Gannett Announces Further Real Estate Sales and Debt Repayment

Rhea-AI Summary

Gannett Co., Inc. (NYSE: GCI) announced it repaid $647 million of its 11.5% term loan, lowering the balance to $1.082 billion. This repayment was financed through $497 million from issuing senior secured convertible notes, $135 million from asset sales, and $15 million from excess cash. The company expects to reduce debt further by $100 million by early 2021. This move lowers annual interest payments by $45 million and enhances confidence in refinancing the remaining term loan. Current total debt stands at $1.582 billion.

Positive

• Reduced term loan balance to $1.082 billion, enhancing financial stability.
• Lowered annual interest payments by $45 million, improving cash flow.
• Strong expectations for fourth quarter revenue growth.

Negative

• None.

Gannett Co., Inc. ("Gannett", "we", "us", "our", or the “Company") (NYSE: GCI) today announced that from the beginning of the fourth quarter through the end of this week, the Company will have repaid approximately $647 million of its 11.5% term loan, reducing the outstanding balance to $1.082 billion. The sources of funds for the $647 million of repayment are:

• $497 million of proceeds from the Company’s issuance of 6% senior secured convertible notes due 2027;
• Approximately $135 million of real estate and other non-core asset sales; and
• Approximately $15 million of excess cash sweeps.

“We are pleased to be closing the year having made significant progress to improve our capital structure. The actions we have taken to date have lowered our interest payments by $45 million annually. Our asset sales have accelerated our debt repayment expectations and have increased our confidence in our ability to refinance the remaining term loan during the first half of 2021,” said Michael Reed, Gannett Chairman and Chief Executive Officer. “Additionally, revenue trends have continued to improve, which we expect will drive strong fourth quarter results and set us up to start the year with strong momentum. Our real estate sales pipeline and amortization payments are expected to further reduce debt by approximately $100 million by early 2021.”

Accounting for recent real estate sales, total debt outstanding is $1.582 billion, which includes the $1.082 billion outstanding term loan, $497.1 million 6% senior secured convertible notes, and $3.3 million of legacy Gannett 4.75% senior secured convertible notes.

About Gannett

Gannett Co., Inc. (NYSE: GCI) is an innovative, digitally focused media and marketing solutions company committed to the communities in our network and helping them build relationships with their local businesses. With an unmatched reach at the national and local level, Gannett touches the lives of millions with our Pulitzer-Prize winning content, consumer experiences and benefits, and advertiser products and services. Its portfolio includes the USA TODAY, local media organizations in 46 states in the U.S. and Guam, and Newsquest, a wholly owned subsidiary with over 140 local media brands operating in the United Kingdom. Gannett also owns the digital marketing services companies ReachLocal, Inc., UpCurve, Inc., and WordStream, Inc. and runs the largest media-owned events business in the U.S., USA TODAY Network Ventures, formerly GateHouse Live. To connect with us, visit www.gannett.com.

Cautionary Statement Regarding Forward-Looking Statements

Certain items in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding our expectations, in terms of both amount and timing, with respect to debt repayment and debt refinancing, and statements regarding expected real estate and other non-core asset sales, revenue trends and revenues and earnings results. These statements are based on management’s current expectations and beliefs and are subject to a number of risks and uncertainties. These and other risks and uncertainties could cause actual results to differ materially from those described in the forward-looking statements, many of which are beyond our control. The Company can give no assurance its expectations will be attained. Accordingly, you should not place undue reliance on any forward-looking statements contained in this press release. For a discussion of some of the risks and important factors that could cause actual results to differ from such forward-looking statements, see the risks and other factors detailed from time to time in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the Securities and Exchange Commission. Furthermore, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Such forward-looking statements speak only as of the date of this press release. The Company expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201217005274/en/

FAQ

What recent financial actions has Gannett Co. (GCI) taken?

Gannett Co. announced the repayment of $647 million of its term loan, lowering the outstanding balance to $1.082 billion.

How will Gannett's recent debt repayment affect its financials?

The repayment reduces annual interest expenses by $45 million and strengthens Gannett's capital structure.

What is Gannett's total debt after recent repayments?

As of the latest report, Gannett's total debt stands at $1.582 billion.

What sources funded Gannett's recent loan repayment?

The repayment was funded through proceeds from issuing convertible notes, asset sales, and excess cash sweeps.

What are Gannett's expectations for future revenue trends?

Gannett expects continued improvement in revenue trends, driving strong results for the fourth quarter.