Core Viewpoint - Lee Enterprises has extended its shareholder rights plan for one year in response to an unsolicited acquisition interest from Hoffmann Family of Companies, ensuring fair treatment for all shareholders during potential takeover discussions [1][2][3]. Group 1: Rights Plan Extension - The Board of Directors unanimously approved the extension of the Rights Plan's expiration date from March 27, 2025, to March 27, 2026 [1][6]. - The Rights Plan was initially adopted in March 2024 to protect against a significant accumulation of shares by a competing digital publishing business [2][3]. - The extension aims to allow shareholders to realize long-term value and ensure fair treatment in any proposed takeover [3][6]. Group 2: Hoffmann's Acquisition Interest - Hoffmann has accumulated approximately 9.8% of Lee's outstanding common stock and expressed interest in acquiring the company [9]. - On March 20, 2025, Hoffmann publicly announced its interest in acquiring Lee but did not specify any acquisition price or material terms [9]. - The Board is open to reviewing any credible acquisition proposals and has offered to enter into a confidentiality agreement with Hoffmann to facilitate discussions [4][5]. Group 3: Company Overview - Lee Enterprises is a major subscription and advertising platform, providing local news and information through daily newspapers and digital products across 72 markets in 25 states [8]. - The company is committed to delivering valuable local news and information to the communities it serves [8].

Core Insights - Wang & Lee Group, Inc. has formed a strategic partnership with HK Golden, Inc. to integrate ad-driven content into Linko's AI-powered smart home devices, allowing users to earn blockchain tokens for ad engagement, thereby enhancing ESG impact and consumer value [1][2][3] Group 1: Tokenized Ad Engagement - Users of Linko's devices will earn W&L-issued blockchain tokens for every minute spent interacting with HKGolden's ads, which can be redeemed for device upgrades, premium subscriptions, or cash [2] - The partnership ensures transparent tracking of ad engagement and token distribution through W&L's blockchain ledger [2] Group 2: ESG-Driven Synergy - A portion of the ad revenue generated will fund W&L's solar crypto-mines, linking user engagement to renewable energy growth and supporting global decarbonization goals [3] - This initiative promotes sustainable behavior while rewarding users for their engagement with ads [3] Group 3: Leadership Commentary - The CEO of Wang & Lee Group emphasized the transformation of passive ad consumption into active participation in the green economy, benefiting both users and the environment [4] - Representatives from Linko and HK Golden highlighted the enhanced value of devices and the pioneering nature of the alliance in redefining media monetization [4] Group 4: Strategic Benefits - Users can earn tokens through ad engagement, energy savings, and sustainable actions, while advertisers benefit from precise AI targeting, leading to higher ROI [5] - The partnership positions Wang & Lee as a leader in combining AI smart homes, blockchain rewards, and ESG-aligned media partnerships [5] Group 5: Projected Impacts - Anticipated user growth in Linko device adoption is expected post-integration, driven by the incentive of token rewards [6] - The alliance is projected to reduce household carbon footprints among participating users [6]

Core Insights - Lee Enterprises has launched a suite of AI-powered solutions called AmplifiedDigital.AI aimed at supporting local businesses in enhancing operations and customer connections in a digital marketplace [1][2]. Group 1: AI Solutions Overview - The AI solutions are designed to provide local businesses with essential tools for success, including data-driven insights and personalized marketing capabilities [2]. - The first product, A.I. Enablement, focuses on transforming businesses through various features that address marketing inefficiencies and customer engagement challenges [3][4]. Group 2: Commitment to Local Businesses - Lee Enterprises emphasizes its mission to foster economic growth and support local entrepreneurs, highlighting the importance of local businesses as the backbone of communities [3][4]. - The company aims to create opportunities and drive results through its AI solutions, which are not solely technology-focused but also geared towards tangible business success [4]. Group 3: Features of AI Solutions - Key features of the AI solutions include enhanced visibility in AI search engines, rapid content creation, distribution through local news websites, educational resources for leveraging AI, AI-enhanced social media tools, and next-generation website optimization [5].

Core Insights - Lee Enterprises has launched a suite of AI-powered solutions called AmplifiedDigital.AI aimed at supporting local businesses in enhancing operations and customer connections in a digital marketplace [1][2][3] Group 1: AI Solutions Overview - The AI solutions are designed to provide local businesses with essential tools for success, including data-driven insights and personalized marketing capabilities [2] - The first product, A.I. Enablement, focuses on transforming businesses through various features [2][3] Group 2: Support for Local Businesses - The launch emphasizes Lee Enterprises' commitment to fostering economic growth and supporting local entrepreneurs by addressing marketing inefficiencies and customer engagement challenges [3][4] - The company aims to create opportunities and drive results for local businesses, which are considered the backbone of communities [4] Group 3: Features of AI Solutions - A.I. Visibility enhances visibility in top-performing AI search engines, ensuring content is indexed and featured prominently [5] - Content Creation allows for the generation of sponsored articles in seconds [5] - Content Distribution utilizes Lee's local news websites and other AI engines for effective outreach [5] - Education is provided through a comprehensive library to leverage AI for business growth [5] - AI Social offers AI-enhanced social media tools [5] - SmartSites.AI represents a next-generation approach to website optimization [5]

Core Insights - Lee Enterprises Inc has partnered with VeeFriends to produce original comics that will be published weekly in its publications, marking a significant content expansion strategy [1][5] - VeeFriends, created by Gary Vaynerchuk, features a universe of 251 characters aimed at connecting with audiences through storytelling and positivity [2][6] - The comics will debut on February 23 and will include characters like Brave Bison and Empathy Elephant, designed to inspire and entertain readers [3][6] Company Strategy - Lee Enterprises is enhancing reader experiences through strategic content partnerships, with this collaboration being a key example of delivering premium content [5][6] - The partnership aims to engage audiences by integrating interactive elements, such as live drawing events and a Readers' Choice feature for fan contributions [4][6] Industry Context - The collaboration reflects a growing trend in the media industry to incorporate diverse content formats, such as comics, to attract and retain subscribers [5][6] - VeeFriends' focus on community-driven experiences and storytelling aligns with current consumer preferences for engaging and relatable content [2][7]

Core Insights - Lee Enterprises Inc has partnered with VeeFriends to produce original weekly comics that will be published in Lee's publications starting February 23, 2025 [1][3] - VeeFriends is an entertainment company created by Gary Vaynerchuk, featuring a universe of 251 characters aimed at inspiring and connecting with audiences [2][7] - The partnership aims to enhance reader experiences through engaging content, leveraging the popularity of comics in both print and digital formats [5][6] Company Overview - Lee Enterprises operates in 72 markets across 25 states, focusing on local news, information, and advertising [1][7] - The company emphasizes quality journalism and digital innovation, aiming to deliver valuable content and advertising solutions [7] Partnership Details - The comics will feature characters like Brave Bison, Empathy Elephant, and Fearless Fairy, who use their superpowers to help humanity [3] - To celebrate the launch, live streaming events called "Draw Offs" will be held, allowing audiences to see the creative process and submit their own comic contributions [4] Strategic Goals - The collaboration with VeeFriends is part of Lee Enterprises' strategy to provide world-class content partnerships that enhance reader engagement [5][6] - The partnership is expected to bring positivity and inspiration to audiences, showcasing VeeFriends' creativity in cartooning [6]

Revenue Performance - Total operating revenue decreased by $11.1 million, or 7.1%, to $144.6 million in the 2025 Quarter compared to the 2024 Quarter [64]. - Digital subscription revenue increased by 10.8% to $21.6 million, while print subscription revenue decreased by 16.3% to $43.4 million [66]. - Digital-only subscribers grew by 5% to a total of 774,000, contributing to a total subscription revenue of $65.0 million, down 8.9% from the previous year [66]. - Digital advertising and marketing services revenue totaled $46.7 million, a slight increase of 0.6%, representing 70.2% of total advertising and marketing services revenue [65]. - Total digital revenue, including digital advertising, subscription, and services, reached $73.4 million, an increase of 3.5% and representing 50.8% of total operating revenue [68]. Operating Expenses and Losses - Total operating expenses were $149.0 million, a decrease of 0.2% compared to the 2024 Quarter, with compensation expenses rising by 1.0% [70]. - The company reported an operating loss of $3.4 million in the 2025 Quarter, compared to an operating income of $7.8 million in the 2024 Quarter [75]. - Net loss was $16.2 million, with diluted loss per share of $2.80, compared to net income of $1.2 million and diluted earnings per share of $0.12 in the previous year [82]. - Adjusted EBITDA for the three months ended December 29, 2024, was $7.609 million, a decrease of 59.3% from $18.649 million in the prior year [89]. - Operating expenses for the three months ended December 29, 2024, were $149.036 million, slightly down from $149.386 million in the same period of 2023 [89]. Cash Flow and Liquidity - Cash required by operating activities totaled $7.3 million in the 2025 Period, a decrease of $7.4 million compared to cash provided by operating activities of $0.1 million in the 2024 Period [92]. - Cash provided by investing activities increased to $3.9 million in the 2025 Period from $2.1 million in the 2024 Period, driven by proceeds from the sale of non-core real estate [94]. - The company expects capital expenditures to total approximately $10.0 million in 2025, funded by internally generated funds [95]. - The company's liquidity, consisting of cash on the balance sheet, totaled $6.1 million on December 29, 2024 [99]. - No cash was required for financing activities in the 2025 Period, compared to $1.4 million in the 2024 Period, primarily for debt reduction [97]. Interest and Debt Management - Interest expense increased by 1.5% to $10.3 million, with a weighted average cost of debt of 9% [77]. - The company experienced a decrease in operating results of $13.6 million, adjusted for non-working capital items, partially offset by a $6.2 million increase in working capital [92]. - The company anticipates that all interest and principal payments due in the next twelve months will be satisfied by existing cash and cash flows [99].

Digital Revenue Performance - Total Digital Revenue increased by 5% year-over-year to $73 million, representing 51% of total operating revenue[4] - Digital-only subscription revenue rose by 14% year-over-year, totaling $22 million[4] - Amplified Digital Agency revenue reached $24 million, also up 14% year-over-year[1] - Digital advertising and marketing services revenue accounted for 70% of total advertising revenue, totaling $47 million[4] - The company expects full-year digital revenue growth to accelerate between 7% and 10%[2] - Total Digital Revenue includes digital advertising, marketing services, digital-only subscriptions, and digital services revenue[1] Financial Performance - The company reported a net loss of $16 million for the quarter, with Adjusted EBITDA of $8 million[4] - Operating revenue for the quarter was $145 million, a decrease of 7% compared to the prior year[4] - Adjusted EBITDA is defined as net income plus non-operating expenses, income tax, depreciation, and other adjustments, providing a clearer view of operating performance[3] - Cash Costs, which exclude non-cash expenses, are defined as compensation, newsprint, ink, and other operating expenses, aiding in understanding the company's cash-settled costs[4] Cost Management - The company has identified approximately $40 million in annualized cost reductions expected to be executed by the end of the second quarter[2] Debt and Financing - Total debt outstanding is $446 million, with favorable financing terms including a fixed annual interest rate of 9.0%[5] - The company's debt stands at $576 million under a term loan agreement with BH Finance LLC[5] Strategic Partnerships - A strategic partnership with Amazon Web Services (AWS) was announced to enhance digital transformation and optimize content delivery[1] Revenue Definitions - Same-store revenues are based on U.S. GAAP revenues, excluding exited operations such as business divestitures and discontinued print products[2] - Excess Cash Flow is defined as any cash exceeding $20 million on the balance sheet at the end of each fiscal quarter[6]

Financial Data and Key Metrics Changes - Total operating revenue for Q1 2025 was $145 million, with total digital revenue growing 5% year over year [17] - Digital subscription revenue grew 40% year over year, contributing to the overall digital revenue growth [10][17] - Digital revenue has grown more than 17% annually since FY21, translating to a 13% annual growth in digital gross margin, with a digital margin of 70% [16] Business Line Data and Key Metrics Changes - Total digital revenue was $302 million on a trailing twelve-month basis, with $102 million from Amplified Digital agency [10] - Digital subscription revenue and Amplified Digital revenue both grew 14% year over year [17] - Digital subscription units increased by 8%, totaling 774,000 [38] Market Data and Key Metrics Changes - Digital subscription revenue has nearly doubled compared to the nearest industry peer, growing 46% annually over the last three years [9] - Amplified Digital agency revenue has grown 33% annually over the past three years, significantly outpacing competitors [9] Company Strategy and Development Direction - The company is focused on leveraging AI to enhance digital transformation and improve customer engagement [7][15] - A three-pillar growth strategy aims to achieve total digital revenue of over $450 million by 2028, with current annualized digital revenue at $302 million [24] - Investments in AI are expected to drive new revenue and maintain a dominant market position, with $40 million in annual cost reductions identified [20][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year guidance for FY2025, citing growth in core digital businesses and AI initiatives [36][39] - The company anticipates digital revenue growth of 7% to 10% and adjusted EBITDA growth in the low single digits for the year [25] Other Important Information - The company has favorable credit terms with Berkshire Hathaway, allowing focus on strategic execution [21][22] - Over $5 million in asset sales were closed in Q1, with an additional $1 million deal completed since then [22] Q&A Session Summary Question: Plans to monetize AI library and value proposition for advertising customers - Management is evaluating the best opportunities to monetize their AI library and believes the AI Boost program will provide significant benefits to advertisers [32][34] Question: Information on cost initiatives and confidence in digital revenue growth - Management highlighted confidence in achieving guidance due to scale from core digital businesses, AI initiatives, and identified cost reductions of $40 million [36][39]

Lee Enterprises (LEE) Q1 2025 Earnings Call February 06, 2025 10:00 AM ET Company Participants Jared Marks - Vice President, FinanceKevin Mowbray - President and Chief Executive OfficerLes Ottolenghi - Chief Transformation & Commercial OfficerTimothy Millage - Vice President, Chief Financial Officer and Treasurer Conference Call Participants Daniel Harriman - Analyst Operator Welcome to the Li Enterprises twenty twenty five First Quarter Webcast and Conference Call. The call is being recorded and will be av ...