Lee Enterprises (LEE) 12 Dec 192019 Q4 Earnings call transcript

Good day, everyone. Welcome to the Lee Enterprises 2019 Fourth Quarter Webcast and Conference Call. This call is being recorded and will be available for replay beginning later this morning at lee.net. [Operator Instructions]. A link to the live webcast can be found at www.lee.net.

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

you us. for Thank morning. Good joining

Speaking on Vice Green, and this today's Bekke, President Financial and Vice morning's Also Vice call call will Executive Officer. Sales questions and President, be and Officer; President, available Digital. Tim are us Consumer James Millage, with President for Chief Chief and on Kevin Nathan Mowbray, Marketing; and

XXXX. issued a financial fourth news release is results as preliminary lee.net our of websites. major we with fiscal for well quarter today, It at at available Earlier as

One housekeeping item to start.

last an Our year fourth operations. week quarter included extra of

revenue we one operating a on basis, in property Additionally, affecting expense fiscal which off These same-property impact of excludes XXXX. and certain transactions are disposed trends. properties these and certain in year-to-date transactions. quarter trends year acquired and the XXXX discuss We

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

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

our advertising, the services digital for accounts the million These we thank and success of same-property digital now advertising year for includes on in our an from all increase huge continued revenue. basis. more XXth accounts digital XXXX fiscal morning, joining our total in pleased retail of digital call. transformation the year, good And comes grew than that which local fourth the X.X% advertising advertising of local in revenue. you subscription Jamie. advertising. was audience Much represent you, of Total digital reach. XX% a Overall, the digital quarter, on Thank depend we're XX% $XXX.X controllable with and represents revenue, In consecutive

finished typically mobile much According to the and advantage Revenue local of Lee to platforms. makes digital XX% to XXX Amplified Lee's standards funding on industry markets data, outpace has adults on than experts trends. our our from and our This clients custom between [indiscernible] over campaigns, national advertising print, more retail outperformed Digital us digital the With overall approach of X,XXX marketing in category rely Digital centralized reached with continued expectations active and this digital agency, our XXX advertising. advertising to XX% XXXX consistently performance. our campaigns. to Amplified staff outperform we

suite Amplified is retail quarter up approach we from by fourth retail revenue in local creators, are digital is and in accounts local and when media, efforts strong with appropriate. custom events Digital a of and anchored the Amplified can promotions accounts. Revenue we steadfast agency confident remain agency-level our from Digital The grow agency, in XX.X% margins. Our complete aimed our initiatives

audiences. and to continue We engaged have large

digital membership completed to fourth base. continued total to in quarter. our net XXXX, digital-only the quarter we fourth We increase we In and bringing We digital-only on XXXX, added program read audience digital-only new subscribers, grew our our of expecting to products, significant the subscriptions rewards subscriber a transition XX,XXX content our growing half XX.X%. While we in printed of keenly XX,XXX. News+ In the focused are remain consumption.

content combined rewards program You more with to content premium that the and News+ digital access offers for our remember may subscribers.

audience all will of a that digital believe are and News+ growth. local, content more full and digital-only includes access and simulate print of and X has continued offering regional X engaging access digital-only. rewards, national access tiers benefits tiers X the subscription and full stabilize We our

some fourth to due on in down timing. expect revenue Subscription a in X.X% revenue improved the We modestly quarters subscription quarter, coming the same-property in volatility basis.

TownNews double-digit As TownNews the growth content basis, and continue market core video leading includes and our provider streaming industry, of revenue on well. in to among of we Total XX%. over TownNews share its substantial in quarter. drive TownNews the With with growth top share in dominant their continued CMS to certain fourth for customers, $XX.X print XXXX, at and an and management revenue revenue is stand-alone services markets, more we EBITDA our of customers is In market increase as revenue product XX.X% due the right. line publishing revenue digital integrated which Lee and believe earned million CMS solutions, saw in X,XXX to than utilizing in broadcast margins totaled poised The increased growth. adjusted

per services alone. diversify expand expect XXX% to as We their revenue share, services base TownNews customer their In we further these market user XXXX, new and continue providing increase and around data by saw broadcast their in analysis. and products average other to markets and penetrate growth programmatic they

transform results, pleased in industry-leading and quarter industry. provide a reduce EBITDA Adjusted with totaled moment. despite reiterate, quarter. overall, in produce we details strategy fourth we and the $XX.X the million future. more million in the our optimistic the performance, prior costs We compared we're quarter, business believe $XX.X have the the in We challenges continue continue to to in fourth about to and Tim quarter the operating will our remain right to core To

Now highlights. here's Tim financial additional to discuss

and you, morning, Thank good Kevin, everyone.

reduce structure. with compensation down were our continue to basis on to in reductions the cost drive headcount. transform efficiencies same-property a in fourth We business quarter cost X.X% company costs model, due down X.X% our Cash our across legacy and

decreased in Other circulation operating by the expense delivery well in lower driven costs. by XX.X% prices. and Newsprint driven as print decreased in quarter, ink as declines lower primarily X.X% the expenses newsprint quarter, volumes

the our $XX.X million. previously the announced cash fourth on of in For down topping cash costs strong fiscal posted totaling X.X%, We year XXXX, same-property cost quarter were basis guidance. adjusted EBITDA a exceeding

For flow allowed debt totaled the in EBITDA million. us EBITDA of debt fourth use and to $XXX.X reduce our year, million repay to Strong adjusted to the commitment adjusted by our quarter. $XX.X substantially all fiscal cash

fiscal totaled the reduction year, For $XX.X debt million.

Our balance the cash down on the sheet net year. X.Xx, was of from prior leverage

is than it March which reduced and 'XX, committed is obligations excess outstanding with continue contract evaluate these the investments. for side to million amount, the maturity of cost and from sales months. our real sale mature majority next we to in estate assets, and million under of Lee consideration $X.X excess to business. is including Our Currently, addressing in coming close to breakage reducing of just identified in $XX.X One debt, expected our the noncore to $XX.X of debt but X one doing of We're X to our real estate today, our monetize debt that current early. way $X we leverage more the and X is totaled of Legacy months. Of million have

assurance Although, under there could that no close. will real ultimately estate contract be

have to properties sale a private future, in being for looking evaluated $XX we worth that additional nine the we're equity million approximately monetize. We and investment also have

We using these to remaining our paying in taxpayer is became sold, repay by income reminder, event we subsidiaries year. par. believe our will one proceeds used in NOLs, overall $X.X a our actions us loan Pulitzer at during As taxes be help both in fiscal the will million owned Due a second-lien to XXXX, the reduce term of asset the leverage.

Lee as We and X-K and with Pulitzer An SEC to will information And expectations. to data the on Legacy questions will questions. our and XX-K expect results include answer be line remarks. supplemental with our I'll from concludes the file to the tomorrow. web, always, also additional turn over tomorrow. Jamie financial it facilitate it now to filed on to This We're our

Tim. you, Thank

question web. December on extending the If matures first what's the Our from it? XXXX, XX, plan revolver for our

filed we -- was actually the the November. of runway extended that. release XXXX. revolver a in on have -- X-K XX There a month and We've December in revolver, So extended matures our

have tab publishers? to What announced News that recently Live in Facebook involvement, Lee will if promises Facebook's some any,

at to know three point. the outcome It's Lee is the the markets. of in involved too test in this early

Will next debt Our deal Lee XXXX? to March question. complete a be refinancing able by

our still So -- looking talked look of a of our haven't our the of have reduce We've a things still Leasing March some that of is looking companies do out we the about laid we cost we're have we've we objectives in opportunistic And and 'XX we're one to to today. about refinancing, down our options. plans lot step at of capital. in in to consider. an looking that remarks, talked cost at

options. focus meantime, still the our continue quickly as we're to In all as evaluating to of is So reduce we can. our leverage our

related million million $X in provide pension the color costs Our $X.X multi-employer to and next the Please the further withdrawals question. of plans. quarter restructuring from on

biggest first piece address because million million. the $X.X I'll of $X the the So withdraw that's

over disclosed we the of things filings, a The laws one So that our severance is we to way And due that from the with projects. and to risk years, that number of plans. have a with plan lot paid plans. we're of the that dominantly in transformation given liability we of that cost one the effective credit, have pension works is around our did $X.X a And -- of SEC to and withdraw plans. doing multi-employer of of those creating liability risk million. a those restructuring period rest the -- And those associated of XX costs, multi-employer mitigate there's business plans we

next Our question.

is you comment buybacks in quarter? paydown December and over. the the nearly quarter December that bond Can debt Given on

Yes.

do first we've quarter in debt by this We to historically we've far, to reduced million So our similar in first quarter. this expect done the quarter. year $X what be

that with web. quarter of closing right turn -- -- our at for we've no have or this $X to par. Kevin And that done I'll the it but the back more buybacks we're the remarks. questions million. from under to And yet not now all we been effected quarter have So

appreciate for the us call. joining time today's We you on call. and being Lee. for your Thank Thank in your again, interest you, on