Lee Enterprises, Incorporated (NYSE:LEE), a major provider of local
news, information and advertising in 49 markets, today reported
earnings(1) of $2.5 million for its second fiscal quarter ended
March 25, 2018, or 4 cents per diluted common share. For the
same quarter a year ago, earnings totaled $6.4 million, or 11 cents
per diluted common share. Excluding the adjustment related to the
change in fair value of the stock warrants, adjusted earnings per
diluted common share(2) totaled 3 cents in both the current year
quarter and the prior year quarter.
"Trends in virtually all of our revenue categories improved, and
we are pleased with the positive momentum that we generated in the
second quarter," said Kevin Mowbray, President and Chief Executive
Officer. "Digital advertising revenue increased 2.7% and
represented 31.9% of total advertising revenue for the quarter.
This was driven by strong performance in digital retail and a 25.5%
increase in programmatic advertising," said Mowbray.
"Subscription revenue increased 2.1% in the quarter through our
premium content offerings and acquisitions in the prior year. Total
revenue decreased 4.2% in the second quarter compared to the same
quarter in 2017 and was down 6.3% on same-property basis," Mowbray
said.
"Revenue at TownNews.com, excluding intercompany revenue,
increased 17.0% in the quarter and over the last twelve months on a
standalone basis, revenue totaled $17.3 million," Mowbray added.
"Townnews.com further strengthened its position as the leading
multimedia content management platform through the acquisition of
Field59, a producer of video management and streaming solutions. We
are optimistic that the acquisition will accelerate top-line
revenue growth at TownNews.com," Mowbray said.
Mowbray also noted the following financial highlights for the
quarter:
- Digital retail advertising, which represented 63% of total
digital advertising in the March quarter, grew 6.5% in the quarter,
driven by advertising from local retailers.
- Monthly visits to Lee mobile, tablet, desktop and app sites
averaged 77.5 million, an increase of 11.6% over the prior year
quarter.
- Total advertising and marketing services revenue decreased 7.7%
in the quarter.
"Cash costs(2) in the quarter, excluding workforce
adjustments and other, were down 3.5% compared to the prior year,"
said Vice President, Chief Financial Officer and Treasurer Ron
Mayo. "On a same property basis, cash costs excluding workforce
adjustments and other were down 6.0%.
"For fiscal 2018, we expect cash cost excluding
workforce adjustments and other, to decrease 6.0-6.5% on a same
property basis," Mayo added.
"Our revenue and cost performance for the quarter resulted in
maintaining our industry-leading margins, and we expect this to
continue throughout fiscal year 2018.
"The company continues to aggressively reduce debt," Mayo added.
"Debt reduction in the March quarter was $15.6 million and totaled
$68.6 million over the last twelve months. Interest expense
decreased $1.4 million, or 9.3%, in the quarter and $5.5 million,
or 9.1%, in the past twelve months.
"Adjusted EBITDA(2) over the last twelve months totaled
$139.7 million. For the quarter, Adjusted EBITDA totaled $26.8
million compared to $28.8 million in the same quarter of the prior
year. As of March 25, 2018, the principal amount of debt
was $516.3 million," Mayo said.
"Leverage net of cash was 3.61 times Adjusted EBITDA compared to
3.89 times Adjusted EBITDA one year ago," he added.
SECOND QUARTER OPERATING RESULTS
Operating revenue for the 13 weeks ended March 25, 2018
totaled $127.8 million, a decrease of 4.2% compared with a year
ago. On a same property basis, total operating revenue for the 13
weeks ended March 25, 2018 decreased 6.3%.
Advertising and marketing services revenue combined decreased
7.7% to $71.6 million. Digital advertising and marketing services
revenue increased 2.7% to $22.9 million and increased 2.2% on a
same property basis. Digital retail advertising, grew 6.5% in the
quarter. Digital advertising in the quarter represented 31.9% of
total advertising revenue.
Total digital revenue, including digital advertising and digital
services, was $26.7 million for the quarter, up 3.6% compared with
a year ago and up 3.2% on a same property basis. Mobile, tablet,
desktop and app sites, including TNI and MNI(3), attracted monthly
average visits of 77.5 million for the 13 weeks ended
March 25, 2018, an increase of 11.6% over the prior year.
Subscription revenue increased 2.1% in the current year quarter
and decreased 0.4% on a same property basis. Average daily
newspaper circulation, including TNI and MNI and digital
subscribers, totaled 0.8 million in the 13 weeks ended
March 25, 2018. Sunday circulation totaled 1.1 million. Price
increases and additional revenue from premium content partially
offset revenue lost from lower print circulation volumes.
Other revenue, which consists of digital services, commercial
printing, revenue from delivery of third party products, decreased
5.2% in the current year quarter. The decrease was due to volume
declines in commercial printing and third party delivery and was
partially offset by an increase in revenue at TownNews.com.
Excluding intercompany revenue, revenue at TownNews.com, the
majority of which is included in Other revenue, increased to $3.5
million, or 17.0% in the quarter. On a standalone basis, revenue at
TownNews.com totaled $17.3 million for the last twelve months.
Operating expenses for the 13 weeks ended March 25, 2018
decreased 3.6%. Cash costs, excluding workforce adjustments and
other, decreased 3.5% compared to the prior year quarter and
decreased 6.0% on a same property basis. Compensation decreased
9.4% on a same property basis, primarily as a result of a reduction
in staffing levels. Newsprint and ink expense decreased 9.2% on a
same property basis due to lower volumes from unit declines and
using lower basis weight newsprint. Other operating expenses
decreased 1.9% on a same property basis, primarily driven by lower
delivery and other print-related costs and offset in part by higher
costs associated with growing digital revenue and increases in
other cash costs from outsourcing.
Workforce adjustment and other costs totaled $1.8 million and
$2.4 million in the 2018 quarter and 2017 quarter,
respectively.
Including equity in earnings of associated companies,
depreciation and amortization, gain on sales of assets, and
workforce adjustments and other, operating income totaled $17.3
million in the current year quarter, compared with $18.8 million a
year ago.
In the 13 weeks ended March 25, 2018, interest expense
decreased 9.3%, or $1.4 million, due to lower debt balances. The
company recognized non-operating income of $0.6 million in the
current year quarter compared to $4.3 million in the same quarter
of the prior year due to a change in fair value of stock warrants.
Lee recognized $1.2 million of debt refinancing and administrative
costs in the current quarter and $1.1 million in the same quarter
of the prior year. The vast majority of the debt refinancing and
administrative costs represent amortization of refinancing costs
paid in 2014.
Income attributable to Lee Enterprises, Incorporated for the
quarter totaled $2.2 million, compared with income of $6.1 million
a year ago. Adjusted EBITDA for the quarter was $26.8 million.
ADJUSTED EARNINGS AND EPS FOR THE QUARTER
The following table summarizes the impact from warrant fair
value adjustments on income attributable to Lee Enterprises,
Incorporated and earnings per diluted common share. Per share
amounts may not add due to rounding.
|
|
13 Weeks Ended |
|
| |
March 25 2018 |
|
|
March 26 2017 |
|
|
(Thousands of Dollars, Except Per Share Data) |
Amount |
|
|
Per Share |
|
|
Amount |
|
|
Per Share |
|
| |
|
|
|
| Income attributable to
Lee Enterprises, Incorporated, as reported |
2,239 |
|
|
0.04 |
|
|
6,128 |
|
|
0.11 |
|
| Adjustments (tax
affected): |
|
|
|
|
|
|
|
| Warrants
fair value adjustment |
(555 |
) |
|
|
|
(4,283 |
) |
|
|
|
|
(555 |
) |
|
(0.01 |
) |
|
(4,283 |
) |
|
(0.08 |
) |
|
Income attributable to Lee Enterprises, Incorporated, as
adjusted |
1,684 |
|
|
0.03 |
|
|
1,845 |
|
|
0.03 |
|
YEAR TO DATE OPERATING RESULTS(4)
Operating revenue for 26 weeks ended March 25, 2018 totaled
$271.6 million, a decrease of 5.5% compared with the 26 weeks ended
March 26, 2017. On a same property basis, total operating
revenue for the 26 weeks ended March 25, 2018 decreased
7.7%.
Advertising and marketing services revenue combined decreased
8.4% to $156.2 million, retail advertising decreased 8.4%,
classified decreased 11.5% and national increased 3.2%. Digital
advertising and marketing services revenue on a standalone basis
increased 2.8% to $46.5 million. Digital advertising represented
29.7% of total advertising.
Total digital revenue was $53.9 million in 2018, up 3.4%
compared to 2017.
Subscription revenue increased 0.4% in 2018 compared to
2017.
Operating expenses for 2018 decreased 5.7%. Cash costs,
excluding workforce adjustments and other, decreased 5.1% compared
to the prior year and decreased 7.5% on a same property basis.
Compensation decreased 9.6% on a same property basis, primarily as
a result of a decrease in the average number of full-time
equivalent employees of 12.5%. Newsprint and ink expense decreased
12.5%, due to a reduction in newsprint volume partially offset by
higher prices. Other operating expenses decreased 4.6%.
Including equity in earnings of associated companies,
depreciation and amortization, gain on sales of assets, curtailment
gains, as well as workforce adjustments and other in both years,
operating income was $47.8 millions in 2018, compared with $50.2
millions a year ago.
In the 26 weeks ended March 25, 2018 interest expense
decreased 9.0%, or $2.7 million, due to lower debt balances, and we
recognized non-operating income of $0.1 million in 2018 compared to
$7.4 million for the change in fair value of stock warrants in the
prior year. The fair value of the warrants fluctuates with the
market value of our common stock. In the current fiscal year,
$2.3 million of debt financing and administrative costs were
expensed compared to $2.0 million in the same period a year ago.
Debt financing and administrative costs are mainly amortization of
costs paid as part of our refinancing in 2014.
Income attributable to Lee Enterprises, Incorporated for the
year totaled $37.2 million, compared to income of $18.3 million a
year ago.
Adjusted EBITDA for the 26 weeks ended March 25, 2018 was
$67.1 million, compared to $72.1 million for the 26 weeks ended
March 25, 2018.
ADJUSTED EARNINGS AND EPS FOR THE YEAR TO DATE
On December 22, 2017, comprehensive tax legislation commonly
referred to as the Tax Cuts and Jobs Act (the “2017 Tax Act”) was
signed into law. Among other provisions, the 2017 Tax Act reduces
the federal statutory corporate income tax rate from 35% to 21% in
December 2017. The reduction of the corporate tax rate will cause
us to adjust our deferred tax assets and liabilities to the lower
federal base rate of 21%. The transitional impact from revaluing
our deferred tax assets and liabilities resulted in a provisional
net decrease in income tax expense of $24,872,000 in the 26 weeks
ended March 25, 2018.
The following table summarizes the estimated impact from the
2017 Tax Act as well as the warrant fair value adjustments on
income attributable to Lee Enterprises, Incorporated and earnings
per diluted common share.
|
|
26 Weeks Ended |
|
| |
March 25 2018 |
|
|
March 26 2017 |
|
|
(Thousands of Dollars, Except Per Share Data) |
Amount |
|
|
Per Share |
|
|
Amount |
|
|
Per Share |
|
| |
|
|
|
| Income attributable to
Lee Enterprises, Incorporated, as reported |
37,242 |
|
|
0.67 |
|
|
18,301 |
|
|
0.33 |
|
| Adjustments: |
|
|
|
|
|
|
|
| Warrants
fair value adjustment |
(124 |
) |
|
|
|
(7,378 |
) |
|
|
| Income tax effect of
adjustments, net |
(24,872 |
) |
|
|
|
— |
|
|
|
|
|
(24,996 |
) |
|
(0.45 |
) |
|
(7,378 |
) |
|
(0.13 |
) |
|
Income attributable to Lee Enterprises, Incorporated, as
adjusted |
12,246 |
|
|
0.22 |
|
|
10,923 |
|
|
0.20 |
|
DEBT AND FREE CASH FLOW
Debt was reduced $15.6 million in the quarter and $68.6 million
during the last twelve months. As of March 25, 2018, the
principal amount of debt was $516.3 million. The principal amount
of our debt, net of cash, is 3.61 times our adjusted EBITDA for the
past 12 months ended March 25, 2018.
At March 25, 2018, including $12.3 million in cash and
availability under our revolving facility(3), liquidity totaled
$46.1 million compared to $30.9 million of required debt principal
payments over the next twelve months. Our revolving facility
expires December 28, 2018.
CONFERENCE CALL INFORMATION
As previously announced, we will hold an earnings conference
call and audio webcast today at 9 a.m. Central Time. The live
webcast will be accessible at www.lee.net and will be available for
replay two hours later. Several analysts have been invited to ask
questions on the call. Questions from other participants may be
submitted by participating in the webcast. The call also may be
monitored on a listen-only conference line by dialing (toll free)
888-481-2848 and entering a conference passcode of 493607 at least
five minutes before the scheduled start. Participants on the
listen-only line will not have the opportunity to ask
questions.
ABOUT LEE
Lee Enterprises is a leading provider of local news and
information, and a major platform for advertising, with daily
newspapers, rapidly growing digital products and nearly 300 weekly
and specialty publications serving 49 markets in 21 states. Year to
date, Lee's newspapers have average circulation of 0.8 million
daily and 1.1 million Sunday, and are estimated to reach almost
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;
- Our ability to manage declining print revenue;
- 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;
- Changes in technology that impact our ability to deliver
digital advertising;
- Potential changes in newsprint, other commodities and energy
costs;
- Interest rates;
- Labor costs;
- Legislative and regulatory rulings, including new tax
legislation;
- 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.
Contact:IR@lee.net(563) 383-2100
CONSOLIDATED STATEMENTS OF
OPERATIONS(UNAUDITED)
|
|
13 Weeks Ended |
|
26 Weeks Ended |
|
|
(Thousands of Dollars, Except Per Share Data) |
March 25 2018 |
|
March 26 2017 |
|
Percent Change |
|
March 25 2018 |
|
March 26 2017 |
|
Percent Change |
|
| |
|
|
|
|
|
|
|
|
| Advertising and
marketing services |
71,553 |
|
77,533 |
|
(7.7 |
) |
156,213 |
|
170,568 |
|
(8.4 |
) |
| Subscription |
45,972 |
|
45,009 |
|
2.1 |
|
94,241 |
|
93,896 |
|
0.4 |
|
|
Other |
10,280 |
|
10,845 |
|
(5.2 |
) |
21,136 |
|
22,912 |
|
(7.8 |
) |
| Total
operating revenue |
127,805 |
|
133,387 |
|
(4.2 |
) |
271,590 |
|
287,376 |
|
(5.5 |
) |
| Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
Compensation |
48,656 |
|
52,414 |
|
(7.2 |
) |
99,567 |
|
107,470 |
|
(7.4 |
) |
| Newsprint
and ink |
5,640 |
|
6,200 |
|
(9.0 |
) |
11,478 |
|
13,093 |
|
(12.3 |
) |
| Other
operating expenses |
49,315 |
|
48,756 |
|
1.1 |
|
99,671 |
|
101,533 |
|
(1.8 |
) |
|
Cash costs excluding workforce adjustments and other |
103,611 |
|
107,370 |
|
(3.5 |
) |
210,716 |
|
222,096 |
|
(5.1 |
) |
| Workforce
adjustments and other |
1,816 |
|
2,405 |
|
(24.5 |
) |
2,284 |
|
2,470 |
|
(7.5 |
) |
|
Cash costs |
105,427 |
|
109,775 |
|
(4.0 |
) |
213,000 |
|
224,566 |
|
(5.2 |
) |
| |
22,378 |
|
23,612 |
|
(5.2 |
) |
58,590 |
|
62,810 |
|
(6.7 |
) |
| Depreciation |
3,685 |
|
4,008 |
|
(8.1 |
) |
7,441 |
|
8,079 |
|
(7.9 |
) |
| Amortization |
4,331 |
|
6,310 |
|
(31.4 |
) |
8,627 |
|
12,619 |
|
(31.6 |
) |
| Gain on sales of assets
and other, net |
(1,300 |
) |
(3,783 |
) |
(65.6 |
) |
(1,297 |
) |
(3,716 |
) |
(65.1 |
) |
| Equity in earnings of
associated companies |
1,608 |
|
1,729 |
|
(7.0 |
) |
3,991 |
|
4,417 |
|
(9.6 |
) |
|
Operating income |
17,270 |
|
18,806 |
|
(8.2 |
) |
47,810 |
|
50,245 |
|
(4.8 |
) |
| Non-operating income
(expense): |
|
|
|
|
|
|
| Interest
expense |
(13,274 |
) |
(14,637 |
) |
(9.3 |
) |
(26,924 |
) |
(29,588 |
) |
(9.0 |
) |
| Debt
financing and administrative costs |
(1,217 |
) |
(1,075 |
) |
13.2 |
|
(2,313 |
) |
(2,026 |
) |
14.2 |
|
| Other,
net |
681 |
|
4,427 |
|
(84.6 |
) |
524 |
|
7,597 |
|
(93.1 |
) |
|
|
(13,810 |
) |
(11,285 |
) |
22.4 |
|
(28,713 |
) |
(24,017 |
) |
19.6 |
|
| Income before income
taxes |
3,460 |
|
7,521 |
|
(54.0 |
) |
19,097 |
|
26,228 |
|
(27.2 |
) |
| Income tax expense
(benefit) |
927 |
|
1,144 |
|
(19.0 |
) |
(18,763 |
) |
7,410 |
|
NM |
|
|
Net income |
2,533 |
|
6,377 |
|
(60.3 |
) |
37,860 |
|
18,818 |
|
NM |
|
| Net
income attributable to non-controlling interests |
(294 |
) |
(249 |
) |
18.1 |
|
(618 |
) |
(517 |
) |
19.5 |
|
| Income
attributable to Lee Enterprises, Incorporated |
2,239 |
|
6,128 |
|
(63.5 |
) |
37,242 |
|
18,301 |
|
NM |
|
| |
|
|
|
|
|
|
|
| Earnings
per common share: |
|
|
|
|
|
|
Basic |
0.04 |
|
0.11 |
|
NM |
|
0.68 |
|
0.34 |
|
NM |
|
|
Diluted |
0.04 |
|
0.11 |
|
NM |
|
0.67 |
|
0.33 |
|
NM |
|
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES(UNAUDITED)
The table below reconciles the non-GAAP financial performance
measure of adjusted EBITDA to net income, its most directly
comparable GAAP measure:
|
|
13 Weeks Ended |
|
26 Weeks Ended |
|
52 Weeks Ended |
|
|
(Thousands of Dollars) |
March 25 2018 |
|
March 26 2017 |
|
March 25 2018 |
|
March 26 2017 |
|
March 25 2018 |
|
| |
|
|
|
|
|
| Net Income |
2,533 |
|
6,377 |
|
37,860 |
|
18,818 |
|
47,647 |
|
| Adjusted to
exclude |
|
|
|
|
|
| Income
tax expense (benefit) |
927 |
|
1,144 |
|
(18,763 |
) |
7,410 |
|
(14,562 |
) |
|
Non-operating expenses (income), net |
13,810 |
|
11,285 |
|
28,713 |
|
24,017 |
|
57,027 |
|
| Equity in
earnings of TNI and MNI |
(1,608 |
) |
(1,729 |
) |
(3,991 |
) |
(4,417 |
) |
(7,183 |
) |
| Gain on
sale of assets and other, net |
(1,300 |
) |
(3,783 |
) |
(1,297 |
) |
(3,716 |
) |
(1,248 |
) |
|
Impairment of intangible and other assets |
— |
|
— |
|
— |
|
— |
|
2,517 |
|
|
Depreciation and amortization |
8,016 |
|
10,318 |
|
16,068 |
|
20,698 |
|
36,652 |
|
| Workforce
adjustments and other |
1,816 |
|
2,405 |
|
2,284 |
|
2,470 |
|
7,337 |
|
| Stock
compensation |
497 |
|
559 |
|
1,016 |
|
1,083 |
|
2,021 |
|
| Add: |
|
|
|
|
|
| Ownership
share of TNI and MNI EBITDA (50%) |
2,086 |
|
2,220 |
|
5,245 |
|
5,696 |
|
9,476 |
|
|
Adjusted EBITDA |
26,777 |
|
28,796 |
|
67,135 |
|
72,059 |
|
139,684 |
|
SELECTED BALANCE SHEET INFORMATION
|
(Thousands of Dollars) |
|
March 25 2018 |
|
September 24 2017 |
|
| Cash |
|
12,301 |
|
10,621 |
|
| Debt (Principal
Amount): |
|
|
|
|
|
| 1st Lien
Term Loan |
|
24,645 |
|
45,145 |
|
|
Notes |
|
385,000 |
|
385,000 |
|
| 2nd Lien
Term Loan |
|
106,676 |
|
118,240 |
|
|
|
|
516,321 |
|
548,385 |
|
SELECTED STATISTICAL INFORMATION
|
|
13 Weeks Ended |
|
|
26 Weeks Ended |
|
|
|
March 25 2018 |
|
March 26 2017 |
|
|
March 25 2018 |
|
March 26 2017 |
|
| |
|
|
|
|
|
| Capital expenditures
(Thousands of Dollars) |
1,350 |
|
990 |
|
|
2,452 |
|
2,079 |
|
| Average common shares -
basic (Thousands of Shares) |
54,692 |
|
54,055 |
|
|
54,508 |
|
53,789 |
|
| Average common shares -
diluted (Thousands of Shares) |
55,861 |
|
55,470 |
|
|
55,817 |
|
55,420 |
|
| Shares
outstanding at end of period (Thousands of Shares) |
|
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57,046 |
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56,634 |
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NOTES
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(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. |
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(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: |
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• |
Adjusted EBITDA is a non-GAAP financial performance
measure that enhances financial statement users overall
understanding of the operating performance of the Company. The
measure isolates unusual, infrequent or non-cash transactions from
the operating performance of the business. This allows users to
easily compare operating performance among various fiscal periods
and how management measures the performance of the business. This
measure also provides users with a benchmark that can be used when
forecasting future operating performance of the Company that
excludes unusual, nonrecurring or one time transactions. Adjusted
EBITDA is also a component of the calculation used by stockholders
and analysts to determine the value of our business when using the
market approach, which applies a market multiple to financial
metrics. It is also a measure used to calculate the leverage ratio
of the Company, which is a key financial ratio monitored and used
by the Company and its investors. Adjusted EBITDA is defined as net
income (loss), plus nonoperating expenses, income tax expense
(benefit), depreciation, amortization, loss (gain) on sale of
assets, impairment charges, workforce adjustment and other costs,
stock compensation and our 50% share of EBITDA from TNI and MNI,
minus equity in earnings of TNI and MNI and curtailment gains. |
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Adjusted
Income (Loss) and Adjusted Earnings (Loss) Per Common Share are
non-GAAP financial performance measures that we believe offer a
useful metric to evaluate overall performance of the Company by
providing financial statement users the operating performance of
the Company on a per share basis excluding the impact of changes in
the warrant valuation as well as unusual and infrequent
transactions. It is defined as income (loss) attributable to Lee
Enterprises, Incorporated and earnings (loss) per common share
adjusted to exclude the impact of the warrant valuation and the
impact of the 2017 Tax Act. |
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Cash Costs
is a non-GAAP financial performance measure of operating expenses
that are settled in cash and is useful to investors in
understanding the components of the Company’s cash operating costs.
Generally, the Company provides forward-looking guidance of Cash
Costs, which can be used by financial statement users to assess the
Company's ability to manage and control its operating cost
structure. Cash Costs is defined as compensation, newsprint and
ink, other operating expenses. Depreciation, amortization,
impairment charges, other non-cash operating expenses and other
unusual and infrequent transactions are excluded. Cash Costs are
also presented excluding workforce adjustments and other. |
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We also
present revenue and certain operating expense trends on a Same
Property basis which excludes the operating results of a weekly
publication purchased in 2017 and the purchase of the
Dispatch-Argus on June 30, 2017. Same Property results are useful
to investors in understanding the revenue and operating expense
trends excluding the impact of changes due to operations no longer
owned by the Company. |
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(3 |
) |
The 1st Lien
Term Loan is the $250 million first lien term loan and $40 million
revolving facility under a First Lien Credit Agreement dated as of
March 31, 2014. The Notes are the $400 million senior secured notes
pursuant to an indenture dated March 31, 2014. The 2nd Lien Term
Loan is the $150 million second lien term loan under the Second
Lien Loan Agreement dated as of March 31, 2014. TNI refers to TNI
Partners publishing operations in Tucson, AZ. MNI refers to Madison
Newspapers, Inc. publishing operations in Madison, WI. |
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(4 |
) |
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. |
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