Lee Enterprises, Inc. Executive Chairman Mary Junck told stock analysts last week the media company – owner of the Quad City Times and Dispatch/Argus – remains "steadfast in our optimism" with "a growth strategy aimed at achieving a digital inflection point when digital-related revenues exceed print-related revenues."
The company also reported higher earnings for the fourth quarter ($4.4 million versus $3.5 million a year ago) and for the full fiscal year ($28.6 million versus $18.4 million) ended Sept. 30.
The positive comments and financial results, though, weren't enough to lift the firm's stock price, which fell to a 52-week low of $1.87 Tuesday (12/18).
The company announced December 10 that Junck, 71, will "transition from executive chairman after the upcoming February 20 shareholders' meeting and continue as chairman of the board." Kevin Mowbray was named president and chief executive officer in 2016.
Junck received a compensation package totaling $2 million in 2017, while Mowbray received $2.2 million in total compensation in 2017, according to the company's proxy.
Junck has been with Lee since 1999, becoming president in 2000, chief executive in 2001 and chairman in 2002.
She presided over acquisition of the St. Louis Post-Dispatch in 2005 as Google began to dominate online advertising through search engine marketing and its AdWords product, and companies like eBay and Craigslist siphoned off classified and display advertising revenues.
Lee borrowed $1.5 billion to buy the Post-Dispatch and has been on a decade-long quest to pay down the enormous debt. Long-term debt now stands at $461 million.
To maintain its "industry leading" profit margin of more than 20 percent, the company has had to continually trim costs, particularly personnel.
In just the past year, the company reduced employment another 11 percent, 385 full-time jobs. It now has 3,241 full-time equivalent positions, compared with 8,300 in 2007.
"2018 was a successful year at Lee," Junck told analysts on the webcast December 14. "And while we recognize the industry headwinds, we remain steadfast in our optimism.
"We operate in attractive midsize markets with huge audiences," she told analysts on the phone call. "We’ve outperformed the industry in many key financial performance metrics, including digital revenue growth, subscription revenue performance and margin. And we have a growth strategy aimed at achieving a digital inflection point when digital-related revenues exceed print-related revenue."
Mowbray echoed her optimism about Lee's digital initiatives and cited the success of the company's TownNews operation, a content management system used by some 1,700 online media sites to handle their news and information operations.
"TownNews represents a powerful opportunity to drive additional digital revenue. . .," Mowbray said. "Over the past seven years the compound annual growth rate of TownNews was 12 percent and is poised for more significant growth. In 2018, TownNews grew by 19.8 percent with margins in excess of 40 percent," he said. "Because our content management services are widely regarded as best-in-class, we expect to continue to substantially grow revenue in this category."
The company also is seeking to expand video/broadcast revenues through the TownNews technology, he said.
Lee's 49 daily newspapers had combined circulation of 725,353 as of September 30, down 7.9 percent from a year ago. Sunday circulation as of September was 1,037,291, an 8.2 percent decline from a year ago.
CLICK HERE to view Lee's annual report for the fiscal year ended Sept. 30, 2018.
CLICK HERE to read the transcript from the Dec. 14 earnings call with analysts.
