Gannett(US:GCI)2023-02-23 19:39Financial Data and Key Metrics Changes - For the full year, total operating revenues were $2.9 billion, with approximately 35% from digital sources, which grew 1.8% year-over-year on a same-store basis [2] - Adjusted EBITDA totaled $90.4 million in Q4, a decrease of 21.7% year-over-year, with an adjusted EBITDA margin of 12.4% compared to 14% in the prior year quarter [49] - Total operating revenues for Q4 were $730.7 million, a decrease of 11.6% compared to the prior year quarter, and a decline of 10.3% on a same-store basis [76] Business Line Data and Key Metrics Changes - Digital-only subscription revenue grew nearly 30% year-over-year, reaching $35.5 million, while ARPU grew approximately 2% year-over-year [15][51] - In the Digital Marketing Solutions (DMS) segment, total revenue in Q4 reached a record high of $121.1 million, an increase of 7.8% year-over-year on a same-store basis [26] - The average monthly customer count in the DMS segment increased by approximately 1%, with ARPU reaching a new high of over $2,600 per month, growing 7.7% versus the prior year [26] Market Data and Key Metrics Changes - Local markets are expected to drive most of the subscription growth, accounting for over 90% of current subscribers, with significant opportunities remaining as local subscribers represent only about 3% of the digital local audience [4] - Total digital revenues in Q4 were $269.2 million, down 0.4% year-over-year on a same-store basis, but up sequentially by 190 basis points from Q3 [24] Company Strategy and Development Direction - The company aims to balance profitability and subscriber growth, focusing on acquiring highly engaged, long-term, and more profitable subscribers [17] - There is a commitment to local operations and communities, with plans to enhance local connections to better serve audiences and improve operating performance [21] - The company is focused on creating a lower and more variable cost base, expecting annual savings of at least $220 million in 2023 [8][71] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about entering 2023, citing improving revenue trends and a strong team in place [64] - The company does not foresee a recession impacting its business, with trends improving in the first quarter of 2023 compared to Q4 [31][60] - Expected adjusted EBITDA growth for 2023 is projected to be in the range of $280 million to $300 million, translating to year-over-year growth of 10% to 15% [54][86] Other Important Information - The company repaid $147 million of debt in 2022 and expects to repay at least another $120 million in 2023, aiming for first lien net debt to be less than 2x EBITDA by the end of 2023 [7][29] - The company has launched new partnerships to drive immediate revenue opportunities and enhance monetization of its content platform [46][82] Q&A Session Summary Question: What is the macroeconomic outlook for 2023? - Management indicated that they are not seeing trends suggesting a recession, with improving trends in the first quarter compared to Q4 [31] Question: Will the company consider selling trophy properties? - Management confirmed they would entertain bids on any markets or products at or above fair market value, indicating potential sales in the future [35] Question: When will the company be in a position to buy back equity? - Management stated that the focus is currently on reducing debt, with plans to widen capital allocation opportunities as leverage improves [66]