|
|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Delaware
|
|
38-3910250
|
||
|
(State or Other Jurisdiction of Incorporation or Organization)
|
|
(I.R.S. Employer Identification No.)
|
||
|
|
|
|
|
|
|
7950 Jones Branch Drive,
|
McLean,
|
Virginia
|
|
22107-0910
|
|
(Address of principal executive offices)
|
|
(Zip Code)
|
||
|
Title of Each Class
|
|
Trading Symbol
|
|
Name of Each Exchange on Which Registered
|
|
Common Stock, par value $0.01 per share
|
|
GCI
|
|
The New York Stock Exchange
|
|
Preferred Stock Purchase Rights
|
|
N/A
|
|
The New York Stock Exchange
|
|
Large Accelerated Filer
|
☒
|
Accelerated Filer
|
☐
|
|
|
|
|
|
|
Non-Accelerated Filer
|
☐
|
Smaller Reporting Company
|
☐
|
|
|
|
|
|
|
|
Emerging Growth Company
|
☐
|
|
|
|
|
•
|
Risks and uncertainties associated with the ongoing COVID-19 pandemic;
|
|
•
|
General economic and market conditions;
|
|
•
|
Economic conditions in the various regions of the United States;
|
|
•
|
The growing shift within the publishing industry from traditional print media to digital forms of publication;
|
|
•
|
Risks and uncertainties associated with our Marketing Solutions segment, including its significant reliance on Google for media purchases, its international operations, and its ability to develop and gain market acceptance for new products or services;
|
|
•
|
Declining print advertising revenue and circulation subscribers;
|
|
•
|
Our ability to grow our digital marketing services initiatives, digital audience, and advertiser base;
|
|
•
|
Our ability to grow our business organically;
|
|
•
|
Variability in the exchange rate relative to the U.S. dollar of currencies in foreign jurisdictions in which we operate;
|
|
•
|
The risk that we may not realize the anticipated benefits of our acquisitions;
|
|
•
|
The availability and cost of capital for future investments;
|
|
•
|
Our indebtedness may restrict our operations and/or require us to dedicate a portion of cash flow from operations to payments associated with our debt;
|
|
•
|
Our ability to pay dividends consistent with prior practice or at all;
|
|
•
|
Our ability to reduce costs and expenses;
|
|
•
|
The impact of any material transactions with the Manager (as defined below) or one of its affiliates, including the impact of any actual, potential, or perceived conflicts of interest;
|
|
•
|
The competitive environment in which we operate; and
|
|
•
|
Our ability to recruit and retain key personnel.
|
|
in thousands, except share data
|
June 30, 2020
|
|
December 31, 2019
|
||||
|
ASSETS
|
(Unaudited)
|
|
|
||||
|
Current assets
|
|
|
|
||||
|
Cash and cash equivalents
|
$
|
158,603
|
|
|
$
|
156,042
|
|
|
Accounts receivable, net of allowance for doubtful accounts of $26,560 and $19,923
|
288,509
|
|
|
438,523
|
|
||
|
Inventories
|
40,468
|
|
|
55,090
|
|
||
|
Prepaid expenses and other current assets
|
125,208
|
|
|
129,460
|
|
||
|
Total current assets
|
612,788
|
|
|
779,115
|
|
||
|
Property, plant and equipment, at cost net of accumulated depreciation of $358,746 and $277,291
|
718,590
|
|
|
815,807
|
|
||
|
Operating lease assets
|
296,128
|
|
|
309,112
|
|
||
|
Goodwill
|
559,623
|
|
|
914,331
|
|
||
|
Intangible assets, net
|
920,525
|
|
|
1,012,564
|
|
||
|
Deferred income tax assets
|
105,051
|
|
|
76,297
|
|
||
|
Other assets
|
125,212
|
|
|
112,876
|
|
||
|
Total assets
|
$
|
3,337,917
|
|
|
$
|
4,020,102
|
|
|
|
|
|
|
||||
|
LIABILITIES AND EQUITY
|
|
|
|
||||
|
Current liabilities
|
|
|
|
||||
|
Accounts payable and accrued liabilities
|
$
|
327,071
|
|
|
$
|
453,628
|
|
|
Deferred revenue
|
213,988
|
|
|
218,823
|
|
||
|
Current portion of long-term debt
|
—
|
|
|
3,300
|
|
||
|
Other current liabilities
|
47,017
|
|
|
42,702
|
|
||
|
Total current liabilities
|
588,076
|
|
|
718,453
|
|
||
|
Long-term debt
|
1,633,449
|
|
|
1,636,335
|
|
||
|
Convertible debt
|
3,300
|
|
|
3,300
|
|
||
|
Deferred tax liabilities
|
6,256
|
|
|
9,052
|
|
||
|
Pension and other postretirement benefit obligations
|
214,084
|
|
|
235,906
|
|
||
|
Long-term operating lease liabilities
|
282,896
|
|
|
297,662
|
|
||
|
Other long-term liabilities
|
157,313
|
|
|
136,188
|
|
||
|
Total noncurrent liabilities
|
2,297,298
|
|
|
2,318,443
|
|
||
|
Total liabilities
|
2,885,374
|
|
|
3,036,896
|
|
||
|
Redeemable noncontrolling interests
|
458
|
|
|
1,850
|
|
||
|
Commitments and contingent liabilities (See Note 12)
|
|
|
|
||||
|
|
|
|
|
||||
|
Equity
|
|
|
|
||||
|
Common stock of $0.01 par value per share, 2,000,000,000 shares authorized, 136,885,320 issued and 136,114,347 shares outstanding at June 30, 2020; 129,386,258 issued and 128,991,544 shares outstanding at December 31, 2019
|
1,369
|
|
|
1,294
|
|
||
|
Treasury stock at cost, 770,973 and 394,714 shares at June 30, 2020 and December 31, 2019, respectively
|
(4,818
|
)
|
|
(2,876
|
)
|
||
|
Additional paid-in capital
|
1,101,899
|
|
|
1,090,694
|
|
||
|
Accumulated deficit
|
(633,003
|
)
|
|
(115,958
|
)
|
||
|
Accumulated other comprehensive income (loss)
|
(13,362
|
)
|
|
8,202
|
|
||
|
Total equity
|
452,085
|
|
|
981,356
|
|
||
|
Total liabilities and equity
|
$
|
3,337,917
|
|
|
$
|
4,020,102
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
Operating revenues:
|
|
|
|
|
|
|
|
||||||||
|
Advertising and marketing services
|
$
|
356,918
|
|
|
$
|
204,697
|
|
|
$
|
843,929
|
|
|
$
|
398,242
|
|
|
Circulation
|
342,646
|
|
|
150,850
|
|
|
717,369
|
|
|
303,015
|
|
||||
|
Other
|
67,436
|
|
|
48,840
|
|
|
154,385
|
|
|
90,730
|
|
||||
|
Total operating revenues
|
767,000
|
|
|
404,387
|
|
|
1,715,683
|
|
|
791,987
|
|
||||
|
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
|
Operating costs
|
476,735
|
|
|
233,407
|
|
|
1,043,199
|
|
|
462,902
|
|
||||
|
Selling, general and administrative expenses
|
226,484
|
|
|
126,628
|
|
|
525,622
|
|
|
255,676
|
|
||||
|
Depreciation and amortization
|
66,327
|
|
|
23,328
|
|
|
144,352
|
|
|
44,251
|
|
||||
|
Integration and reorganization costs
|
32,306
|
|
|
4,278
|
|
|
60,560
|
|
|
10,077
|
|
||||
|
Acquisition costs
|
2,379
|
|
|
2,364
|
|
|
8,348
|
|
|
3,137
|
|
||||
|
Impairment of property, plant and equipment
|
6,859
|
|
|
1,262
|
|
|
6,859
|
|
|
2,469
|
|
||||
|
Goodwill and intangible impairment
|
393,446
|
|
|
—
|
|
|
393,446
|
|
|
—
|
|
||||
|
Loss on sale or disposal of assets
|
88
|
|
|
947
|
|
|
745
|
|
|
2,737
|
|
||||
|
Total operating expenses
|
1,204,624
|
|
|
392,214
|
|
|
2,183,131
|
|
|
781,249
|
|
||||
|
Operating income (loss)
|
(437,624
|
)
|
|
12,173
|
|
|
(467,448
|
)
|
|
10,738
|
|
||||
|
Non-operating (income) expense:
|
|
|
|
|
|
|
|
||||||||
|
Interest expense
|
57,928
|
|
|
10,212
|
|
|
115,827
|
|
|
20,346
|
|
||||
|
Loss on early extinguishment of debt
|
369
|
|
|
—
|
|
|
1,174
|
|
|
—
|
|
||||
|
Non-operating pension income
|
(17,553
|
)
|
|
(208
|
)
|
|
(36,099
|
)
|
|
(417
|
)
|
||||
|
Other income, net
|
(6,261
|
)
|
|
(103
|
)
|
|
(4,616
|
)
|
|
(154
|
)
|
||||
|
Non-operating expense
|
34,483
|
|
|
9,901
|
|
|
76,286
|
|
|
19,775
|
|
||||
|
Net income (loss) before income taxes
|
(472,107
|
)
|
|
2,272
|
|
|
(543,734
|
)
|
|
(9,037
|
)
|
||||
|
Benefit for income taxes
|
(34,276
|
)
|
|
(343
|
)
|
|
(25,297
|
)
|
|
(2,297
|
)
|
||||
|
Net income (loss)
|
(437,831
|
)
|
|
2,615
|
|
|
(518,437
|
)
|
|
(6,740
|
)
|
||||
|
Net income (loss) attributable to redeemable noncontrolling interests
|
(938
|
)
|
|
(200
|
)
|
|
(1,392
|
)
|
|
(449
|
)
|
||||
|
Net income (loss) attributable to Gannett
|
$
|
(436,893
|
)
|
|
$
|
2,815
|
|
|
$
|
(517,045
|
)
|
|
$
|
(6,291
|
)
|
|
Income (loss) per share attributable to Gannett - basic
|
$
|
(3.32
|
)
|
|
$
|
0.05
|
|
|
$
|
(3.95
|
)
|
|
$
|
(0.10
|
)
|
|
Income (loss) per share attributable to Gannett - diluted
|
$
|
(3.32
|
)
|
|
$
|
0.05
|
|
|
$
|
(3.95
|
)
|
|
$
|
(0.10
|
)
|
|
Dividends declared per share
|
$
|
0.00
|
|
|
$
|
0.38
|
|
|
$
|
0.00
|
|
|
$
|
0.76
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
||||||||
|
Foreign currency translation adjustments
|
$
|
(2,552
|
)
|
|
3
|
|
|
$
|
(16,585
|
)
|
|
3
|
|
||
|
Pension and other postretirement benefit items:
|
|
|
|
|
|
|
|
||||||||
|
Net actuarial loss
|
(8,078
|
)
|
|
—
|
|
|
(8,078
|
)
|
|
—
|
|
||||
|
Amortization of net actuarial gain
|
(11
|
)
|
|
(30
|
)
|
|
(25
|
)
|
|
(60
|
)
|
||||
|
Other
|
95
|
|
|
—
|
|
|
1,061
|
|
|
—
|
|
||||
|
Total pension and other postretirement benefit items
|
(7,994
|
)
|
|
(30
|
)
|
|
(7,042
|
)
|
|
(60
|
)
|
||||
|
Other comprehensive loss before tax
|
(10,546
|
)
|
|
(27
|
)
|
|
(23,627
|
)
|
|
(57
|
)
|
||||
|
Income tax effect related to components of other comprehensive income
|
2,059
|
|
|
—
|
|
|
2,063
|
|
|
—
|
|
||||
|
Other comprehensive loss, net of tax
|
(8,487
|
)
|
|
(27
|
)
|
|
(21,564
|
)
|
|
(57
|
)
|
||||
|
Comprehensive loss
|
(446,318
|
)
|
|
2,588
|
|
|
(540,001
|
)
|
|
(6,797
|
)
|
||||
|
Comprehensive loss attributable to redeemable noncontrolling interests
|
(938
|
)
|
|
(200
|
)
|
|
(1,392
|
)
|
|
(449
|
)
|
||||
|
Comprehensive loss attributable to Gannett
|
$
|
(445,380
|
)
|
|
$
|
2,788
|
|
|
$
|
(538,609
|
)
|
|
$
|
(6,348
|
)
|
|
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
GANNETT CO., INC.
|
|||||||||||||||||||||||||||||
|
Unaudited; in thousands, except share data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
Common stock
|
|
Additional
Paid-in Capital |
|
Accumulated other comprehensive income (loss)
|
|
Retained
Earnings (Accumulated Deficit) |
|
Treasury stock
|
|
|
||||||||||||||||||
|
|
Shares
|
|
Amount
|
Shares
|
|
Amount
|
|
Total
|
|||||||||||||||||||||
|
Three months ended June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Balance as of March 31, 2020
|
132,715,532
|
|
|
$
|
1,327
|
|
|
$
|
1,093,705
|
|
|
$
|
(4,875
|
)
|
|
$
|
(196,110
|
)
|
|
657,165
|
|
|
$
|
(4,491
|
)
|
|
$
|
889,556
|
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(436,893
|
)
|
|
—
|
|
|
—
|
|
|
(436,893
|
)
|
||||||
|
Restricted share grants
|
3,531,279
|
|
|
36
|
|
|
(36
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
Restricted stock awards settled, net of withholdings
|
251,250
|
|
|
3
|
|
|
(109
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(106
|
)
|
||||||
|
Other comprehensive income, net of income taxes of $2,059
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,487
|
)
|
|
|
|
|
—
|
|
|
—
|
|
|
(8,487
|
)
|
||||||
|
Equity-based compensation expense
|
—
|
|
|
—
|
|
|
7,391
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,391
|
|
||||||
|
Issuance of common stock
|
387,259
|
|
|
3
|
|
|
1,021
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,024
|
|
||||||
|
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55,236
|
|
|
(326
|
)
|
|
(326
|
)
|
||||||
|
Restricted share forfeiture
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58,572
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||
|
Other activity
|
—
|
|
|
—
|
|
|
(73
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(73
|
)
|
||||||
|
Balance as of June 30, 2020
|
136,885,320
|
|
|
1,369
|
|
|
1,101,899
|
|
|
(13,362
|
)
|
|
(633,003
|
)
|
|
770,973
|
|
|
(4,818
|
)
|
|
452,085
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Three months ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Balance as of March 31, 2019
|
60,806,451
|
|
|
$
|
608
|
|
|
$
|
699,787
|
|
|
$
|
(6,911
|
)
|
|
$
|
(5,224
|
)
|
|
276,590
|
|
|
$
|
(2,562
|
)
|
|
$
|
685,698
|
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,815
|
|
|
—
|
|
|
—
|
|
|
2,815
|
|
||||||
|
Other comprehensive income, net of income taxes of $0
|
—
|
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
||||||
|
Equity-based compensation expense
|
—
|
|
|
—
|
|
|
707
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
707
|
|
||||||
|
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
955
|
|
|
(11
|
)
|
|
(11
|
)
|
||||||
|
Restricted share forfeiture
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47,232
|
|
|
—
|
|
|
—
|
|
||||||
|
Dividends declared
|
—
|
|
|
—
|
|
|
(22,920
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,920
|
)
|
||||||
|
Balance as of June 30, 2019
|
60,806,451
|
|
|
$
|
608
|
|
|
$
|
677,574
|
|
|
$
|
(6,938
|
)
|
|
$
|
(2,409
|
)
|
|
324,777
|
|
|
$
|
(2,573
|
)
|
|
$
|
666,262
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
Six months ended June 30,
|
||||||
|
|
2020
|
|
2019
|
||||
|
|
|
|
|
||||
|
Cash flows from operating activities:
|
|
|
|
||||
|
Net loss
|
$
|
(518,437
|
)
|
|
$
|
(6,740
|
)
|
|
Adjustments to reconcile net income to operating cash flows:
|
|
|
|
||||
|
Depreciation and amortization
|
144,352
|
|
|
44,251
|
|
||
|
Equity-based compensation expense
|
18,968
|
|
|
1,843
|
|
||
|
Non-cash interest expense
|
11,902
|
|
|
689
|
|
||
|
Loss on sale or disposal of assets
|
745
|
|
|
2,737
|
|
||
|
Loss on early extinguishment of debt
|
1,174
|
|
|
—
|
|
||
|
Goodwill and intangible impairment
|
393,446
|
|
|
—
|
|
||
|
Impairment of property, plant and equipment
|
6,859
|
|
|
2,469
|
|
||
|
Pension and other postretirement benefit obligations, net of contributions
|
(49,064
|
)
|
|
(649
|
)
|
||
|
Change in other assets and liabilities, net
|
14,695
|
|
|
13,053
|
|
||
|
Net cash provided by operating activities
|
24,640
|
|
|
57,653
|
|
||
|
Cash flows from investing activities:
|
|
|
|
||||
|
Acquisitions, net of cash acquired
|
—
|
|
|
(39,353
|
)
|
||
|
Purchase of property, plant, and equipment
|
(22,157
|
)
|
|
(4,934
|
)
|
||
|
Proceeds from sale of real estate and other assets
|
17,792
|
|
|
7,107
|
|
||
|
Insurance proceeds received for damage to property
|
1,643
|
|
|
—
|
|
||
|
Change in other investing activities
|
(304
|
)
|
|
—
|
|
||
|
Net cash used for investing activities
|
(3,026
|
)
|
|
(37,180
|
)
|
||
|
Cash flows from financing activities:
|
|
|
|
||||
|
Repayment under term loans
|
(18,985
|
)
|
|
(11,296
|
)
|
||
|
Borrowing under revolving credit facility
|
—
|
|
|
102,900
|
|
||
|
Repayments under revolving credit facility
|
—
|
|
|
(94,900
|
)
|
||
|
Payments for employee taxes withheld from stock awards
|
(1,942
|
)
|
|
(700
|
)
|
||
|
Issuance of common stock
|
1,007
|
|
|
—
|
|
||
|
Payment of dividends
|
—
|
|
|
(46,066
|
)
|
||
|
Changes in other financing activities
|
(411
|
)
|
|
—
|
|
||
|
Net cash used for financing activities
|
(20,331
|
)
|
|
(50,062
|
)
|
||
|
Effect of currency exchange rate change on cash
|
(780
|
)
|
|
3
|
|
||
|
Increase (decrease) in cash and cash equivalents and restricted cash
|
503
|
|
|
(29,586
|
)
|
||
|
Balance of cash, cash equivalents, and restricted cash at beginning of period
|
188,664
|
|
|
52,770
|
|
||
|
Balance of cash, cash equivalents, and restricted cash at end of period
|
$
|
189,167
|
|
|
$
|
23,184
|
|
|
|
|
|
|
||||
|
Supplemental cash flow information:
|
|
|
|
||||
|
Cash paid for taxes, net of refunds
|
$
|
(1,720
|
)
|
|
$
|
921
|
|
|
Cash paid for interest
|
$
|
125,311
|
|
|
$
|
22,684
|
|
|
Non-cash investing and financing activities:
|
|
|
|
||||
|
Accrued capital expenditures
|
$
|
718
|
|
|
$
|
183
|
|
|
|
June 30,
|
||||||
|
In thousands
|
2020
|
|
2019
|
||||
|
Cash and cash equivalents
|
$
|
158,603
|
|
|
$
|
20,029
|
|
|
Restricted cash included in other current assets
|
9,298
|
|
|
3,155
|
|
||
|
Restricted cash included in investments and other assets
|
21,266
|
|
|
—
|
|
||
|
Total cash, cash equivalents, and restricted cash
|
$
|
189,167
|
|
|
$
|
23,184
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
In thousands
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
Print advertising
|
$
|
188,158
|
|
|
$
|
158,205
|
|
|
$
|
456,000
|
|
|
$
|
309,105
|
|
|
Digital advertising and marketing services
|
168,760
|
|
|
46,492
|
|
|
387,929
|
|
|
89,137
|
|
||||
|
Total advertising and marketing services
|
356,918
|
|
|
204,697
|
|
|
843,929
|
|
|
398,242
|
|
||||
|
Circulation
|
342,646
|
|
|
150,850
|
|
|
717,369
|
|
|
303,015
|
|
||||
|
Other
|
67,436
|
|
|
48,840
|
|
|
154,385
|
|
|
90,730
|
|
||||
|
Total revenues
|
$
|
767,000
|
|
|
$
|
404,387
|
|
|
$
|
1,715,683
|
|
|
$
|
791,987
|
|
|
In thousands
|
Advertising, Marketing Services, and Other
|
|
Circulation
|
|
Total
|
||||||
|
Beginning balance
|
$
|
67,543
|
|
|
$
|
151,280
|
|
|
$
|
218,823
|
|
|
Cash receipts
|
141,146
|
|
|
595,078
|
|
|
736,224
|
|
|||
|
Revenue recognized
|
(144,172
|
)
|
|
(596,887
|
)
|
|
(741,059
|
)
|
|||
|
Ending balance
|
$
|
64,517
|
|
|
$
|
149,471
|
|
|
$
|
213,988
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
In thousands
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
Operating lease cost (a)
|
$
|
24,437
|
|
|
$
|
7,864
|
|
|
$
|
48,321
|
|
|
$
|
15,969
|
|
|
Short-term lease cost (b)
|
1,345
|
|
|
866
|
|
|
4,487
|
|
|
1,632
|
|
||||
|
Net lease cost
|
$
|
25,782
|
|
|
$
|
8,730
|
|
|
$
|
52,808
|
|
|
$
|
17,601
|
|
|
In thousands
|
Year ended December 31, (a)
|
||
|
2020 (excluding the six months ended June 30, 2020)
|
$
|
38,209
|
|
|
2021
|
81,131
|
|
|
|
2022
|
72,967
|
|
|
|
2023
|
60,508
|
|
|
|
2024
|
53,594
|
|
|
|
Thereafter
|
236,727
|
|
|
|
Total future minimum lease payments
|
543,136
|
|
|
|
Less: Imputed interest
|
(215,575
|
)
|
|
|
Total
|
$
|
327,561
|
|
|
|
Six months ended June 30,
|
||||||
|
In thousands, except lease term and discount rate
|
2020
|
|
2019
|
||||
|
Supplemental information
|
|
|
|
||||
|
Cash paid for amounts included in the measurement of operating lease liabilities
|
$
|
38,989
|
|
|
$
|
12,200
|
|
|
Right-of-use assets obtained in exchange for operating lease obligations
|
14,610
|
|
|
14,983
|
|
||
|
|
|
|
|
||||
|
|
As of June 30,
|
||||||
|
|
2020
|
|
2019
|
||||
|
Weighted-average remaining lease term (in years)
|
7.9
|
|
|
8.8
|
|
||
|
Weighted-average discount rate
|
12.78
|
%
|
|
10.58
|
%
|
||
|
In thousands
|
|
||
|
Beginning balance
|
$
|
19,923
|
|
|
Current period provision
|
17,345
|
|
|
|
Write-offs charged against the allowance
|
(12,019
|
)
|
|
|
Recoveries of amounts previously written-off
|
1,467
|
|
|
|
Foreign currency
|
(156
|
)
|
|
|
Ending balance
|
$
|
26,560
|
|
|
In thousands
|
Estimated fair value as previously reported (a)
|
Measurement period adjustments (b)
|
Final fair value as adjusted
|
||||||
|
Cash and restricted cash acquired
|
$
|
149,452
|
|
$
|
—
|
|
$
|
149,452
|
|
|
Current assets
|
383,965
|
|
—
|
|
383,965
|
|
|||
|
Other assets
|
97,459
|
|
—
|
|
97,459
|
|
|||
|
Property, plant and equipment
|
536,511
|
|
—
|
|
536,511
|
|
|||
|
Operating lease assets
|
200,550
|
|
—
|
|
200,550
|
|
|||
|
Developed technology
|
47,770
|
|
(11,670
|
)
|
36,100
|
|
|||
|
Advertiser relationships
|
272,740
|
|
(16,580
|
)
|
256,160
|
|
|||
|
Subscriber relationships
|
104,490
|
|
6,100
|
|
110,590
|
|
|||
|
Other customer relationships
|
63,820
|
|
3,540
|
|
67,360
|
|
|||
|
Trade names
|
16,470
|
|
(630
|
)
|
15,840
|
|
|||
|
Mastheads
|
97,340
|
|
8,420
|
|
105,760
|
|
|||
|
Goodwill
|
644,766
|
|
13,018
|
|
657,784
|
|
|||
|
Total assets
|
2,615,333
|
|
2,198
|
|
2,617,531
|
|
|||
|
Current liabilities
|
513,752
|
|
95
|
|
513,847
|
|
|||
|
Long-term liabilities
|
787,019
|
|
2,103
|
|
789,122
|
|
|||
|
Total liabilities
|
1,300,771
|
|
2,198
|
|
1,302,969
|
|
|||
|
Net assets
|
$
|
1,314,562
|
|
$
|
—
|
|
$
|
1,314,562
|
|
|
in thousands
|
Estimated fair value as previously reported (a)
|
Measurement period adjustments (b)
|
Final fair value as adjusted
|
||||||
|
Cash acquired
|
$
|
323
|
|
$
|
—
|
|
$
|
323
|
|
|
Current assets
|
9,320
|
|
(112
|
)
|
9,208
|
|
|||
|
Other assets
|
950
|
|
—
|
|
950
|
|
|||
|
Property, plant and equipment
|
20,492
|
|
730
|
|
21,222
|
|
|||
|
Non-compete agreements
|
280
|
|
—
|
|
280
|
|
|||
|
Advertiser relationships
|
2,357
|
|
279
|
|
2,636
|
|
|||
|
Subscriber relationships
|
1,457
|
|
—
|
|
1,457
|
|
|||
|
Other customer relationships
|
1,323
|
|
2,942
|
|
4,265
|
|
|||
|
Software
|
140
|
|
2,130
|
|
2,270
|
|
|||
|
Trade names
|
299
|
|
2,105
|
|
2,404
|
|
|||
|
Mastheads
|
2,896
|
|
—
|
|
2,896
|
|
|||
|
Goodwill
|
20,850
|
|
(1,248
|
)
|
19,602
|
|
|||
|
Total assets
|
60,687
|
|
6,826
|
|
67,513
|
|
|||
|
Current liabilities assumed
|
11,961
|
|
—
|
|
11,961
|
|
|||
|
Long-term liabilities assumed
|
463
|
|
50
|
|
513
|
|
|||
|
Total liabilities
|
12,424
|
|
50
|
|
12,474
|
|
|||
|
Minority interest
|
$
|
1,651
|
|
$
|
—
|
|
$
|
1,651
|
|
|
Net assets
|
$
|
46,612
|
|
$
|
6,776
|
|
$
|
53,388
|
|
|
|
Three months ended
|
Six months ended
|
||||
|
In thousands; unaudited
|
June 30, 2019
|
June 30, 2019
|
||||
|
Total revenues
|
$
|
1,063,689
|
|
$
|
2,113,678
|
|
|
Net income (loss)
|
88
|
|
(52,081
|
)
|
||
|
Earnings (loss) per share - diluted
|
$
|
0.00
|
|
$
|
(0.42
|
)
|
|
in thousands
|
June 30, 2020
|
||||||||||
|
|
Gross carrying amount
|
|
Accumulated
amortization
|
|
Net carrying
amount
|
||||||
|
Amortized intangible assets(a):
|
|
|
|
|
|
||||||
|
Advertiser relationships
|
$
|
496,285
|
|
|
$
|
100,061
|
|
|
$
|
396,224
|
|
|
Other customer relationships
|
112,740
|
|
|
21,329
|
|
|
91,411
|
|
|||
|
Subscriber relationships
|
265,491
|
|
|
60,059
|
|
|
205,432
|
|
|||
|
Other intangible assets
|
70,317
|
|
|
19,076
|
|
|
51,241
|
|
|||
|
Total
|
$
|
944,833
|
|
|
$
|
200,525
|
|
|
$
|
744,308
|
|
|
Non-amortized intangible assets:
|
|
|
|
||||||||
|
Goodwill
|
$
|
559,623
|
|
|
|||||||
|
Mastheads(a)
|
176,217
|
|
|
||||||||
|
Total
|
$
|
735,840
|
|
|
|||||||
|
|
|
||||||||||
|
|
December 31, 2019
|
||||||||||
|
|
Gross carrying amount
|
|
Accumulated
amortization |
|
Net carrying
amount
|
||||||
|
Amortized intangible assets:
|
|
|
|
|
|
||||||
|
Advertiser relationships
|
$
|
534,161
|
|
|
$
|
75,363
|
|
|
$
|
458,798
|
|
|
Other customer relationships
|
109,674
|
|
|
14,303
|
|
|
95,371
|
|
|||
|
Subscriber relationships
|
259,391
|
|
|
44,878
|
|
|
214,513
|
|
|||
|
Other intangible assets
|
76,552
|
|
|
11,229
|
|
|
65,323
|
|
|||
|
Total
|
$
|
979,778
|
|
|
$
|
145,773
|
|
|
$
|
834,005
|
|
|
Non-amortized intangible assets:
|
|
|
|
||||||||
|
Goodwill
|
$
|
914,331
|
|
|
|||||||
|
Mastheads
|
$
|
178,559
|
|
|
|||||||
|
Total
|
$
|
1,092,890
|
|
|
|||||||
|
in thousands
|
|||||||||||
|
|
Publishing(a)
|
|
Marketing Solutions
|
|
Consolidated
|
||||||
|
Gross balance at December 31, 2019
|
$
|
800,606
|
|
|
$
|
201,646
|
|
|
$
|
1,002,252
|
|
|
Accumulated impairments
|
(84,272
|
)
|
|
(3,649
|
)
|
|
(87,921
|
)
|
|||
|
Net balance at December 31, 2019
|
$
|
716,334
|
|
|
$
|
197,997
|
|
|
$
|
914,331
|
|
|
|
|
|
|
|
|
||||||
|
Activity during the six months ended June 30, 2019:
|
|
|
|
|
|
||||||
|
Goodwill impairment
|
(321,851
|
)
|
|
(40,499
|
)
|
|
(362,350
|
)
|
|||
|
Measurement period adjustments
|
70,558
|
|
|
(58,788
|
)
|
|
11,770
|
|
|||
|
Foreign currency exchange rate changes
|
(4,128
|
)
|
|
—
|
|
|
(4,128
|
)
|
|||
|
Total
|
$
|
(255,421
|
)
|
|
$
|
(99,287
|
)
|
|
$
|
(354,708
|
)
|
|
|
|
|
|
|
|
||||||
|
Gross balance at June 30, 2020
|
$
|
866,052
|
|
|
$
|
142,858
|
|
|
$
|
1,008,910
|
|
|
Accumulated impairments
|
(405,139
|
)
|
|
(44,148
|
)
|
|
(449,287
|
)
|
|||
|
Net balance at June 30, 2020
|
$
|
460,913
|
|
|
$
|
98,710
|
|
|
$
|
559,623
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
In thousands
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
Publishing
|
$
|
19,142
|
|
|
$
|
2,676
|
|
|
$
|
31,418
|
|
|
$
|
4,656
|
|
|
Marketing Solutions
|
2,753
|
|
|
180
|
|
|
4,137
|
|
|
736
|
|
||||
|
Corporate and Other
|
3,847
|
|
|
24
|
|
|
11,966
|
|
|
901
|
|
||||
|
Total
|
$
|
25,742
|
|
|
$
|
2,880
|
|
|
$
|
47,521
|
|
|
$
|
6,293
|
|
|
In thousands
|
|
||
|
Beginning balance
|
$
|
30,785
|
|
|
Restructuring provision included in integration and reorganization costs
|
47,521
|
|
|
|
Cash payments
|
(47,641
|
)
|
|
|
Ending balance
|
$
|
30,665
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
In thousands
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
Publishing
|
$
|
1,477
|
|
|
$
|
1,398
|
|
|
$
|
2,509
|
|
|
$
|
1,803
|
|
|
Marketing Solutions
|
209
|
|
|
—
|
|
|
214
|
|
|
—
|
|
||||
|
Corporate and Other
|
4,878
|
|
|
—
|
|
|
10,316
|
|
|
1,981
|
|
||||
|
Total
|
$
|
6,564
|
|
|
$
|
1,398
|
|
|
$
|
13,039
|
|
|
$
|
3,784
|
|
|
|
Three months ended June 30,
|
||||||||||||||
|
|
2020
|
|
2019
|
||||||||||||
|
In thousands
|
Pension
|
|
OPEB
|
|
Pension
|
|
OPEB
|
||||||||
|
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
|
Service cost - Benefits earned during the period
|
$
|
704
|
|
|
$
|
19
|
|
|
$
|
159
|
|
|
$
|
—
|
|
|
Non-operating expenses (Other income):
|
|
|
|
|
|
|
|
||||||||
|
Interest cost on benefit obligation
|
20,416
|
|
|
593
|
|
|
736
|
|
|
22
|
|
||||
|
Expected return on plan assets
|
(38,551
|
)
|
|
—
|
|
|
(936
|
)
|
|
—
|
|
||||
|
Amortization of actuarial loss (gain)
|
(27
|
)
|
|
16
|
|
|
(39
|
)
|
|
9
|
|
||||
|
Total non-operating expenses (benefit)
|
$
|
(18,162
|
)
|
|
$
|
609
|
|
|
$
|
(239
|
)
|
|
$
|
31
|
|
|
Total expense (benefit) for retirement plans
|
$
|
(17,458
|
)
|
|
$
|
628
|
|
|
$
|
(80
|
)
|
|
$
|
31
|
|
|
|
Six months ended June 30,
|
||||||||||||||
|
|
2020
|
|
2019
|
||||||||||||
|
In thousands
|
Pension
|
|
OPEB
|
|
Pension
|
|
OPEB
|
||||||||
|
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
|
Service cost - Benefits earned during the period
|
$
|
1,385
|
|
|
$
|
52
|
|
|
$
|
317
|
|
|
$
|
—
|
|
|
Non-operating expenses (Other income):
|
|
|
|
|
|
|
|
||||||||
|
Interest cost on benefit obligation
|
41,133
|
|
|
1,160
|
|
|
1,473
|
|
|
45
|
|
||||
|
Expected return on plan assets
|
(78,367
|
)
|
|
—
|
|
|
(1,875
|
)
|
|
—
|
|
||||
|
Amortization of actuarial loss (gain)
|
(54
|
)
|
|
29
|
|
|
(78
|
)
|
|
18
|
|
||||
|
Total non-operating expenses (benefit)
|
$
|
(37,288
|
)
|
|
$
|
1,189
|
|
|
$
|
(480
|
)
|
|
$
|
63
|
|
|
Total expense (benefit) for retirement plans
|
$
|
(35,903
|
)
|
|
$
|
1,241
|
|
|
$
|
(163
|
)
|
|
$
|
63
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
In thousands
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
Pre-tax net income (loss)
|
$
|
(472,107
|
)
|
|
$
|
2,272
|
|
|
$
|
(543,734
|
)
|
|
$
|
(9,037
|
)
|
|
Benefit for income taxes
|
(34,276
|
)
|
|
(343
|
)
|
|
(25,297
|
)
|
|
(2,297
|
)
|
||||
|
Effective tax rate
|
7.3
|
%
|
|
***
|
|
|
4.7
|
%
|
|
25.4
|
%
|
||||
|
in thousands, except share data
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
Net income (loss) attributable to Gannett
|
$
|
(436,893
|
)
|
|
$
|
2,815
|
|
|
$
|
(517,045
|
)
|
|
$
|
(6,291
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
|
Basic weighted average shares outstanding
|
131,471
|
|
|
60,031
|
|
|
130,999
|
|
|
59,998
|
|
||||
|
Diluted weighted average shares outstanding
|
131,471
|
|
|
60,031
|
|
|
130,999
|
|
|
59,998
|
|
||||
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||
|
in thousands, except share data
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||
|
Stock warrants
|
1,362
|
|
|
1,362
|
|
|
1,362
|
|
|
1,362
|
|
|
Stock options
|
6,068
|
|
|
2,905
|
|
|
6,068
|
|
|
2,905
|
|
|
Restricted stock grants
|
8,510
|
|
|
450
|
|
|
8,510
|
|
|
450
|
|
|
in thousands, except share data
|
Number of Options
|
|
Weighted-Average Grant Date Fair Value
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Contractual Term (Years)
|
|
Aggregate Intrinsic Value ($000)
|
|||||||
|
Outstanding at December 31, 2019
|
6,068
|
|
|
$
|
1.78
|
|
|
$
|
14.70
|
|
|
8.2
|
|
$
|
—
|
|
|
Granted
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
|
Outstanding at June 30, 2020
|
6,068
|
|
|
$
|
1.78
|
|
|
$
|
13.97
|
|
|
7.7
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Exercisable at June 30, 2020
|
3,551
|
|
|
$
|
1.78
|
|
|
$
|
12.94
|
|
|
6.5
|
|
$
|
—
|
|
|
|
Six months ended June 30,
|
|||||
|
|
2020
|
|||||
|
in thousands, except per share data
|
Number
of
RSUs & PSUs
|
|
Weighted-
Average Grant Date Fair Value |
|||
|
Unvested at beginning of period
|
7,368
|
|
|
$
|
6.28
|
|
|
Granted
|
282
|
|
|
0.90
|
|
|
|
Vested
|
(3,012
|
)
|
|
6.28
|
|
|
|
Forfeited
|
(371
|
)
|
|
2.31
|
|
|
|
Unvested at end of period
|
4,267
|
|
|
$
|
6.27
|
|
|
|
Six months ended June 30,
|
||||||||||||
|
|
2020
|
|
2019
|
||||||||||
|
in thousands, except per share data
|
Number
of RSGs
|
|
Weighted-
Average
Grant Date
Fair Value
|
|
Number
of RSGs
|
|
Weighted-
Average Grant Date Fair Value |
||||||
|
Unvested at beginning of period
|
317
|
|
|
$
|
14.61
|
|
|
384
|
|
|
$
|
16.11
|
|
|
Granted
|
5,248
|
|
|
3.91
|
|
|
298
|
|
|
13.65
|
|
||
|
Vested
|
(1,041
|
)
|
|
6.19
|
|
|
(162
|
)
|
|
15.90
|
|
||
|
Forfeited
|
(283
|
)
|
|
2.21
|
|
|
(70
|
)
|
|
15.27
|
|
||
|
Unvested at end of period
|
4,241
|
|
|
$
|
4.26
|
|
|
450
|
|
|
$
|
14.69
|
|
|
|
Six months ended June 30, 2020
|
||||||||||
|
In thousands
|
Retirement Plans
|
|
Foreign Currency Translation
|
|
Total
|
||||||
|
Beginning balance
|
$
|
936
|
|
|
$
|
7,266
|
|
|
$
|
8,202
|
|
|
Other comprehensive income (loss) before reclassifications
|
(4,961
|
)
|
|
(16,585
|
)
|
|
(21,546
|
)
|
|||
|
Amounts reclassified from accumulated other comprehensive loss(1)
|
(18
|
)
|
|
—
|
|
|
(18
|
)
|
|||
|
Net current period other comprehensive income (loss), net of taxes
|
(4,979
|
)
|
|
(16,585
|
)
|
|
(21,564
|
)
|
|||
|
Ending balance
|
$
|
(4,043
|
)
|
|
$
|
(9,319
|
)
|
|
$
|
(13,362
|
)
|
|
(1)
|
This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost. See Note 9 — Pensions and other postretirement benefit plans
|
|
|
Six months ended June 30, 2019
|
||||||||||
|
In thousands
|
Retirement Plans
|
|
Foreign Currency Translation
|
|
Total
|
||||||
|
Beginning balance
|
$
|
(6,881
|
)
|
|
$
|
—
|
|
|
$
|
(6,881
|
)
|
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
3
|
|
|
3
|
|
|||
|
Amounts reclassified from accumulated other comprehensive loss(1)
|
(60
|
)
|
|
—
|
|
|
(60
|
)
|
|||
|
Net current period other comprehensive income (loss), net of taxes
|
(60
|
)
|
|
3
|
|
|
(57
|
)
|
|||
|
Ending balance
|
$
|
(6,941
|
)
|
|
$
|
3
|
|
|
$
|
(6,938
|
)
|
|
(1)
|
This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost. See Note 9 — Pensions and other postretirement benefit plans
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
In thousands
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
Amortization of prior service credit, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Amortization of actuarial gain
|
(11
|
)
|
|
(30
|
)
|
|
(25
|
)
|
|
(60
|
)
|
||||
|
Total reclassifications, before tax
|
(11
|
)
|
|
(30
|
)
|
|
(25
|
)
|
|
(60
|
)
|
||||
|
Income tax effect
|
3
|
|
|
—
|
|
|
7
|
|
|
—
|
|
||||
|
Total reclassifications, net of tax
|
$
|
(8
|
)
|
|
$
|
(30
|
)
|
|
$
|
(18
|
)
|
|
$
|
(60
|
)
|
|
•
|
Publishing, which consists of our portfolio of local, regional, national, and international newspaper publishers. The results of this segment include local, classified, and national advertising revenues consisting of both print and digital advertising, circulation revenues from the distribution of our publications on our digital platforms, home delivery of our publications, single copy sales, and other revenues from commercial printing, events, and distribution arrangements. The Publishing reportable segment is an aggregation of two operating segments: Domestic Publishing and the U.K.
|
|
•
|
Marketing Solutions, which is comprised of our digital marketing solutions subsidiaries ReachLocal and UpCurve. The results of this segment include advertising and marketing services revenues through multiple services including search advertising, display advertising, search optimization, social media, website development, web presence products, and software-as-a-service solutions.
|
|
|
Three months ended June 30, 2020
|
||||||||||||||||||
|
In thousands
|
Publishing
|
|
Marketing Solutions
|
|
Corporate and other
|
|
Intersegment Eliminations
|
|
Consolidated
|
||||||||||
|
Advertising and marketing services - external sales
|
$
|
266,398
|
|
|
$
|
89,809
|
|
|
$
|
711
|
|
|
$
|
—
|
|
|
$
|
356,918
|
|
|
Advertising and marketing services - intersegment sales
|
25,854
|
|
|
—
|
|
|
—
|
|
|
(25,854
|
)
|
|
—
|
|
|||||
|
Circulation
|
342,645
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
342,646
|
|
|||||
|
Other
|
60,996
|
|
|
4,754
|
|
|
1,686
|
|
|
—
|
|
|
67,436
|
|
|||||
|
Total revenues
|
$
|
695,893
|
|
|
$
|
94,563
|
|
|
$
|
2,398
|
|
|
$
|
(25,854
|
)
|
|
$
|
767,000
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Adjusted EBITDA
|
$
|
91,991
|
|
|
$
|
2,784
|
|
|
$
|
(16,757
|
)
|
|
$
|
—
|
|
|
$
|
78,018
|
|
|
|
Three months ended June 30, 2019
|
||||||||||||||||||
|
In thousands
|
Publishing
|
|
Marketing Solutions
|
|
Corporate and other
|
|
Intersegment Eliminations
|
|
Consolidated
|
||||||||||
|
Advertising and marketing services - external sales
|
$
|
180,890
|
|
|
$
|
23,157
|
|
|
$
|
650
|
|
|
$
|
—
|
|
|
$
|
204,697
|
|
|
Advertising and marketing services - intersegment sales
|
18,288
|
|
|
—
|
|
|
—
|
|
|
(18,288
|
)
|
|
—
|
|
|||||
|
Circulation
|
150,827
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
150,850
|
|
|||||
|
Other
|
44,430
|
|
|
4,188
|
|
|
222
|
|
|
—
|
|
|
48,840
|
|
|||||
|
Total revenues
|
$
|
394,435
|
|
|
$
|
27,345
|
|
|
$
|
895
|
|
|
$
|
(18,288
|
)
|
|
$
|
404,387
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Adjusted EBITDA
|
$
|
55,493
|
|
|
$
|
(2,459
|
)
|
|
$
|
(5,739
|
)
|
|
$
|
—
|
|
|
$
|
47,295
|
|
|
|
Six months ended June 30, 2020
|
||||||||||||||||||
|
In thousands
|
Publishing
|
|
Marketing Solutions
|
|
Corporate and other
|
|
Intersegment Eliminations
|
|
Consolidated
|
||||||||||
|
Advertising and marketing services - external sales
|
$
|
636,277
|
|
|
$
|
206,092
|
|
|
$
|
1,560
|
|
|
$
|
—
|
|
|
$
|
843,929
|
|
|
Advertising and marketing services - intersegment sales
|
59,611
|
|
|
—
|
|
|
—
|
|
|
(59,611
|
)
|
|
—
|
|
|||||
|
Circulation
|
717,365
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
717,369
|
|
|||||
|
Other
|
140,790
|
|
|
9,752
|
|
|
3,843
|
|
|
—
|
|
|
154,385
|
|
|||||
|
Total revenues
|
$
|
1,554,043
|
|
|
$
|
215,844
|
|
|
$
|
5,407
|
|
|
$
|
(59,611
|
)
|
|
$
|
1,715,683
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Adjusted EBITDA
|
$
|
203,014
|
|
|
$
|
10,668
|
|
|
$
|
(36,598
|
)
|
|
$
|
—
|
|
|
$
|
177,084
|
|
|
|
Six months ended June 30, 2019
|
||||||||||||||||||
|
In thousands
|
Publishing
|
|
Marketing Solutions
|
|
Corporate and other
|
|
Intersegment Eliminations
|
|
Consolidated
|
||||||||||
|
Advertising and marketing services - external sales
|
$
|
352,708
|
|
|
$
|
44,547
|
|
|
$
|
987
|
|
|
$
|
—
|
|
|
$
|
398,242
|
|
|
Advertising and marketing services - intersegment sales
|
35,328
|
|
|
—
|
|
|
—
|
|
|
(35,328
|
)
|
|
—
|
|
|||||
|
Circulation
|
302,991
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
303,015
|
|
|||||
|
Other
|
81,489
|
|
|
8,685
|
|
|
556
|
|
|
—
|
|
|
90,730
|
|
|||||
|
Total revenues
|
$
|
772,516
|
|
|
$
|
53,232
|
|
|
$
|
1,567
|
|
|
$
|
(35,328
|
)
|
|
$
|
791,987
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Adjusted EBITDA
|
$
|
97,188
|
|
|
$
|
(5,689
|
)
|
|
$
|
(11,354
|
)
|
|
$
|
—
|
|
|
$
|
80,145
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
In thousands
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
Net income (loss) attributable to Gannett
|
$
|
(436,893
|
)
|
|
$
|
2,815
|
|
|
$
|
(517,045
|
)
|
|
$
|
(6,291
|
)
|
|
Benefit for income taxes
|
(34,276
|
)
|
|
(343
|
)
|
|
(25,297
|
)
|
|
(2,297
|
)
|
||||
|
Interest expense
|
57,928
|
|
|
10,212
|
|
|
115,827
|
|
|
20,346
|
|
||||
|
Loss on early extinguishment of debt
|
369
|
|
|
—
|
|
|
1,174
|
|
|
—
|
|
||||
|
Non-operating pension income
|
(17,553
|
)
|
|
(208
|
)
|
|
(36,099
|
)
|
|
(417
|
)
|
||||
|
Other non-operating income
|
(6,261
|
)
|
|
(103
|
)
|
|
(4,616
|
)
|
|
(154
|
)
|
||||
|
Depreciation and amortization
|
66,327
|
|
|
23,328
|
|
|
144,352
|
|
|
44,251
|
|
||||
|
Integration and reorganization costs
|
32,306
|
|
|
4,278
|
|
|
60,560
|
|
|
10,077
|
|
||||
|
Acquisition costs
|
2,379
|
|
|
2,364
|
|
|
8,348
|
|
|
3,137
|
|
||||
|
Impairment of property, plant and equipment
|
6,859
|
|
|
1,262
|
|
|
6,859
|
|
|
2,469
|
|
||||
|
Goodwill and intangible impairment
|
393,446
|
|
|
—
|
|
|
393,446
|
|
|
—
|
|
||||
|
Loss on sale or disposal of assets
|
88
|
|
|
947
|
|
|
745
|
|
|
2,737
|
|
||||
|
Equity-based compensation expense
|
7,391
|
|
|
707
|
|
|
18,968
|
|
|
1,843
|
|
||||
|
Other items
|
5,908
|
|
|
2,036
|
|
|
9,862
|
|
|
4,444
|
|
||||
|
Adjusted EBITDA (non-GAAP basis)
|
$
|
78,018
|
|
|
$
|
47,295
|
|
|
$
|
177,084
|
|
|
$
|
80,145
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||
|
In thousands
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||
|
Management fee expense
|
4,674
|
|
|
2,456
|
|
|
8,433
|
|
|
4,912
|
|
|
Incentive fee expense
|
—
|
|
|
1,413
|
|
|
—
|
|
|
1,413
|
|
|
Management fees paid
|
3,759
|
|
|
2,456
|
|
|
7,383
|
|
|
6,167
|
|
|
Incentive fees paid
|
—
|
|
|
—
|
|
|
2,602
|
|
|
5,220
|
|
|
Reimbursement for expenses
|
658
|
|
|
577
|
|
|
1,325
|
|
|
1,226
|
|
|
•
|
In November 2019, we acquired substantially all of the assets, properties, and business of Legacy Gannett for an aggregate purchase price of $1.3 billion. The acquisition was funded by a new term loan facility with an aggregate principal balance of $1.8 billion and available cash on hand.
|
|
•
|
During 2019 prior to the acquisition of Legacy Gannett, we acquired substantially all the assets, properties, and business of certain publications and businesses, including 11 daily newspapers, 11 weekly publications, nine shoppers, a remnant advertising agency, five events production businesses, and a business community and networking platform for an aggregate purchase price of $53.4 million, including estimated working capital. As part of one of the 2019 acquisitions, the Company also acquired a 58% equity interest in the acquiree, and the minority equity owners retained a 42% interest, which has been classified as a redeemable non-controlling interest on the Condensed consolidated statements of operations and comprehensive income (loss). These acquisitions were financed from available cash on hand.
|
|
•
|
In the three months ended June 30, 2020, the Company incurred integration and reorganization costs of $32.3 million. Of the total charges incurred, $25.7 million were related to severance activities while $6.6 million were related to other costs, including those for the purpose of consolidating operations. In the six months ended June 30, 2020, the Company incurred integration and reorganization costs of $60.6 million. Of the total charges incurred, $47.5 million were related to severance activities while $13.0 million were related to other costs, including those for the purpose of consolidating operations.
|
|
•
|
In the three months ended June 30, 2019, the Company incurred integration and reorganization costs of $4.3 million. Of the total charges incurred, $2.9 million were related to severance activities while $1.4 million were related to other costs, including those for the purpose of consolidating operations. In the six months ended June 30, 2019, the Company incurred integration and reorganization costs of $10.1 million. Of the total charges incurred, $6.3 million were related to severance activities while $3.8 million were related to other costs, including those for the purpose of consolidating operations.
|
|
•
|
In the three months ended June 30, 2020, the Company ceased operations of 10 printing facilities as part of the synergy and ongoing cost reduction programs. As a result, the Company recognized accelerated depreciation of $11.0 million during the three months ended June 30, 2020. There were no impairment charges recognized relating to retired equipment during the three months ended June 30, 2020. In the six months ended June 30, 2020, the Company ceased operations of 24 printing facilities as part of the synergy and ongoing cost reduction programs. As a result, the Company recognized accelerated depreciation of $35.8 million during the six months ended June 30, 2020. There were no impairment charges recognized relating to retired equipment during the six months ended June 30, 2020.
|
|
•
|
There were $6.9 million of property, plant and equipment impairment charges recorded for the three and six months ended June 30, 2020 by the Publishing segment as a result of the Company's recoverability test for long-lived asset groups performed as of June 30, 2020.
|
|
•
|
In the three months ended June 30, 2019, the Company ceased operations of three print publications and eight printing operations as part of the ongoing cost reduction programs. As a result, the Company recognized impairment charges relating to retired equipment of $1.3 million during the three months ended June 30, 2019. In the six months ended June 30, 2019, the Company ceased operations of three print publications and nine printing operations as part of the ongoing cost reduction programs. As a result, the Company recognized impairment charges relating to retired equipment of $2.5 million during the six months ended June 30, 2019.
|
|
•
|
In the three months ended June 30, 2019, there were $1.3 million property, plant and equipment impairment charges recorded by the Corporate and other segment as a result of cost efficiency programs. For the six months ended June 30, 2019, there were $2.5 million property, plant and equipment impairment charges recorded by the Corporate and other segment.
|
|
•
|
In the three and six months ended June 30, 2020, the Company incurred a goodwill and intangible impairment of $393.4 million primarily due to the current and expected impact of the COVID-19 pandemic on the Company’s operations.
|
|
•
|
There was no goodwill and intangible impairment recognized in the three and six months ended June 30, 2019.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||||
|
In thousands
|
2020
|
|
2019
|
|
Change
|
|
2020
|
|
2019
|
|
Change
|
||||||||||||
|
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Publishing
|
$
|
695,893
|
|
|
$
|
394,435
|
|
|
$
|
301,458
|
|
|
$
|
1,554,043
|
|
|
$
|
772,516
|
|
|
$
|
781,527
|
|
|
Marketing Solutions
|
94,563
|
|
|
27,345
|
|
|
67,218
|
|
|
215,844
|
|
|
53,232
|
|
|
162,612
|
|
||||||
|
Corporate and other
|
2,398
|
|
|
895
|
|
|
1,503
|
|
|
5,407
|
|
|
1,567
|
|
|
3,840
|
|
||||||
|
Intersegment eliminations
|
(25,854
|
)
|
|
(18,288
|
)
|
|
(7,566
|
)
|
|
(59,611
|
)
|
|
(35,328
|
)
|
|
(24,283
|
)
|
||||||
|
Total operating revenues
|
767,000
|
|
|
404,387
|
|
|
362,613
|
|
|
1,715,683
|
|
|
791,987
|
|
|
923,696
|
|
||||||
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Publishing
|
$
|
1,045,492
|
|
|
$
|
370,152
|
|
|
$
|
675,340
|
|
|
$
|
1,876,021
|
|
|
$
|
729,981
|
|
|
$
|
1,146,040
|
|
|
Marketing Solutions
|
140,403
|
|
|
31,152
|
|
|
109,251
|
|
|
263,135
|
|
|
62,667
|
|
|
200,468
|
|
||||||
|
Corporate and other
|
44,583
|
|
|
9,198
|
|
|
35,385
|
|
|
103,586
|
|
|
23,929
|
|
|
79,657
|
|
||||||
|
Intersegment eliminations
|
(25,854
|
)
|
|
(18,288
|
)
|
|
(7,566
|
)
|
|
(59,611
|
)
|
|
(35,328
|
)
|
|
(24,283
|
)
|
||||||
|
Total operating expenses
|
1,204,624
|
|
|
392,214
|
|
|
812,410
|
|
|
2,183,131
|
|
|
781,249
|
|
|
1,401,882
|
|
||||||
|
Operating income (loss)
|
(437,624
|
)
|
|
12,173
|
|
|
(449,797
|
)
|
|
(467,448
|
)
|
|
10,738
|
|
|
(478,186
|
)
|
||||||
|
Non-operating expense
|
34,483
|
|
|
9,901
|
|
|
24,582
|
|
|
76,286
|
|
|
19,775
|
|
|
56,511
|
|
||||||
|
Income (loss) before income taxes
|
(472,107
|
)
|
|
2,272
|
|
|
(474,379
|
)
|
|
(543,734
|
)
|
|
(9,037
|
)
|
|
(534,697
|
)
|
||||||
|
Benefit for income taxes
|
(34,276
|
)
|
|
(343
|
)
|
|
(33,933
|
)
|
|
(25,297
|
)
|
|
(2,297
|
)
|
|
(23,000
|
)
|
||||||
|
Net income (loss)
|
$
|
(437,831
|
)
|
|
$
|
2,615
|
|
|
$
|
(440,446
|
)
|
|
$
|
(518,437
|
)
|
|
$
|
(6,740
|
)
|
|
$
|
(511,697
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Loss per share attributable to Gannett - diluted
|
$
|
(3.32
|
)
|
|
$
|
0.05
|
|
|
$
|
(3.37
|
)
|
|
$
|
(3.95
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(3.85
|
)
|
|
•
|
Operating costs such as labor, newsprint, and delivery costs in our Publishing segment or the cost of online media acquired from third parties, such as Google, and costs to manage and operate our marketing solutions and technology infrastructure in our Marketing Solutions segment;
|
|
•
|
Selling, general, and administrative expenses such as labor, payroll, outside services, and benefits costs;
|
|
•
|
Depreciation and amortization;
|
|
•
|
Integration and reorganization costs such as severance charges, facility consolidation charges, and acquisition or integration-related costs;
|
|
•
|
Costs incurred pursuant to acquisitions or mergers;
|
|
•
|
Impairment charges such as those for property, plant and equipment, goodwill, or other intangible assets; and
|
|
•
|
Net gains or losses on the sale or disposal of assets such as property, plant, and equipment.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||||
|
In thousands
|
2020
|
|
2019
|
|
Change ($)
|
|
2020
|
|
2019
|
|
Change ($)
|
||||||||||||
|
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Advertising and marketing services
|
$
|
292,252
|
|
|
$
|
199,178
|
|
|
$
|
93,074
|
|
|
$
|
695,888
|
|
|
$
|
388,036
|
|
|
$
|
307,852
|
|
|
Circulation
|
342,645
|
|
|
150,827
|
|
|
191,818
|
|
|
717,365
|
|
|
302,991
|
|
|
414,374
|
|
||||||
|
Other
|
60,996
|
|
|
44,430
|
|
|
16,566
|
|
|
140,790
|
|
|
81,489
|
|
|
59,301
|
|
||||||
|
Total operating revenues
|
695,893
|
|
|
394,435
|
|
|
301,458
|
|
|
1,554,043
|
|
|
772,516
|
|
|
781,527
|
|
||||||
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Operating costs
|
432,920
|
|
|
229,568
|
|
|
203,352
|
|
|
951,779
|
|
|
455,270
|
|
|
496,509
|
|
||||||
|
Selling, general and administrative expenses
|
176,043
|
|
|
110,113
|
|
|
65,930
|
|
|
406,856
|
|
|
223,007
|
|
|
183,849
|
|
||||||
|
Depreciation and amortization
|
56,553
|
|
|
21,769
|
|
|
34,784
|
|
|
123,510
|
|
|
40,599
|
|
|
82,911
|
|
||||||
|
Integration and reorganization costs
|
20,619
|
|
|
4,074
|
|
|
16,545
|
|
|
33,927
|
|
|
6,458
|
|
|
27,469
|
|
||||||
|
Impairment of property, plant and equipment
|
6,859
|
|
|
2,469
|
|
|
4,390
|
|
|
6,859
|
|
|
2,469
|
|
|
4,390
|
|
||||||
|
Goodwill and intangible impairment
|
352,947
|
|
|
—
|
|
|
352,947
|
|
|
352,947
|
|
|
—
|
|
|
352,947
|
|
||||||
|
Net loss on sale or disposal of assets
|
(449
|
)
|
|
2,159
|
|
|
(2,608
|
)
|
|
143
|
|
|
2,178
|
|
|
(2,035
|
)
|
||||||
|
Total operating expenses
|
1,045,492
|
|
|
370,152
|
|
|
675,340
|
|
|
1,876,021
|
|
|
729,981
|
|
|
1,146,040
|
|
||||||
|
Operating income
|
$
|
(349,599
|
)
|
|
$
|
24,283
|
|
|
(373,882
|
)
|
|
$
|
(321,978
|
)
|
|
$
|
42,535
|
|
|
(364,513
|
)
|
||
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||||
|
In thousands
|
2020
|
|
2019
|
|
Change ($)
|
|
2020
|
|
2019
|
|
Change ($)
|
||||||||||||
|
Net income (loss) attributable to Gannett (GAAP basis)
|
$
|
(328,207
|
)
|
|
$
|
24,830
|
|
|
$
|
(353,037
|
)
|
|
$
|
(281,213
|
)
|
|
$
|
43,586
|
|
|
$
|
(324,799
|
)
|
|
Interest expense
|
92
|
|
|
23
|
|
|
69
|
|
|
110
|
|
|
78
|
|
|
32
|
|
||||||
|
Non-operating pension income
|
(17,480
|
)
|
|
(208
|
)
|
|
(17,272
|
)
|
|
(35,953
|
)
|
|
(417
|
)
|
|
(35,536
|
)
|
||||||
|
Other non-operating income
|
(3,066
|
)
|
|
(162
|
)
|
|
(2,904
|
)
|
|
(3,530
|
)
|
|
(263
|
)
|
|
(3,267
|
)
|
||||||
|
Depreciation and amortization
|
56,553
|
|
|
21,769
|
|
|
34,784
|
|
|
123,510
|
|
|
40,599
|
|
|
82,911
|
|
||||||
|
Integration and reorganization costs
|
20,619
|
|
|
4,074
|
|
|
16,545
|
|
|
33,927
|
|
|
6,458
|
|
|
27,469
|
|
||||||
|
Impairment of property, plant and equipment
|
6,859
|
|
|
2,469
|
|
|
4,390
|
|
|
6,859
|
|
|
2,469
|
|
|
4,390
|
|
||||||
|
Goodwill and intangible impairment
|
352,947
|
|
|
—
|
|
|
352,947
|
|
|
352,947
|
|
|
—
|
|
|
352,947
|
|
||||||
|
Net loss on sale or disposal of assets
|
(449
|
)
|
|
2,159
|
|
|
(2,608
|
)
|
|
143
|
|
|
2,178
|
|
|
(2,035
|
)
|
||||||
|
Other items
|
4,123
|
|
|
539
|
|
|
3,584
|
|
|
6,214
|
|
|
2,500
|
|
|
3,714
|
|
||||||
|
Adjusted EBITDA (non-GAAP basis)
|
$
|
91,991
|
|
|
$
|
55,493
|
|
|
$
|
36,498
|
|
|
$
|
203,014
|
|
|
$
|
97,188
|
|
|
$
|
105,826
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||||
|
In thousands
|
2020
|
|
2019
|
|
Change
|
|
2020
|
|
2019
|
|
Change
|
||||||||||||
|
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Advertising and marketing services
|
$
|
89,809
|
|
|
$
|
23,157
|
|
|
$
|
66,652
|
|
|
$
|
206,092
|
|
|
$
|
44,547
|
|
|
$
|
161,545
|
|
|
Other
|
4,754
|
|
|
4,188
|
|
|
566
|
|
|
9,752
|
|
|
8,685
|
|
|
1,067
|
|
||||||
|
Total operating revenues
|
94,563
|
|
|
27,345
|
|
|
67,218
|
|
|
215,844
|
|
|
53,232
|
|
|
162,612
|
|
||||||
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Operating costs
|
63,264
|
|
|
19,376
|
|
|
43,888
|
|
|
136,519
|
|
|
37,648
|
|
|
98,871
|
|
||||||
|
Selling, general and administrative expenses
|
29,158
|
|
|
10,817
|
|
|
18,341
|
|
|
69,892
|
|
|
22,224
|
|
|
47,668
|
|
||||||
|
Depreciation and amortization
|
4,004
|
|
|
778
|
|
|
3,226
|
|
|
11,335
|
|
|
2,056
|
|
|
9,279
|
|
||||||
|
Integration and reorganization costs
|
2,962
|
|
|
180
|
|
|
2,782
|
|
|
4,351
|
|
|
736
|
|
|
3,615
|
|
||||||
|
Goodwill and intangible impairment
|
40,499
|
|
|
—
|
|
|
40,499
|
|
|
40,499
|
|
|
—
|
|
|
40,499
|
|
||||||
|
Net loss on sale or disposal of assets
|
516
|
|
|
1
|
|
|
515
|
|
|
539
|
|
|
3
|
|
|
536
|
|
||||||
|
Total operating expenses
|
140,403
|
|
|
31,152
|
|
|
109,251
|
|
|
263,135
|
|
|
62,667
|
|
|
200,468
|
|
||||||
|
Operating loss
|
$
|
(45,840
|
)
|
|
$
|
(3,807
|
)
|
|
$
|
(42,033
|
)
|
|
$
|
(47,291
|
)
|
|
$
|
(9,435
|
)
|
|
$
|
(37,856
|
)
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||||
|
In thousands
|
2020
|
|
2019
|
|
Change
|
|
2020
|
|
2019
|
|
Change
|
||||||||||||
|
Net income (loss) attributable to Gannett (GAAP basis)
|
$
|
(43,226
|
)
|
|
$
|
(3,807
|
)
|
|
$
|
(39,419
|
)
|
|
$
|
(48,301
|
)
|
|
$
|
(9,435
|
)
|
|
$
|
(38,866
|
)
|
|
Other non-operating income
|
(2,614
|
)
|
|
—
|
|
|
(2,614
|
)
|
|
1,010
|
|
|
—
|
|
|
1,010
|
|
||||||
|
Depreciation and amortization
|
4,004
|
|
|
778
|
|
|
3,226
|
|
|
11,335
|
|
|
2,056
|
|
|
9,279
|
|
||||||
|
Integration and reorganization costs
|
2,962
|
|
|
180
|
|
|
2,782
|
|
|
4,351
|
|
|
736
|
|
|
3,615
|
|
||||||
|
Goodwill and intangible impairment
|
40,499
|
|
|
—
|
|
|
40,499
|
|
|
40,499
|
|
|
—
|
|
|
40,499
|
|
||||||
|
Net loss on sale or disposal of assets
|
516
|
|
|
1
|
|
|
515
|
|
|
539
|
|
|
3
|
|
|
536
|
|
||||||
|
Other items
|
643
|
|
|
389
|
|
|
254
|
|
|
1,235
|
|
|
951
|
|
|
284
|
|
||||||
|
Adjusted EBITDA (non-GAAP basis)
|
$
|
2,784
|
|
|
$
|
(2,459
|
)
|
|
$
|
5,243
|
|
|
$
|
10,668
|
|
|
$
|
(5,689
|
)
|
|
$
|
16,357
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
In thousands
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
Pre-tax net income (loss)
|
$
|
(472,107
|
)
|
|
$
|
2,272
|
|
|
$
|
(543,734
|
)
|
|
$
|
(9,037
|
)
|
|
Benefit for income taxes
|
(34,276
|
)
|
|
(343
|
)
|
|
(25,297
|
)
|
|
(2,297
|
)
|
||||
|
Effective tax rate
|
7.3
|
%
|
|
***
|
|
|
4.7
|
%
|
|
25.4
|
%
|
||||
|
|
Six months ended June 30,
|
||||||
|
In thousands
|
2020
|
|
2019
|
||||
|
Net cash provided by operating activities
|
$
|
24,640
|
|
|
$
|
57,653
|
|
|
Net cash used for investing activities
|
(3,026
|
)
|
|
(37,180
|
)
|
||
|
Net cash used for financing activities
|
(20,331
|
)
|
|
(50,062
|
)
|
||
|
Effect of currency exchange rate change on cash
|
(780
|
)
|
|
3
|
|
||
|
Increase (decrease) in cash
|
$
|
503
|
|
|
$
|
(29,586
|
)
|
|
•
|
Income tax expense (benefit);
|
|
•
|
Interest expense;
|
|
•
|
Gains or losses on early extinguishment of debt;
|
|
•
|
Non-operating items, primarily pension costs;
|
|
•
|
Depreciation and amortization;
|
|
•
|
Integration and reorganization costs;
|
|
•
|
Impairment of property, plant and equipment;
|
|
•
|
Goodwill and intangible impairments;
|
|
•
|
Net loss (gain) on sale or disposal of assets;
|
|
•
|
Equity-based compensation;
|
|
•
|
Acquisition costs; and
|
|
•
|
Certain other non-recurring charges.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||||
|
In thousands
|
2020
|
|
2019
|
|
Change
|
|
2020
|
|
2019
|
|
Change
|
||||||||||||
|
Net income (loss) attributable to Gannett
|
$
|
(436,893
|
)
|
|
$
|
2,815
|
|
|
$
|
(439,708
|
)
|
|
$
|
(517,045
|
)
|
|
$
|
(6,291
|
)
|
|
$
|
(510,754
|
)
|
|
Benefit for income taxes
|
(34,276
|
)
|
|
(343
|
)
|
|
(33,933
|
)
|
|
(25,297
|
)
|
|
(2,297
|
)
|
|
(23,000
|
)
|
||||||
|
Interest expense
|
57,928
|
|
|
10,212
|
|
|
47,716
|
|
|
115,827
|
|
|
20,346
|
|
|
95,481
|
|
||||||
|
Loss on early extinguishment of debt
|
369
|
|
|
—
|
|
|
369
|
|
|
1,174
|
|
|
—
|
|
|
1,174
|
|
||||||
|
Non-operating pension income
|
(17,553
|
)
|
|
(208
|
)
|
|
(17,345
|
)
|
|
(36,099
|
)
|
|
(417
|
)
|
|
(35,682
|
)
|
||||||
|
Other non-operating income
|
(6,261
|
)
|
|
(103
|
)
|
|
(6,158
|
)
|
|
(4,616
|
)
|
|
(154
|
)
|
|
(4,462
|
)
|
||||||
|
Depreciation and amortization
|
66,327
|
|
|
23,328
|
|
|
42,999
|
|
|
144,352
|
|
|
44,251
|
|
|
100,101
|
|
||||||
|
Integration and reorganization costs
|
32,306
|
|
|
4,278
|
|
|
28,028
|
|
|
60,560
|
|
|
10,077
|
|
|
50,483
|
|
||||||
|
Acquisition costs
|
2,379
|
|
|
2,364
|
|
|
15
|
|
|
8,348
|
|
|
3,137
|
|
|
5,211
|
|
||||||
|
Impairment of property, plant and equipment
|
6,859
|
|
|
1,262
|
|
|
5,597
|
|
|
6,859
|
|
|
2,469
|
|
|
4,390
|
|
||||||
|
Goodwill and intangible impairment
|
393,446
|
|
|
—
|
|
|
393,446
|
|
|
393,446
|
|
|
—
|
|
|
393,446
|
|
||||||
|
Loss on sale or disposal of assets
|
88
|
|
|
947
|
|
|
(859
|
)
|
|
745
|
|
|
2,737
|
|
|
(1,992
|
)
|
||||||
|
Equity-based compensation expense
|
7,391
|
|
|
707
|
|
|
6,684
|
|
|
18,968
|
|
|
1,843
|
|
|
17,125
|
|
||||||
|
Other items
|
5,908
|
|
|
2,036
|
|
|
3,872
|
|
|
9,862
|
|
|
4,444
|
|
|
5,418
|
|
||||||
|
Adjusted EBITDA (non-GAAP basis)
|
$
|
78,018
|
|
|
$
|
47,295
|
|
|
$
|
30,723
|
|
|
$
|
177,084
|
|
|
$
|
80,145
|
|
|
$
|
96,939
|
|
|
•
|
Challenges or uncertainties arising from unexpected legal, political, or systemic events, including the global COVID-19 pandemic;
|
|
•
|
Difficulties or delays in developing a network of clients in international markets;
|
|
•
|
Restrictions on the ability of U.S. companies to do business in foreign countries;
|
|
•
|
Different legal or regulatory requirements, including with respect to internet services, privacy and data protection, censorship, banking and money transmitting, and selling, which may limit or prevent the offering of our products in some jurisdictions or otherwise harm our business;
|
|
•
|
International intellectual property laws that may be insufficient to protect our intellectual property or permit us to successfully defend our intellectual property in international lawsuits;
|
|
•
|
Different employee/employer relationships and the existence of workers' councils and labor unions, which could make it more difficult to terminate underperforming salespeople;
|
|
•
|
Difficulties in staffing and managing foreign operations;
|
|
•
|
Difficulties in accounts receivable collection;
|
|
•
|
Currency fluctuations and price controls or other restrictions on foreign currency;
|
|
•
|
Potential adverse tax consequences including difficulties in repatriating earnings generated abroad; and
|
|
•
|
Lack of infrastructure to adequately conduct electronic commerce transactions.
|
|
•
|
Risks and uncertainties associated with the ongoing COVID-19 pandemic;
|
|
•
|
Our business profile and market capitalization may not fit the investment objectives of any stockholder;
|
|
•
|
A shift in our investor base;
|
|
•
|
Our quarterly or annual earnings, or those of other comparable companies;
|
|
•
|
Actual or anticipated fluctuations in our operating results;
|
|
•
|
Changes in accounting standards, policies, guidance, interpretations or principles;
|
|
•
|
Risks relating to our ability to meet long-term forecasts;
|
|
•
|
Announcements by us or our competitors of significant investments, acquisitions or dispositions;
|
|
•
|
The failure of securities analysts to cover our Common Stock;
|
|
•
|
Changes in earnings estimates by securities analysts or our ability to meet those estimates;
|
|
•
|
The operating and stock price performance of other comparable companies;
|
|
•
|
Negative public perception of us, our competitors, or industry;
|
|
•
|
Overall market fluctuations; and
|
|
•
|
General economic conditions.
|
|
•
|
Amendment of provisions in our amended and restated certificate of incorporation and amended and restated bylaws regarding the election of directors, the term of office of directors, the filling of director vacancies and the resignation and removal of directors only upon the affirmative vote of at least 80% of the then issued and outstanding shares of our capital stock entitled to vote thereon;
|
|
•
|
Amendment of provisions in our amended and restated certificate of incorporation regarding corporate opportunity only upon the affirmative vote of at least 80% of the then issued and outstanding shares of our capital stock entitled to vote thereon;
|
|
•
|
Removal of directors only for cause and only with the affirmative vote of at least 80% of the voting interest of stockholders entitled to vote in the election of directors;
|
|
•
|
Our Board to determine the powers, preferences and rights of our preferred stock and to issue such preferred stock without stockholder approval;
|
|
•
|
Provisions in our amended and restated certificate of incorporation and amended and restated bylaws prevent stockholders from calling special meetings of our stockholders;
|
|
•
|
Advance notice requirements applicable to stockholders for director nominations and actions to be taken at annual meetings;
|
|
•
|
A prohibition, in our amended and restated certificate of incorporation, stating that no holder of shares of our Common Stock will have cumulative voting rights in the election of directors, which means that the holders of majority of the issued and outstanding shares of our Common Stock can elect all the directors standing for election; and
|
|
•
|
Action by our stockholders outside a meeting, in our amended and restated certificate of incorporation and our amended and restated bylaws, only by unanimous written consent.
|
|
3.1
|
|
Certificate of Designation of Series A Junior Participating Preferred Stock of Gannett Co., Inc.
|
|
Incorporated by reference to Exhibit 3.1 to Gannett’s Current Report on Form 8-K, filed April 7, 2020.
|
|
|
|
|
|
|
|
4.1
|
|
Section 382 Rights Agreement, dated as of April 6, 2020, by and between Gannett Co., Inc. and American Stock Transfer & Trust Company LLC, as Rights Agent.
|
|
Incorporated by reference to Exhibit 4.1 to Gannett’s Current Report on Form 8-K, filed April 7, 2020.
|
|
|
|
|
|
|
|
10.1
|
|
Offer Letter Agreement, dated March 25, 2020, by and between Gannett Co., Inc. and Douglas E. Horne.
|
|
Incorporated by reference to Exhibit 10.1 to Gannett’s Current Report on Form 8-K, filed April 6, 2020.
|
|
|
|
|
|
|
|
10.2
|
|
Amendment No. 2, dated as of April 6, 2020, to the Credit Agreement, dated as of November 19, 2019, by and among Gannett Co., Inc., Gannett Holdings LLC, each person listed as a guarantor on the signature pages thereto, the lenders from time to time party thereto and Cortland Capital Market Services LLC, as collateral agent and administrative agent.
|
|
Incorporated by reference to Exhibit 10.4 to Gannett’s Quarterly Report on Form 10-Q, filed May 7, 2020.
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31.1
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Rule 13a-14(a) Certification of CEO
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31.2
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Rule 13a-14(a) Certification of CFO
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32.1
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Section 1350 Certification of CEO
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32.2
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Section 1350 Certification of CFO
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101
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The following financial information from Gannett Co., Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Operations and Comprehensive Income; (iii) Condensed Consolidated Statements of Cash Flow; (iv) Condensed Consolidated Statements of Equity; and (v) Notes to Condensed Consolidated Financial Statements
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Attached.
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104
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Cover Page Interactive Data File (formatted as Inline XBRL and embedded within the Inline XBRL document)
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Attached.
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Date: August 6, 2020
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GANNETT CO., INC.
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/s/ Douglas E. Horne
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Douglas E. Horne
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Chief Financial Officer
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(on behalf of Registrant and as Principal Financial Officer)
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I,
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Michael E. Reed, certify that:
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1.
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I have reviewed this quarterly report on Form 10-Q of Gannett Co., Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: August 6, 2020
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/s/ Michael E. Reed
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Michael E. Reed
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President and Chief Executive Officer
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(principal executive officer)
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I,
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Douglas E. Horne, certify that:
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1.
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I have reviewed this quarterly report on Form 10-Q of Gannett Co., Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: August 6, 2020
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/s/ Douglas E. Horne
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Douglas E. Horne
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Chief Financial Officer
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(principal financial officer)
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(1)
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the Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
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(2)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Gannett.
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/s/ Michael E. Reed
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Michael E. Reed
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President and Chief Executive Officer
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(principal executive officer)
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August 6, 2020
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(1)
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the Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
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(2)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Gannett.
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/s/ Douglas E. Horne
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|
Douglas E. Horne
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|
Chief Financial Officer
|
|
(principal financial officer)
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|
August 6, 2020
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