Lee Enterprises, Incorporated

Welcome to the Lee Enterprises 2023 fourth quarter webcast and conference call. This call is being recorded and will be available for replay at investors.lee.net. At this time, all participants are in a listen-only mode. At the close of the planned remarks, there will be an opportunity for questions. Participants accessing this call by webcast may submit written questions through the website and they will be answered during the call as time permits. Otherwise, you will receive a response later. A link to the live webcast can be found at investors.lee.net. Now, I will turn the call over to your host, Josh Reinholz, Vice President, Finance. Please go ahead.

Good morning. 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 Milledge, Vice President, Chief Financial Officer and Treasurer. Also with us today and available for questions is Nathan Becky, Vice President, Audience Strategy. Earlier today, we issued a news release with preliminary results for our fourth fiscal quarter of 2023. It is available at lee.net as well as the major financial websites. Please also refer to our earnings presentation found at investors.lee.net that includes supplemental information. As a reminder, this morning's discussion will include forward-looking statements based on our current expectations. These statements are subject to certain risks, trends, and uncertainties that could cause actual results to differ materially. Such factors are described in this morning's news release and also in our SEC filings. During the call, we refer to certain non-GAAP financial measures, including adjusted EBITDA, cash costs, and same-store revenues, which are defined in our news release. We will also refer to digital direct costs, which is defined in the earnings presentation. For each of these non-GAAP measures, reconciliations to the relevant GAAP measures are included in tables accompanying the release. And now to open the discussion is our President and Chief Executive Officer, Kevin Mowbray.

Good morning, everyone, and thank you for joining us. I'm excited to share with you all of the many reasons why we're optimistic about the future of LEAD. We'll begin this morning with an overview of our fiscal year 2023 operating results, including our industry-leading digital performance. We'll also provide an update to our digital transformation strategy and given the strong execution of the three pillars, I'm excited to share increases to our long-term outlook. The Lean team delivered another strong quarter with continued execution on our three-pillar digital growth strategy, and I'm very encouraged at the pace by which we're transforming Lean into a vibrant, digitally-centered company. Our fourth quarter results helped us to achieve all of our full-year guidance. Our ability to exceed expectation and produce industry-leading results in this challenging environment demonstrates the success of our strategy, the resiliency of our business model support needs investment thesis, and increases our conviction in achieving our long-term goals. We grew digital subscribers 36% for the year, leading us to substantially exceed our initial guidance with 721,000 digital subscribers by the end of the fiscal year. And we're also encouraged that we grew average rates for our digital-only subscriptions, driving fourth quarter digital subscription revenue up 68% year-over-year and up 51% for the full year. On the advertising side, Amplify Digital grew revenue 11% in the fourth quarter and 20% for the full year, with revenue totaling $91 million for the fiscal year. facing well ahead of other digital marketing solutions in the industry. These strong performances in digital revenue are pushing us down the path of driving recurring profitable digital revenue, which bolsters our confidence in achieving our long-term goals. We faced significant macroeconomic headwinds this year. The soft advertising environment across the industry and an uncertain market for subscription products with consumers Our current revenue streams were negatively impacted as revenue trends worsened. This team took quick and decisive action by eliminating more than $100 million in cost reductions this year. This accelerated growth in digital revenue combined with solid cost management resulted in achieving our full year adjusted EBITDA guidance. This solid performance is a testament to the fact we have the right team and the right strategy in place. And now I'll pass it to Tim for more detail on our fourth quarter results.