Lee Enterprises, Incorporated · NASDAQ:LEE
Lee Enterprises — Q3 FY2024 Earnings Presentation
17 slides from Lee Enterprises's earnings presentation, Aug 1, 2024
Slide 1: Third Quarter FY2024 Earnings
THIRD QUARTER FY2024 EARNINGS AUGUST 1, 2024
Slide 2: Safe Harbor
2 SAFE HARBOR The information provided in this presentation may include forward-looking statements relating to future events or the future financial performance of the Company. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed o
Slide 3: Lee's Three Pillar Digital Growth Strategy
3 LEE’S THREE PILLAR DIGITAL GROWTH STRATEGY LEE IS RAPIDLY TRANSFORMING FROM A PRINT-CENTRIC TO A DIGITAL-CENTRIC COMPANY PILLAR 1 Expand our audience by providing compelling local content PILLAR 2 Accelerate digital subscription growth PILLAR 3 Diversify and expand offerings for local advertisers
Slide 4: Industry-Leading Digital Growth
4 Digital Sub Revenue Growth Leads Industry Digital Agency Revenue Growth Leads Industry Total Digital Revenue Growing Significantly $79M LTM Digital Sub Revenue $94M LTM Amplified Digital® Agency $290M LTM Total Digital Revenue Industry-leading 51% YOY(1) LTM growth Mar 2024 3-Year CAGR Industry-le
Slide 5: Digital Revenue Reaches Inflection Point
5 DIGITAL REVENUE REACHES INFLECTION POINT Digital Advertising Digital-only Subscription Digital Other Total Digital Revenue Q3 FY2024 Revenue Mix Q3 FY24 % of Total Revenue $50M % Variance to Prior Year(1) +2% YOY $21M +34% YOY $5M +6% YOY $76M +9% YOY (1) Same-store revenues is a non-GAAP performa
Slide 6: Lee Nears Sustainability from Digital Revenue
6 FY21 FY22 FY23 FY24E FY25E FY26E FY27E FY28E Digital Margin SG&A Digital transformation Digital sustainability LEE NEARS SUSTAINABILITY FROM DIGITAL REVENUE KEY HIGHLIGHTS • Digital revenue replacing print revenue and growing at more than 17% CAGR since 2021 • Digital gross margin(1) growing at a
Slide 7: Third Quarter 2024 Results
7 THIRD QUARTER 2024 RESULTS (1) Same-store revenues is a non-GAAP performance measure based on U.S. GAAP revenues for Lee for the current period, excluding exited operations. Exited operations include (1) business divestitures and (2) the elimination of stand-alone print products discontinued withi
Slide 8: Strong Track Record of Sustainable Cost Management
8 STRONG TRACK RECORD OF SUSTAINABLE COST MANAGEMENT KEY TAKEAWAYS • Proficient in driving efficiencies • Current base of $237M of direct costs associated with our legacy revenue streams that will be managed with associated revenue trends • Ongoing initiatives aimed at optimizing manufacturing, dist
Slide 9: Strengthened Balance Sheet
9 Q2 2020 Q3 2024 STRENGTHENED BALANCE SHEET • $123M debt reduction since refinancing in March 2020 • Favorable credit agreement with Berkshire Hathaway • 25-year runway with no breakage costs or prepayment penalties • Fixed annual interest rate, no financial performance covenants and no fixed amort
Slide 10: 2024 Outlook Updated
10 2024 OUTLOOK UPDATED 2023 2024 Outlook Total Digital Revenue $273M $310-$330M YoY 14% 13% to 21% Digital-only subscribers 721,000 771,000 YoY 36% 7% Cash Costs(1) $615M $550-$560M YoY -11% -11% to -9% Adjusted EBITDA(1) $85M $73-$78M YoY -11% -14% to -8% (1) Adjusted EBITDA and Cash Costs are non
Slide 11: Lee Investment Thesis
11 LEE INVESTMENT THESIS WE BELIEVE OUR THREE PILLAR DIGITAL GROWTH STRATEGY WILL CREATE SUBSTANTIAL VALUE: Increased Shareholder Value Enhanced cash generation Debt reduction drives shareholder value Multiple expansion fueled by increased recurring, high-margin digital revenue Continued Debt Reduct
Slide 12: Lee Enterprises
EE ENTERPRISES
Slide 13: Non-GAAP Reconciliation
13 NON-GAAP RECONCILIATION The Company uses non-GAAP financial performance measures to supplement the financial information presented on a U.S. GAAP basis. These non-GAAP financial measures, which may not be comparable to similarly titled measures reported by other companies, should not be considere
Slide 14: Quarterly Revenue Composition
14 QUARTERLY REVENUE COMPOSITION (1) Same-store revenues is a non-GAAP performance measure based on U.S. GAAP revenues for Lee for the current period, excluding exited operations. Exited operations include (1) business divestitures and (2) the elimination of stand-alone print products discontinued w
Slide 15: Reconciliation of Non-GAAP Financial Measures: Adjusted EBITDA
15 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Adjusted EBITDA is a non-GAAP financial performance measure that enhances financial statement users’ overall understanding of the operating performance of the Company. The measure isolates unusual, infrequent or non- cash transactions from the operati
Slide 16: Reconciliation of Non-GAAP Financial Measures: Cash Costs
16 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Cash Costs represent a non-GAAP financial performance measure of operating expenses which are measured on an accrual basis and settled in cash. This measure is useful to investors in understanding the components of the Company’s cash-settled operating
Slide 17: Same-Store Non-GAAP Revenue Reconciliation
17 SAME-STORE NON-GAAP REVENUE RECONCILIATION(1) (1) Same-store revenues is a non-GAAP performance measure based on U.S. GAAP revenues for Lee for the periods presented, excluding exited operations. Exited operations include (1) businesses divested and (2) the elimination of stand-alone print produc