Friday, March 03, 2023
Lee Enterprises, Incorporated provides local news, information, and advertising primarily in midsize markets in the United States. It publishes 49 daily newspapers, as well as offers 300 weekly newspapers and specialty publications in 23 states. The company also provides online advertising and services; and online infrastructure and online publishing services for approximately 1,500 daily and weekly newspapers and shoppers. In addition, it offers commercial printing services. The company has a strategic alliance with Yahoo!, Inc. to provide its classified employment advertising customer base the opportunity to post job listings and other employment products on Yahoo!�s HotJobs national platform. Lee Enterprises, Incorporated was founded in 1890 and is based in Davenport, Iowa.
Michael Kupinski, Director of Research, Noble Capital Markets, Inc.
Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Slow start to the year. The company reported fiscal Q1 revenue of $185 million and adj. EBITDA of $17.6 million, below expectations, illustrated in Figure #1 Q1 Results. The slow start to the fiscal year was the result of a print revenue decline 18% to $120 million. Digital increased a strong 17% to $65 million, and now accounts for a record 35% of total company revenue.
Right-sizing its business. Given a weak print advertising environment, management announced that it implemented additional cost reductions, expected to result in $40 million of savings in FY 23, and $60 million in annualized savings going forward. Additionally, there is approximately $30 million in noncore assets that it will seek to monetize in FY 23.
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