USA TODAY owner Gannett reported a net loss of approximately $437 million in the quarter, as corporations reduced their advertising amid the COVID-19 pandemic and significant accounting expenses had a negative effect on profits.
The company, which aggressively reduced its expenses in the quarter to offset the decline in revenue, reported that $393 million of the net loss was attributed to a rate of “non-monetary equity and intangible impairment,” while $66 million was attributed to depreciation and amortization.
Revenues fell 28% from the previous year to $767 million, the company reported a monthly increase in revenue in the quarter as business situations gradually improved.
The media company, which owns more than 260 publications, reported adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $78 million, reflecting a profit margin of 10.2%.
“While the quarter of the time was particularly affected by the COVID 19 pandemic, our profits were consistent with the recommendation that we share our last profit call and our EBITDA functionality benefited from our expense relief efforts,” Michael Reed, Gannett’s CEO, said in a statement. . Statement.
He also praised the company’s journalism at the time of the quarter, which included reports on the COVID-19 pandemic, economic misery and widespread protests against police brutality and racism.
At no point in our history has the price of high-quality journalism been as transparent as it is now at this crossroads of a global pandemic and a country ravaged by systemic racism and inequality. Our hounds have worked tirelessly and persistently to help keep our communities informed, while playing the very important role of empowering public servants,” Reed said.
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The company’s second quarter earnings report reflects the combination of New Media Investment Group and Gannett following its merger in November, an agreement that created the largest U.S. print media company. And one of the biggest through the virtual audience.
The journalism industry is grappling with strong relief in advertising due to COVID-19, which has harmed primary consumers such as restaurants, retail stores and agencies. The industry also continues to face the shift from printed to digital advertising.
To offset a sudden drop in profits due to coronavirus referrals, Gannett suspended his dividend on April 1, reduced capital expenditures and implemented more than $125 million in second quarter fee reductions, in addition to the past expected merger savings.
Discounts come with licenses, task cuts, executive pay cuts, and suspension of non-essential expenses. The company also recently announced the suspension of its 401 (k) setting from the end of the month. Many other news organizations have taken similar measures.
Overall, operating expenses decreased by 26% for the previous year’s era.
Gannett’s print advertising profits fell 45% to $188 million in the quarter, compared to the same era the previous year. Advertising and virtual marketing revenue decreased by 27% to $104 million. Transmission gains decreased 14% to $342 million.
It paid higher virtual subscriptions up to 31% in the past year to 927,000. Online subscriptions are noticed in terms of the good fortune of media corporations in the virtual era, while newspaper dollars are falling.
Gannett is forced to repay a $1.8 billion five-year loan to Apollo Global Management, which helped finance the transaction between GateHouse Media’s parent company, New Media, and the “old” Gannett.
The company said it has “a lot of confidence” in its ability to repay debt on time.
After the merger, Gannett continues to lower duplication costs. The company stated that it had already achieved more than $160 million in annualized savings as a result of the merger and was still on track to reach its $300 million target by the end of 2021.
Gannett’s publications come with Arizona Republic, Detroit Free Press, Columbus Dispatch, Austin American-Statesman, Milwaukee Journal Sentinel, Louisville Courier Journal and many other weekly newspapers.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.