Lee Enterprises, Incorporated (NYSE: LEE), a major provider of
local news, information and advertising in 50 markets, today
reported preliminary(1) earnings of 3 cents per diluted common
share for its second fiscal quarter ended March 30, 2014, compared
with a loss of 12 cents a year ago. Excluding unusual matters,
adjusted earnings per diluted common share(2) totaled 5 cents,
compared with a loss of 5 cents a year ago.
Mary Junck, chairman and chief executive officer, said: "We
continued 2014 with another good quarter. The market for digital
advertising continues to expand, with digital advertising revenue
growing at a double digit clip. Our business transformation
initiatives continue to create efficiencies, driving cash costs(2)
down almost 6% in the quarter and creating an increase in operating
cash flow(2) over the prior year. We are now in a position to
improve our full year guidance, once again, as we expect our cash
costs to be down 3.0-3.5% in 2014."
She added: "With the refinancing announcement a few weeks ago,
pushing our maturities out to 2022, we can continue to focus on
driving operating results through our many revenue and business
transformation initiatives. One of our key initiatives is our
full-access subscription model, with our first two markets having
launched in April. We are optimistic about the results and will
continue the roll out of full-access subscriptions to more than
half of our markets by the end of the year."
SECOND QUARTER OPERATING
RESULTS(3)
Operating revenue for the 13 weeks ended March 30, 2014
totaled $154.1 million, a decrease of 4.1% compared with a year
ago. Combined print and digital advertising and marketing services
revenue decreased 4.3% to $102.7 million, an improvement from
recent trends, with retail advertising down 2.4%, classified down
10.7% and national up 9.9%. Retail preprint advertising decreased
1.3%. Combined print and digital classified employment revenue
decreased 6.9%, while automotive decreased 17.0%, real estate
decreased 6.8% and other classified decreased 10.5%. Digital
advertising and marketing services revenue on a stand-alone basis
increased 10.2% to $17.4 million and now totals 16.9% of total
advertising and marketing services revenue. Print advertising and
marketing services revenue on a stand-alone basis decreased 6.8%.
Subscription revenue decreased 4.3%.
Total digital revenue, including advertising, marketing
services, subscriptions and digital businesses, totaled $20.5
million in the quarter, up 13.1% compared with the quarter a year
ago. Mobile advertising revenue increased 9.8%, to $1.5
million.
Digital audiences continued to grow. Mobile, tablet, desktop and
app page views increased 16.2% to 235.9 million, and monthly unique
visitors increased 30.8% to 30.3 million for the month of March
2014. Increases from branded editions resulted in a 9.9% increase
in Sunday circulation during the quarter. Daily circulation
decreased 5.0%.
Cash costs decreased 5.7% for the 13 weeks ended March 30, 2014.
Compensation decreased 8.0%, with the average number of full-time
equivalent employees down 6.0%. Newsprint and ink expense decreased
12.9%, primarily a result of a reduction in newsprint volume of
13.5%. Other operating expenses decreased 1.0%.
For the full year, 2014 cash costs are now expected to decrease
3.0-3.5%, excluding the impact of a subscription-related expense
reclassification as a result of moving to fee-for-service delivery
contracts at several of our newspapers. This reclassification will
increase both revenue and operating expenses, with no impact on
operating cash flow or operating income. A table later in this
release details the impact of the reclassification on revenue and
cash costs.
Operating cash flow increased 2.4% from a year ago to $32.7
million. Operating cash flow margin(2) was 21.2%, compared to 19.9%
a year ago. Including equity in earnings of associated companies,
depreciation and amortization, as well as unusual matters in both
years, operating income increased 27.1% to $23.7 million in the
current year quarter, compared with $18.7 million a year ago.
Operating income margin increased to 15.4% up from 11.6% a year
ago.
Non-operating expenses, primarily interest expense and debt
financing costs, decreased 10.9%, due to a 10.4% reduction in
interest expense. Lower debt balances and the refinancing of the
Pulitzer Notes in May 2013 contributed to the interest expense
reduction. Income attributable to Lee Enterprises, Incorporated for
the quarter totaled $1.5 million, compared with a loss of $6.0
million a year ago.
ADJUSTED EARNINGS AND EPS FOR THE
QUARTER
The following table summarizes the impact from unusual matters
on income (loss) attributable to Lee Enterprises, Incorporated and
earnings per diluted common share. Per share amounts may not add
due to rounding.
13 Weeks Ended
March 30
March 31
2014
2013
(Thousands of Dollars, Except Per Share
Data)
Amount Per Share Amount Per Share
Income (loss) attributable to Lee
Enterprises, Incorporated, as reported
1,486 0.03 (5,995 ) (0.12 ) Adjustments: Debt financing and
reorganization costs 99 42 Amortization of debt present value
adjustment 1,196 1,358 Other, net 414
560 1,709 1,960 Income tax
effect of adjustments, net (567 )
(689 ) 1,142 0.02 1,271 0.02 Unusual matters
related to discontinued operations — —
2,181 0.04 Income (loss) attributable to Lee
Enterprises, Incorporated, as adjusted 2,628
0.05 (2,543 ) (0.05 )
YEAR-TO-DATE OPERATING
RESULTS(3)
Operating revenue for the 26 weeks ended March 30, 2014
totaled $331.5 million, a decrease of 4.0% compared with the 26
weeks ended March 31, 2013. Combined print and digital advertising
and marketing services revenue decreased 4.7% to $225.1 million,
with retail advertising down 3.0%, classified down 10.0% and
national increased 2.0%. Combined print and digital classified
employment revenue decreased 6.6%, while automotive decreased
14.8%, real estate decreased 5.9% and other classified decreased
10.3%. Digital advertising and marketing services revenue on a
stand-alone basis increased 10.0% to $36.0 million. Print
advertising and marketing services revenue on a stand-alone basis
decreased 7.1%. Subscription revenue decreased 2.6%.
Total digital revenue, including advertising, marketing
services, subscriptions and digital businesses, totaled $42.1
million in the quarter, up 12.9% compared with a year ago. Mobile
advertising revenue increased 22.9%, to $3.3 million.
Increases from branded editions resulted in a 9.4% increase in
Sunday circulation during the 26 weeks ended March 30, 2014, as
audited by the Alliance for Audited Media. Audited daily
circulation decreased 3.1% over the same six month period.
Cash costs for the 26 weeks ended March 30, 2014 decreased 4.7%
compared to the same period a year ago. Compensation decreased
6.9%, with the average number of full-time equivalent employees
down 5.9%. Newsprint and ink expense decreased 13.1%, a result of a
reduction in newsprint volume of 11.7%. Other operating expenses
increased 0.4%.
Operating cash flow decreased 1.7% from a year ago to $82.0
million. Operating cash flow margin increased to 24.7% from 24.2% a
year ago. Including equity in earnings of associated companies,
depreciation and amortization, as well as unusual matters in both
years, operating income increased 9.9% to $63.9 million in the 26
weeks ended March 30, 2014, compared with $58.2 million a year
ago.
Non-operating expenses increased 4.5%, as a $6.9 million gain on
sale of an investment in the prior year was partially offset by a
10.8% decrease in interest expense in the current year due to lower
debt balances and the refinancing of the Pulitzer Notes in May
2013. Income attributable to Lee Enterprises, Incorporated totaled
$13.4 million, compared to $8.6 million a year ago.
ADJUSTED EARNINGS AND EPS FOR THE YEAR TO
DATE
The following table summarizes the impact from unusual matters
on income (loss) attributable to Lee Enterprises, Incorporated and
earnings (loss) per diluted common share. Per share amounts may not
add due to rounding.
26 Weeks Ended
March 30
March 31
2014
2013
(Thousands of Dollars, Except Per Share Data) Amount
Per Share Amount Per Share Income attributable
to Lee Enterprises, Incorporated, as reported 13,378 0.25 8,575
0.17 Adjustments: Gain on sale of investment, net — (6,909 ) Debt
financing and reorganization costs 203 89 Amortization of debt
present value adjustment 2,394 2,716 Other, net 577
1,626 3,174
(2,478 ) Income tax effect of adjustments, net (1,079 )
865 2,095
0.04 (1,613 ) (0.03 ) Unusual matters related to discontinued
operations — — 1,014
0.02 Income attributable to Lee Enterprises,
Incorporated, as adjusted 15,473 0.29
7,976 0.15
Certain results, excluding the impact of the
subscription-related expense reclassification, are as follows:
13 Weeks Ended 26 Weeks Ended March 30
March 31 Percent March 30 March 31
Percent
(Thousands of Dollars)
2014 2013 Change 2014
2013 Change Subscription revenue, as reported 42,098
43,970 (4.3 ) 87,648 90,026 (2.6 ) Adjustment for
subscription-related expense reclassification (400 )
— NM (400 ) —
NM Subscription revenue, as adjusted 41,698
43,970 (5.2 ) 87,248
90,026 (3.1 ) Total operating
revenue, as reported 154,093 160,603 (4.1 ) 331,478 345,258 (4.0 )
Adjustment for subscription-related expense reclassification
(400 ) — NM (400 )
— NM Total operating revenue, as adjusted
153,693 160,603 (4.3 )
331,078 345,258 (4.1 )
Total cash costs, as reported 121,416 128,692 (5.7 ) 249,483
261,836 (4.7 ) Adjustment for subscription-related expense
reclassification (400 ) — NM
(400 ) — NM Total cash
costs, as adjusted 121,016 128,692
(6.0 ) 249,083 261,836
(4.9 )
DEBT AND FREE CASH FLOW(2)
Debt was reduced $20.0 million in the quarter and $80.0 million
in the last twelve months. The principal amount of debt totaled
$813.0 million at March 30, 2014.
As previously announced, on March 31, 2014, subsequent to
the end of the quarter, we completed a comprehensive refinancing of
our long-term debt, which includes the following:
- $400 million aggregate principal amount
of 9.5% senior secured notes due 2022;
- $250 million first lien term loan due
2019 and $40 million revolving facility (which was undrawn at
closing); and
- $150 million second lien term loan due
2022.
The new facilities enabled the Company to repay in full $768
million outstanding under, and terminate, the previous 1st
lien agreement and 2nd lien agreement. We also used the
proceeds of the refinancing to pay fees and expenses totaling
approximately $32 million related to the refinancing. The Company's
Pulitzer Notes debt, which totaled $45 million at March 30, 2014,
was not refinanced.
On a pro forma basis for the refinancing, the principal amount
of debt at March 30, 2014 totaled $845 million. Since the
refinancing, $15.25 million of debt has been repaid, and the
remaining amount stands at $829.75 million.
Free cash flow increased to $12.7 million for the quarter,
compared with $10.4 million a year ago, and totaled $85.0 million
in the last twelve months. Liquidity at the end of the quarter
totaled $44.8 million, compared to required debt principal payments
of $27.4 million in the next twelve months, as adjusted for the
refinancing.
CONFERENCE CALL INFORMATION
As previously announced, we will hold an earnings conference
call and audio webcast later today at 9 a.m. Central Daylight Time.
The live webcast will be accessible at lee.net and will be
available for replay two hours later. The call also may be
monitored on a listen-only conference line by dialing (toll free)
877-407-3980 and entering a conference passcode of 13581947 at
least five minutes before the scheduled start.
ABOUT LEE
Lee Enterprises is a leading provider of local news and
information, and a major platform for advertising, in its markets,
with 46 daily newspapers and a joint interest in four others,
rapidly growing digital products and nearly 300 specialty
publications in 22 states. Lee's newspapers have circulation of 1.2
million daily and 1.5 million Sunday, reaching nearly four million
readers in print alone. Lee's websites and mobile and tablet
products attracted 30.3 million unique visitors in March 2014.
Lee's markets include St. Louis, MO; Lincoln, NE; Madison, WI;
Davenport, IA; Billings, MT; Bloomington, IL; and Tucson, AZ. Lee
Common Stock is traded on the New York Stock Exchange under the
symbol LEE. For more information about Lee, please visit
lee.net.
FORWARD-LOOKING STATEMENTS — The Private Securities Litigation
Reform Act of 1995 provides a “safe harbor” for forward-looking
statements. This news release contains information that may be
deemed forward-looking that is based largely on our current
expectations, and is subject to certain risks, trends and
uncertainties that could cause actual results to differ materially
from those anticipated. Among such risks, trends and other
uncertainties, which in some instances are beyond our control, are
our ability to generate cash flows and maintain liquidity
sufficient to service our debt, comply with or obtain amendments or
waivers of the financial covenants contained in our credit
facilities, if necessary, to refinance our debt as it comes due, or
that the warrants issued in our refinancing will not be exercised.
Other risks and uncertainties include the impact and duration of
continuing adverse conditions in certain aspects of the economy
affecting our business, changes in advertising demand, potential
changes in newsprint and other commodity prices, energy costs,
interest rates, labor costs, legislative and regulatory rulings,
difficulties in achieving planned expense reductions, maintaining
employee and customer relationships, increased capital costs,
maintaining our listing status on the NYSE, competition and other
risks detailed from time to time in our publicly filed documents.
Any statements that are not statements of historical fact
(including statements containing the words “may”, “will”, “would”,
“could”, “believe”, “expect”, “anticipate”, “intend”, “plan”,
“project”, “estimate”, “consider” and similar expressions)
generally should be considered forward-looking statements. Readers
are cautioned not to place undue reliance on such forward-looking
statements, which are made as of the date of this Current Report on
Form 8-K. We do not undertake to publicly update or revise our
forward-looking statements.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(UNAUDITED)
13 Weeks Ended 26 Weeks Ended
(Thousands of Dollars and Shares, Except
Per
March 30 March 31 Percent March 30
March 31 Percent
Share Data)
2014 2013 Change 2014 2013
Change Advertising and marketing services Retail
64,821 66,387 (2.4 ) 147,111 151,719 (3.0 ) Classified: Employment
8,060 8,657 (6.9 ) 15,269 16,341 (6.6 ) Automotive 6,889 8,304
(17.0 ) 15,017 17,622 (14.8 ) Real estate 4,125 4,425 (6.8 ) 8,544
9,077 (5.9 ) All other 10,303 11,512
(10.5 ) 20,756 23,142
(10.3 ) Total classified 29,377 32,898 (10.7 ) 59,586 66,182 (10.0
) National 6,094 5,544 9.9 13,611 13,339 2.0 Niche publications and
other 2,427 2,553 (5.0 )
4,802 5,041 (4.7 ) Total advertising
and marketing services revenue 102,719 107,382
(4.3 ) 225,110 236,281
(4.7 ) Subscription 42,098 43,970 (4.3 ) 87,648 90,026 (2.6
) Commercial printing 2,992 3,121 (4.1 ) 6,023 6,423 (6.2 ) Digital
services and other 6,284 6,130
2.5 12,697 12,528 1.3
Total operating revenue 154,093 160,603
(4.1 ) 331,478 345,258
(4.0 ) Operating expenses: Compensation 59,071 64,209 (8.0 )
121,212 130,165 (6.9 ) Newsprint and ink 9,334 10,712 (12.9 )
19,895 22,886 (13.1 ) Other operating expenses 52,712 53,259 (1.0 )
107,870 107,470 0.4 Workforce adjustments 299
512 (41.6 ) 506 1,315
(61.5 ) 121,416 128,692
(5.7 ) 249,483 261,836
(4.7 ) Operating cash flow 32,677 31,911 2.4 81,995 83,422 (1.7 )
Depreciation 5,135 5,294 (3.0 ) 10,411 10,796 (3.6 ) Amortization
6,916 9,539 (27.5 ) 13,809 19,093 (27.7 ) Loss (gain) on sale of
assets, net (1,501 ) 150 NM (1,635 ) 135 NM Equity in earnings of
associated companies 1,593 1,733
(8.1 ) 4,512 4,778 (5.6 )
Operating income 23,720 18,661
27.1 63,922 58,176 9.9
CONSOLIDATED STATEMENTS OF OPERATIONS,
continued
13 Weeks Ended 26 Weeks Ended
(Thousands of Dollars and Shares, Except
Per
March 30 March 31 Percent March 30
March 31 Percent
Share Data)
2014 2013 Change 2014 2013
Change Non-operating income (expense): Financial
income 101 5 NM 221 85 NM Interest expense (20,552 ) (22,933 )
(10.4 ) (41,379 ) (46,399 ) (10.8 ) Debt financing costs (99 ) (42
) NM (203 ) (89 ) NM Other, net 27 (61 )
NM 121 6,946 (98.3
) (20,523 ) (23,031 ) (10.9 )
(41,240 ) (39,457 ) 4.5 Income (loss) before
income taxes 3,197 (4,370 ) NM 22,682 18,719 21.2 Income tax
expense (benefit) 1,492 (808 ) NM
8,875 8,640 2.7
Income (loss) from continuing operations 1,705 (3,562 ) NM 13,807
10,079 37.0 Discontinued operations, net of income taxes —
(2,293 ) NM —
(1,247 ) NM Net income (loss) 1,705 (5,855 ) NM
13,807 8,832 56.3 Net income attributable to non-controlling
interests (219 ) (140 ) 56.4
(429 ) (257 ) 66.9 Income (loss) attributable
to Lee Enterprises, Incorporated 1,486 (5,995
) NM 13,378 8,575
56.0 Income (loss) from continuing operations
attributable to Lee Enterprises, Incorporated 1,486
(3,702 ) NM 13,378 9,822
36.2 Earnings (loss) per common share:
Basic: Continuing operations 0.03 (0.07 ) NM 0.26 0.19 36.8
Discontinued operations — (0.04 ) NM
— (0.02 ) NM
0.03 (0.12 ) NM 0.26
0.17 52.9 Diluted:
Continuing operations 0.03 (0.07 ) NM 0.25 0.19 31.6 Discontinued
operations — (0.04 ) NM —
(0.02 ) NM 0.03
(0.12 ) NM 0.25 0.17
47.1 Average common shares: Basic
52,223 51,796 52,151 51,795 Diluted 53,798
51,796 53,541
51,866
SELECTED CONSOLIDATED FINANCIAL
INFORMATION
(UNAUDITED)
52 Weeks 13 Weeks Ended
26 Weeks Ended Ended March 30 March 31 March
30 March 31 March 30
(Thousands of Dollars)
2014 2013 2014 2013 2014
Advertising and marketing services 102,719 107,382 225,110 236,281
449,369 Subscription 42,098 43,970 87,648 90,026 174,733 Other
9,276 9,251 18,720
18,951 36,859 Total operating revenue
154,093 160,603 331,478
345,258 660,961 Compensation 59,071 64,209
121,212 130,165 245,880 Newsprint and ink 9,334 10,712 19,895
22,886 40,490 Other operating expenses 52,712 53,259 107,870
107,470 213,421 Depreciation and amortization 12,051 14,833 24,220
29,889 49,880 Loss (gain) on sale of assets, net (1,501 ) 150
(1,635 ) 135 (1,683 ) Impairment of goodwill and other assets — — —
— 171,094 Workforce adjustments 299 512
506 1,315 1,870 Total
operating expenses 131,966 143,675 272,068 291,860 720,952 Equity
in earnings of associated companies 1,593
1,733 4,512 4,778 8,420
Operating income 23,720 18,661 63,922 58,176 (51,571 )
Adjusted to exclude: Depreciation and amortization 12,051 14,833
24,220 29,889 49,880 Loss (gain) on sale of assets, net (1,501 )
150 (1,635 ) 135 (1,683 ) Impairment of intangible and other assets
— — — — 171,094 Equity in earnings of associated companies
(1,593 ) (1,733 ) (4,512 ) (4,778 )
(8,420 ) Operating cash flow 32,677 31,911 81,995 83,422 159,300
Add: Ownership share of TNI and MNI EBITDA (50%) 2,031 2,332 5,952
6,541 11,189 Adjusted to exclude: Stock compensation 420
364 684 732
1,213 Adjusted EBITDA(2) 35,128 34,607 88,631 90,695 171,702
Adjusted to exclude: Ownership share of TNI and MNI EBITDA (50%)
(2,031 ) (2,332 ) (5,952 ) (6,541 ) (11,189 ) Add: Distributions
from TNI and MNI 2,494 2,715 5,309 4,785 11,922 Capital
expenditures (2,600 ) (2,626 ) (4,895 ) (4,699 ) (9,936 ) Pension
contributions (705 ) (275 ) (705 ) (275 ) (6,446 ) Cash income tax
refunds (payments) (103 ) (93 ) (117 )
(333 ) 9,342 Unlevered free cash flow (2) 32,183
31,996 82,271 83,632 165,395 Add: Financial income 101 5 221 85 436
Interest expense settled in cash (19,356 ) (21,521 ) (38,984 )
(43,367 ) (79,629 ) Debt financing costs paid (266 )
(100 ) (268 ) (100 ) (1,239 ) Free cash flow
12,662 10,380 43,240
40,250 84,963
SELECTED LEE LEGACY(2)
ONLY FINANCIAL INFORMATION
(UNAUDITED)
52 Weeks 13 Weeks Ended
26 Weeks Ended Ended March 30 March 31 March
30 March 31 March 30
(Thousands of Dollars)
2014 2013 2014 2013 2014
Advertising and marketing services 72,055 74,625 155,263 161,976
310,448 Subscription 26,873 27,309 55,720 55,936 110,174 Other
8,266 7,734 16,386
15,673 31,738 Total operating revenue
107,194 109,668 227,369
233,585 452,360 Compensation 44,123 46,440
89,948 93,956 181,464 Newsprint and ink 6,733 7,364 14,070 15,768
28,497 Other operating expenses 28,633 28,453 57,754 57,864 112,658
Depreciation and amortization 8,103 6,770 16,311 13,732 29,892 Loss
(gain) on sale of assets, net (1,512 ) 156 (1,652 ) 150 (1,691 )
Impairment of goodwill and other assets — — — — 523 Workforce
adjustments 122 331 171
613 1,103 Total operating expenses
86,202 89,514 176,602 182,083 352,446 Equity in earnings of
associated companies 313 510
1,443 1,782 3,171 Operating
income 21,305 20,664 52,210 53,284 103,085 Adjusted to exclude:
Depreciation and amortization 8,103 6,770 16,311 13,732 29,892 Loss
(gain) on sale of assets, net (1,512 ) 156 (1,652 ) 150 (1,691 )
Impairment of intangible and other assets — — — — 523 Equity in
earnings of associated companies (313 ) (510 )
(1,443 ) (1,782 ) (3,171 ) Operating cash flow 27,583
27,080 65,426 65,384 128,638 Add: Ownership share of MNI EBITDA
(50%) 646 928 2,673 3,183 5,471 Adjusted to exclude: Stock
compensation 420 364 684
732 1,213 Adjusted EBITDA 28,649 28,372
68,783 69,299 135,322 Adjusted to exclude: Ownership share of MNI
EBITDA (50%) (646 ) (928 ) (2,673 ) (3,183 ) (5,471 ) Add:
Distributions from MNI 1,250 900 2,750 2,150 5,850 Capital
expenditures (2,082 ) (2,116 ) (4,245 ) (3,442 ) (8,516 ) Cash
income tax refunds (payments) (103 ) (93 ) (117 ) (333 ) (149 )
Intercompany charges not settled in cash (2,099 ) (2,146 ) (4,198 )
(4,292 ) (8,302 ) Other — (2,000 ) —
(2,000 ) — Unlevered free cash flow
24,969 21,989 60,300 58,199 118,734 Add: Financial income 101 5 221
85 436 Interest expense settled in cash (18,206 ) (18,797 ) (36,561
) (37,837 ) (73,365 ) Debt financing costs paid (266 )
(100 ) (268 ) (100 ) (308 ) Free cash
flow 6,598 3,097 23,692
20,347 45,497
SELECTED PULITZER(2) ONLY
FINANCIAL INFORMATION
(UNAUDITED)
52 Weeks 13 Weeks Ended
26 Weeks Ended Ended March 30 March 31 March
30 March 31 March 30 (Thousands of Dollars) 2014
2013 2014 2013 2014 Advertising
and marketing services 30,664 32,757 69,847 74,305 138,921
Subscription 15,225 16,661 31,928 34,090 64,559 Other 1,010
1,517 2,334 3,278
5,121 Total operating revenue 46,899
50,935 104,109 111,673
208,601 Compensation 14,948 17,769 31,264 36,209
64,416 Newsprint and ink 2,601 3,348 5,825 7,118 11,993 Other
operating expenses 24,079 24,806 50,116 49,606 100,763 Depreciation
and amortization 3,948 8,063 7,909 16,157 19,988 Loss (gain) on
sale of assets, net 11 (6 ) 17 (15 ) 8 Impairment of goodwill and
other assets — — — — 170,571 Workforce adjustments 177
181 335 702
767 Total operating expenses 45,764 54,161 95,466 109,777
368,506 Equity in earnings of associated companies 1,280
1,223 3,069 2,996
5,249 Operating income 2,415 (2,003 ) 11,712 4,892
(154,656 ) Adjusted to exclude: Depreciation and amortization 3,948
8,063 7,909 16,157 19,988 Loss (gain) on sale of assets, net 11 (6
) 17 (15 ) 8 Impairment of intangible and other assets — — — —
170,571 Equity in earnings of associated companies (1,280 )
(1,223 ) (3,069 ) (2,996 ) (5,249 )
Operating cash flow 5,094 4,831 16,569 18,038 30,662 Add: Ownership
share of TNI EBITDA (50%) 1,385 1,404
3,279 3,358 5,718
Adjusted EBITDA 6,479 6,235 19,848 21,396 36,380 Adjusted to
exclude: Ownership share of TNI EBITDA (50%) (1,385 ) (1,404 )
(3,279 ) (3,358 ) (5,718 ) Add: Distributions from TNI 1,244 1,815
2,559 2,635 6,072 Capital expenditures (518 ) (510 ) (650 ) (1,257
) (1,420 ) Pension contributions (705 ) (275 ) (705 ) (275 ) (6,446
) Cash income tax refunds (payments) — — — — 9,491 Intercompany
charges not settled in cash 2,099 2,146 4,198 4,292 8,302 Other
— 2,000 — 2,000
— Unlevered free cash flow 7,214 10,007 21,971
25,433 46,661 Add: Interest expense settled in cash (1,150 ) (2,724
) (2,423 ) (5,530 ) (6,264 ) Debt financing costs paid —
— — — (931
) Free cash flow 6,064 7,283
19,548 19,903 39,466
REVENUE BY REGION
13 Weeks Ended
26 Weeks Ended
March 30 March 31 Percent March 30 March 31 Percent
(Thousands of Dollars)
2014 2013 Change 2014 2013
Change Midwest 94,702 99,875 (5.2 ) 206,647 216,610 (4.6 )
Mountain West 30,419 31,561 (3.6 ) 65,103 67,669 (3.8 ) West 10,144
10,470 (3.1 ) 21,806 22,777 (4.3 ) East/Other 18,828
18,697 0.7 37,922 38,202 (0.7 )
Total 154,093 160,603 (4.1 ) 331,478
345,258 (4.0 )
SELECTED BALANCE SHEET
INFORMATION
March 30
March 31
(Thousands of Dollars)
2014
2013
Cash
14,878
22,446
Debt (Principal Amount)
813,000
893,000
SELECTED STATISTICAL
INFORMATION
13 Weeks Ended
26 Weeks Ended
March 30
March 31
Percent
March 30
March 31
Percent
2014
2013
2014
2013
Change
Capital expenditures (Thousands of
Dollars)
2,600
2,626
(1.0
)
4,895
4,699
4.2
Newsprint volume (Tonnes)
13,981
16,161
(13.5
)
29,911
33,873
(11.7
)
Average full-time equivalent employees
4,486
4,770
(6.0
)
4,551
4,838
(5.9
)
Shares outstanding at end of period
(Thousands of Shares)
53,596
52,296
2.5
NOTES
(1) This earnings release is a preliminary report of results
for the periods included. The reader should refer to the Company's
Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K for
definitive information. (2) The following are non-GAAP
(Generally Accepted Accounting Principles) financial measures for
which reconciliations to relevant GAAP measures are included in
tables accompanying this release:
•
Adjusted EBITDA is defined as operating income (loss), plus
depreciation, amortization, impairment charges, stock compensation
and 50% of EBITDA from associated companies, minus equity in
earnings of associated companies and curtailment gains.
•
Adjusted Income (Loss) and Adjusted Earnings (Loss) Per Common
Share are defined as income (loss) attributable to Lee Enterprises,
Incorporated and earnings (loss) per common share adjusted to
exclude both unusual matters and those of a substantially
non-recurring nature.
•
Cash Costs are defined as compensation, newsprint and ink, other
operating expenses and certain unusual matters, such as workforce
adjustment costs. Depreciation, amortization, impairment charges,
other non-cash operating expenses and other unusual matters are
excluded.
•
Operating Cash Flow is defined as operating income (loss) plus
depreciation, amortization and impairment charges, minus equity in
earnings of associated companies and curtailment gains. Operating
Cash Flow margin is defined as operating cash flow divided by
operating revenue. The terms operating cash flow and EBITDA are
used interchangeably.
•
Unlevered Free Cash Flow is defined as operating income (loss),
plus depreciation, amortization, impairment charges, stock
compensation, distributions from associated companies and cash
income tax refunds, minus equity in earnings of associated
companies, curtailment gains, cash income taxes, pension
contributions and capital expenditures. Changes in working capital,
asset sales, minority interest and discontinued operations are
excluded. Free Cash Flow also includes financial income, interest
expense and debt financing and reorganization costs. We also
present selected information for Lee Legacy and Pulitzer Inc.
("Pulitzer"). Lee Legacy constitutes the business of the Company
excluding Pulitzer, a wholly-owned subsidiary of the Company.
No non-GAAP financial measure should be considered as a
substitute for any related GAAP financial measure. However, the
Company believes the use of non-GAAP financial measures provides
meaningful supplemental information with which to evaluate its
financial performance, or assist in forecasting and analyzing
future periods. The Company also believes such non-GAAP financial
measures are alternative indicators of performance used by
investors, lenders, rating agencies and financial analysts to
estimate the value of a publishing business and its ability to meet
debt service requirements. (3) Certain amounts as previously
reported have been reclassified to conform with the current period
presentation. The prior periods have been adjusted for comparative
purposes, and the reclassifications have no impact on earnings.
Results of North County Times operations and The Garden
Island operations have been reclassified as discontinued operations
for all periods presented.
Lee EnterprisesDan Hayes, 563-383-2100dan.hayes@lee.net
Lee Enterprises (NYSE:LEE)
Historical Stock Chart
From Mar 2024 to Apr 2024
Lee Enterprises (NYSE:LEE)
Historical Stock Chart
From Apr 2023 to Apr 2024