Lee Enterprises, Incorporated · NASDAQ:LEE
Lee Enterprises — Q4 2024 Earnings Presentation
19 slides from Lee Enterprises's earnings presentation, Dec 12, 2024
Slide 1: Fourth Quarter FY2024 Earnings
FOURTH QUARTER FY2024 EARNINGS DECEMBER 12, 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: Fourth Quarter and Full Year 2024 Results
FOURTH QUARTER AND FULL YEAR 2024 RESULTS Q4 Revenue FY24 Revenue Total Operating Revenue $159M, down 2% YOY(1) Total Operating Revenue $611M, down 8% YOY(1) Total Digital Revenue $82M, up 13%(1) Total Digital Revenue $299M, up 11%(1) • Digital subscription $24M, up 30%(1) • Digital subscription $84
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 $84M LTM Digital Sub Revenue $99M LTM Amplified Digital® Agency $299M LTM Total Digital Revenue Industry-leading 41% YOY(1) LTM growth In
Slide 5: 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 $187M of direct costs associated with our $705M $693M legacy revenue streams that will be managed with associated $615M $553M revenue trends • Ongoing ini
Slide 6: Credit Agreement Represents Strategic Asset
CREDIT AGREEMENT REPRESENTS STRATEGIC ASSET • $130M 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 pe
Slide 7: Lee Nears Sustainability from Digital Revenue
LEE NEARS SUSTAINABILITY FROM DIGITAL REVENUE GROSS MARGIN KEY HIGHLIGHTS Digital transformation Digital sustainability • Digital revenue replacing print revenue and growing at 17% Digital Margin SG&A FY24 Total Company Gross Margin CAGR since 2021 • Digital gross margin(1) growing at a 13% CAGR sin
Slide 8: Long-Term Outlook: Digital Revenue
LONG-TERM OUTLOOK: DIGITAL REVENUE DIGITAL REVENUE GROWTH IS FUELED BY AMPLIFIED AND DIGITAL SUBSCRIPTION GROWTH $500M • Amplified Digital® Agency will drive digital marketing services revenue growth $450M • Our owned & operated digital products provide a unique $400M opportunity to grow high margin
Slide 9: 2025 Outlook
2025 OUTLOOK Key Metric 2025 Outlook Total Digital Revenue YOY growth in the range of 7% - 10% Adjusted EBITDA(1) YOY growth in the low-single digits (1) Adjusted EBITDA is a non-GAAP financial measure. See appendix. 9
Slide 10: The Time to Act Is Now
THE TIME TO ACT IS NOW TECTONIC SHIFT IN TECHNOLOGY & LEE’S MARKET LEADERSHIP CONSUMER ADOPTION ACCELERATING DIGITAL BEHAVIOR • Traditional search declining • AI search rapidly growing • Content production costs dropping • Hyper-personalized commerce growing OTHER STRATEGIES • “Fair-Use” lawsuits •
Slide 11: AI Creates a New Economic Model
AI CREATES A NEW ECONOMIC MODEL PARTNERSHIPS DRIVE THE MODEL NEWS & MEDIA LANDSCAPE EVOLUTION GOOGLE & SOCIAL AI SEARCH - ANSWER AI APP NETWORKS 2020 2025 2028 LEE ADVERTISING AI PARTNERS NEW VALUE DRIVERS & AUDIENCE LLM’s, GPTs, SLMs, PLATFORMS SEARCH ENGINE PERPLEXITY ANSWER ENGINE CONTENT PRORATA
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 Q4 FY2024 FY 2024 Digital Advertising and Marketing Services 47.7 46.3 49.9 49.3 193.2 46.5 45.4 49.9 52.5 194.2 YoY % (1) 11.3% 6.2% 7.8% 1.1% 6.4% -1.1% -0.2% 1.6% 7.5%
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) Q4 FY2024 measure that enhances financial statement users’ overall understanding of the operating performance of the Net loss (9.5) Company. The measure isolates unusual, infrequen
Slide 16: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Q4 Q4 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: Q4 Same-Store Non-GAAP Revenue Reconciliation
Q4 SAME-STORE NON-GAAP REVENUE RECONCILIATION(1) Q4 Q4 $ % Q4 Q4 $ % (Millions of Dollars) (Millions of Dollars) FY2024 FY2023 Change Change FY2024 FY2023 Change Change Print Advertising Revenue 19.4 23.3 (3.9) -16.9% Print Other Revenue 8.4 9.0 (0.5) -6.1% Exited operations 0.0 (0.8) 0.8 NM Exited
Slide 18: FY24 Same-Store Non-GAAP Revenue Reconciliation
FY24 SAME-STORE NON-GAAP REVENUE RECONCILIATION(1) $ % $ % (Millions of Dollars) FY2024 FY2023 (Millions of Dollars) FY2024 FY2023 Change Change Change Change Print Advertising Revenue 81.5 125.8 (44.3) -35.2% Print Other Revenue 33.3 39.5 (6.3) -15.8% Exited operations (0.9) (19.1) 18.2 NM Exited o
Slide 19: External Source Links
EXTERNAL SOURCE LINKS https://www.abiresearch.com/news-resources/chart-data/report-artificial-intelligence-market-size-global/ https://www.nextmsc.com/report/artificial-intelligence-market https://www.grandviewresearch.com/industry-analysis/artificial-intelligence-ai-market https://www.marketsandmar