LEE - Earnings call 1 2024 | Lee Enterprises, Incorporated

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Operator

Welcome to the Lee Enterprises 2024 First Quarter Webcast and Conference Call. The call is being recorded and will be available for replay at investors.lee.net. [Operator Instructions] A link to the live webcast can be found at investors.lee.net.

Now I will turn the call over to your host, Josh Rinehults, Vice President, Finance. Please go ahead.

Josh Rinehults

morning. Good joining for us. you Thank

Officer addition speaking are Millage, this Financial call myself, Mowbray, In Vice President Chief Tim on Kevin and and morning's Officer; to Chief Treasurer. and President, Executive

first well investors.lee.net issued our a earnings refer is with for XXXX. Earlier today, that financial information. fiscal lee.net websites. news of as we quarter at to at includes major preliminary supplemental presentation release results found our as available also It Please

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

to Reconciliations we financial are non-GAAP measures GAAP call, to relevant in the tables the measures. included During refer accompanying the release. certain

our the Kevin open to Mowbray. now discussion Officer, And and is Chief Executive President

Kevin Mowbray

everyone, for and joining Good you us. thank morning,

Three success long-term We'll our We mix time begin first our performance. adjusted transforming revenue subscribers growing of reiterating highlighting will Growth EBITDA. confidence demonstrating our the our discuss results, industry-leading and our this the Strategy quarter also by our our digital growing digital in of Pillar conclude We'll and morning, operating Digital goals.

Strategy. to offerings more digital diversify our of advertisers. XXXX is will products, well expanding digitally the into year encouraged our audiences, company. off on fiscal digital that solely Growth Growth subscriber we're our is thus of and for and strategy by extremely of the our level strategy pace revenue generation centric long-term revenue expanding cash million recurring incredibly than our start is point sustainable Lee a within generate and and far expected I'm regional be results Digital as base The vibrant, and $XXX that by are We're executed good important progress on sustainable from Pillar concentrated Lee's local our our to Digital objective as through which we Three of a our the X transforming of performance, flow Strategy. Three Pillar With growing we digital an digital years.

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Importantly, XXXX, where fiscal revenue from revenue the digital a of milestone of we point sources. second reach the growing of transformation our in digital inflection half This coming come to is the expect sources. XX% sustainable our more in of an result than majority important will from our as

to subscription growth revenue solutions in to continue and Lee digital digital industry-leading Our marketing this will drive point.

hand operating Tim to to it first our over results. discuss I'll now quarter And

Tim Millage

good Kevin, and you, Thank morning, everyone.

a Print pace in operating ] by revenue digital trends, Amplified growth revenue revenue but EBITDA modestly revenue revenue adjusted [ to costs revenue at strong cost performance we the the in continued in effective by the million. actions Digital. our digital up total first and Digital digital Total the remained quarter was Cash XX%, $XX revenues. and improved fiscal $XXX operating quarter the in management, trends fourth subscription first with from continued driven growth a down XXXX. grew quarter. million year at XX% and growth headwind to Due totaled total driven quarter, strong were the XX% X% throughout took

the factors us A in the profitability of confidence major that of our magnitude digital digital revenue as couple the opportunity both well [indiscernible]. give transformation of are as

revenue respect from We to products. have with opportunity digital shared long-term expectations the

well. confidence the our revenue streams However, profitability as these equally important is of to

strong Our XX%. prior quarter remained in the year. resulted over digital an at the margin, million direct increase really digital first in in margin direct This $XX

products. flow digital a our aim cash sustainable from we we the from focused business, from and [indiscernible] digital As the revenue become are our maintaining to margins on solely revenue high

of effective a $XX taken cost those were million have business record between Most of savings. our yield year. successful actions will and cost $XX transformation XXXX, year efforts fiscal of million last We management. In track

print drive main the digital structure we and steadfast. will to we drive and to our year future future excellence to local digital tied of business The areas invest focused news commitment is investments While growing our to profits, our will costs impact and in technology talent and growth. legacy fiscal Therefore, in sustainable operational targeted on our business digital XXXX. our remain our cash and reducing of priority long-term our revenue cost continue in remains high-quality

We expect to making of on technology million cost investments talent sold increase year. $XX margin cost profile costs transformation. goods total will are our the and by the to approximately These digital new are a cash impact this in digital increased expected our we short-term have Lee's but drive and

in sheet. $XXX quarter principal strengthen to reduction of first million debt $X of the continue totaled balance decreased $XXX XXXX. and million million, We of a The March our since amount

with agreement execute rate allows our are as necessary our that in ability investment seen The us XXXX for to we strategy. interest [indiscernible] and last in of Berkshire environment a important make our reminder, us a was have talent a has recurring sole helpful executed the our couple credit It rate and in XX-year fuel maturity. Hathaway, we terms These the [indiscernible] sustainable that incredibly agreement technology fixed As incredibly been revenue the has and over have rising favorable growth. years. terms the favorable

we the no are In contributions overfunded made aggregate. quarter, pension in as pensions the our

noncore monetize have we $X sale in to repayment. in facilitates our first assets and sales of identified which continue we additional an of closed million which million noncore opportunities to process. phases Finally, various are assets the $XX to asset We of accelerated quarter, debt monetize identify the

our as our as well of under sheet Digital Growth is solid our with improving our reminder, Strategy Three to target leverage X.Xx. a Pillar our balance to of execution long-term commitment As goal achieve

we from back Last, before what XXXX, outlook our hand up, remains wrap unchanged like it I which to would call. I December's to shared for Kevin revisit to in

provide to As actions are I fiscal significant made this mentioned our earlier, fiscal expected year. a cost year benefit last

these million adjusted to actions to digital $XX million. range progress With we be transformation, $XX continued EBITDA our on within targeted of cost and our expect

I it back will that, with flip So Kevin. to

Kevin Mowbray

Tim. Thanks,

Pillar thesis. the of is transformation Our guiding our Growth Digital and digital Three investment Strategy our foundation into

Lee from revenue through to value As to strategy multiple products and a debt from within us cash Doing previously, allow years. and becoming I our our so environment sustainable mentioned will expansion. continued digital increase solely the shareholder guide reduction our flow X will

Pillar execution revenue The Growth our transformation of results our reinforce. with Three on quarter first digital progress demonstrate digital Our to continues Strategy. strong consistent Digital growth tremendous

strategy goals. We long-term and the team right our place achieve have to right the in

their like thank To in wrap to up, team driving efforts transformation. the our for Lee entire I'd

to to leadership repositioning strategy and continue our achieve goals, and As of journey stage equity for Under long-term execution the sets digital-first Directors, our as value Board our growth expect significant of value our to a our drive we Lee for long-term company. our we converting team's creation. continued and debt of through significant oversight guidance shareholders the

Board, the team have right long-term users, We advertisers create the for readers, right value to strategy right the and shareholders. our and

line the line the you The please will questions This open for Operator, concludes on remarks. may team questions. our for have. any remain

Operator

Daniel [Operator & Instructions] going line to Company. Our Harriman from Sidoti question first the with come is of

Daniel Harriman

both thus a and little I then and and advertising of XXXX fiscal the Tim, you're a a expecting of space. for Can from also print the seeing both results decline and quarter? I'll on have us digital perspective. of fiscal Kevin congrats you're update and subscriber a the bit you the your perspective progress second give Print from couple questions start us trajectory far what just your in and in

headwinds your continuing digital the expansion that might be you margins the And advertising to impacted there. seeing I how digital mentioned making then you know, on may be platform? then Amplified Amplified margin side, revenue what you And well? are as you're within and Tim, investments within But for see

Tim Millage

it Yes. I'll Kevin. off, kick Great Daniel. questions,

your print investment It's print and develop is, our reliant sheet business. business certainly drive other to challenged and aspect balance print we in. to and revenue predict. So to flow, our jump predict harder fell streams our free cash areas obviously, To than our important the pathway reason the of of an on realize trajectory to digital question for what the not And that is of being is thesis. see hard it's transformation our on the in first address improve

The modest see back have will the the we the of of begin the things year. would half improvement improve half number aimed in of XXXX, first those in year to softer the move to at as is cycling improving as of do percentage we as We are environment, we back a total prior the in couple than quarters print And advertising from be get to particular, challenged we a expect trends more into I we trend. quarter. did our points like. revenue,

print through rapid In our of business. circling cycle we strategy, our to scaling and digital to volatility back aim growth the

Kevin our larger the print as half expect point revenue to inflection our revenue on back aim in call, we streams this So be will of mentioned to than digital reach do the reach where streams. XXXX, or

will milestone. And important an be so that

-- that and talked of business through margin things already margin our margins margin our was we we margins to profitable. are see what's forward. sustainable that one call be is products. to digital the that the great maintain margins. scaling this the businesses from And the improve. position to cash from digital Said need that direct flow highly that business, we're XX% we from need Switching digital on just about and And solid digital see our will fully differently, our in the digital to We digital don't going in

Daniel Harriman

may. more, revenue upcoming That's advertising an that, then what you with the the on just I idea of you very if could election advertising us driving bit cycle digital give growth? helpful. that digital will your about little talk may the business? have And just sectors impact a then cycle, just be one And obviously, Can

Tim Millage

on digital kick I a legal, are in number quarter, growth or categories drive driving specifically growth. Yes, the few higher off first The that helping education are medical, that advertising. the of can categories

at we political a growing as get the where number of have advertising, operate other states in And historically been of As North were political in We which our political has aimed of anticipate spent tactics we and some key a certainly, low. advertising Montana, far share be do spend, money half. include lot back specifically areas Wisconsin. as like we some into there'll Carolina that

Kevin Mowbray

political our $X add to million next we in about would I million as the to a months result expect XX efforts. $X of And that,

Daniel Harriman

me, I'm I to sorry. guys. Great. all That's didn't Okay. off, cut you for mean

Kevin Mowbray

timing we piece well answer But in going Amplified to larger to I'm some account communicated on are Digital we're there's digital wise, that the some happening the say guidance fiscal Amplified year-over-year. of that I that also of And what earnings that No, later I in to a advertising remind a question screen campaigns the would would down to the it. million last everyone on call. $XXX of track for on Digital year is

Tim Millage

to Kevin remarks. web. it back no I see I for questions more will any from closing flip the

Kevin Mowbray

on us call joining today. the everybody, thanks, Well, for

As I employees, mentioned earlier, your appreciate interest readers transforming benefit shareholders, We on our our and and time your business our our of the keenly focused we advertisers. remain our Lee. for models in long-term

again. you Thank

Operator

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

Lee Enterprises (LEE) 1 Feb 242024 Q1 Earnings call transcript