Gannett (GCI) Q2 2025 Earnings Call July 31, 2025 08:30 AM ET Speaker0Greetings. Welcome to the Gannett Company Q2 twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded.I would now like to turn the conference over to your host, Matt Esposito, Head of Investor Relations. You may begin.Speaker1Thank you. Good morning, everyone, and thank you for joining our cal ...

Core Viewpoint - DallasNews Corporation has rejected an unsolicited acquisition proposal from MNG Enterprises, Inc. and reaffirmed its commitment to a merger agreement with Hearst, which has been amended to increase the purchase price from $14.00 to $15.00 per share in cash [2][5]. Summary by Sections Acquisition Proposals - DallasNews received a non-binding proposal from MNG Enterprises to acquire its shares at $16.50 per share, which was reviewed and rejected by the Board [2][4]. - The Board concluded that the Alden Proposal does not qualify as a "Superior Proposal" under the existing Hearst Merger Agreement [4]. Hearst Merger Agreement - On July 9, 2025, DallasNews entered into a definitive agreement with Hearst to acquire all outstanding shares at $14.00 per share, which was later amended to $15.00 per share at the Board's request [3][5]. - Robert W. Decherd, who controls a significant portion of the voting power, has committed to vote in favor of the Hearst merger and against alternative proposals [3][4]. Shareholder Rights Plan - The Board adopted a shareholder rights plan to protect against potential hostile takeovers, particularly in response to the Alden Proposal [6][7]. - The rights plan allows shareholders to purchase additional shares at a discounted price if a person or group acquires 10% or more of the Company's Series A common stock without Board approval [8][9]. - The rights plan is effective immediately and will expire on July 26, 2026, unless terminated earlier [10]. Financial Advisory - J.P. Morgan Securities LLC is serving as the exclusive financial advisor to DallasNews, while Haynes Boone is providing legal advice [11].

Company Overview - Lee Enterprises, Incorporated is a major subscription and advertising platform providing high-quality local news and information in 72 markets across 25 states [3] - The company operates daily newspapers, rapidly growing digital products, and nearly 350 weekly and specialty publications [3] - Key markets include St. Louis, MO; Buffalo, NY; Omaha, NE; Richmond, VA; Lincoln, NE; Madison, WI; Davenport, IA; and Tucson, AZ [3] Upcoming Events - Lee Enterprises has scheduled an audio webcast and conference call for August 7, 2025, at 9 a.m. Central Time to discuss preliminary results for the quarter ended June 29, 2025 [1] - A news release will be issued before the market opens on the same day [1] - The live webcast can be accessed via the Investor Relations section of Lee's website and will be available for replay 24 hours later [2]

Core Viewpoint - DallasNews Corporation has received an unsolicited proposal from MNG Enterprises to acquire its shares at $16.50 per share, while it is already under a merger agreement with Hearst at $14.00 per share [1][2][3] Group 1: Acquisition Proposals - MNG Enterprises has proposed to acquire all outstanding shares of DallasNews at a price of $16.50 per share in cash [1] - DallasNews is currently bound by a merger agreement with Hearst, which offers $14.00 per share in cash for the acquisition [2] - The Board of Directors is reviewing the MNG Proposal while maintaining its support for the existing merger agreement with Hearst [3] Group 2: Company Background - DallasNews Corporation is the holding company for The Dallas Morning News and Medium Giant, known for its strong journalistic reputation and community ties [4] - The Dallas Morning News has won nine Pulitzer Prizes, highlighting its commitment to quality journalism [4] - Medium Giant, a creative marketing agency under DallasNews, has received multiple industry awards, including the AAF Addy and AMA DFW Annual Marketer of the Year Award [4]

Core Insights - Zacks Premium provides various tools to enhance stock market investment confidence and knowledge [1][2] - The Zacks Style Scores are designed to help investors select stocks with the highest potential to outperform the market in the short term [3][4] Zacks Style Scores - The Style Scores categorize stocks into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each assessing different investment characteristics [4][5][6][7] - Value Score focuses on identifying undervalued stocks using financial ratios [4] - Growth Score emphasizes a company's financial health and future growth potential [5] - Momentum Score identifies trends in stock prices and earnings estimates to optimize entry points [6] - VGM Score combines the three styles to highlight stocks with the best overall potential [7] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investment decisions, with 1 (Strong Buy) stocks historically yielding an average annual return of +23.62% since 1988 [8][10] - A large number of stocks are rated, with over 800 top-rated stocks available, making it essential to utilize Style Scores for better selection [9] Stock Highlight: New York Times Co. (NYT) - NYT is rated 2 (Buy) on the Zacks Rank and has a VGM Score of A, indicating strong potential [12] - The company has a Value Style Score of B, supported by a forward P/E ratio of 25.12, making it attractive to value investors [12] - Recent earnings estimates for fiscal 2025 have been revised upward, with the Zacks Consensus Estimate increasing by $0.04 to $2.14 per share, and an average earnings surprise of +11.2% [13]

Core Viewpoint - DallasNews Corporation is set to be acquired by Hearst, enhancing its legacy of independent journalism with Hearst's resources and industry reputation [1][3]. Company Overview - DallasNews Corporation is the holding company for The Dallas Morning News and Medium Giant, known for its strong journalistic reputation and community ties [7]. - The Dallas Morning News has won nine Pulitzer Prizes, highlighting its commitment to quality journalism [7]. - Medium Giant is an integrated creative marketing agency that has received multiple industry awards, including the AAF Addy and the AMA DFW Annual Marketer of the Year [8]. Acquisition Details - Shareholders of DallasNews will receive $14.00 in cash per share, representing a 219% premium over the closing price of $4.39 on July 9, 2025 [3]. - The acquisition has been unanimously approved by the Boards of Directors of both companies and is expected to close in the third or early fourth quarter of 2025 [3][4]. Strategic Implications - Upon completion, The Dallas Morning News will join Hearst Newspapers, which publishes 28 dailies and 50 weeklies across the U.S. [4]. - Hearst plans to invest in The Dallas Morning News' digital strategy and journalism, aiming to expand its audience reach [5]. - The acquisition aligns with Hearst's strategy of supporting trusted local media brands in growth markets [5]. Leadership Statements - Hearst Newspapers' president emphasized the commitment to support The Dallas Morning News through investments in digital strategy and journalism [5]. - The CEO of DallasNews highlighted the shared values with Hearst and the importance of their resources for the future of The Dallas Morning News [5]. Transition to Private Company - Following the acquisition, DallasNews Corporation will become a private entity, and its shares will no longer be traded on Nasdaq [5].

Core Viewpoint - DallasNews Corporation has appointed Colleen McCain Nelson as the Executive Editor of The Dallas Morning News, effective August 11, 2025, marking her return to the newsroom after nearly 12 years as a writer [1][4]. Company Overview - DallasNews Corporation is the holding company for The Dallas Morning News and Medium Giant, with The Dallas Morning News being Texas' leading daily newspaper, recognized for its strong journalistic reputation and community ties [9]. - Medium Giant is an integrated creative marketing agency that has received multiple industry awards, including the AAF Addy and the AMA DFW Annual Marketer of the Year Award for Campaign of the Year in 2024 [10]. Leadership Appointment - Colleen McCain Nelson, a Pulitzer Prize-winning journalist, previously served as the Executive Editor of The Sacramento Bee and has led journalists across five California newsrooms [2][3]. - Grant Moise, Publisher of The Dallas Morning News, expressed confidence in Nelson's leadership, highlighting her commitment to journalistic excellence and digital transformation [3][4]. Career Background of Colleen McCain Nelson - Nelson has a rich background in journalism, having worked as a White House correspondent for The Wall Street Journal and covering two presidential campaigns [7]. - She has held various editorial roles, including national opinion editor for McClatchy and vice president/editorial page editor of the Kansas City Star, which produced three Pulitzer finalists [6][8]. - Nelson's previous work at The Dallas Morning News included reporting on local, state, and national politics, contributing to the newspaper's 2010 Pulitzer Prize for editorial writing [4][5]. Awards and Recognition - Under Nelson's leadership, the Sacramento Bee received several national and state journalism awards, including a Sigma Delta Chi Award and six first-place awards at the California Journalism Awards in 2024 [3].

Group 1 - Gannett (NYSE: GCI) is viewed as a deeply discounted turnaround opportunity, with the market pricing in failure while overlooking execution potential [1] - If management successfully continues deleveraging and meets digital revenue targets, there is a credible path for a 50-70% re-rating through modest multiple expansion [1] - The analysis emphasizes the importance of financial trends, profit growth, and institutional capital accumulation in identifying high-growth, underanalyzed companies [1] Group 2 - The research approach integrates both fundamental and technical analysis, focusing on indicators such as relative strength, trading volume shifts, and accelerating profit growth [1] - The goal is to identify strong growth stocks before they gain widespread attention, enhancing market understanding and providing actionable investment insights [1]

Core Insights - Nathan Bekke has been appointed as the Chief Operating Officer of Lee Enterprises, succeeding his role as Operating Vice President and Vice President of Audience Strategy [1][2] - Kevin Mowbray, the President and CEO of Lee, highlighted Bekke's significant contributions to the company's digital transformation and revenue growth, particularly in digital-only audience expansion [2] - Bekke expressed his commitment to accelerating Lee's digital transformation and building on the company's progress as a digital-first organization [2] Company Overview - Lee Enterprises is a major subscription and advertising platform, providing local news and information through daily newspapers and nearly 350 weekly and specialty publications across 72 markets in 25 states [6] - The company is focused on delivering valuable local news and information to its communities, with key markets including St. Louis, MO; Buffalo, NY; Omaha, NE; and Richmond, VA [6] - Lee's common stock is traded on NASDAQ under the symbol LEE [6]

Core Insights - The New York Times Company (NYT) has positioned digital subscriptions as a central element of its growth strategy, focusing on high-quality journalism and personalized content to expand its subscriber base [1][2][6] - The company has diversified its digital offerings beyond news, including cooking, games, and lifestyle features, which contribute to its subscription growth [1][2] Subscriber Growth - As of the end of Q1 2025, NYT had approximately 11.66 million subscribers, with 11.06 million being digital-only subscribers, marking a net addition of 250,000 digital-only subscribers from the previous quarter [3] - The company reported that 5.76 million of its digital-only subscribers were bundle and multi-product subscribers [3] Revenue Performance - Subscription revenues reached $464.3 million in Q1 2025, reflecting an 8.2% year-over-year increase, while digital-only subscription revenues surged by 14.4% to $335 million [4] - The average revenue per user (ARPU) for digital-only subscribers increased to $9.54 from $9.21 year-over-year, driven by subscribers moving to higher rate plans and price increases for long-term non-bundle subscribers [5] Future Outlook - Management anticipates continued growth in subscriptions, projecting total subscription revenue growth of 8-10% and digital-only subscription revenue growth of 13-16% for Q2 2025 [6] - The strategic focus on building a loyal subscriber base has reduced the company's reliance on volatile advertising revenues [6] Market Positioning - NYT's emphasis on subscription growth and digital innovation has been a key factor in its success within a competitive media landscape, showcasing its ability to attract new subscribers and optimize ARPU [7] - Despite the positive trends, the company faces challenges with a decline in print advertising revenues, which fell by 8.5% in Q1 2025 [7] - Over the past three months, NYT shares have increased by 15.7%, outperforming the industry growth of 14.8% [8]