Good day, everyone. Welcome to the Lee Enterprises 2019 Fourth Quarter Webcast and Conference Call. This call is being recorded and will be available for replay beginning later this morning at lee.net. [Operator Instructions]. A link to the live webcast can be found at www.lee.net. Now I'll turn the call over to your host, Jamie Seratt, Corporate Controller. Please go ahead.

Good morning. Thank you for joining us. Speaking on this morning's call will be Kevin Mowbray, President and Chief Executive Officer; and Tim Millage, Vice President and Chief Financial Officer. Also with us on today's call and available for questions are Nathan Bekke, Vice President, Consumer Sales and Marketing; and James Green, Vice President, Digital. Earlier today, we issued a news release with preliminary results for our fourth fiscal quarter of 2019. It is available at lee.net as well as at major financial websites. One housekeeping item to start. Our fourth quarter last year included an extra week of operations. Additionally, we acquired certain properties in fiscal year 2019 and disposed off one property in 2018. These transactions are affecting quarter and year-to-date trends. We discuss certain revenue and operating expense trends on a same-property basis, which excludes the impact of these transactions. As a reminder, this morning's discussion will include forward-looking statements that are 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 make reference to certain non-GAAP financial measures, which are defined in our news release. 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.

Thank you, Jamie. And good morning, and thank you all for joining the call. Overall, we're pleased with the continued digital transformation in 2019 for the 10th consecutive year we grew digital revenue. Total digital revenue, which includes advertising, subscription and digital services was $144.6 million in the fiscal year, an increase of 4.3% on a same-property basis. In the fourth quarter, digital advertising now represents 40% of total advertising. Much of our success in digital advertising comes from our local controllable retail accounts that represent more than 50% of advertising revenue. These local accounts depend on our huge audience reach. According to the Lee [indiscernible] data, we typically reached 75% to 80% of the adults in our local markets between our print, digital and mobile platforms. This advantage makes us much rely on national retail advertising. Revenue from this category has outperformed our overall advertising trends. Lee's Amplified Digital agency, our centralized approach to funding custom digital advertising and marketing campaigns, continued to outpace our expectations to consistently outperform industry standards of performance. With more than 160 digital experts on staff Amplified Digital finished 2019 with over 600 clients and 1,300 active campaigns. Our agency approach is anchored by agency-level creators, a complete suite of digital media, custom promotions and events when appropriate. Revenue from Amplified Digital is up 13.1% in the fourth quarter with strong margins. The initiatives aimed in local retail accounts and our Amplified Digital agency, we remain steadfast in our efforts and are confident we can grow revenue from local retail accounts. We continue to have large and engaged audiences. While half of our audience continued to read our printed products, we are expecting a significant increase in digital content consumption. We remain keenly focused on growing digital-only subscriber base. In our fourth quarter of…

Thank you, Kevin, and good morning, everyone. We continue to transform our business model, drive efficiencies across our company and reduce our legacy cost structure. Cash cost on a same-property basis were down 8.1% in the fourth quarter with compensation costs down 9.7% due to reductions in headcount. 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 topping 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 and our commitment to use substantially all of our cash flow to repay debt allowed us to reduce debt by $14.9 million in the fourth quarter. For the fiscal year, debt reduction totaled $41.2 million. Our leverage net of cash on the balance sheet was 3.6x, down from the prior year. Our outstanding debt obligations mature in March of '22, and we continue to evaluate addressing our debt maturity early. One consideration is the breakage cost of our current debt, which totaled $8.6 million today, but is reduced to $0 in just more than 3 months. We're committed to reducing our leverage and one way of doing it is to monetize noncore assets, including excess real estate and investments. Currently, we have identified $30.8 million of excess real estate for sale with the majority of these sales coming from our Lee 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 could be no assurance that real estate under contract will ultimately close. We have nine additional properties being evaluated for sale in the future, and we also have a private equity investment worth approximately $10 million that we're looking to monetize. As a reminder, in the event asset owned by one of our Pulitzer subsidiaries is sold, both proceeds will be used to repay the second-lien term loan at par. We believe these actions will help us reduce our overall leverage. Due to using our remaining NOLs, 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 Lee Legacy and Pulitzer financial data will also be filed tomorrow. This concludes our remarks. We're now on the line to answer questions from the web, and I'll turn it over to Jamie to facilitate to questions.

Thank you, Tim. Our first question from the web. If our revolver matures on December 28, 2019, what's the plan for extending it?

So we actually have extended that. There was a release -- our 8-K filed in November. We've extended -- a runway 12 month on the revolver, and the revolver matures in December of 2020.

What involvement, if any, will Lee have in Facebook's recently announced Facebook Live News tab that promises to some publishers?

Lee is involved in the test in three of the markets. It's too early to know the outcome at this point.

Our next question. Will Lee be able to complete a debt refinancing deal by March 2022?

So we've talked a lot about our plans to look at an opportunistic refinancing, and we're still in -- still looking at options. We've laid out our objectives of looking to reduce our cost of capital. Leasing some of the companies that we have today. And one of the things we haven't talked about in our remarks, is we do have a cost step down in March of '15 that we're looking to consider. So we're still evaluating all of our options. In the meantime, our focus is to continue to reduce our leverage as quickly as we can.

Our next question. Please provide further color on the $6 million of restructuring costs in the quarter and the $3.8 million related to withdrawals from multi-employer pension plans.

So I'll address the $3.8 million withdraw first because that's the biggest piece of the $6 million. So we have a number of multi-employer pension plans that we have disclosed in our SEC filings, and there's a lot of risk associated with those plans. And one of the things we're doing to mitigate those -- that risk is to -- effective withdraw from those plans. And we did that with one of the plan creating a liability of $3.8 million. And the way that works is we paid that liability over a period of 20 years, given the laws around multi-employer plans. The rest of the restructuring cost of credit, dominantly severance costs, due to our business and transformation projects.

Our next question. Given that the December quarter is nearly over. Can you comment on debt paydown and bond buybacks in the December quarter?

Yes. So far, we've reduced debt by $7 million in the first quarter. We do expect our first quarter this year to be similar to what we've done historically in this quarter. So not yet done with the quarter but right now we're $7 million. And all of the buybacks that we've effected this quarter have been at or under par. And that -- we have no more questions from the web. I'll turn it back to our -- to Kevin for closing remarks.

Thank you for joining us on today's call. We appreciate your time and your interest in Lee. Thank you, again, for being on the call.