Lee Enterprises(US:LEE)2020-08-07 19:26Financial Performance - The company reported a net loss of $727,000 for the 13 weeks ended June 28, 2020, compared to a net income of $6,172,000 for the same period in 2019[136]. - Adjusted EBITDA for the 13 weeks ended June 28, 2020, was $26,303,000, down from $30,651,000 in the prior year, reflecting a decrease of approximately 11%[137]. - Total operating revenue was $182,528,000 in the 2020 Quarter, an increase of $55,244,000, or 43.4%, including $91,173,000 from acquisitions[162]. - Subscription revenue reached $88,517,000 in the 2020 Quarter, up 89.9% compared to the prior year, driven by $48,205,000 of acquired subscription revenue[164]. - Advertising and marketing services revenue totaled $77,754,000 in the 2020 Quarter, an increase of 18.2%, with print advertising revenues up 29.0%[163]. - Operating income decreased to $11,749,000 in the 2020 Quarter, down 41.3% from $20,031,000 in the 2019 Quarter[174]. - Net loss was $727,000 in the 2020 Quarter, compared to net income of $6,172,000 in the 2019 Quarter[182]. - Digital revenue, including digital advertising, subscription, and services, totaled $42,423,000, a 15.0% increase over the 2019 Quarter[167]. - Other revenue totaled $45,157,000, a 3.6% increase compared to the 2019 Period[190]. - Total digital revenue reached $116,332,000, a 7.3% increase, representing 27.3% of total operating revenue[193]. Expenses and Costs - Total operating expenses were $171,621,000, a 57.9% increase compared to the 2019 Quarter, including $86,680,000 from acquisitions[169]. - Cash costs rose to $157,408,000, a 59.4% increase compared to the 2019 Quarter[169]. - Total operating expenses rose 16.6% to $386,168,000, including $98,291,000 from acquisitions[195]. - Interest expense increased by $1,275,000, or 10.8%, to $13,135,000 in the 2020 Quarter[176]. Impact of COVID-19 - The COVID-19 pandemic has significantly impacted the company's business, leading to lower revenue and profitability, with ongoing uncertainty regarding future effects[155]. - The COVID-19 pandemic negatively impacted single copy sales, which were down 26.9% on a proforma basis[165]. Subscriber and Digital Growth - Digital-only subscribers increased by 85.4% year-over-year, reaching approximately 222,000 subscribers[152]. - The company's web and mobile sites reached over 60 million unique visitors in June 2020, with 485 million page views and 131 million visits[152]. - Digital services revenue increased by 6.2% to $15,400,000, with TownNews revenue rising 12.0% to $18,669,000[191]. - Commercial printing revenue surged 51.9% to $9,437,000 due to acquired revenues[192]. Acquisitions and Strategic Moves - The company completed the acquisition of BHMG and The Buffalo News for a total purchase price of $140,000,000, enhancing its local media operations[146]. - The company expects to achieve $100 million in cost reductions from December 2019 through September 2021 by centralizing business functions and reducing duplicate costs[156]. - Cash required for investing activities increased significantly to $121,137,000, primarily due to acquisitions[213]. Cash Flow and Liquidity - Cash provided by operating activities decreased to $38,010,000 from $43,786,000 in the previous year[211]. - Cash provided by financing activities totaled $131,192,000, with proceeds from refinancing amounting to $576,000,000[215]. - The company plans to defer certain employer payroll tax payments and pension contributions under the CARES Act to preserve liquidity[224]. Impairment and Future Risks - The company has recorded impairment charges totaling almost $1.3 billion since 2007, indicating potential future risks related to goodwill and intangible assets[150].