Lee Enterprises(LEE)2020-06-18 17:03Financial Data and Key Metrics Changes - Total operating revenue on a pro forma basis was $207.3 million, a 10% decline compared to the prior year, but a 100 basis point improvement from the first quarter trend [16][28] - Adjusted EBITDA in the second quarter totaled $24 million, with pro forma adjusted EBITDA for the last 12 months at $152.1 million [38] - Operating expenses decreased by 2.6% in the quarter, with cash costs down 9.8% on a pro forma basis [29] Business Line Data and Key Metrics Changes - Subscription revenue on a pro forma basis was down 2.8% in the second quarter, representing 41.5% of total operating revenue [13] - Digital-only subscribers increased by 91.7% in the second quarter compared to the same quarter a year ago, reaching nearly 200,000 [14] - Revenue at TownNews increased by 11.1% in the second quarter, despite some slowdown due to COVID-19 [15] Market Data and Key Metrics Changes - Pro forma advertising revenue in the second quarter was on par with first quarter trends, despite a significant decline in demand due to COVID-19 [10] - The company expects total operating revenue for the third quarter to be between $177 million and $180 million, down 24.9% compared to the prior year on a pro forma basis [17] Company Strategy and Development Direction - The acquisition of BH Media Group and the Buffalo News is expected to unlock significant value through synergies and reduce the cost of capital, extending the company's runway for 25 years [9][26] - The company aims to achieve more than $100 million in cash cost savings by the end of 2021 through business transformation initiatives and acquisition integration [25][36] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the future despite the significant negative impact from COVID-19, citing a favorable mix of advertising revenue and strong local advertising relationships [21][22] - The company has taken swift actions to mitigate the impacts of COVID-19, including launching a local marketing brand program that has attracted over 4,400 advertisers [11][12] Other Important Information - The company completed a comprehensive refinancing of its debt with Berkshire Hathaway, borrowing $576 million at a fixed interest rate of 9%, which is expected to save nearly $5 million annually [31][35] - As of the call, the company had more than $50 million in cash on its balance sheet, providing sufficient liquidity in the near term [20][40] Q&A Session Summary Question: How much of the $17.7 million received from asset sales came from the sale of the Oregon and California newspaper publications? - The majority of the $17.7 million came from real estate sales, with less than $4 million from the sale of four business operations out West [43]