LEE - Earnings call transcript Q3 2024 | Lee Enterprises, Incorporated

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Operator

Good day, and welcome to the Lee Enterprises' 2024 Third 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, Jared Marks, Vice President of Finance.

Jared Marks

Good morning. us. joining for you Thank

we In addition Kevin Tim morning's are for to quarter of our Treasurer. Earlier includes on found Vice release myself, President investors.lee.net, our and at earnings is XXXX. websites. financial supplemental fiscal speaking today, and as which Mowbray, well presentation Officer and Chief this as a Chief major news third President, with information. Please call results Financial to It issued Executive Millage, available preliminary lee.net, also refer at Officer;

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

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

Kevin Mowbray

Thank adjusted print that revenue the minutes. inflection print. It's and and digital transformation costs. morning. we share volatility marks on guidance force you, happy third each to progress business the This our as the our joining quarter, in digital on our I'm that grew share our streams share that you digital told and operating the for everyone, point. managed reduces revenue in updates made in driving as the we've also quarter. will reliance third this thanks our morning, delighted third important print to digital is this transformation. the few revenue I'm of call we In call, our our effectively behind surpassed achieved revenue our year-over-year, it EBITDA Good Jared. milestone quarter In of significant more last Tim had an a important in digital results

margin made nearly company's local digital growth industry only. derived we businesses, products the a is of in of the digital are inflection Nearing subscriptions from we've Another goal is X/X approaching our revenue digital important gross digital and from platform sustainability reason point from key is perspective. our the digital with a the leader our sustainable testament fastest-growing both categories. progress our remained to media strategy. We We're X-pillar in an subscriber on several digital being

do our strengthened behind and committed force our conversations are driving serve. Publishing prior revenue is content outpaced generated ultimately competitor. Simply Our than reflects industry news X XX% revenue digital XX% we're more to strategy our amount we the our and growth our else, is significant This first unit the consistent while provide. We've more connections community subscription We've peers also from subscribe. subscribers. presence our work we strong to which annually the and news a the our the of engage the subscribers, throughout give and over digital the has markets to put, communities to XXX,XXX the significant as we implemented digital growth the them subscribers. We've local digital years and content local readers, category leading This nearest since subscription to price up local demonstrates increases doubling content ago. We executing nearly year. now value subscribers digital faster they valuable industry as X well than transformation digital last to compared readers communities uplift for business. anyone expanded digital we distinguished has people demonstrating higher their in growing grown to demand to years, delivered the opportunities clearly the have

licensing digital driver the through most opportunities. advertising, provides robust monetization potential key a transformation content is content subscriptions, as opportunities and content hyper-local to Our our our other agreements

transformation. $XXX to million grew the revenues in This to our Digital X annual digital are composition, earlier. years. over Amplified XX% months, represents X Amplified rate has and change agency, I in outstanding the these an revenue years, This industry. The Digital over $XXX rapid than third growth annually XX driving the XX% inflection helping Our million. growth revenue streams last the within our over the mentioned rate revenue digital quarter driven is digital digital grown has last rates growth Total annualized a last point revenue far growth more of us XX% in others industry-leading the outpacing achieve

grew by reached digital year-over-year. at Our transformation revenue growing million each margins. Amplified digital advertising is commitment healthy $XX which and a to revenue achieved totaled year-over-year million and totaled at subscriptions strong stream highest yielded clearly Digital our and growth Digital revenue XX% seen $XX Digital margins digital most quarter this $XX advertising revenue results subset in year-over-year digital Agency, of million the grew year-over-year. portfolio. digital XX% our

reliant translated span. not of over this of or thus last of the print. We Our one streams. rate Digital revenue in that's revenue FY important since more growth milestone a of grew is Of annual to reduces stream our to than and digital growth our on our This profitable. the digital growing rather highly annually revenue a the quarter. growth and but time revenue, headed made few on great on digital the profitable streams growing transformation far revenue has revenue demonstrates diverse, progress point digital the inflection XX% We're and same note, collection surpass any strategy we're to X-year and digital our 'XX, reliance XX% years. margins success

profitable. Replacing profitable digital revenue our long-term a us help achieve businesses XX%, growing will impressive digital digital margin sustainability. print digital Our also are highly our is and revenue meaning

company's from remaining gross digital products will margin SG&A the We exceed by our expect XXXX, costs.

being and marketplace. from subscription digital It's digital expected our to definitely now, as X digital in So sustainable it excluding is within our digital the to we profits, quite are businesses updates streams. I'll over these exciting print. The more close our growth quarterly -- revenue still to about digital accelerate talk market scratching this more of services pass the cash we in progress cover businesses revenue our regarding expect years, coming show Tim I'll digital quarters to from our of see to results. the we're milestone. But to digital surface all addressable how towards for

Tim Millage

good you, Thank and morning Kevin, all.

Kevin representing XXX quarter and improvement we're operating These financial noted, sequential the basis quarter Total quite in pleased As results this our have with momentum is business improvement. progress represent $XXX point our we transformation, a the reflected in a million. revenue trends, in results. our revenue third was same-store made digital marked and on this

and digital a ARPU X%. The total digital an XX% of primary at which clip, was strong well. had Looking digital-only increased to year-over-year. Digital the the growth strong continued year-over-year growth digital up impressive driver business, growth our a grew as revenue, revenue subscribers XX% subscription

growth products We operated it and Digital the double-digit also in revenue saw will We're the continue. revenue our the improvement quite digital digital delivered and our with in we pleased expect own gained Amplified quarter. momentum advertising quarter, and in within digital

side, modest the the On total declined revenue year-over-year, print trends. a print XX% but quarter over sequential second improvement representing

quarter to carefully our the we've costs prior side, leading the in managed cash expense down compared being to costs X% the year. On

EBITDA a in yield cost between of efforts $XX track of adjusted fiscal highly that 'XX, million million management. In million our business cost record $XX and quarter. Lee effective will $XX savings. successful of year led All in to the has transformation

commitment excellence, sustainable of of in cost reducing hyper-local areas legacy focused to growing is we long-term continue technology to on high-quality our While remain to our and our the structure invest primary. profits, print digital our growth. Therefore, and revenue and in news main remains talent operational we our and priority business drive digital tied our business to future

As exciting digital pathway as continue keep you ahead. we is an digital we transformation, progress to our with on there updated our investments will

March to $XXX Next, and of $XXX of amount I'll principal million the balance move decreased reduction $X by million XXXX. debt a The totaled million, sheet. year-to-date since

make in investments credit agreement our our necessary for and Let been me you lender, is rising to flexibility favorable maturity. These beneficial the environment very technology quite fueling strategic seen have and rate the growth a our as debt rate is enables a have sole agreement that us interest transformation. The talent it will important has Berkshire a fixed was we has digital longevity we terms few are last strategy. The our that favorable remind the of in XX-year us, terms Hathaway, that over execute XXXX, incredibly and advantage with achieve in as executed our our digital a years.

million We asset of facilitate assets reduction. of continue and to $X have year-to-date non-core $XX to sales assets, our monetize closed million identify opportunities identified additional We nearly an accelerated non-core monetize. which to debt

to digital digital with to competitive we on targets within the year our our and end revenue, expect deliver achieve year. I'd year we growth total We of year. for range for our total we outlook the due approximately and pace be total races we adjusted subscriber the fiscal for with details our While sure EBITDA. revenue digital on revenue. Digital the the to cash potential poised by to point and political costs to $XX cannot digital market spend has close, digital to to advertising everyone like XXX,XXX track subscriber markets the end incremental close remain us subscribers, expectations, digital expect will the do Improving million and of sales in digital full of XXXX continues subscribers. of

this range our the represents million towards tightening to $XX cash that tied million the improving end, the improvement reflects million, cost declines. are revenue print of -- low a have our operating We expenses as to $XXX and persistent in on $XXX been working we guidance of

million, of $XX with will we of in Kevin. the We taken million incremental print to have it to reductions cost the adjusted lagging and outlook is reflective and $XX business are I updating that, turn this EBITDA response. And change to the back result

Kevin Mowbray

To are a and solid transformation. both sustained we reflect digital my performance about in notable believe reiterate Tim. excitement ground we this on our quarter, that momentum Thanks, a

our on investment which digital is X-pillar us strategy, growth is on our Our digital founded thesis journey. transformation guiding

my entire this want guidance to Lee well remain team. Board questions significant quarter's on leadership positioned value We us, Our The progress line users, and we're team creation long-term oversight sets for thus been Operator, execution the ahead Under for momentum of please moving remarks. the of our have. genuine forward. there's will our a the Directors, to I far concludes for team capitalize our for total strategy, advertisers you gratitude opportunity and for express effort, tremendous shareholders. This the on the to questions. believe and and stage of open any continued may line our our readers, has team's

Operator

[Operator Instructions].

Daniel first Our from from & the line Sidoti comes Harriman of question Company.

Daniel Harriman

inflection decline. like seems it on for great you're we guide doing with down on But Congratulations lot there. Obviously, print work have understand EBITDA to million million this year as you the a the the $XX of cost reason side, us remind just digital you in into the goes said, $XX you're obviously, little and transformation. expecting, what Can bit like you a that? with the the savings about more

Tim Millage

Yes. Daniel. Thanks,

a baked you into forecast significant million record our we out, we costs, a FY As business to -- of $XX transformation good do of do million pointed managing have have $XX 'XX. about and our for track

a million with that those revenue expenses, we the on have of that guidance primarily have significant persistent low cost to print, of expenses print are the the and expenses, ensure end, business. by operating streams. And print monitor reflects improved costs, and $XX to with We line our within number costs effect, tightening acceleration certainly the decline we those that in

margin the digital really our mentioned All important to think be of change to of that sustainable mix and the us be milestone importance and of revenue demonstrates it business to well significant transformation. print positions And growing. and our volatile going more an point, as that a also and you less aligns on speaks is reliant gross inflection in the the our forward I

Daniel Harriman

just quickly. I more, then one if And can

asset you're in the this amount you've projecting to decent a obviously, year. $XX that million close identified With sales of assets, those the non-core

safe surrounding there For the uncertainty that close is is now? in assume too you 'XX? to close right can't balance that, 'XX, in Or that much will it that

Tim Millage

Yes.

start can horizon. we I uncertainty lowering but think that will commercial some construction of on think closed a more are estate, will always see investment assets into commercial real rates the do of estate we we in remaining helpful. costs get Lowering I XXXX. as be there's with optimistic be real the to interest helpful

evaluate get that optimistic So $XX We're our 'XX. amount as not the we are to end. to and going in forward the well. And the estate going can portfolio is increase top to work million amount continue that remaining closed real we

We the have web. no questions from

remarks. So it I'll Kevin to for turn back closing

Kevin Mowbray

in interest morning. this and Well, call the appreciate your thank you your time Thank you joining Lee. all We for again.

Operator

Thank of this end call. our we've time, you. session. reached question-and-answer concludes the At our This

Lee Enterprises (LEE) 1 Aug 242024 Q3 Earnings call transcript