Lee Enterprises Reports EPS Growth of 6.8% for Quarter and 9.7% for Fiscal Year
DAVENPORT, Iowa--(BUSINESS WIRE)--Nov. 11, 2004--Lee Enterprises, Incorporated (NYSE:LEE), reported today that diluted earnings per common share from continuing operations were 47 cents for its fourth quarter ended Sept. 30, 2004, and $1.92 for the fiscal year. The results represent increases of 6.8 percent over 44 cents in the quarter a year ago and 9.7 percent over $1.75 in fiscal 2003.
"Same property advertising revenue growth of 9.5 percent in September capped off another banner year for Lee," said Mary Junck, chairman and chief executive officer. "Our newspapers turned in impressive performance across the board in fiscal 2004, adding up to strong results for stockholders. We've stayed focused on our top priorities of growing revenue creatively and rapidly, increasing readership and circulation, emphasizing strong local news, driving our online strength and exercising careful cost controls. As a result, we've continued to become even more vital in our markets as the far-and-away leader for news and advertising, both in print and online."
Advertising revenue for the quarter increased 8.2 percent to $130.2 million, with retail up 6.0 percent, classified up 10.0 percent, online ad revenue up 25.1 percent and niche publications down 0.7 percent. Total operating revenue increased 6.9 percent to $174.0 million. On a same property basis, which excludes the impact of acquisitions made in the current or prior year, total advertising revenue for the quarter ended Sept. 30, 2004, increased 6.2 percent from a year ago and total operating revenue increased 5.1 percent.
Operating expenses, excluding depreciation and amortization, increased 6.2 percent to $128.2 million, with compensation up 4.0 percent, newsprint up 15.6 percent as a result of supplier rate increases and other expenses up 6.5 percent. All categories of expenses were affected by acquisitions made during the fiscal year. Same property operating expenses in the quarter, excluding depreciation and amortization, increased 4.4 percent.
Operating cash flow(1) increased 8.9 percent to $45.9 million. Operating cash flow margin(1) was 26.4 percent, compared with 25.9 percent a year ago. Operating income, which includes equity in net income of associated companies and depreciation and amortization, rose 8.4 percent to $35.4 million. Income from continuing operations increased 8.8 percent to $21.2 million. Net income increased 9.3 percent to $21.3 million.
CIRCULATION RESULTS
As reported Nov. 1 by the Audit Bureau of Circulations, Lee's circulation volume held steady in the six-month Fas-Fax period that ended Sept. 30. For the 39 Lee newspapers included in the report, average paid circulation was flat both daily and Sunday compared with the previous year. In comparison, the Newspaper Association of America reported that the average change for all newspapers during the period was minus 0.9 percent daily and minus 1.5 percent Sunday. Lee's 44 daily newspapers have combined paid circulation of 1.1 million weekdays and 1.2 million on Sundays.
FISCAL YEAR
For the year ended Sept. 30, 2004, advertising revenue increased 6.7 percent to $507.1 million, and total operating revenue increased 5.6 percent to $683.3 million. Operating expenses, excluding depreciation and amortization, rose 5.3 percent to $497.1 million, led by an increase of 11.5 percent for newsprint and ink. Operating cash flow(1) increased 6.3 percent to $186.2 million. Operating cash flow margin(1) was 27.3 percent, compared with 27.1 percent a year ago. Operating income rose 6.4 percent to $146.6 million. Income from continuing operations increased 11.0 percent to $86.5 million. Net income increased 10.3 percent to $86.1 million.
On a same property basis, total advertising revenue for the year ended Sept. 30, 2004, increased 5.7 percent from a year ago and total operating revenue increased 4.7 percent. Same property operating expenses, excluding depreciation and amortization, increased 4.7 percent.
Tables follow.
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 September, is available at www.lee.net.
LEE ENTERPRISES, INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Year Ended
Sept. 30 Sept. 30
----------------------------------------------------------------------
(Thousands,
Except EPS
Data) 2004 2003 % 2004 2003 %
----------------------------------------------------------------------
Operating
revenue:
Advertising
revenue:
Retail......... $ 69,687 $ 65,741 6.0% $283,892 $272,213 4.3%
National....... 4,582 3,860 18.7 18,404 15,612 17.9
Classified:
Daily
newspapers:
Employment... 12,556 10,951 14.7 44,562 39,058 14.1
Automotive... 10,724 10,794 (0.6) 40,873 41,832 (2.3)
Real estate.. 9,308 8,370 11.2 34,081 30,569 11.5
All other.... 7,153 6,075 17.7 25,572 23,728 7.8
Other
publications. 10,091 9,093 11.0 37,431 34,682 7.9
----------------------------------------------------------------------
Total
classified.... 49,832 45,283 10.0 182,519 169,869 7.4
Niche
publications.. 2,985 3,005 (0.7) 11,212 9,227 21.5
Online......... 3,133 2,505 25.1 11,121 8,359 33.0
----------------------------------------------------------------------
Total
advertising
revenue........ 130,219 120,394 8.2 507,148 475,280 6.7
----------------------------------------------------------------------
Circulation..... 32,680 32,631 0.2 130,552 130,197 0.3
Commercial
printing....... 5,048 4,469 13.0 19,851 18,683 6.3
Online services
& other........ 6,083 5,291 15.0 25,773 23,173 11.2
----------------------------------------------------------------------
Total operating
revenue........ 174,030 162,785 6.9 683,324 647,333 5.6
----------------------------------------------------------------------
Operating
expenses:
Compensation... 70,008 67,315 4.0 276,204 267,456 3.3
Newsprint and
ink........... 16,974 14,683 15.6 63,502 56,955 11.5
Other operating
expenses...... 41,178 38,647 6.5 157,377 147,775 6.5
----------------------------------------------------------------------
Operating
expenses,
excluding
depreciation
and
amortization... 128,160 120,645 6.2 497,083 472,186 5.3
----------------------------------------------------------------------
Operating cash
flow(1)........ 45,870 42,140 8.9 186,241 175,147 6.3
Depreciation.... 5,777 5,035 14.7 20,578 18,532 11.0
Amortization.... 6,929 6,765 2.4 27,449 26,975 1.8
----------------------------------------------------------------------
Operating
income, before
equity in net
income of
associated
companies...... 33,164 30,340 9.3 138,214 129,640 6.6
Equity in net
income of
associated
companies...... 2,250 2,320 (3.0) 8,340 8,053 3.6
----------------------------------------------------------------------
Operating income 35,414 32,660 8.4 146,554 137,693 6.4
----------------------------------------------------------------------
Non-operating
income:
Financial
income........ 258 204 26.5 1,066 1,120 (4.8)
Financial
expense....... (2,864) (3,503) (18.2) (12,665) (16,535) (23.4)
Other, net..... - (254) NM (294) (1,049) NM
----------------------------------------------------------------------
(2,606) (3,553) (26.7) (11,893) (16,464) (27.8)
----------------------------------------------------------------------
Income from
continuing
operations
before income
taxes.......... 32,808 29,107 12.7 134,661 121,229 11.1
Income tax
expense........ 11,560 9,585 20.6 48,192 43,348 11.2
----------------------------------------------------------------------
Income from
continuing
operations..... 21,248 19,522 8.8 86,469 77,881 11.0
Discontinued
operations..... 66 (21) NM (398) 160 NM
----------------------------------------------------------------------
Net income...... $ 21,314 $ 19,501 9.3% $ 86,071 $ 78,041 10.3%
======================================================================
Earnings per
common share:
Basic:
Continuing
operations... $ 0.47 $ 0.44 6.8% $ 1.93 $ 1.76 9.7%
Discontinued
operations... - - - (0.01) - NM
----------------------------------------------------------------------
Net income...... $ 0.47 $ 0.44 6.8% $ 1.92 $ 1.76 9.1%
======================================================================
Diluted:
Continuing
operations... $ 0.47 $ 0.44 6.8% $ 1.92 $ 1.75 9.7%
Discontinued
operations... - - - (0.01) - NM
----------------------------------------------------------------------
Net income...... $ 0.47 $ 0.44 6.8% $ 1.91 $ 1.75 9.1%
======================================================================
Average common
shares:
Basic.......... 44,969 44,436 44,792 44,316
Diluted........ 45,271 44,718 45,092 44,513
======================================================================
SELECTED BALANCE SHEET INFORMATION
Sept. 30
----------------------------------------------------------------------
(Thousands) 2004 2003
----------------------------------------------------------------------
Cash and temporary cash investments........... $ 8,010 $ 11,064
Total assets.................................. 1,403,844 1,421,377
Debt, including current maturities............ 213,600 305,200
Stockholders' equity.......................... 876,843 802,156
======================================================================
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. 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