Gannett(GCI) - 2023 Q2 - Quarterly Report

Financial Performance - Total operating revenues for Q2 2023 were $672.4 million, a decrease of 10.2% compared to $748.7 million in Q2 2022[10] - Net loss attributable to Gannett for Q2 2023 was $12.7 million, compared to a net loss of $53.7 million in Q2 2022, representing a significant improvement[10] - Operating income for the six months ended June 30, 2023, was $33.5 million, compared to a loss of $23.2 million for the same period in 2022[10] - The company reported a loss per share attributable to Gannett of $0.09 for Q2 2023, compared to a loss of $0.39 per share in Q2 2022[10] - Gannett reported a net loss of $2,430,000 for the six months ended June 30, 2023, a significant improvement compared to a net loss of $56,802,000 for the same period in 2022[11] - For the three months ended June 30, 2023, Gannett Holdings recognized interest expense of $10.4 million, compared to $7.5 million for the same period in 2022, reflecting a 38.7% increase[38] - The Company reported a pre-tax net loss of $11.4 million for the three months ended June 30, 2023, compared to a loss of $31.5 million in the same period of 2022[69] - Gannett's net loss attributable to the company was $(12,677) for the three months ended June 30, 2023, a reduction from $(53,688) in the same period of 2022[98] Revenue Breakdown - Advertising and marketing services revenue for Q2 2023 was $353.3 million, down 7.9% from $383.6 million in Q2 2022[10] - Circulation revenue for Q2 2023 was $233.6 million, a decline of 15% compared to $274.6 million in Q2 2022[10] - Digital advertising and marketing services revenue for the six months ended June 30, 2023, was $396.9 million, down 3.6% from $411.8 million in 2022[23] - Total operating revenues for the three months ended June 30, 2023, were $672.4 million, a decrease of 10.2% compared to $748.7 million for the same period in 2022[23] - Digital-only subscriptions increased by 17% to $37.9 million for the three months ended June 30, 2023, compared to $32.5 million in 2022[125] Cash and Assets - Cash and cash equivalents increased to $106.6 million as of June 30, 2023, up from $94.3 million at the end of 2022[9] - Total assets decreased to $2.31 billion as of June 30, 2023, from $2.39 billion at the end of 2022[9] - Total equity increased to $326.9 million as of June 30, 2023, from $295.4 million at the end of 2022[9] - Gannett's cash, cash equivalents, and restricted cash at the end of the period stood at $118,133,000, an increase from $99,471,000 at the end of June 2022[11] Expenses and Costs - The company experienced a decrease in depreciation and amortization expenses, totaling $83,482,000 in 2023, down from $97,313,000 in 2022[11] - Severance-related expenses for the three months ended June 30, 2023, totaled $2.6 million, compared to $11.6 million in 2022[31] - Integration and reorganization costs for the three and six months ended June 30, 2023, were $7.3 million and $19.4 million, respectively, with severance activities accounting for $2.6 million and $12.8 million[110] - Compensation and benefits costs decreased by $31.1 million (22%) for the three months ended June 30, 2023, totaling $109.3 million compared to $140.4 million in 2022[146] Debt and Financing - As of June 30, 2023, total debt was $1.2 billion, a decrease from $1.3 billion as of December 31, 2022[33] - Gannett Holdings entered into a five-year senior secured term loan facility with an original principal amount of $516 million, later increasing it by $50 million through incremental loans[34] - The effective interest rate for the Senior Secured Term Loan was 11.1% as of June 30, 2023[39] - The carrying value of outstanding debt as of June 30, 2023, totaled $1.121 billion, including $383.4 million related to the Senior Secured Term Loan[181] Strategic Initiatives - The company aims to enhance its digital marketing solutions and audience engagement through its subscription-led media strategy[16] - Gannett is focused on optimizing print operations while expanding its digital marketing services to meet the needs of small and medium-sized businesses[108] - The company aims to grow its paid digital-only subscriber base as part of its subscription-led business strategy, expecting fluctuations in new digital-only subscriptions compared to historical trends[113] - The company plans to expand its digital marketing services business, leveraging its integrated sales structure and data insights to create new advertising products[114] Market Conditions - Macroeconomic conditions, including higher inflation and interest rates, have adversely impacted advertising revenues and consumer spending, leading to reduced demand for print and digital advertising[118] - Inflationary pressures on costs, including labor and materials, are expected to continue impacting the company's overall cost structure year over year[108] - Foreign currency fluctuations negatively impacted revenues and profitability during the three and six months ended June 30, 2023, due to a stronger U.S. dollar against foreign currencies[111] Compliance and Governance - The company is in compliance with all covenants and obligations related to its Senior Secured Term Loan and Notes as of June 30, 2023[186] - The company does not currently pay a quarterly dividend, and future dividends may be restricted by the terms of its indebtedness[188] - The company published its 2023 ESG Report, highlighting commitments to diversity, climate action, and community impact initiatives[123]