LEE - Earnings call transcript Q2 2020 | Lee Enterprises, Incorporated

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Operator

Welcome to the Lee Enterprises 2020 Second Quarter Webcast and Conference Call. The call is being recorded and will be available for replay beginning later this morning at lee.net. At the close of the prepared remarks, there will be an opportunity for questions. [Operator Instructions] A link to the live webcast can be found at www.lee.net.

Now, I will turn the call over to your host, Jamie Seratt, Corporate Controller. ahead. go Please

Jamie Seratt

you Thank us. Good for morning. joining

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uncertainties our are Such include and release SEC could reminder, this materially. These and this morning's certain cause in statements As differ expectations. a based in actual to factors discussion forward-looking that filings. our to morning's are trends also risks, current will results on that statements described subject news are

tables the Chief our discussion to are in open to to are the release. our reconciliations Kevin And certain release Executive is During non-GAAP accompanying the now in Mowbray financial defined reference measures and call, relevant included GAAP President Officer, which we news make the measures,

Kevin Mowbray

thank few months, economic all. what's truly spoke a for just meltdown and we've unprecedented and last are global a pandemic, truly unwellness, to It's remarkable since in all the you, short our transpired In we several to and think you morning, you times. markets, about government joining restrictions call. Good the Jamie. Thank time these experienced local

to are long-term we operating our who role time. in to Before our a ensure working Lee nearly underscores I of moment especially recognize time, where operate. we tirelessly employees Besides vital X,XXX take during this play across a our our results, during to engagement success, an audience we the communities difficult this discuss wanted

deliver engaged. our and partnerships outstanding We readers are coverage and trust strong local that to community maintaining informed focusing keeping advertisers, our on our continued news with

grateful are transitional and it each extends significant improvement the in extended attractive cannot our demonstrated at and EBITDA our with last runway and of cost overstated transaction adjusted this significance two second of through month. trends with of to transaction resiliency and dedicated being for deliver nearly The creativity our quarter quarter as March financing our operations transformative incredible closed doubled Lee, the work for was on when quarter as The XX we financing synergies a employees the The March, reduces terms. a unlocks us we We until difficult Hathaway. to acquisition there matters the reacting under acquisition most financing and robust long-term weeks circumstances. Throughout Berkshire revenue capital for and the with years. size provided of continuous the highly and value be

to focus trend. We business in COVID-XX of for relationships par in trends in side we from on first the last the quarter March, seen COVID-XX the two with quarter second two saw favorable revenue and haven't more first and In local to and operational levels decline was March, due of on with demand our at pandemic than advertisers. the phase in were impact COVID-XX, weeks Despite the pro a year. the our our needed forma advertising For advertising swift of solidify weeks the the actions took we significant. advertising revenue was

As funds outbreak an for COVID-XX. advertisers we marketing local example, in impacted program, in April, marketing to $XX brands. this offers launched X,XXX the of more by adversely More businesses than which a have million than brand local program, applied worth matching

lot ease teams. efforts more as than customer super We impressive currently majority proud on is local feedback end that in expect revenue are program markets I'm down our quarter not July. represented these us to revenue. our to and program earn of more overwhelmingly and a the active to revenue which forma XX.X% $X from gives What of The this million basis by advertisers the of continue restrictions. of is a optimism second on begin even customers, X.X% total and was sales Subscription of positive, the in of operating this has pro been encouraging the

At to our as basis and to in to and continue Legacy of as expectations. and From in priority We new continue grow we as the media, the significant the a share at [indiscernible] the Legacy of quarter, on digital-only gain digital-only be a exceeding continues the expect base Lee, we have to for well quarter trends digital-only print the subscribers market TownNews quarter organization. Group broadcast. across ago year the subscribers subscriber compared increased we this percentage Revenue to same continue our to second Buffalo. as stand-alone as to end BH second Media us, have nearly quarter at execute as improved strategies XX.X% XX.X% second

providing in our was first pro anticipate outlook to not quarter provide the due quarter decline in XX% operating quarters. providing improvement June, at generally The future which outlook operations, trend. quarter would results basis our on some wanted growth second the our our from of ends strong not results just delay forma slowed operating outlook prior-year COVID-XX, two point in at revenue of is basis expect for they has TownNews Company results, we we an to on release and third fiscal a XXX third end compared growth in weeks do million, of future our revenue While Total $XXX.X to a quarter.

COVID-XX, range in third a to which quarter revenue Advertising million forma the behind decline We the year continued improvement the expect in XX.X% with significantly pro basis. on last in March. $XXX media trend prior revenue to advertising hardest of total quarter. beginning trends our is the is operating due in of two April, and down for million compared demand there's balance to $XXX throughout negative the a third a weeks slow of throughout the These again,

COVID-XX trend single-copy XX% executives, for capital revenue however, modest and cost will which the to To Lee, $XX impacts actions stream to quarter the operating than in reductions We total These by and expect stable throughout with third been provide we reduced quarter pandemic, liquidity. between trends COVID-XX prior as EBITDA of needed well in in revenue $XX.X on expected cash strong decline to due third last reduce the sales $XX.X the the Subscription third incremental expenditures. force, by compensation for our expect including results combat year negative sufficient us implementing improve in our a furloughs, due [indiscernible] the worsening has to in more than million. is actions revenue quarter. various Adjusted initiatives do significantly million, million and quarter and and June. a as reduction the in more

sheet. $XX on our more we have of today, of cash million balance than As

reasons business. financial I significant Enterprises, this, turn to from despite that along to for the negative call our Tim I remain over several business COVID-XX, impact Before details, wanted future there reiterate are we the strategy discuss about to and Lee operate optimistic to the right the to the best having very of

mix relationship industry. was have with from First, these advertisers. was of XX% our favorable compared our strong advertising local to others advertising in revenue of a revenue and we retailers, our

pandemic. TownNews. our also local XX% in subscription has been optimistic is deploying and our Group quantifying BH are those low at of from because this we financial the base, Due two now customers at our to hardest-hit revenue local strategies only and survive areas base, total with advertising of thrive build initiatives our new the pipeline is them News. of during XX% at from a revenue to Additionally, revenue, time. Legacy strong including subscription Lee performance our and support a partners Media exited of retailers of through national and helping advertising subscription advertising pandemic consistently revenue programmatic, we our and X% The during industry challenging top and Buffalo contract and our revenue revenue We're the this

that business transformation. Also, expect at plus, at record track we as a well. long of we to a to successful and TownNews Additionally, continue revenue continues grow double-digit have

end than Media we including evaluate of normal a who've we to our Group the As refinancing new and just terms, last, acquisition a single completed low-interest the no our through more a these performance with savings outstanding in later $XXX by cost of in covenants the XX-year walk detail maturity the expect XXXX. in in success. rate, lender long-term more and combination discussion. comprehensive committed to favorable debt cash a And with post-pandemic BH Buffalo Tim will million News, we the achieve at of

While a that behavior and on everyone environment knows now, we broadly, lot going us more highlights. will how the confidence going that our additional pandemic is gives to the consumer in we're play And and proud definitely financial have of discuss Tim very out, future. ultimately general economic

Timothy Millage

down optimism, ago, COVID-XX. in same in down more and basis, quarter them. Kevin and GAAP a a the historical and and costs included $XXX.X and On decreased basis revenue was include on XX% morning, of that million XX.X%, million, a trend $XX.X into a pro quarter minutes of pro with integration consistent X.X% forma cash total were good On significant expenses was compared us and were to a compensation the pro to transformation acquired Kevin, quarter continued were $XXX.X largely on impact acquisition and of million take points or current down a I'll year forma the as cost number a couple you, and Thank forma business X.X% other ink of operating the decreased go result negative initiatives newsprint revenue give down few operating cash quarter in from everyone. immediate detail the already basis, X.X%. mentioned Operating revenue. a in basis year a a underway. Total XX.X%, and

our in million the our matures Also, $X year of years interest benefit Berkshire to The points. saves totaled the our need The period a XXX had this We interest refinance overstate of significant reduction in me Completing loan allows On rate replaced of cost the of has which go outstanding our we reduction We fees on are closed rate Company agreement. on we comprehensive lender before nearly refinanced in refinancing take by XX, required minute millions. with basis let quickly X%, capital in average annually second repaid comprehensive lender us and debt, a completing XX thrilled quarter. deleverage credit and the a so and XXXX, it a XX, March with a details to and debt. to weighted expense more transaction, of agreement through saving of over no of Company with some $XXX credit on refinancing interest reducing maturities our time million a expect that fixed all single long debt in again. Hathaway, calendar borrowing XXXX. March refinancing the XXXX our of the in term cannot the to runway the

million financing, financing. credit we agreement has $XX in credit as financial and As this cash no nearly the the tied now other in fixed default complete allows leverage we agreements economic This of a from impacts help comparison, prior to year associated and meaning our COVID-XX, we more paid in excess also required events from avoid in or predominantly time no our deal liquidity. as do fees is derived was the the experiencing with payments not after significant breakage The are from generates. step-down. than are XXXX, payments mandatory principal Company. million $X with the costs The in immediate maintenance previous conjunction Company have us of financial The the performance agreement performance financial to credit ratios beneficial downturns, flow to the has preserve to covenants,

agreement single not events fixed no years, to knows credit no virtually and success. the has lowered has payments, cost is does and financial committed who maturities principal recap, with of tied to capital, to us performance default debt to fees executed our a our extended metrics, with require of XX So mandatory well was lender

is target acquisition forma costs expect for initiatives last As and total XX of than mentioned achieve $XXX integration. Kevin ended a due this months business transformation cost to we earlier, or December million to XXXX. pro on more the baseline as The cash basis in synergies pre-acquisition

end year million XXXX. the by achieve of the $XXX to reduction expect We fiscal

strong structure expect vertical forma markets the operating in by deliver second of HR, has in efficiencies will been XX% design, of at We print one, finance, the and pro number creating the million synergies all to or business in on to departments, back-office initiative areas, from million. of in This transformation our operating EBITDA and executed totaling synergies, our following functions, the of we a integration market-based transformation three the quarter, reorganization depending technology our and significant lines, and day of operating add week of Acquisition two in evaluation reduce $XX our date. systems our of achieve posted newspaper market. including adjusted across markets. certain nearly virtualization our initiatives and to print in design project structure days edition IT, execution certain $XXX print We of days

second XX business operations. consisting last EBITDA, and of $XXX.X $XX.X in of we the pro sold strong small the of assets quarter, million forma For estate our adjusted real To months our adjusted supplement four EBITDA million. totaled

liquidity Our real the approximately program worth program a million pandemic. active our on remains adjusted have million. we investment of monetization comprehensive we and $XX strong a asset and refinancing, execution asset With an the our listed of throughout maintained and currently sale have for monetization good completion $XX EBITDA, additional position strong estate

than by liquidity near Last, that open sheet, for to our XX-Q of the $XX balance will provides term. liquidity The and additional have. our of expectations. for on sufficient include line more will as today, may with million you expect SEC and Operator, any on questions. remarks. consists us we on have of cash it the in remain As team line questions which the June with the file the our please This XX, information we always, results concludes

Operator

call you. At time, we I question-and-answer Seratt discuss will will over your questions this session. the webcast. to back the from turn Thank conducting be a host, Jamie to now

Jamie Seratt

Thank you.

from and from first came the publications? from asset web, million sales the how the of received Oregon of newspaper $XX.X Our question California sale much the

Timothy Millage

I that four estate million, did sales, the properties can than take The from less so I the sold total majority out of than $X like four million business for West. for $X $XX.X We we operations sale question. the came less real that was mentioned but million.

Jamie Seratt

turn from no We remarks. call closing Kevin have more questions our web participants. back now the I'll for to

Kevin Mowbray

Well, thank for a with you Thank again. Have today. you week. time us call appreciate We your understanding. your great the joining and

Operator

end our and concludes Thank call. gentlemen, our have reached question-and-answer of time, you, this the we session. This at ladies

Lee Enterprises (LEE) 18 Jun 202020 Q2 Earnings call transcript