Q4 2023 Gannett Co Inc Earnings Call

Greetings and welcome to Gannett's fourth Q earnings Conference call.

At this time all participants are in a listen only mode.

Brief question and answer session will follow the formal presentation.

Anyone should require operator assistance during the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded it is not my pleasure to introduce your host Matthew Esposito Investor Relations. Thank you Mr. Esposito she might be.

Michael E. Reed: It is now my pleasure to introduce your host, Matthew Esposito, in Mr. We significantly increased our net income, we developed new partnership revenue streams, and we improved our capital structure. In 2023, adjusted EBITDA grew 4% over the prior year. We also significantly improved free cash flow in 2023, and we maintain a strong liquidity position with just over 100 million of cash on the balance sheet.

Yeah.

Matthew Esposito: Thank you good morning, everyone and thank you for joining our call today to discuss Gannett's fourth quarter 2023 financial results presenting on today's call will be Mike Reed, Chairman and Chief Executive Officer, Doug Horne, Chief Financial Officer, Kristin Roberts, Chief content Officer, and Chris Joe.

Matthew Esposito: President of digital marketing solutions, if you navigate to the Gannett website, you will find that we have posted an earnings supplement in addition to our earlier press release, we will be referencing it today on the call as it provides you with additional detail on this quarter's performance before we begin. Please let me remind you that this call is being recorded in addition.

Michael E. Reed: We are very excited to carry this momentum into the year ahead. As you'll hear from Doug later, among progress in several other areas, in 2024, we expect another year of adjusted EBITDA and free cash flow growth, another $110 million in debt repayment, and further reduction to our first lien net leverage.

Matthew Esposito: Certain statements made during this call are or may be deemed to be forward looking statements, including those with respect to future results and events and are based upon current expectations. These statements involve risks and uncertainties that may cause actual results and events to differ materially from those discussed today, we encourage you to read the cautionary statement.

Michael E. Reed: Over the past year, the investment and successful execution of our content strategy allowed us to grow our digital audience and engagement, as well as improve the overall monetization of our audience. And we expect digital revenues to grow approximately 10% versus 2023 and, importantly, begin to outpace the declines we see in our legacy revenue stream. As a result, we are expecting total revenue growth near the end of 2024. We've talked about the inflection point in the past being the end of 2024.

Matthew Esposito: Regarding forward looking statements in the earnings supplement as well as the risk factors described in Gannett's filings made with the SEC.

Matthew Esposito: That does required by law, we undertake no obligation to publicly update or correct any of the forward looking statements made during this call.

Matthew Esposito: In addition, we will be discussing non-GAAP financial information during the call, including same store revenues free cash flow adjusted EBITDA adjusted EBITDA margin and adjusted net income attributable to connect you can find reconciliations of our non-GAAP measures to the most comparable U S. GAAP measures in the earnings supplement lastly.

Michael E. Reed: The inflection point is when revenue flips from declining to growing. And as I just said, we're expecting that towards the end of 2024 as we enter 2025. There were numerous accomplishments in 2023, and they underscore the strength of our strategy at a time when the media industry faces many challenges, nonprofits have been forced to close, and some media outlets have ceased to exist. Although we face similar headwinds, we believe our scale and our strategy are differentiated. Important to our success in 2023 and our success in 2024 is the growth of total digital revenue. Our digital revenue strategy and the foundation for anticipated future growth is to expand our audience and improve engagement, and improve platform monetization at each point in the customer journey with us, which, by the way, grew 4% year over year. In Q4, digital-only Subscription Revenue and digital-only ARPU experienced new highs, reflecting a more strategic acquisition and pricing model.

Matthew Esposito: I would like to remind you that nothing on this call constitutes an offer to sell or solicitation of offers to purchase any interest in Gannett. The webcast and audio cast are copyrighted material of Gannett and may not be duplicated reproduced or rebroadcast without prior written consent with that I would like to turn the call over to Mike Reed Gannett's, Chairman and CEO.

Matthew Esposito: Ill.

Michael E. Reed: Thanks, Matt Good morning, everybody and thanks for joining our call. This morning.

Michael E. Reed: I am pleased to share with you details on our solid fourth quarter and very solid 2023 full year performance.

Michael E. Reed: And how we are building on this momentum already in 2024 two.

Michael E. Reed: 2023 was a year marked by innovation resilience and collaborative efforts that Gannett.

Michael E. Reed: We rallied around new ideas, new approaches and new avenues and implemented substantive change in our organization, which drove meaningful improvement in our key metrics.

Michael E. Reed: As a result, we achieved four consecutive quarters of sequential improvement in same store revenues.

Michael E. Reed: We grew adjusted EBITDA and free cash flow for the full year with.

Michael E. Reed: We significantly increased our net income we developed new partnership revenue streams, and we improved our capital structure.

Michael E. Reed: We believe we have continued upside in both areas as we maintain our focus on smart customer acquisition, in-depth local content, and effective pricing strategies. While digital-only subscription revenue growth remains a key element given its highly recurring nature, we are balancing it with a focus on our digital advertising business. In the fourth quarter, our initiatives around audience expansion and increased engagement led to the best quarterly performance for digital advertising in all of 2023. First party data is crucial to unlocking further value in our digital advertising. Lengthening the time on site and creating personalized, smart customer journeys that allow for the full implementation of multi-point monetization. Another channel to increase our overall monetization is through partnerships. In the quarter, we announced two more partnerships with JackPocket and Home Solutions.

Michael E. Reed: In 2023, adjusted EBITDA grew 4% over the prior year.

Michael E. Reed: We repaid approximately $142 million of debt, which combined with the growth in adjusted EBITDA significantly reduced our first lien net leverage from two seven times to two point in old times.

Michael E. Reed: We also significantly improved free cash flow in 2023, and we maintain a strong liquidity position with just over $100 million of cash on the balance sheet.

Michael E. Reed: We are very excited to carry this momentum into the year ahead as.

Michael E. Reed: As you will hear from Doug later among progress in several other areas in 2024, we expect another year of adjusted EBITDA and free cash flow growth.

Michael E. Reed: Another $110 million in debt repayment and further reduction to our first lien net leverage.

Michael E. Reed: In 2023 digital revenues were approximately $1 1 billion and represented 39% of total revenues growing over the prior year.

Michael E. Reed: Over the past year, the investment and successful execution of our content strategy allowed us to grow our digital audience and engagement as well as improved the overall monetization of our audience.

Michael E. Reed: Our five announced partnerships in 2023 create a new digital revenue stream with significant potential and, importantly, at a very high margin, and they have become immediately accretive. For 2024, we expect to generate approximately $20 million in this very high-margin partnership revenue, more than doubling 2023 levels, virtually all of which is accretive to adjusted EBITDA and free cash flow. And while we expect to launch new partnerships in 2024, the more substantial revenue growth is expected to come from scaling our existing portfolio of partnerships, further embedding content across our platform, and driving increased engagement. Now central to our strategy is our commitment to expanding our audience and their engagement through a renewed content strategy focused on creating joyful experiences. Since joining us as our chief content officer, Kristen has made a remarkable impact on the domestic Gannett media segment.

Michael E. Reed: Our expectation for 2024 is that total digital revenues will make up over 45% of total revenues by the end of the year and we expect digital revenues to grow approximately 10% versus 2023.

Michael E. Reed: And importantly begin to outpace the declines we see in our legacy revenue streams. As a result, we are expecting total revenue growth near the end of 2024, we've talked about the inflection point in the past being the end of 'twenty for the inflection point is when revenue flips from declining to growing.

Michael E. Reed: And as and as I, just said, we're expecting that towards the end of 'twenty four as we enter 'twenty five.

Michael E. Reed: There were numerous accomplishments in 2023 and they underscore the strength of our strategy at a time when the media industry faces many challenges.

Michael E. Reed: I'm sure. Many of you have read in the press over the last couple of months and many of our peers have recently announced sizable layoffs.

Michael E. Reed: Nonprofits have been forced to close and some media outlets have ceased to exist.

Michael E. Reed: Although we faced similar headwinds we believe our scale.

Michael E. Reed: And our strategy are differentiators that our results are continued proof that we were on that we are on the right path.

Kristen: Kristen and her team are executing on our strategy to rapidly expand our audience and content, amplify our journalism, and drive diversified revenue streams. I'll now hand it over to Kristen to recap her team's accomplishments in 2023 and hear what we can expect in 2024. Okay, Kristen?

Michael E. Reed: Remember, we grew profitability in 2023 and.

Michael E. Reed: And our outlook. This morning forecast continued growth over the next three years.

Michael E. Reed: Later today, you'll hear from Christian Roberts, and how we are reinvesting in our newsrooms.

Michael E. Reed: Typically in our small communities and as we enter 2024, we are energized to have laid the necessary groundwork for sustainable growth here at Gannett.

Kristen: Thank you, Mike. We are doing exactly what we said we would do when we launched our renewed content strategy six months ago. More people are reading and watching us than ever before. We are using strong journalism to serve our communities in ways that are also expected to create revenue. And we're showing that content can be the engine of growth at Gannett. All of this success is linked to the ambition and the energy that our content team brings to the challenge every day.

Michael E. Reed: Important to our success in 2023 and the success in 2024 is the growth of total digital revenues.

Michael E. Reed: We have seen solid progress across several several of our digital revenue streams and in the fourth quarter total digital revenues continued to grow over the prior year.

Michael E. Reed: Our digital revenue strategy and the foundation for anticipated future growth is to expand our audience and improve engagement.

Michael E. Reed: And improved the platform monetization.

Michael E. Reed: Yes at each point in the customer journey with us.

Michael E. Reed: We believe the greatest revenue opportunity lies in a comprehensive monetization strategy that maximizes revenue across the entire spectrum of our 187 million average monthly unique visitors, which by the way grew 4% year over year.

Kristen: As I outlined last year, our strategy centers on audience growth. Expansion of our audience, along with deepening insights and engagement, creates the foundation expected to maximize monetization across increasingly diverse revenue streams. In 2023, we experienced significant audience expansion due to strong improvements in the efficiency of our content team, which in turn resulted in increased page views and readership per story. We also remained focused on staying attuned to our audience's preferences, particularly around college football and high school sports. In 2024, we will be entering the next phase of our plan, which is engagement initiatives such as rebooting our small newsrooms and gearing up for the 2024 election will be at the top of our list. So let's briefly walk through each of them.

Michael E. Reed: An important component of the monetization of our audience has been digital only subscription revenue.

Michael E. Reed: In Q4 digital only subscription revenue and digital only <unk> experienced new highs, reflecting a more strategic acquisition and pricing model.

Michael E. Reed: We believe we have continued upside in both areas as we maintain our focus on smart customer acquisition.

Michael E. Reed: In depth local content and effective pricing strategies.

Michael E. Reed: While digital only subscription revenue growth remains a key element given its highly recurring nature, we are balancing it with a focus on our digital advertising business.

Michael E. Reed: In the fourth quarter, our initiatives around audience expansion and increased engagement led to the best quarterly performance for digital advertising in all of 2023.

Kristen: A key focus for us in 2024 is reinvesting in our small newsrooms. Last year, we launched an initiative with the conviction that putting reporters into our smallest newsrooms was critical, but not enough on its own to be sustainable. We needed to experiment with new ways of engaging hometown readers at a small site scale. Our reporters combined a first-person voice with a newsletter approach that invited readers to join them in experiencing their community firsthand. The results were remarkable and gave us the confidence to boldly expand this strategy. We're hiring more journalists in communities that, like the pilot sites, have lost local news reporters, and we're converting more of our smaller newsrooms across the country to take advantage of the engagement, reader satisfaction, and retention that the newsletters offer.

Michael E. Reed: First party data is crucial to unlocking further value in our digital advertising lengthening the time on site and creating personalized smart customer journeys that allow for the full implementation of multi point monetization.

Michael E. Reed: By leveraging our data science capabilities, we launched first party data led campaigns across 50 demographic segments and 800 interest segments in 2023.

Michael E. Reed: The deprecation of the third party Cookie is expected to result in a substantial shift in the advertising industry.

Michael E. Reed: While its full impact remains to be seen we believe we are well positioned in 2024 to capture increased premium revenue as we expand our already robust first party data capabilities.

Michael E. Reed: Another channel to increase our overall monetization is through partnerships.

Michael E. Reed: We made great strides with partnerships in 2023, as we align with brands that share our values and are expected to expand our audience.

Kristen: We're also directing our focus for the 2024 elections with our one team unified strategy leading the charge. Our mission is to leverage the strength, power, and footprint of the USA Today network to create the preeminent balanced source of news, information, tools, and guides that empower voters to make informed choices on specific issues and political races that will set America's direction for the next four years. We will center our election journalism on the people we serve, not the candidates courting them.

Michael E. Reed: Within the quarter, we announced two more partnerships with jab pocket in home solutions our.

Michael E. Reed: Our five announced partnerships in 2023 create a new digital revenue stream with significant potential and importantly at a very high margin.

Michael E. Reed: That'll become immediately accretive.

Michael E. Reed: Two our total revenue and to our total free cash flow.

Michael E. Reed: For 2024, we expect to generate approximately $20 million in this very high margin partnership revenue more than double in 2023 levels virtually all of which is accretive to adjusted EBITDA and free cash flow.

Kristen: The USA Today network is committed to making the voter the VIP of our election strategy. We will help readers, viewers, and listeners become more informed and ready to make the best choices for themselves and their families at the ballot box. We're also leaning into the local through meaningful voter guides in more than 100 cities and towns, as well as service journalism, community events, and engagement opportunities that allow our readers, viewers, and listeners to get accurate, nuanced coverage of their specific communities. We will be launching a helpful email course that prepares readers to vote, and we're creating explanatory journalism on the platforms we know our audiences are already on. We've redesigned our results page to get audiences the information they care about faster, and we're investing to make it all happen. We're creating roles and redeploying journalists throughout the network to focus on better serving the voter during this election.

Michael E. Reed: Over the next five years, we believe this partnership revenue can grow more meaningfully.

Michael E. Reed: And while we expect to launch new partnerships in 2024.

Michael E. Reed: More substantial revenue growth is expected to come from scaling our existing portfolio of partnerships.

Michael E. Reed: Further embedding the content across our platform and driving increased engagement.

Michael E. Reed: Now central to our strategy is our commitment to expanding our audience and their engagement through a renewed content strategy focused on creating joyful experiences.

Michael E. Reed: Since joining us as our chief content Officer Christian has made a remarkable impact on the domestic media segment.

Michael E. Reed: Kristen and her team are executing on our strategy to rapidly expand our audience and content ample.

Michael E. Reed: Amplify our journalism and drive diversified revenue streams.

Michael E. Reed: Over the past two quarters. The team has driven a significant increase in audience growth page views and readership per story, while also leveraging the power of data to deliver the right outcomes for each consumer.

Kristen: Ultimately, all of these initiatives are expected to have a tangible impact on our company, both in delivering on our mission of serving our audience and in revenue generation. We drove meaningful audience growth in the second half of 2023. We're scaling the outcomes of our successes in 2024, and we're leaning hard into new initiatives expected to drive new and sustainable growth. I am profoundly thankful to be leading the content team. We are proud to be a growth engine at Gannett, and we're doing it with a commitment to our purpose. Back to you, Michael.

Michael E. Reed: I'll now hand, it over to Christian to recap our team's accomplishments in 2023 and here what we can expect in 2020 for Kristen. Thank you, Mike we arent doing exactly what we said we would do when we launched our renewed content strategy six months ago more people are reading and watching us.

Christian Roberts: Than ever before we aren't using strong journalism to serve our communities in ways that are also expected to create revenue and we're selling our content can be the engine of growth I feel that all of this success is linked to the ambition and the energy that our content team brings to the challenge every day.

Michael E. Reed: Thanks, Kristen. We're so excited to see the significant audience growth in the closing months of 23, especially when you consider how large our audience already is. To see that on such a large scale, and then to be able to continue to grow from there is very exciting. And we look forward to scaling and having that impact our 24, 25, and 26 results as we go forward. And in parallel to the digital revenue growth in our media properties is the growth of our DMS business, LocalIQ. Our DMS business continues to operate at a high level, and it ended the full year 2023 with more than $475 million of highly recurring revenue. Approximately 15,000 core platform customers, double-digit adjusted EBITDA margin, healthy ARPU, and customer budget retention rates of over 95%.

Christian Roberts: As I outlined last year, our strategy centers on audience glass expansion of our audience, along with deepening insights and engagement create the foundation expected to maximize monetization across increasingly diverse revenue streams in 2023.

Christian Roberts: Barring any significant audience expansion data strong improvements in the efficiency of our content.

Christian Roberts: This in turn resulted in increased page views and readership. Her story. We also remain focused on staying attuned to our audiences preferences, particularly around college football and high School sports in 2024, we will be entering the next phase of our plan, which is engagement initiatives such as rebooting our small.

Christian Roberts: Newsrooms and gearing up for the 2020 for election will be at the top of our list. So lets briefly walk through each of these.

Christian Roberts: A key focus for us in 2024 is reinvesting in our small newsrooms last year, we launched an initiative with the conviction that putting reporters and for our smallest newsrooms was critical but not enough on its own to be sustainable we needed to experiment with new ways of engaging hometown readers that are small sites scale.

Christian Roberts: Our reporters combined the first person voice, where the newsletter approach that invited readers to join them and experiencing their communities.

Chris Cho: In spite of the relatively flat performance in core platform revenues during the fourth quarter, we did manage to achieve full-year growth over the prior year. And importantly, we anticipate revenue growth for the first quarter of 2024, as well as for the full year. We are also pleased to see core platform ARPU hit a new high in the fourth quarter. We are excited to have Chris Cho lead our DMS business in 2024. Chris is a proven leader in the product field, and his team is laser focused on driving future growth, expanding our product portfolio, and providing a best-in-class marketing solution for our SMB partners. And I'll now hand it over to Chris to provide an update on the business and outline some of the exciting initiatives that are in motion. Thank you, Mike.

Christian Roberts: Yes.

Chris Cho: I am pleased with the remarkable resilience our DMS business showcased despite a more challenging environment in the latter half of the year. In 2023, our DMS business continued to grow. Our fundamentals remain strong, and we have laid the groundwork for expected success in 2024 and beyond. As we head into 2024, I am thrilled about the strategic initiatives underway, as well as the ones we are poised to pursue. In the fourth quarter, DMS revenue reflected a continuation of the macro trends from Q3. General consumer stress and weakness slowed the growth of our largest vertical, Home Services, along with other large verticals such as Healthcare Professional, and other services.

Christian Roberts: Network is committed to making the voter the V. I P of our election strategy, we will help readers viewers and listeners become more informed and ready to make the best choices for themselves and their families at the ballot box. We're also leaning into local <unk>.

Christian Roberts: Meaning full voter guides in more than 100 cities and towns as well as service journalism community events and engagement opportunities that allow our readers viewers and listeners to get accurate nuanced coverage of their specific communities. We will be launching I helpful. Email course that prepares readers to vote.

Christian Roberts: We're creating explanatory journalism on the platforms. We know our audiences are already on we've redesigned our results page to get audiences. The information they care about faster and more investing to make it all happened or creating bowls and redeploying journalist throughout the network to focus on better serving the voter during this election.

Christian Roberts: Alternately all of these initiatives are expected to have a tangible impact on our company both in delivering on our mission of serving our audience as well as revenue generation, we drove meaningful audience growth in the second half of 2023, we're scaling the outcomes of our successes in 2024.

Chris Cho: We have already begun to see this dissipate in 2024, and as a result, our DMS revenue is expected to grow 1% to 2% in Q1, and we also anticipate a higher growth trajectory for the full year of 2024 than experienced in 2023. Several actions are currently underway that are expected to further accelerate. In 2024, we will strategically align ourselves to meet demand where it is most prevalent and offers the greatest potential. Home services will remain a high priority given its size and its growth.

Speaker Change: And we're leaning hard into new initiatives expected to drive new and sustainable growth I'm profoundly thankful to be leading the content team. We are proud to be a gross and <unk> and we're doing it with a commitment to our purpose back to you Mike.

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Christian Roberts: 24, 25 26 results as we go forward.

Chris Cho: We continue to be highly optimistic about this customer segment and expect to see double-digit growth for the full year of 2024. Additionally, we will replicate the scale achieved there by doubling down in areas where we have strong domain expertise. I've seen strong demand for areas such as healthcare, real estate, and health and fitness.

Christian Roberts: Parallel to.

Christian Roberts: The digital revenue growth in our immediate properties.

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Christian Roberts: Most business continues to operate at a high level.

Christian Roberts: It ended the full year 2023 with more than 475 million of highly recurring revenue.

Christian Roberts: Approximately 15004 platform customers.

Christian Roberts: Double digit adjusted EBITDA margins healthy R. P.

Chris Cho: Scale and verticals are incredibly important in serving our clients and optimizing customer results, and we've been building that critical scale beyond home services, and we are well positioned to meet the increasing demand in these verticals. The contribution from these high potential categories is expected to accelerate in 2024 as we leverage our extensive knowledge and expertise in both sales and service within these domains. Additionally, in 2024, we are placing a strong emphasis on product development to expand our overall portfolio and increase our total addressable market with AI-powered solutions that we believe will make the local IQ value proposition even stronger for our clients. I am energized and motivated.

Christian Roberts: Customer budget returned to redo over 95%.

Christian Roberts: Despite the relatively flat performance and poor platform revenues during the fourth quarter.

Christian Roberts: We did manage to achieve full year growth over the prior year and importantly, we anticipate revenue growth for the four first quarter of 2024 as well as the full year.

Christian Roberts: We are also pleased to see core platform <unk> hit a new high in the fourth quarter.

Speaker Change: We're excited to have Chris Joe Reed R. D M S business in 2024.

Christian Roberts: This is a proven leader in the product field and his team is laser focused on driving future growth.

Christian Roberts: Expanding our product portfolio and providing a best in class marketing solution for our SNB partners.

Christian Roberts: And I will now hand, it over to Chris to provide an update on the business and outlines some of the exciting initiatives that are in motion Chris.

Chris Joe: Thank you Mike.

Chris Joe: I'm pleased with the remarkable resilience our a T M S business showcase despite a more challenging environment in the latter half of the year.

Chris Joe: In 2023 R. D M S business continued to grow.

Chris Cho: I'm excited to be leading our DMS business into 2024. We have made great progress in 2023, and we believe the potential is even greater for the year ahead. I want to thank the incredibly talented Local IQ team for their relentless effort to achieve our goals and deliver innovative marketing solutions to our valued customers. Mike.

Chris Joe: Our fundamentals remain strong and we laid the groundwork for expected success in 2024 and beyond.

Chris Joe: As we head into 2024, I am thrilled about the strategic initiatives under way as well as the ones we are poised to pursue.

Chris Joe: And the fourth quarter revenue reflected a continuation of the macro trends from Q3 <unk>.

Chris Joe: General consumer stress and weakness slowed the growth in our largest vertical home services, along with other large vertical such as health care professional and other services.

Michael E. Reed: Thanks, Chris. It's very exciting to see where the DMS business is heading under your leadership. The expansion into these new categories is going to be a critical component of growth and give us great diversification in our revenue streams. And frankly, it increases our addressable market for this business, which, you know, combined with our new product development gives us a lot of confidence that we'll return to, pretty significant growth in this business over the next three years. So I am really excited to see that.

Chris Joe: We have already begun to see the specific in 2024.

Chris Joe: And as a result R. D. M. S revenue is expected to grow 1% to two per cent in Q1.

Chris Joe: And we also anticipate a higher growth trajectory for the full year of 2024 that experienced in 2023.

Chris Joe: Several options are currently underway that are expected to further accelerate the business.

Chris Joe: In 2024, we will strategically aligned ourselves to meet demand where it is most prevalent and offers the greatest potential.

Chris Joe: Home services will remain a high priority given its size and its growth potential.

Chris Joe: We continue to be highly optimistic about this customer segment and expect to see double digit growth for the full year of 2024.

Michael E. Reed: And overall, I'm very excited about the execution in 2023 by Gannett and its team and the progress we've already made in 2024. We have a top-tier, passionate leadership team. One of the best I've ever worked with, frankly, and I've been a CEO for a long time in this industry, and I just love this team we've assembled.

Chris Joe: Additionally, we will replicate the scale achieved there by doubling down in areas, where we have strong domain expertise.

Chris Joe: Seeing strong demand such as healthcare real estate and health and fitness.

Chris Joe: Scale and verticals is incredibly important and serving our clients and optimizing customer results.

Chris Joe: And we've been building that critical scale beyond home services, and we are well positioned to meet increasing demand and these verticals.

Doug: We have a dynamic content strategy and a growing DMS business. We feel the momentum shifting here at Gannett, and we are heading into 2024 with incredible optimism. And with that, I'll now turn the call over to Doug to provide additional detail and color around our 2023 fourth-quarter financials, as well as the details on our full year 2024 and midterm business outlook.

Chris Joe: The contribution from these high potential categories is expected to accelerating 2024, as we leverage our extensive knowledge and expertise in both sales and service within these domains.

Chris Joe: Additionally, in 2024, we are placing a strong emphasis on product development to expand our overall portfolio and increase our total total addressable market with a high powered solutions that we believe will make the local like you value proposition even stronger for our clients.

Speaker Change: I am energized I'm excited to be leading our D. M. S business in between 24, we have made great progress in 2023, and we believe that potential is even greater for the year ahead.

Doug: Thank you, Mike. And good morning, everyone. As Mike mentioned, we are very excited with the progress in our digital revenue, the resulting solid financial performance in the fourth quarter, as well as the significant progress against our strategic priority. Let's begin with our consolidated results. And just to note, all the comparisons are on a year-over-year basis unless otherwise noted. For Q4, total operating revenues were $669.4 million, a decrease of 8.4% or 8% on a same store basis.

Speaker Change: I Wanna, Thank incredibly talented local like you team for their relentless effort to achieve our goals and deliver innovative marketing solutions to our valued customers.

Speaker Change: Mike.

Speaker Change: Thanks, Chris.

Speaker Change: It's very exciting to see where the D. M. S business is heading under your leadership the expansion into these new categories is going to be a critical component of growth give us great diversification revenue streams and frankly, it increases our addressable market for this business that.

Speaker Change: Combined with our new product development gives us a lot of confidence that will return to to pretty significant growth in this business over the next three years, so really excited to see that.

Doug: This represents a 40-basis point sequential improvement from Q3 revenue trends, marking four consecutive quarters of top-line trend improvement. It is encouraging to note that we are seeing positive developments in several key digital areas. As we look ahead, our execution remains focused on cultivating sustainable revenue growth, growing our digital audience and customer base, increasing our monetization of this base, and continuing to stabilize our print business. As we continue to execute on these fronts, we expect the pace and the magnitude of our revenue trend to accelerate, and improvement to accelerate. Adjusted EBITDA totaled $74.1 million in the 4th quarter, a decrease of 18% or $16.2 million.

Speaker Change: Overall I'm very excited by the execution 20 twenty-three by give that in its team and the progress we've already made in 2024.

Speaker Change: We have a top to your passionate leadership team.

Speaker Change: One of the best I've ever worked with frankly, and I've been C. E O for a long time in this industry and I just just loved this team. We've assembled we have a dynamic content strategy and a growing D. M. S business, we feel the momentum shifting here to do that and we are heading into 2024 was incredible optimism.

Speaker Change: And would that I'll now turn the call over to Doug to provide additional detail and color around our 2000 twenty-three fourth quarter financials as well as the details on our full year 2024, and midterm business outlook Dot.

Doug Horne: Thank you, Mike and good morning, everyone. As Mike mentioned, we are very excited with the progress in our digital revenue.

Douglas Middleton Arthur: The resulting solid financial performance in the fourth quarter as well as the significant progress against our strategic priorities let's.

Douglas Middleton Arthur: Let's begin with our consolidated results and just to know all the comparisons are on a year over year basis, unless otherwise noted.

Doug: Adjusted Evo to Margin in Q4 was 11.1% compared to 12.4% in the prior year. Revenue declines were largely mitigated by strategic cost controls, although in the fourth quarter, we cycled against some of the larger temporary cost savings from the prior year, which resulted in an estimated $9 million impact in savings from the prior year quarter. On a sequential basis, Adjusted EBITDA increased $14.6 million, representing solid growth over Q3. Solid improvement in adjusted EBITDA and adjusted EBITDA margin from Q3 to Q4 reflects a seasonally stronger revenue, enhanced focus on high-margin revenue streams, and our commitment to expense management. In Q4, we continue to modulate our cost base in alignment with our overall revenue. Operating expenses in the fourth quarter decreased approximately 9% despite the temporary actions in the prior year.

Douglas Middleton Arthur: Q for total operating revenues were $669.4 million, a decrease of 8.4% or 8% on our same store basis.

Douglas Middleton Arthur: This represents a 40 basis points sequential improvement from Q3 revenue trends marketing four consecutive quarters of top line trend improvement.

Douglas Middleton Arthur: It is encouraging to note that we are seeing positive developments in several key digital areas as.

Douglas Middleton Arthur: As we look ahead, our execution remains focused on cultivating sustainable revenue growth growing our digital audience and customer base, increasing our monetization of the space and continuing to stabilize our prep business.

Douglas Middleton Arthur: As we continue to execute on these fronts, we expect the pace and the magnitude of our revenue trying to accelerate trend improvement to accelerate.

Douglas Middleton Arthur: Adjusted EBITDA totaled $74.1 million in the fourth quarter, a decrease of 18% or $16.2 million adjusted EBITDA margin in Q4 was 11.1% compared to 12.4% in the prior year.

Doug: And we are also pleased to see continued deflationary pressures on some of our larger raw material categories. We anticipate that these cost savings will contribute favorably to our operating expense trends moving forward. Total digital revenues in Q4 were $277.1 million, up 2.9%, representing the third consecutive quarter of growth. Digital advertising, which is a component of total digital revenues, posted its strongest results for the year thanks to stabilizing rates in our programmatic business and a notable increase in our platform page views.

Douglas Middleton Arthur: Revenue declines were largely mitigated by strategic cost controls, although in the fourth quarter recycled against some of the larger temporary cost savings from the prior year, which resulted in an estimated 9 billion dollar impact in savings from the prior year quarter.

Douglas Middleton Arthur: On a sequential basis, adjusted EBITDA increased $14.6 million, representing solid growth over Q3 <unk>.

Douglas Middleton Arthur: Solid improvement adjusted EBITDA and adjusted EBITDA margin from Q3 Q for reflects the seasonally stronger revenue enhanced focus on high margin revenue streams and our commitment to expense management.

Douglas Middleton Arthur: In queue for we continue to modulate our cost base in a line with our overall revenue trends.

Douglas Middleton Arthur: Operating expenses in the fourth quarter decreased approximately 9% despite the temporary actions in the prior year and we are pleased also pleased to see that continued deflationary pressures for some of our larger raw material categories. We anticipate that these cost savings will contribute favourably to our operating expense trends moving forward.

Doug: This is a very promising sign, which we believe reflects the success of our expanding audience and renewed content strategy. Our digital-only subscription revenue growth remains strong, with increased subscriptions on a sequential basis and significant year-over-year growth in digital-only ARPU. In Q4, our digital-only subscription revenues reached a high of approximately $42 million, growing 18.3% on a same-store basis. Digital-only ARPU also reached a new high of $7.05, growing approximately 20% year-over-year.

Douglas Middleton Arthur: Total digital revenues in queue for $277.1 million up 2.9%, representing the third consecutive quarter of growth.

Douglas Middleton Arthur: Digital advertising, which is a component of total digital revenues posted its strongest results for the year, thanks to stabilizing rates in our programmatic business and a notable increase in our platform pages.

Douglas Middleton Arthur: This is a very promising sign which we believe reflect reflect the success of our expanding.

Douglas Middleton Arthur: Our audience and a renewed content strategy.

Doug: Longer term, we see an opportunity to double our digital only ARPU due to the highly local and relevant content our team produces. While our print advertising trends remain impacted by secular declines, we are pleased to have improved our trend by seven points compared to Q4 of the prior year. Print advertising remains an effective tool for many national and local businesses, and we expect these trends to return to mid-single-digit decreases in 2024. The results for print subscription revenue continue to show promising improvements driven by the actions we have implemented to enhance the subscriber experience. We are pleased to report that our service levels and the percentage of open routes are at their best levels in two years. In Q4 alone, our open routes decreased by an additional 20%.

Douglas Middleton Arthur: Are digital only subscription revenue growth remains strong with increased subscriptions on a sequential basis and significant year over year growth in digital only <unk>.

Douglas Middleton Arthur: In queue for our digital only subscription revenues reached a high of approximately $42 million growing 18.3% on the same store basis.

Douglas Middleton Arthur: Digital only <unk> also reached a new high of $7.05 growing approximately 20% year over year.

Douglas Middleton Arthur: Longer term, we see an opportunity to double our digital <unk> due to the highly local and relevant content our team produces.

Douglas Middleton Arthur: While our print advertising trends remain impacted by secular declines we are pleased to have improved our trend by seven points compared to the queue for in the prior year.

Douglas Middleton Arthur: Print advertising remains an effective tool for many national and local businesses and we expect these trends to return to mid single digit decreases in 2024.

Douglas Middleton Arthur: The results in print subscription revenue continue to show promising improvements driven by the actions we have implemented to enhance the subscriber experience we.

Douglas Middleton Arthur: We are pleased to report that our service levels and the percentage of open routes are at their best levels in two years.

Doug: Furthermore, the conversion to mail delivery has proven to be a consistent and effective delivery model for our consumers in areas where staffing delivery routes is a more persistent challenge. In 2023, we successfully converted 46 markets to mail delivery, with plans for approximately 53 more markets in the first half of 2024. Mail delivery not only provides a better consumer experience, but it is, on average, approximately 50% of the cost compared to carrier delivery.

Douglas Middleton Arthur: In queue for alone are open routes decrease an additional 20%.

Douglas Middleton Arthur: Furthermore, the conversion to mail delivery has proven to be a consistent and effective delivery model.

Douglas Middleton Arthur: To our consumers in areas, where staffing delivery routes is a more persistent challenge.

Douglas Middleton Arthur: In 2023, we successfully converted 46 markets to mail delivery with plans for approximately 53 more markets and the first half of 2024.

Douglas Middleton Arthur: Mail delivery not only provides a better consumer experience, but it is on average approximately 50% of the cost compared to carrier delivery.

Douglas Middleton Arthur: In queue for our other revenues category, which includes commercial printing and delivery as well as other digital syndication and affiliate revenues benefited from growth in partnership revenue, but we did experience an overall, 8.5% decrease on our same store basis due to the secular clients associated.

Doug: In Q4, our other revenue category, which includes commercial printing and delivery, as well as other digital syndication and affiliate revenues, benefited from growth in partnership revenue, but we did experience an overall 8.5% decrease on a same-store basis due to the secular declines associated with commercial print volume. In the fourth quarter, we began reporting in three segments. We are separating our Gannett Media segment into two segments, Domestic Gannett Media and NewsQuest. Domestic Gannett Media is comprised of USA Today, daily and weekly content brands and approximately 220 local US markets across 43 states. NewsQuest reflects the operations of more than 220 local brands and magazines across the UK. The primary operational difference between the two segments is the home delivery nature of the print product in the U.S. and the single copy retail outlet distribution model in the UK.

Douglas Middleton Arthur: With commercial print volumes.

Douglas Middleton Arthur: In the fourth quarter, we began reporting in three segments.

Douglas Middleton Arthur: Separating are <unk> media segment into two segments domestic at media and newest quest.

Douglas Middleton Arthur: Domestic and that media is comprised of USA today daily and weekly content brands and approximately 220 local U S markets across 43 states.

Douglas Middleton Arthur: News Quest reflects the operations of more than 220, local brands and magazines across the U K.

Douglas Middleton Arthur: The primary operational difference between the two segments as the home delivered nature of the prep product in the U S.

Douglas Middleton Arthur: And the single copy retail outlet distribution model in the U K.

Doug: This difference in distribution models creates a difference in margin for the two segments. Looking at the domestic and media segments, we believe our strategic initiatives continue to play a crucial role in driving sequential improvements in same store revenue trends. For Q4, our same store revenue decrease of 9.3% represents an 80 basis point improvement from the Q3 revenue trend. Additionally, our digital businesses continue to operate at a high level in Q4, with total digital revenues growing 5.6% on a same store basis. As a result, total digital revenues return to full-year growth on a same store basis, and we expect this to accelerate this momentum in 2024. Turning to NewsQuest.

Douglas Middleton Arthur: This difference of distribution models creates a difference in margin for the two segments.

Douglas Middleton Arthur: Looking at the domestic media segment, we believe our strategic initiatives continue to play a crucial role in driving sequential improvements in same store revenue trends.

Douglas Middleton Arthur: Q for our same store revenue decrease of 9.3% represents an 80 basis point improvement from Q3 revenue trends.

Douglas Middleton Arthur: Additionally, our digital businesses continue to operate at a high level in queue for with total digital revenues growing 5.6% on the same store basis.

Douglas Middleton Arthur: As a result total digital revenues returned to full year growth on the same store basis, and we expect this to accelerate this momentum and 2024.

Douglas Middleton Arthur: Turning to newest quest <unk>.

Doug: Despite the challenged inflationary environment in the UK, NewsQuest delivered a strong quarterly performance. For Q4, adjusted EBITDA in this segment was $11.3 million, growing 23.3% compared to the same period in the prior year. For the full year, our adjusted EBITDA of $50.1 million reflects the highest figure since 2017, growing approximately 25.2% over the prior year as a result of the successful integration of the Q1 2022 ARCHIT acquisition. For Q4, total revenues were approximately $58.2 million, down 2% on a same-store basis, and represents a 390-basis-point sequential improvement from Q3 revenue trends. Equally important, we are pleased to see Total Digital revenues experience their second consecutive quarter of growth in Q4, which is a trend we expect to continue in 2024. For our digital marketing solutions business, total core platform revenue in the fourth quarter was $119.4 million. Adjusted EBITDA for the segment was $12.5 million, representing a margin of 10.4% in the fourth quarter.

Douglas Middleton Arthur: Despite the challenge an inflationary environment in the UK News Quest delivered a strong quarterly performance for Q4 adjusted EBITDA. In this segment was $11.3 million growing 23.3% compared to the same period in the prior year.

Douglas Middleton Arthur: For the full year, our adjusted EBITDA of $50.1 million reflects the highest figure since 2017 growing approximately 25.2% over the prior year as a result of the successful integration of the Q1 2022 arch an acquisition.

Douglas Middleton Arthur: Q for total revenues, where approximately $58.2 million down 2% on our same store basis and represents a 390 basis points sequential improvement from Q3 revenue trends.

Douglas Middleton Arthur: Equally important we are pleased to see total digital revenues experience or second consecutive quarter of growth in queue for which is a trend we expect to continue in 2024.

Douglas Middleton Arthur: And our digital marketing solutions business total core platform revenue in the fourth quarter was $119.4 million adjust.

Douglas Middleton Arthur: Justin EBIT for the segment was $12.5 million, representing a margin of 10.4% in the fourth quarter.

Doug: We had approximately 15,000 core platform customers in the fourth quarter, with core platform ARPU reaching a new high, up 2% over the prior year. As Chris highlighted, our strategic plan for 2024 involves continuing to optimize and grow our core DMS solutions, while at the same time expanding our product portfolio with AI-powered software solutions, which we believe will increase our total addressable market and core platform revenue. It's now been shipped to The Balance.

Douglas Middleton Arthur: We had approximately 15000 core platform customers in the fourth quarter with core platform or poo, reaching a new high up 2% over the prior year as.

Douglas Middleton Arthur: As Chris highlighted our strategic plan for 2024 involved continuing to optimize and grow our core DMF solutions, while at the same time, expanding our product portfolio with AI powered software solutions, which we believe will increase our total addressable market and core platform revenue.

Douglas Middleton Arthur: Let's now shipped to the balance sheet.

Douglas Middleton Arthur: At the end of the fourth quarter, our cash balance stood at $100.2 million and are outstanding net debt was approximately $1 billion, our queue for free cash flow improved by $14.4 million to $12.7 million in for the full year free cash flow was 56.5.

Doug: At the end of the fourth quarter, our cash balance stood at $100.2 million, and our outstanding net debt was approximately $1 billion. Our Q4 free cash flow improved by $14.4 million to $12.7 million. For the full year, free cash flow was $56.5 million, which is up approximately $60 million from 2022. We ended Q4 with approximately $1.1 billion of total debt, reflecting $23.9 million of total debt paydown for the quarter.

Douglas Middleton Arthur: <unk>, which is up approximately $60 million from 2022.

Douglas Middleton Arthur: We ended Q4 with approximately $1.1 billion, a total debt, reflecting $23.9 million of total debt pay down for the quarter.

Doug: For the full year, we repaid $141.6 million of total debt, which exceeded our initial projections for the year. Debt repayment remains our primary use of capital allocation, and we will continue to focus on reducing our overall leverage. As a result, we expect to repay $110 million in 2024. I'm also pleased to report that our first lean net leverage ended the year at two times, which reflects our current year debt reduction, as well as our improved EBITDA performance in 2023. In Q4, we completed three real estate and non-strategic asset sales, bringing our full year total to $85.3 million.

Douglas Middleton Arthur: For the full year, we repay at $141.6 million, a total debt, which exceeded our initial projections for the year.

Douglas Middleton Arthur: Debt repayment remains our primary use of capital allocation and we will continue to focus on reducing our overall leverage.

Douglas Middleton Arthur: As a result, we expect to repay $110 million in 2024.

Douglas Middleton Arthur: I'm also pleased to report that our firstly net leverage ended the year at two times, which reflects our current your debt reduction as well as the improved EBIT performance in 2023.

Douglas Middleton Arthur: In queue for we completed three real estate and non strategic asset sales, bringing our full your total to $85.3 million and.

Doug: In 2024, we expect our real estate and non-strategic asset sales to be in the range of 45 to $50 million, and we will continue to evaluate our full product portfolio on an ongoing basis. In 2024, we are committed to making greater investments in our people and technology and reducing the amount of money spent on underutilized real estate. This means that we are assessing our office space on a market by market basis to free up additional resources to reinvest in journalism and content, bolster both our nationwide and local coverage, better serve our partners, and accelerate our digital future. We have a significant real estate footprint in McLean, Virginia, which has been underutilized since the pandemic, which, like many companies, prompted a fundamental shift in how and where Gannett employees work.

Douglas Middleton Arthur: In 2024, we expect our real estate and non strategic asset sales to be in the range of $45 million to $50 million and we will continue to evaluate our full product portfolio on an ongoing basis.

Douglas Middleton Arthur: In 2024, we're committed to making greater investments in our people and technology and reducing the amount of money spent on underutilized real estate.

Douglas Middleton Arthur: This means that we are assessing our office space on a market by market basis to free up additional resources to reinvest in journalism and content.

Douglas Middleton Arthur: Bolster both are nationwide and local coverage better serve our partners and accelerate our digital future.

Douglas Middleton Arthur: We have a significant real estate footprint in Mclean, Virginia, which has been underutilized since the pandemic, which like for many companies prompted a fundamental shift in how and we're getting at employees work.

Doug: Given the success of our flexible work model and our current office space requirements, we plan to vacate our McLean office, move our headquarters to our existing location in New York City, and transition the USA Today newsroom to our D.C. Bureau. It is important to note that as a result of these moves, we will incur an impairment charge of approximately $45 million in the first quarter of 2024. But importantly, this will not impact our cash flow.

Douglas Middleton Arthur: Given the success of our flexible work model and our current office space requirements, we plan to vacate armor clean office move our headquarters to our existing location in New York City and transition the USA today newsroom to our D. C Bureau.

Douglas Middleton Arthur: It is important to note that as a result of these moves we will and current impairment charge of approximately $45 million in the first quarter of 2024, but importantly, this will not impact our cash flow.

Douglas Middleton Arthur: Turning now to our guidance.

Operator: Turning now to our guidance. As we look forward to 2024, we expect another year of adjusted EBITDA growth over the prior year, driven by improving revenue. This is the operator. Speakers, can you hear me? I'm Kristen. I can hear you. Mr. Esposito, can you hear me?

Douglas Middleton Arthur: As we look forward to 2024, we expect another year of adjusted EBITDA growth over the prior year driven by improving revenue.

Douglas Middleton Arthur: <unk>.

Douglas Middleton Arthur: Speakers can you hear me.

Christian Roberts: I'm Christian I can hear you.

Christian Roberts:

Christian Roberts: I cannot.

Christian Roberts: Can you hear me.

Douglas Middleton Arthur: I think.

Operator: I think the main room went out, so I'm going to tell them now. Alright, let me just quickly connect them. Just give me a moment.

Douglas Middleton Arthur: I think.

Douglas Middleton Arthur: So I'm going to tell our mam.

Speaker Change: Alright, let me just quickly connect them just give me a moment.

Speaker Change: The management ninth has been disconnected please be on hold.

Operator: The management line has been disconnected, please be on hold, I'll get the... BF-WATCH TV 2021 BF-WATCH TV 2021 BF-WATCH TV 2021 BF-WATCH TV 2021 BF-WATCH TV 2021 BF-WATCH TV 2021 BF-WATCH TV 2021 BF-WATCH TV 2021 Thank you. Thank you very much. Apologies for the technical difficulties.

Douglas Middleton Arthur: [noise] them to connect.

Douglas Middleton Arthur: [music].

Doug: As I mentioned, we are planning to vacate our McLean office space in Virginia. As a result of these moves, we will incur an impairment charge of approximately $45 million in the first quarter of 2024. But importantly, this will not impact our cash flow.

Doug: I'm going to now turn to our guidance. As we look forward to 2024, we expect another year of adjusted EBITDA growth over the prior year, driven by improving revenue trends and ongoing cost management. We expect total digital revenues to grow approximately 10% year-over-year, bringing total revenue trends in at low to mid single-digit declines year-over-year. Revenue trends on a same store basis are expected to begin growing on an overall basis as we near the end of 2024. We expect revenue trends to continue to improve sequentially starting in Q1. We expect adjusted EBITDA in the first quarter of 2024 to perform similar to the fourth quarter of 2023, steadily improving to meaningful growth in the back half of the year. In 2024, we will continue to make further investments in our technology infrastructure and in our product portfolio, driving an increase in capital expenditures year over year. This is expected to have a $15 million impact on free cash flow for 2024.

Doug: However, free cash flow is still expected to grow in 2024. The expected digital revenue growth in 2024 is the foundation for what we believe is sustainable growth in total revenues across 2025 and 2026. Along with growth in adjusted EBITDA and net income, free cash flow generation is expected to accelerate in future years with a 40% CAGR from 2023 to 2026. As we grow our audience, expand our product suite, and diversify our digital monetization, we believe we can establish a sustainably growing media and digital marketing solutions company that holds true to our mission to enrich the communities and businesses we serve. Thanks, Doug. Again, as Doug said, apologies for the technical difficulties. Our line dropped.

Douglas Middleton Arthur: [noise], ladies and gentlemen, the management lines has been reconnected.

Speaker Change: Please call. Thank you. Thank you.

Speaker Change: Thank you very much apologies for the technical difficulties as I was mentioning we are planning to vacate our Mcclain office space in Virginia, and as a result of these moves we will incur an impairment charge of approximately $45 million in the first quarter of 2024, but importantly this one.

Speaker Change: Not impact on cash flow.

Speaker Change: Can I now turn to our guidance.

Michael E. Reed: It seemed to happen right when we mentioned that we were moving the Gannett headquarters from McLean to New York. So maybe the old Gannett gods were trying to tell us something. Anyways, let me recap before we move to Q&A. And then I'll be back after Q&A, too, to wrap the call up. To recap, we're entering 2024 with a great deal of optimism, as you've heard here this morning. We have a very strong team here at Gannett. We've made several key hires to our leadership team and believe we have the right structure and personnel in place to drive the speed and execution that we need to evolve this business. In 2023, we saw significant improvement in our key financial metrics.

Speaker Change: As we look forward to 2024, we expected another year of adjusted EBITDA growth over the prior year, driven by improving revenue trends and ongoing cost management.

Speaker Change: We expect total digital revenues to grow approximately 10% year over year, bringing total revenue trends and at low to mid single digit declines year over year.

Speaker Change: Revenue trends on the same store basis are expected to begin growing on an overall basis as we near the end of 2024.

Speaker Change: We expect revenue trends to continue to improve sequentially. Starting in Q1, we expect adjusted EBITDA in the first quarter of 2024 to perform similar to the fourth quarter of 2023 steadily improving to meaningful growth in the back half of the year.

Michael E. Reed: We told you we would focus on profitability, digital revenue growth, and improve our balance sheet. And we have done just that. We grew at Justin Ibbitt Dow for the full year, which, combined with our $142 million of debt repayment, reduced our first lien net leverage by about 27% to 2.0 times. We generated free cash flow of approximately $56 million, representing over $60 million of growth over the prior year.

Speaker Change: In 2024, we will continue to make further investments in our technology infrastructure and in our product portfolio driving an increase in capital expenditures year over year.

Speaker Change: This is expected to have a 15 million dollar impact on free castle for 2024, However, free cash flow is still expected to grow in 2024.

Speaker Change: The expected digital revenue growth in 2024 is the foundation for what we believe is sustainable growth in total revenues across 2025 in 2026, along with growth and adjusted EBITDA and net income.

Michael E. Reed: We improved our revenue trends in each quarter consecutively throughout the year, and we expect to end 2024 with revenue near flat, and we believe this sets us up nicely for anticipated revenue growth in 2025. Total digital revenue for the full year continued to grow, with nearly 40% of total revenue coming from digital sources and more than 41% from digital in the fourth quarter. We expect that percentage to move towards 45% of total revenue in 2024. We are also seeing wins in several of our key digital initiatives. Importantly, we are growing our audience and our engagement with that audience. Our paid digital subscription strategy resulted in new highs in revenue and ARPU as well as increased volumes in the back half of the year.

Speaker Change: Free cash flow generation is expected to accelerate in future years with a 40% <unk> from 2023 to 2026.

Speaker Change: As we grow our audience expand our product suite and diversify our digital monetization. We believe we can establish a sustainably growing media and digital marketing solutions company that holds true to our mission to enrich the communities and businesses we serve.

Speaker Change: I will now hand, it back to Mike.

Michael E. Reed: Thanks <unk>.

Michael E. Reed: Again, as Doug said apologies for the technical difficulties are lying dropped it seemed to happen right. When we mentioned that we're moving the headquarters from Mclean to New York. So maybe the will do that gods were trying to sell something [laughter].

Speaker Change: Anyways.

Michael E. Reed: Let me recap before we moved to Q&A and then I'll be back after Q&A too to wrap the call up but to recap as <unk> 2024, with a great deal of optimism as you've heard this morning.

Michael E. Reed: The five partnerships we announced in 2023 are expected to become a greater contributor to our overall performance in 2024 and, of course, beyond. These high-margin deals are anticipated to generate approximately $20 million in affiliate revenue in 2024 and grow more meaningfully over the long term. As you can see, our commitment to our strategy and, most importantly, our readers and customers, is unwavering. We believe we are on the path to sustainable revenue growth while also increasing our free cash flow generation. Now, I'll turn it over to the operator for questions. Operator?

Michael E. Reed: We have a very strong team here, we've made several key hires to our leadership team and believe we have the right structure than personnel in place to drive the speed and execution that we need to evolve this business too.

Michael E. Reed: 2023, we saw significant improvement in a key financial metrics.

Michael E. Reed: We told you we would focus on profitability digital revenue growth and improve our balance sheet.

Michael E. Reed: And we have John just we have done just that we grew adjusted EBITDA for the full year.

Which combined with $140 million $142 million of debt repayment reduced our first lien that leverage by about 27% to two point old times.

Michael E. Reed: We generated free cash flow of approximately 56 million representing over $60 million of growth over the prior year.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone. A confirmation tone will indicate your line is in the question. You can press star 2 if you would like to remove your questions from the chat, for participants using speaker equipment. It may be necessary to pick up your handset before pressing the start button.

Operator: We had proved a revenue trends in each quarter consecutively throughout the year and we expect to end 2024 with revenue near flat and we believe this sets us up nicely for anticipated revenue growth in 2025.

Operator: Total digital revenue for the full year continued to grow with nearly 40% of total revenue coming from digital sources and more than 41% up from digital in the in the fourth quarter.

Operator: One moment, please, while we poll for questions. The first question comes from the line of Giuliano Bologna with Compass Point. Please go ahead. Hello, good morning. Maybe to take it off on the first question from more of a high level, your suggestion, you know, a tectonic shift in the business and kind of, and, and the kind of revenue proposal of the platform. I'd be curious about the shift and why you're so bullish about the opportunities that I have here. Hey, thanks. Good morning.

Operator: We expect that percentage to move towards 45% of total revenue in 2024.

Operator: We are also seen wins and several of our T digital initiatives.

Operator: Accordingly, we are growing our audience and our engagement would that audience.

Speaker Change: <unk> digital subscription strategy resulted in new highs and revenue and are too as well as increasing volumes in the back half of the year.

Speaker Change: The five partnerships, we announced in 2023 are expected to become a greater contributor to our overall performance in 24 and of course beyond.

Speaker Change: Hi margin deals are anticipated to generate approximately 20 million in affiliate revenue in 2024 and grow more meaningfully over the long term.

Michael E. Reed: Thanks for the question, too. Yeah, there are many initiatives underway that give us that bullishness and that confidence in the shift we're seeing in the back half of 23 and early 24. But let me hit on a few of the bigger ones, in my view. Number one, our new content strategy. So we have scale, and the new content strategy is driving further audience growth, which is really important. And we're also, through data and AI, engaging with that audience better, which is leading to more opportunities to engage with that consumer throughout their lifecycle on our platform, leading to revenue monetization opportunities across the spectrum for us. So much better digital revenue opportunity as we grow that audience and engage better with that audience. Second, I would say, is our affiliate revenue partnerships. That's bringing in an additional broader audience, engaging with us in a different way, or coming to us from a different place.

Michael E. Reed: As you can see our commitment to our strategy and most importantly, our readers and customers is unwavering. We believe we are on the path to sustainable revenue growth, while also increasing our free cash flow generation.

Speaker Change: Now I'll turn it over to the operator for questions operator.

Speaker Change: Thank you.

Speaker Change: Now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.

Speaker Change: <unk> tone will indicate your line isn't the question queue.

Michael E. Reed: Stop too if you would like to remove your questions from the Q4 participants using speaker equipment. It may be necessary to pick up the handset before pressing the stock keys, one moment, please pull for questions.

Michael E. Reed: The first question comes from the line of Giuliano Polonia <unk>. Please go ahead.

Michael E. Reed: Good morning.

Michael E. Reed: And then, through AI and data, we're able to engage better with that audience. And that's driving not only affiliate revenues but more revenue on our platform as well. So the content strategy, the affiliate revenue partnerships, using data and AI to engage is really helping to give us a lot of confidence in the growth on the digital side of the platform. I would also say that we're seeing a much bigger TAM as we engage with a wider audience on the platform.

Michael E. Reed: Take it off in a prescription.

Michael E. Reed: More of a high level your suggestion.

Michael E. Reed: Tectonic shift in the in the business he kind of <unk>.

Michael E. Reed: And.

Michael E. Reed: And then it kind of programming to provoke the platform I'd be curious why the shift and why you're so gosh about you know the opportunities that I had tears.

Speaker Change: Hey, Thanks. Good morning, Thanks for thanks for the question too Yeah. There there are many initiatives underway that give a step bullishness in that confidence in the in the shipped we're seeing back half the twenty-three and early twenty-four but let me hit on a few of the the bigger ones in my view number one our our new content strategy so weak.

Michael E. Reed: And we're seeing our monetization hit consumers all along their journey, which is helpful to our growth now and in the future. You know, a big part of our overall confidence in total revenue growth is seeing that digital revenue growth surpassing 50% next year and 55% in 2026. And where these digital revenues come from, we have a lot more visibility, which gives us a great deal of confidence. As many of you know, our most volatile and unpredictable revenue line is print advertising, and less than 20% of our total revenue now comes from print advertising, and that percentage will continue to decline significantly in 2025 and 2026. So a lot more visibility into where the revenues are coming from in the media business on the digital side, more visibility on the DMS side with a much more recurring nature to that revenue on the DMS side. And then, I would say, finally, this new management team is in place as of essentially this summer. So the things they're executing on are just starting to take hold. We'll barely see the fruits of that in 2023.

Michael E. Reed: We have scale and the new content strategy is driving further audience growth, which is really important and we're also through through data in AI engaging with that audience, better which is leading to.

Michael E. Reed: More more opportunities to engage would that consumer throughout their life cycle on our platform leading to revenue monetization opportunities across the spectrum for us so much better digital revenue opportunity as we grow that audience and engage better with that audience.

Michael E. Reed: Second I would say is our affiliate revenue partnerships, that's bringing in additional.

Michael E. Reed: Additional broader audience engaging with us in a different way or coming to us from a different way than than through a I M data, we're able to engage better with that audience and that's driving not only affiliate revenues, but more revenue on our platform as well. So so the content strategy the affiliate revenue partners.

Michael E. Reed: Ships using data in AI to engage is really helping to to give us a lot of confidence in the growth on the digital <unk>.

Michael E. Reed: Digital side off the platform.

Michael E. Reed: I'd also say that we're we're seeing you know a much more ah bigger Tam as we engage with a wider audience on the platform and that and we're seeing our monetization hit consumers all along their journey, which is which is helpful to our growth now and in the future.

Michael E. Reed: You know a big a big part of our overall confidence in total revenue growth.

Michael E. Reed: Being that digital revenue growth and surpassing 50% next year, 55% in 2026, and where are these digital revenues come from we have a lot more visibility, which gives us a great deal of confidence.

Michael E. Reed: We'll really see the fruits of that in 2024, 2025, 2026. So I guess to sum that up, content strategy, the use of data and AI, our new affiliate partnerships in this management team, and their strategy are really giving us a ton of confidence as we look out over the next three years. That's very helpful.

Michael E. Reed: Many of you know our most volatile and unpredictable revenue line is print advertising in less than 20% of our total revenue now comes from print advertising and that percentage will continue to decline significantly in 25 and 26 so.

Doug: And shifting to the deleveraging part of the story, you paid down, you know, about 140 million in 2023. And whereas you had projected about 110 million, and you're projecting 110 million again for 2024. I'm curious, you know, what your confidence level is around that 110 million for 24. Hi, this is Doug.

Doug: A lot more visibility and where are the revenues are coming from in the media business on the digital side more visibility on the D. M. S side with with a much more recurring nature to that revenue on the D. M S side.

Doug: And then I would say finally this this new management team is is is in place as essentially this summer. So the things that are executing on are just starting to take hold we've barely seen the fruits of that and twenty-three will really see the fruits of that 24 25 26, So I guess.

Doug: To sum that up content strategy use of data and AI, our new affiliate partnerships and this management team and their strategy are really giving us a ton of confidence as we.

Doug: I'll take that one. You know, we feel really good about the results in 24 in terms of both our projections and our asset sales. You know, we repaid, like you said, over 140 million in 2023. And, you know, that was in excess of what we had planned.

Doug: Looks out over the next three years.

Doug: That's very helpful shifting to deleveraging part of the story you pay down.

Doug: About 140 million in 2023, whereas you inside projected about 110 million and you're projecting 110 million again for 2024.

Doug: And I would say over the last couple of years, we've been really successful at kind of exceeding the asset sale expectations that we've put out there. And, you know, we feel very confident in our ability to kind of meet that threshold that we've put out there for next year. That's very helpful. Then, you know, kind of pivoting to the digital side.

Doug: Curious you know where your confidence level was around $110 million for 24.

Doug: Hi, This is Doug I'll I'll take that one you know we feel really good about the results in 20th four in terms of both our projections and or asset sales.

Doug: You know, we repaid like you said 100 and over 140 in 2023 and that was in excess of what we had planned and I would say over the last couple of years, we've been really successful it kind of exceeding the asset sale expectations that we have put out there.

Michael E. Reed: I'm curious what's accelerating the revenue growth on the digital side. You know, I know there's obviously been the focus on higher RPU, and that's materializing at this point. I'd be curious, you know, if there's anything else on the digital side we should be focused on. Yeah, yeah, ARPU is a good starting jumping off point to answer that question.

Speaker Change: And you know.

Michael E. Reed: We feel very confident in our ability to kind of meet that threshold that we've put out there for next year.

Speaker Change: That's very helpful. Then.

Michael E. Reed: Kept everything to the digital side.

Michael E. Reed: I'm curious what is accelerating the revenue growth on all sides.

Michael E. Reed: There's obviously been the focus on <unk> material I think this month's I'd be curious to know.

Michael E. Reed: If there's anything else on the digital side, we should be focused on.

Michael E. Reed: Because that ARPU growth we're seeing, especially in the back half of 23, obviously, that carries into 24. And with our renewed subscription strategy focused on bringing in the right customers at the right price points and improving retention, we expect that ARPU to continue to grow. So that that will be a revenue driver. We're also seeing volume growth, again, in the back half of the year, and we expect that to continue over the projection period. So we feel that will be a nice revenue driver. But the biggest things that are going to drive our digital revenue growth go back to the confidence we have in the overall business projections. Number one is our content strategy, which is growing our audience and growing the engagement with that audience, which just leads to more digital revenue opportunities off the platform. And that is furthered by our affiliate partnership strategy, which leads to more audience hitting us coming to us. And it fuels the first point of growing audience and growing engagement leading to more advertising opportunities, as well as subscription opportunities, as well as affiliate revenue opportunities.

Speaker Change: Yeah, Yeah. The <unk> a good good started jumping off point to answer that question.

Michael E. Reed: <unk> growth, we're seeing especially the back half of twenty-three, obviously that carries into 24 and with our renewed subscription strategy focused on bringing in the right customers at the right price points and improving retention, we expect that our poo to continue to grow so that that will be a revenue driver. We're also seeing volume.

Michael E. Reed: Growth again, the back half of the year, we expect that to continue over the net over the projection period. So we feel that will be a nice revenue driver, but the the biggest things that are gonna drive our digital revenue growth go back to really the confidence we have in the overall business projections.

Michael E. Reed: Number one is our content strategy, which is growing our audience and growing the engagement with that audience, which just leads to more digital revenue offer opportunities off the platform.

Michael E. Reed: That is furthered by our affiliate partnership strategy, which leads to more audience hitting us coming to us and it fuels. The first point of growing audience growing engagement, leading to more average advertising opportunities as well as subscription opportunities as well as our affiliate revenue opportunities and then we.

Michael E. Reed: And then we have the DMS business, which you heard from Chris today. We have vertical expansion underway, developing that subject matter expertise, growing our algorithm to be able to deliver similar results in other verticals. Diversifying ourselves from the home services space gives us a much bigger addressable market and more opportunity for growth. And then leveraging AI and data to acquire customers but also to grow our product set in that business gives us a lot of confidence for growth too. So there are several factors here that are not really on the come.

Michael E. Reed: We have the D M S business, which you heard from Chris today, we have a vertical expansion underway the developing that subject matter expertise growing our algorithm to be able to deliver similar results in other verticals diversifying ourselves from the home services space gives us a much bigger addressable market and more opportunity for <unk>.

Michael E. Reed: <unk>.

Michael E. Reed: And then leveraging a I and data to acquire customers, but also to grow our product set in that business gives us a lot of confidence for growth too. So.

Michael E. Reed: There are several factors here that that are are.

Michael E. Reed: Are not really on the Tom we're seeing those results back half of this year and early in 2024, the give us the confidence to grow 10% on the digital side, and and 24 and to accelerate that growth 25 and 26.

Michael E. Reed: We're seeing those results back half of this year and early in 2024 give us the confidence to grow 10% on the digital side in 24 and to accelerate that growth 25 and 26. That's very helpful. Then, moving over to the affiliate deals.

Michael E. Reed: That's.

Michael E. Reed: Very helpful.

Michael E. Reed: Yeah.

Michael E. Reed: The.

Michael E. Reed: Here's kind of like talking about the existing deals and what you're working on for, you know, additional or incremental deals. And then, you know, kind of related to that topic, I'd be curious what the average EBITDA margin is for the existing deals and what you think it'll be for kind of current and future deals. Yeah, so we're obviously really excited about this potential revenue stream. It's really new to us in 2023. We signed five deals in 2023, and two of those were signed in the fourth quarter.

Michael E. Reed: <unk> that'd be here as soon as I talk about the existing deals.

Michael E. Reed: What are you working on for.

Michael E. Reed: Additional or incremental deals and then yeah, we kind of related to that topic I I'd be curious what the average EBITDA margin.

Michael E. Reed: As for the existing goes or what do you think it'll be for.

Michael E. Reed: Current and future deals.

Michael E. Reed: Yeah. So we're we're obviously we're really excited about this potential revenue stream, it's it's really new to us in 2023.

Michael E. Reed: We signed five deals in 2023 two of those were signed in the fourth quarter. We really we only had two that were live in 2023 and they were not lie for the full year. So we general generated you know somewhere just below $10 million of revenue in 2023, and as we mentioned on the call we.

Michael E. Reed: We only had two that were live in 2023, and they were not live for the full year. So we generated somewhere just below $10 million in revenue in 2023. And as we mentioned on the call, we expect that revenue to more than double to $20 million in 2024 as all five deals get live, which they are now. And so last year's results were really based just on two deals that were not live for the full year.

Michael E. Reed: Expect that revenue to more than double to $20 million in 2024, as all five deals get live which which they are now until last year's results really basic just add two deals that were not lied. The full year. This year will have five deals live for most of the year. However, there's a lot of maturity to come with those D.

Michael E. Reed: This year we'll have five deals live for most of the year. However, there's a lot of maturity to come with those deals, so what we're seeing in 2024 is not where we expect these deals to end up. So, as we mentioned in the call, we expect pretty significant growth from the current five deals we've signed. And then, of course, we expect to sign more deals than we have today. From a margin, to answer your margin question, these are.

Michael E. Reed: <unk> so what we're seeing in 24 is not where we expect these deals to end up so as we mentioned in the call. We expect pretty significant growth from the current five deals. We've signed and then of course, we expect to sign you know more deals than the five we have today.

Michael E. Reed: From a from a margin to answer your margin question. These are.

Michael E. Reed: I would say 95 to 100% margin. We really don't incur any incremental cost. The content comes from our partners. It's on our platform. Users come and engage, and we generate revenues. So the margins on this revenue are almost 100%. Very helpful. And then you mentioned this earlier, but on the AI topic, I'm curious if there's anything happening on the Gannett front with AI, or if there are opportunities to leverage Gannett's data and or content. Yeah, it seems like every day there's a new deal that's being announced in the market. So I'd be curious to get your opinion on that.

Michael E. Reed: I would say 95 to 100 per cent margin, we really don't incur any.

Michael E. Reed: Any incremental costs the content comes from our partners.

Michael E. Reed: It's on our platform users common engage in we generate revenue so the the the margins on this revenue.

Michael E. Reed: Almost 100%.

Michael E. Reed: And then Mary you'd mentioned this earlier, but on the AI topic I'm curious if there's anything happening on the so you're not friends with AI, if their opportunities to leverage connect data or.

Michael E. Reed: Contact.

Michael E. Reed: Seems like every day, there's a new deal that's being outside in the market Sir take care of it.

Michael E. Reed: Your your your opinion there.

Michael E. Reed: Yeah, so there's two sides of AI, you know. One is how we're leveraging AI to improve our business and our business opportunities. The other side of AI is the continued theft of our content and us preventing the theft of that content and eventually being paid fair value for the great content that we produce every day. So starting with, you know, the benefits of AI, those tools are obviously, I'm stating the obvious here, but they're evolving rapidly.

Michael E. Reed: Yeah. So there's there's two sides of the eye one is how.

Michael E. Reed: How we're leveraging AI too.

Michael E. Reed: To improve our business and our business opportunities. The other side of AI is the continued theft of our content and thus preventing the theft of that content and eventually being paid fair value for the great content that we produce everyday so starting with you know the the benefits of AI those stills tools obviously.

Michael E. Reed: Stating the obvious here, but they are evolving wrapping rapidly we're embracing them you know as quickly as we can but we're being thoughtful and how we deploy them. So that we're not making big mistakes high level, we're using the tools to reduce costs increase efficiencies in to drive revenue.

Michael E. Reed: We're embracing them, you know, as quickly as we can, but we're being thoughtful in how we deploy them so that we don't make big mistakes. At a high level, we're using the tools to reduce costs, increase efficiency, and to drive revenue. And this is an important note: We're not using these tools to replace journalists or to publish content.

Michael E. Reed: This is an important note we're not using these tools to replace journalists or to publish content.

Michael E. Reed: We're using them more behind the scenes to help our journalists become more efficient, leading to more time for each journalist to be able to create more content. We're also using the tools to better engage with customers and business customers. And the benefits will continue to accrue as we use these developing AI tools through increased productivity, intelligent monetization strategies, new product opportunities, cost savings, you know, and then the revenue opportunities that come from increased productivity and new product opportunities. Switching to the other side, Juliana, on the licensing side, I have nothing yet to report.

Michael E. Reed: We are using them more behind the scenes to help our journalists become more efficient leading to more time for each journalists to be able to create more content.

Michael E. Reed: We're also using the tools to better engage with customers and and and business customers and the benefits will continue to accrue as we use these developing AI tools through an increase productivity intelligent monetization strategies, new product opportunities cost savings.

Juliana: And then the revenue opportunities that come from increased productivity and new product opportunities.

Speaker Change: Switching to the other side Julianna on the licensing side nothing yet to report you know we do believe that we will be fairly compensated for this content. We do believe this content is immensely valuable to so many of the the learning machines out there around a I and the thing about news and information as a cough.

Michael E. Reed: You know, we do believe that we will be fairly compensated for this content. We do believe this content is immensely valuable to so many of the learning machines out there in the world of AI. And the thing about news and information is, it constantly refreshes; it's not stale.

Michael E. Reed: Absolutely refreshes, it's not scale and so there's there's real value in that and feeding these machines.

Michael E. Reed: And so there's real value in that, in feeding these machines. I can't tell you whether it's, you know, next month, next year, or three years when we start to really see these licensing deals come to fruition, but we do believe they will because our content's copyright protected, and this content's really important to a lot of these AI technologies. So you know, we haven't built any licensing revenue into our projections we shared this morning, so it's really free optionality for our shareholders. It's all upside to the projections we used this morning, but I would reiterate, we do expect deals to come. I just can't predict the timing of them at this point. That's very helpful. And then there is one last one. Yeah, I'm curious what the drivers of cost reduction are in 24 and beyond if you can put any kind of rough numbers around some of those opportunities. Dave, this is Doug again.

Doug: I can't I can't tell you whether it's you know next month next year or three years, when we start to really see these licensing deals come to fruition, but we do believe they will because our contents copyright protected and and and this contents really important to a lot of these AI technology. So.

Doug: You know that we haven't built any licensing revenue into our projections. We shared this morning. So it's real really free optionality for our shareholders. It's all upside to the projections. We use this morning, but I would reiterate we do expect deals to come I, just can't predict the timing of them at this point.

Doug: That's very helpful and then one last one.

Doug: I'm curious what the drivers are of cost reduction or 24 and beyond but if you can put.

Doug: Rough numbers around some of those opportunities.

Michael E. Reed: Sure I mean this is Doug again on the cost front, we're hitting it on a number of areas I mentioned on the call in terms of some of our raw.

Doug: On the cost front, we're hitting it on a number of areas. I mentioned on the call that in terms of some of our raw materials, you know, most notably paper, we've seen kind of deflationary pressures where prices have returned to more kind of unnormalized levels, which is creating favorability for us both kind of at the tail end of the year but also going into 2024. You know, the move to mail delivery in markets where it makes sense saves us roughly 50% on home delivery costs.

Doug: Materials, and most notably paper, we've seen kind of deflationary pressures where prices have returned to more kind of.

Doug: Normalized levels, which is creating favorability for us both kind of on the tail end of the year, but also going into 2024.

Doug: The move to mail delivery and in markets, where it makes sense.

Doug: Saves us Russell roughly 50% on the.

Doug: The home delivery costs.

Doug: So we're, you know, continuing to pursue that and also, you know, some bigger opportunities. We continue to consolidate our physical, you know, printing and distribution infrastructure, and so you'll see us continue to reduce the number of sites that we maintain across the country, as well as, we talked about investing in technology, and the consolidation of Technology Systems is unlocking kind of duplicate license costs and just efficiency efforts. And then we also talked about office space, and we're, you know, we have a program in place that will, you know, we're critically assessing all office space outside of kind of our biggest markets, biggest, you know, areas of content creation. And we're really going to be very aggressive and make sure that we're not investing any excess dollars in real estate moving forward. That's very helpful.

Doug: So we're continuing to pursue that and also some chunkier opportunities we continue to consolidate our physical.

Doug: Hunting and distribution infrastructure.

Doug: So you'll you'll see us continue to reduce the number of sites that we maintained across the country as well as you know we talked about investing in technology and the consolidation.

Doug: Technology systems is unlocking kind of duplicate license costs and just efficiency efforts and then we also talked about you know.

Doug: This space and were you know we have a program in place that will you know were critically assessing.

Doug: All office space outside of kind of our our biggest markets biggest you know areas of content creation.

Doug: And we're really going to be very aggressive and making sure that we're not investing any excess dollars in real estate moving forward.

Speaker Change: That's very helpful. I appreciate it all the time and.

Doug: I appreciate all the time and answers to my questions, and then we'll jump back into Q&A. Thanks, Julia. Thank you. The next question comes on the line from Lee Kupelman, Omega Family Office.

Michael A. Kupinski: Switching my questions and I will come back into here.

Michael A. Kupinski: Thanks Julia.

Michael A. Kupinski: Thank you next question comes from the light of League Kopelman.

Michael A. Kupinski: Make a family office. Please go ahead.

Michael A. Kupinski: Please. I thank you very much. I apologize when you blacked out.

Michael A. Kupinski: Thank you very much I apologize.

Michael A. Kupinski: When you blacked out I Miss some numbers, but what is it that you're looking for for the year inhibitor.

Michael E. Reed: I missed some numbers. But what is it that you're looking for for the year in IBIDA? and where do you expect to end the year in net debt? And you did not mention the $40 million charge for moving out of the facilities in Virginia. That would be the first series of questions, and I have some others. Yeah, so Lee, we didn't give a specific number of guidance on EBITDA. What we did guidance to this morning was that we expected growth in EBITDA 24 over 23. And so that's a continuation of the growth we saw in 23 over 22. With regard to McLean, the impairment charge is really to take the future operating expenses for that lease and impair that now since we're not going to use the office building.

Michael E. Reed: And where you expect in the year in and it did.

Speaker Change: And you did that you mentioned it 40 million no charge for moving out of the facilities in Virginia. What is your annual savings that you're expecting to get from that move.

Michael E. Reed: There'll be a first series of questions that I have some others.

Michael E. Reed: Yeah. So the the we didn't give specific a specific number of guidance and EBITDA. What we did guide to this morning was that we expected growth in EBITDA twenty-four over twenty-three.

Speaker Change: And so that that's continuance of the growth we saw on twenty-three over 22.

Michael E. Reed: With regard to Ah Mcclain, the impairment charges really to take the future operating expenses for that lease and impair that now since we're not going to use the office building. So the the operating expense reduction we would expect in the future years, while that Lee.

Michael E. Reed: So the operating expense reduction we would expect in the future years while that lease is still in place is in the kind of $7 to $8 million range. So we expect our operating expenses to go down by about $7 to $8 million as a result of that impairment of the McLean office space. And just to clarify, that charge is going to be approximately $45 million. $45 million. Right, right?

Michael E. Reed: Is still in place or in the kind of 78 million dollar range. So we expect our operating expenses to go down by about $78 million as a result of that impairment of the Mclean office space right.

Michael E. Reed: And just to clarify that charges.

Michael E. Reed: Approximately $45 billion five minute right right and your your in that that you're projecting for this year.

Michael E. Reed: And your year-end debt that you're projecting for this year? Yeah, so right now, we're on that. That's about a billion, and as you know, half of that is second lien convertible.

Michael E. Reed: Yeah. So right now we're on that that's about 1 billion and as you know half half of that is second lien convertible so.

Michael E. Reed: So the first lien net, we expect to pay down another hundred and 10 million this year, and we would expect to still have 100 million in cash on the balance sheet. So, you know, we're looking at first lien first lien net debt as we end next year closer to about 300 million. Okay, now the Bloomberg shows you have fully diluted shares of 150 million. That's wrong, right? If you take the convert, where's the fully diluted share count?

Michael E. Reed: The first lien on that we expect to pay down another hundred and 10 million. This year and we would expect to have still $100 million of cash on the balance sheet. So.

Michael E. Reed: Looking at first lien firstly net debt as we are next year closer to about $300 million.

Michael E. Reed: Okay now the Bloomberg shows you have fully diluted shares of 150 million that's wrong right. If you take the convert.

Michael E. Reed: Fully diluted share count.

Michael E. Reed: The fully diluted share count, if you count the converts, would add about $95 million to that. As you know, we can buy some of those convertible notes back, so it's $95 million at a maximum but could be less over time if we buy back some of those convertible notes, about $270 million. So it would not be unreasonable to think in terms of $300 million this year. I know you're not giving gold. We just got it to grow this year, Lee. We just got it to grow. It's a little early for us to tell.

Speaker Change: The the full at the fully diluted share count if you come to convert to that about 95 million to that.

Michael E. Reed: As you know we can buy some of those convertible notes back. So it's it's 95 million at a maximum but could be less overtime. If we buy back some of those convertible notes.

Speaker Change: What was your 2023.

Michael E. Reed: About $270 million.

Michael E. Reed: It would be unreasonable to think in terms of 300 million this year.

Michael E. Reed: I know you're not giving guy just like we just got it to growth. This year Lee we just got into growth. It's a little it's a little early for us to tell.

Michael E. Reed: All right. All right, so I'm trying to go through the numbers. 300. I'm using 300 million, but... Let's say the net debt is less than a billion.

Michael E. Reed: Alright.

Speaker Change: Alright, so I'm gonna I'm trying to go through the numbers 300 with that I'm using 300 million of it but.

Michael E. Reed: Let's see Nit that is less than a billion.

Michael E. Reed: I'm 245 minutes shy. I'll figure all that out. I'll talk to you tomorrow. Okay. Very good. Good luck. Just to highlight, there is a Business Outlook slide in our supplement that I think provides a lot of context in terms of the outlook. I'd refer everyone to that slide, for the kind of official outlook. Thanks, Lee. Thank you very much. Talk to you tomorrow.

Michael E. Reed: 245, which I I figured all that I'll talk to you tomorrow.

Speaker Change: Very good good luck.

Michael E. Reed: It just just a a highlight there is a business outlook side in our supplement that I think provides a lot of context in terms of the outlook I'd refer everyone to that slide.

Michael E. Reed: For the kind of official outlook.

Michael E. Reed: Thankfully. Thank you very much took two were thank you.

Speaker Change: Thank you.

Doug: Thank you. There are no further questions at this time. I would now like to turn the floor over to Mike Reed for closing. Yeah, thanks, everyone. And apologies again for the hiccup mid call. But thanks.

Speaker Change: And all sorts of questions at this time I would now like to turn the floor over to my Creed foreclosure comments.

Michael E. Reed: Yeah, Thanks, everyone and apologies again for the hiccup mid call, but thanks, Thanks solve you stuck with us overall.

Michael E. Reed: Thanks to all of you who stuck with us. Overall, as you can tell, we're really enthusiastic about the future. We're also very proud of the execution in 2023, given the, you know, the circumstances and some of the tough backdrop that our industry faces. As you heard today, our strategies yielded solid results and growth. And we've built the foundation for sustainable growth in the future. Entering 2024, we have a top-tier leadership team and a dynamic content strategy. We're using data to drive improved engagement and revenue through monetization, both consumer-related and advertising-related. And we have a resilient DMS business with new growth opportunities, with channel expansion in areas where we're actually seeing demand. And based on our progress in 2023, we feel a palpable momentum shift at Gannett, and we're heading into 2024, as I said, with a great deal of optimism. So thanks again for your time today, and we look forward to updating you on Q1 in just two months. Thank you all. Thank you. This concludes today's study conference. You may disconnect your lines at this time. Thank you for your participation. BF-WATCH TV 2021 BF-WATCH TV 2021, BF-WATCH TV 2021

Michael E. Reed: Overall as you can tell we're really enthusiastic about the future. We're also very proud of the execution in 2000 twenty-three given the.

Michael E. Reed: The circumstances and some of the top backdrop that our industry faces.

Michael E. Reed: Heard today, our strategies yielded salad results and growth and we built the foundation for sustainable growth in the future entering 2024, we have top tier leadership team dynamic content strategy, we're using data to drive improved engagement and revenue to monetization both.

Michael E. Reed: Consumer related in advertising related and we have a resilient dmf's business with growth with new growth opportunities with channel expansion in areas, where we're actually seeing demand.

Michael E. Reed: And based on our progress in 2023, we feel a portable momentum shifted Jeanette and we're heading into 2024 as I said with a great deal of optimism. So thanks again for your time today and with afford update you updating you on Q1 in just two months. Thank you all.

Speaker Change: Thank you. This concludes today's steady conference you may disconnect. Your lines at this time. Thank you for your participation.

Michael E. Reed: [music].