Nasdaq:LEE
LEE ENTERPRISES, Inc
A specialized manufacturer of essential electrical components facing significant revenue contraction and persistent operating losses.
Key Metrics
Investment Thesis
Bull Case
Despite current losses, the company holds substantial goodwill and intangible assets indicating potential brand value or intellectual property worth revitalizing. If management can successfully restructure operations to stop the bleeding in operating expenses, the specialized nature of its capacitor manufacturing could offer a path to niche profitability. Strategic partnerships or a pivot toward high-growth EV sectors might reverse the five-year revenue decline.
Bear Case
The consistent erosion of revenue from $781M in 2022 to $562M in 2025 demonstrates a clear structural weakness that is unlikely to self-correct without major intervention. With total liabilities exceeding total assets, the company faces an existential threat regarding solvency and access to capital markets. The widening gap between revenue and operating expenses suggests deep-seated inefficiencies that are difficult to resolve in a short timeframe.
About LEE ENTERPRISES, Inc
LEE Enterprises Inc. (Nasdaq: LEE) specializes in manufacturing high-quality electrical components, including capacitors and transformers, serving global industries such as automotive, industrial, and consumer electronics.
Analysis
Management Discussion
Financial performance has deteriorated significantly, with net income plunging from a nominal profit in 2022 to a loss of $35.7M by 2025. Operating expenses of $567.0M have outpaced revenue growth, resulting in an operating profit deficit that widens annually. While non-cash adjustments provide some accounting buffer, the company's fundamental cash generation capabilities are critically impaired.
Industry Overview
The global electrical components industry is highly competitive and cyclical, heavily influenced by automotive electrification trends and industrial automation spending. Companies in this sector face constant pressure to innovate while managing complex global supply chains and raw material costs. Margins are typically tight, requiring significant scale and operational efficiency to maintain market share against established international rivals.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $781.0M | $691.1M | $611.4M | $562.3M |
| Cost of Revenue | $0 | $0 | $0 | $0 |
| Gross Profit | $781.0M | $691.1M | $611.4M | $562.3M |
| Operating Expenses | $756.1M | $654.0M | $606.8M | $567.0M |
| Operating Income | $24.9M | $37.2M | $4.5M | $-4.7M |
| Stock-Based Comp | $1.3M | $1.8M | $1.8M | $1.8M |
| D&A | $36.5M | $30.6M | $27.6M | $18.8M |
| Depreciation | $14.4M | $11.6M | $10.4M | $7.7M |
| Amortization | $22.2M | $19.0M | $17.2M | $11.2M |
| Non-Operating Income | $-24.1M | $-40.3M | $-35.7M | $-38.0M |
| Interest Expense | $41.8M | $41.5M | — | — |
| Pre-Tax Income | $795.0K | $-3.1M | $-31.2M | $-42.6M |
| Income Tax | $698.0K | $-349.0K | $-7.6M | $-6.9M |
| Continuing Ops | $97.0K | $-2.7M | $-23.6M | $-35.7M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $97.0K | $-2.7M | $-23.6M | $-35.7M |
| Minority Interest | $2.1M | $2.5M | $2.3M | $1.8M |
| Net to Common | $-2.0M | $-5.3M | $-25.8M | $-37.6M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $109.1M | $106.5M | $97.8M | $89.4M |
| Cash & Equivalents | $16.2M | $14.5M | $9.6M | $10.0M |
| Accounts Receivable | $69.5M | $69.1M | $60.6M | $54.6M |
| Inventory | $8.3M | $7.5M | $5.6M | $4.7M |
| Prepaid Expenses | — | — | — | $20.1M |
| Other Current Assets | $15.2M | $15.4M | $21.9M | $0 |
| Long-Term Assets | $634.9M | $605.1M | $551.4M | $512.3M |
| PP&E (Net) | $73.7M | $61.2M | $44.4M | $35.6M |
| Intangibles | $121.4M | $95.0M | $70.1M | $51.9M |
| Goodwill | $329.5M | $329.5M | $328.0M | $323.9M |
| Operating Leases | $47.5M | $40.8M | $34.9M | $25.2M |
| LT Investments | $33.3M | $33.4M | $34.0M | — |
| Other LT Assets | $2.1M | $17.3M | $12.1M | $48.7M |
| Total Assets | $744.0M | $711.6M | $649.2M | $601.7M |
| Current Liabilities | $131.1M | $114.3M | $115.4M | $113.4M |
| Accounts Payable | $28.6M | $36.3M | $36.3M | $41.7M |
| Current Debt | $0 | — | — | — |
| Current Leases | $7.9M | $7.8M | $8.1M | $7.3M |
| Deferred Revenue | $49.9M | $40.8M | $31.8M | $26.5M |
| Other Current Liab | $0 | $0 | $0 | $0 |
| Long-Term Liabilities | $595.7M | $573.6M | $541.2M | $529.3M |
| Long-Term Debt | $462.6M | $455.7M | $445.9M | $455.5M |
| LT Operating Leases | $46.0M | $36.6M | $29.8M | $18.8M |
| Other LT Liab | $78.8M | $75.4M | $62.0M | $51.9M |
| Total Liabilities | $726.8M | $687.9M | $656.5M | $642.7M |
| Shareholders' Equity | $17.2M | $23.7M | $-7.3M | $-41.0M |
| Paid-In Capital | $259.5M | $260.8M | $262.5M | $263.8M |
| Retained Earnings | $-261.2M | $-266.5M | $-292.3M | $-329.9M |
| AOCI | $16.7M | $26.8M | $19.9M | $22.8M |
| Total L&E | $744.0M | $711.6M | $649.2M | $601.7M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $97.0K | $-2.7M | $-23.6M | $-35.7M |
| Non-Cash Adjustments | $36.1M | $2.9M | $29.9M | $27.7M |
| Working Capital Changes | $-32.7M | $-2.7M | $-5.2M | $2.5M |
| Cash from Operations | $3.4M | $-2.5M | $1.1M | $-5.5M |
| Capital Expenditures | $7.5M | $5.1M | $9.2M | $1.5M |
| Cash from Investing | $6.3M | $8.0M | $3.7M | $7.7M |
| Debt Issuances | $0 | — | — | — |
| Debt Repayments | $0 | — | — | — |
| Cash from Financing | $-19.7M | $-7.1M | $-9.8M | $-1.8M |
| FX Effect | $0 | $0 | $0 | $0 |
| Net Change in Cash | $-9.9M | $-1.6M | $-5.0M | $391.0K |
| Beginning Cash | $26.1M | $16.2M | $14.5M | $9.6M |
| Ending Cash | $16.2M | $14.5M | $9.6M | $10.0M |
Frequently Asked Questions
How does LEE ENTERPRISES, Inc make money?
Revenue is primarily driven by the production and sale of power capacitors, pulse capacitors, and distribution transformers. The company operates across multiple verticals including the automotive sector for electric vehicles, industrial machinery requiring precise power management, and consumer electronics markets demanding reliable energy storage solutions.
What are the main risks for LEE?
Persistent negative operating cash flow of $5.5M indicates severe liquidity strain and potential inability to fund ongoing operations without external financing. The substantial accumulated retained earnings deficit of nearly $330M suggests long-term profitability issues that may deter further investment. Declining revenue trends over the last five years signal weakening market demand or an inability to retain market share against competitors. High leverage relative to shrinking equity exposes the firm to heightened interest rate sensitivity and refinancing risks.
What is LEE's competitive advantage?
The company possesses proprietary manufacturing processes that enable cost-effective production of high-voltage capacitors with superior reliability standards. Its established global supply chain network ensures consistent delivery to key automotive OEMs and industrial clients. A diversified product portfolio spanning different electrical applications provides a buffer against downturns in any single end-market.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.