Lee Enterprises, Incorporated (NYSE: LEE), a major provider of
local news, information and advertising in 50 markets, today
announced certain summary preliminary results(1) for its fourth
fiscal quarter and fiscal year ended September 27, 2015.
“The September 2015 quarter marks another strong operating cash
flow(2) performance, with an improvement of 5.0% over the same
quarter last year,” Mary Junck, chairman and chief executive
officer said. “Fourth quarter EBITDA(2) increased 7.5% over
prior year to $40.0 million and totaled $163.3 million for the
year.”
"We also achieved outstanding results from our strategic
business transformation initiatives and cost management," she
added. "In the September quarter, we reduced cash costs(2) on a
comparable basis after excluding unusual matters, 7.8%, or $9.8
million, exceeding earlier guidance of 5.5%-6.0%."
Junck also noted the following financial highlights:
- Total digital revenue grew 23.9% for
the quarter.
- Overall revenue on a comparable basis
decreased 4.4% in fourth quarter, which is an improvement from the
June quarterly trend. Total advertising and marketing services
revenue decreased 9.0%.
- Fourth quarter subscription revenue,
excluding the subscription-related expense reclassification
increased 6.1%.
- Debt was reduced $19.1 million in the
quarter and $78.9 million for the fiscal year. As of
September 27, 2015, the principal amount of debt was $725.9
million.
Fourth quarter and year-end results for fiscal year 2015 will be
released December 10, 2015 and will include an audio webcast and
conference call. The annual report on Form 10-K will be filed on
December 11, 2015.
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES(3)
(UNAUDITED)
13 Weeks Ended 52 Weeks Ended
(Thousands of Dollars) Sept 272015 Sept 282014
Sept 272015 Sept 282014
Advertising and marketing services 97,318 106,958 412,099
443,247 Subscription 48,570 46,081 194,474 176,826 Other
10,206 10,134 41,965
40,802 Total operating revenue 156,094
163,173 648,538 660,875
Compensation 57,413 61,511 239,028 243,054 Newsprint and ink
6,335 8,874 30,263 37,994 Other operating expenses 55,518 58,700
229,160 223,507 Workforce adjustments 1,396
341 3,304 1,265
Cash
costs 120,662 129,426
501,755 505,820 Depreciation and amortization
11,106 12,100 45,563 48,511 Loss (gain) on sales of assets, net
(328 ) 284 282 (1,338 ) Impairment of goodwill and other assets
— 2,644 (176 )
2,980 Total operating expenses 131,440 144,454 547,424
555,973 Equity in earnings of TNI(4) and MNI(4) 2,141
1,949 8,254 8,297
Operating income 26,795 20,668 109,368 113,199 Adjusted to
exclude: Depreciation and amortization 11,106 12,100 45,563 48,511
Loss (gain) on sales of assets, net (328 ) 284 282 (1,338 )
Impairment of intangible and other assets — 2,644 (176 ) 2,980
Equity in earnings of TNI and MNI (2,141 ) (1,949 )
(8,254 ) (8,297 )
Operating cash flow
35,432 33,747 146,783 155,055 Add: Ownership share of TNI and MNI
EBITDA (50%) 2,814 2,697 11,246 11,236 Adjusted to exclude:
Workforce adjustments 1,396 341 3,304 1,265 Stock compensation
326 400 1,971
1,481
EBITDA 39,968
37,185 163,304 169,037
Comparable basis results, excluding the impact of the
subscription-related expense reclassification are as follows:
13 Weeks Ended 52 Weeks Ended
(Thousands of Dollars) Sept 272015 Sept 282014
Sept 272015 Sept 282014 Subscription revenue, as
reported 48,570 46,081 194,474 176,826 Adjustment for
subscription-related expense reclassification (4,376 )
(4,442 ) (18,300 ) (6,707 )
Subscription revenue, as adjusted 44,194
41,639 176,174 170,119
Total cash cost excluding workforce adjustments 119,266
129,085 498,451 504,555 Adjustment for subscription-related expense
reclassification (4,376 ) (4,442 )
(18,300 ) (6,707 ) Total cash cost excluding workforce
adjustments, as adjusted 114,890 124,643
480,151 497,848
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 1.0
million daily and of 1.4 million Sunday, reaching over three
million readers in print alone. 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 and subscription
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.
NOTES
(1) This report is a preliminary report of certain unaudited
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
this release:
--
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.
--
EBITDA is defined as operating income (loss), plus depreciation,
amortization, loss (gain) on sale of assets impairment charges,
workforce adjustment costs, stock compensation and 50% of EBITDA
from TNI and MNI, minus equity in earnings of TNI and MNI and
curtailment gains.
--
Operating Cash Flow is defined as operating income (loss) plus
depreciation, amortization, loss (gain) on sale of assets and
impairment charges, minus equity in earnings of TNI and MNI and
curtailment gains. 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.
(4) The Company owns a 50% interest in TNI Partners, in
Tucson, AZ, and a 50% interest in Madison Newspapers, Inc., in
Madison, WI.
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version on businesswire.com: http://www.businesswire.com/news/home/20151112006341/en/
Lee Enterprises, IncorporatedCharles Arms, 563-383-2100Director
of CommunicationsIR@lee.net
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