Lee Enterprises, Incorporated · NASDAQ:LEE
Lee Enterprises — Q3 2024 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
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's Three Pillar Digital Growth Strategy
LEE’S THREE PILLAR DIGITAL GROWTH STRATEGY LEE IS RAPIDLY TRANSFORMING FROM A PRINT-CENTRIC TO A DIGITAL-CENTRIC COMPANY PILLAR 1 PILLAR 2 PILLAR 3 Expand our audience by Accelerate digital Diversify and expand providing compelling local subscription growth offerings content for local advertisers Le
Slide 4: Industry-Leading Digital Growth
INDUSTRY-LEADING DIGITAL GROWTH Digital Sub Revenue Digital Agency Revenue Total Digital Revenue Growth Leads Industry Growth Leads Industry Growing Significantly $79M LTM Digital Sub Revenue $94M LTM Amplified Digital® Agency $290M LTM Total Digital Revenue Industry-leading 51% YOY(1) LTM growth In
Slide 5: Digital Revenue Reaches Inflection Point
DIGITAL REVENUE REACHES INFLECTION POINT % of Total % Variance to Q3 FY24 Q3 FY2024 Revenue Prior Year(1) Revenue Mix Digital Advertising $50M 33% +2% YOY Amplified Digital® Agency $26M 18% +12% YOY 50% 50% Digital-only Print Digital Subscription $21M 14% +34% YOY Digital Other $5M 3% +6% YOY Total
Slide 6: Lee Nears Sustainability from Digital Revenue
LEE NEARS SUSTAINABILITY FROM DIGITAL REVENUE GROSS MARGIN Digital transformation Digital sustainability KEY HIGHLIGHTS • Digital revenue replacing print Digital Margin SG&A FY24 Est. Total Company Gross Margin revenue and growing at more than 17% CAGR since 2021 • Digital gross margin(1) growing at
Slide 7: Third Quarter 2024 Results
THIRD QUARTER 2024 RESULTS Q3 Revenue Total Digital Revenue $76M, +9% YOY on a Same-store basis(1) Continued digital • Digital subscription revenue $21M, +34%(1) revenue growth • Digital advertising revenue $50M, +2%(1) • Amplified Digital® Agency revenue $26M, +12%(1) Total Print Revenue $75M, -22%
Slide 8: Strong Track Record of Sustainable Cost Management
STRONG TRACK RECORD OF SUSTAINABLE COST MANAGEMENT KEY TAKEAWAYS Total Cash Costs(1) • Proficient in driving efficiencies $1.0B • Current base of $237M of direct costs associated with our $705M $693M legacy revenue streams that will be managed with associated $615M revenue trends • Ongoing initiativ
Slide 9: Strengthened Balance Sheet
STRENGTHENED BALANCE SHEET • $123M debt reduction since refinancing in March 2020 Significant Gross Debt Reduction • Favorable credit agreement with Berkshire Hathaway • 25-year runway with no breakage costs or prepayment penalties $576M • Fixed annual interest rate, no financial performance covenan
Slide 10: 2024 Outlook Updated
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-GA
Slide 11: Lee Investment Thesis
LEE INVESTMENT THESIS WE BELIEVE OUR THREE PILLAR DIGITAL GROWTH STRATEGY WILL CREATE SUBSTANTIAL VALUE: Execute Three Pillar Digital Growth Strategy Generate long-term sustainable digital revenue growth, margin expansion, and strong free cash flow Continued Debt Reduction & Strengthened Balance She
Slide 12: Lee Enterprises
EE ENTERPRISES
Slide 13: Non-GAAP Reconciliation
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 considered i
Slide 14: Quarterly Revenue Composition
QUARTERLY REVENUE COMPOSITION (Millions of Dollars) Q1 FY2023 Q2 FY2023 Q3 FY2023 Q4 FY2023 FY 2023 Q1 FY2024 Q2 FY2024 Q3 FY2024 Digital Advertising and Marketing Services 47.7 46.3 49.9 49.3 193.2 46.5 45.4 49.9 YoY % (1) 11.3% 6.2% 7.8% 1.1% 6.4% -1.1% -0.2% 1.6% Digital Only Subscription Revenue
Slide 15: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Adjusted EBITDA is a non-GAAP financial performance (Millions of Dollars) Q3 FY2024 measure that enhances financial statement users’ overall understanding of the operating performance of the Net loss (3.7) Company. The measure isolates unusual, infrequen
Slide 16: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Q3 Q3 Cash Costs represent a non-GAAP financial performance (Millions of Dollars) measure of operating expenses which are measured on an FY2024 FY2023 accrual basis and settled in cash. This measure is useful to investors in understanding the components
Slide 17: Same-Store Non-GAAP Revenue Reconciliation
SAME-STORE NON-GAAP REVENUE RECONCILIATION(1) Q3 Q3 $ % Q3 Q3 $ % (Millions of Dollars) (Millions of Dollars) FY2024 FY2023 Change Change FY2024 FY2023 Change Change Print Advertising Revenue 18.9 29.2 (10.3) (35.2)% Print Other Revenue 8.3 9.8 (1.5) (15.3)% Exited operations (0.0) (4.0) 4.0 NM Exit