Lee Enterprises Reports Q1 Earnings Growth of 7.8%
DAVENPORT, Iowa--(BUSINESS WIRE)--Jan. 20, 2004--Lee Enterprises, Incorporated (NYSE:LEE), reported today that diluted earnings per common share from continuing operations were 55 cents for its first quarter ended Dec. 31, 2003. The results represent an increase of 7.8 percent over earnings of 51 cents a year ago.
Advertising revenue increased 4.3 percent to $130.8 million, and total operating revenue increased 3.3 percent to $175.5 million. Same property results are identical to reported results in the quarter. Operating expenses, excluding depreciation and amortization, rose 3.0 percent to $124.2 million, led by an increase of 10.0 percent for newsprint and ink. Operating cash flow(1) increased 4.2 percent to $51.3 million. Operating cash flow margin(1) was 29.2 percent, compared with 29.0 percent a year ago. Operating income, which includes equity in net income of associated companies and depreciation and amortization, rose 4.8 percent to $42.0 million. Income from continuing operations increased 8.9 percent to $24.5 million. Net income increased 9.0 percent.
Mary Junck, chairman and chief executive officer, said: "We're off to an excellent start in fiscal 2004, with advertising and total revenue increasing strongly against an exceptionally good quarter a year ago. Although the overall economy remains uneven, we're especially gratified to see our first quarterly gain in employment advertising revenue in three years, continued strength in retail advertising; and another quarter of higher rates of growth at our new newspapers. At the same time, we've been able to keep costs under control overall, despite a double-digit increase in newsprint expense."
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 December, is available at www.lee.net.
LEE ENTERPRISES, INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
Unaudited. (Thousands, Except Per Common Share Data)
Three Months Ended
December 31,
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2003 2002 %
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Operating revenue: (1)(2) (1)(2)
Advertising...............................$130,758 $125,394 4.3
Circulation .............................. 33,722 33,612 0.3
Other..................................... 11,021 10,830 1.8
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175,501 169,836 3.3
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Operating expenses:
Compensation.............................. 69,635 68,492 1.7
Newsprint and ink......................... 15,891 14,450 10.0
Other..................................... 38,660 37,646 2.7
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124,186 120,588 3.0
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Operating cash flow......................... 51,315 49,248 4.2
Depreciation and amortization............... 11,594 11,371 2.0
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Operating income, before equity in net
income of associated companies............. 39,721 37,877 4.9
Equity in net income of associated companies 2,292 2,218 3.3
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Operating income............................ 42,013 40,095 4.8
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Non-operating income:
Financial income.......................... 298 340 (12.4)
Financial expense......................... (3,537) (4,690) (24.6)
Other, net................................ (28) (344) NM
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(3,267) (4,694) (30.4)
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Income from continuing operations
before income taxes ....................... 38,746 35,401 9.4
Income tax expense.......................... 14,267 12,923 10.4
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Income from continuing operations........... 24,479 22,478 8.9
Discontinued operations..................... -- (20) --
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Net income..................................$ 24,479 $ 22,458 9.0
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Earnings per common share:
Basic:
Continuing operations..................... $0.55 $0.51 7.8
Discontinued operations................... -- -- --
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Net income.................................. $0.55 $0.51 7.8
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Diluted:
Continuing operations..................... $0.55 $0.51 7.8
Discontinued operations................... -- -- --
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Net income.................................. $0.55 $0.51 7.8
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Average common shares:
Basic..................................... 44,573 44,221
Diluted................................... 44,840 44,353
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SELECTED BALANCE SHEET INFORMATION
December 31,
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2003 2002
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Cash and temporary cash investments............$ 10,053 $ 26,455
Total assets................................... 1,414,016 1,460,857
Debt, including current maturities............. 275,200 381,800
Stockholders' equity........................... 825,471 759,733
(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
included 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) Excludes revenue of Madison Newspapers, Inc., (MNI) in order to
comply with SEC regulations related to disclosure of non-GAAP
financial measures. Lee owns 50% of the capital stock of MNI,
which for financial reporting purposes is reported using the
equity method of accounting.
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