Q2 2024 Lee Enterprises Inc Earnings Call Transcript
Key Points
- Lee Enterprises Inc (LEE) reported strong second quarter operating results with improved overall revenue trends and managed costs.
- The company is successfully transitioning from a print-centric to a digital-centric model, with digital revenue now representing 40% of total revenue.
- Digital subscriber growth was robust, with a 25% increase year-over-year, and digital subscription rates also increased by 17%.
- LEE's digital advertising and marketing services are growing, with expectations to drive $300 million of digital advertising revenue by 2028.
- Cost management initiatives have been effective, with cash costs down 16% in the quarter, contributing to a 5% growth in adjusted EBITDA.
- Print revenue declined by 24% on a same property basis, continuing the trend of decreasing print media demand.
- The decline in print revenue was partly due to the elimination of certain print products that did not meet profitability standards.
- While digital revenue growth is strong, the total operating revenue was only modestly improved, indicating ongoing challenges in offsetting print declines.
- The transformation to digital, while necessary, requires significant ongoing investment in talent and technology, which could impact short-term profitability.
- Despite reductions in debt, LEE still has a substantial debt load with a principal amount of $454 million.
Welcome to Lee Enterprises 2024 second quarter webcast and conference call. This call is being recorded and will be available for replay at investors.lee.net. (Operator Instructions) A link to the live webcast can be found at investors.lee.net.
I will now turn the call over to your host, Josh Rinehults, Vice President Finance. Sir, please begin.
Good morning, and thank you for joining us. In addition to myself, speaking on this morning's call are Kevin Mowbray, President and Chief Executive Officer; and Tim Millage, Vice President, Chief Financial Officer and Treasurer.
Earlier today, we issued a news release with preliminary results for our second fiscal quarter of 2024. It is available at lee.net as well as major financial websites. Please also refer to our earnings presentation found at investors.lee.net, which includes supplemental information.
As a reminder, this morning's discussion will include forward-looking statements based on our current expectations. These
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