Gannett (GCI)

Stacy Cunningham VP, Financial Planning and Investor Relations
Robert Dickey President & CEO
Sharon Rowlands Former CEO, ReachLocal, Inc.
Alison Engel SVP, Treasurer & CFO
Maribel Wadsworth President, USA Today Network
John Janedis Jefferies
Michael Kupinski NOBLE Capital Markets
Kyle Evans Stephens Inc.
Barry Lucas G. Research
Douglas Arthur Huber Research Partners
Call transcript
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Good morning, ladies and gentlemen, and welcome to the First Quarter 2018 Gannett Earnings Conference Call. [Operator Instructions].

As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host for today, Stacy Cunningham, Vice President, Financial Planning and Investor Relations.

You may begin.

Stacy Cunningham

you. Thank and First everyone, Conference XXXX to Call. welcome morning, Quarter Gannett's Earnings Good

this recorded. is a call As reminder, being

Joining us Officer; today Solutions and President Chief from USA and Gannett are Officer; of of Engel, Bob Chief Ali Executive Chief ReachLocal. NETWORK, Financial TODAY and Officer Rowlands, Executive Sharon Marketing Dickey, President

cause The to factors Before forward-looking financial our statements like attention results safe provision our risk call actual release. identifies harbor we may materially statements. begin, contents I safe differ to that in our results your of would from harbor for to press provision the forward-looking

results For the our and non-GAAP during conference management's commentary affect financial website. is between we may release, measures. detailed XXXX be through SEC a Relations to can release this found our call, Reconciliations press non-GAAP our in posted press more the Also, our also website have and investors.gannett.com. our description risk factors to Relations financial for tables GAAP XX-K. results webcast, include which Investor results refer and our is Investor being will filings, of results, at metrics financial please reported including that available of the call our This Form

the to way, the now these out formalities With of Bob like call to I'd turn over Dickey.

Robert Dickey

Thanks, Stacy.

to local to subscriber advertising access advertising quarter, and by digital full the advertising stronger revenue, our Total we of show We approximately a the of driven revenues, of in are increased XX% total continued initiative. client, We ReachLocal. report our pay revenues and that pleased QX results in company sales continues trend revenues are same-store efforts improvement starting grew ago. in ReachLocal X.X% our integration the digital pricing benefit digital and technology to deliver for experienced a our ongoing revenues, marketing up only XX% from our saw results especially superior from robust to platform market dividends. The training with benefit growth as services year

national with advertising a resulted strong quarter, margin contributed combined Our combined digital delivered media The less sales revenues. revenue management, which expected. growth, performance, audience to solid than cost compression digital improved also team in with

$XX Now the The busy consumer had key marketing our on its Starting and solid marketing achieving changes first annualized our on team leadership track, executing which an local goals quarter solutions savings. transformation organizations. The laser-focused I'd markets, organization. of deliver local delivering in sales its and in also on first while with is we results. revenue a will update now million like initiatives solutions completed our planned and quarter on rate to you run within the staying very transformation,

the structures. both a reminder, rationale our reporting local segments as to sales closely to aligned well reorganize streamline efforts behind our with transformation our is into as clients, As our more

quarter, our centralize to the savings. in able were client also in We solutions an million presales resulting additional $X organization annualized of

ahead of creative the look the processing, we client the covers which services. are of the quarter, second consolidation we on our sales to order and structure and accounts activity, coordination As post to new focused migration

the busy pleased we a strong highlighted first We I'm quarter, audience the to Turning had growth financial consumer and with organization. by delivered. results

Ventures off Our platform. quarter, visitors, first driven the the year-over-year, $XXX by increase, comScore to mobile XX% of addition on and the million uniques both continued up averaging Grateful Olympics, growth for and in

XX% engagement We both time B. according scroll as XX% network also across and is up on depth on made progress consumer to year-over-year mobile increased spent solid the year-over-year, Chart devices driving deeper

and faster of QX. are by engagement, and the to higher reflecting will continue, frequency in sites engagement websites a homepage first times. video from Early to showing were late driven launch We part growth load redesigned expect launched wave revenue, mobile continue that that in in and QX, in this and increased rollout improved ad results

platforms. On to been our and doubled, QX. Spotify content plays our Amazon we've other real headline feeds consumers Echo, Google the voice by updates, computer remains Home, monthly voice critical believe people in and and We have on test it's content available radio product compared want markets news style wherever it. Average testing recorded side, in X whenever

of As home among you audio know, of are an best-selling audio consumer important available clearly, is today, many devices products the and future. channel the

landing. This rocket our the the to bring from With national in great unique reality way. LAUNCH, collaboration in and launched XXXX, augmented connection a launches to the reality between our we an market off of lift over and rocket-launch new from Brevard, TODAY future, users coverage augmented is hologram, of experience NETWORK. to we TODAY XXX XX app, Speaking that USA local wanted first the to to USA engaging Brevard a industry Florida of example space is

On subscriber our program. roll pricing subscriber access we the aggressive full revenue continue to side, out more

and have We line be in from expectations. now with of continue target perspective volume, repriced a rate total results revenue subscription X/X our base. about to our Overall

that Arizona team examined by campaign every of build Pulitzer additional tremendous value and President at in is day. was a It a TODAY have Consequences.” prizes hand to it update Sharon I total over to had the “The journalism, Unintended the network the national NETWORK take investment performance that three Wall: project continued Unknown over our wall promise to we Pulitzer Mexico for finalists, U.S. local X NETWORK quality journalism makes Donald moment powerful two want outstanding our on that USA on USA the I Before the explanatory recently led ReachLocal, TODAY This to winners a for The of Stories, emphasizes a recognize multi-platform a in won to announced years. the and testament difference This Republic. were, a an created last to Prizes. The Trump's our the border.

finalists Des for editorial For Register's writing of what Press which investigation were on cartooning. the And reporting, the about Moines care. year-long heroin TODAY looks NETWORK, Seven issues to Murphy Dominick USA of Cincinnati. of This is his the writing, local editorial health Mike and and companies, won port light for for trucking in the Brett epidemic Days in shine like, Iowa into an Detroit The Heroin. related Andie opioid Thompson crisis for Free

We let our With our and success. are tremendously turn for quarter. believe it over for positioned me that, these accomplishments, continued Sharon and ReachLocal future is network journalists the proud of highlights well to for

Sharon Rowlands

you, Thank Bob.

delivering As mentioned, all time new areas The accountable streamlined was broader for busy USA new with ReachLocal NETWORK in the our we leadership. the still team, results structures at ReachLocal. business, Gannett's realigned solutions many organization, first and spent across and quarter as presales very significant marketing sales in roles, company solid TODAY while

results, were year-over-year XX% of million, revenues solid $XX.X ReachLocal with by strong segment North America turning X market, year-on-year. quarter growth. Results driven the Specifically local grew revenues up XX% organic in particularly and to Gannett SweetIQ to addition the

growth Our as international deeper, business, America, search, with strong we solid year-over-year. had which includes XX% grew X% Digging continued countries and ads. Latin grew Asia retargeting our social of performance Pacific in solutions North solutions. America and display, In range social year-on-year across Europe, such advertising digital from

management an aided addition SEO XX% website Our our year-on-year, growth development, subscription SweetIQ, impressive services, such SEO, listings solution. grew from of by the and as review

client success. locations reporting will new industry next quarter-end, with product we clients turn XX% their our an new XX,XXX so in reaching key to broad as offering, units our larger well video several larger of end segment quickly year-over-year, on spectrum, In per trends, contribute demand in XX% our North multi-location a believe one our client at generation client clients, continues as as the marketers America, Facebook solution the multi-location to our increase product XX%. large needs. as reporting clients. our we grew Looking of both national that SMB require grew per targeting. regional on with as metrics flexible a the YouTube. X, We're local count SweetIQ grew typically the We reporting, for both Average marketing and These meet launch client year-on-year, and of Quarter video our line strong the we have tools front, to also key we're launch markets, and developed custom in seeing to a digital on for tactic. key added in increased XX%. revenue quarter video at was product focus

second more us quarter, precisely while to this version turn This accelerate new X tool. sales broader launch tool executing this me sales we team right our achieve predictive our Additionally, the even retention. results Overall, setting also what both size the on tool will our digital optimal with marketing this differentiator client help clients, we'll proprietary as for as productivity we in new better budget intelligence of growth over With insights estimate client ReachLocal strategy Ultimately, field, in for will market to quarter, of Ali. very the will forward and look let drive proud that, believe strong group excited our further. the I'm call solutions that leverage expectations. about We're well data accomplished the to both greater to clients. growth and

Alison Engel

everyone. Sharon, you, Thank morning, and good

with quarter cost advertising, improved demonstrated continued We first revenue management. same-store are our strong digital as well pleased which as trends, results, within especially

a the given of As results Gregorian days XX in first versus XXXX. contained move quarter XX reminder, to calendar, quarter our a our first XXXX days

revenue X.X% full table day by $XXX Sunday revenues total reflects Consolidated initiatives, growth, acquisition the total of basis, we a publishing of loss X% $XXX our first the million $XX and XX% represented XXXX. $XX X% X.X% and the million and of the environment year-over-year, and improvement The expenses of approximately print expense, the payroll On pricing the lower day $XXX million first our was SweetIQ our from Sunday, Sunday, estimate the revenues part a up publishing Total ago. we In expenses. quarter, reflects acquisitions. a which savings the were in loss segment, for copy revenue the some and in and approximately decline reflecting revenues. million lower quarter advertising in-house to XXXX. down composition loss fourth newsprint to reductions goods basis of to We day of in Adjusted consolidations quarter, in the facility grew and development. revenue, from circulation day want production producing at our the product clarity the a declined and Total to ago. remaining $XX XX% result the small our EBITDA more are investment revenue digital was some offset distribution I year earnings lost around same-store subscriber of X revenue the decline quarter point compared is of ReachLocal partially compared due with Additionally, operating in additional an print revenue to revenues higher to million a digital related same-store totaled decline the release providing challenged in the decline adjusted digital pressures. of of year offset out $XX the disclosures These by access give in represented million of EBITDA. were cost advertising X/X Sunday, fell About single segment the largest week. associated in our million of due quarter to adjusted advertising expenses revenues higher a and

as offered being includes well partnership Going digital the auto, will legal and and classifieds, represents on on obituaries. products our which in News; Panda estate, display media, channels, off ReachLocal Apple delivered Instant real Facebook disclosing in as partnership or be main Logic forward, markets, digital digital we categories: marketing all with X platform e-mail via digital revenues our which with marketing; our our via services, of Cars.com; Articles advertising, which employment local products and like advertising partner either suite represents our

local, have clients. we versus Additionally, X, as provided local the in revenues, speak classified, print about in disclosure Table differences often national around our and we more national

improved within marketing company transition are we pleased classifieds. X% digital a was in per of first This services digital digital the media quarter, in growth by very up the up we to services, momentum product quarter the our been to deal, by The quarter, platform same-store compared campaign the strong a are has a clear higher clients up Florida weaknesses X-figure belief compared that about and one of markets technology In marketplace. reiterating seeing the a marketing we continued results, performance improved key revenue signing studio, regional belief ReachLocal growth wins noted, digital the suite a the multi-location branded win, largest offset in in the are mattress in strong X.X% had in as number success with the advertising ReachLocal significant of our advertising expected client, best revenue, as improved day our publishing validates has from Bob national sale technology annual GET As XXXX. national basis the driven digital of advertising including clients and quarter to year-long Creative. in XX% digital brand media, X%, partnership with opportunities revenues, we XXXX. strong fourth had the clients. ever Within on second to our segment our revenues auto X-figure there Within and which our saw adjusted with category, and content a

transition to weigh based marketplace. weakness breadth than saw adjusted to programmatic classifieds Easter. category. drive take a the digital the more versus also overall rate add are detailed working the but of the recruitment improvements in our advertising has on we valuable We brand the fourth the of product our particular continues quarter. revenues The plans ad of print growth CPMs stack units. in X.X about digital performance. new addition to to partner on earlier Overall, our point We improved offerings growth on decline of us seen that actively national employment our in continued percentage slower XX.X% the the solid from in to Digital with to to been year-over-year Same-store our results and XX.X% in strength to day allow benefited and quarter expected, improve new, hold

obituary the section. Additionally, redesign we benefited our from of

expectations, to other while our Our from retailers. to and circulation. national preprint impacted market local large perform our of USA cutback at accounts TODAY revenue regional be continued negatively our print print ahead to continued by business national Switching large

X.X% U.S. circulation We revenues, overall X.X% Same-store continued in the in to local especially see in decline improvement total from an our declined day fourth improved quarter, XXXX the in the adjusted circulation markets. trends revenues quarter.

which last growth circulation was up rate we only year-over-year, market results, deliver target pricing in down access revenues volume our aggressively and subscribers. local X% Digital-only were continue first new full volume U.S. digital expectations. subscriber driven Our XX% actions, to in our over quarter, continue circulation year's quarter, robust by with as the line to

SweetIQ growth. revenue organic first migrated at of driven and USA million, solid continue segment, softer Gannett clients, In we to at trends see came Finally, XX% revenue circulation by year-over-year, up $XX.X the TODAY. quarter our in ReachLocal performance the acquisition strong revenue

or quarter ReachLocal, at we reflects XXXX EBITDA adjusted quarter First X million are seeing $X million. margin, of as X.X% than nearly ReachLocal The first scale we double was profit the EBITDA $X clients utilize a strong growth more especially leverage the as product. continued

GAAP facility and net million $XX charges. was $XXX,XXX, after-tax for the of reflecting consolidation loss Our restructuring severance, quarter

the sheet. in We bond issuance early to balance Turning announced the million $XXX April. convertible

especially As to we of continue invest strategically access our to critical, context transformation, remains acquisitions. capital in making in the

equity sheet right unsecured our debt a balance with our option As covenants. restrictive taps options a of with sell such, a our It price, bond, no cash our the coupon leaves healthy us -- structure. were able equity effectively than how we capital term convertible bond the and a and evaluated market a we at of We settle instrument future loan, and dilution. portion have current limit which determined with to could convertible for healthier premium the the lower to

immediately We revolver paid of the We strong the with proceeds. saw down execution which are demand. the pleased transactions, with our

well our first expenditures as the of additional of million current our paid shares development, beginning this totaled consolidations. revolver debt repurchased on our There the dividends. total end was as an $XXX reflecting paid investments $XX we quarter, to May, balance in ongoing supporting $XX million projects quarter. As have down no quarter, digital for we million were Capital of product and million, the as facility related $XX map since the first

our to Turning outlook.

quarter. last We are reiterating our issued guidance

We turn are that, results. results will I the newsprint than be impacted prices, could higher will to With currently operator questions. anticipating which second quarter that the offset over by for expected first better it half


Instructions]. [Operator

John of question comes from first Jefferies. Our Janedis

John Janedis

the if there you know the showing ReachLocal, really and was was with that's the the is revenue sticking extent mentioned this, strength. organization of about And more I maybe you little on structure's on the per a I wondering new client? already year, I hoping retention and services per the touched for or benefits guess way digital increased the the when You bit I And marketing front? realignment seeing size cross-selling trends to what but calm. earlier on on a client, talked you're revenue in are to increased for color sales opportunity what the

Sharon Rowlands

question, very for Thanks much your John.

things. So of a couple

that look you a out spans product really social, of that the websites services as at display, range when built number now search, new are it total subscription and ReachLocal across such Firstly, SEO. had, being

through of why to customers, per process customer on So and those we we're customers. up-selling per of number that cross-selling focused products significant see the revenue increase opportunity that's of metric a and very

has have that the growth even give digital opportunity stronger the conjunction marketing in in sales think services. key of us client the So that to that previous on they into seeing digital an we as their ReachLocal really as the Gannett them of yet, in ReachLocal the to a we year transformation. believe form driven, the of you platform. it I half second performance that that platform look get with for And from the we're more the don't tangible, back that sales you've through I clients on the is force do attention is, market, great sales rates of further improved When their focused training performance seeing partner with the accelerate Gannett of the to at identified. from opportunity transformation think indeed, segments, the confidence migrated force, will the as and very I is

John Janedis

retention Maybe anything the on front?

Sharon Rowlands

yes. front, retention the on And

always the client has us us to the from prior at that that's ReachLocal this second Gannett track I post-sales in retention retention in platform for be we to but to Gannett the top retention their on to working an uptick consolidate they our the example, rates, set, the against opportunity ReachLocal rates peer Google, we shares transferred of QBR, clients when retention -- improve we What saw closer retention our clients with an and So the we there, rates where we'll shows excelled transformed data half still client Gannett see platform, when quartile. something in the our saw of ReachLocal our XX% in we year. as organization get

continued see in also penetration We where relatively clients, Gannett whilst rates great are low. growth, opportunities improve the penetration rates still to digital our we're print-only seeing


Our of Markets. Michael comes next Noble question Capital from Kupinski

Michael Kupinski

type Cost it about in increases, of kind I the of lower-than-expected, type back in a sales, want what your so not anticipating year sales was that going improvement from terms basis price increases and in as total are cost we this is the future your are to what right? see quarter -- of second first -- of about I of was and at And It improvement that the of the improvement guess XXX you the newsprint is quarter? quarter. rate into newsprint earlier cost in a given the of quarters, comments likely assume point, would materially total that about the of comment newsprint forth. points I as to and revenues was to percent go percent

Alison Engel

Yes, it's Ali. so Michael,

Newsprint's about total our base. X% cost roughly of

first about somewhat down by by it XX%. volume, had partially -- the in price We -- increases. was quarter, And so by offset driven

due increases. and price the fully increases through seeing timing the we it, the the the we're quarter cost has price in to also So first way cycled of

us So in is the of start year. second going the cycle to to half against that up

you're also to you're us So than timing in in that start think impact later half to of the the -- see year, the of first we correct. saw year I going the

Michael Kupinski

hitting of ReachLocal Got into the you. you advertising that And it for quarter? its the second seems quarter. talk heading kind in piece revenues like ReachLocal of is Can about stride

Sharon Rowlands

to continue strong that ReachLocal our core So see expectation in we'll business. growth is the

with really source penetration to of As the clients, we we're resources start marketing business as will business to in there's because increasingly, a digital are large to totality. double-digit as marketing Gannett that a opportunity backdrop, for more bases, to we deploy understanding strong client start growth ReachLocal as though, And continue its penetration, increasingly look as And whole. That's drive well services. going Gannett solutions ReachLocal at as digital against to we we think that such a see about the clients.

Michael Kupinski

number Got industry color? of on Any their about digital talk advantage you. opportunities. Can take And the sheet you market? What you there, little to that there have areas that companies things have opportunities of it seems a acquisition like seeing are the balance there you repositioned like versus are a where in traditional? opportunities, possibly bit are out are

Robert Dickey

Michael, for a some optimistic continue out good products We've pointing and ad of strongly also, be We've interested there very out pretty continue Grateful for that will the there the opportunities very, around see very opportunities door there looking some very investment ad we're starting and We've to to other can done number in to we Bob. niche the more Ventures, are be marketplace, space we realistic. ReachLocal us to around thorough become has opened that really a content it's been may to that we're consideration the us good in still a Valuations interesting enhance and marketplaces. examination are Grateful content, offerings, continue how give very around with that and we on we're explore. out providers in are it consistent very so the tech. of digital that believe

focus at the So point that's this in really time. primary


Our of from next question Evans comes Stephens. Kyle

Kyle Evans

year before. longer do over see the contribution of the from Digital Where term? ad, the XX% that period in going total you XX%

Alison Engel

want I of digital as a circulation. total that That's does revenue, include Kyle, revenue clarify. percentage just make to Sorry, digital so sure total

advertising So of total revenue, a XX%. as digital percentage was advertising, about

for in as for advertising. XX-XX And think so look, advertising, -- we're we've somewhere the that XXXX we saying been mark we'll in cross consistent --

a to XX-XX total couple get mark, later, that. I be it'll that years later think of for to than revenue

trajectory, advertising times XXXX. talked that we're we've that we're very on TODAY. threshold approaching on past in obviously, focused advertising. So well as on very We're focused really that we're the USA threshold And before, but at XX-XX about XX% many

Kyle Evans

done quarters increases you're And three you. subscriptions. pricing Got with away on

I ask your line knew going in were expectations, volume with specifically volume, You was question, what were Net pricing the to do. always I the trends...

Robert Dickey

we Kyle, question, because ask that but... So added you'd we knew that

Kyle Evans

a I broken on sorry. know that, I'm record

Robert Dickey

But give more Maribel can you insights. some

Maribel Wadsworth

for thanks Kyle, question. that

As we our volume line expectations. with Ali in said, are seeing

increased approximately The in it's Our to to X% was to X% declines and the note volume XX% mid-teens, volumes across print range. are yield estimating -- audience digital. did our that But but pricing. focused about I of tick reach on We're both we're declines that up the we again into think, tied important, total that expected.

volumes piece And are our correlation evident with print that in and revenue prior a so increasingly the an of volumes engaged growing that while print reach, and years. was direct digital advertising more So overall we audience. growing to don't is a audience, see

Kyle Evans

tied What Do to points you get say you X only -- to or there? do data pricing? X how

Alison Engel

Kyle, only of that's to portion think and estimate is on and price pricing and with an kind portion of we able to able what priced related we portion Because, we're that the to we portion didn't We're at of and population. we priced, come total look our a of sort to decline price the that didn't population secular what's the we not. related up based the extrapolate the

Kyle Evans

increase be you cost it. One about average pushed pricing that the I promise quiet What was question, you. more Got through? and I'll

Alison Engel

average The yield the Maribel? is XX%, increase XX%, was but about price

Maribel Wadsworth


Alison Engel

About XX%, Kyle.

Kyle Evans

us Okay. you SweetIQ the contribution Can for the quarter? give

Alison Engel

direction in segment, rolled we're ReachLocal pleased SweetIQ No, But the out it's meeting It's Kyle. team. separately, taking. we're our not and breaking and the it's the into with shared expectations that

Kyle Evans

share Can you the with Got who us was with? win you. auto

Alison Engel

don't I their release I... permission Otherwise, to have No. names. their

Kyle Evans

updated trouble. don't you get you kind I stand the us in where want your to of with thoughts Cars.com on give Can anybody relationship?

Alison Engel

the the with don't got look, a our working with continue think improved we a to We mean, for relationship I color if can Sharon know great approach executing Sharon, add we to to I be and them. towards relationship them. performer good continue performance We've Cars.com. value around reorganized want drive that. to And we've that in talk market hard around are which mean whole more to I Yes, this, segment, work automotive to there, segment. any will you and

Sharon Rowlands


stood across board, not vertical. we've So large a for the It's dedicated Cars.com. just auto segment up with a us

We in segment a digital marketing can large we grow too. also services believe business that

have dedicated on Cars.com, our believe we're client success specifically, our up standing help broader quarter, up group on retention auto, but a rates a to we dedicated going we And focused business will So in organization. in focus be sales is actually that this both over management actually that and really drive there.

on big the So We're look, focused excited big a and a it's very market. segment. very, it, It's about opportunities.


Our Lucas next question comes from Barry of Gabelli Company. &

Barry Lucas

and is indicated the to you've Sharon, would be XQ quite in margin see. that Reach, for progress on calls, reasonable margin past I think double-digit nice

You number of the reach that long-term spitting if by end target, be? had to the do how to in yet it And the takes be initiatives contribute goal? and pick meaningfully, that you do long success you could are really think you distance you think we the a the think described Given what to of think year? I margin might that margin

Sharon Rowlands


The So I very of market balancing think range Gannett low the base. product tremendous margin first the thing between see performing. focused on really is, say We is right still have and rates We opportunity. growth. we're penetration very to a now,

that through very line We're growth. the you're really And And so very, numbers. seeing growth. are top we prioritizing come

continue is, improved line our numbers we as able be on sense you'll expectation, XXXX as see, double-digit performance. go and to go with as performance double-digit into and to Our number. through quarter-over-quarter, we EBITDA And getting EBITDA that double-digit top we'll growth XXXX, very low-teens, the close

Barry Lucas

whether soft. that, to down but pre-print, don't a maybe local that maybe on the housing And deeper still and I incremental and kind that of or given particular, advertising, in it's the in things same display market, contrast digital strength strength furnishings weakness, categories. could the so say just in ad -- home other you improvement. Bob, kind the home it those in bit performance of seen What's drill related media the want the with could driving to you is has

Robert Dickey

the telecommunication, So in board we've can the on same the national across print, you and that see banking, cetera. look ROP the categories side, you past, et seen

Some traditional down well -- national. well, continuing and compete on be to the some stores Walmarts a Foods. department more to the the try grocers impacts Grocery on with Whole also, with At be national are out local side, the challenges real weighted how to this the to to But figure Amazons have as continues to the out preprint level. continues challenge. local automotive that trying as figure

continue us. more see, local national that preprints continue some the can pretty come clients progress to our add where markets frequency to Locally, the types print X like a to but your preprint point, nicely so those with good outdoor of Sharon be patio put those spend still program with And headwinds it we're we've we and very big at back, the anything outdoor, to we real categories, Phoenix, -- on starting continue are estates furnishings, to gardening, furniture, color, us. nurseries, a in out to looking our win markets. the print. in against the up when little But seeing some comes are home

from little we're we're better color, but you clients performance that clients We trends. think much Sharon a and right converted, those our than previous of XX% can of I seeing the is the give have much, bit about, around

Sharon Rowlands

a offset print our We've good seen preprint on, -- progress clients you're plan area with expectations has terms no, very such where a drag. a is been on Yes, drag spot as really small been track Unfortunately, Bob also to identified, frequency and the the the that have were. of in the Bob.

a is in So result that net position.

that small. clients, the making will dedicated to of furniture, focused a also really there, focused standing health, multi-location the on regional some segments grocery, focused the operational smaller sales up focus, in is education, things vertical is these standing up a QX, on very, and see days span a of will trajectory that have early the very we're SMBs, which the move states, on be these smaller and we the spectrum, home by that start the today, and penetration its other often organization are end At opportunity organizations One end digital units them. those having services, of digital but see back at added to with a dialogue for opportunity on we're these by the more segments our we very also we sales a clients, our that churn transformation all high that low the growth business, where that with by many of tremendous big strategic sure early

much geared very areas turning our transformation us. addressing those So at into opportunities and is challenging for them sales


[Operator Instructions].

from Our Huber Doug of Arthur next comes question Research.

Douglas Arthur

mostly A in segment sell-through couple is newspapers? $XX.X of questions. the Ali, intersegment the got X, to you've number? that eliminations. ReachLocal's Is million of table that What

Stacy Cunningham

Or that's ReachLocal in the that's ReachLocal that's Stacy. Yes, revenue in local the revenue, Yes, this the sales is segment. put revenue publishing the way, publishing segment. another the DMS

Douglas Arthur

Okay. And Sharon, with great then number ReachLocal. two, numbers

that down conclude to tougher bit half. second slow second tougher the You it in little fair growth Is do comps in rate half? the the against growth a will comps face the

Sharon Rowlands

in the we already Clearly, certainly, the second is of migrated Gannett high digits. do relatively But half, double quarter, the Gannett rates we'll comps to low. local penetration good we expectation the by see third Our the is we've -- client client base. our change, still time growth because the get

So lot us. opportunity of see we ahead of a still

Douglas Arthur

way USA any effort the the I TODAY of digital overall finally, talked right then about And it you a Okay. TODAY mean, box sort within I but USA to now? put Gannett pressure, Bob, way success. Is complex around print -- mean, there box to us things -- different to at here. seems going ransom kind kind get the the of got overall put you've it a right a of trying I'm now, just hard around for it's lot and impact. amorphous of

Robert Dickey

We that look TODAY don't it's way, both generate. and we of the why and well on at as integrated very concept, local that sales content the USA with our once gone operations it the we've print as to digital side organization, our on NETWORK that's

cherished the TODAY the was the USA brand, Gannett we managed it it's prior So not individual to but entity like spin. to

growth our that USA as of point which to USA USA part the revenues XX% audience to contribution are us. how That's of were that, digital it meaningful we that around us just the earlier, to TODAY contribution, tell not can it. network I So for improved. are a significant continues very overall areas, economics adds brings you sales a of total specific be digital it advertising, is many TODAY, to to The of have very, out. TODAY, but in don't Its at break if look standalone, Ali's we

Sharon Rowlands

having to resonating footprint, what's our fact I that can audiences national would And add sales down across that is could we that to success. tremendous the to that, bring is NETWORK. brands USA national with to TODAY put local the the organization we and Bob, really on them if

Douglas Arthur

on I branded follow-up of you a been that the lot success? of TODAY lot or Has Has throughput the content -- just USA And selling continued? local did Okay. newspapers. through start one putting mean, a a that. that

Sharon Rowlands

sales to We're signs early out opportunity, of of early content half actually. year. are about the markets, promising, think and that the rolling team, but see we'll very, the second the stages local to The very starting the branded impact I very in excited

Robert Dickey

Overall, it happy. very We're grow. continues to

continue to just branded our But seen network, that doors, particularly We It's we to new ad and across top against to resources in products put already the opens the with point, local some do XX put entire content, we've it markets Sharon's larger results. the it. early.


today's in conclude you concludes ladies our participating program. session. conference. Thank And This this gentlemen, and does today's question-and-answer for

have Everyone, disconnect. all may day. great You a