Lee Enterprises, Incorporated · NASDAQ:LEE
Lee Enterprises — Investor Presentation (September 2022)
26 slides from Lee Enterprises's investor presentation, Sep 23, 2022
Slide 1: Building Long-Term Value Investor Presentation
BUILDING LONG-TERM VALUE INVESTOR PRESENTATION | SEPTEMBER 2022 Exhibit 99.1
Slide 2: Safe Harbor
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 or
Slide 3: Lee is strongly positioned for the future
Lee is strongly positioned for the future (NASDAQ: lEE) 1 Digital audience represents average monthly UV on Lee’s owned and operated websites in the three months ended June 2022. Leading provider of digital products and services and high quality, trusted, local news and information Deep relationship
Slide 4: Warren Buffett believes we are well-positioned to execute on our transformation
WARREN BUFFETT BELIEVES THAT WE ARE WELL-POSITIONED TO EXECUTE ON OUR TRANSFORMATION My partner Charlie Munger and I have known and admired the Lee organization for over 40 years. They have delivered exceptional performance managing BH Media’s newspapers and continue to outpace the industry in digit
Slide 5: Lee investment thesis
Lee investment thesis We believe our three pillar digital growth strategy will create substantial value: Increased Shareholder Value Operating cash flow and profits are enhanced Debt reduction drives shareholder value Multiple expansion fueled by increased recurring, high-margin digital revenue Cont
Slide 6: Digital Transformation: market leading growth
Digital Subscriber Growth Leads Industry Digital Agency Revenue Growth Leads Industry Total Digital Revenue Growing Significantly 501K Current Digital-only Subscribers $66M Amplified LTM Revenue $224M of LTM Total Digital Revenue 11 quarters of leading digital subscriber growth June YOY Growth LTM J
Slide 7: Lee's Strategy for Digital Transformation: the Three Pillars
Lee’s Strategy for Digital Transformation:the Three Pillars Lee is rapidly transforming from a print-centric to a digital-Centric company PILLAR 1 Expand digital audiences by transforming the presentation of local news and information PILLAR 2 Expand digital subscription base and revenue PILLAR 3 Di
Slide 8: Digital Transformation: Expand Digital Audiences
Digital Transformation: Expand Digital audiences Enhancing digital presentations to provide best-in-class user experience of local news, with multiformat, rich content Creating cohesive digital experience across all platforms by investing in user-experience design talent Improving multimedia present
Slide 9: Digital Transformation: Strategies to Drive Subscription Revenue
Digital Transformation: Strategies to Drive Subscription Revenue Enhancing conversion within Lee’s addressable market Convert more of our addressable market to digital content subscribers Leverage embedded position in 77 attractive markets to grow audiences and share of total addressable market Conv
Slide 10: Digital Transformation: Industry Leading Digital Subscription Growth
Digital Transformation: industry leading digital subscription growth Digital subscriber growth has outpaced industry peers for 11 quarters
Slide 11: Digital Transformation: Five-Year Subscription Growth Outlook
Digital Transformation: Five-Year Subscription growth Outlook We expect significant growth in digital subscribers: Convert more visitors to our core digital products Launch new digital niche subscription products Continued conversion of audiences to digital subscribers Expect 900,000 digital subscri
Slide 12: Digital Transformation: Key Takeaways for Subscription Revenue
1 Lee is the fastest growing digital subscription platform with a strong track record of digital subscription growth. 2 Lee is more than halfway to the goal of reaching 900,000 paid digital only subscribers assuming a modest penetration of the total addressable market. 3 Lee’s digital transformation
Slide 13: Digital Transformation: Amplified is growing rapidly
Digital Transformation: Amplified is growing rapidly Amplified – Lee’s full-service digital agency is expected to continue to grow significantly Overview of Amplified: Provides full suite of digital services such as omnichannel marketing solutions, audience targeted display, SEM, social audience tar
Slide 14: Digital Transformation: Five-Year Digital Advertising Outlook
Digital Transformation: Five-Year digital advertising Outlook Digital advertising growth is fueled by amplified Amplified will drive digital marketing services revenue growth. Rapidly growing digital marketing services provider with $66M of revenue over the last twelve months, up 80% Leverage local
Slide 15: Digital Transformation: Key Takeaways for Advertising Revenue Growth
1 Amplified is a majorgrowth engine for Lee’s digital advertising transformation. 2 Lee’s sophisticated Vision platform uniquely positions us to capitalize on the double-digit growth in omnichannel digital advertising. 3 Lee’s strategy is expectedto generate recurring sustainable digitalrevenue exce
Slide 16: Third Quarter 2022 Financial Highlights & 2022 Outlook
Third quarter 2022 Financial Highlights & 2022 outlook Q3 FY2022 FINANCIAL PERFORMANCE Total Operating Revenue was $195 million in the third quarter, less than a one-percent YOY decline Total Digital Revenue was $61 million, up 27% YOY Digital-only subscription revenue increased 50% YOY and totaled
Slide 17: 2022 Outlook
2022 outlook (1) Adjusted EBITDA and Cash Costs are non-GAAP financial measures. See appendix. Q3 YTD Q4 Outlook 2022 Improved Outlook Digital Only Subscription Revenue $29M $11M $39M YoY 41% 44% 40% Digital Advertising and Marketing Services Revenue $132M $47M $179M YoY 27% 27% 27% Total Digital Re
Slide 18: Strong Track Record of Sustainable Cost Management
Strong TRACK RECORD OF SUSTAINABLE COST MANAGEMENT Proficient in driving efficiencies Current base of +$300M of direct costs associated with our legacy revenue streams that will be managed with associated revenue trends Executed $45M in annualized cash cost reductions early in Q3 FY22; FY22 impact $
Slide 19: Digital Transformation: Required Investments
Digital Transformation: required investments $15M of incremental investments expected in FY22 Lee is making value-added investments to drive its digital transformation TALENT AND TEAM Data and technology team with AI expertise Brand development and strategic marketing experts User experience experts
Slide 20: Digital Transformation Five Year Outlook: Strengthened Balance Sheet
Digital Transformation Five Year Outlook: Strengthened Balance Sheet $20M in debt reduction in first nine months of 2022 and $113M since refinancing in March 2020 Favorable credit agreement with Berkshire Hathaway 25-year runway w/ no breakage costs or prepayment penalties Fixed annual interest rate
Slide 21: Lee investment thesis
Lee investment thesis We believe our three pillar digital growth strategy will create substantial value: Increased Shareholder Value Operating cash flow and profits are enhanced Debt reduction drives shareholder value Multiple expansion fueled by increased recurring, high-margin digital revenue Cont
Slide 22: Appendix
Appendix
Slide 23: Quarterly Revenue Composition
Quarterly Revenue Composition Total Digital Revenue – Total Digital Revenue in the prior year was reclassified to conform to the current year presentation. Total Digital Revenue is defined as digital advertising and marketing services revenue (including Amplified), digital-only subscription revenue
Slide 24: Reconciliation of Non-GAAP Financial Measures: Adjusted EBITDA
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 operating pe
Slide 25: Reconciliation of Non-GAAP Financial Measures: Cash Costs
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Cash Costs is a non-GAAP financial performance measure 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 component
Slide 26: f= ENTERPRISES
f= ENTERPRISES
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