A previous version of this news release should have said that
debt reduction since the end of the fiscal year ended September 28,
2014, totaled $15.3 million, rather than $12.3 million. The
corrected amount is included below. The change has no impact on any
reported amounts for the quarter or the full year.
Fourth paragraph, seventh bullet should read: Debt was reduced
$10.3 million in the quarter and another $15.3 million since the
end of our fiscal year. (instead of Debt was reduced $10.3 million
in the quarter and another $12.3 million since the end of our
fiscal year.)
The corrected release reads:
LEE ENTERPRISES REPORTS RESULTS FOR FOURTH FISCAL
QUARTER
Lee Enterprises, Incorporated (NYSE:LEE), a major provider of
local news, information and advertising in 50 markets, today
reported preliminary(1) earnings of 6 cents per diluted common
share for its fourth fiscal quarter ended September 28, 2014,
compared with a loss of $1.71 a year ago. Excluding unusual
matters, adjusted earnings per diluted common share(2) totaled 2
cents, compared with earnings of 25 cents a year ago. For the full
year, earnings per diluted common share totaled $0.13 compared to a
loss of $1.51 in the prior year, and adjusted earnings per diluted
common share decreased to $0.41 from $0.47.
Mary Junck, chairman and chief executive officer, said: “Lee
continues to drive digital revenue and audiences at an accelerating
pace. Our rapid digital growth, along with our many print and new
digital initiatives, positions us especially well, we believe, for
a strong 2015. Our successful introduction of full access
subscriptions also continues to heighten our optimism, as our
unmatched local news gives us a powerful advantage in every
market.”
She added: “For the fiscal year, through our business
transformation initiatives, we reduced cash costs(2) 2.4% as
reported, and 3.7% excluding the subscription-related expense
reclassification, exceeding our previous guidance of a decrease of
3.0-3.5%. Since 2007 we have reduced cash costs by more than 37%,
totaling $297 million. Additionally, we achieved our sixth
consecutive year of strong and stable adjusted EBITDA(2) and
unlevered free cash flow(2) and returned to profitability for the
first year since 2010.”
She also noted the following financial highlights for the
quarter:
- Total digital revenue increased 24.6%
from the same quarter a year ago, with the trend improving each
quarter of this year;
- Digital advertising revenue increased
14.8% and represented 18.5% of total advertising revenue;
- Mobile advertising revenue increased
38.3%;
- We have rolled out our full access
subscription model in the majority of our markets;
- Overall revenue trends improved again
this quarter, with total revenue down 0.2% from the same quarter a
year ago;
- Digital audiences continued to grow at
a double digit clip with 231.3 million mobile, tablet, desktop and
app page views and 30.0 million unique visitors in the month of
September 2014; and
- Debt was reduced $10.3 million in the
quarter and another $15.3 million since the end of our fiscal
year.
FOURTH QUARTER OPERATING
RESULTS
Operating revenue for the 13 weeks ended September 28, 2014
totaled $162.1 million, a decrease of 0.2% compared with a year
ago. 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, operating revenue decreased
3.0%. This reclassification will increase both print subscription
revenue and operating expenses, with no impact on operating cash
flow(2) or operating income. Certain delivery expenses were
previously reported as a reduction of revenue. A table later in
this release details the impact of the reclassification on revenue
and cash costs.
Combined print and digital advertising and marketing services
revenue decreased 3.4% to $106.6 million, with retail advertising
down 4.6%, classified down 3.6% and national up 5.6%. Retail
preprint advertising decreased 4.9%. Combined print and digital
classified employment revenue increased 2.2%, while automotive
decreased 13.3%, real estate decreased 6.8% and other classified
increased 0.5%. Digital advertising and marketing services revenue
on a stand-alone basis increased 14.8% to $19.7 million and now
totals 18.5% of total advertising and marketing services revenue.
Mobile advertising revenue increased 38.3%. Print advertising and
marketing services revenue on a stand-alone basis decreased
6.7%.
Subscription revenue increased 6.1%. Excluding the impact of the
subscription-related expense reclassification, subscription revenue
decreased 4.2%.
Total digital revenue, including advertising, marketing
services, subscriptions and digital businesses, totaled $24.7
million in the quarter, up 24.6%.
Cash costs increased 2.7% for the 13 weeks ended September 28,
2014. Compensation decreased 1.3%, with the average number of
full-time equivalent employees down 3.3%. Newsprint and ink expense
decreased 12.3%, primarily the result of a reduction in newsprint
volume of 10.7%. Other operating expenses increased 10.6%.
Excluding the impact of the subscription-related expense
reclassification, cash costs decreased 0.8%. We expect our cash
costs, excluding the subscription-related expense reclassification,
to decrease 1.0-2.0% in the December 2014 quarter.
Operating cash flow decreased 10.0% from a year ago to $33.7
million. Operating cash flow margin(2) decreased to 20.8%, compared
to 23.1% a year ago. We recorded $2.6 million of non-cash
impairment losses in the current year quarter compared to $171.1
million in the prior year quarter. Including equity in earnings of
associated companies, depreciation and amortization, as well as
unusual matters in both years, operating income totaled $20.7
million in the current year quarter, compared with an operating
loss of $142.4 million a year ago. Operating income margin was
12.8% in the current year quarter.
Non-operating expenses decreased 27.4% for the 13 weeks ended
September 28, 2014. Interest expense decreased 11.2% due to lower
debt balances and non-cash interest expense of $1.2 million in the
prior year quarter. We recognized $5,543,000 of non-operating
income in the current year quarter due to the change in fair value
of stock warrants issued in connection with our refinancing in
2014. Income attributable to Lee Enterprises, Incorporated for the
quarter totaled $3.2 million, compared with a loss of $88.7 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 (loss) per diluted common share. Per share amounts may not
add due to rounding.
13 Weeks Ended September
28 September 29 2014
2013 (Thousands of Dollars, Except Per Share Data)
Amount Per Share Amount
Per Share Income (loss) attributable to Lee
Enterprises, Incorporated, as reported 3,162 0.06
(88,697 ) (1.71 ) Adjustments: Impairment of
intangible and other assets 2,644 171,094 Debt financing and
reorganization costs 992 88 Other, net (4,227 )
1,726
(591 ) 172,908 Income tax effect of
adjustments, net (1,733 )
(71,093 )
(2,324 ) (0.04 ) 101,815
1.96 Income attributable to Lee Enterprises,
Incorporated, as adjusted 838
0.02 13,118 0.25
FULL ACCESS SUBSCRIPTION
INITIATIVE
As previously reported, we launched our full access subscription
initiative in April. As of today, 30 markets have been
launched and we are on track to launch all of our markets before
June 2015. Early results are promising, with large numbers of
print subscribers activating their digital subscriptions in the
markets launched. And, thanks in part to a major customer service
initiative, subscriber losses have been lower than
expected. We expect subscription revenue in the December 2014
quarter, excluding the impact of the subscription-related expense
reclassification, to be comparable to the prior year
level. Also as previously reported, due to the timing of the
rollout and subscriber renewal dates, we expect the bulk of the
positive revenue from this initiative to be realized in 2015.
YEAR-TO-DATE OPERATING
RESULTS(3)
In 2014, we continued to drive strong digital revenue growth,
transform our business, and rapidly reduce debt. Highlights for the
year include the following:
- Digital advertising revenue reached
$75.2 million for the year, an increase of 12.0%, contributing to
total digital revenue growth of 17.1% and improved overall
advertising trends compared to the prior year;
- We reduced reported cash costs 2.4%,
and 3.7% excluding the subscription-related expense
reclassification, exceeding guidance of a decrease of 3.0-3.5%.
Since 2007 we have reduced cash costs of our continuing operations
by more than 37%, totaling $297 million;
- We achieved our sixth consecutive year
of strong and stable adjusted EBITDA and unlevered free cash
flow;
- The Company returned to profitability,
as reported, for the first year since 2010;
- We completed a comprehensive
refinancing of our long-term debt, significantly extending
maturities, improving operating flexibility and providing a
substantial runway for the future;
- Debt principal reduction totaled $42.8
million in 2014 and $32 million borrowed to fund refinancing costs
was also repaid; and
- The Company’s stock price increased 24%
during the year, resulting in an increase in equity value to
stockholders of $38 million.
Operating revenue for the 52 weeks ended September 28,
2014, totaled $656.7 million, a decrease of 2.7% compared with the
52 weeks ended September 29, 2013. Excluding the impact of the
subscription-related expense reclassification, operating revenue
decreased 3.7%.
Combined print and digital advertising and marketing services
revenue decreased 4.0% to $442.0 million, retail advertising
decreased 3.4%, classified decreased 7.0% and national increased
3.6%. Retail preprint advertising decreased 1.7%. Combined print
and digital classified employment revenue decreased 1.3%, while
automotive decreased 14.2%, real estate decreased 6.2% and other
classified decreased 6.1%. Digital advertising and marketing
services revenue on a stand-alone basis increased 12.0% to $75.2
million. Mobile advertising revenue increased 27.6%. Print
advertising and marketing services revenue on a stand-alone basis
decreased 6.8%.
Subscription revenue decreased 0.1%. Excluding the impact of the
subscription-related expense reclassification, subscription revenue
decreased 3.9%.
Total digital revenue totaled $90.2 million year to date, up
17.1% compared with a year ago.
Cash costs for the 52 weeks ended September 28, 2014
decreased 2.4% compared to the same period a year ago. Compensation
decreased 4.6%, with the average number of full-time equivalent
employees down 4.8%. Newsprint and ink expense decreased 12.6%,
primarily the result of a reduction in newsprint volume of 11.5%.
Other operating expenses increased 3.0%. Excluding the impact of
the subscription-related expense reclassification, cash costs
decreased 3.7%.
Operating cash flow decreased 3.5% from a year ago to $155.1
million. Operating cash flow margin decreased to 23.6% from 23.8% a
year ago. We recorded $3.0 million of noncash impairment losses in
the current year compared to $171.1 million in the prior year.
Including equity in earnings of associated companies, depreciation
and amortization, as well as unusual matters in both years,
operating income increased to $113.2 million in the 52 weeks ended
September 28, 2014, compared with an operating loss of $57.3
million a year ago.
Non-operating expenses increased 21.2%, as we charged $22.9
million of debt financing costs to expense and recorded a $2.3
million loss related to a litigation settlement in 2014. These
costs were partially offset by a 10.9% decrease in interest expense
in the current year, due to lower debt balances and the refinancing
of the Pulitzer Notes in May 2013, and $6,122,000 of non-operating
income from the change in fair value of stock warrants. We recorded
a $6.9 million gain on sale of an investment in the prior year
period. Income attributable to Lee Enterprises, Incorporated for
the year totaled $6.8 million, compared to a loss of $78.3 million
a year ago.
ADJUSTED EARNINGS AND EPS FOR THE YEAR TO
DATE
The following table summarizes the impact from unusual matters
on income attributable to Lee Enterprises, Incorporated and
earnings per diluted common share. Per share amounts may not add
due to rounding.
52 Weeks Ended
September 28 September 29 2014
2013 (Thousands of Dollars, Except Per Share Data)
Amount Per Share Amount
Per Share Income (loss) attributable to Lee
Enterprises, Incorporated, as reported 6,795 0.13
(78,317 ) (1.51 ) Adjustments: Impairment of
intangible and other assets 2,980 171,094 Gain on sale of
investment, net — (6,909 ) Debt financing and reorganization costs
22,927 646 Other, net 891
7,828
26,798 172,659 Income tax effect of adjustments, net
(11,487 ) (70,991 )
15,311 0.28 101,668 1.96 Unusual
matters related to discontinued operations —
— 1,014
0.02 Income attributable to Lee Enterprises, Incorporated,
as adjusted 22,106 0.41
24,365 0.47
SUBSCRIPTION EXPENSE
RECLASSIFICATION
Certain results, excluding the impact of the
subscription-related expense reclassification, are as follows:
13 Weeks Ended 52 Weeks Ended
Sept 28 Sept 29 Percent Sept 28
Sept 29 Percent
(Thousands of Dollars)
2014 2013 Change 2014
2013 Change Subscription revenue, as reported
46,081 43,447 6.1 176,826 177,056 (0.1 ) Adjustment for
subscription-related expense reclassification (4,442
) — NM (6,707 ) —
NM Subscription revenue, as adjusted
41,639 43,447 (4.2 )
170,119 177,056 (3.9 )
Total operating revenue, as reported 162,094 162,462 (0.2 ) 656,697
674,740 (2.7 ) Adjustment for subscription-related expense
reclassification (4,442 ) — NM
(6,707 ) — NM
Total operating revenue, as adjusted 157,652
162,462 (3.0 ) 649,990
674,740 (3.7 ) Total cash costs, as
reported 128,347 124,959 2.7 501,642 514,013 (2.4 ) Adjustment for
subscription-related expense reclassification (4,442
) — NM (6,707 ) —
NM Total cash costs, as adjusted
123,905 124,959 (0.8 )
494,935 514,013 (3.7 )
DEBT AND FREE CASH FLOW(2)
Debt was reduced $10.3 million in the quarter and by a net
amount of $42.8 million for the fiscal year. As of
September 28, 2014 the principal amount of debt was $804.8
million. As previously announced, on March 31, 2014, we
completed a comprehensive refinancing of our long-term debt and
borrowed an additional $32.0 million of debt in order to pay
related debt refinancing costs, which was also repaid during the
year.
Unlevered free cash flow totaled $32.2 million in the current
year quarter compared to $47.5 million in the same quarter a year
ago. Timing of receipt of income tax refunds was the biggest reason
for the decrease. Unlevered free cash flow totaled $159.2 million
for the fiscal year compared to $166.8 million in the prior
year.
CONFERENCE CALL INFORMATION
As previously announced, we will hold an earnings conference
call and audio webcast later today at 9 a.m. Central Standard 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)
888-397-5339 and entering a conference passcode of 354430 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 1.1
million daily and 1.4 million Sunday, reaching nearly four million
readers in print alone. Lee's websites and mobile and tablet
products attracted 30.0 million unique visitors in September 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
www.lee.net.
FORWARD-LOOKING STATEMENTS — The Private Securities Litigation
Reform Act of 1995 provides a “safe harbor” for forward-looking
statements. This 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;
- Our ability to comply with the
financial covenants in our credit facilities;
- Our ability to refinance our debt as it
comes due;
- That the warrants issued in our
refinancing will not be exercised;
- The impact and duration of adverse
conditions in certain aspects of the economy affecting our
business;
- Changes in advertising demand;
- Potential changes in newsprint, other
commodities and energy costs;
- Interest rates;
- Labor costs;
- Legislative and regulatory
rulings;
- Our ability to achieve planned expense
reductions;
- Our ability to maintain employee and
customer relationships;
- Our ability to manage increased capital
costs;
- Our ability to maintain 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”, “believes”, “expects”, “anticipates”, “intends”, “plans”,
“projects”, “considers” 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 release. We do not undertake to
publicly update or revise our forward-looking statements, except as
required by law.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(UNAUDITED)
13 Weeks Ended 52 Weeks Ended
Sept 28 Sept 29 Percent
Sept 28 Sept 29 Percent
(Thousands of Dollars, Except Per Share
Data)
2014 2013 Change 2014
2013 Change Advertising and marketing
services: Retail 65,815 68,979 (4.6 ) 282,407 292,417 (3.4 )
Classified: Employment 8,576 8,395 2.2 33,123 33,560 (1.3 )
Automotive 7,238 8,350 (13.3 ) 29,547 34,424 (14.2 ) Real estate
4,586 4,920 (6.8 ) 17,699 18,862 (6.2 ) All other
11,618 11,566 0.5
44,298 47,197 (6.1 ) Total classified
32,018 33,231 (3.6 ) 124,667 134,043 (7.0 ) National 5,988 5,672
5.6 24,867 23,999 3.6 Niche publications and other
2,787 2,433 14.5
10,060 10,081 (0.2 ) Total advertising
and marketing services revenue 106,608
110,315 (3.4 ) 442,001
460,540 (4.0 ) Subscription 46,081 43,447 6.1 176,826
177,056 (0.1 ) Commercial printing 2,880 2,945 (2.2 ) 12,050 12,625
(4.6 ) Digital services and other 6,525
5,755 13.4 25,820
24,519 5.3 Total operating revenue
162,094 162,462 (0.2 )
656,697 674,740 (2.7 ) Operating
expenses: Compensation 61,511 62,327 (1.3 ) 243,054 254,831 (4.6 )
Newsprint and ink 8,874 10,123 (12.3 ) 37,994 43,481 (12.6 ) Other
operating expenses 57,621 52,090 10.6 219,329 213,021 3.0 Workforce
adjustments 341 419 (18.6
) 1,265 2,680 (52.8 )
Cash costs 128,347 124,959
2.7 501,642 514,013
(2.4 ) Operating cash flow 33,747 37,503 (10.0 )
155,055 160,727 (3.5 ) Depreciation 5,220 5,179 0.8 20,920 21,302
(1.8 ) Amortization 6,880 5,590 23.1 27,591 34,225 (19.4 ) Loss
(gain) on sales of assets, net 284 87 NM (1,338 ) 110 NM Impairment
of intangible and other assets 2,644 171,094 (98.5 ) 2,980 171,094
(98.3 ) Equity in earnings of associated companies
1,949 2,015 (3.3 ) 8,297
8,685 (4.5 ) Operating income (loss)
20,668 (142,432 ) NM
113,199 (57,319 ) NM
CONSOLIDATED STATEMENTS OF OPERATIONS, continued
13 Weeks Ended 52 Weeks Ended
Sept 28 Sept 29 Percent Sept 28 Sept 29
Percent
(Thousands of Dollars and Shares, Except
Per Share Data)
2014 2013 Change 2014
2013 Change Non-operating income (expense):
Financial income 79 81 (2.5 ) 385 300 28.3 Interest expense (18,691
) (21,056 ) (11.2 ) (79,724 ) (89,447 ) (10.9 ) Debt financing
costs (992 ) (88 ) NM (22,927 ) (646 ) NM Other, net
4,607 411 NM 3,028
7,889 (61.6 )
(14,997 ) (20,652 ) (27.4 ) (99,238 )
(81,904 ) 21.2 Income (loss) before income
taxes 5,671 (163,084 ) NM 13,961 (139,223 ) NM Income tax expense
(benefit) 2,296 (74,548 ) NM
6,290 (62,745 ) NM
Income (loss) from continuing operations 3,375 (88,536 ) NM 7,671
(76,478 ) NM Discontinued operations, net of income taxes
— 1 NM —
(1,246 ) NM Net income (loss) 3,375
(88,535 ) NM 7,671 (77,724 ) NM Net income attributable to
non-controlling interests (213 ) (162 )
31.5 (876 ) (593 ) 47.7
Income (loss) attributable to Lee Enterprises, Incorporated
3,162 (88,697 ) NM
6,795 (78,317 ) NM Income (loss)
from continuing operations attributable to Lee Enterprises,
Incorporated 3,162 (88,698 ) NM
6,795 (77,071 ) NM
Earnings (loss) per common share: Basic: Continuing
operations 0.06 (1.71 ) NM 0.13 (1.49 ) NM Discontinued operations
— — NM
— (0.02 ) NM
0.06 (1.71 ) NM
0.13 (1.51 ) NM Diluted:
Continuing operations 0.06 (1.71 ) NM 0.13 (1.49 ) NM Discontinued
operations — — NM
— (0.02 ) NM
0.06 (1.71 ) NM
0.13 (1.51 ) NM Average
common shares: Basic 52,442 51,916 52,273 51,833 Diluted
53,988 51,916
53,736 51,833
SELECTED CONSOLIDATED
FINANCIAL INFORMATION
(UNAUDITED)
13 Weeks Ended 52 Weeks
Ended Sept 28 Sept 29 Sept 28 Sept 29
(Thousands of Dollars)
2014 2013 2014 2013
Advertising and marketing services 106,608 110,315
442,001 460,540 Subscription 46,081 43,447 176,826 177,056 Other
9,405 8,700 37,870 37,144
Total operating revenue 162,094 162,462
656,697 674,740 Compensation 61,511
62,327 243,054 254,831 Newsprint and ink 8,874 10,123 37,994 43,481
Other operating expenses 57,621 52,090 219,329 213,021 Depreciation
and amortization 12,100 10,769 48,511 55,527 Loss (gain) on sales
of assets, net 284 87 (1,338 ) 110 Impairment of goodwill and other
assets 2,644 171,094 2,980 171,094 Workforce adjustments
341 419 1,265 2,680 Total
operating expenses 143,375 306,909 551,795 740,744 Equity in
earnings of associated companies 1,949 2,015
8,297 8,685 Operating income (loss)
20,668 (142,432 ) 113,199 (57,319 ) Adjusted to exclude:
Depreciation and amortization 12,100 10,769 48,511 55,527 Loss
(gain) on sales of assets, net 284 87 (1,338 ) 110 Impairment of
intangible and other assets 2,644 171,094 2,980 171,094 Equity in
earnings of associated companies (1,949 ) (2,015 )
(8,297 ) (8,685 ) Operating cash flow 33,747 37,503 155,055
160,727 Add: Ownership share of TNI and MNI EBITDA (50%) 2,697
2,451 11,236 11,761 Adjusted to exclude: Stock compensation
400 152 1,481 1,261
Adjusted EBITDA(2) 36,844 40,106 167,772 173,749 Adjusted to
exclude: Ownership share of TNI and MNI EBITDA (50%) (2,697 )
(2,451 ) (11,236 ) (11,761 ) Add (deduct): Distributions from TNI
and MNI 2,342 3,219 9,996 11,398 Capital expenditures, net of
insurance proceeds (3,620 ) (2,905 ) (11,824 ) (9,740 ) Pension
contributions (800 ) — (1,522 ) (6,016 ) Cash income tax refunds
(payments) 89 9,486 6,022
9,126 Unlevered free cash flow (2) 32,158 47,455 159,208
166,756 Add (deduct): Financial income 79 81 385 300 Interest
expense to be settled in cash (18,692 ) (19,871 ) (77,330 ) (84,012
) Debt financing costs paid (311 ) (305 )
(31,587 ) (1,071 ) Free cash flow (deficit) 13,234
27,360 50,676 81,973
SELECTED LEE LEGACY(2)
ONLY FINANCIAL INFORMATION
(UNAUDITED)
13 Weeks Ended 52 Weeks
Ended Sept 28 Sept 29
Sept 28 Sept 29
(Thousands of Dollars)
2014 2013 2014
2013 Advertising and marketing services
75,408 76,920 306,818 317,161 Subscription 30,492 27,307 113,992
110,335 Other 8,249 7,632
33,208 31,079 Total operating revenue
114,149 111,859
454,018 458,575 Compensation 45,606 46,059
180,641 185,470 Newsprint and ink 6,461 7,202 27,084 30,195 Other
operating expenses 32,265 27,163 118,971 112,768 Depreciation and
amortization 8,529 6,722 33,163 27,291 Loss (gain) on sales of
assets, net 281 82 (1,362 ) 134 Impairment of goodwill and other
assets 42 523 378 523 Workforce adjustments 116
360 551 1,546
Total operating expenses 93,300 88,111 359,426 357,927
Equity in earnings of associated companies 1,152
852 3,384 3,509
Operating income 22,001 24,600 97,976 104,157 Adjusted to
exclude: Depreciation and amortization 8,529 6,722 33,163 27,291
Loss (gain) on sales of assets, net 281 82 (1,362 ) 134 Impairment
of intangible and other assets 42 523 378 523 Equity in earnings of
associated companies (1,152 ) (852 )
(3,384 ) (3,509 ) Operating cash flow 29,701 31,075
126,771 128,596 Add: Ownership share of MNI EBITDA (50%) 1,795
1,183 5,905 5,964 Adjusted to exclude: Stock compensation
400 152 1,481
1,261 Adjusted EBITDA 31,896 32,410 134,157 135,821
Adjusted to exclude: Ownership share of MNI EBITDA (50%) (1,795 )
(1,183 ) (5,905 ) (5,964 ) Add (deduct): Distributions from MNI
1,000 1,250 4,750 5,250 Capital expenditures, net of insurance
proceeds (2,543 ) (2,586 ) (9,688 ) (7,713 ) Pension contributions
(70 ) — (87 ) — Cash income tax refunds (payments) 51 (5 ) (266 )
(365 ) Intercompany charges not settled in cash (3,381 ) (1,958 )
(9,678 ) (8,396 ) Other — —
(2,000 ) (2,000 ) Unlevered free cash flow
25,158 27,928 111,283 116,633 Add (deduct): Financial income 79 81
385 300 Interest expense to be settled in cash (18,095 ) (18,187 )
(73,491 ) (74,641 ) Debt financing costs paid (311 )
(40 ) (31,579 ) (140 ) Free cash flow
6,831 9,782 6,598
42,152
SELECTED PULITZER(2) ONLY
FINANCIAL INFORMATION
(UNAUDITED)
13 Weeks Ended 52 Weeks
Ended Sept 28 Sept 29 Sept 28
Sept 29
(Thousands of Dollars)
2014 2013 2014
2013 Advertising and marketing services 31,200 33,395
135,183 143,379 Subscription 15,589 16,140 62,834 66,721 Other
1,156 1,068 4,662
6,065 Total operating revenue 47,945
50,603 202,679 216,165
Compensation 15,905 16,268 62,413 69,361 Newsprint and ink 2,413
2,921 10,910 13,286 Other operating expenses 25,356 24,927 100,358
100,253 Depreciation and amortization 3,571 4,047 15,348 28,236
Loss (gain) on sales of assets, net 3 5 24 (24 ) Impairment of
goodwill and other assets 2,602 170,571 2,602 170,571 Workforce
adjustments 225 59 714
1,134 Total operating expenses 50,075 218,798 192,369
382,817 Equity in earnings of associated companies
797 1,163 4,913 5,176
Operating income (loss) (1,333 ) (167,032 ) 15,223 (161,476 )
Adjusted to exclude: Depreciation and amortization 3,571 4,047
15,348 28,236 Loss (gain) on sales of assets, net 3 5 24 (24 )
Impairment of intangible and other assets 2,602 170,571 2,602
170,571 Equity in earnings of associated companies
(797 ) (1,163 ) (4,913 ) (5,176 ) Operating cash flow
4,046 6,428 28,284 32,131 Add: Ownership share of TNI EBITDA (50%)
902 1,268 5,331
5,797 Adjusted EBITDA 4,948 7,696 33,615 37,928 Adjusted to
exclude: Ownership share of TNI EBITDA (50%) (902 ) (1,268 ) (5,331
) (5,797 ) Add (deduct): Distributions from TNI 1,342 1,969 5,246
6,148 Capital expenditures, net of insurance proceeds (1,077 ) (319
) (2,136 ) (2,027 ) Pension contributions (730 ) — (1,435 ) (6,016
) Cash income tax refunds (payments) 38 9,491 6,288 9,491
Intercompany charges not settled in cash 3,381 1,958 9,678 8,396
Other — — 2,000
2,000 Unlevered free cash flow 7,000 19,527 47,925 50,123
Add (deduct): Interest expense to be settled in cash (597 ) (1,684
) (3,839 ) (9,371 ) Debt financing costs paid —
(265 ) (8 ) (931 ) Free cash flow
6,403 17,578 44,078
39,821
REVENUE BY REGION
13 Weeks Ended
52 Weeks Ended Sept 28 Sept 29 Percent
Sept 28 Sept 29 Percent
(Thousands of Dollars)
2014 2013 Change 2014
2013 Change Midwest 99,685 101,355 (1.6 )
408,526 423,823 (3.6 ) Mountain West 33,760 32,994 2.3 132,319
134,173 (1.4 ) West 11,053 10,820 2.2 43,928 44,870 (2.1 )
East/Other 17,596 17,293
1.8 71,924 71,874
0.1 Total 162,094 162,462
(0.2 ) 656,697 674,740
(2.7 )
SELECTED BALANCE SHEET
INFORMATION
September 28 September 29
(Thousands of Dollars)
2014 2013 Cash 16,704 17,562 Debt
(Principal Amount) 804,750 847,500
SELECTED STATISTICAL
INFORMATION
13 Weeks Ended
52 Weeks Ended Sept 28
Sept 29 Percent Sept 28
Sept 29 Percent
2014 2013 Change
2014 2013 Change Capital
expenditures, net of insurance proceeds (Thousands of Dollars)
3,620 2,905 24.6 11,824 9,740 21.4 Newsprint volume (Tonnes) 13,691
15,334 (10.7 ) 58,007 65,560 (11.5 ) Average full-time equivalent
employees 4,443 4,596 (3.3 ) 4,515 4,740 (4.8 ) Shares outstanding
at end of period (Thousands of Shares)
53,747 52,434 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
most recent reports on Form 10-Q and 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 Aug 2024 to Sep 2024
Lee Enterprises (NYSE:LEE)
Historical Stock Chart
From Sep 2023 to Sep 2024