Gannett Co., Inc. (NYSE:GCI) Q2 2020 Earnings Conference Call - Final Transcript
Aug 06, 2020 • 08:30 am ET
Michael E. Reed
Gannett. Revenue trends improved throughout the quarter, with April revenue down just over 30% and June revenue down about 24%. We did see sequential improvement in each month through the quarter. Advertising revenue was the hardest hit category for us, though we saw a nice rebound during the quarter, which helped to drive the positive movement on trend in total revenue.
On the circulation side, single-copy sales had a major impact on our total circulation revenues. They were lower due to business closures around the country, folks being sheltered in place for a good part of the second quarter, which hurt single-copy sales. And then the material impact came from the shutdown in travel, which impacted our hotel and airports single-copy sales for the USA TODAY.
On the subscription side, moving away from single-copy, we were pleased with print subscriber trends, which held constant with our first quarter results and expectations through the second quarter. On a very positive note, we continued to see strong digital subscriber growth, ending the quarter up over 30% to the prior year, with over 925,000 digital-only subscribers. That growth has continued in July. In fact, last week was our single largest growth week for paid digital subscribers this year. We expect to pass 1 million paid digital-only subscribers within the next few months. Furthermore, we have ambitious goals and expectations for the digital subscription category. We expect this to be a major driver of our business in the coming years. We plan to share a lot more detail about our plans and goals in this category over the next couple of quarters, and you'll hear briefly later on in this call how it fits into our strategic plan.
As you all know, the COVID-19 crisis had an abrupt and severe impact on the economy. However, we quickly adjusted to the change in circumstances, and were able to successfully implement over $125 million of expense savings during the second quarter. These savings were driven primarily by lower cost of goods sold, furloughs, wage and staff reductions, along with reductions in discretionary spend for categories such as travel and supplies, and many more. This $125 million of quick to execute on cost savings was in addition to our synergy implementation and other previously implemented normal way cost reduction efforts. Selectively these measures resulted in costs being down over $240 million in the quarter, or 26% to the prior year.
In response to the pandemic, we prioritized the safety of our employees, while preserving our ability to produce vital news, by asking our employees to work remotely where possible and implementing new safety procedures for our manufacturing and distribution teams, who had to continue to come to work. In spite of these reconfigurations, we were able to continue to effectively execute on our synergy plans, which resulted in $41.2 million of savings during the second quarter. Year-to-date, we have implemented over $160 million in annualized synergies, which exceeds the annual goal we had set for ourselves in