Lee Enterprises Reports Q1 Earnings Growth of 11.1%
DAVENPORT, Iowa--(BUSINESS WIRE)--Jan. 18, 2005--Lee Enterprises, Incorporated (NYSE:LEE), reported today that diluted earnings per common share from continuing operations were 60 cents for its first quarter ended Dec. 31, 2004. The results represent an increase of 11.1 percent over earnings of 54 cents a year ago.
Advertising revenue increased 8.4 percent to $139.8 million, with growth of 5.1 percent in retail, 8.9 percent in classified, 39.6 in national, 27.3 percent in niche and 36.1 percent in online advertising. Total operating revenue increased 6.4 percent to $184.1 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 increased 5.8 percent from a year ago and total operating revenue increased 4.4 percent.
Operating expenses, excluding depreciation and amortization, increased 6.2 percent to $129.7 million, with compensation up 4.9 percent, newsprint up 7.3 percent and other expenses up 8.2 percent. All categories of expenses were affected by acquisitions made in the current or prior year. Same property operating expenses, excluding depreciation and amortization, increased 4.4 percent in the quarter, with compensation up 3.6 percent, newsprint and ink up 7.5 percent and other operating expenses up 4.6 percent.
Operating cash flow(1) increased 6.9 percent to $54.4 million. Operating cash flow margin(1) was 29.6 percent, compared with 29.4 percent a year ago. Operating income, which includes equity in net income of associated companies and depreciation and amortization, rose 8.6 percent to $45.5 million. Income from continuing operations increased 10.7 percent to $27.0 million. Net income increased 10.3 percent to $27.0 million.
Mary Junck, chairman and chief executive officer, said: "Our newspapers have continued to perform exceptionally well in a spotty economic climate, and our momentum has given us a good start in fiscal 2005. As the year unfolds, we will continue to focus on our top five operating priorities - growing revenue creatively and rapidly, increasing readership and circulation, emphasizing strong local news, driving our online strength and exercising careful cost controls."
Tables follow. Expanded tables with same property comparisons are available at www.lee.net/financial.
Lee Enterprises operates 44 daily newspapers in 19 states, along with associated online services, and 200 weekly newspapers, shoppers and specialty publications. Lee stock is traded on the New York Stock Exchange under the symbol LEE. More information about Lee, including revenue statistics for December, is available at www.lee.net.
LEE ENTERPRISES, INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
Dec. 31
----------------------------------------------------------------------
(Thousands, Except EPS Data) 2004 2003 %
----------------------------------------------------------------------
Operating revenue:
Advertising revenue:
Retail............................... $83,344 $79,331 5.1%
National............................. 6,543 4,686 39.6
Classified:
Daily newspapers:
Employment......................... 10,805 9,180 17.7
Automotive......................... 9,868 10,048 (1.8)
Real estate........................ 8,790 7,998 9.9
All other.......................... 6,106 5,719 6.8
Other publications.................. 8,548 7,579 12.8
----------------------------------------------------------------------
Total classified..................... 44,117 40,524 8.9
Niche publications................... 2,666 2,094 27.3
Online............................... 3,123 2,295 36.1
----------------------------------------------------------------------
Total advertising revenue............. 139,793 128,930 8.4
----------------------------------------------------------------------
Circulation........................... 32,452 32,980 (1.6)
Commercial printing................... 5,380 4,863 10.6
Online services & other............... 6,459 6,211 4.0
----------------------------------------------------------------------
Total operating revenue............... 184,084 172,984 6.4
----------------------------------------------------------------------
Operating expenses:
Compensation......................... 71,729 68,384 4.9
Newsprint and ink.................... 16,827 15,680 7.3
Other operating expenses............. 41,119 38,018 8.2
----------------------------------------------------------------------
Operating expenses,
excluding depreciation
and amortization..................... 129,675 122,082 6.2
----------------------------------------------------------------------
Operating cash flow(1)................ 54,409 50,902 6.9
Depreciation.......................... 4,945 4,559 8.5
Amortization.......................... 6,561 6,756 (2.9)
----------------------------------------------------------------------
Operating income, before equity in
net income of associated companies... 42,903 39,587 8.4
Equity in net income of associated
companies............................ 2,593 2,292 13.1
----------------------------------------------------------------------
Operating income...................... 45,496 41,879 8.6
----------------------------------------------------------------------
Non-operating income:
Financial income..................... 278 298 (6.7)
Financial expense.................... (2,839) (3,537) (19.7)
Other, net........................... - (28) NM
----------------------------------------------------------------------
(2,561) (3,267) (21.6)
----------------------------------------------------------------------
Income from continuing operations
before income taxes.................. 42,935 38,612 11.2
Income tax expense.................... 15,924 14,215 12.0
----------------------------------------------------------------------
Income from continuing operations..... 27,011 24,397 10.7
Discontinued operations............... - 82 NM
----------------------------------------------------------------------
Net income............................ $27,011 $24,479 10.3%
================================================== ========= =========
Earnings per common share:
Basic:
Continuing operations............... $0.60 $0.55 9.1%
Discontinued operations............. - - -
----------------------------------------------------------------------
Net income............................ $0.60 $0.55 9.1%
======================================================================
Diluted:
Continuing operations............... $0.60 $0.54 11.1%
Discontinued operations............. - - -
----------------------------------------------------------------------
Net income............................ $0.60 $0.55 9.1%
======================================================================
Average common shares:
Basic................................ 45,027 44,573
Diluted.............................. 45,243 44,840
======================================================================
SELECTED BALANCE SHEET INFORMATION
Dec. 31
----------------------------------------------------------------------
(Thousands) 2004 2003
----------------------------------------------------------------------
Cash and temporary cash investments........ $12,891 $10,053
Total assets............................... 1,407,962 1,414,016
Debt, including current maturities......... 196,600 275,200
Stockholders' equity....................... 898,253 825,471
======================================================================
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, Davenport
Dan Hayes, 563-383-2100
dan.hayes@lee.net
SOURCE: Lee Enterprises, Incorporated