Lee Enterprises(US:LEE)2019-05-10 20:19Financial Data and Key Metrics Changes - Total revenue for the quarter decreased by 4% while cash costs were down by 2.6% [17] - Adjusted EBITDA totaled $23.6 million for the quarter and $125.9 million over the last 12 months [24] Business Line Data and Key Metrics Changes - Total digital revenue increased by 8% in the second quarter, totaling over $117 million over the last 12 months [8] - Revenue at TownNews increased by 24.3% in the second quarter, totaling $20.9 million over the last 12 months with adjusted EBITDA margins of 40% [9] - Subscription revenue decreased by 1.9% in the second quarter, showing a 220-basis-point improvement from the first quarter [15] Market Data and Key Metrics Changes - Local controllable retail accounts represented approximately 6% of advertising revenue, outperforming overall advertising trends [12] - Revenue from the Amplified Digital agency increased by 18% in the second quarter [15] Company Strategy and Development Direction - The company aims to dominate market share among print and digital local market operations, diversify its customer base, and increase average revenue per user [11] - The transition to the News+ membership program is expected to improve retention and provide opportunities for strategic pricing actions [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future performance despite industry challenges, citing strong digital transformation and cost management strategies [17] - The company plans to continue using additional cash flow to pay down debt and make strategic acquisitions [39] Other Important Information - Cash costs are expected to decline between 4% and 5% for fiscal year 2019 compared to fiscal year 2018 [23] - The principal amount of debt totaled $476.5 million as of the end of the second quarter [25] Q&A Session Summary Question: What is the addressable market for TownNews? - Management indicated that there is substantial growth potential in increasing ARPU from existing customers and expanding into the broadcast space [30] Question: What is the company's market share in TownNews? - Management believes there is significant upside in market share, particularly in print and broadcast sectors [33] Question: What is the latest thinking on debt refinancing? - Management discussed ongoing productive conversations with advisers and lenders regarding refinancing objectives, including lowering the cost of capital and extending the debt maturity [35][36] Question: When will the company pay investors a quarterly dividend? - Management stated that all additional cash flow will be used to pay down debt and make strategic acquisitions, prioritizing these over dividends [39]