Inc. (“New Media”), and Gannett Co., Inc. (“Legacy Gannett”) was a separate publicly traded company. On November 19, 2019, we completed the acquisition of Legacy Gannett and changed our name to Gannett Co., Inc.
• Third quarter revenues of $814.5 million rose 116.3% as compared to the prior year, reflecting the acquisition of Legacy Gannett.
*Same store pro forma revenues (as defined and reconciled below) decreased 19.6%, due to unfavorable impacts resulting from the COVID-19 pandemic and general trends adversely impacting the publishing industry.
• Digital advertising and marketing services revenues were $197.2 million in the third quarter, or 24.2% of total revenues.
• Over $218 million in annualized synergy measures were implemented by the end of the third quarter, with approximately $54.5 million in savings recognized in the quarter.
• On a pro forma basis, operating expenses included in Adjusted EBITDA decreased 19.3% to the prior year quarter due to the implementations of synergies, normal course cost reductions, and temporary expense actions in response to the COVID-19 pandemic.
• GAAP net loss attributable to Gannett of $31.3 million in the third quarter reflects $61.4 million of depreciation and amortization.
• Adjusted EBITDA totaled $88.0 million. Margins in the quarter were 10.8%, despite the pressures from the COVID-19 pandemic.
details at: https://s1.q4cdn.com/307481213/files/doc_financials/2020/q3/GCI-Q3-2020-EX-99.1-Earnings-Release_FINAL.pdf

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