Lee Enterprises(LEE)2021-02-04 18:20Financial Data and Key Metrics Changes - Total operating revenue decreased by 10.8% on a pro forma basis compared to the previous fiscal year, with trends improving from declines of 16.9% and 24.7% in the third and fourth quarters of fiscal year 2020 respectively [9] - Adjusted EBITDA for the first quarter totaled $40 million, reflecting strong cost management [10][22] - Total cash costs were down 10.1% compared to the same quarter last year, with compensation down 5.9% and newsprint costs down 34% [20] Business Line Data and Key Metrics Changes - Digital revenue reached $62.5 million, accounting for 29.5% of total operating revenue, marking a 26% improvement year-over-year [10] - Digital-only subscriptions grew by 69% year-over-year, totaling 286,000 paid subscriptions, contributing to a 1.9% quarter-over-quarter growth in subscription revenue [11] - Advertising revenue trends improved significantly, with a 690 basis point improvement compared to the fourth quarter trends of fiscal 2020 [12][13] Market Data and Key Metrics Changes - Revenue from top local accounts and small-to-medium businesses (SMBs) comprised nearly 50% of total advertising revenue, indicating a strong focus on local market relationships [13] - TownNews revenue increased by 8.5%, with 45% of total revenue being recurring or subscription-based [16] Company Strategy and Development Direction - The company is focused on executing its post-dynamic strategy to drive new revenues, with significant progress in digital transformation and cost management [8][17] - Plans to triple digital-only subscriptions by 2025 and expand into new revenue streams such as video sales, e-commerce, and first-party data [28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about revenue trends improving and emphasized the importance of local audience and advertising revenue [8] - The company has exceeded its cost synergy target of $100 million nine months ahead of schedule, achieving $103 million in cost synergies by the end of the first quarter [19] Other Important Information - The principal amount of debt at the end of the first quarter was $523.6 million, down $52.4 million since refinancing in March [22] - The company has $30 million in non-core real estate assets available for sale, which will be used to further reduce debt [25] Q&A Session Summary Question: Are there further opportunities for cost synergies in the second quarter? - Management confirmed their commitment to managing cost structures and driving efficiencies while investing in revenue growth, particularly in digital [27] Question: What are the company's expectations for digital revenue growth? - The company aims to triple digital-only subscriptions by 2025 and is focused on new revenue achievements in video sales, e-commerce, and first-party data [28] Question: What is the company's debt reduction target for fiscal year 2021? - Management did not provide specific guidance but indicated that all cash flow and excess cash flow will be used to repay debt [29]