Lee Enterprises Reports EPS Growth of 12.5%
DAVENPORT, Iowa--(BUSINESS WIRE)--July 19, 2004--Lee Enterprises, Incorporated (NYSE:LEE), reported today that diluted earnings per common share from continuing operations were 54 cents for its third quarter ended June 30, 2004. The results represent an increase of 12.5 percent over earnings of 48 cents a year ago.
Advertising revenue increased 7.8 percent to $131.4 million, with retail up 4.1 percent, classified up 9.8 percent, online ad revenue up 34.4 percent and niche publications up 40.0 percent. Total operating revenue increased 6.7 percent to $176.0 million.
Operating expenses, excluding depreciation and amortization, increased 6.4 percent to $125.3 million, with compensation up 3.3 percent, newsprint up 9.5 percent and other expenses up 10.8 percent. New niche publications and programs to increase circulation contributed to the expense growth during the quarter, as did acquisitions. Businesses acquired in the current fiscal year added $1.5 million to operating expenses, excluding depreciation and amortization, in the third quarter.
Operating cash flow(1) increased 7.4 percent to $50.7 million. Operating cash flow margin(1) was 28.8 percent, compared with 28.6 percent a year ago. Operating income, which includes equity in net income of associated companies and depreciation and amortization, rose 7.6 percent to $40.9 million. Income from continuing operations increased 14.7 percent to $24.6 million. Net income increased 14.0 percent to $24.5 million.
On a same property basis, which excludes the impact of acquisitions and divestitures made in the current or prior year, total advertising revenue for the quarter ended June 30, 2004, increased 6.6 percent from a year ago and total operating revenue increased 5.6 percent.
"We're delighted to report another quarter of strong performance," said Mary Junck, chairman and chief executive officer. "We credit the strength of our small and midsize markets, and - especially - the impressive results our people are getting from our revenue-building programs. We're leaving no stone unturned as we continue building our position as the market leader in every advertising category, both in print and online."
YEAR TO DATE
For the nine months ended June 30, 2004, advertising revenue increased 6.2 percent to $377.0 million, and total operating revenue increased 5.1 percent to $509.3 million. Operating expenses, excluding depreciation and amortization, rose 4.9 percent to $368.9 million, led by an increase of 10.1 percent for newsprint and ink. Operating cash flow(1) increased 5.5 percent to $140.4 million. Operating cash flow margin(1) was 27.6 percent, compared with 27.4 percent a year ago. Operating income rose 5.8 percent to $111.1 million. Income from continuing operations increased 11.8 percent to $65.2 million. Net income increased 10.6 percent to $64.8 million.
On a same property basis, total advertising revenue for the nine months ended June 30, 2004, increased 5.6 percent from a year ago and total operating revenue increased 4.5 percent.
Lee Enterprises is based in Davenport, Iowa, and is the premier publisher of daily newspapers in midsize markets. Lee owns 38 daily newspapers and a joint interest in six others, along with associated online services. Lee also publishes nearly 200 weekly newspapers, shoppers and classified and specialty publications. Lee stock is traded on the New York Stock Exchange under the symbol LEE. More information about Lee Enterprises, including revenue statistics for June, is available at www.lee.net.
LEE ENTERPRISES, INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Nine Months Ended
June 30 June 30
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(Thousands, Except
EPS Data) 2004 2003 % 2004 2003 %
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Operating revenue:
Advertising revenue:
Retail......... $ 71,207 $ 68,408 4.1% $211,315 $203,999 3.6%
National....... 4,541 3,943 15.2 13,822 11,752 17.6
Classified:
Daily
newspapers:
Employment... 11,889 9,697 22.6 31,430 27,595 13.9
Automotive... 10,165 10,465 (2.9) 29,546 30,210 (2.2)
Real estate.. 8,975 8,200 9.5 25,468 22,994 10.8
All other.... 8,709 7,781 11.9 21,958 20,672 6.2
Other
publications. 9,773 8,936 9.4 27,174 25,588 6.2
----------------------------------------------------------------------
Total
classified.... 49,511 45,079 9.8 135,576 127,059 6.7
Niche
publications.. 3,114 2,225 40.0 8,227 6,222 32.2
Online......... 3,004 2,235 34.4 7,989 5,854 36.5
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Total
advertising
revenue........ 131,377 121,890 7.8 376,929 354,886 6.2
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Circulation..... 32,363 32,312 0.2 97,872 97,566 0.3
Commercial
printing....... 5,301 4,840 9.5 14,803 14,214 4.1
Online services
& other........ 6,925 5,922 16.9 19,690 17,882 10.1
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Total operating
revenue........ 175,966 164,964 6.7 509,294 484,548 5.1
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Operating
expenses:
Compensation... 68,838 66,649 3.3 206,196 200,141 3.0
Newsprint and
ink........... 16,334 14,912 9.5 46,556 42,272 10.1
Other operating
expenses...... 40,097 36,203 10.8 116,171 109,128 6.5
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Operating
expenses,
excluding
depreciation
and
amortization... 125,269 117,764 6.4 368,923 351,541 4.9
----------------------------------------------------------------------
Operating cash
flow(1)........ 50,697 47,200 7.4 140,371 133,007 5.5
Depreciation.... 5,179 4,418 17.2 14,801 13,497 9.7
Amortization.... 6,855 6,758 1.4 20,520 20,210 1.5
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Operating
income, before
equity in net
income of
associated
companies...... 38,663 36,024 7.3 105,050 99,300 5.8
Equity in net
income of
associated
companies...... 2,209 1,962 12.6 6,090 5,733 6.2
----------------------------------------------------------------------
Operating income 40,872 37,986 7.6 111,140 105,033 5.8
----------------------------------------------------------------------
Non-operating
income:
Financial
income........ 243 373 (34.9) 808 916 (11.8)
Financial
expense....... (2,867) (4,072) (29.6) (9,801) (13,032) (24.8)
Other, net..... - (408) NM (294) (795) NM
----------------------------------------------------------------------
(2,624) (4,107) (36.1) (9,287) (12,911) (28.1)
----------------------------------------------------------------------
Income from
continuing
operations
before income
taxes.......... 38,248 33,879 12.9 101,853 92,122 10.6
Income tax
expense........ 13,696 12,475 9.8 36,632 33,763 8.5
----------------------------------------------------------------------
Income from
continuing
operations..... 24,552 21,404 14.7 65,221 58,359 11.8
Discontinued
operations..... (88) 54 NM (464) 181 NM
----------------------------------------------------------------------
Net income...... $ 24,464 $ 21,458 14.0% $ 64,757 $ 58,540 10.6%
======================================================================
Earnings per
common share:
Basic:
Continuing
operations... $ 0.55 $ 0.48 14.6% $ 1.46 $ 1.32 10.6%
Discontinued
operations... - - - (0.01) - NM
----------------------------------------------------------------------
Net income $ 0.55 $ 0.48 14.6% $ 1.45 $ 1.32 9.8%
======================================================================
Diluted:
Continuing
operations... $ 0.54 $ 0.48 12.5% $ 1.45 $ 1.31 10.7%
Discontinued
operations... - - - (0.01) - NM
----------------------------------------------------------------------
Net income...... $ 0.54 $ 0.48 12.5% $ 1.44 $ 1.32 9.1%
======================================================================
Average common
shares:
Basic.......... 44,884 44,351 44,733 44,277
Diluted........ 45,205 44,574 45,032 44,444
======================================================================
SELECTED BALANCE SHEET INFORMATION
June 30
----------------------------------------------------------------------
(Thousands) 2004 2003
----------------------------------------------------------------------
Cash and temporary cash investments.............$ 8,251 $ 20,960
Total assets.................................... 1,402,383 1,436,029
Debt, including current maturities.............. 234,600 331,200
Stockholders' equity............................ 860,136 787,798
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NOTES:
(1) Operating cash flow, which is defined as operating income before
depreciation, amortization and equity in net income of associated
companies, and operating cash flow margin (operating cash flow
divided by operating revenue) represent non-GAAP financial
measures. A reconciliation of operating cash flow to operating
income, the most directly comparable measure under accounting
principles generally accepted in the United States (GAAP), is
reflected in the tables accompanying this release. The Company
believes that operating cash flow and the related margin ratio are
useful measures of evaluating its financial performance because of
their focus on the Company's results from operations before
depreciation and amortization. The Company also believes that
these measures are several of the alternative financial measures
of performance used by investors, rating agencies and financial
analysts to estimate the value of a company and evaluate its
ability to meet debt service requirements.
(2) Certain amounts as previously reported have been reclassified to
conform with the current period presentation. Also, in order to
report revenue statistics on a basis more consistent with peer
newspaper companies and to recognize the growing importance of
niche and online advertising revenue, several revenue categories
have been reclassified. The prior period has been restated for
comparative purposes, and the reclassifications have no impact on
earnings.
(3) Same property comparisons exclude acquisitions and divestitures
made in the current or prior year. Same property revenue also
excludes revenue of Madison Newspapers, Inc., (MNI). Lee owns 50%
of the capital stock of MNI, which for financial reporting
purposes is reported using the equity method of accounting.
(4) The Company disclaims responsibility for updating information
beyond the release date.
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 and that is based largely on the Company's 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 are changes in advertising demand, newsprint prices, interest rates, labor costs, legislative and regulatory rulings and other results of operations or financial conditions, difficulties in integration of acquired businesses or maintaining employee and customer relationships and increased capital and other costs. The words "may," "will," "would," "could," "believes," "expects," "anticipates," "intends," "plans," "projects," "considers" and similar expressions generally identify 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. The Company does not publicly undertake to update or revise its forward-looking statements.
CONTACT: Lee Enterprises, Incorporated, Davenport
Dan Hayes, 563-383-2100
dan.hayes@lee.net
SOURCE: Lee Enterprises, Incorporated