Gannett reports decline in Q2 revenue as pandemic takes toll

USA Today owner Gannett reported a net loss of about $437 million in the second quarter as businesses cut back on advertising due to the pandemic with $393 million of the net loss being attributable to a “non-cash goodwill and intangible impairment” charge and $66 million being attributable to depreciation and amortization.

Revenue declined 28 percent from a year earlier to $767 million, though the company said it recorded an increase in revenue from month to month during the second quarter as business conditions gradually improved.

Adjusted earnings before interest, taxes, depreciation and amortization of $78 million, reflecting a profit margin of 10.2 percent.

Gannett CEO and chairman Michael Reed said:

“We see a clear path to significant upside over the next several years.

“At no time in our history has the value of high quality journalism been as clear as it is right now at this intersection of a global pandemic and a nation in turmoil over systemic racism and inequality. Our journalists have worked tirelessly and doggedly to help keep our communities safe and informed, while exercising the crucial role of holding officials accountable.”

Other highlights include:

• Operating expenses dropped 26 percent for the period, compared with a year earlier.
• Print advertising revenue decline 45 percent to $188 million in the second quarter compared with the same period a year earlier.
• Digital advertising and marketing services revenue was down 27 percent to $104 million.
• Circulation revenue plummeted 14 percent to $342 million.
• Paid digital subscriptions rose 31 percent from a year earlier to 927,000.

Additionally, Reed also added Gannett believes it will exceed its goal of $300 million in annualized savings by the end of 2021.

“We believe our company is undervalued right now,” he concluded.