Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | May 02, 2022 | |
Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-36097 | |
Entity Registrant Name | GANNETT CO., INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 38-3910250 | |
Entity Address, Address Line One | 7950 Jones Branch Drive, | |
Entity Address, City or Town | McLean, | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 22107-0910 | |
City Area Code | 703 | |
Local Phone Number | 854-6000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock Shares Outstanding | 146,591,116 | |
Entity Central Index Key | 0001579684 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Common stock | ||
Entity Information | ||
Title of Each Class | Common Stock, par value $0.01 per share | |
Trading Symbol | GCI | |
Name of Each Exchange on Which Registered | NYSE | |
Preferred Stock Purchase Rights | ||
Entity Information | ||
Title of Each Class | Preferred Stock Purchase Rights | |
Name of Each Exchange on Which Registered | NYSE | |
No Trading Symbol | true |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 152,191 | $ 130,756 |
Accounts receivable, net of allowance for doubtful accounts of $11,566 and $16,470 as of March 31, 2022 and December 31, 2021, respectively | 293,462 | 328,733 |
Inventories | 37,144 | 37,662 |
Prepaid expenses and other current assets | 79,548 | 80,110 |
Total current assets | 562,345 | 577,261 |
Property, plant and equipment, net of accumulated depreciation of $346,271 and $336,500 as of March 31, 2022 and December 31, 2021, respectively | 388,367 | 415,384 |
Operating lease assets | 263,980 | 271,935 |
Goodwill | 540,894 | 533,709 |
Intangible assets, net | 694,521 | 713,153 |
Deferred tax assets | 25,802 | 32,399 |
Pension and other assets | 307,534 | 284,228 |
Total assets | 2,783,443 | 2,828,069 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 346,368 | 357,014 |
Deferred revenue | 185,579 | 184,838 |
Current portion of long-term debt | 62,860 | 69,456 |
Other current liabilities | 46,997 | 51,218 |
Total current liabilities | 641,804 | 662,526 |
Long-term debt | 783,010 | 769,446 |
Convertible debt | 396,297 | 393,354 |
Deferred tax liabilities | 11,711 | 28,812 |
Pension and other postretirement benefit obligations | 69,687 | 71,937 |
Long-term operating lease liabilities | 247,487 | 254,969 |
Other long-term liabilities | 118,721 | 117,410 |
Total noncurrent liabilities | 1,626,913 | 1,635,928 |
Total liabilities | 2,268,717 | 2,298,454 |
Commitments and contingent liabilities (See Note 11) | ||
Equity | ||
Preferred stock, $0.01 par value per share, 300,000 shares authorized, of which 150,000 shares are designated as Series A Junior Participating Preferred Stock, none of which were issued and outstanding at March 31, 2022 and December 31, 2021 | 0 | 0 |
Common stock, $0.01 par value per share, 2,000,000,000 shares authorized, 151,016,595 shares issued and 147,828,491 shares outstanding at March 31, 2022; 144,667,389 shares issued and 142,299,399 shares outstanding at December 31, 2021 | 1,510 | 1,446 |
Treasury stock, at cost, 3,188,104 shares and 2,367,990 shares at March 31, 2022 and December 31, 2021, respectively | (11,290) | (8,151) |
Additional paid-in capital | 1,397,516 | 1,400,206 |
Accumulated deficit | (924,366) | (921,399) |
Accumulated other comprehensive income | 51,607 | 59,998 |
Total Gannett stockholders equity | 514,977 | 532,100 |
Noncontrolling interests | (251) | (2,485) |
Total equity | 514,726 | 529,615 |
Total liabilities and equity | $ 2,783,443 | $ 2,828,069 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Trade receivables, allowance for doubtful receivables | $ 11,566 | $ 16,470 |
Property plant and equipment, accumulated depreciation | $ 346,271 | $ 336,500 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock authorized (in shares) | 300,000 | 300,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, issued (in shares) | 151,016,595 | 144,667,389 |
Common stock, outstanding (in shares) | 147,828,491 | 142,299,399 |
Treasury stock (in shares) | 3,188,104 | 2,367,990 |
Series A Junior Participating Preferred Stock | ||
Preferred stock authorized (in shares) | 150,000 | 150,000 |
Preferred stock, outstanding (in shares) | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Total operating revenues | $ 748,077 | $ 777,084 | |
Operating costs | 469,885 | 477,798 | |
Selling, general and administrative expenses | 221,837 | 203,684 | |
Depreciation and amortization | 47,783 | 58,103 | |
Integration and reorganization costs | 11,398 | 13,404 | |
Asset impairments | 854 | 833 | |
(Gain) loss on sale or disposal of assets, net | (2,804) | 4,745 | |
Other operating expenses | 1,102 | 10,576 | |
Total operating expenses | 750,055 | 769,143 | |
Operating income (loss) | (1,978) | 7,941 | |
Interest expense | 26,006 | 39,503 | |
Loss on early extinguishment of debt | 2,743 | 19,401 | |
Non-operating pension income | (18,213) | (23,878) | |
Loss on convertible notes derivative | 0 | 126,600 | |
Other non-operating income, net | (1,805) | (1,875) | |
Non-operating expenses | 8,731 | 159,751 | |
Loss before income taxes | (10,709) | (151,810) | |
Benefit for income taxes | (7,607) | (9,109) | |
Net loss | (3,102) | (142,701) | |
Net loss attributable to noncontrolling interests | [1] | (135) | (385) |
Net loss attributable to Gannett | $ (2,967) | $ (142,316) | |
Loss per share attributable to Gannett - basic (in dollars per share) | $ (0.02) | $ (1.06) | |
Loss per share attributable to Gannett - diluted (in dollars per share) | $ (0.02) | $ (1.06) | |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments | $ (7,556) | $ 3,037 | |
Pension and other postretirement benefit items: | |||
Net actuarial gain (loss) | (1,796) | 1,126 | |
Amortization of net actuarial (gain) loss | (32) | 20 | |
Other | 536 | (554) | |
Total pension and other postretirement benefit items | (1,292) | 592 | |
Other comprehensive income (loss) before tax | (8,848) | 3,629 | |
Income tax expense (benefit) related to components of other comprehensive income (loss) | (457) | 206 | |
Other comprehensive income (loss), net of tax | [2] | (8,391) | 3,423 |
Comprehensive loss | (11,493) | (139,278) | |
Comprehensive loss attributable to noncontrolling interests | [1] | (135) | (385) |
Comprehensive loss attributable to Gannett | (11,358) | (138,893) | |
Advertising and marketing services | |||
Total operating revenues | 375,114 | 388,357 | |
Circulation | |||
Total operating revenues | 288,602 | 325,437 | |
Other | |||
Total operating revenues | $ 84,361 | $ 63,290 | |
[1] | ) For the three months ended March 31, 2022, there were no redeemable noncontrolling interests included in Net loss attributable to noncontrolling interests. For the three months ended March 31, 2021, Net loss attributable to noncontrolling interests included $385 thousand relating to redeemable noncontrolling interests. | ||
[2] | For the three months ended March 31, 2022 and 2021, Other comprehensive income is net of income tax benefit of $0.5 million and income tax provision of $0.2 million, respectively. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Net loss attributable to noncontrolling interests | $ 0 | $ 385 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating activities | ||
Net loss | $ (3,102) | $ (142,701) |
Adjustments to reconcile net loss to operating cash flows: | ||
Depreciation and amortization | 47,783 | 58,103 |
Share-based compensation expense | 3,393 | 3,423 |
Non-cash interest expense | 5,316 | 6,118 |
(Gain) loss on sale or disposal of assets, net | (2,804) | 4,745 |
Loss on convertible notes derivative | 0 | 126,600 |
Loss on early extinguishment of debt | 2,743 | 19,401 |
Asset impairments | 854 | 833 |
Pension and other postretirement benefit obligations | (27,291) | (48,538) |
Change in other assets and liabilities, net | 5,537 | 33,332 |
Cash provided by operating activities | 32,429 | 61,316 |
Investing activities | ||
Acquisitions, net of cash acquired | (15,427) | 0 |
Purchase of property, plant and equipment | (10,764) | (7,607) |
Proceeds from sale of real estate and other assets | 20,471 | 10,123 |
Change in other investing activities | (500) | 0 |
Cash provided by (used for) investing activities | (6,220) | 2,516 |
Financing activities | ||
Payments of deferred financing costs | (423) | (33,921) |
Borrowings under term loans | 72,500 | 1,045,000 |
Repayments under term loans | (47,976) | (1,083,791) |
Repayments of long-term debt | (22,500) | 0 |
Acquisition of noncontrolling interests | 2,050 | 0 |
Payments for employee taxes withheld from stock awards | (3,138) | (1,707) |
Changes in other financing activities | (231) | (280) |
Cash used for financing activities | (3,818) | (74,699) |
Effect of currency exchange rate change on cash | (992) | 314 |
Increase (decrease) in cash, cash equivalents and restricted cash | 21,399 | (10,553) |
Cash, cash equivalents and restricted cash at beginning of period | 143,619 | 206,726 |
Cash, cash equivalents and restricted cash at end of period | $ 165,018 | $ 196,173 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Common stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Accumulated deficit | Treasury stock | Non-controlling interest | ||
Beginning balance at Dec. 31, 2020 | $ 364,109 | $ 1,395 | $ 1,103,881 | $ 50,173 | $ (786,437) | $ (4,903) | $ 0 | [1] | |
Beginning balance (in shares) at Dec. 31, 2020 | 139,495,000 | 1,392,000 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net loss attributable to Gannett | (142,316) | (142,316) | |||||||
Restricted stock awards settled, net of withholdings | (1,885) | $ 10 | (1,895) | ||||||
Restricted stock awards settled, net of withholdings (in shares) | 1,057,000 | ||||||||
Restricted share grants | 0 | $ 39 | (39) | ||||||
Restricted share grants (in shares) | 3,878,000 | ||||||||
Equity component - 2027 Notes | 316,252 | 316,252 | |||||||
Other comprehensive income (loss), net of income tax | [2] | 3,423 | 3,423 | ||||||
Share-based compensation expense | 3,423 | 3,423 | |||||||
Issuance of common stock | 61 | 61 | |||||||
Issuance of common stock (in shares) | 14,000 | ||||||||
Remeasurement of redeemable noncontrolling interests | 126 | 126 | |||||||
Treasury stock | (1,707) | $ (1,707) | |||||||
Treasury stock (in shares) | 330,000 | ||||||||
Restricted share forfeiture | (2) | $ (2) | |||||||
Restricted share forfeiture (in shares) | 180,000 | ||||||||
Other activity | 168 | 168 | |||||||
Ending balance at Mar. 31, 2021 | 541,652 | $ 1,444 | 1,421,977 | 53,596 | (928,753) | $ (6,612) | 0 | [1] | |
Ending balance (in shares) at Mar. 31, 2021 | 144,444,000 | 1,902,000 | |||||||
Beginning balance at Dec. 31, 2021 | 529,615 | $ 1,446 | 1,400,206 | 59,998 | (921,399) | $ (8,151) | (2,485) | ||
Beginning balance (in shares) at Dec. 31, 2021 | 144,667,000 | 2,368,000 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net loss attributable to Gannett | (3,102) | (2,967) | (135) | ||||||
Acquisition of noncontrolling interests | (2,050) | (4,419) | 2,369 | ||||||
Restricted stock awards settled, net of withholdings | (1,534) | $ 7 | (1,541) | ||||||
Restricted stock awards settled, net of withholdings (in shares) | 615,000 | ||||||||
Restricted share grants | 0 | $ 57 | (57) | ||||||
Restricted share grants (in shares) | 5,728,000 | ||||||||
Other comprehensive income (loss), net of income tax | [2] | (8,391) | (8,391) | ||||||
Share-based compensation expense | 3,393 | 3,393 | |||||||
Issuance of common stock | 62 | 62 | |||||||
Issuance of common stock (in shares) | 7,000 | ||||||||
Treasury stock | (3,138) | $ (3,138) | |||||||
Treasury stock (in shares) | 692,000 | ||||||||
Restricted share forfeiture | (1) | $ (1) | |||||||
Restricted share forfeiture (in shares) | 128,000 | ||||||||
Other activity | (128) | (128) | 0 | ||||||
Ending balance at Mar. 31, 2022 | $ 514,726 | $ 1,510 | $ 1,397,516 | $ 51,607 | $ (924,366) | $ (11,290) | $ (251) | ||
Ending balance (in shares) at Mar. 31, 2022 | 151,017,000 | 3,188,000 | |||||||
[1] | Excludes Redeemable noncontrolling interests which are reflected in temporary equity. | ||||||||
[2] | For the three months ended March 31, 2022 and 2021, Other comprehensive income is net of income tax benefit of $0.5 million and income tax provision of $0.2 million, respectively. |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||
Other comprehensive income, tax (benefit) expense | $ (457) | $ 206 |
Description of business and bas
Description of business and basis of presentation | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Description of business and basis of presentation | NOTE 1 — Description of business and basis of presentation Description of business Gannett Co., Inc. ("Gannett", "we", "us", "our", or the "Company") is a subscription-led and digitally-focused media and marketing solutions company committed to empowering communities to thrive. Gannett operates a scalable, data-driven media platform that aligns with consumer and digital marketing trends. We aim to be the premier source for clarity, connections and solutions within our communities. Our strategy is focused on driving audience growth and engagement by delivering deeper content experiences to our consumers, while offering the products and marketing expertise our advertisers desire. We expect the execution of this strategy to enable us to continue our evolution from a more traditional print media business to a digitally-focused content platform. Our current portfolio of media assets includes USA TODAY, local media organizations in 45 states in the U.S., and Newsquest, a wholly-owned subsidiary operating in the United Kingdom (the "U.K.") with more than 150 local media brands. We also operate a digital marketing solutions company, branded LOCALiQ, which provides a cloud-based platform of products to enable small and medium-sized businesses to accomplish their marketing goals. In addition, we run what we believe is the largest media-owned events business in the U.S., USA TODAY NETWORK Ventures. Through USA TODAY, our local property network, and Newsquest, we deliver high-quality, trusted content with a commitment to balanced, unbiased journalism, where and when consumers want to engage with it on virtually any device or platform. Additionally, the Company has strong relationships with hundreds of thousands of local and national businesses in both our U.S. and U.K. markets due to our large local and national sales forces and a robust advertising and marketing solutions product suite. The Company reports in two segments, Publishing and Digital Marketing Solutions. We also have a Corporate and other category that includes activities not directly attributable to a specific reportable segment and includes broad corporate functions such as legal, human resources, accounting, analytics, finance, and marketing. A full description of our reportable segments is included in Note 12 — Segment reporting in the notes to the condensed consolidated financial statements. Impacts of the COVID-19 pandemic As a result of the COVID-19 pandemic, we initially experienced a significant decline in Advertising and marketing services revenues, which accelerated the secular declines that we continue to experience. We continue to experience constraints on the sales of single copy newspapers, largely tied to reduced business travel and challenges in permitting and attendance at in-person events. While we have seen COVID-19 related operating trends improve since the second quarter of 2020, which represents the quarter that was most significantly impacted by the pandemic, we expect that the COVID-19 pandemic, and the resulting changes in consumer behavior, will continue to have a slight negative impact on our business and results of operations in the near-term, including lower revenues associated with events and lower sales of single copy newspapers. If the COVID-19 pandemic were to revert to conditions that existed during 2020, including measures to help mitigate and control the spread of the virus, we would expect to experience further negative impacts in Advertising and marketing services and Circulation revenues. Basis of presentation The condensed consolidated financial statements included in this report are unaudited; however, in the opinion of management, they contain all of the adjustments (consisting of those of a normal, recurring nature) considered necessary to present fairly the financial position, results of operations, and cash flows for the periods presented in conformity with U.S. generally accepted accounting principles ("U.S. GAAP") applicable to interim periods. All significant intercompany accounts and transactions have been eliminated in consolidation. The Company consolidates entities that it controls due to ownership of a majority voting interest. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021. Use of estimates The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and footnotes thereto. Actual results could differ materially from those estimates. Significant estimates inherent in the preparation of the condensed consolidated financial statements include pension and postretirement benefit obligation assumptions, income taxes, goodwill and intangible asset impairment analysis, valuation of property, plant and equipment and intangible assets. Recent accounting pronouncements adopted Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In August 2020, the Financial Accounting Standards Board (the "FASB") issued new guidance ("ASU 2020-06") that simplifies the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. In addition to eliminating certain accounting models, the guidance amends the disclosures for convertible instruments and earnings-per-share guidance. It also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. This guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The adoption of this guidance did not have a material impact on the accounting for the Company's $497.1 million in aggregate principal amount of 6.0% Senior Secured Convertible Notes due 2027 issued by the Company on November 17, 2020 (the "2027 Notes"), or the condensed consolidated financial statements. Reference Rate Reform In March 2020, the FASB issued guidance ("ASU 2020-04"), that provides optional expedients and exceptions for contracts, hedging relationships, and other transactions that reference the London Inter-bank Offered Rate ("LIBOR"). ASU 2020-04 is effective prospectively for all entities through December 31, 2022, when the reference rate replacement activity is expected to have been completed. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During Q1 2022, the Company applied the optional expedient for contract modifications to the amendment of its five-year senior secured term loan facility in an aggregate principal amount of $516.0 million (the "New Senior Secured Term Loan") with Citibank N.A., as collateral agent and administrative agent for the lenders. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements. Disclosures by Business Entities about Government Assistance In November 2021, the FASB issued new guidance ("ASU 2021-10") that requires annual disclosures for transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy, including: (i) information about the nature of the transactions and related accounting policy used to account for the transactions; (ii) the line items on the condensed consolidated balance sheets and condensed consolidated statements of operations and comprehensive income (loss) affected by these transactions, including amounts applicable to each line; and (iii) significant terms and conditions of the transactions, including commitments and contingencies. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements. Accounting for Contract Assets and Contract Liabilities from Contracts with Customers in a Business Combination In October 2021, the FASB issued new guidance ("ASU 2021-08") that requires an acquirer to recognize and measure certain contract assets and contract liabilities in a business combination in accordance with ASC 606, "Revenue from Contracts with Customers", rather than at fair value on the acquisition date as required under current U.S. GAAP. This guidance is effective for fiscal years beginning after December 15, 2022, with early adoption permitted, including interim periods within those fiscal years. The early adoption of this guidance effective January 1, 2022 did not have a material impact on the condensed consolidated financial statements. |
Revenues
Revenues | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | NOTE 2 — Revenues Revenues are recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company’s condensed consolidated statements of operations and comprehensive income (loss) present revenues disaggregated by revenue type. Sales taxes and other usage-based taxes are excluded from revenues. The following table presents our revenues disaggregated by source: Three months ended March 31, In thousands 2022 2021 Print advertising $ 173,518 $ 193,196 Digital advertising and marketing services 201,596 195,161 Total advertising and marketing services 375,114 388,357 Circulation 288,602 325,437 Other 84,361 63,290 Total revenues $ 748,077 $ 777,084 For the three months ended March 31, 2022 and 2021, revenues generated from international locations were approximately 8.9% and 7.5% of total revenues, respectively. Deferred revenues The Company records deferred revenues when cash payments are received in advance of the Company’s performance obligation. The Company's primary source of deferred revenues is from circulation subscriptions paid in advance of the service provided, which represents future delivery of publications (the performance obligation) to subscription customers. The Company expects to recognize the revenue related to unsatisfied performance obligations over the next one The Company's payment terms vary by the type and location of the customer and the products or services offered. The period between invoicing and when payment is due is not significant. For certain products or services and customer types, the Company requires payment before the products or services are delivered to the customer. The majority of our subscription customers are billed and pay on monthly terms. The following table presents changes in the deferred revenues balance by type of revenues: Three months ended March 31, 2022 Three months ended March 31, 2021 In thousands Advertising, marketing services, and other Circulation Total Advertising, marketing services, and other Circulation Total Beginning balance $ 60,665 $ 124,173 $ 184,838 $ 51,686 $ 134,321 $ 186,007 Acquisition — 2,388 2,388 — — — Cash receipts 76,125 237,860 313,985 60,117 284,175 344,292 Revenue recognized (75,463) (240,169) (315,632) (58,953) (280,647) (339,600) Ending balance $ 61,327 $ 124,252 $ 185,579 $ 52,850 $ 137,849 $ 190,699 |
Accounts receivable, net
Accounts receivable, net | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Accounts receivable, net | NOTE 3 — Accounts receivable, net The Company performs its evaluation of the collectability of trade receivables based on customer category. For example, trade receivables from individual subscribers to our publications are evaluated separately from trade receivables related to advertising customers. For advertising trade receivables, the Company applies a "black motor formula" methodology as the baseline to calculate the allowance for doubtful accounts. The reserve percentage is calculated as a ratio of total net bad debts (less write-offs and recoveries) for the prior three-year period to total outstanding trade accounts receivable for the same three-year period. The calculated reserve percentage by customer category is applied to the consolidated gross advertising receivable balance, irrespective of aging. In addition, each category has specific reserves for at risk accounts that vary based on the nature of the underlying trade receivables. Due to the short-term nature of our circulation receivables, the Company reserves all receivables aged over 90 days. The following table presents changes in the allowance for doubtful accounts: Three months ended March 31, In thousands 2022 2021 Beginning balance $ 16,470 $ 20,843 Current period provision (2,403) (2,171) Write-offs charged against the allowance (3,868) (2,805) Recoveries of amounts previously written-off 942 1,206 Other 425 51 Ending balance $ 11,566 $ 17,124 The calculation of the allowance considers current economic, industry and customer-specific conditions relative to their respective operating environments in the incremental allowances recorded related to high-risk accounts, bankruptcies, receivables in repayment plan and other aging specific reserves. As a result of this analysis, the Company adjusts specific reserves and the amount of allowable credit as appropriate. The collectability of trade receivables related to advertising, marketing services and other customers depends on a variety of factors, including trends in local, regional or national economic conditions that affect our customers' ability to pay. The advertisers in our newspapers and other publications and related websites are primarily retail businesses that can be significantly affected by regional or national economic downturns and other developments that may impact our ability to collect on the related receivables. Similarly, while circulation revenues related to individual subscribers are primarily prepaid, changes in economic conditions may also affect our ability to collect on amounts owed from single copy circulation customers. For the three months ended March 31, 2022 and 2021, the Company recorded a benefit of $2.4 million and $2.2 million in bad debt expense, respectively. Bad debt expense is included in Selling, general and administrative expenses on the condensed consolidated statements of operations and comprehensive income (loss). For the three months ended March 31, 2022 and 2021, the Company recorded reductions to bad debt expense due to a decrease in required reserves due to lower receivable balances. |
Goodwill and intangible assets
Goodwill and intangible assets | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and intangible assets | NOTE 4 — Goodwill and intangible assets Goodwill and intangible assets consisted of the following: March 31, 2022 December 31, 2021 In thousands Gross carrying amount Accumulated Net carrying Gross carrying amount Accumulated Net carrying Finite-lived intangible assets: Advertiser relationships $ 455,522 $ 163,594 $ 291,928 $ 453,038 $ 153,988 $ 299,050 Other customer relationships 102,798 37,920 64,878 102,486 35,237 67,249 Subscriber relationships 253,890 106,986 146,904 254,162 99,905 154,257 Other intangible assets 68,780 47,519 21,261 68,690 44,291 24,399 Sub-total $ 880,990 $ 356,019 $ 524,971 $ 878,376 $ 333,421 $ 544,955 Indefinite-lived intangible assets: Mastheads 169,550 168,198 Total intangible assets $ 694,521 $ 713,153 Goodwill $ 540,894 $ 533,709 Consistent with the Company’s past practice, the Company performs its annual goodwill and indefinite-lived intangible impairment assessment on the last day of its fiscal second quarter. In addition to the annual impairment test, the Company is required to regularly assess whether a triggering event has occurred under both ASC 350 and/or ASC 360, which would require interim impairment testing. As of March 31, 2022, the Company performed a review of potential impairment indicators and it was determined that no indicators of impairment were present. |
Integration and reorganization
Integration and reorganization costs and asset impairments | 3 Months Ended |
Mar. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Integration and reorganization costs and asset impairments | NOTE 5 — Integration and reorganization costs and asset impairments Over the past several years, the Company has engaged in a series of individual restructuring programs, designed primarily to right-size the Company’s employee base, consolidate facilities and improve operations, including those of recently acquired entities. These initiatives impact all the Company’s operations and can be influenced by the terms of union contracts. Costs related to these programs, which primarily include severance expense, facility consolidation and other restructuring-related expenses, are accrued when probable and reasonably estimable or at the time of program announcement. Severance-related expenses We recorded severance-related expenses by segment as follows: Three months ended March 31, In thousands 2022 2021 Publishing $ 5,177 $ 6,779 Digital Marketing Solutions 9 (57) Corporate and other 174 375 Total $ 5,360 $ 7,097 A rollforward of the accrued severance and related costs included in Accounts payable and accrued expenses on the condensed consolidated balance sheets for the three months ended March 31, 2022 is as follows: In thousands Severance and Beginning balance $ 12,558 Restructuring provision included in integration and reorganization costs 5,360 Cash payments (5,430) Ending balance $ 12,488 The restructuring reserve balance is expected to be paid out over the next twelve months. Facility consolidation and other restructuring-related expenses Facility consolidation and other restructuring-related expenses represent costs for consolidating operations, systems implementation, and outsourcing of corporate functions. We recorded facility consolidation charges and other restructuring-related costs by segment as follows: Three months ended March 31, In thousands 2022 2021 Publishing $ 544 $ 547 Digital Marketing Solutions 142 223 Corporate and other 5,352 5,537 Total $ 6,038 $ 6,307 Accelerated depreciation For the three months ended March 31, 2022 and 2021, the Company incurred accelerated depreciation, a component of Depreciation and amortization expense in the condensed consolidated statements of operations and comprehensive income (loss), of $4.7 million and $9.2 million, respectively, related to the shortened useful life of assets due to the sale of property primarily at the Publishing segment. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 6 — Debt The Company's debt consisted of the following: March 31, 2022 December 31, 2021 (in millions) Principal balance Unamortized original issue discount Unamortized deferred financing costs Carrying value Principal balance Unamortized original issue discount Unamortized deferred financing costs Carrying value New Senior Secured Term Loan $ 504.6 $ (12.0) $ (2.4) $ 490.2 $ 480.1 $ (14.1) $ (2.7) $ 463.3 2026 Senior Notes 377.5 (12.2) (9.6) 355.7 400.0 (13.7) (10.7) 375.6 2027 Notes 485.3 (90.4) (1.9) 393.0 485.3 (93.2) (2.0) 390.1 2024 Notes 3.3 — — 3.3 3.3 — — 3.3 Total debt $ 1,370.7 $ (114.6) $ (13.9) $ 1,242.2 $ 1,368.7 $ (121.0) $ (15.4) $ 1,232.3 Less: Current portion of long-term debt $ (62.9) $ — $ — $ (62.9) $ (69.5) $ — $ — $ (69.5) Non-current portion of long-term debt $ 1,307.8 $ (114.6) $ (13.9) $ 1,179.3 $ 1,299.2 $ (121.0) $ (15.4) $ 1,162.8 New Senior Secured Term Loan On October 15, 2021, Gannett Holdings LLC ("Gannett Holdings"), a wholly-owned subsidiary of the Company, entered into the New Senior Secured Term Loan with Citibank N.A., as collateral agent and administrative agent for the lenders. On January 31, 2022, Gannett Holdings entered into an amendment (the "Term Loan Amendment") to its New Senior Secured Term Loan to provide for new incremental senior secured term loans (the "Incremental Term Loans") in an aggregate principal amount of $50 million. The Incremental Term Loans have substantially identical terms as the New Senior Secured Term Loan and are treated as a single tranche with the New Senior Secured Term Loan. The Term Loan Amendment also amended the New Senior Secured Term Loan to transition the interest rate base from LIBOR to Adjusted Term SOFR and to permit the repurchase of up to $50 million of the Company's common stock, par value $0.01 per share ("Common Stock") under the Stock Repurchase Program (defined below in Note 10 — Supplemental equity information) consummated on or prior to December 31, 2022, in addition to capacity for Gannett Holdings to make restricted payments, including stock repurchases, currently permitted under other provisions of the New Senior Secured Term Loan and our other debt facilities, including the 2026 Senior Secured Notes Indenture and the 2027 Notes Indenture (terms defined below). On March 21, 2022, Gannett Holdings entered into an amendment (the "Second Term Loan Amendment") to its New Senior Secured Term Loan to provide for incremental senior secured term loans in an aggregate principal amount of $22.5 million. The New Senior Secured Term Loan bears interest at a per annum rate equal to Adjusted Term SOFR (which shall not be less than 0.50% per annum) plus a margin of 5.00% or an alternate base rate (which shall not be less than 1.50% per annum) plus a margin equal to 4.00%. Loans under the New Senior Secured Term Loan may be prepaid, at the option of Gannett Holdings, at any time without premium, except a premium equal to 1.00% of the aggregate principal amount of the loans being repaid in connection with certain refinancing or repricing events that reduce the all-in yield applicable to the loans and occur on or before October 15, 2022. In addition, we are required to repay the New Senior Secured Term Loan from time to time with (i) the proceeds of non-ordinary course asset sales and casualty and condemnation events, (ii) the proceeds of indebtedness not permitted under the New Senior Secured Term Loan , and (iii) the aggregate amount of cash and cash equivalents on hand at the Company and its restricted subsidiaries in excess of $100 million at the end of each fiscal year of the Company. The New Senior Secured Term Loan amortizes in equal quarterly installments, beginning June 30, 2022, at a rate equal to 10.00% per annum (or, if the ratio of debt secured on an equal basis with the New Senior Secured Term Loan less unrestricted cash of the Company and its restricted subsidiaries to Consolidated EBITDA (as such terms are defined in the New Senior Secured Term Loan ) (such ratio, the "First Lien Net Leverage Ratio"), for the most recently ended period of four consecutive fiscal quarters is equal to or less than 1.20 to 1.00, 5.00% per annum). All obligations under the New Senior Secured Term Loan are secured by all or substantially all of the assets of the Company and the wholly-owned domestic subsidiaries of the Company (the "New Senior Secured Term Loan Guarantors"). The obligations of Gannett Holdings under the New Senior Secured Term Loan are guaranteed on a senior secured basis by the Company and the New Senior Secured Term Loan Guarantors. The New Senior Secured Term Loan contains usual and customary covenants for credit facilities of this type, including a requirement to have minimum unrestricted cash of $30 million as of the last day of each fiscal quarter, and restricts, among other things, our ability to incur debt, grant liens, sell assets, and make investments and pay dividends, in each case with customary exceptions, including an exception that permits dividends and repurchases of outstanding junior debt or equity in (i) an amount of up to $25 million per fiscal quarter if the First Lien Net Leverage Ratio for such fiscal quarter is equal to or less than 2.00 to 1.00, (ii) an amount of up to $50 million per fiscal quarter if the First Lien Net Leverage Ratio for such fiscal quarter is equal to or less than 1.50 to 1.00, and (iii) an unlimited amount if First Lien Net Leverage Ratio for such fiscal quarter is equal to or less than 1.00 to 1.00. As of March 31, 2022, the Company was in compliance with all of the covenants and obligations under the New Senior Secured Term Loan. The New Senior Secured Term Loan was recorded at carrying value, which approximates fair value in the condensed consolidated balance sheets and was classified as Level 2. For the three months ended March 31, 2022, the Company recognized interest expense of $6.9 million, paid interest expense of $6.9 million and recognized amortization of original issue discount and deferred financing costs of $0.9 million and $0.2 million, respectively, under the New Senior Secured Term Loan. Additionally, during the three months ended March 31, 2022, the Company recognized losses on early extinguishment of debt of approximately $1.4 million related to the write-off of original issue discount and deferred financing costs as a result of early prepayments on the New Senior Secured Term Loan. For the three months ended March 31, 2022, the Company made prepayments, inclusive of both mandatory and optional prepayments, totaling $48.0 million, which were classified as financing activities in the condensed consolidated statements of cash flows. As of March 31, 2022, the effective interest rate for the New Senior Secured Term Loan was 6.3%. Senior Secured Notes due 2026 On October 15, 2021, Gannett Holdings completed a private offering of $400 million aggregate principal amount of 6.00% first lien notes due November 1, 2026 (the "2026 Senior Notes"). The 2026 Senior Notes were issued pursuant to an indenture, dated October 15, 2021 (the "2026 Senior Notes Indenture") among Gannett Holdings, the Company, the guarantors from time to time party thereto (the "2026 Senior Notes Guarantors"), U.S. Bank National Association, as trustee, and U.S. Bank National Association, as collateral agent, registrar, paying agent and authenticating agent. Interest on the 2026 Senior Notes is payable semi-annually in arrears, beginning on May 1, 2022. The 2026 Senior Notes mature on November 1, 2026, unless redeemed or repurchased earlier pursuant to the 2026 Senior Notes Indenture. The 2026 Senior Notes may be redeemed at the option of Gannett Holdings, in whole or in part, at any time and from time to time after November 1, 2023, at the redemption prices set forth in the 2026 Senior Notes Indenture. At any time prior to such date, Gannett Holdings will be entitled at its option to redeem all, but not less than all, of the 2026 Senior Notes at the "make-whole" redemption price set forth in the 2026 Senior Notes Indenture. Additionally, at any time prior to November 1, 2023, Gannett Holdings may, on one or more occasions, redeem up to 40% of the aggregate principal amount of the 2026 Senior Notes at the redemption price set forth in the 2026 Senior Notes Indenture with the net cash proceeds of certain equity offerings. If certain changes of control with respect to Gannett Holdings or the Company occur, Gannett Holdings must offer to purchase the 2026 Senior Notes at a purchase price in cash equal to 101% of the principal amount thereof on the date of purchase, plus accrued and unpaid interest to, but excluding, the date of purchase. In addition, during any twelve-month period commencing on or after October 15, 2021 and ending prior to November 1, 2023, up to 10% of the aggregate principal amount of the 2026 Senior Notes issued under the 2026 Senior Notes Indenture may be redeemed at a purchase price equal to 103% of the aggregate principal amount of the 2026 Senior Notes to be redeemed, plus accrued and unpaid interest, if any, to but excluding, the redemption date. The 2026 Senior Notes are unconditionally guaranteed, jointly and severally, on a senior secured basis by the 2026 Senior Notes Guarantors. The 2026 Senior Notes and such guarantees are secured on a first-priority basis by the collateral, consisting of substantially all of the assets of Gannett Holdings and the 2026 Senior Notes Guarantors, subject to certain intercreditor arrangements. The 2026 Senior Notes Indenture limits the Company and its restricted subsidiaries’ ability to, among other things, make investments, loans, advances, guarantees and acquisitions; incur or guarantee additional debt and issue certain disqualified equity interests and preferred stock; make certain restricted payments, including a limit on dividends on equity securities or payments to redeem, repurchase or retire equity securities or other indebtedness; dispose of assets; create liens on assets to secure debt; engage in transactions with affiliates; enter into certain restrictive agreements; and consolidate, merge, sell or otherwise dispose of all or substantially all of their or a 2026 Senior Notes Guarantor’s assets. These covenants are subject to a number of limitations and exceptions. The 2026 Senior Notes Indenture also contains customary events of default. The 2026 Senior Notes are classified as Level 2 because it is measured at fair value using commonly accepted valuation methodologies and indirectly observable, market-based risk measurements and historical data, and a review of prices and terms available for similar debt instruments. The unamortized original issue discount and unamortized deferred financing costs will be amortized over the remaining contractual life of the 2026 Senior Notes. For the three months ended March 31, 2022, the Company recognized interest expense of $6.0 million, paid interest expense of $0.6 million and recognized amortization of $1.3 million of deferred financing costs in connection with the 2026 Senior Notes. As of March 31, 2022, the effective interest rate on the 2026 Senior Notes was 7.3%. In March 2022, the Company entered into a privately negotiated agreement with certain holders of our 2026 Senior Notes and repurchased $22.5 million principal of our outstanding 2026 Senior Notes in exchange for $22.5 million of New Senior Secured Term Loans (discussed above). The repurchase was treated as an extinguishment of a portion of the 2026 Senior Notes and as a result, for the three months ended March 31, 2022, the Company recognized losses on early extinguishment of debt of approximately $1.3 million related to the write-off of deferred financing costs. Senior Secured Convertible Notes due 2027 The 2027 Notes were issued pursuant to an Indenture dated as of November 17, 2020, as amended by the First Supplemental Indenture dated as of December 21, 2020 and the Second Supplemental Indenture dated as of February 9, 2021 (collectively, the "2027 Notes Indenture"), between the Company and U.S. Bank National Association, as trustee. In connection with the issuance of the 2027 Notes, the Company entered into an Investor Agreement (the "Investor Agreement") with the holders of the 2027 Notes (the "Holders") establishing certain terms and conditions concerning the rights and restrictions on the Holders with respect to the Holders' ownership of the 2027 Notes. The Company also entered into an amendment to the Registration Rights Agreement dated November 19, 2019, between the Company and FIG LLC, the Company's former manager. Interest on the 2027 Notes is payable semi-annually in arrears. The 2027 Notes mature on December 1, 2027, unless earlier repurchased or converted. The 2027 Notes may be converted at any time by the holders into cash, shares of the Company’s Common Stock or any combination of cash and Common Stock, at the Company's election. The initial conversion rate is 200 shares of Common Stock per $1,000 principal amount of the 2027 Notes, which is equal to a conversion price of $5.00 per share of Common Stock (the "Conversion Price"). The conversion rate is subject to customary adjustment provisions as provided in the 2027 Notes Indenture. In addition, the conversion rate will be subject to adjustment in the event of any issuance or sale of Common Stock (or securities convertible into Common Stock) at a price equal to or less than the Conversion Price in order to ensure that following such issuance or sale, the 2027 Notes would be convertible into approximately 42% (adjusted for repurchases and certain other events that reduce the outstanding amount of the 2027 Notes) of the Common Stock after giving effect to such issuance or sale (assuming the initial principal amount of the 2027 Notes remains outstanding). After giving effect to the repurchase of $11.8 million in aggregate principal outstanding of the 2027 Notes during the year ended December 31, 2021, such percentage is approximately 41%. Upon the occurrence of a "Make-Whole Fundamental Change" (as defined in the 2027 Notes Indenture), the Company will in certain circumstances increase the conversion rate for a specified period of time. If a "Fundamental Change" (as defined in the 2027 Notes Indenture) occurs, the Company will be required to offer to repurchase the 2027 Notes at a repurchase price of 110% of the principal amount thereof. Holders of the 2027 Notes will have the right to put up to approximately $100 million of the 2027 Notes at par on or after the date that is 91 days after the maturity date of the New Senior Secured Term Loan. Under the 2027 Notes Indenture, the Company can only pay cash dividends up to an agreed-upon amount, provided the ratio of consolidated debt to EBITDA (as such terms are defined in the 2027 Notes Indenture) does not exceed a specified ratio. In addition, the 2027 Notes Indenture provides that, at any time that the Company’s Total Gross Leverage Ratio (as defined in the 2027 Notes Indenture) exceeds 1.5 and the Company approves the declaration of a dividend, the Company must offer to purchase a principal amount of 2027 Notes equal to the proposed amount of the dividend. Until the four-year anniversary of the issuance date, the Company will have the right to redeem for cash up to approximately $99.4 million of the 2027 Notes at a redemption price of 130% of the principal amount thereof, with such amount reduced ratably by any principal amount of 2027 Notes that has been converted by the holders or redeemed or purchased by the Company. The 2027 Notes are guaranteed by Gannett Holdings and any subsidiaries of the Company that guarantee the New Senior Secured Term Loan. The 2027 Notes are secured by the same collateral that secures the New Senior Secured Term Loan. The 2027 Notes rank as senior secured debt of the Company and are secured by a second priority lien on the same collateral package that secured the indebtedness incurred in connection with the New Senior Secured Term Loan. The 2027 Notes Indenture includes affirmative and negative covenants, including limitations on liens, indebtedness, dispositions, loan, advances and investors, sale and leaseback transactions, restricted payments, transactions with affiliates, restrictions on dividends and other payment restrictions affecting restricted subsidiaries, negative pledges and modifications to certain agreements. The 2027 Notes Indenture also requires that the Company maintain, as of the last day of each fiscal quarter, at least $30.0 million of Qualified Cash (as defined in the 2027 Notes Indenture). The 2027 Notes Indenture includes customary events of default. The 2027 Notes has two components: (i) a debt component, and (ii) an equity component. The debt component of the 2027 Notes is classified as Level 2 because it is measured at fair value using commonly accepted valuation methodologies and indirectly observable, market-based risk measurements and historical data, and a review of prices and terms available for similar debt instruments that do not contain a conversion feature. The fair value of the equity component is classified as Level 3 because it is measured at fair value using a binomial lattice model using assumptions based on market information and historical data, and significant unobservable inputs. As of March 31, 2022 and December 31, 2021, the amount of the conversion feature recorded in Additional paid-in capital was $279.6 million. For the three months ended March 31, 2022 and 2021, the Company recognized amortization of the original issue discount of $2.9 million and $2.3 million, respectively, and for the three months ended March 31, 2022, recorded amortization of deferred financing costs of $0.1 million in connection with the 2027 Notes. Amortization of deferred financing costs related to the 2027 Notes was immaterial for the three months ended March 31, 2021. In addition, for the three months ended March 31, 2022 and 2021, the Company recognized interest expense of $7.2 million and $7.5 million, respectively, in connection with the 2027 Notes. The effective interest rate on the liability component of the 2027 Notes was 10.5% as of both March 31, 2022 and 2021. For the three months ended March 31, 2022, no shares were issued upon conversion, exercise, or satisfaction of the required conditions. Refer to Note 10 — Supplemental equity information for details on the convertible debt's impact to diluted earnings per share under the if-converted method. Senior Convertible Notes due 2024 |
Pensions and other postretireme
Pensions and other postretirement benefit plans | 3 Months Ended |
Mar. 31, 2022 | |
Retirement Benefits [Abstract] | |
Pensions and other postretirement benefit plans | NOTE 7 — Pensions and other postretirement benefit plans We, along with our subsidiaries, sponsor various defined benefit retirement plans, including plans established under collective bargaining agreements. Our retirement plans include the Gannett Retirement Plan (the "GR Plan"), the Newsquest and Romanes Pension Schemes in the U.K., and other defined benefit and defined contribution plans. We also provide health care and life insurance benefits to certain retired employees who meet age and service requirements. Retirement plan costs include the following components: Pension benefits Postretirement benefits Three months ended March 31, Three months ended March 31, In thousands 2022 2021 2022 2021 Operating expenses: Service cost - benefits earned during the period $ 475 $ 511 $ 15 $ 31 Non-operating expenses: Interest cost on benefit obligation 18,649 17,031 451 501 Expected return on plan assets (37,281) (41,430) — — Amortization of actuarial loss (gain) 20 35 (52) (15) Total non-operating (benefit) expenses $ (18,612) $ (24,364) $ 399 $ 486 Total expense (benefit) for retirement plans $ (18,137) $ (23,853) $ 414 $ 517 |
Fair value measurement
Fair value measurement | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair value measurement | NOTE 8 — Fair value measurement In accordance with ASC 820, "Fair Value Measurement," fair value measurements are required to be disclosed using a three-tiered fair value hierarchy which distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Level 1 refers to fair values determined based on quoted prices in active markets for identical assets or liabilities, Level 2 refers to fair values estimated using significant other observable inputs and Level 3 includes fair values estimated using significant unobservable inputs. As of March 31, 2022 and December 31, 2021, assets and liabilities recorded at fair value and measured on a recurring basis primarily consist of pension plan assets. As permitted by U.S. GAAP, we use net asset values ("NAV") as a practical expedient to determine the fair value of certain investments. These investments measured at NAV have not been classified in the fair value hierarchy. Refer to Note 6 — Debt for additional discussion regarding fair value of the New Senior Secured Term Loan, the 2026 Senior Notes, the 2027 Notes and the 2024 Notes. Certain assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). Assets held for sale (Level 3) are measured on a nonrecurring basis and are evaluated using executed purchase agreements, letters of intent or third-party valuation analyses when certain circumstances arise. Assets held for sale totaled $5.9 million and $3.5 million as of March 31, 2022 and December 31, 2021, respectively. The Company performs its annual goodwill and indefinite-lived intangible impairment assessment during the second quarter of the year. Any resulting asset impairment would require that the asset be recorded at its fair value. The resulting fair value measurements of the assets are considered to be Level 3 measurements. Refer to Note 4 — Goodwill and intangible assets for additional discussion regarding the annual impairment assessment. |
Income taxes
Income taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income taxes | NOTE 9 — Income taxes The following table outlines our pre-tax net loss and income tax amounts: Three months ended March 31, In thousands 2022 2021 Loss before income taxes $ (10,709) $ (151,810) Benefit for income taxes (7,607) (9,109) Effective tax rate 71.0 % 6.0 % The benefit for income taxes for the three months ended March 31, 2022 was mainly driven by pre-tax loss and the current year tax benefit from the release of tax reserves, partially offset by the creation of valuation allowances on non-deductible interest expense carryforwards. The provision was calculated using an estimated annual effective tax rate of 41.25%. The estimated annual effective tax rate is based on the projected tax expense for the full year. The estimated annual effective tax rate is principally impacted by the creation of valuation allowances on non-deductible interest expense carryforwards, the global intangible low taxed income inclusion from our wholly-owned U.K. subsidiary, and state and foreign income tax expense. The total amount of unrecognized tax benefits that, if recognized, may impact the effective tax rate was approximately $49.0 million and $45.0 million as of March 31, 2022 and December 31, 2021, respectively. The amount of accrued interest and penalties payable related to unrecognized tax benefits was $3.8 million and $3.7 million as of March 31, 2022 and December 31, 2021, respectively. It is reasonably possible that further adjustments to our unrecognized tax benefits may be made within the next twelve months due to audit settlements and regulatory interpretations of existing tax laws. At this time, an estimate of potential change to the amount of unrecognized tax benefits cannot be made. The benefit for income taxes for the three months ended March 31, 2021 was mainly driven by the pre-tax net loss generated during the quarter and was calculated using the estimated annual effective tax rate of 43.4%. The estimated annual effective tax rate is based on the projected tax expense for the full year. The tax benefit for the three months ended March 31, 2021 is lower than the 21% statutory federal rate due to the impact of the derivative revaluation, which is nondeductible for tax purposes, partially offset by the creation of valuation allowances on non-deductible interest expense carryforwards as well as state income tax and foreign tax expense. |
Supplemental equity information
Supplemental equity information | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Supplemental equity information | NOTE 10 — Supplemental equity information Loss per share The following table sets forth the information to compute basic and diluted loss per share: Three months ended March 31, In thousands, except per share data 2022 2021 Net loss attributable to Gannett $ (2,967) $ (142,316) Basic weighted average shares outstanding 136,425 134,075 Diluted weighted average shares outstanding 136,425 134,075 Loss per share attributable to Gannett - basic $ (0.02) $ (1.06) Loss per share attributable to Gannett - diluted $ (0.02) $ (1.06) The Company excluded the following securities from the computation of diluted income per share because their effect would have been antidilutive: Three months ended March 31, In thousands 2022 2021 Warrants 845 845 Stock options 6,068 6,068 Restricted stock grants (a) 12,403 10,811 2027 Notes (b) 97,057 99,419 (a) Includes Restricted stock awards ("RSAs"), Restricted stock units ("RSUs") and Performance stock units ("PSUs"). (b) Represents the total number of shares that would be convertible at March 31, 2022 and 2021 as stipulated in the 2027 Notes Indenture. The 2027 Notes may be converted at any time by the holders into cash, shares of the Company’s Common Stock or any combination of cash and Common Stock, at the Company’s election. Conversion of all of the 2027 Notes into Common Stock (assuming the maximum increase in the conversion rate as a result of a Make-Whole Fundamental Change but no other adjustments to the conversion rate), would result in the issuance of an aggregate of 287.2 million shares of Common Stock. The Company has excluded approximately 190.1 million shares from the loss per share calculation, representing the difference between the total number of shares that would be convertible at March 31, 2022 and the total number of shares issuable assuming the maximum increase in the conversion rate. Share-based compensation The Company recognized compensation cost for share-based payments of $3.4 million for each of the three months ended March 31, 2022 and 2021. The total compensation cost not yet recognized related to non-vested awards as of March 31, 2022 was $48.7 million, which is expected to be recognized over a weighted-average period of 2.4 years through September 2024. Equity awards During the three months ended March 31, 2022, a total of 5.7 million RSAs were granted. RSAs generally vest 33.3% on the first and second anniversary of the date of grant, and 33.4% on the third anniversary of the date of grant, subject to the participants' continued employment with the Company and the terms of the applicable award agreement. The weighted average grant date fair value of RSAs granted during the three months ended March 31, 2022 was $4.63. During the three months ended March 31, 2022, a total of 0.3 million PSUs were granted. PSUs are subject to the achievement of certain performance goals over the eligible period. Compensation cost ultimately recognized for these PSUs will equal the grant-date fair market value of the unit that coincides with the actual outcome of the performance conditions. On an interim basis, we record compensation cost based on the expected level of achievement of the performance conditions. Preferred stock The Company has authorized 300,000 shares of preferred stock, par value $0.01 per share, issuable in one or more series designated by the Board, of which 150,000 shares have been designated as Series A Junior Participating Preferred Stock, none of which are outstanding. There were no issuances of preferred stock during the three months ended March 31, 2022. Stock Repurchase Program On February 1, 2022, the Board of Directors authorized the repurchase of up to $100 million of the Company's Common Stock (the "Stock Repurchase Program"). Repurchases may be made from time to time through open market purchases or privately negotiated transactions, pursuant to one or more plans established pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934 or by means of one or more tender offers, in each case, as permitted by securities laws and other legal requirements. The amount and timing of the purchases will depend on a number of factors including, but not limited to, the price and availability of the Company’s shares, trading volume, capital availability, Company performance and general economic and market conditions. The Stock Repurchase Program may be suspended or discontinued at any time. As of March 31, 2022, there were no repurchases of Common Stock under the Stock Repurchase Program. Accumulated other comprehensive income (loss) The following tables summarize the components of, and the changes in, Accumulated other comprehensive income (loss), net of tax for the three months ended March 31, 2022 and 2021: Three months ended March 31, 2022 Three months ended March 31, 2021 In thousands Pension and postretirement plans Foreign currency translation Total Pension and postretirement plans Foreign currency translation Total Beginning balance $ 50,870 $ 9,128 $ 59,998 $ 40,441 $ 9,732 $ 50,173 Other comprehensive income (loss) before reclassifications (811) (7,556) (8,367) 371 3,037 3,408 Amounts reclassified from accumulated other comprehensive income (loss) (a)(b) (24) — (24) 15 — 15 Net current period other comprehensive income (loss), net of taxes (835) (7,556) (8,391) 386 3,037 3,423 Ending balance $ 50,035 $ 1,572 $ 51,607 $ 40,827 $ 12,769 $ 53,596 (a) This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost. See Note 7 — Pensions and other postretirement benefit plans. (b) Amounts reclassified from accumulated other comprehensive loss are recorded net of tax impacts of $8 thousand and $5 thousand for the three months ended March 31, 2022 and 2021, respectively. |
Commitments, contingencies and
Commitments, contingencies and other matters | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, contingencies and other matters | NOTE 11 — Commitments, contingencies and other matters Legal Proceedings The Company is and may become involved from time to time in legal proceedings in the ordinary course of its business, including but not limited to matters such as libel, invasion of privacy, intellectual property infringement, wrongful termination actions, complaints alleging employment discrimination, and regulatory investigations and inquiries. In addition, the Company is involved from time to time in governmental and administrative proceedings concerning employment, labor, environmental, and other claims. Insurance coverage mitigates potential loss for certain of these matters. Historically, such claims and proceedings have not had a material adverse effect on the Company’s consolidated results of operations or financial position. We are also defendants in judicial and administrative proceedings involving matters incidental to our business. Although the Company is unable to predict with certainty the eventual outcome of any litigation, regulatory investigation or inquiry, in the opinion of management, the Company does not expect its current and any threatened legal proceedings to have a material adverse effect on the Company’s business, financial position or consolidated results of operations. Given the inherent unpredictability of these types of proceedings, however, it is possible that future adverse outcomes could have a material effect on the Company’s financial results. |
Segment reporting
Segment reporting | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment reporting | NOTE 12 — Segment reporting We define our reportable segments based on the way the Chief Operating Decision Maker ("CODM"), which is our Chief Executive Officer, manages the operations for purposes of allocating resources and assessing performance. Our reportable segments include the following: • Publishing is comprised of our portfolio of local, regional, national, and international newspaper publishers. The results of this segment include Advertising and marketing services revenues from local, classified, and national advertising across multiple platforms, including print, online, mobile, and tablet as well as niche publications, Circulation revenues from home delivery, digital distribution and single copy sales of our publications, and Other revenues, mainly from commercial printing, distribution arrangements, revenues from our events business, digital content syndication and affiliate revenues, and third-party newsprint sales. The Publishing reportable segment is an aggregation of two operating segments: Domestic Publishing and U.K. Publishing. • Digital Marketing Solutions is comprised of our digital marketing solutions subsidiary, branded LOCALiQ. 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, customer relationship management, and software-as-a-service solutions. In addition to the reportable segments above, we have a Corporate and other category that includes activities not directly attributable to a specific segment. This category primarily consists of broad corporate functions, including legal, human resources, accounting, finance and marketing as well as other general business costs. In the ordinary course of business, our reportable segments enter into transactions with one another. While intersegment transactions are treated like third-party transactions to determine segment performance, the revenues and expenses recognized by the segment that is the counterparty to the transaction are eliminated in consolidation and do not affect consolidated results. The CODM uses Adjusted EBITDA and Adjusted EBITDA margin to evaluate the performance of the segments and allocate resources. Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial performance measures we believe offer a useful view of the overall operation of our businesses and may be different than similarly-titled measures used by other companies. We define Adjusted EBITDA as Net income (loss) attributable to Gannett before (1) Income tax expense (benefit), (2) Interest expense, (3) Gains or losses on the early extinguishment of debt, (4) Non-operating pension income, (5) Loss on convertible notes derivative, (6) Depreciation and amortization, (7) Integration and reorganization costs, (8) Other operating expenses, including third-party debt expenses and acquisition costs, (9) Asset impairments, (10) Goodwill and intangible impairments, (11) Gains or losses on the sale or disposal of assets, (12) Share-based compensation, and (13) certain other non-recurring charges. We define Adjusted EBITDA margin as Adjusted EBITDA divided by total Operating revenues. Management considers Adjusted EBITDA and Adjusted EBITDA margin to be important metrics to evaluate and compare the ongoing operating performance of our segments on a consistent basis across reporting periods as they eliminate the effect of items that we do not believe are indicative of each segment's core operating performance. The following tables present our segment information: Three months ended March 31, 2022 In thousands Publishing Digital Marketing Solutions Corporate and other Intersegment Eliminations Consolidated Advertising and marketing services - external sales $ 265,405 $ 109,709 $ — $ — $ 375,114 Advertising and marketing services - intersegment sales 33,357 — — (33,357) — Circulation 288,602 — — — 288,602 Other 83,055 — 1,306 — 84,361 Total operating revenues $ 670,419 $ 109,709 $ 1,306 $ (33,357) $ 748,077 Adjusted EBITDA (non-GAAP basis) $ 68,648 $ 11,180 $ (15,657) $ — $ 64,171 Adjusted EBITDA margin (non-GAAP basis) 10.2 % 10.2 % NM NM 8.6 % NM indicates not meaningful. Three months ended March 31, 2021 In thousands Publishing Digital Marketing Solutions Corporate and other Intersegment Eliminations Consolidated Advertising and marketing services - external sales $ 286,454 $ 101,376 $ 527 $ — $ 388,357 Advertising and marketing services - intersegment sales 27,856 — — (27,856) — Circulation 325,436 — 1 — 325,437 Other 59,839 905 2,546 — 63,290 Total operating revenues $ 699,585 $ 102,281 $ 3,074 $ (27,856) $ 777,084 Adjusted EBITDA (non-GAAP basis) $ 102,208 $ 9,172 $ (10,915) $ — $ 100,465 Adjusted EBITDA margin (non-GAAP basis) 14.6 % 9.0 % NM NM 12.9 % NM indicates not meaningful. The table below shows the reconciliation of Net loss attributable to Gannett to Adjusted EBITDA and Net loss attributable to Gannett margin to Adjusted EBITDA margin: Three months ended March 31, In thousands 2022 2021 Net loss attributable to Gannett $ (2,967) $ (142,316) Benefit for income taxes (7,607) (9,109) Interest expense 26,006 39,503 Loss on early extinguishment of debt 2,743 19,401 Non-operating pension income (18,213) (23,878) Loss on convertible notes derivative — 126,600 Depreciation and amortization 47,783 58,103 Integration and reorganization costs 11,398 13,404 Other operating expenses 1,102 10,576 Asset impairments 854 833 (Gain) loss on sale or disposal of assets, net (2,804) 4,745 Share-based compensation expense 3,393 3,423 Other Items 2,483 (820) Adjusted EBITDA (non-GAAP basis) $ 64,171 $ 100,465 Net loss attributable to Gannett margin (0.4) % (18.3) % Adjusted EBITDA margin (non-GAAP basis) 8.6 % 12.9 % |
Other supplemental information
Other supplemental information | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Other supplemental information | NOTE 13 — Other supplemental information Cash and cash equivalents, including restricted cash Cash equivalents represent highly liquid certificates of deposit which have original maturities of three months or less. Restricted cash is held as cash collateral for certain business operations. Restricted cash primarily consists of funding for letters of credit and cash held in an irrevocable grantor trust for our deferred compensation plans. The restrictions will lapse when benefits are paid to plan participants and their beneficiaries as specified in the plans. The following table presents a reconciliation of cash, cash equivalents and restricted cash: March 31, In thousands 2022 2021 Cash and cash equivalents $ 152,191 $ 163,505 Restricted cash included in prepaid expenses and other current assets 1,105 8,999 Restricted cash included in other assets 11,722 23,669 Total cash, cash equivalents and restricted cash $ 165,018 $ 196,173 Supplemental cash flow information The following table presents supplemental cash flow information, including non-cash investing and financing activities: Three months ended March 31, In thousands 2022 2021 Cash paid for taxes, net of refunds $ 846 $ (997) Cash paid for interest 7,531 13,528 Non-cash investing and financing activities: Accrued capital expenditures $ 1,160 $ 627 Accounts payable and accrued liabilities A breakout of Accounts payable and accrued liabilities is presented below: In thousands March 31, 2022 December 31, 2021 Accounts payable $ 138,045 $ 157,257 Compensation 106,611 107,585 Taxes (primarily property and sales taxes) 19,887 26,042 Benefits 21,052 21,056 Interest 20,193 7,577 Other 40,580 37,497 Accounts payable and accrued liabilities $ 346,368 $ 357,014 |
Description of business and b_2
Description of business and basis of presentation (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The condensed consolidated financial statements included in this report are unaudited; however, in the opinion of management, they contain all of the adjustments (consisting of those of a normal, recurring nature) considered necessary to present fairly the financial position, results of operations, and cash flows for the periods presented in conformity with U.S. generally accepted accounting principles ("U.S. GAAP") applicable to interim periods. All significant intercompany accounts and transactions have been eliminated in consolidation. The Company consolidates entities that it controls due to ownership of a majority voting interest. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021. |
Use of estimates | Use of estimates The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and footnotes thereto. Actual results could differ materially from those estimates. |
Recent accounting pronouncements adopted and Recent accounting pronouncements not yet adopted | Recent accounting pronouncements adopted Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In August 2020, the Financial Accounting Standards Board (the "FASB") issued new guidance ("ASU 2020-06") that simplifies the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. In addition to eliminating certain accounting models, the guidance amends the disclosures for convertible instruments and earnings-per-share guidance. It also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. This guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The adoption of this guidance did not have a material impact on the accounting for the Company's $497.1 million in aggregate principal amount of 6.0% Senior Secured Convertible Notes due 2027 issued by the Company on November 17, 2020 (the "2027 Notes"), or the condensed consolidated financial statements. Reference Rate Reform In March 2020, the FASB issued guidance ("ASU 2020-04"), that provides optional expedients and exceptions for contracts, hedging relationships, and other transactions that reference the London Inter-bank Offered Rate ("LIBOR"). ASU 2020-04 is effective prospectively for all entities through December 31, 2022, when the reference rate replacement activity is expected to have been completed. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During Q1 2022, the Company applied the optional expedient for contract modifications to the amendment of its five-year senior secured term loan facility in an aggregate principal amount of $516.0 million (the "New Senior Secured Term Loan") with Citibank N.A., as collateral agent and administrative agent for the lenders. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements. Disclosures by Business Entities about Government Assistance In November 2021, the FASB issued new guidance ("ASU 2021-10") that requires annual disclosures for transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy, including: (i) information about the nature of the transactions and related accounting policy used to account for the transactions; (ii) the line items on the condensed consolidated balance sheets and condensed consolidated statements of operations and comprehensive income (loss) affected by these transactions, including amounts applicable to each line; and (iii) significant terms and conditions of the transactions, including commitments and contingencies. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements. Accounting for Contract Assets and Contract Liabilities from Contracts with Customers in a Business Combination In October 2021, the FASB issued new guidance ("ASU 2021-08") that requires an acquirer to recognize and measure certain contract assets and contract liabilities in a business combination in accordance with ASC 606, "Revenue from Contracts with Customers", rather than at fair value on the acquisition date as required under current U.S. GAAP. This guidance is effective for fiscal years beginning after December 15, 2022, with early adoption permitted, including interim periods within those fiscal years. The early adoption of this guidance effective January 1, 2022 did not have a material impact on the condensed consolidated financial statements. |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | The following table presents our revenues disaggregated by source: Three months ended March 31, In thousands 2022 2021 Print advertising $ 173,518 $ 193,196 Digital advertising and marketing services 201,596 195,161 Total advertising and marketing services 375,114 388,357 Circulation 288,602 325,437 Other 84,361 63,290 Total revenues $ 748,077 $ 777,084 |
Schedule of deferred revenue | The following table presents changes in the deferred revenues balance by type of revenues: Three months ended March 31, 2022 Three months ended March 31, 2021 In thousands Advertising, marketing services, and other Circulation Total Advertising, marketing services, and other Circulation Total Beginning balance $ 60,665 $ 124,173 $ 184,838 $ 51,686 $ 134,321 $ 186,007 Acquisition — 2,388 2,388 — — — Cash receipts 76,125 237,860 313,985 60,117 284,175 344,292 Revenue recognized (75,463) (240,169) (315,632) (58,953) (280,647) (339,600) Ending balance $ 61,327 $ 124,252 $ 185,579 $ 52,850 $ 137,849 $ 190,699 |
Accounts receivable, net (Table
Accounts receivable, net (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Schedule of allowance for doubtful accounts | The following table presents changes in the allowance for doubtful accounts: Three months ended March 31, In thousands 2022 2021 Beginning balance $ 16,470 $ 20,843 Current period provision (2,403) (2,171) Write-offs charged against the allowance (3,868) (2,805) Recoveries of amounts previously written-off 942 1,206 Other 425 51 Ending balance $ 11,566 $ 17,124 |
Goodwill and intangible assets
Goodwill and intangible assets (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill and intangible assets | Goodwill and intangible assets consisted of the following: March 31, 2022 December 31, 2021 In thousands Gross carrying amount Accumulated Net carrying Gross carrying amount Accumulated Net carrying Finite-lived intangible assets: Advertiser relationships $ 455,522 $ 163,594 $ 291,928 $ 453,038 $ 153,988 $ 299,050 Other customer relationships 102,798 37,920 64,878 102,486 35,237 67,249 Subscriber relationships 253,890 106,986 146,904 254,162 99,905 154,257 Other intangible assets 68,780 47,519 21,261 68,690 44,291 24,399 Sub-total $ 880,990 $ 356,019 $ 524,971 $ 878,376 $ 333,421 $ 544,955 Indefinite-lived intangible assets: Mastheads 169,550 168,198 Total intangible assets $ 694,521 $ 713,153 Goodwill $ 540,894 $ 533,709 |
Integration and reorganizatio_2
Integration and reorganization costs and asset impairments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring and related costs | We recorded severance-related expenses by segment as follows: Three months ended March 31, In thousands 2022 2021 Publishing $ 5,177 $ 6,779 Digital Marketing Solutions 9 (57) Corporate and other 174 375 Total $ 5,360 $ 7,097 A rollforward of the accrued severance and related costs included in Accounts payable and accrued expenses on the condensed consolidated balance sheets for the three months ended March 31, 2022 is as follows: In thousands Severance and Beginning balance $ 12,558 Restructuring provision included in integration and reorganization costs 5,360 Cash payments (5,430) Ending balance $ 12,488 |
Schedule of consolidation charges and accelerated depreciation | We recorded facility consolidation charges and other restructuring-related costs by segment as follows: Three months ended March 31, In thousands 2022 2021 Publishing $ 544 $ 547 Digital Marketing Solutions 142 223 Corporate and other 5,352 5,537 Total $ 6,038 $ 6,307 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of debt | The Company's debt consisted of the following: March 31, 2022 December 31, 2021 (in millions) Principal balance Unamortized original issue discount Unamortized deferred financing costs Carrying value Principal balance Unamortized original issue discount Unamortized deferred financing costs Carrying value New Senior Secured Term Loan $ 504.6 $ (12.0) $ (2.4) $ 490.2 $ 480.1 $ (14.1) $ (2.7) $ 463.3 2026 Senior Notes 377.5 (12.2) (9.6) 355.7 400.0 (13.7) (10.7) 375.6 2027 Notes 485.3 (90.4) (1.9) 393.0 485.3 (93.2) (2.0) 390.1 2024 Notes 3.3 — — 3.3 3.3 — — 3.3 Total debt $ 1,370.7 $ (114.6) $ (13.9) $ 1,242.2 $ 1,368.7 $ (121.0) $ (15.4) $ 1,232.3 Less: Current portion of long-term debt $ (62.9) $ — $ — $ (62.9) $ (69.5) $ — $ — $ (69.5) Non-current portion of long-term debt $ 1,307.8 $ (114.6) $ (13.9) $ 1,179.3 $ 1,299.2 $ (121.0) $ (15.4) $ 1,162.8 |
Pensions and other postretire_2
Pensions and other postretirement benefit plans (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Retirement Benefits [Abstract] | |
Summary of retirement plan costs | Retirement plan costs include the following components: Pension benefits Postretirement benefits Three months ended March 31, Three months ended March 31, In thousands 2022 2021 2022 2021 Operating expenses: Service cost - benefits earned during the period $ 475 $ 511 $ 15 $ 31 Non-operating expenses: Interest cost on benefit obligation 18,649 17,031 451 501 Expected return on plan assets (37,281) (41,430) — — Amortization of actuarial loss (gain) 20 35 (52) (15) Total non-operating (benefit) expenses $ (18,612) $ (24,364) $ 399 $ 486 Total expense (benefit) for retirement plans $ (18,137) $ (23,853) $ 414 $ 517 |
Income taxes (Tables)
Income taxes (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense (benefit) | The following table outlines our pre-tax net loss and income tax amounts: Three months ended March 31, In thousands 2022 2021 Loss before income taxes $ (10,709) $ (151,810) Benefit for income taxes (7,607) (9,109) Effective tax rate 71.0 % 6.0 % |
Supplemental equity informati_2
Supplemental equity information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Schedule of loss per share (basic and diluted) | The following table sets forth the information to compute basic and diluted loss per share: Three months ended March 31, In thousands, except per share data 2022 2021 Net loss attributable to Gannett $ (2,967) $ (142,316) Basic weighted average shares outstanding 136,425 134,075 Diluted weighted average shares outstanding 136,425 134,075 Loss per share attributable to Gannett - basic $ (0.02) $ (1.06) Loss per share attributable to Gannett - diluted $ (0.02) $ (1.06) |
Schedule of securities from computation of diluted income per share | The Company excluded the following securities from the computation of diluted income per share because their effect would have been antidilutive: Three months ended March 31, In thousands 2022 2021 Warrants 845 845 Stock options 6,068 6,068 Restricted stock grants (a) 12,403 10,811 2027 Notes (b) 97,057 99,419 (a) Includes Restricted stock awards ("RSAs"), Restricted stock units ("RSUs") and Performance stock units ("PSUs"). (b) Represents the total number of shares that would be convertible at March 31, 2022 and 2021 as stipulated in the 2027 Notes Indenture. |
Schedule of accumulated other comprehensive income (loss) | The following tables summarize the components of, and the changes in, Accumulated other comprehensive income (loss), net of tax for the three months ended March 31, 2022 and 2021: Three months ended March 31, 2022 Three months ended March 31, 2021 In thousands Pension and postretirement plans Foreign currency translation Total Pension and postretirement plans Foreign currency translation Total Beginning balance $ 50,870 $ 9,128 $ 59,998 $ 40,441 $ 9,732 $ 50,173 Other comprehensive income (loss) before reclassifications (811) (7,556) (8,367) 371 3,037 3,408 Amounts reclassified from accumulated other comprehensive income (loss) (a)(b) (24) — (24) 15 — 15 Net current period other comprehensive income (loss), net of taxes (835) (7,556) (8,391) 386 3,037 3,423 Ending balance $ 50,035 $ 1,572 $ 51,607 $ 40,827 $ 12,769 $ 53,596 (a) This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost. See Note 7 — Pensions and other postretirement benefit plans. (b) Amounts reclassified from accumulated other comprehensive loss are recorded net of tax impacts of $8 thousand and $5 thousand for the three months ended March 31, 2022 and 2021, respectively. |
Segment reporting (Tables)
Segment reporting (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information, by segment | The following tables present our segment information: Three months ended March 31, 2022 In thousands Publishing Digital Marketing Solutions Corporate and other Intersegment Eliminations Consolidated Advertising and marketing services - external sales $ 265,405 $ 109,709 $ — $ — $ 375,114 Advertising and marketing services - intersegment sales 33,357 — — (33,357) — Circulation 288,602 — — — 288,602 Other 83,055 — 1,306 — 84,361 Total operating revenues $ 670,419 $ 109,709 $ 1,306 $ (33,357) $ 748,077 Adjusted EBITDA (non-GAAP basis) $ 68,648 $ 11,180 $ (15,657) $ — $ 64,171 Adjusted EBITDA margin (non-GAAP basis) 10.2 % 10.2 % NM NM 8.6 % NM indicates not meaningful. Three months ended March 31, 2021 In thousands Publishing Digital Marketing Solutions Corporate and other Intersegment Eliminations Consolidated Advertising and marketing services - external sales $ 286,454 $ 101,376 $ 527 $ — $ 388,357 Advertising and marketing services - intersegment sales 27,856 — — (27,856) — Circulation 325,436 — 1 — 325,437 Other 59,839 905 2,546 — 63,290 Total operating revenues $ 699,585 $ 102,281 $ 3,074 $ (27,856) $ 777,084 Adjusted EBITDA (non-GAAP basis) $ 102,208 $ 9,172 $ (10,915) $ — $ 100,465 Adjusted EBITDA margin (non-GAAP basis) 14.6 % 9.0 % NM NM 12.9 % NM indicates not meaningful. The table below shows the reconciliation of Net loss attributable to Gannett to Adjusted EBITDA and Net loss attributable to Gannett margin to Adjusted EBITDA margin: Three months ended March 31, In thousands 2022 2021 Net loss attributable to Gannett $ (2,967) $ (142,316) Benefit for income taxes (7,607) (9,109) Interest expense 26,006 39,503 Loss on early extinguishment of debt 2,743 19,401 Non-operating pension income (18,213) (23,878) Loss on convertible notes derivative — 126,600 Depreciation and amortization 47,783 58,103 Integration and reorganization costs 11,398 13,404 Other operating expenses 1,102 10,576 Asset impairments 854 833 (Gain) loss on sale or disposal of assets, net (2,804) 4,745 Share-based compensation expense 3,393 3,423 Other Items 2,483 (820) Adjusted EBITDA (non-GAAP basis) $ 64,171 $ 100,465 Net loss attributable to Gannett margin (0.4) % (18.3) % Adjusted EBITDA margin (non-GAAP basis) 8.6 % 12.9 % |
Other supplemental information
Other supplemental information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of cash and cash equivalents | The following table presents a reconciliation of cash, cash equivalents and restricted cash: March 31, In thousands 2022 2021 Cash and cash equivalents $ 152,191 $ 163,505 Restricted cash included in prepaid expenses and other current assets 1,105 8,999 Restricted cash included in other assets 11,722 23,669 Total cash, cash equivalents and restricted cash $ 165,018 $ 196,173 |
Summary of restrictions on cash and cash equivalents | The following table presents a reconciliation of cash, cash equivalents and restricted cash: March 31, In thousands 2022 2021 Cash and cash equivalents $ 152,191 $ 163,505 Restricted cash included in prepaid expenses and other current assets 1,105 8,999 Restricted cash included in other assets 11,722 23,669 Total cash, cash equivalents and restricted cash $ 165,018 $ 196,173 |
Schedule of cash flow, supplemental disclosures | The following table presents supplemental cash flow information, including non-cash investing and financing activities: Three months ended March 31, In thousands 2022 2021 Cash paid for taxes, net of refunds $ 846 $ (997) Cash paid for interest 7,531 13,528 Non-cash investing and financing activities: Accrued capital expenditures $ 1,160 $ 627 |
Schedule of accounts payable and accrued liabilities | A breakout of Accounts payable and accrued liabilities is presented below: In thousands March 31, 2022 December 31, 2021 Accounts payable $ 138,045 $ 157,257 Compensation 106,611 107,585 Taxes (primarily property and sales taxes) 19,887 26,042 Benefits 21,052 21,056 Interest 20,193 7,577 Other 40,580 37,497 Accounts payable and accrued liabilities $ 346,368 $ 357,014 |
Description of business and b_3
Description of business and basis of presentation - Narrative (Details) | Oct. 15, 2021USD ($) | Mar. 31, 2022USD ($)statebrandssegment | Dec. 31, 2021USD ($) | Nov. 17, 2020USD ($) |
Significant Accounting Policies | ||||
Number of states in which entity operates (states) | state | 45 | |||
Number of media brands, more than (brands) | brands | 150 | |||
Number of operating segments | segment | 2 | |||
Long-term debt | $ 783,010,000 | $ 769,446,000 | ||
Principal balance | 1,370,700,000 | 1,368,700,000 | ||
2027 Notes | Convertible debt | ||||
Significant Accounting Policies | ||||
Long-term debt | 393,000,000 | 390,100,000 | $ 497,100,000 | |
Stated interest rate (as a percent) | 6.00% | |||
Principal balance | 485,300,000 | 485,300,000 | ||
New Senior Secured Term Loan | Senior Secured Term Loan | ||||
Significant Accounting Policies | ||||
Stated interest rate (as a percent) | 1.50% | |||
Debt instrument term (in years) | 5 years | |||
Principal balance | $ 516,000,000 | $ 504,600,000 | $ 480,100,000 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue | ||
Total revenues | $ 748,077 | $ 777,084 |
Total advertising and marketing services | ||
Disaggregation of Revenue | ||
Total revenues | 375,114 | 388,357 |
Print advertising | ||
Disaggregation of Revenue | ||
Total revenues | 173,518 | 193,196 |
Digital advertising and marketing services | ||
Disaggregation of Revenue | ||
Total revenues | 201,596 | 195,161 |
Circulation | ||
Disaggregation of Revenue | ||
Total revenues | 288,602 | 325,437 |
Other | ||
Disaggregation of Revenue | ||
Total revenues | $ 84,361 | $ 63,290 |
Revenues - Narrative (Details)
Revenues - Narrative (Details) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
International | Revenue Benchmark | Geographic Concentration Risk | ||
Revenue, Initial Application Period Cumulative Effect Transition | ||
Revenue, percentage | 8.90% | 7.50% |
Revenues - Deferred Revenues Na
Revenues - Deferred Revenues Narrative (Details) - Customer Subscription | Mar. 31, 2022 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | Minimum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Expected timing of satisfaction | 1 month |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | Maximum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Expected timing of satisfaction | 12 months |
Revenues - Deferred Revenue (De
Revenues - Deferred Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Movement in Deferred Revenue | ||
Beginning balance | $ 184,838 | $ 186,007 |
Acquisition | 2,388 | 0 |
Cash receipts | 313,985 | 344,292 |
Revenue recognized | (315,632) | (339,600) |
Ending balance | 185,579 | 190,699 |
Advertising, marketing services, and other | ||
Movement in Deferred Revenue | ||
Beginning balance | 60,665 | 51,686 |
Acquisition | 0 | 0 |
Cash receipts | 76,125 | 60,117 |
Revenue recognized | (75,463) | (58,953) |
Ending balance | 61,327 | 52,850 |
Circulation | ||
Movement in Deferred Revenue | ||
Beginning balance | 124,173 | 134,321 |
Acquisition | 2,388 | 0 |
Cash receipts | 237,860 | 284,175 |
Revenue recognized | (240,169) | (280,647) |
Ending balance | $ 124,252 | $ 137,849 |
Accounts receivable, net - Narr
Accounts receivable, net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Receivables [Abstract] | ||
Accounts receivable, reserve percentage calculation period | 3 years | |
Threshold period for reserves | 90 days | |
Reversal of bad debt expense | $ 2,403 | $ 2,171 |
Accounts receivable, net - Allo
Accounts receivable, net - Allowance for doubtful accounts (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accounts Receivable, Allowance for Credit Loss | ||
Beginning balance | $ 16,470 | $ 20,843 |
Current period provision | (2,403) | (2,171) |
Write-offs charged against the allowance | (3,868) | (2,805) |
Recoveries of amounts previously written-off | 942 | 1,206 |
Other | 425 | 51 |
Ending balance | $ 11,566 | $ 17,124 |
Goodwill and intangible asset_2
Goodwill and intangible assets - Schedule of goodwill and intangible assets (Detail) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets | ||
Gross carrying amount | $ 880,990 | $ 878,376 |
Accumulated amortization | 356,019 | 333,421 |
Net carrying amount | 524,971 | 544,955 |
Indefinite-lived intangible assets: | ||
Total intangible assets | 694,521 | 713,153 |
Goodwill | 540,894 | 533,709 |
Mastheads | ||
Indefinite-lived intangible assets: | ||
Non-amortized intangible assets | 169,550 | 168,198 |
Advertiser relationships | ||
Finite-Lived Intangible Assets | ||
Gross carrying amount | 455,522 | 453,038 |
Accumulated amortization | 163,594 | 153,988 |
Net carrying amount | 291,928 | 299,050 |
Other customer relationships | ||
Finite-Lived Intangible Assets | ||
Gross carrying amount | 102,798 | 102,486 |
Accumulated amortization | 37,920 | 35,237 |
Net carrying amount | 64,878 | 67,249 |
Subscriber relationships | ||
Finite-Lived Intangible Assets | ||
Gross carrying amount | 253,890 | 254,162 |
Accumulated amortization | 106,986 | 99,905 |
Net carrying amount | 146,904 | 154,257 |
Other intangible assets | ||
Finite-Lived Intangible Assets | ||
Gross carrying amount | 68,780 | 68,690 |
Accumulated amortization | 47,519 | 44,291 |
Net carrying amount | $ 21,261 | $ 24,399 |
Integration and reorganizatio_3
Integration and reorganization costs and asset impairments - Severance Related Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Restructuring Cost and Reserve | ||
Severance related expenses | $ 11,398 | $ 13,404 |
Severance | ||
Restructuring Cost and Reserve | ||
Severance related expenses | 5,360 | 7,097 |
Operating Segments | Publishing | Severance | ||
Restructuring Cost and Reserve | ||
Severance related expenses | 5,177 | 6,779 |
Operating Segments | Digital Marketing Solutions | Severance | ||
Restructuring Cost and Reserve | ||
Severance related expenses | 9 | (57) |
Corporate and other | Severance | ||
Restructuring Cost and Reserve | ||
Severance related expenses | $ 174 | $ 375 |
Integration and reorganizatio_4
Integration and reorganization costs and asset impairments - Restructuring Reserve (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Restructuring Reserve | ||
Restructuring provision included in integration and reorganization costs | $ 11,398 | $ 13,404 |
Severance | ||
Restructuring Reserve | ||
Beginning balance | 12,558 | |
Restructuring provision included in integration and reorganization costs | 5,360 | $ 7,097 |
Cash payments | (5,430) | |
Ending balance | $ 12,488 |
Integration and reorganizatio_5
Integration and reorganization costs and asset impairments - Facility Consolidation Charges and Accelerated Depreciation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Restructuring Cost and Reserve | ||
Restructuring provision included in integration and reorganization costs | $ 11,398 | $ 13,404 |
Facility Closing | ||
Restructuring Cost and Reserve | ||
Restructuring provision included in integration and reorganization costs | 6,038 | 6,307 |
Operating Segments | Publishing | Facility Closing | ||
Restructuring Cost and Reserve | ||
Restructuring provision included in integration and reorganization costs | 544 | 547 |
Operating Segments | Digital Marketing Solutions | Facility Closing | ||
Restructuring Cost and Reserve | ||
Restructuring provision included in integration and reorganization costs | 142 | 223 |
Corporate and other | Facility Closing | ||
Restructuring Cost and Reserve | ||
Restructuring provision included in integration and reorganization costs | $ 5,352 | $ 5,537 |
Integration and reorganizatio_6
Integration and reorganization costs and asset impairments - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Restructuring and Related Activities [Abstract] | ||
Accelerated depreciation | $ 4.7 | $ 9.2 |
Integration and reorganizatio_7
Integration and reorganization costs and asset impairments - Asset Impairment Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Restructuring Cost and Reserve | ||
Asset impairments | $ 854 | $ 833 |
Debt - Schedule of Debt Outstan
Debt - Schedule of Debt Outstanding (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | Oct. 15, 2021 | Nov. 17, 2020 |
Debt Instrument | ||||
Principal balance | $ 1,370,700,000 | $ 1,368,700,000 | ||
Unamortized original issue discount | (114,600,000) | (121,000,000) | ||
Unamortized deferred financing costs | (13,900,000) | (15,400,000) | ||
Long-term debt | 783,010,000 | 769,446,000 | ||
Principal outstanding | 1,242,200,000 | 1,232,300,000 | ||
Long term debt, gross, current | (62,900,000) | (69,500,000) | ||
Debt instrument unamortized discount current | 0 | 0 | ||
Debt issuance costs, current, net | 0 | 0 | ||
Long-term debt, current maturities | (62,900,000) | (69,500,000) | ||
Non-current debt, gross, noncurrent | 1,307,800,000 | 1,299,200,000 | ||
Debt instrument, unamortized discount, noncurrent | (114,600,000) | (121,000,000) | ||
Debt issuance costs, noncurrent, net | (13,900,000) | (15,400,000) | ||
Non-current portion of long-term debt | 1,179,300,000 | 1,162,800,000 | ||
Senior Secured Term Loan | New Senior Secured Term Loan | ||||
Debt Instrument | ||||
Principal balance | 504,600,000 | 480,100,000 | $ 516,000,000 | |
Unamortized original issue discount | (12,000,000) | (14,100,000) | ||
Unamortized deferred financing costs | (2,400,000) | (2,700,000) | ||
Secured Debt | 490,200,000 | 463,300,000 | ||
Senior Secured Term Loan | 2026 Senior Notes | ||||
Debt Instrument | ||||
Principal balance | 377,500,000 | 400,000,000 | $ 400,000,000 | |
Unamortized original issue discount | (12,200,000) | (13,700,000) | ||
Unamortized deferred financing costs | (9,600,000) | (10,700,000) | ||
Long-term debt | 355,700,000 | 375,600,000 | ||
Convertible debt | 2027 Notes | ||||
Debt Instrument | ||||
Principal balance | 485,300,000 | 485,300,000 | ||
Unamortized original issue discount | (90,400,000) | (93,200,000) | ||
Unamortized deferred financing costs | (1,900,000) | (2,000,000) | ||
Long-term debt | 393,000,000 | 390,100,000 | $ 497,100,000 | |
Convertible debt | 2024 Notes | ||||
Debt Instrument | ||||
Principal balance | 3,300,000 | 3,300,000 | ||
Unamortized original issue discount | 0 | 0 | ||
Unamortized deferred financing costs | 0 | 0 | ||
Long-term debt | $ 3,300,000 | $ 3,300,000 |
Debt - New Senior Secured Term
Debt - New Senior Secured Term Loan (Details) | Oct. 15, 2021USD ($)plan | Mar. 31, 2022USD ($)$ / shares | Mar. 31, 2021USD ($) | Jun. 30, 2022 | Feb. 01, 2022USD ($) | Jan. 31, 2022USD ($)$ / shares | Dec. 31, 2021USD ($)$ / shares |
Line of Credit Facility | |||||||
Principal balance | $ 1,370,700,000 | $ 1,368,700,000 | |||||
Shares authorized for repurchase, value | $ 100,000,000 | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||||
Cash paid for interest | $ 7,531,000 | $ 13,528,000 | |||||
Loss on early extinguishment of debt | 2,743,000 | 19,401,000 | |||||
Mandatory and optional prepayments | 47,976,000 | $ 1,083,791,000 | |||||
New Senior Secured Term Loan | Senior Secured Term Loan | |||||||
Line of Credit Facility | |||||||
Principal balance | $ 516,000,000 | 504,600,000 | $ 480,100,000 | ||||
Stated interest rate (as a percent) | 1.50% | ||||||
Prepayment premium (as a percent) | 1.00% | ||||||
Cash requirement | $ 100,000,000 | ||||||
Quarterly amortization percentage | 5.00% | ||||||
Net leverage ratio | plan | 1.20 | ||||||
Interest expense | 6,900,000 | ||||||
Cash paid for interest | 6,900,000 | ||||||
Amortization of original issue cost | 900,000 | ||||||
Amortization of debt issuance costs | 200,000 | ||||||
Loss on early extinguishment of debt | 1,400,000 | ||||||
Mandatory and optional prepayments | $ 48,000,000 | ||||||
Effective interest rate (as a percent) | 6.30% | ||||||
New Senior Secured Term Loan | Senior Secured Term Loan | Forecasted | Subsequent Event | |||||||
Line of Credit Facility | |||||||
Quarterly amortization percentage | 10.00% | ||||||
New Senior Secured Term Loan | Senior Secured Term Loan | Debt Covenant, Range One | |||||||
Line of Credit Facility | |||||||
Net leverage ratio | 2 | ||||||
Maximum debt or equity purchasable | $ 25,000,000 | ||||||
New Senior Secured Term Loan | Senior Secured Term Loan | Debt Covenant, Range Two | |||||||
Line of Credit Facility | |||||||
Net leverage ratio | 1.50 | ||||||
Maximum debt or equity purchasable | $ 50,000,000 | ||||||
New Senior Secured Term Loan | Senior Secured Term Loan | Debt Covenant, Range Three | |||||||
Line of Credit Facility | |||||||
Net leverage ratio | 1 | ||||||
New Senior Secured Term Loan | Senior Secured Term Loan | SOFR | |||||||
Line of Credit Facility | |||||||
Variable rate (as a percent) | 5.00% | ||||||
New Senior Secured Term Loan | Senior Secured Term Loan | Base Rate | |||||||
Line of Credit Facility | |||||||
Variable rate (as a percent) | 4.00% | ||||||
New Senior Secured Term Loan | Senior Secured Term Loan | Minimum | |||||||
Line of Credit Facility | |||||||
Stated interest rate (as a percent) | 0.50% | ||||||
Unrestricted cash requirement | $ 30,000,000 | ||||||
Incremental Term Loans | Senior Secured Term Loan | |||||||
Line of Credit Facility | |||||||
Principal balance | $ 50,000,000 | ||||||
Incremental Term Loans | Senior Secured Term Loan | Share Repurchase Program | |||||||
Line of Credit Facility | |||||||
Shares authorized for repurchase, value | $ 50,000,000 | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | ||||||
Second Term Loan Amendment | Senior Secured Term Loan | |||||||
Line of Credit Facility | |||||||
Principal balance | $ 22,500,000 |
Debt - Senior Secured Notes due
Debt - Senior Secured Notes due 2026 (Details) - USD ($) | Oct. 15, 2021 | Nov. 17, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Nov. 30, 2021 |
Line of Credit Facility | ||||||
Principal balance | $ 1,370,700,000 | $ 1,368,700,000 | ||||
2026 Senior Notes | Senior Secured Term Loan | ||||||
Line of Credit Facility | ||||||
Principal balance | $ 400,000,000 | 377,500,000 | 400,000,000 | |||
Stated interest rate (as a percent) | 6.00% | |||||
2026 Senior Notes | Senior Notes | ||||||
Line of Credit Facility | ||||||
Amortization of debt issuance costs | 1,300,000 | |||||
Interest expense | 600,000 | |||||
Interest expense | $ 6,000,000 | |||||
Effective interest rate (as a percent) | 7.30% | |||||
2026 Senior Notes | Senior Notes | Period 1 | ||||||
Line of Credit Facility | ||||||
Redemption price | 40.00% | |||||
Redemption rate | 101.00% | |||||
2026 Senior Notes | Senior Notes | Period 2 | ||||||
Line of Credit Facility | ||||||
Redemption price | 10.00% | |||||
Redemption rate | 103.00% | |||||
2026 Senior Notes | Convertible debt | ||||||
Line of Credit Facility | ||||||
Face amount | $ 22,500,000 | |||||
Second Term Loan Amendment | Senior Secured Term Loan | ||||||
Line of Credit Facility | ||||||
Principal balance | 22,500,000 | |||||
2027 Notes | Convertible debt | ||||||
Line of Credit Facility | ||||||
Principal balance | 485,300,000 | $ 485,300,000 | ||||
Stated interest rate (as a percent) | 6.00% | |||||
Amortization of the discount | 2,900,000 | $ 2,300,000 | ||||
Amortization of debt issuance costs | 100,000 | |||||
Interest expense | $ 7,200,000 | $ 7,500,000 | ||||
Effective interest rate (as a percent) | 10.50% | 10.50% | ||||
Face amount | $ 11,800,000 | |||||
2027 Notes | Convertible debt | Period 1 | ||||||
Line of Credit Facility | ||||||
Redemption rate | 110.00% | |||||
2027 Notes | Convertible debt | Period 2 | ||||||
Line of Credit Facility | ||||||
Redemption rate | 130.00% |
Debt - Senior Secured Convertib
Debt - Senior Secured Convertible Notes due 2027 (Details) - 2027 Notes - Convertible debt - USD ($) | Nov. 17, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Nov. 30, 2021 |
Line of Credit Facility | |||||
Percentage of notes initially convertible to common stock | 42.00% | 41.00% | |||
Face amount | $ 11,800,000 | ||||
Minimum qualified cash required | $ 30,000,000 | ||||
Fair value of equity component of debt | $ 279,600,000 | $ 279,600,000 | |||
Amortization of the discount | 2,900,000 | $ 2,300,000 | |||
Amortization of debt issuance costs | 100,000 | ||||
Interest expense | $ 7,200,000 | $ 7,500,000 | |||
Effective interest rate (as a percent) | 10.50% | 10.50% | |||
Debt instrument, share conversion rate (per $1,000) | 20.00% | ||||
Period 1 | |||||
Line of Credit Facility | |||||
Redemption rate | 110.00% | ||||
Maximum repurchase amount | $ 100,000,000 | ||||
Total gross leverage ratio | 1.5 | ||||
Period 2 | |||||
Line of Credit Facility | |||||
Redemption rate | 130.00% | ||||
Maximum repurchase amount | $ 99,400,000 | ||||
Redemption term | 4 years | ||||
Scenario, Plan | |||||
Line of Credit Facility | |||||
Conversion price (in usd per share) | $ 5 |
Debt - Senior Convertible Notes
Debt - Senior Convertible Notes due 2024 (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Line of Credit Facility | ||
Long-term debt | $ 783,010 | $ 769,446 |
2024 Notes | Convertible debt | ||
Line of Credit Facility | ||
Long-term debt | $ 3,300 | $ 3,300 |
Stated interest rate (as a percent) | 4.75% | |
Effective interest rate (as a percent) | 6.05% |
Pensions and other postretire_3
Pensions and other postretirement benefit plans - Retirement Plan Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Company's pension costs | ||
Total non-operating (benefit) expenses | $ (18,213) | $ (23,878) |
Pension benefits | ||
Company's pension costs | ||
Service cost - benefits earned during the period | 475 | 511 |
Interest cost on benefit obligation | 18,649 | 17,031 |
Expected return on plan assets | (37,281) | (41,430) |
Amortization of actuarial loss (gain) | 20 | 35 |
Total non-operating (benefit) expenses | (18,612) | (24,364) |
Total expense (benefit) for retirement plans | (18,137) | (23,853) |
Postretirement benefits | ||
Company's pension costs | ||
Service cost - benefits earned during the period | 15 | 31 |
Interest cost on benefit obligation | 451 | 501 |
Expected return on plan assets | 0 | 0 |
Amortization of actuarial loss (gain) | (52) | (15) |
Total non-operating (benefit) expenses | 399 | 486 |
Total expense (benefit) for retirement plans | $ 414 | $ 517 |
Pensions and other postretire_4
Pensions and other postretirement benefit plans - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 21 Months Ended |
Mar. 31, 2022 | Sep. 30, 2022 | |
Pension Plan | ||
Defined Benefit Plan Disclosure | ||
Contribution to the defined benefit plans | $ 7.6 | |
Pension Plan | U.S. | Forecasted | Subsequent Event | ||
Defined Benefit Plan Disclosure | ||
Deferred contributions by employer in response to COVID-19 | $ 5 | |
Other Postretirement Benefits Plan | ||
Defined Benefit Plan Disclosure | ||
Contribution to the defined benefit plans | $ 2 |
Fair value measurement - Narrat
Fair value measurement - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value, Measurements, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets held for sale | $ 5.9 | $ 3.5 |
Income taxes - Pre-tax Net Loss
Income taxes - Pre-tax Net Loss and Income Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Loss before income taxes | $ (10,709) | $ (151,810) |
Benefit for income taxes | $ (7,607) | $ (9,109) |
Effective tax rate (percent) | 71.00% | 6.00% |
Income taxes - Narrative (Detai
Income taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Estimated annual effective tax rate (percent) | 41.25% | 43.40% | |
Unrecognized tax benefits that would impact effective tax rate | $ 49,000 | $ 45,000 | |
Unrecognized tax benefits, accrued interest and penalties | 3,800 | $ 3,700 | |
Benefit for income taxes | $ (7,607) | $ (9,109) |
Supplemental equity informati_3
Supplemental equity information - Loss Per Share (Basic and Diluted) (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Equity [Abstract] | ||
Net loss attributable to Gannett | $ (2,967) | $ (142,316) |
Basic weighted average shares outstanding (in shares) | 136,425 | 134,075 |
Diluted weighted average shares outstanding (in shares) | 136,425 | 134,075 |
Loss per share attributable to Gannett - basic (in dollars per share) | $ (0.02) | $ (1.06) |
Loss per share attributable to Gannett - diluted (in dollars per share) | $ (0.02) | $ (1.06) |
Supplemental equity informati_4
Supplemental equity information - Computation of Diluted Income Per Share (Detail) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Warrants | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Computation of diluted income per share (in shares) | 845 | 845 |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Computation of diluted income per share (in shares) | 6,068 | 6,068 |
Restricted stock grants | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Computation of diluted income per share (in shares) | 12,403 | 10,811 |
2027 Notes | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Computation of diluted income per share (in shares) | 97,057 | 99,419 |
Supplemental equity informati_5
Supplemental equity information - Narrative (Detail) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2022USD ($)shares$ / shares | Mar. 31, 2021USD ($) | |
Stockholders Equity Note | ||
Share-based compensation cost | $ | $ 3.4 | $ 3.4 |
Unrecognized compensation cost related to non-vested share-based compensation | $ | $ 48.7 | |
Weighted average period (in years) | 2 years 4 months 24 days | |
Tranche One | ||
Stockholders Equity Note | ||
Vesting, percentage | 33.30% | |
Tranche Two | ||
Stockholders Equity Note | ||
Vesting, percentage | 33.30% | |
Tranche Three | ||
Stockholders Equity Note | ||
Vesting, percentage | 33.40% | |
2027 Notes | Convertible debt | ||
Stockholders Equity Note | ||
Aggregate shares receivable upon conversion (shares) | 287.2 | |
2027 Notes and restricted stock grants (in shares) | 190.1 | |
Restricted Stock Awards | ||
Stockholders Equity Note | ||
Granted (in shares) | 5.7 | |
Granted (in dollars per share) | $ / shares | $ 4.63 | |
Phantom Share Units | ||
Stockholders Equity Note | ||
Granted (in shares) | 0.3 |
Supplemental equity informati_6
Supplemental equity information - Preferred Stock and Stock Repurchase Program (Details) - USD ($) | Mar. 31, 2022 | Feb. 01, 2022 | Dec. 31, 2021 |
Class of Stock | |||
Preferred stock authorized (in shares) | 300,000 | 300,000 | |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Preferred stock, outstanding (in shares) | 0 | 0 | |
Preferred stock, issued (in shares) | 0 | 0 | |
Shares authorized for repurchase, value | $ 100,000,000 | ||
Series A Junior Participating Preferred Stock | |||
Class of Stock | |||
Preferred stock authorized (in shares) | 150,000 | 150,000 | |
Preferred stock, outstanding (in shares) | 0 |
Supplemental equity informati_7
Supplemental equity information - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||
Beginning balance | $ 532,100 | |
Other comprehensive income (loss) before reclassifications | (8,367) | $ 3,408 |
Amounts reclassified from accumulated other comprehensive (loss) | (24) | 15 |
Net current period other comprehensive income (loss), net of taxes | (8,391) | 3,423 |
Ending balance | 514,977 | |
Amounts reclassified from accumulated other comprehensive loss, tax | (8) | 5 |
Total | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||
Beginning balance | 59,998 | 50,173 |
Ending balance | 51,607 | 53,596 |
Pension and postretirement plans | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||
Beginning balance | 50,870 | 40,441 |
Other comprehensive income (loss) before reclassifications | (811) | 371 |
Amounts reclassified from accumulated other comprehensive (loss) | (24) | 15 |
Net current period other comprehensive income (loss), net of taxes | (835) | 386 |
Ending balance | 50,035 | 40,827 |
Foreign currency translation | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||
Beginning balance | 9,128 | 9,732 |
Other comprehensive income (loss) before reclassifications | (7,556) | 3,037 |
Amounts reclassified from accumulated other comprehensive (loss) | 0 | 0 |
Net current period other comprehensive income (loss), net of taxes | (7,556) | 3,037 |
Ending balance | $ 1,572 | $ 12,769 |
Segment reporting - Narrative (
Segment reporting - Narrative (Details) | 3 Months Ended |
Mar. 31, 2022segment | |
Segment Reporting Information | |
Number of operating segments | 2 |
Publishing | |
Segment Reporting Information | |
Number of operating segments | 2 |
Segment reporting -Segment Info
Segment reporting -Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting Information | ||
Total operating revenues | $ 748,077 | $ 777,084 |
Adjusted EBITDA | $ 64,171 | $ 100,465 |
Adjusted EBITDA margin (non-GAAP basis) (percent) | 8.60% | 12.90% |
Advertising and marketing services | ||
Segment Reporting Information | ||
Total operating revenues | $ 375,114 | $ 388,357 |
Circulation | ||
Segment Reporting Information | ||
Total operating revenues | 288,602 | 325,437 |
Other Revenue [Member] | ||
Segment Reporting Information | ||
Total operating revenues | 84,361 | 63,290 |
Operating Segments | Publishing | ||
Segment Reporting Information | ||
Total operating revenues | 670,419 | 699,585 |
Adjusted EBITDA | $ 68,648 | $ 102,208 |
Adjusted EBITDA margin (non-GAAP basis) (percent) | 10.20% | 14.60% |
Operating Segments | Publishing | Advertising and marketing services | ||
Segment Reporting Information | ||
Total operating revenues | $ 265,405 | $ 286,454 |
Operating Segments | Publishing | Circulation | ||
Segment Reporting Information | ||
Total operating revenues | 288,602 | 325,436 |
Operating Segments | Publishing | Other Revenue [Member] | ||
Segment Reporting Information | ||
Total operating revenues | 83,055 | 59,839 |
Operating Segments | Digital Marketing Solutions | ||
Segment Reporting Information | ||
Total operating revenues | 109,709 | 102,281 |
Adjusted EBITDA | $ 11,180 | $ 9,172 |
Adjusted EBITDA margin (non-GAAP basis) (percent) | 10.20% | 9.00% |
Operating Segments | Digital Marketing Solutions | Advertising and marketing services | ||
Segment Reporting Information | ||
Total operating revenues | $ 109,709 | $ 101,376 |
Operating Segments | Digital Marketing Solutions | Circulation | ||
Segment Reporting Information | ||
Total operating revenues | 0 | 0 |
Operating Segments | Digital Marketing Solutions | Other Revenue [Member] | ||
Segment Reporting Information | ||
Total operating revenues | 0 | 905 |
Corporate and other | ||
Segment Reporting Information | ||
Total operating revenues | 1,306 | 3,074 |
Adjusted EBITDA | (15,657) | (10,915) |
Corporate and other | Advertising and marketing services | ||
Segment Reporting Information | ||
Total operating revenues | 0 | 527 |
Corporate and other | Circulation | ||
Segment Reporting Information | ||
Total operating revenues | 0 | 1 |
Corporate and other | Other Revenue [Member] | ||
Segment Reporting Information | ||
Total operating revenues | 1,306 | 2,546 |
Intersegment Eliminations | ||
Segment Reporting Information | ||
Total operating revenues | (33,357) | (27,856) |
Intersegment Eliminations | Advertising and marketing services | ||
Segment Reporting Information | ||
Total operating revenues | (33,357) | (27,856) |
Intersegment Eliminations | Publishing | Advertising and marketing services | ||
Segment Reporting Information | ||
Total operating revenues | $ (33,357) | $ (27,856) |
Segment reporting - Reconciliat
Segment reporting - Reconciliation of EBITDA to Operating Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting [Abstract] | ||
Net loss attributable to Gannett | $ (2,967) | $ (142,316) |
Benefit for income taxes | (7,607) | (9,109) |
Interest expense | 26,006 | 39,503 |
Loss on early extinguishment of debt | 2,743 | 19,401 |
Non-operating pension income | (18,213) | (23,878) |
Loss on convertible notes derivative | 0 | 126,600 |
Depreciation and amortization | 47,783 | 58,103 |
Integration and reorganization costs | 11,398 | 13,404 |
Other operating expenses | 1,102 | 10,576 |
Asset impairments | 854 | 833 |
(Gain) loss on sale or disposal of assets, net | (2,804) | 4,745 |
Share-based compensation expense | 3,393 | 3,423 |
Other Items | 2,483 | (820) |
Adjusted EBITDA (non-GAAP basis) | $ 64,171 | $ 100,465 |
Net loss attributable to Gannett margin (percent) | (0.40%) | (18.30%) |
Adjusted EBITDA margin (non-GAAP basis) (percent) | 8.60% | 12.90% |
Other supplemental informatio_2
Other supplemental information - cash, cash equivalents and restricted cash (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 152,191 | $ 130,756 | $ 163,505 | |
Restricted cash included in prepaid expenses and other current assets | 1,105 | 8,999 | ||
Restricted cash included in other assets | 11,722 | 23,669 | ||
Total cash, cash equivalents and restricted cash | $ 165,018 | $ 143,619 | $ 196,173 | $ 206,726 |
Other supplemental informatio_3
Other supplemental information - cash flow information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Cash paid for taxes, net of refunds | $ 846 | $ (997) |
Cash paid for interest | 7,531 | 13,528 |
Non-cash investing and financing activities: | ||
Accrued capital expenditures | $ 1,160 | $ 627 |
Other supplemental informatio_4
Other supplemental information - Accounts payable and accrued liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts payable | $ 138,045 | $ 157,257 |
Compensation | 106,611 | 107,585 |
Taxes (primarily property and sales taxes) | 19,887 | 26,042 |
Benefits | 21,052 | 21,056 |
Interest | 20,193 | 7,577 |
Other | 40,580 | 37,497 |
Accounts payable and accrued liabilities | $ 346,368 | $ 357,014 |