Lee Enterprises, Incorporated (NYSE:LEE) Q4 2019 Earnings Conference Call - Preliminary Transcript

Dec 12, 2019 • 10:00 am ET

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Lee Enterprises, Incorporated (NYSE:LEE) Q4 2019 Earnings Conference Call - Preliminary Transcript

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Presentation
Executive
Timothy Millage

company and reduce our legacy cost structure. Cash cost on the same property basis were down 8.1% in the fourth quarter with compensation costs down 9.7% due to reductions in head count. Newsprint and ink expense decreased 25.9% in the quarter driven by declines in print circulation volumes as well as lower newsprint prices. Other operating expenses decreased 4.2% in the quarter, primarily driven by lower delivery costs.

For fiscal year 2019, cash costs on a same-property basis were down 5.9% exceeding the top end of our previously announced cash cost guidance. We posted strong adjusted EBITDA in the fourth quarter, totaling 31.1 million for the fiscal year, adjusted EBITDA totaled $121.5 million. Strong adjusted EBITDA in our commit

to use substantially all of our cash flow to repay debt. A lot of to reduce debt by 14.9 million in the fourth quarter. For the fiscal year, debt reduction totaled 49.2 million. Our leverage, net of cash on the balance sheet was 3.6 times down from the prior year. Our outstanding debt obligations mature in March 22 and we continue to evaluate addressing our debt maturity early, one consideration is the breakage cost of our current debt, which totals $8.6 million today, but is reduced to zero in just more -- in just more than 3 months.

We're committed to reducing our leverage and one way of doing is to monetize non-core assets, including excess real estate and investments. Currently, we have identified $30.8 million of excess real estate for sale with the majority of the sales coming from our lead legacy side of the business. Of that amount $18.7 million is under contract and expected to close in the next 6 to 9 months. Although there can be no assurance that real estate under contract will ultimately close. We have 9 additional properties being evaluated for sale in the future and we also have a private equity investment worth approximately $10 million that we're working to monetize as a reminder immediate will asset owned by one of our -- subsidiary sold those proceeds will be used to repay the second lien term loan at par.

We believe these actions will help us reduce our overall leverage. -- to using our remaining NOL, we became a taxpayer in 2019 paying $8.4 million in income taxes during the fiscal year. We expect to file our 10-K with the SEC tomorrow and as always, it will include additional information on our results and expectations. An 8-K with supplemental new Legacy and financial data will also be filed tomorrow. This concludes our remarks, we'll remain on the line to get into your questions from the web and I'll turn it over to Jamie to get the questions.