Lee Enterprises, Incorporated

Welcome to the Lee Enterprises 2024 first quarter webcast and conference call. The call is being recorded and will be available for replay at investor.lee.net. 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 Weinholz, 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 Moberg, President and Chief Executive Officer, and Tim Millich, Vice President, Chief Financial Officer, and Treasurer. Earlier today, we issued a news release with preliminary results for our first 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 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 violence. During the call, we refer to certain non-GAAP financial measures. Reconciliation 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. We'll begin our time this morning demonstrating the success of our three-pillar digital growth strategy in growing digital subscribers, transforming the mix of our revenue, and growing adjusted EBITDA. We'll also discuss our first quarter operating results, highlighting our industry-leading digital performance. We'll conclude by reiterating our confidence in our long-term goals. Lead fiscal year 2024 is off to a good start as we executed well on our three-pillar digital growth strategy. We're concentrated on expanding our digital audiences, growing our digital subscriber base and revenue, and diversifying and expanding our offerings for regional and local advertisers. The long-term results of our strategy are expected to generate more than $450 million of recurring sustainable digital revenue within five years. With that level of performance, Lee will be sustainable solely through cash flow generation from our digital products. That is an incredibly important point, as is the objective of our three-pillar digital growth strategy. I'm extremely encouraged by the progress of our strategy thus far and the pace by which we're transforming Lee into a vibrant, digitally-centric company. As a proof point of the progress on our digital transformation, Lee continues to be the fastest growing digital subscription platform in local media by a significant margin. Digital subscriber growth at Lee has outpaced our industry peers for the last 16 quarters. We now have more than 735 digital subscribers, which is up 30% compared to the prior year. What's even more impressive in our eyes is that we increased average rates for our digital subscriptions by more than 20% over the same period. Said differently, we're growing digital subscribers at the fastest clip in the industry, and we're doing it while we're executing increases in pricing. This demonstrates our ability in a meaningful way to drive wantedness, resiliency, and value of our intensely local content we provide in our markets. This industry-leading performance gives us even more confidence and achieving our long-term goals, which we covered in detail in the last quarter. Amphidigital achieved 11% revenue growth over the last 12 months despite the soft advertising environment. Revenue totaled $91 million and has grown a staggering 50% annually over the last three years, far outpacing others within the industry. Fueled by these industry-leading metrics, total digital revenue has grown to $279 million over the last 12 months, which is driving the rapid change in our revenue composition as evidenced in the next slide. The significant growth of our digital revenue from our three-filler digital growth strategy has transformed the composition of these overall revenue over the last few years. When we first launched our three-pillar digital growth strategy, digital revenue represented only 21% of our total operating revenue. And today, digital revenue represents 46% of our revenue. Importantly, we expect to reach the inflection point in the second half of fiscal 2024 where more than 50% of our revenue will come from digital sources. This is an important milestone in our digital transformation. as a result of the majority of our revenue coming from sustainable growing sources. Our industry-leading growth in digital subscription revenue and digital marketing solutions will continue to drive LEED to this point. And now I'll hand it over to Tim to discuss our first quarter operating results.