A fairly upbeat assessment of Lee Enterprises’ financial prospects.
Lee is most certainly not a blue-chip company and the glory days of the newspaper publishing business are most certainly over. However, we also believe that the worst for Lee is over and we don’t expect it to buy any other newspaper chains at 25X TTM FCFs using debt like it did with Pulitzer in 2005. Lee has been able to keep its EBITDA stable since it bottomed out in 2009. Although Lee’s revenue has been steadily sagging since 2006, it has been able to offset these headwinds with lower operating costs. Lee has also mitigated its print revenue declines with its revenue from its digital advertising and circulation programs.