Lee Enterprises: High Risk And Very High Potential Return
Jonah Jones, CFA • 11 Comments
Jonah Jones, CFA • 11 Comments
Mon, Aug. 22, 9:22 AM
- Lee Enterprises (NYSE:LEE) is up 2.7% premarket on news that it's selling its assets in Provo, Utah -- the Daily Herald and heraldextra.com -- to Ogden Newspapers.
- Terms were undisclosed. The sale's expected to close in a week.
- The Provo print newspaper reaches about 20,000 each day and almost 27,000 on Sunday, while the Web property has about 700,000 unique visitors per month.
- Ogden Newspapers publishes 40 dailies along with a number of magazines, weekly papers and shoppers across 14 states.
Thu, Aug. 4, 1:20 PM
- Lee Enterprises (NYSE:LEE) is a top media gainer today, up 6.9% after fiscal Q3 earnings where profits more than doubled from last year though revenue fell nearly 5%.
- Along with revenue, the company is cutting costs (total cash costs fell 4.3%) and saving interest by repaying debt. Adjusted EBITDA was $36.9M.
- Revenue breakout: Advertising and marketing services, $92.3M (down 8.6%); Subscription, $47.2M (down 0.5%); Digital services, $3.5M (up 15.3%); Commercial printing, $3.1M (down 3.8%); other, $4.8M (up 19.6%).
- In advertising, digital advertising increased 4.9% overall; mobile advertising was up 22.2% and national digital advertising rose 15.8%.
- From here, the company says it expects to direct all of its interest savings toward further debt reduction "as we continue to use all our available free cash flow to reduce debt." Debt principal came to $640.3M as of June 26.
- The company expects cash costs for the full year to fall 3.75%-4% (vs. previous estimate of 3.5%-4%).
- Press Release
Thu, May 5, 8:36 PM
- Lee Enterprises (NYSE:LEE) slid 10.3% today, denting YTD gains of more than 32%, after its fiscal Q2 earnings were flat from a year ago after excluding extraordinary items.
- On a headline basis, the publisher posted EPS of $0.36 vs. a year-ago $0.03, after recording a $30.6M gain from an insurance settlement. Adjusted EBITDA came to $31.1M, down 7.5% from a year ago.
- Revenue by segment: Advertising and Marketing services, $88.7M (down 9.5%); Subscription, $46.7M (down 3%); Digital Services, $3.4M (up 11.5%); Commercial printing, $3M (up 9.7%); other, $4.99M (up 8.6%).
- Average daily newspaper circulation totaled 1M; Sunday circulation came to 1.3M.
- CEO Kevin Mowbray pointed to "significant" debt reduction efforts, as "we continue to use substantially all of our free cash flow to pay down debt ... In the second quarter of 2016, we reduced debt by more than $47 million, reducing the company's leverage, net of cash, to 4.0 times the last 12 months adjusted EBITDA."
- Debt reduction cut interest expense by $2.1M in Q2 and $3.8M YTD. Total debt at quarter's end was $656.5M; unlevered free cash flow was $30.6M.
- Press Release
Wed, Feb. 24, 5:27 PM
- Lee Enterprises (LEE -5.2%) is putting its money where its debt-reduction plans were, by announcing a repurchase of another $10M of its 9.5% notes at an "attractive discount."
- The company used proceeds from an insurance settlement to buy back the debt and reduce one of its higher costs of capital, said CFO Ron Mayo.
- At Lee's annual meeting, newly elected Executive Chairman Mary Junck said the company would pursue "aggressive deleveraging" with a steady free cash flow.
Thu, Feb. 4, 12:27 PM
- Lee Enterprises (NYSE:LEE) is among the biggest media decliners, slipping 7.1% today after fiscal Q1 earnings showed operating revenues dropping 5% Y/Y and adjusted EBITDA slipping 3.6%.
- Digital ad revenue grew 7.2%; of that, mobile advertising grew 12.4%. About half the company's revenue now comes from growing categories.
- Ad and marketing services revenue breakout: Retail, $70.6M (down 8.4%); Classified, $25.4M (down 13.4%); National, $6.7M (down 5.7%); Niche and other, $2.9M (up 27.1%).
- In other revenues: Subscription, $50.4M (up 0.1%); Commercial printing, $3.2M (up 14.6%); Digital services, $3.3M (up 5.7%).
- The company's undergoing across the board redesigns, with print products changing up in many markets and all websites changing to a new design this year.
- Operating cash flow dropped 5.2% (down 4.3%, excluding workforce adjustments) to $43.6M.
Nov. 12, 2015, 6:22 PM
- Lee Enterprises (LEE -2.1%) issued some preliminary summary numbers for its fiscal Q4, highlighting operating cash flow growth of 5% Y/Y and adjusted cost reductions of 7.8%, above guidance for cuts of 5.5%-6%.
- It's scheduled to release its full fourth-quarter results along with those for fiscal 2015 on Dec. 10.
- In its preliminary look, total operating revenues have fallen 4% to $156.1M, and total operating expenses fell to $131.4M. Operating income rose 29.6% to $26.8M.
- It's projecting adjusted EBITDA to come in at $39.97M (up 7.5%).
Oct. 28, 2015, 11:47 AM
- McClatchy's (MNI +3%) Tru Measure unit will power digital marketing and ad offerings to small and mid-sized business customers of Lee Enterprises (LEE +2.6%) in a new deal.
- Lee will launch Tru Measure's "Tru Local" digital agency solution to build and amnage ad campaigns for its local markets.
- The offering also promises customizable analytics including "a combination of historical pre- and post-click data and analysis" to better show ROI for ad spending.
- Lee publishes 50 daily newspapers and 300 specialty publications across 22 states; its online sites have more than 26M unique visitors/month.
Sep. 29, 2015, 11:49 AM
- Publisher Lee Enterprises (NYSE:LEE) is up 4.6% on light volume as it notes in a presentation to a Deutsche Bank conference that it's expecting EBITDA growth in Q4.
- "Digital revenue is on a strong trajectory," says Chairman and CEO Mary Junck. "Subscription revenue continues to grow, and the audiences in our markets are huge across all age groups and platforms."
- The company pointed to industry-leading operating cash flow margins of 22% over the 12 months ended in June.
- It says it's on track to meet the upper end of Q4 2015 comparable cash cost guidance (of down 5.5%-6%).
- Total debt at September's end is expected at $726M, down $119M from a March 2014 refinancing.
Sep. 2, 2015, 6:31 PM
- Lee Enterprises (LEE -3.1%) has closed on the sale of its properties in Napa, Calif., including the HQ of the Napa Valley Register, for a net $5M.
- The move is part of continuing monetization of the company's real estate to reduce its highest-rate debt. It has more than $10M worth of real estate listed for sale or under contract in several states.
- The company will apply the Napa proceeds to reduce its second-lien term loan.
- Since reporting its Q3 earnings in early August, shares in Lee Enterprises are down 39%.
Jun. 25, 2015, 6:35 PM
- Lee Enterprises (NYSE:LEE) is up 1.5% in late trading after announcing that two years ahead of schedule, it's paid off a set of 9% senior notes issued by units St. Louis Post-Dispatch LLC and Pulitzer Inc., pointing to strong cash flows.
- The notes were issued along with a $94M refinancing in May 2013 and were due in April 2017.
- "We have been, and will continue to be, committed to the repayment of the company's debt," said CEO/Chairman Mary Junck.
- The move also relaxes cash flow restrictions in the company's capital structure, a change that should end up in more rapid amortization for the company's First Lien Credit Agreement, which has $205.25M outstanding from an initial $250M.
- Total debt at its most recent quarterly report was $764M.
May 7, 2015, 3:51 PM
- Local-news firm Lee Enterprises (NYSE:LEE) has climbed to a 5.3% gain today after reporting fiscal Q2 earnings where it beat expectations on top and bottom lines and cut comparable cash costs, while guiding to further decreases in 2015.
- Digital ad revenue was up 8.3%, while the mobile ad component of that rose 37.9%. More tellingly, perhaps, is that subscription revenue increased 4.7% even after adjustment.
- Cash costs fell 0.2% excluding impact from an expense reclassification, and the company says full-year cash costs on the same basis to fall between 2.25% and 2.75%.
- The company reduced debt $20.3M to a principal amount of $764.3M. Unlevered free cash flow was $31.4M, compared to a year-ago $32.2M.
Feb. 17, 2015, 4:28 PM
- Lee Enterprises (NYSE:LEE) finished up 7.7% as Wingspan Investment Management disclosed a 9.1% passive stake, making it one of Lee's biggest shareholders.
- Wingspan has a longstanding relationship with Lee as former members of its investment team shaped Lee's 2012 restructuring, and the firm was an anchor investor in refinancing last year.
- The firm disclosed its beneficial ownership of the stake of 4.98M shares in its 13G.
Feb. 3, 2015, 10:17 AM
- The New York Times Co. (NYSE:NYT) is up 5.9% on news of its Q4 earnings beat.
- Digital ad growth of 19% is seen as encouraging as the company wrestles with slipping print advertising revenue.
- News peers are also trading higher today: (GCI +2.8%), (SSP +2.9%), (LEE +3.4%), (AHC +2.5%).
- The NYT conference call comes up at 11 a.m.
Aug. 11, 2014, 1:45 PM
- There's some asset re-allocation going on in the media sector with a group of newspapers stocks piling on some gains - while select TV broadcaster and digital media stocks head in the other direction.
- The flurry of merger and spinoff news within the sector has created more pure-play bets and consolidated some firms into larger players.
- Analysts have noted the extra volatility in the sector has created more buy/sell opportunities than normal on mismatched valuation.
- Gainers: McClatchy (NYSE:MNI) +3.0%, Lee Enterprises (NYSE:LEE) +3.3%, New Media Investment (NYSE:NEWM) +4.4%.
- Decliners: E.W. Scripps (NYSE:SSP) -3.6%, Media General (NYSE:MEG) -2.1%, Journal Communication (NYSE:JRN) -3.4%.
- Related ETF: PBS
Nov. 11, 2013, 5:39 PM
Jul. 12, 2013, 12:45 PM
Lee Enterprises, Inc. provides local news, information, marketing and advertising services. It offers its services in midsize markets with daily newspapers and specialty publications, including Midwest, mountain west and west regions of the United States. The company offers Retail, Classified,... More
Industry: Publishing - Newspapers
Country: United States