On December 12, 2024, Lee Enterprises Inc (LEE, Financial) released its 8-K filing detailing the financial results for the fourth quarter and full fiscal year 2024. Lee Enterprises Inc, a digital-first subscription business, focuses on delivering high-quality local news and advertising services across the United States.
Performance Overview and Challenges
Lee Enterprises Inc reported total operating revenue of $159 million for the fourth quarter, falling short of the analyst estimate of $169.88 million. The company's digital revenue, however, showed a promising increase, accounting for 51% of the total revenue at $82 million, marking a 13% year-over-year growth. Despite these gains, the company faced challenges with its print revenue, which decreased by 21% compared to the previous year.
Financial Achievements and Industry Context
Lee Enterprises Inc achieved significant milestones in digital subscriptions, with a 30% increase in digital-only subscription revenue for the quarter. The Amplified Digital® Agency also contributed positively, with a 21% year-over-year increase in revenue, totaling $28 million for the quarter. These achievements are crucial as the media industry increasingly shifts towards digital platforms, highlighting Lee's strategic focus on digital transformation.
Key Financial Metrics
For the fiscal year 2024, Lee Enterprises Inc reported total operating revenue of $611 million, with digital revenue contributing $299 million, an 11% increase from the previous year. Operating expenses matched the revenue at $611 million, while cash costs decreased by 10% to $553 million. The company's Adjusted EBITDA was $65 million, indicating a shortfall from its targets.
| Metric | Q4 2024 | FY24 |
|---|---|---|
| Total Operating Revenue | $159 million | $611 million |
| Total Digital Revenue | $82 million | $299 million |
| Adjusted EBITDA | $17 million | $65 million |
| Net Loss | $(9.48) million | $(23.57) million |
Analysis of Financial Performance
Lee Enterprises Inc's focus on digital transformation is evident in its revenue composition, with digital services now representing a significant portion of its income. However, the decline in print revenue continues to pose a challenge, impacting overall profitability. The company's net loss for the fiscal year was $23.57 million, translating to a loss per share of $4.35, which is below the annual estimated earnings per share of -$2.02.
The team achieved significant milestones in FY24, driving 41% revenue growth in digital subscriptions and approaching $100 million in Amplified Digital® revenue for the fiscal year," said Kevin Mowbray, Lee’s President and Chief Executive Officer.
Debt and Cash Flow Considerations
Lee Enterprises Inc reported a total debt of $446 million, with a reduction of $10 million over the fiscal year. The company maintained $10 million in cash on the balance sheet, resulting in a net debt of $436 million. Capital expenditures for FY24 were $9 million, with expectations to increase to approximately $12 million in FY25.
In conclusion, while Lee Enterprises Inc has made strides in its digital strategy, the ongoing decline in print revenue and the resulting financial losses highlight the challenges it faces in the evolving media landscape. The company's ability to leverage its digital growth and manage costs will be critical in navigating these challenges moving forward.
Explore the complete 8-K earnings release (here) from Lee Enterprises Inc for further details.
