Gannett(GCI) - 2022 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION This section provides Gannett Co., Inc.'s unaudited condensed consolidated financial information for the quarter ended March 31, 2022 ITEM 1. FINANCIAL STATEMENTS This section presents Gannett Co., Inc.'s unaudited condensed consolidated financial statements for the quarter ended March 31, 2022, including balance sheets, statements of operations, cash flows, and equity, along with detailed notes explaining business operations, accounting policies, revenue recognition, debt, and segment reporting Condensed Consolidated Balance Sheets Presents the company's financial position, detailing assets, liabilities, and equity as of March 31, 2022 Condensed Consolidated Balance Sheets (In thousands) | In thousands | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $152,191 | $130,756 | | Accounts receivable, net | $293,462 | $328,733 | | Total current assets | $562,345 | $577,261 | | Total assets | $2,783,443 | $2,828,069 | | Liabilities and equity | | | | Total current liabilities | $641,804 | $662,526 | | Long-term debt | $783,010 | $769,446 | | Convertible debt | $396,297 | $393,354 | | Total liabilities | $2,268,717 | $2,298,454 | | Total equity | $514,726 | $529,615 | | Total liabilities and equity | $2,783,443 | $2,828,069 | - Total assets decreased by $44.6 million from December 31, 2021, to March 31, 2022, primarily due to decreases in accounts receivable, property, plant and equipment, and intangible assets[12] - Total liabilities decreased by $29.7 million, driven by reductions in current liabilities and deferred tax liabilities, partially offset by an increase in long-term debt[12] Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) Details the company's financial performance, including revenues, expenses, and net loss for the period Condensed Consolidated Statements of Operations (In thousands, except per share amounts) | In thousands, except per share amounts | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | Total operating revenues | $748,077 | $777,084 | | Total operating expenses | $750,055 | $769,143 | | Operating income (loss) | $(1,978) | $7,941 | | 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 attributable to Gannett | $(2,967) | $(142,316) | | Loss per share attributable to Gannett - basic | $(0.02) | $(1.06) | | Loss per share attributable to Gannett - diluted | $(0.02) | $(1.06) | - Total operating revenues decreased by 3.7% year-over-year, from $777.1 million in Q1 2021 to $748.1 million in Q1 2022[14] - Net loss attributable to Gannett significantly improved from $(142.3) million in Q1 2021 to $(3.0) million in Q1 2022, primarily due to the absence of a $126.6 million loss on convertible notes derivative in 2022[14] Condensed Consolidated Statements of Cash Flows Summarizes cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | Cash provided by operating activities | $32,429 | $61,316 | | Cash provided by (used for) investing activities | $(6,220) | $2,516 | | Cash used for financing activities | $(3,818) | $(74,699) | | Increase (decrease) in cash, cash equivalents and restricted cash | $21,399 | $(10,553) | | Cash, cash equivalents and restricted cash at end of period | $165,018 | $196,173 | - Cash provided by operating activities decreased by $28.9 million, from $61.3 million in Q1 2021 to $32.4 million in Q1 2022[15] - Cash used for financing activities significantly decreased from $74.7 million in Q1 2021 to $3.8 million in Q1 2022, mainly due to lower repayments under term loans and deferred financing costs[15] Condensed Consolidated Statements of Equity Outlines changes in stockholders' equity, including common stock and accumulated deficit Condensed Consolidated Statements of Equity (In thousands, except share data) | In thousands, except share data | Balance at December 31, 2021 | Balance at March 31, 2022 | | :--- | :--- | :--- | | Common stock (shares) | 144,667 | 151,017 | | Common stock (amount) | $1,446 | $1,510 | | Additional paid-in capital | $1,400,206 | $1,397,516 | | Accumulated deficit | $(921,399) | $(924,366) | | Total Gannett stockholders equity | $532,100 | $514,977 | | Total equity | $529,615 | $514,726 | - Total equity decreased by $14.9 million from December 31, 2021, to March 31, 2022, primarily due to net loss attributable to Gannett and other comprehensive loss[17] - Common stock shares outstanding increased from 144,667 thousand to 151,017 thousand, reflecting restricted stock awards settled and grants[17] NOTE 1 — Description of business and basis of presentation Describes Gannett's business operations, segments, and the basis for financial statement presentation - Gannett is a subscription-led, digitally-focused media and marketing solutions company, operating USA TODAY, local media in 45 U.S. states, Newsquest in the U.K., and the digital marketing solutions company LOCALiQ[18][19][20] - The Company reports in two segments: Publishing and Digital Marketing Solutions, with a Corporate and other category for broad corporate functions[20] - The COVID-19 pandemic continues to have a slight negative impact on Advertising and marketing services and Circulation revenues, particularly affecting single copy newspaper sales and in-person events[21] NOTE 2 — Revenues Provides a detailed breakdown of the company's revenue streams and their year-over-year changes Revenues by Source (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 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 | - Total revenues decreased by $29.0 million (3.7%) year-over-year. Print advertising declined by $19.7 million (10%), and Circulation decreased by $36.8 million (11%)[31] - Digital advertising and marketing services revenues increased by $6.4 million (3%), and Other revenues grew by $21.1 million (33%)[31] NOTE 3 — Accounts receivable, net Details the composition of accounts receivable and changes in the allowance for doubtful accounts Allowance for Doubtful Accounts (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | Beginning balance (allowance for doubtful accounts) | $16,470 | $20,843 | | Ending balance (allowance for doubtful accounts) | $11,566 | $17,124 | - The allowance for doubtful accounts decreased from $16.5 million at the beginning of the period to $11.6 million at March 31, 2022, reflecting a $2.4 million benefit in bad debt expense due to lower receivable balances[36][37] NOTE 4 — Goodwill and intangible assets Presents the carrying values of goodwill and intangible assets, noting any changes or impairment assessments Goodwill and Intangible Assets (In thousands) | In thousands | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Total intangible assets, net | $694,521 | $713,153 | | Goodwill | $540,894 | $533,709 | - Total net intangible assets decreased by $18.6 million, while goodwill increased by $7.2 million from December 31, 2021, to March 31, 2022[38] - No indicators of impairment for goodwill or indefinite-lived intangible assets were present as of March 31, 2022[39] NOTE 5 — Integration and reorganization costs and asset impairments Reports expenses related to business integration, reorganization, and asset impairments Integration and Reorganization Costs (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | Severance-related expenses | $5,360 | $7,097 | | Facility consolidation and other restructuring-related expenses | $6,038 | $6,307 | | Accelerated depreciation | $4,700 | $9,200 | - Total integration and reorganization costs were $11.4 million in Q1 2022, down from $13.4 million in Q1 2021, reflecting decreased severance and facility consolidation activities[40][41][42] - Accelerated depreciation related to shortened asset useful lives from property sales decreased from $9.2 million in Q1 2021 to $4.7 million in Q1 2022[43] NOTE 6 — Debt Details the company's debt structure, including term loans, senior notes, and recent debt activities Debt Carrying Values (In millions) | In millions | March 31, 2022 (Carrying value) | December 31, 2021 (Carrying value) | | :--- | :--- | :--- | | New Senior Secured Term Loan | $490.2 | $463.3 | | 2026 Senior Notes | $355.7 | $375.6 | | 2027 Notes | $393.0 | $390.1 | | 2024 Notes | $3.3 | $3.3 | | Total debt | $1,242.2 | $1,232.3 | - Total debt increased by $9.9 million from December 31, 2021, to March 31, 2022, primarily due to incremental term loans under the New Senior Secured Term Loan[44][45] - The Company entered into amendments for its New Senior Secured Term Loan, adding $72.5 million in incremental term loans and transitioning the interest rate base from LIBOR to Adjusted Term SOFR[45] - In March 2022, the Company repurchased $22.5 million principal of 2026 Senior Notes in exchange for New Senior Secured Term Loans, resulting in a $1.3 million loss on early extinguishment of debt[58][184] NOTE 7 — Pensions and other postretirement benefit plans Provides information on the company's pension and postretirement benefit plan expenses and contributions Retirement Plan Expenses (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | Total expense (benefit) for retirement plans | $(18,137) | $(23,853) | | Total non-operating (benefit) expenses | $(18,612) | $(24,364) | | Service cost - benefits earned during the period | $475 | $511 | - Non-operating pension income decreased from $23.9 million in Q1 2021 to $18.2 million in Q1 2022, mainly due to a lower expected return on plan assets from a more conservative asset allocation[76][136] - The Company contributed $7.6 million to pension plans and $2.0 million to other postretirement plans during Q1 2022[76] NOTE 8 — Fair value measurement Explains the fair value hierarchy and measurement of assets and liabilities on a recurring and nonrecurring basis - Fair value measurements are categorized into a three-tiered hierarchy (Level 1, 2, 3) based on observable and unobservable inputs[77] - Assets and liabilities measured at fair value on a recurring basis primarily consist of pension plan assets, with certain investments measured at Net Asset Value (NAV) as a practical expedient[78] - Assets held for sale, totaling $5.9 million as of March 31, 2022, are measured at fair value on a nonrecurring basis (Level 3) using purchase agreements or third-party valuations[80] NOTE 9 — Income taxes Presents the company's income tax benefit, effective tax rate, and unrecognized tax benefits Income Tax Details (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 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 in Q1 2022 was $7.6 million, driven by pre-tax loss and the release of tax reserves, partially offset by valuation allowances on non-deductible interest expense carryforwards, resulting in an effective tax rate of 71.0%[82] - Unrecognized tax benefits that could impact the effective tax rate were approximately $49.0 million as of March 31, 2022, up from $45.0 million at December 31, 2021[83] NOTE 10 — Supplemental equity information Offers additional details on equity, including share data, loss per share, and share-based compensation Supplemental Equity and Per Share Data (In thousands, except per share data) | In thousands, except per share data | Three months ended March 31, 2022 | Three months ended March 31, 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) | - Diluted loss per share improved significantly from $(1.06) in Q1 2021 to $(0.02) in Q1 2022[86] - The Company recognized $3.4 million in share-based compensation expense for both Q1 2022 and Q1 2021[88] - The Board authorized a Stock Repurchase Program of up to $100 million of Common Stock on February 1, 2022, with no repurchases made as of March 31, 2022[92] NOTE 11 — Commitments, contingencies and other matters Discusses legal proceedings and other contingent matters affecting the company - Gannett is involved in various legal proceedings in the ordinary course of business, including libel, intellectual property, and employment claims[95] - Management believes current and threatened legal proceedings are not expected to have a material adverse effect on the Company's business, financial position, or consolidated results of operations[96] NOTE 12 — Segment reporting Provides financial performance data for the company's Publishing and Digital Marketing Solutions segments - Gannett operates in two reportable segments: Publishing (local, regional, national, and international newspaper publishers) and Digital Marketing Solutions (LOCALiQ)[98][102] - Adjusted EBITDA and Adjusted EBITDA margin are key non-GAAP metrics used by the Chief Operating Decision Maker (CEO) to evaluate segment performance and allocate resources[100][101] Consolidated Adjusted EBITDA by Segment (In thousands) | In thousands | Q1 2022 Adjusted EBITDA | Q1 2021 Adjusted EBITDA | | :--- | :--- | :--- | | Publishing | $68,648 | $102,208 | | Digital Marketing Solutions | $11,180 | $9,172 | | Corporate and other | $(15,657) | $(10,915) | | Consolidated Adjusted EBITDA | $64,171 | $100,465 | - Consolidated Adjusted EBITDA decreased by $36.3 million (36.1%) year-over-year, with Publishing segment Adjusted EBITDA declining by 32.8% and Digital Marketing Solutions segment Adjusted EBITDA increasing by 21.9%[102][103][104] NOTE 13 — Other supplemental information Includes additional cash flow details, such as cash paid for taxes and interest Cash and Restricted Cash (In thousands) | In thousands | March 31, 2022 | March 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $152,191 | $163,505 | | Restricted cash | $12,827 | $32,668 | | Total cash, cash equivalents and restricted cash | $165,018 | $196,173 | Cash Paid for Taxes and Interest (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | Cash paid for taxes, net of refunds | $846 | $(997) | | Cash paid for interest | $7,531 | $13,528 | - Cash paid for interest decreased by $6.0 million (44.3%) year-over-year[107] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section provides a detailed discussion and analysis of Gannett's financial condition, results of operations, and business trends for the three months ended March 31, 2022, compared to the same period in 2021. It covers consolidated performance, segment-specific results, liquidity, capital resources, and non-GAAP financial measures OVERVIEW Introduces Gannett's strategic focus as a subscription-led, digitally-focused media and marketing solutions company - Gannett is a subscription-led and digitally-focused media and marketing solutions company, aiming to drive audience growth and engagement through deeper content experiences and digital marketing expertise[110] - The Company's portfolio includes USA TODAY, local media in 45 U.S. states, Newsquest in the U.K., and the digital marketing solutions company LOCALiQ, along with USA TODAY NETWORK Ventures for events[111][112] Business Trends Highlights key industry trends impacting Gannett, including digital shifts, SMB needs, and cost inflation - Print advertising continues to decline as audiences shift to digital platforms; focus is on converting digital audiences to digital-only subscribers - SMBs require digital presence, addressed by LOCALiQ's broad suite of digital marketing services - COVID-19 pandemic negatively impacts in-person events and single copy newspaper sales - Newsprint availability is constrained globally, leading to increased costs due to inflation in energy and fuel[113] Recent Developments Reports on recent company initiatives, such as the publication of its inaugural ESG report - Gannett published its inaugural 2022 ESG report, detailing efforts aligned with U.N. Sustainable Development Goals, prioritizing Reduced Inequalities, Climate Action, and Peace, Justice & Strong Institutions[114][115] Certain matters affecting comparability Discusses factors like integration costs, accelerated depreciation, and foreign currency impacts on comparability - Integration and reorganization costs decreased to $11.4 million in Q1 2022 from $13.4 million in Q1 2021, primarily due to lower severance and facility consolidation expenses[116] - Accelerated depreciation from printing operation closures decreased to $4.7 million in Q1 2022 from $9.2 million in Q1 2021[117] - Foreign currency fluctuations impact revenue, expense, and operating income for international operations in the U.K., Canada, Australia, New Zealand, and India[118] Outlook for 2022 Outlines Gannett's strategic priorities and expectations for the upcoming year, focusing on digital growth and efficiency - Accelerate digital subscriber growth by leveraging its newsroom network and developing new digital subscription offerings - Drive digital marketing services growth by expanding LOCALiQ into local markets and using data to inform new advertising products - Optimize traditional print businesses through efficiency, process improvements, and aligning with digital subscription strategies - Prioritize investments in growth businesses like USA TODAY NETWORK Ventures, which saw 83% revenue increase in Q1 2022 - Build an inclusive and diverse culture, with published inclusion goals for 2025 and an annual workforce diversity report[120][121][122][123][124] - The COVID-19 pandemic is expected to continue having a slight negative impact on business operations in the near-term, particularly on event revenues and single copy newspaper sales[125][126] - Revenues are subject to moderate seasonality, with Advertising and marketing services typically highest in the fourth quarter due to holiday advertising volumes[127] RESULTS OF OPERATIONS Provides a comprehensive analysis of the company's financial performance for the reporting period Consolidated Summary Presents a high-level overview of Gannett's consolidated financial results, including revenues and net loss Consolidated Financial Summary (In thousands, except per share amounts) | In thousands, except per share amounts | Three months ended March 31, 2022 | Three months ended March 31, 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $748,077 | $777,084 | $(29,007) | (4)% | | Advertising and marketing services | $375,114 | $388,357 | $(13,243) | (3)% | | Circulation | $288,602 | $325,437 | $(36,835) | (11)% | | Other | $84,361 | $63,290 | $21,071 | 33% | | Net loss attributable to Gannett | $(2,967) | $(142,316) | $139,349 | (98)% | | Loss per share attributable to Gannett - diluted | $(0.02) | $(1.06) | $1.04 | (98)% | - Consolidated operating revenues decreased by 4% year-over-year, primarily driven by declines in print advertising and circulation, partially offset by growth in digital marketing services and other revenues[129] - Net loss attributable to Gannett significantly improved by 98% due to the absence of a large loss on convertible notes derivative in the prior year[129] Operating revenues Details the various sources of the company's operating revenues, including advertising, circulation, and other income - Advertising and marketing services revenues are generated by both Publishing (print and digital advertising, digital marketing services) and Digital Marketing Solutions (search, display, SEO, social media, website development)[130] - Circulation revenues come from home delivery, digital distribution, and single copy sales of publications[131] - Other revenues are mainly from commercial printing, distribution, events, digital content syndication, and third-party newsprint sales[132] Operating expenses Describes the primary categories of expenses incurred in the company's operations - Operating costs include labor, newsprint, delivery, and third-party online media acquisition - Selling, general and administrative expenses cover labor, payroll, outside services, benefits, and bad debt - Integration and reorganization costs include severance and facility consolidation expenses - Other operating expenses include third-party debt and acquisition-related costs[133] Non-operating (income) expense Reports financial items outside of core operations, such as interest expense and pension income Non-Operating Expenses (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | 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 | - Interest expense decreased by $13.5 million (34.2%) due to a lower debt balance and reduced interest rates[134] - Loss on early extinguishment of debt decreased by $16.7 million (86.4%) due to the payoff of a senior-secured term loan in Q1 2021[135] - The absence of a $126.6 million loss on convertible notes derivative in Q1 2022 significantly improved non-operating expenses[137] Benefit for income taxes Explains the income tax benefit and the factors influencing the effective tax rate Income Tax Benefit and Rate (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 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 effective tax rate increased significantly from 6.0% in Q1 2021 to 71.0% in Q1 2022, primarily due to the pre-tax loss and the release of tax reserves, partially offset by valuation allowances on non-deductible interest expense carryforwards[140] Net loss attributable to Gannett and diluted loss per share attributable to Gannett Focuses on the company's net loss and per-share performance Net Loss and Diluted EPS (In thousands, except per share data) | In thousands, except per share data | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | Net loss attributable to Gannett | $(2,967) | $(142,316) | | Diluted loss per share attributable to Gannett | $(0.02) | $(1.06) | - Net loss attributable to Gannett improved from $142.3 million in Q1 2021 to $3.0 million in Q1 2022, leading to a significant improvement in diluted loss per share from $(1.06) to $(0.02)[141] Segment Results Provides a detailed breakdown of financial performance for each of Gannett's operating segments Publishing segment Analyzes the financial performance of the company's traditional publishing business Publishing Segment Performance (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $670,419 | $699,585 | $(29,166) | (4)% | | Advertising and marketing services | $298,762 | $314,310 | $(15,548) | (5)% | | Circulation | $288,602 | $325,436 | $(36,834) | (11)% | | Other revenues | $83,055 | $59,839 | $23,216 | 39% | | Operating income | $25,592 | $42,355 | $(16,763) | (40)% | | Adjusted EBITDA (non-GAAP basis) | $68,648 | $102,208 | $(33,560) | (33)% | - Publishing segment total operating revenues decreased by 4%, driven by a 10% decline in print advertising and an 11% decrease in circulation, partially offset by a 39% increase in other revenues[142][143] - Digital-only circulation revenues increased by 30% due to a 44% increase in paid digital-only subscribers, reaching approximately 1.75 million[145] - Operating income for the Publishing segment decreased by 40%, and Adjusted EBITDA decreased by 33% year-over-year[142][157] Digital Marketing Solutions segment Examines the financial performance of the company's digital marketing services business Digital Marketing Solutions Segment Performance (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $109,709 | $102,281 | $7,428 | 7% | | Advertising and marketing services | $109,709 | $101,376 | $8,333 | 8% | | Operating income | $4,414 | $1,177 | $3,237 | *** | | Adjusted EBITDA (non-GAAP basis) | $11,180 | $9,172 | $2,008 | 22% | - Digital Marketing Solutions segment total operating revenues increased by 7%, driven by 8% growth in advertising and marketing services revenues from core direct business and local markets[159][160] - Operating income for the Digital Marketing Solutions segment increased significantly by over 100%, and Adjusted EBITDA increased by 22% year-over-year[159][165] - Operating costs increased by 10% due to higher third-party media fees associated with increased revenues, while Selling, general and administrative expenses decreased by 7% due to lower miscellaneous and bad debt expenses[161][162] Corporate and other category Reports on financial results for corporate functions and other unallocated items Corporate and Other Operating Results (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Operating revenues | $1,306 | $3,074 | $(1,768) | (57)% | | Total operating expenses | $33,290 | $38,665 | $(5,375) | (14)% | - Corporate and other operating revenues decreased by 57%, while total operating expenses decreased by 14%, primarily due to the absence of $10.2 million in third-party fees expensed in Q1 2021[167] LIQUIDITY AND CAPITAL RESOURCES Assesses the company's ability to meet its financial obligations and fund operations - Primary cash requirements are for working capital, debt obligations, and capital expenditures, expected to be funded by operating activities and available financing capacity[168] Cash Flow Summary (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | Cash provided by operating activities | $32,429 | $61,316 | | Cash provided by (used for) investing activities | $(6,220) | $2,516 | | Cash used for financing activities | $(3,818) | $(74,699) | | Increase (decrease) in cash, cash equivalents and restricted cash | $21,399 | $(10,553) | - Cash provided by operating activities decreased by $28.9 million, mainly due to lower cash receipts from deferred revenues and a decrease in accounts payable, partially offset by lower severance payments and interest paid[170] - Cash used for financing activities decreased by $70.9 million, primarily due to lower repayments under term loans and deferred financing costs, despite $22.5 million in repayments for 2026 Senior Notes[172] - The Company expects capital expenditures for the remainder of 2022 to be approximately $35.5 million, focused on digital product development, print/technology systems, and system upgrades[200] - The Company does not currently pay a quarterly dividend and has no intention to reinstate it, with debt terms restricting dividend payments[198] CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES Reaffirms the consistency of critical accounting policies and estimates with prior reports - There have been no material changes to the critical accounting policies and use of estimates discussed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021[203] NON-GAAP FINANCIAL MEASURES Defines and reconciles non-GAAP financial measures used to evaluate performance - Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures used to evaluate ongoing operating performance, excluding items not indicative of core operations[205][206] Non-GAAP Financial Measures (In thousands) | In thousands | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | Net loss attributable to Gannett | $(2,967) | $(142,316) | | 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 % | - Adjusted EBITDA decreased by $36.3 million (36.1%) year-over-year, and Adjusted EBITDA margin decreased from 12.9% to 8.6%[211] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK This section states that there have been no material changes to the quantitative and qualitative disclosures about market risks since the fiscal year ended December 31, 2021, as reported in the Company's Form 10-K - No material changes to market risk disclosures were reported for the quarter ended March 31, 2022, compared to the previous Form 10-K[212] ITEM 4. CONTROLS AND PROCEDURES This section confirms the effectiveness of the Company's disclosure controls and procedures as of March 31, 2022, and reports no material changes in internal control over financial reporting during the quarter - The Company's Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were effective as of March 31, 2022[213] - There were no material changes in internal control over financial reporting during the first quarter ended March 31, 2022[214] PART II. OTHER INFORMATION This section presents additional non-financial disclosures required in the quarterly report ITEM 1. LEGAL PROCEEDINGS Refers to the relevant note for details on ongoing legal matters - Information on legal proceedings is incorporated by reference from Note 11 of the condensed consolidated financial statements[217] ITEM 1A. RISK FACTORS States that there are no new material risk factors since the last annual report - No material changes to the risk factors were reported for the quarter ended March 31, 2022, compared to the previous Form 10-K[218] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Confirms no unregistered equity sales or use of proceeds during the period - No unregistered sales of equity securities or use of proceeds occurred during the period[219] ITEM 3. DEFAULTS UPON SENIOR SECURITIES Confirms no defaults on senior securities during the reporting period - No defaults upon senior securities occurred during the period[220] ITEM 4. MINE SAFETY DISCLOSURES States that this disclosure item is not applicable to the company - Mine Safety Disclosures are not applicable to Gannett Co., Inc[221] ITEM 5. OTHER INFORMATION Confirms no other material information to report under this item - No other information is reported under this item[222] ITEM 6. EXHIBITS Lists all documents filed as exhibits to the Form 10-Q - Fourth Supplemental Indenture, dated January 31, 2022 - Amendment No. 1 to the First Lien Credit Agreement, dated January 31, 2022 - Form of Gannett Co., Inc. Employee Performance Restricted Stock Unit Grant Agreement - Certifications of Principal Executive Officer and Principal Financial Officer (Rule 13a-14(a)/15d-14(d) and Section 1350)[224] Signatures Provides the official signatures for the submitted Form 10-Q - The report was signed by Douglas E. Horne, Chief Financial Officer and Chief Accounting Officer, on May 5, 2022[228]