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Gannett (GCI)

Participants
Mike Reed Chief Executive Officer
Doug Horne Chief Financial Officer
Trisha Gosser Investor Relations
Call transcript
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Operator

Greetings and welcome to Gannett Fourth Quarter Earnings Conference Call. [Operator Instructions]. I would now like to turn the call over to your host Trisha Gosser, Investor Relations. Please go ahead. Hello, Ms. unmuted, hear is Hello, line your can us? you Ms. Gosser, you hear can us? Gosser,

Mike Reed

Mike. me? Hamed, you this Can is hear

Operator

Yes, I can hear Ms. hear Ms. Gosser -- Gosser. I don't

Mike Reed

I'll it from Are open? take here. we

Operator

thank you. Yes, we are,

Mike Reed

Thank you.

joining So morning, this everyone. for good our Thanks morning. call

some Let had difficulties the We've with me go to of we been here technical ready apologizing arranger for start by call. off for the XX minutes.

but do preamble I'll read then first. to mine, and so Trisha's really the do will here that. we part for to apologies that So I have get

So discuss again, Financial apologies Chief be and on for the joining our will technical for our good morning, Quarter Officer, Presenting difficulties. Doug call Gannett's results. today and Thanks today XXXX Horne. call to the myself Fourth

quarter. will you website morning has in release During in the Gannett and that to find addition And press supplement if an this discuss to for call, we'll earnings you navigate this the have Gannett's it. we posted financial earlier supplement information our the good results

We have will we you quarter's expectations on some and be ahead. the performance and on call today additional years detail with referencing 'XX the in it for it provides the

me we is recorded. Before that this let you being call begin, remind please

made obligation call. statements update the those those and this discussed including in uncertainties by today. SEC. We correct forward-looking expectations. from required to statements, in to supplement certain Except you well and described the no cause forward-looking of respect Gannett's cautionary actual read events may we the that or addition, regarding In statement with factors statements involve results to events earnings publicly undertake are statements materially differ future current on any law, the made and based during with These risks results as to and as encourage the filings risk as

some flow, will the we financial discussing to net EBITDA addition, revenues, Gannett. cash and adjusted be free call income including attributable today, information same-store during adjusted non-GAAP In

comparable most website. in earnings to of non-GAAP our on reconciliations our find U.S. can supplement, GAAP again measures the You the posted measure

call Lastly, be I'd or offer offer like without Gannett. not to sell to remind material to this may solicitation reproduced are The our an interest prior webcast cast you or nothing and Gannett any duplicated, of in purchase rebroadcasted written consent. constitutes an on and audio copyrighted that of

So with let that me into way, the out meat call. jump of of the the

very So the a year important XXXX. progress again, against morning. throughout we year. was Gannett. in and the well some strategy executed thanks, for place We everybody, milestones joining for strategy right that XXXX key this have in believe have achieved We of

digital For billion surpassed XX% total example, year-over-year $X in digital-only annual we volumes. growth revenue. in We subscriber saw

in subscription that $XXX rounds and million that nearing We year we over And $XXX of agreement repaid on million is million our platform XXXX, through digital-only digital over place. program our and XX% to we revenue. in repurchase share our during of early in efforts and debt that in optimized marketing structure XXXX an surpassed business put on also million credit $XXX we punctuated of annual amendment total a revenue. services basis in same-store a we with annual grew $XXX Further, refinancing business authorization now the and capital X

operating in heading strategic very to our out the interest we rate We into. have against debt, fixed on important we last our now time XXXX, well importantly, accomplished XXXX lowered cost X Further of At capital refinancings the pillars. in With and have we of strategic X.X%. we executed rising in rate approximately those year, environment we're this interest laid our this X/X next ended out We what's we ahead for what's Page X year-over-year. X, as years. journey, next page X,XXX,XXX subscribers. I of and mentioned, digital-only the ahead first what X growth saw over for where we we And accomplished, for next to now XX% XXXX years the all. with you transformation in pillars the And we phase supplement lay a that have the X

We also in XX% fourth saw growth quarter. the

margins growth record with XXXX over revenue $X streams, And Gannett in on record billion a platform XXXX marketing same-store digital and in total revenue digital XX.X% the our coming revenue year. EBITDA segment core Our in saw exceeding category. total X/X solutions revenue digital had ended of year-over-year we from revenue. basis in

consistent $XX have million into year-over-year. this does XXXX, investments adjusted a point reflect marketing. about $XXX bit content, and X% Investments line It geared grew XXXX. be great pillars heading but today, going for In operating towards EBITDA momentum our our And growth. EBITDA or the to reaching business our there data, We product number was are million. top consistent with big just were long-term quite in inflection current discussed areas about

relentlessly our reducing We as well strategic our have focus been narrowing leverage. our top on as priorities, pillars X

over XXXX expense X helped has to and as that reduced I refinancing drive improved ago, our years year, lowered X significantly the debt over Gannett over bringing XXX% pay in XXX acquisition debt XXXX basis compared with million to And $XXX that since points. now. During is we over of of cash repaid interest initial The debt by we've growth just over free efforts of cost $XXX since down acquisition million the payment total XXXX. mentioned flow of in our total debt,

benefit continue cash going forward. pension expect cash well as flow payments such, we with cash years cost, restructuring as a significant to integration interest cash continue and us. the of the behind increase reduced interest, believe the come. associated cash to to debt expect We materially flow are burdens, we including Importantly, expense as see most to cost cash over to years free this of And

cash to and XX% to we this that expect XXXX. double XXXX flow now morning a have guided fact, we free In at and CAGR between nearly in grow

cash sustainable So growth. very In our the for delivered flow and importantly cash free foundation ahead. pillars growth revenue within more significant year, we the against strategic XXXX, flow but set future

reviewing items for I key Before spend few about XXXX. we talk operating minutes other our pillars, specifically a some want to

year, proceeds debt for Over completed XXX the repayment. million price, for dispositions over just used real $XXX estate over were we and of purchase past the

of shuttered long-term or The internal nonpaid to and the lower solutions addressable in small that moving the we advertising quarter also cash markets line growth strategies. marketing allowed our performance and in digital are our focus portfolio print a of and lowers number the top payments nonstrategic XX to with these our greater subscription our of allows dependencies In with subscription with business long-term were up And senior our our incremental business. properties overall sales, Further, exit $XX a didn't on first the digital-only newspaper digital our within properties revenue. agreement impactful an X-year not print to products of of shuttering marketing to up the credit $XXX include digital resources service the strategy. of XXXX, all us program amendment digital and repurchased in a At XX, on to that digital $XX of for moves agreement restricted free permitted also not repurchase XXXX, of to and also principal these the company's secured either both profitable portfolio. us Board repurchase while us profit an time, We authorized $XXX market million print. to existing allow million Properties opportunity in subscription portfolio. total or the common agreements stock also These very long-term to our position, million our providing In across line products markets of up while announced words, optimize Directors on overdependence announced across it of long-term stock. allow an with advertising-supported revenue lined expanding same definition a other for and on before fit to we million portfolio of we sold up for advertising, execute to that at low share the sales properties in to toward have all share our December slightly XXXX. growth we us primarily our Late credit repurchase. DMS

place capital us stock the opportunity top shareholders. tool an to maximum for and repurchase repayment plan regard presents having in to allocation us remains While our with our allows one have debt best with flexibility important returns of maximize to the that is priorities, that

Now strategic turning pillars. to our

subscription XX% over grew our subscribers. and the is been of priorities fourth mentioned, has ended prior digital-only year We top the In quarter, I digital year. growth. accelerating One the subscribers, as digital-only X,XXX,XXX with paid

subscribers subscription products XXX,XXX XXX,XXX XXXX, Our XXXX. added year full digital full and for in compares subscribers year that new net new to net

XX,XXX but paid small we digital subscriber had more properties with subscribers. The small the and strategic paid previously each net One digital was XXXX subscribers growth right stated we aggregate, I than XX individually, of X,XXX,XXX mentioned So in the from in because over our I market year while terms would subscribers our very 'XX about are the we the we done total item removed X,XXX,XXX of those, goal not disposals we mentioned paid in have accounts. note, subscribers. was of doubled disposed XXX% the ended move

did overachieve goal. So our we actually

driver have was these of and enhancement, further and our visitors We we XXX analysis. accelerate that million area expand to importantly regard a continue subscription further the Data in revenue $XXX us addressable strategies. see significant right include a us. grew across our believe with the However, and to making Digital-only strategy, current XXXX potential. to and the our attack, at content, are properties market results, month. creation, our surpassed infrastructure for content pleased dispose thing averaged quarter, the are digital financial we product XX.X% is with collection the and U.K. to market digital to this we U.S. to us in And this product Investments improvements our enhancements investments the to also and rate fourth audiences penetration our offerings tremendous In of the of to most while continue come see for data sizable unique year-over-year. in do product markets. and our revenue, significant for content marketing circulation growth million per

growth second concentrates business. accelerating on our marketing Turning to which digital strategic solutions our in pillar,

solutions digital as a local reminder Our IQ marketing platform. our on business sits

ARPU quarter, posted refer IQ over XX% in So margins. in We fourth fourth by and quarter our and of year-over-year core count that grew consecutive we in it DMS to local the we really its business EBITDA as client DMS double-digit business grew our third our quarter X.X% the business.

note run XXXX on little rate revenue. million XXXX $XXX X% is basis based core just to positioned over core to that recurring It's important recurring done the in revenue platform platform into Our annual ended year-over-year the business has a that what the annual with alone. grow by and

we support operations, growth that customers freemium product in local just sales we and the paid platform in double-digit fourth pure development So a support channel more the believe the increased reflected investment in sales phases buy to free number, with growth ongoing product, as to and in models. top customers. expansion, local grading a sustaining long-term marketing with the specific our tools, the to These growth today. expect the double We a create investment off our and critical recommendations line are creation lead IQ the no our users enhancements that of give that online in which to in and and inside will new in receive comes and ongoing product go-to-market X% quarter, turn launched our engagement investment sales our But believe to presence marketing and that channel channels, just them and an platform. also account. we In freemium and of quarter strategy again XXXX, marketing announced digits and enhancements current of this IQ their XXXX, buy of did in drive customer-facing we platform we expansion allowing assessment XXXX. in into suite, in core online enabling fourth Please to registered recall local expansion growth of the further IQ third third enhancement the to several the

the businesses more in U.S. our business medium-sized client over in count XX,XXX to meaningful from DMS of of we the a the the and small millions future. and percentage grown have today expect in core have We

All space of us are the greatly U.S. positioning product the expand doing SMB our to enhancements penetrate the opportunity in we're to

So a customers platform today just XX,XXX with it. great we over on have

much but our opportunities to growth go off us that marketing after expect product core a opportunities market here. our give We and really bigger addressable of

across Our subscription optimizing third strategic is business pillar print traditional our advertising. and

to the will premium add digital universal free electronic across with us early benefits we optimization a crossword was an on has announced allows capabilities, commitment future quarter to shifting of e-editions information as platforms our our As e-editions. with e-edition publications in the In access USA TODAY, noted and transition Saturday them features and news, other subscribers through expand TODAY to have scaled improving also also on to the sports, meets puzzle. working our our home the our first earlier, this our opportunity fully This and category. products audience performance such print delivery giving and the a in move of effect profitability to XXXX, put rollout access focus value offering, paired the our they Gannett print also including USA only to audio to which allocate current believe improve our subscribers to while our to overall increased We to advertisers resources reduce are late not for exposure markets a subscribers most. but This the events majority XXXX. XXX our of over the network, the archive the take of access content from to

We our to different rapidly also landscape select provide the with evolving experience. to subscribers print and plan current address to stimulate learning delivery further best digital markets insights models the we as introduce and in

Our prioritizing growth fourth investments businesses. pillar is in our

shows. COVID-XX Delta and branded business, that in limited ability Events endurance and to host of due the remained impacts Network the Our Omicron. pandemic quarter emerged USA the our Ventures TODAY as ongoing such variants to in-person the and challenged It local events fourth

races, we reliance the events of years. X% example than virtual our event. X Encouragingly, million the An we have virtual to some So the by in like League greater of as were hosted is realized Justice significant American marathons, events grew XX we fourth the in-person the engagement the in to we most events. X.X and XX shifted to Series virtual with to hosting consumers anticipated Run start Included for we of quarter, that Influencer XX the through Series. consumers, count success and starting and in-person last quarter the return Chocolate had in Hot on venture's Cohen revenue in event Awards, done to we see are pivot Andy year-over-year live Despite quarter. during fourth virtual to a a that Run quarter, including

first the third XXXX, NFL And XXXX. held largest race For Los in QX example, Angeles Alumni Legends was the hosted country quarter and Hot game to in Bowl of XXK weekend. we the by XXXX party Chocolate the XK Chicago, foot in the kick Champion, held in big in off the Super Rob Gronkowski

Group Our a brand Ventures our leverage brand broader legends further sporting audience. major continue experience branded to introduce will to and to much our with events

we the installment building well taking our pillar goals. are outlined report culture. strategic published and goals inclusion equity and XXXX diverse In final and fifth as is reach and achieve Our Gannett's steps diversity XXXX, first annual our our we that an focused on we QX an as inclusion, on of into efforts inclusive to

culture XXXX will that achievement share an our through an importantly, honor Campaign a to in core Index. recognition were this earned these shortly, foundational receive diversity in XXXX the publishing updated consecutive and pillars Gannett last And stated great through advancing our Human progress and for against commitment score pleased Gannett, inclusive year. to month It a Equality our strong at Foundation's be to again we Corporate and our goals. are equity recognizes actions. policies fifth We Rights sharing this is Inclusion, report top

quarter as just of we advertising, saw to COVID-XX year-over-year have revenue our fourth guidance. away hair same-store first expected declined see combined with quarter in business with finished our digital-only events pillars throughout volumes Omicron the in XX% projections. softness from our of improvement each And we While in in Same-store trend quarter but made the X.X% XXXX guidance the short trends against growth challenges our challenging in year-over-year in solid first variants you'll We fourth variant. move was seen today noted as subscription more our XXXX print as of the really in that the than improvement well ongoing we progress tied revenue XXXX quarter, anticipated. variants. the a was operating Encouragingly,

we made away those small market a from However, hair as great to have over actually not we had move strategic noted our the projections. I move finished would properties,

However, will pillars the strategic continued very important with be heading XX% our Gannett in fourth forward build growth believe We in We quarter the have XXXX in of XXXX for this in year year in full XXXX, category the across XXXX. the 'XX we and momentum towards company. for see our board. carrying progression momentum into to evolve another tremendous

company technology content, plan in sustainable marketing growth. organizations digitally TODAY Events focused data, media company subscription-led a into and investments along marketing our make We with solutions to with strategic solutions is Ventures into marketing intentional evolving businesses. and growth digital Our and product business Network digital and long-term USA supporting our

and we are that remain ongoing our we We in XXXX in that our to operating efficiencies create will flat XXXX. in the as result compared will to areas. you. tied in long-term Resulting offset to operations office general continuing have expectations the savings vision to to print back administration with relatively make largely overall investments investments plan legacy We expenses these articulated to and committed

we previously flow operating the making free are nearly double in we expect the business. XXXX, in However, as noted investments of cash to inclusive

investments digital-only subscription-led content support data strategy. and our Our in will directly

local our is pay for. know protection, in name just sports, topics in converting we and finance, as investing personal about the will a passionate and and real are such consumer health High know We estate, we audience consumers that few. areas areas dining well-being, to the

our well an specialists and as focus graphic portfolio. newsletter increased with we also portfolio expanding expanding engagement sports, sports already as of our on are storytelling, Speaking databases significant

investment will data have users our their we Additionally, content allowing along with journey. seamlessly to consumption agile have with interactions marketing on analytics to combine allow in our directly efforts, the us us

Our of growth readers consumers investments to turns to as drive we our in our which into subscriber efforts. increased efforts base. In an XXXX, paying scale our content in on data engage really with intention emotional platform consumers marketing our build longer The more to will go expect we then hand-in-hand our with stay marketing digital-only to there our customers. is those connection

overlays, our in enhancements, Investments subscription personalization digital-only Our support product pillars. a X among our content tests XXXX have team be USA to four including to subscriber our continues other in properties local expected, products subscriptions, created TODAY. growth support and new things strategic to cornerstone entrance first of are lift in XX% initial through XX% which at lift in the significant lift our in and

XXXX. Our marketing for platform team to and project well considering buy the to of Even in on More digital a also another expansion platform. free as that continues investments, as future business SaaS mentioned year, and in of meaningful the solutions growth online XXXX. ongoing product our the these later focus as come in do-it-yourself build-out on flow we cash with foundation laying

With free interest cash anticipate XXXX. decline will to and shy in year-over-year decline cash year-over-year restructuring set and to cash costs we XX% flow just XX% over in double the integration behind are refinancing nearly of us, efforts leading and obligations pension

CAGR increase seen our noted, operating XXXX, flow but only actually between and With based not we XXXX. we line free expect XX% grow the will favorable at significantly cash in just a with strategy, now combined results importantly, below lower EBITDA on costs have

in XXXX guidance and not This growth plan disposition we ahead, issues in further have impact the acquisitions based to no in own we pandemic-related regard the today assuming place ranges. or these assets continuity business on I are is guidance, as within today. significant earlier. any substantial factored mentioned we have and of So the With

expect revenues declines For single-digit XXXX, and between same-store $XXX the on first we quarter a which of basis. $XXX million million total low reflects

perspective, part to interest in a expect an adjusted which reflecting a net and We $XX depreciation smaller normal. about seasonality million is EBITDA $XX of operating of amortization operating quarter overall the and million approximately in with in $XX $XX from range expense, expense and small loss combined million

$XX total high actually billion end revenue on and of full result same-store those between revenues in to flow growth XXXX million on Net the the being in million. to year we XXXX and range revenue $X.XX of the X% same-store billion in we in and $XX of $XXX end, income the in For seeing X%. million $X.XX $XXX of expect the low million a cash XXXX, Gannett of attributable expect ranges to revenue range free decline

in million top of real We on also expect another sales that. $XX estate

be substantial great We're debt for share cash to the year million allocation as give and expect $X.X to addition million that XXXX, before, we'll as to volumes repurchase year-over-year in in million repayment forecasting of of in relatively included which XXXX. compared to have we flexibility the EBITDA $XXX us opportunities, XXXX now $XXX this $X discussed So end subscriber EBITDA our have our we generation expenses of at us million digital-only opportunities. adjusted the remain available range and adjusted plan in to unchanged to capital to

in today, this million removal of print in As $XX mentioned these million although though remarks previously and critical plus achieving believe this business. inflection continue both We mentioned. my top revenue during reach XXXX, line for to grow investment, our and growth part the are as will of by long-term to offset the of point for we reflects $XX free cost sustainable estimate sustainable company period, investments, flow I the will EBITDA from growth plus we throughout cash

Similar other subscribers alone. portfolio to digital on we businesses, the This XXXX. experimenting, of the team super a clear of we digital-only uniques following end to sizable financial investments are of It's are our at prudently repositioning making digital in path current million have across remains CAGR optimizing, moderate the at fast-growing subscribers from sight a million our quarter But our current based outlook modeled the of XX of journey And has growth a improving organization, execution. fourth a ideating, Our X We're the remains on million target we our with Flawless long-term in is products. digital-only time XX% and XXXX. line goal. with subscribers. focused paid more XXX market have million XX XXXX projections. addressable over a we

earnings measures quarterly to includes And in measures. forward-looking to most Doug guidance and information of our our to fourth more at XXXX the additional what Doug? performance to now is posted website reconciliations comparable like do turn quarter it Our GAAP the I'd supplement over financial reflects regarding investors.gannett.com our non-GAAP U.S. detail. to in in discuss

Doug Horne

you, and Thank good everyone. Mike, morning

$XXX.X quarter. that decline our loans in X.X% million the PPP pillars labor. secular well inflationary in The declines, raw was pressures down with total our also total million operating and the on decrease of QX X/X million $XXX.X X.X% year-over-year. XX.X% print EBITDA a from revenues, quarter prior million the margin down related the revenue EBITDA decreased in XXX in of a investment adjusted benefited in XX% million and to revenues same-store strategic X% prior as digital quarter. $XXX.X For $X.X Adjusted was year-over-year. materials year-over-year and XX%, the Expenses were EBITDA represents coupled increasing were operating of of year-over-year. declined included X.X% adjusted forgiveness adjusted year-over-year quarter. as the represented year The totaled and revenues Total or as ongoing points was and basis, pressures from revenues a compared that in the year in basis million On to $XXX.X $XX.X EBITDA same-store recorded

million line, attributable of of income On we $XX.X to a quarter ended fourth net adjusted the $XX.X net million the and loss Gannett. bottom with

to to debt. Our expenses as of net incurred million where interest lower year-over-year lower loss expense year in as a related loss a favorably of benefited and of the $XX.X XX% prior part We compares of well extinguishment as million. debt-related $XXX.X we losses the result

continued mainly sales same-store our X.X% a digital million, as basis. basis. the all decreased Media which of segments. a national segment the X.X% XX.X% XXXX The a cycling and quarter a be to prior on compared prior properties, but year, revenue the reflecting advertising year basis, same-store secular year-over-year digital revenue forma industry compared same-store year revenues basis, due that demand in to from up We pro Digital our to as marketing Digital prior pent-up prior continued on we strength are XX.X% saw but X% down on reflected to pandemic. results growth. decreased X.X% now with basis. a trends a legal as notice Digital to Publishing was Print $XXX.X solid our our decreased same-store sports increased the performance we continued in compared Digital categories. to fourth on year due X.X% and services same-store the XX.X% and the services to year-over-year revenues compared publishing with to employment obituaries classified in X% performance on decreased segment Moving impacting continue same-store on as basis revenue marketing down strong National media demonstrate drive the advertising in revenue to categories.

the fourth $XX.X driven publishing by with quarterly record quarter revenue segment quarter, productivity. of operational third the revenue million consecutive delivered For

to improve client and previous with force medium-sized the its solutions X% DMS continued business Our customers growth in of digital over continue resonate to quarter. local our small sales resulting and our productivity, count

overall compared circulation. prior quarter. This and by in pressure demand. of as result was the worsening the copy fourth a to trends result same-store ongoing on of pandemic lower with now single-copy Single QX the and sales but of part sales and lower X.X%. down of down basis, same-store business a XX.X% negatively to which the remain QX, compares down travel X.X%, as revenues respectively, was in the X.X% which decreased favorably Circulation year a compared change QX to falling Moving slightly impacted

same-store pressure from secular remains While declines. basis on year-over-year print under at XX.X% circulation a declining

same-store volume overall a prior as Our continue subscriptions. base. on the we compared revenues year-over-year ARPU on approximately XX% digital-only year-over-year our X.XX of grew to million subscriber circulation year grew declines slight the to experienced XX.X% growing Digital-only basis. focus subscribers Digital-only to

of copy a ARPU stabilize our events The including margin had publishing off totaled distribution which the were as for it number that resurgence of compared to margin pricing be key labor somewhat will volume to as Adjusted by will the up their with again quarter. in representing segment's postage, QX a well and subscribers XXXX costs the well $XXX.X live and the in impact the year. introductory COVID-XX of fourth as prior roll as increase expect higher impacted plans. we as business. segment as on negatively nearly pandemic publishing in quarter begin both begin fourth However, million we to in the digital-only that newsprint continue EBITDA categories, are contract prices, single our the XX.X% higher XX% a experiencing increased of Also,

For marketing an in solutions X.X% $XXX.X year-over-year same-store fourth increase the digital quarter was on revenue total segment, the basis. a of million

the growth margins. margin that's quarter over EBITDA of XX% Adjusted million, for increased the solutions in of to count prior As and adjusted the revenue results quarter, which portfolio the in X.X% QX home publishing focused more slightly revenue drives sales year digital core represented segment third EBITDA inherent year nearly proprietary XX% XXXX, marketing versus digital for held prior XX% fourth $XX.X and of platform which clients a accounts those steady QX. well grew that the segment channel. Comparing services compared of which strong double-digit categories. year-on-year. education increase. more XX,XXX utilize the clients, marketing a solutions product at to effective in of ARPU client year-over-year, services some consecutive a our representing seasonality X,XXX as totaled marketing the Core the clients quarter digital for due declined to steady as Also, and from business, our XX.X% increased reflects Average our

and the expense rate to our limits Our quarter tax includes In and $XX.X The of interest company's Gannett by approximately effective of consolidated QX QX attributable is expense. $XX.X million, for XX.X% net loss primarily million deductibility was the which year. depreciation the impacted on from amortization. $XX.X was million was interest prior down

now balance sheet. the Let's turn to

QX, the Free investments in Our approximately of approximately well technology million, million debt, $X.XX accounts the $X.XX flow $XX.X balance of our Act of net infrastructure. with We leverage in the Capital development, in reflecting X.XXx. $XX $XX at an and as end $XXX.X and totaled receivable. the payments ended $XX.X debt as of the during deferred cash was CARES in was lien net million million, approximately quarter payments million operating related which to reflects usage FICO cash approximately cash first of quarter fourth increase product billion. tied reflected interest expenditures resulting to digital billion QX,

we $XX.X loan. repaid repaid the million loan aggregate During $XX.X outstanding accrued interest. under million cash, QX, previous our secured of notes senior Prior company for term in also of approximately the including principle million principal under X-year XXXX senior $X.X in to loan secured refinancing the the $XX.X the repurchased million term term and new X-year

For in we the fourth quarter, total generated million. $XXX to $XX sales, our XXXX brought asset sales million asset which

by $XX of of asset additional an sales incremental generate million to expect We the XXXX. end

XXXX $XX the year-end. repayment incremental threshold We also a at debt of in cash $XXX first million over make driven to quarter expect the of by million the

processes. controls our Finally, in pleased remediation to the revenue are certain previously recognition internal to announce we material that our related of weakness

enacted for including controls. remediate and the migrations we accomplishing the teams to environment several to well organization including controls, material IT XXXX, as goal. in various entire During monitoring I'd critical effective weakness, the as systems technology of to the compensating efforts centralized group-wide implementation the their finance thank this like to to specific enhancements and control

meaningful excited to the it operator are communities turn about and flows, shareholders the With improving I are create will and flexibility value solid that, having to paydown pleased with We an questions. strategic we serve. with folks to the progress give a end the to and of our debt a our stock XXXX enter back very repurchase opportunity pillars balance free for progress on significant opportunities program both year we made substantial sheet date, cash to the and towards for

Operator

the first line Instructions] [Operator question The from Lewin Capital Greg [ph]. of comes Lewin with Partners

Unidentified Analyst

Mike, X questions, please.

question, perspective you first in the category anticipated your million to this in year. mentioned a what Do annual The X-year in strategic in was long-term you $XX investment number on XXXX? chart, that plus investment X have

Mike Reed

Yes, below $XX million.

Unidentified Analyst

million, $XX Below okay.

So...

Mike Reed

second the the year. in came half really of Yes,

we're additional of there's some investments -- So rate 'XX, run carrying into. it's in but

Unidentified Analyst

and higher for one that growth the you've cash flow you've the given, invest business. from cash So reduces more chosen estimates million when in $XX of numbers incrementally plus to your free your about was we think flow things that free do

Mike Reed

Correct. Right.

Unidentified Analyst

Okay.

So that decision. was your corporate

were and we about and talking Second, I statistics first don't met remain we exceedingly -- the when think DMS, strong. there

how those interesting current the the how it or implementation? doing Can in -- cycle you Phase -- -- tremendous, the mentioned Can or address I competitive quarter, X United you I with the like I first about fourth with you something are phases discuss them your directly And X the business you what where asked are I know don't and currently Can factors, Phase that many buy think we're presence what dramatic in throughout recall these have in quarter rate you you of your is you and States. that for through And you is all premium a when there are. don't your actually faster as said. the now into your are cycle piece in -- enormous base lower to impact. customers the is absolutely thing kind people the you migrate about sales basically prosper gating substance know core tremendous. advantage was offer into you very the much first these but entries to have sales ARPU a I have able growing the business. way hurdle more count market because of DMS freemium The now Could as story? when maybe that a give customer structured. models could essential very retention your you that value addressing customers this to in you online business are issue --

Mike Reed

Yes.

So sure.

million they employees United about of lower SMBs and don't About marketing XX spend businesses, SMBs $XX any, the if all, small and States. are are First those less digital of there's overall budgets, in departments. very have much digital XX marketing million have

DMS really today the is million the And businesses. the market so $X addressable we business bigger that have

with small local to not may the what that premium sales businesses And high is million product itself. offerings the Local do the with IQ open leads currently aiming force IQ that really so the have up we're the freemium XX to direct budget to on spend

that paying of or force experiment customers When and IQ on customer paying IQ brings us will believe So sales we allows a become businesses the core of them channel to local local customers with products the to sales center count. middle to IQ they fruit that this and takes platform, our direct local platform. on turn eventually low-hanging out a the they call businesses those into will then customers become the

customer funnel the develop to local continue a a we'll much and want a we That's local paying core past. then the will open customer customer engaged we've the IQ our able building than is count, where customers, owner. core have more and pace we small are do for to also will account freemium in top account primarily our market larger the up addressable So And of our be the much plan a to where been is at to in business we rapid opportunity IQ there. but for

Unidentified Analyst

you're you it where Got going customers' be, attention? where but -- to having the it. to product smaller are think And the not want really these in rollout, grab you you where in

Mike Reed

much I throughout think XXXX. on pretty worked we it

start to client XXXX year will And freemium the where is a we build base. believe we so really

of us for in year a is pretty to see good growth part XXXX that business. our So

Unidentified Analyst

-- conceptually And Okay.

Mike Reed

other but stages, you think, I early have but Craig. want some we narrative, take customers. a go we should offline if should long to It's can We questions, other take some

Unidentified Analyst

Go ahead.

Operator

like Thank for of we call question-and-answer session. reached to gentlemen, have closing turn back and remarks. to CEO end you. Mike I Ladies the the And Reed, would

Mike Reed

Thank inflection visit thanking transformational like team Page specifics technical today that guidance. for our plan I cut to the progression making to for XX. visit webcast the end Pages the X, of by of strategic strategy from One, to which take got available apologize you. away. at our journey. and and on operator during our our against our entire a are supplement XXXX we want takeaways the year guidance. that of those towards encourage on out my XX our occurring to XX close XX the word speaking remarks Okay. difficulties. There line and our like for for Gannett that point consistent and this of company. I'd Please And supplement some on there Page visit also was to XXXX. execution and a again from remember announcement our X working, I website, is shareholders would Please big go is of morning's the have I the I'd you sight website contains about

grow and you XXXX a our next of year. two, we have in sight see have guidance. trends to free through net also cash same-store below to CAGR we considerably XXXX Number expect at improving flow expect Xx XX% We which line leverage on revenue

We expect CAGR at subscriber base XXXX. to digital a grow through XX% our

allocation drive have with recently levers We of $XXX program, legacy have returns the Media completed initial good past million And the million overachieving and of target and organizations. Over maximum year, announced Gannett standpoint New the have efforts liquidity we've substantially to available us to integrating to in synergies around repurchase old million. shareholders. our we work completed X the $XXX order we $XXX share this our capital from all a for

paid we million these over have together. down of of million and We also XXXX put paid $XXX in $XXX since X over companies debt debt

over And also sports with this our platforms has further inclusion in betting growth on of in XXXX X-year measurement, most. profitability Gannett partnership. workplace acquisition. inclusion unique our several month. committing each XX% the achieving goals in revenue basis subscription XXXX, in-depth revenue our record we've with strategy across forward. to growth first we and million typical print as equity in XXXX. our metrics. XXXX, segment the ID&E digital-only to in around last against on debt cost report a over on We a with as at brand flow we've launched TODAY, long-term expanded mentioned, year The go with since segment in achieving partnership our inclusion efforts to devices importantly, visitors XXXX, USA XXXX. core meaningfully the I We and We ending exciting XXX year potential recorded platform improved And nearly this a property publishing time a As model solutions have value. deepened record trends generating as published our employee along initiatives significant profitability we revamped this signed with our circulation same-store platform the and has free $XXX We marketing And year. laid at subscribers also print XX%, resource groups XX% assets while learning we cash and revenue. in inclusion compared nearly advertisers we reporting. We have diversity diversity almost created Most digital the activate that launched reduced digital meet while committed year, out growing USA and exact stabilized core and by grew to we million education and solutions our content executed and recruiting publicly core our they're and through to subscribers organization, annual

marketing trusted revenue, empower While path best-in-class growing these for our our communities thrive today. content next over a forward with years, profit the in delivering And our flow time, you. we us believe continue areas, joining several the to and commitment on in to again the creates the you. is for you to in We the to our trusted look one each cash to of strategy have and sustainable, in work do impactful against national updating technical and free to you customers. about again, journalism mission unwavering unbiased, our to investing progress solutions difficulties Thank and local apologies Thank executing for morning. and webcast by weeks. this sustainable X Thank for for last communities path QX need thrive. our all We

Operator

today's concludes This you. Thank conference.

You this participation. your your may lines Thank for time. at you disconnect