Good day, ladies and gentlemen, and welcome to the Gannett Third Quarter of 2023 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Operator instructions are in effect. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Matthew Esposito of Investor Relations. You may go ahead, sir.

Thank you. Good morning, everyone, and thanks for joining our call today to discuss Gannett's third 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, Gannett Media Chief Content Officer; and Chris Cho, 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, 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 regarding forward-looking statements in the earnings supplement as well as the risk factors described in Gannett's filings made with the SEC. Except as required by law, we undertake no obligation to publicly update or correct any of the forward-looking statements made during this call. 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 Gannett. You can find reconciliations of our non-GAAP measures to the most comparable US GAAP measures in the earnings supplement. Lastly, I would like to remind you that nothing on this call constitutes an offer to sell or solicitation of an offer 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.

Thanks, Matt. Good morning to all of you and thanks for joining our call this morning. We continued to make progress in the third quarter across our key priorities. We saw solid adjusted EBITDA growth of 15% year-over-year. We saw further growth in digital revenues and we meaningfully reduced our debt and leverage. We also grew our audience by 7% year-over-year on what is already a large base. Within the quarter, we repaid $65 million of debt, which combined with our adjusted EBITDA growth, reduced our first lien net leverage below two times. We also maintained a strong liquidity position of $109 million at the end of the third quarter. Equally important, digital revenues surpassed 40% of total revenues, growing 3% year-over-year on a same-store basis and we expect this trend of growth to continue in Q4. In Q3, we saw audience growth and engagement improved and we achieved a record high in digital-only subscription ARPU, resulting in ongoing digital-only subscription revenue growth. We continued to grow our DMS business at healthy margins. Since the end of the third quarter, we also announced additional partnerships to further diversify the monetization of our audience. At the core of our future growth lies the mission to expand our audience and maximize meaningful monetization avenues, and we are pleased with the progress made in the third quarter. While we made great strides on our strategic priorities, we must acknowledge the complex economic environment in which we are operating. We believe there are signs that consumers are beginning to feel the cumulative impact of higher interest rates and continued inflation which has led to an overall reduction in consumer confidence. As a result, the small and medium-sized businesses we serve have become more cautious in their approach to advertising expenditures than we had previously seen. While these headwinds impacted our top line performance, we still achieved sequential improvement in same-store revenues for the third consecutive quarter. We will remain diligent in our approach to planning, considering what remains an uncertain environment. We have reduced our full year 2023 outlook but our view on net income and adjusted EBITDA is not markedly different than the outlook we gave to start the year. We will continue to exercise prudent cost management to drive our expected meaningful full year growth in adjusted EBITDA. Our digital revenue growth is based on the growth of DMS and maximizing the revenue per user, on our media platform. While digital-only subscription revenue growth remains a key element, we are combining it with a focus on overall monetization. We have an impressive digital audience and that audience is growing. We are beginning to see positive returns from our investments in content, as evidenced by our large organic audience growing 7% year-over-year to 189 million average monthly unique visitors of which 138 million of those visitors come from our USA TODAY network, as measured by comScore and 51 million from our UK digital properties. We believe the largest opportunity for revenue and profit growth along with shareholder value creation, lies in a comprehensive strategy that monetizes that full audience, at various stages of their journey with us. This encompasses digital subscription revenue, digital advertising revenue, affiliate and e-commerce revenue and future product innovation. A singular focus on any one of these revenue streams comes with degradation to the overall opportunity. Therefore, we are focused on a holistic monetization strategy that ensures we maximize the revenue opportunity across the entire spectrum of our audience. The focus in 2023 on the quality of our digital subscriber acquisition strategy continues to show positive results. In the quarter, we saw a modest sequential growth in digital-only paid subscriptions and substantial growth in digital-only subscription ARPU. Q3 actually reflects our highest digital-only subscription ARPU to date, and is rooted in the highly local and relevant content our teams produce. We believe there is meaningful additional upside for both digital-only subscription and ARPU growth, and we anticipate continued digital-only subscription revenue growth as we maintain our focus on smarter customer acquisition, in-depth local content and effective pricing strategies. Another key component to translate audience growth into increased monetization per user is through the creation of additional meaningful revenue streams on our platform. We continue to make strides with partnerships, as we are aligning with brands that share our values and are expected to expand our audience. Over the past year, affiliate revenue started to be realized with the implementation of gambling.com to provide relevant content for sports enthusiasts, and Forbes Marketplace for personal finance content. We recently announced two more partnerships with Jackpocket and Red Ventures, that will further expand the monetization opportunities of our growing audience. As the exclusive digital lottery courier of the USA TODAY network, Jackpocket will reach a broad audience across the country and provide a fun and convenient way for the USA TODAY network audience to order lottery tickets right from their phones. The Jackpocket deal leverages the extensive lottery-related content we already produce, within a single hub. Additionally, we executed a partnership with Red Ventures, one of the largest independent affiliate marketing companies with brands such as CNET, Bankrate and The Points Guy. The multiyear venture will help consumers find the best broadband service providers for home and small businesses, through original content and Red Ventures' patented technology. This initiative is expected to launch in Q4. These partnerships are expected to drive audience growth and engagement along with high-margin revenues. We expect the affiliate revenue stream to become a much more significant contributor to overall revenue, over the next few years. Before reviewing our LocaliQ business, I'd like to actually turn the call over now to Kristin Roberts, our Chief Content Officer, who will discuss the exciting momentum we are seeing in our audience growth. Kristin?

Thank you, Mike. The purpose of Gannett Media is to operate a sustainable business model for independent journalism, content, news and information that is essential in the communities we serve. Our goal is audience growth. This is foundational. The larger we make our audience, the more we can drive predictable and recurring revenue across multiple channels. We're beginning to see meaningful returns from our investments, reflecting dramatic gains in the efficiency of our content team. This is evident through the remarkable momentum we have observed in terms of increased page views and readership per story. As we continue our journey we will dramatically expand our brand beyond a content company; essential news will remain central to our strategy. But more of our content will be focused on creating joy for our audience. For example, lifestyle and indulgence content have been remarkably successful in attracting significant readership, which in turn contributes to our overall revenue. And we've only scratched the surface of our potential in this area. We are hiring two full-time reporters to cover Taylor Swift and Beyonce, and we will explore additional opportunities to establish similar roles that cover influential personalities and popular topics. Looking ahead to 2024, we have ambitious plans to expand our reach and our impact in new verticals while we double down on verticals that are already essential to our audience. This includes a focus on growing our loyal sports audience, which reached 54 million unique visitors at the end of Q3 according to comScore, as well as the audience that comes to us for relevant and valuable content. This comprehensive approach will enable us to provide diverse engaging content that caters to the wide range of interest within our audience, which is expected to further solidify our position in the market. The most exciting part is that we're just getting started. We plan to maintain our momentum as we enter the next phase of our transformation by building experiences that create habits and reduce churn. I look forward to providing additional detail on our growth on future calls. Back to you Mike.

Thanks Kristin. As you can tell, we have a lot of great things going on in content that's driving audience growth which is going to really lead to much more revenue upside in the future. Now, I'd like to turn to LocaliQ, our digital marketing solutions business. In the third quarter, we recorded core platform revenue of $120.8 million, an increase of 1.8% year-over-year. We continued to generate double-digit adjusted EBITDA margins, while serving over 15,000 customers on our platform. We reported year-over-year growth in both core platform ARPU and budget retention. We continue to expand our DMS product offerings through our freemium experience, which contributed to our DMS registered users surpassing 185,000 in the third quarter. Our registered user count has consistently shown impressive growth as demonstrated by the tenfold increase from 18,000 registered users in the prior year quarter. These premium registered customers are in addition to our core platform customers. I'd now like to hand the call over to Chris Cho, who joined in Q2 as the President of LocaliQ, and he'll share a few remarks on the business and provide insight into some of the strategic initiatives we have in motion. Chris?

Thank you, Mike. In the third quarter, our DMS business maintained strong fundamentals although our growth was tempered. Through customer interactions, we noted a cautious sentiment among our largest customer segment, Home Services, regarding economic uncertainties tied to rising raw material costs and lower consumer demand. However, we are pleased to see improvements in both client and budget retention, along with improvements in how we operate. For example, we have created a blueprint for our digital factory line and identified several fulfillment processes that can be enhanced through technology. Our goal is to streamline operations, remove redundancy, and ultimately translate these efforts into enhanced profitability and an improved customer service experience. In addition, growth in DMS requires an increase in our mastery over the core digital advertising and marketing business. To ensure sustainable growth, we will accelerate new product development, as well as focus on several key areas, such as automation for efficient campaign management, innovative bundling to enhance customer outcomes and retention, and ongoing improvements in reporting and intelligence capabilities. Furthermore, we are collaborating across the Gannett network, sharing best practices and unifying systems to reduce costs and improve efficiencies in order entry and billing. With renewed operational discipline, we believe our business is poised to reliably grow top-line revenue over the long term and add new customers. Mike?

Thank you, Chris. We're so glad to have Chris on board leading our LocaliQ business and we're really excited to see how that business develops and grows. Thanks for the update Chris. Overall, we had a solid third quarter with strong execution across our key financial metrics. We saw significant improvement in net income, sustained growth in adjusted EBITDA and continued expansion of our digital revenues. Our same-store revenue trends improved for the third consecutive quarter. And year-to-date, we've generated $43 million of free cash flow, which is up $46 million compared to the prior year. We also continued to improve our capital structure through significant debt reduction while maintaining a healthy balance sheet and strong liquidity position. Importantly, we expect to end the year with growth in both total digital revenues and adjusted EBITDA. We expect significant free cash flow generation and meaningful debt reduction and first lien net leverage below two times. This momentum fuels our enthusiasm for ongoing revenue trend improvement and future growth opportunities. With that I'd now like to turn the call over to Doug Horne to provide additional detail and color around our 2023 third quarter financials as well as the details on our updated full year 2023 guidance. Doug?

Thank you, Mike and good morning, everyone. As Mike mentioned, we produced another solid quarter of financial results. Let's begin with our consolidated results. And just to note, all comparisons are on a year-over-year basis unless otherwise noted. For Q3, total operating revenues were $652.9 million, a decrease of 9.1% or 8.4% on a same-store basis. This represents a 20 basis point sequential improvement from Q2 revenue trends marking the third consecutive quarter of improvement. With that said, the improvement was smaller than we anticipated as the benefit from our growth initiatives was partially offset by a more challenging operating environment. However, I am pleased to report that many of the strategic actions and initiatives we have in place are yielding positive results. On the cost side, we continue to align our expense structure with recent revenue trends. In Q3, operating expenses decreased approximately 17% reflecting our commitment to prudent cost management as well as the successful execution of our cost optimization efforts. We anticipate additional benefits from these efforts in the upcoming quarters and remain committed to preserving our resources in the markets we serve while also investing in key areas for future growth. The decline in operating expenses also reflected a significant reduction in integration and reorganization costs during the quarter. Adjusted EBITDA totaled $59.5 million in the third quarter, an increase of 15% or approximately $8 million. Adjusted EBITDA margin was 9.1% compared to 7.2% in the prior year quarter. The growth in adjusted EBITDA was driven by our strategic cost controls and the continued operational transformation. We are also pleased to see deflationary pressures for certain raw materials and we anticipate these cost savings will contribute favorably to our operating expense trends moving forward. In the fourth quarter, we will cycle some of the larger temporary cost savings from the prior year. But as a result of our cost efforts this year we still expect meaningful adjusted EBITDA growth in 2023. Total digital revenues in Q3 were $263.6 million up 2.7% on a same-store basis and up 1.9% sequentially. In Q3, total digital revenue surpassed 40% of our total revenues. Digital advertising within total digital revenues also returned to growth in September for the first time in more than a year. The improvement in digital advertising was primarily driven by increased inventory tied to growing page views which are a result of our content strategy. This is a promising sign which we believe positions us well for ongoing digital revenue growth. Turning to the Media segment. Our digital-only subscription revenues surpassed $40 million and grew 16% on a same-store basis. Our digital-only paid subscriptions continue to reflect the intentional actions to optimize our acquisition costs by prioritizing long-term monetization versus shorter-term volumes. Despite a slight decrease in digital-only paid subscriptions, we are encouraged by the sequential growth in the third quarter after two quarters of small declines. We believe these deliberate actions are paying off, evidenced by digital-only subscription ARPU achieving a record high of $6.82 and growing 14% compared to the prior year. We expect ARPU to increase in the upcoming quarters as we maintain our focus on attracting and retaining more profitable subscribers. Print advertising revenue decreased 11.1% on a same-store basis due to ongoing secular declines. However, our print advertising revenue trends improved 100 basis points compared to the same period in the prior year. Our results in print circulation remained consistent with the trends we saw at the end of Q2. We do expect further trend improvement in the upcoming quarters as a result of our continued efforts to improve the subscriber experience. We believe our investments in addressing open routes and distribution challenges are yielding results, evidenced by the percentage of open delivery routes decreasing over 20% versus the same period in the prior year. Additionally, our conversion to mail delivery is expected to deliver a more consistent service level to our consumers in those areas where staffing delivery routes is more of a persistent challenge. At the end of the third quarter, we successfully converted 11 markets to mail delivery with plans for approximately 30 more markets before the end of the year and additional markets in 2024. In Q3, our other revenues category, which includes commercial printing and delivery, as well as other digital syndication and affiliate revenues experienced trends that negatively impacted our overall revenue. While we saw growth in our affiliate revenues, this overall revenue stream experienced a 6.2% decline on a same-store basis. The decline was caused by lower commercial print volumes as a result of the secular trends and digital syndication revenue driven by lower partner monetization of our content. Moving now to our digital marketing solutions business. Total revenue in the third quarter was $121.9 million, an increase of 1.9% on a same-store basis. Adjusted EBITDA for the segment was $13.6 million, representing a margin of 11.1% in the third quarter. The results in our digital marketing solutions business reflect the consumer and advertiser trends that were mentioned earlier. However, we believe our continued focus on improved execution along with the development of additional products and features will increase our addressable market and help us navigate and mitigate these headwinds moving forward. Average monthly customer count remained stable compared to Q2 but decreased 3% to the prior year period due to the previous optimization of our product portfolio, which eliminated lower margin offerings. Core platform ARPU grew 5% versus the prior year period and remain near record highs. Additionally our Q3 customer budget retention was 95.4% representing an increase of 20 basis points. Let's now shift to the balance sheet. At the end of the third quarter, our cash balance stood at $109.2 million, translating to net debt of approximately $1 billion. We generated $7.4 million of free cash flow in the third quarter, bringing our year-to-date free cash flow to $43.7 million, which is up $46.7 million from the prior year period. We anticipate additional free cash flow growth in Q4 with an estimated conversion rate of at least 30%. I'm pleased to report that our first lien net leverage is now below two times. This reflects $65.3 million of total debt pay down in the third quarter, as well as improved adjusted EBITDA performance. Notably, our Q3 debt reduction of $65.3 million is the highest quarterly paydown figure in two years. During October, we repaid an additional $6.2 million on our term loan using the proceeds from real estate asset sales. Year-to-date, we have repaid $124 million of debt. Debt repayment remains a top priority for us. And as a result, we expect our first lien net leverage to remain below two times at year-end. In Q3, we completed eight real estate and other asset sales, totaling $51.5 million bringing our year-to-date total for real estate and other asset sales to $82.7 million. We continually review our full product portfolio and we will continue to sell non-core assets which will allow for flexibility and for reinvestment in the business, as well as ongoing debt repayment. Turning now to guidance. Based on the trends you heard from Mike and Chris, we now expect our 2023 full year adjusted EBITDA to be in the range of $270 million to $290 million as compared to $257 million in 2022. Free cash flow is expected to be in the range of $65 million to $85 million, representing a significant increase to our 2022 results. Our outlook also reflects an assumption that same-store revenue trends will be down between 8% and 9% for the annual period, but we are expecting fourth quarter trends generally in line with those of the third quarter, indicating a further reduction in revenue losses compared to the first half of the year. In the third quarter, we made continued progress on our long-term digital growth strategy. We believe this progress demonstrates the traction we have gained, further validates the company's strategic plan and represents just the beginning of the value we expect to capture over time. Our commitment to the successful execution of our strategy and most importantly, our readers and customers is unwavering. We believe these priorities will keep us firmly on the path to achieving our transformation goals and delivering significant long-term shareholder value. I will now hand it back to the operator for questions. And then after questions, we will go back to Mike for some closing thoughts.

Thank you, sir. Ladies and gentlemen, we will now be conducting a question-and-answer session. Operator instructions are in effect. Our first question comes from Doug Arthur of Huber Research Partners. Please go ahead.

Yes. Thank you. Good morning. Just on the digital subscription strategy, I mean that $40 million in quarterly run rate is a nice achievement. It looks like you've regained some momentum on sub growth. You sort of pivoted a year to 1.5 years ago toward higher pricing, slower growth to sort of maximize return. Is there a point in time where you pivot again to kind of growing aggressively the number of subs to kind of ramp this up? Or are you satisfied with the trend right now? Thanks.

Yes. Doug, thanks for the question. Our focus and we believe the single biggest opportunity for our company from a growth perspective and a profit perspective is actually the monetization of that full audience of 189 million uniques which is growing. Only a certain number are going to pay for digital subscription. So we'll take a very balanced approach to growing that digital subscriber base with growing ARPUs. But in addition, growing our digital advertising business, growing our affiliate revenue and e-commerce business, and being able to launch new products on such a substantial audience base that's growing. So it's really a holistic approach to monetizing the entire audience versus any one singular approach.

Okay. And then my final question, just in terms of the revised guidance, I mean what are the surprises there? Is it sort of the economic retail woes in print? Is it the fact that you're annualizing the big cost cuts a year ago? What's sort of been the big surprise in terms of lowering your full year guide from where it was?

So I think what's really changed Doug, we've seen the consumers start to feel squeezed and that's impacting discretionary spend in certain categories, one of which is home services which happens to be a good category for us. While we see short-term weakness in that category from what the consumer's actually experiencing, we don't expect that to be a long-term thing. And home services is a great category that we expect to continue to return to normal operating for us as we go forward in 2024. So, short-term headwinds—the consumers are feeling some pain for sure: higher interest rates, a little bit less access to capital for discretionary spend in the home services category. But we don't see it as being anything too significant as we look out to 2024.

Great. Thanks Mike.

Thank you. Ladies and gentlemen, it appears we have reached the end of our question-and-answer session. I will now hand over to Mike Reed for closing remarks.

Thank you. So, Gannett and our digital transformation strategy absolutely requires long-term thinking even as we navigate short-term volatility. Over the past 18 months, we've implemented several initiatives aimed at building a solid foundation, investing in key growth areas, and executing on our transformation objectives. As we head into Q4 and beyond, we will build on that progress and accelerate our efforts to further drive the speed of our transformation. I want to share some thoughts with you that are important and give us great optimism when we look to the future company we are building. We continue to make meaningful progress in reducing debt and leverage, reducing first lien net leverage below two times was a nice milestone this past quarter. We continued to grow adjusted EBITDA in the third quarter and we expect to see adjusted EBITDA growth for the full year of 2023. We expect to generate significantly more free cash flow in 2023 than in the prior year. Our digital revenues surpassed 40% of total revenue in the third quarter. Our digital revenues have returned to growth and we saw that growth trend increase a bit in Q3 sequentially from Q2. With all the various initiatives we have in place, many of which you heard about on the call this morning, we expect to see expansion of that growth trend in 2024 and we expect digital revenues to continue to become a larger percentage of our overall revenues. Our paid digital subscription strategy this year is showing encouraging results. We saw significant increases in ARPU and digital-only subscription revenue—digital-only subscription ARPU hit an all-time high for us. However we believe there is still considerable upside to ARPU and to our paid digital subscriber base. Our content strategy is also showing very promising results. We are seeing our audience grow along with engagement. And we believe this will lead to better monetization opportunities as we focus on total digital audience monetization across several different revenue streams. Our focus on external trusted content partners is also showing positive results. We have signed four partnerships this year. Two are brand new but for the two launched earlier this year we are seeing better audience engagement than we originally expected. As these partnerships continue to mature, we expect meaningful revenue growth from them and as I mentioned earlier this is very high-margin revenue. The strategic initiatives we are implementing to evolve this business to a digital business are working. The initiatives we have in place to grow EBITDA and free cash flow are working. The fast pace of debt and leverage reduction is working. We'll navigate any near-term uncertainty that we need to while staying focused on our transformational actions. We believe our current strategy will result in a sustainable revenue and profit growth business and we are optimistic about the future as well as our ability to create value for our shareholders as we execute on these plans. Thanks for your time today and we look forward to updating you again as we close the year of 2023. Thank you all.

Thank you, sir. Ladies and gentlemen, that concludes today's event. Thank you for attending and you may now disconnect your lines.