Gannett Co., Inc. (“Gannett”, “we”, “us”, “our”, or the
“Company”) (NYSE: GCI) announced today that it is seeking to
opportunistically refinance its existing term loan under its senior
secured credit facilities. The Company intends to issue senior
secured notes to refinance a portion of the term loan and refinance
the remainder of the existing term loan with a new senior secured
term loan. The proposed refinancing transactions are subject to
market and other conditions, and the Company can give no assurances
that it will complete any such transactions, in whole or in part,
or as to the amount or timing of any such transactions.
Senior Secured Term Loan
The new senior secured term loan would be in a principal amount
up to $550 million (the “Credit Agreement”). Gannett Holdings LLC,
a Delaware limited liability company and a wholly owned subsidiary
of the Company, would be the borrower under the Credit Agreement
(the “Borrower”), and lenders are anticipated to include funds
managed by affiliates of Apollo Capital Management L.P. Upon
closing, the net proceeds of the loans will be used to refinance a
portion of the Company’s existing term loan.
Loans under the Credit Agreement are expected bear interest at a
per annum rate equal to LIBOR plus a margin of 5.00% with a floor
of 50 basis points. All obligations under the Credit Agreement will
be secured by all or substantially all of the assets of the Company
and the direct and indirect material domestic subsidiaries of the
Company (the “Guarantor Subsidiaries”). The obligations of the
Borrower under the Credit Agreement are guaranteed on a senior
secured basis by the Company and the Guarantor Subsidiaries. The
completion of the Credit Agreement is contingent upon the
successful offering of senior secured notes.
Third Quarter 2021 Operating
Highlights
During the third quarter of 2021, the Company has repaid
approximately $65.0 million in principal under its existing 5-year
term loan using the proceeds from $38.6 million of real estate and
other asset sales and excess cash, bringing the 5-year term loan
principal down to $925.7 million. The Company is scheduled to make
the first amortization payment of $26.1 million on September 30,
2021 and expects to end the quarter with the 5-year term loan
principal under $900 million and to have approximately $130 million
of cash and cash equivalents.
During the third quarter of 2021 the Company continues to expect
its overall revenue to be down slightly year-over-year and
continues to expect growth year-over-year on a same store basis.
Adjusted EBITDA for the third quarter of 2021 is expected to grow
as compared with Adjusted EBITDA for the third quarter of 2020. The
Company now expects that its Adjusted EBITDA margin1 in the third
quarter of 2021 will be approximately 12-13% versus approximately
13.7% in the first half of 2021. The margin outlook is being
impacted by inflationary pressures on newsprint and delivery as
well as the resurgence in the COVID-19 pandemic and the associated
negative impact on single copy circulation revenue and the events
business, including the ability to host in-person endurance races
and local community events.
About Gannett
Gannett Co., Inc. (NYSE: GCI) is a subscription-led and
digitally focused media and marketing solutions company committed
to empowering communities to thrive. With an unmatched reach at the
national and local level, Gannett touches the lives of millions
with our Pulitzer Prize-winning content, consumer experiences and
benefits, and advertiser products and services. Our current
portfolio of media assets includes USA TODAY, local media
organizations in 46 states in the U.S., and Newsquest, a wholly
owned subsidiary operating in the United Kingdom with more than 120
local news media brands. Gannett also owns the digital marketing
services companies ReachLocal, Inc., UpCurve, Inc., and WordStream,
Inc., which are marketed under the LOCALiQ brand, and runs the
largest media-owned events business in the U.S., USA TODAY NETWORK
Ventures. To connect with us, visit www.gannett.com.
Important Additional Information
This press release shall not constitute an offer to sell nor the
solicitation of an offer to buy senior secured notes or any other
securities of the Company, and shall not constitute an offer,
solicitation or sale in any jurisdiction in which such an offer,
solicitation or sale would be unlawful.
Cautionary Statement Regarding Forward-Looking
Statements
Certain items in this press release may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including statements
regarding any future debt refinancing transactions and the ultimate
satisfaction or non-satisfaction of the conditions to the
transactions, the amount, timing, or other terms of any future debt
refinancing transactions, the possible offering of the senior
secured notes and the use of the proceeds from any such offering,
our plans regarding debt repayments and future anticipated debt
balances, the expected benefits of any potential refinancing
transactions, our ability to grow Adjusted EBITDA, our ability to
achieve our operating priorities, our strategy, and future revenue
trends. Words such as "expect(s)", "plan(s)", "believes(s)",
"will", “would,” and similar expressions are intended to identify
such forward-looking statements. These statements are based on
management’s current expectations and beliefs and are subject to a
number of risks and uncertainties. These and other risks and
uncertainties could cause actual results to differ materially from
those described in the forward-looking statements, many of which
are beyond our control. The Company can give no assurance its
expectations will be attained. Accordingly, you should not place
undue reliance on any forward-looking statements contained in this
press release. For a discussion of some of the risks and important
factors that could cause actual results to differ from such
forward-looking statements, see the risks and other factors
detailed from time to time in the Company’s 2020 Annual Report on
Form 10-K, and other filings with the Securities and Exchange
Commission. Furthermore, new risks and uncertainties emerge from
time to time, and it is not possible for the Company to predict or
assess the impact of every factor that may cause its actual results
to differ from those contained in any forward-looking statements.
Such forward-looking statements speak only as of the date of this
press release. The Company expressly disclaims any obligation to
release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any change in the Company’s
expectations with regard thereto or change in events, conditions or
circumstances on which any statement is based.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA is a non-GAAP performance measure the Company
believes offers a useful view of the overall operations of our
business. The Company defines 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 (expense),
(5) Loss on Convertible notes derivative, (6) Other non-operating
items, including equity income, (7) Depreciation and amortization,
(8) Integration and reorganization costs, (9) Asset impairments,
(10) Goodwill and intangible impairments, (11) Gains or losses on
the sale or disposal of assets, (12) Share-based compensation, (13)
Other operating expenses, including third-party debt expenses and
acquisition costs, (14) Gains or losses on the sale of investments
and (15) certain other non-recurring charges. The most directly
comparable U.S. GAAP measure is Net income (loss) attributable to
Gannett.
Adjusted EBITDA margin is a non-GAAP performance measure the
Company believes offers a useful view of the overall operations of
our business. Adjusted EBITDA margin is defined as Adjusted EBITDA
divided by total Operating revenues.
We do not provide guidance for the most directly comparable GAAP
measure, net income (loss) attributable to Gannett margin. We
cannot provide a reconciliation between our forecasted non-GAAP
measure due to the unavailability of reliable estimates for certain
components of net income (loss) attributable to Gannett and the
respective reconciliations at this time, which could be
significant. Accordingly, we cannot provide a reconciliation
between the projected non-GAAP measure and the most comparable GAAP
measure without unreasonable effort.
Same Store Revenues
Same store revenues are based on GAAP revenues for Gannett for
the current period, excluding (i) exited operations, (ii) currency
impacts, and (iii) deferred revenue impacts related to the
acquisition of Legacy Gannett.
1 Please see important information regarding this non-GAAP
measure above.
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version on businesswire.com: https://www.businesswire.com/news/home/20210927005173/en/
For investor inquiries, contact: Trisha Gosser Investor
Relations 703-854-3000 investors@gannett.com
For media inquiries, contact: Lark-Marie Anton Senior
Vice President, Communications 646-906-4087 lark@gannett.com
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