Lee Enterprises(LEE)2019-12-12 17:45Financial Data and Key Metrics Changes - Total digital revenue for fiscal year 2019 was $144.6 million, an increase of 4.3% on a same-property basis [6] - Adjusted EBITDA for the fourth quarter totaled $31.1 million, compared to $35.9 million in the prior quarter [10] - Cash costs on a same-property basis decreased by 8.1% in the fourth quarter, with compensation costs down 9.7% [11] - For fiscal year 2019, adjusted EBITDA totaled $121.5 million, and debt reduction amounted to $41.2 million [12] Business Line Data and Key Metrics Changes - Digital advertising represented 40% of total advertising in the fourth quarter, with local controllable retail accounts contributing over 50% of advertising revenue [6] - Revenue from Amplified Digital agency increased by 13.1% in the fourth quarter, with strong margins [7] - Digital-only subscriptions grew by 79.1% in 2019, adding 13,000 net new subscribers in the fourth quarter [8] - TownNews revenue increased by 10.7% in the fourth quarter, totaling $22.6 million for the fiscal year [9] Market Data and Key Metrics Changes - The company reached 75% to 80% of adults in local markets through print, digital, and mobile platforms [7] - Subscription revenue improved modestly in the fourth quarter, down 4.6% on a same-property basis [8] Company Strategy and Development Direction - The company is focused on digital transformation and reducing costs while maintaining strong performance [10] - Plans to monetize non-core assets, including excess real estate valued at $30.8 million, to reduce leverage [12] - The transition to the News+ membership program aims to stabilize the full access audience and stimulate digital-only subscription growth [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth despite industry challenges, highlighting the success of digital revenue growth [10] - The company is evaluating options for opportunistic refinancing to reduce capital costs [17] Other Important Information - The company became a taxpayer in 2019, paying $8.4 million in income taxes [13] - The company has extended its revolver maturity to December 2020 [15] Q&A Session Summary Question: What is the plan for extending the revolver maturing on December 28, 2019? - The revolver has been extended for an additional 12 months, maturing in December 2020 [15] Question: What involvement will Lee have in Facebook's recently announced Facebook Live News tab? - Lee is involved in the test in three markets, but it is too early to determine the outcome [16] Question: Will Lee be able to complete a debt refinancing deal by March 2022? - The company is exploring options for refinancing and aims to reduce leverage as quickly as possible [17] Question: Can you provide further details on the $6 million of restructuring costs in the quarter? - The majority of the restructuring costs were related to severance due to business transformation projects, with $3.8 million associated with withdrawals from multi-employer pension plans [19] Question: Can you comment on debt paydown and bond buybacks in the December quarter? - The company has reduced debt by $7 million in the first quarter and expects similar results historically [20]