UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 9, 2006
_____________________________________________________________________
LEE ENTERPRISES, INCORPORATED
(Exact name of Registrant as specified in its charter)
_____________________________________________________________________
Commission File Number 1-6227
| Delaware | 42-0823980 | |
| (State of Incorporation) | (I.R.S. Employer Identification No.) |
201 N. Harrison Street, Davenport, Iowa 52801
(Address of Principal Executive Offices)
(563) 383-2100
Registrant’s telephone number, including area code
_________________________________________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On November 9, 2006, Lee Enterprises, Incorporated (the “Company”) reported its results for the fourth fiscal quarter ended September 30, 2006 and for the year ended September 30, 2006. A copy of the earnings release is furnished as Exhibit 99.1 to this Form 8-K.
To supplement the Company’s consolidated operating results presented in accordance with generally accepted accounting principles or GAAP, the Company is using the following non-GAAP financial measures in the earnings release: adjusted income from continuing operations (and related earnings per share) and operating cash flow. The Company’s explanation for the use of the latter measure is contained in the attached earnings release.
The Company believes its presentation of adjusted income from continuing operations provides meaningful supplemental information to investors and financial analysts with which to evaluate its financial performance by excluding expenses and expenditures related to the acquisition of Pulitzer Inc. that may not be indicative of its core business operating results and, except as noted in the release, are of a substantially non-recurring nature. The Company also believes that both management and investors benefit from referring to this non-GAAP financial measure in assessing the Company’s performance and in forecasting and analyzing future periods.
In addition, to facilitate the understanding of investors and financial analysts with regard to the effect of the removal of discontinued operations from the Company’s revenue and financial results, the Company is furnishing Exhibits 99.2 and 99.3, which restate monthly revenue and quarterly earnings, respectively, for the fiscal year ended September 30, 2006.
This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| LEE ENTERPRISES, INCORPORATED | ||||
| Date: November 9, 2006 | By: | /s/ Carl G. Schmidt | ||
| Carl G. Schmidt | ||||
| Vice President, Chief Financial Officer, | ||||
| and Treasurer | ||||
3
INDEX TO EXHIBITS
| Exhibit No. | Description | |
| 99.1 | Earnings Release – Fourth Quarter Ended September 30, 2006 | |
| 99.2 | Revenue, Restated to Exclude Discontinued Operations – Year Ended September 30, 2006 | |
| 99.3 | Earnings, Restated to Exclude Discontinued Operations – Year Ended September 30, 2006 | |
4
Exhibit 99.1
| [Lee Enterprises Logo] | 201 N. Harrison St., Davenport, IA 52801 | |
| (563) 383-2100 | ||
| www.lee.net |
NEWS RELEASE
Lee Enterprises reports earnings for 4th quarter and fiscal year
DAVENPORT, Iowa (Nov. 9, 2006) — Lee Enterprises, Incorporated (NYSE: LEE), reported today that diluted earnings per common share from continuing operations were 33 cents for its fourth fiscal quarter ended Sept. 30, 2006, compared with 25 cents a year ago.
Including discontinued operations, net income for the quarter totaled $10.9 million, or 24 cents per common share, compared with 29 cents in 2005. In the current year quarter, expenses related to the acquisition of Pulitzer Inc. reduced income from continuing operations 2 cents per share and losses on the sales of discontinued operations reduced net income an additional 11 cents per share. A year ago, acquisition expenses and an early retirement program decreased income from continuing operations 22 cents per share.
On a reported basis, total revenue for the quarter increased 0.2 percent from a year ago to $279.7 million. Total advertising revenue declined 0.3 percent, with retail advertising down 1.4 percent, classified down 1.9 percent and national down 8.6 percent. Online advertising revenue increased 43.1 percent, and niche advertising increased 9.0 percent. Circulation revenue decreased 0.2 percent.
On a same property (1) basis, which excludes the impact of acquisitions and divestitures made in the current or prior year, total revenue for the quarter increased 0.5 percent from a year ago. Total advertising also increased 0.5 percent, with retail down 1.2 percent, classified up 0.3 percent and national down 16.1 percent. Online advertising revenue increased 46.0 percent, and niche advertising increased 10.5 percent. Circulation revenue increased 0.3 percent.
Total operating expenses, excluding depreciation and amortization, for the quarter decreased 4.8 percent on a reported basis, reflecting cycling of substantial transition and early retirement costs a year ago related to the acquisition of Pulitzer. Excluding unusual costs and depreciation and amortization, total operating expenses increased 2.0 percent. Compensation declined 2.8 percent. Newsprint and ink expense rose 5.6 percent, and other cash operating expenses increased 8.2 percent.
Same property operating expenses, excluding depreciation and amortization, increased 4.9 percent for the quarter, with compensation up 1.8 percent, newsprint and ink up 6.7 percent, and other operating expenses up 9.6 percent. Same property other operating expenses in 2005 had declined 3.1 percent compared with 2004.
Operating cash flow (2) increased 20.0 percent to $67.2 million, including acquisitions and related costs. Operating income, which includes equity in earnings of associated companies and depreciation and amortization, increased 20.5 percent to $47.4 million. Non-operating expenses, which include financial expense related to the acquisition of Pulitzer, increased 14.1 percent to $25.2 million, reflecting higher interest rates and writedown of other investments, partially offset by lower debt balances. Income from
1
continuing operations before income taxes increased 28.8 percent to $22.2 million. Income from continuing operations increased 31.3 percent, to $15.0 million. Net income, which was substantially impacted by the losses on sales of discontinued operations, as noted above, decreased 16.7 percent.
Results in all periods reflect the impact of stock compensation expense, which Lee has been recognizing since October 2002.
Mary Junck, chairman and chief executive officer, said: “Lee continues to drive advertising revenue aggressively both in print and online, well ahead of the industry average. At the same time, we’re rapidly building larger online audiences while protecting our strong base of paid newspaper circulation. A standout in circulation growth is the St. Louis Post-Dispatch, and the success of the Cardinals in the World Series enhances our prospects for a good start to our new fiscal year in St. Louis, where new management and new sales programs are gaining traction. Meanwhile, due primarily to our strong cash flow, we reduced net debt by $179 million in 2006.”
CIRCULATION AND ONLINE AUDIENCES
On Nov. 1, Lee announced that 37 of its daily newspapers reported year-over-year circulation gains for the six-month Audit Bureau of Circulations Fas-Fax period ended Sept. 30, 2006.
Lee’s 51 newspapers that are members of ABC reported combined declines of 0.2 percent daily and 0.5 percent Sunday. Nationally, newspapers reported average decreases of 2.8 percent daily and 3.4 percent Sunday.
Meanwhile, use of Lee newspaper online sites, as measured by page views, increased 43 percent from September 2005 to September 2006, further extending audience reach.
Lee newspapers with gains include Lee’s largest newspaper, the St. Louis Post-Dispatch, one of only a few major metropolitan dailies in the country to report growth. At the Post-Dispatch, daily circulation climbed 0.7 percent to 276,588, despite a strategic reduction in lower value distribution outside the metropolitan area. The Post-Dispatch reported Sunday circulation of 418,262, a decline of 2.4 percent, reflecting an increase in the Sunday single copy price, as well as the distribution change.
Of the 37 Lee newspapers with circulation growth, 27 reported gains daily, 28 reported gains Sunday, and 18 reported gains both daily and Sunday. The newspapers reporting gains are located in Flagstaff and Tucson, Ariz.; Hanford, Lompoc and Santa Maria, Calif.; Lihue, Hawaii; Mason City, Sioux City and Waterloo, Iowa; Twin Falls, Idaho; Bloomington, Carbondale, Charleston, Decatur and DeKalb, Ill.; Munster, Ind.; Winona, Minn.; Park Hills and St. Louis, Mo.; Billings, Butte and Helena, Mont.; Fremont and Lincoln, Neb.; Bismarck, N.D.; Albany and Coos Bay, Ore.; Carlisle, Pa; Orangeburg, S.C.; Provo, Utah; Longview, Wash.; Baraboo, Chippewa Falls, La Crosse, Portage and Racine, Wis.; and Casper, Wyo.
Lee’s newspapers have circulation of 1.6 million daily and 1.9 million Sunday, reaching more than four million readers daily. Lee’s online sites reach more than two million users, and Lee’s weekly publications have distribution of more than 4.5 million households.
2
FISCAL YEAR
On a reported basis, for the year ended Sept. 30, 2006, income from continuing operations was $71.1 million, or $1.56 per diluted common share, the same as a year ago.
Net income for the year totaled $70.8 million, or $1.56 per share, compared with $1.70 in 2005. Discontinued operations, including losses on sales, accounted for a loss of 1 cent per share in 2006 and income of 13 cents in 2005.
Comparisons include the addition of Pulitzer in June 2005. Transition costs, an early retirement program and a re-evaluation of intangible assets related to the acquisition of Pulitzer reduced diluted earnings per common share from continuing operations by 27 cents in 2006. In 2005, transition costs, the early retirement program and loss on early extinguishment of debt related to Pulitzer reduced earnings by 39 cents.
Including acquisitions and divestitures, for the fiscal year ended Sept. 30, 2006, advertising revenue increased 40.1 percent to $874.6 million, and total operating revenue increased 37.8 percent to $1.13 billion. Operating expenses, excluding depreciation and amortization, increased 38.3 percent to $849.3 million.
On a same property basis, advertising revenue increased 1.7 percent, total operating revenue increased 1.1 percent, and operating expenses, excluding depreciation and amortization, increased 3.9 percent.
Operating income rose 28.9 percent to $204.0 million. Non-operating expenses, which include financial expense related to the Pulitzer acquisition, totaled $91.9 million, compared with $46.8 million a year ago
UNUSUAL COSTS
The following tables summarize the impact on income from continuing operations from unusual costs related to the Pulitzer acquisition:
| Three Months Ended Sept. 30 | ||||||||||||||||
| Thousands, Except EPS Data |
2006 | 2005 | ||||||||||||||
| Amount | Per Share | Amount | Per Share | |||||||||||||
| Income from continuing operations, as reported |
$ | 14,985 | $ | 0.33 | $ | 11,410 | $ | 0.25 | ||||||||
| Adjustments to income from continuing operations: |
||||||||||||||||
| Early retirement program |
- | 9,124 | ||||||||||||||
| Transition costs |
1,759 | 7,387 | ||||||||||||||
| 1,759 | 16,511 | |||||||||||||||
| Income tax benefit of adjustments, net |
(654 | ) | (6,439 | ) | ||||||||||||
| 1,105 | 0.02 | 10,072 | 0.22 | |||||||||||||
| Income from continuing operations, as adjusted |
$ | 16,090 | $ | 0.35 | $ | 21,482 | $ | 0.47 | ||||||||
3
| Year Ended Sept. 30 | ||||||||||||||||
| Thousands, Except EPS Data |
2006 | 2005 | ||||||||||||||
| Amount | Per Share | Amount | Per Share | |||||||||||||
| Income from continuing operations, as reported |
$ | 71,136 | $ | 1.56 | $ | 70,862 | $ | 1.56 | ||||||||
| Adjustments to income from continuing operations: |
||||||||||||||||
| Early retirement program |
8,654 | 9,124 | ||||||||||||||
| Reduction of value of identified intangible assets |
5,526 | - | ||||||||||||||
| Transition costs |
4,589 | 8,929 | ||||||||||||||
| Loss on extinguishment of debt |
- | 11,181 | ||||||||||||||
| 18,769 | 29,234 | |||||||||||||||
| Income tax benefit of adjustments, net |
(6,316 | ) | (11,401 | ) | ||||||||||||
| 12,453 | 0.27 | 17,833 | 0.39 | |||||||||||||
| Income from continuing operations, as adjusted |
$ | 83,589 | $ | 1.84 | $ | 88,695 | $ | 1.96 | ||||||||
DISCONTINUED OPERATIONS
On Oct. 3, Lee announced the completion of the sales of stand-alone publications and commercial printing operations in the Pacific Northwest and northern Wisconsin.
Lee received $51.7 million for the Pacific Northwest properties, which included rack shoppers and commercial printing operations based in Seattle and Spokane, Wash.; rack shopper operations in Portland, Ore., and a twice-weekly newspaper in Newport, Ore. Also in October, Lee sold a weekly newspaper in Cottage Grove, Ore., and closed a nearby weekly newspaper in Springfield, Ore. None of the properties were located in markets where Lee operates daily newspapers. $33 million of proceeds was received in September 2006 and was primarily used to reduce debt in the quarter. The remaining proceeds will also be used to reduce debt as Lee continues to focus on its core publishing and online operations.
In Wisconsin, Lee sold its smallest daily newspaper, located in Rhinelander, for $2.2 million. At the same time, Madison Newspapers, Inc., which is owned jointly by Lee and The Capital Times Co., sold a small daily newspaper and commercial printing operation in Shawano to an affiliate of the same buyer.
Lee recorded an aggregate loss after income taxes of $5.2 million, or 11 cents per diluted common share, which is recorded in discontinued operations. The Company had previously announced an estimated loss of 15 cents per share. Results of the enterprises sold, up to the respective dates of sale, are also included in discontinued operations.
Consolidated statements of income, balance sheet items and selected statistics follow.
4
LEE ENTERPRISES, INCORPORATED
CONSOLIDATED INCOME STATEMENT
| (Unaudited) | ||||||||||||||||||||||
| Three Months Ended Sept. 30 | Year Ended Sept. 30 | |||||||||||||||||||||
| (Thousands, Except EPS Data) |
2006 | 2005 | % | 2006 | 2005 | % | ||||||||||||||||
| Advertising revenue: |
||||||||||||||||||||||
| Retail |
$ | 110,441 | $ | 112,033 | (1.4 | )% | $ | 463,991 | $ | 341,977 | 35.7 | % | ||||||||||
| National |
12,229 | 13,375 | (8.6 | ) | 57,869 | 33,031 | 75.2 | |||||||||||||||
| Classified: |
||||||||||||||||||||||
| Daily newspapers: |
||||||||||||||||||||||
| Employment |
23,649 | 23,994 | (1.4 | ) | 90,472 | 63,923 | 41.5 | |||||||||||||||
| Automotive |
16,204 | 17,617 | (8.0 | ) | 60,953 | 49,320 | 23.6 | |||||||||||||||
| Real estate |
16,947 | 17,004 | (0.3 | ) | 63,802 | 47,171 | 35.3 | |||||||||||||||
| All other |
10,113 | 10,136 | (0.2 | ) | 39,253 | 29,200 | 34.4 | |||||||||||||||
| Other publications |
12,093 | 11,754 | 2.9 | 45,868 | 28,411 | 61.4 | ||||||||||||||||
| Total classified |
79,006 | 80,505 | (1.9 | ) | 300,348 | 218,025 | 37.8 | |||||||||||||||
| Online |
10,400 | 7,270 | 43.1 | 35,769 | 17,983 | 98.9 | ||||||||||||||||
| Niche publications |
4,279 | 3,927 | 9.0 | 16,591 | 13,093 | 26.7 | ||||||||||||||||
| Total advertising revenue |
216,355 | 217,110 | (0.3 | ) | 874,568 | 624,109 | 40.1 | |||||||||||||||
| Circulation |
51,585 | 51,696 | (0.2 | ) | 205,718 | 153,571 | 34.0 | |||||||||||||||
| Commercial printing |
4,200 | 3,831 | 9.6 | 17,265 | 14,766 | 16.9 | ||||||||||||||||
| Online services & other |
7,529 | 6,543 | 15.1 | 31,097 | 26,444 | 17.6 | ||||||||||||||||
| Total operating revenue |
279,669 | 279,180 | 0.2 | 1,128,648 | 818,890 | 37.8 | ||||||||||||||||
| Operating expenses: |
||||||||||||||||||||||
| Compensation |
107,182 | 110,278 | (2.8 | ) | 435,836 | 325,959 | 33.7 | |||||||||||||||
| Newsprint and ink |
30,755 | 29,130 | 5.6 | 120,191 | 79,331 | 51.5 | ||||||||||||||||
| Other operating expenses |
72,790 | 67,261 | 8.2 | 280,018 | 190,768 | 46.8 | ||||||||||||||||
| Transition costs |
1, 759 | 7,387 | NM | 4,589 | 8,929 | NM | ||||||||||||||||
| Early retirement program |
- | 9,124 | NM | 8,654 | 9,124 | NM | ||||||||||||||||
| Operating expenses, excluding depreciation and amortization |
212,486 | 223,180 | (4.8 | ) | 849,288 | 614,111 | 38.3 | |||||||||||||||
| Operating cash flow (2) |
67,183 | 56,000 | 20.0 | 279,360 | 204,779 | 36.4 | ||||||||||||||||
| Depreciation |
9,286 | 8,057 | 15.3 | 33,903 | 23,754 | 42.7 | ||||||||||||||||
| Amortization |
15,066 | 13,861 | 8.7 | 62,167 | 35,495 | 75.1 | ||||||||||||||||
| Equity in earnings of associated companies: |
||||||||||||||||||||||
| Tucson partnership |
2,573 | 2,742 | (6.2 | ) | 12,882 | 3,740 | 244.4 | |||||||||||||||
| Madison Newspapers |
1,999 | 2,505 | (20.2 | ) | 7,857 | 9,044 | (13.1 | ) | ||||||||||||||
| Operating income |
47,403 | 39,329 | 20.5 | 204,029 | 158,314 | 28.9 | ||||||||||||||||
| Non-operating income (expense): |
||||||||||||||||||||||
| Financial income |
1,509 | 1,348 | 11.9 | 6,054 | 2,824 | 114.4 | ||||||||||||||||
| Financial expense |
(24,640 | ) | (23,408 | ) | 5.3 | (95,939 | ) | (38,038 | ) | 152.2 | ||||||||||||
| Loss on early extinguishment of debt |
- | - | NM | - | (11,181 | ) | NM | |||||||||||||||
| Other, net |
(2,037 | ) | - | NM | (2,037 | ) | (439 | ) | NM | |||||||||||||
| (25,168 | ) | (22,060 | ) | 14.1 | (91,922 | ) | (46,834 | ) | NM | |||||||||||||
| Income from continuing operations before income taxes |
22,235 | 17,269 | 28.8 | 112,107 | 111,480 | 0.6 | ||||||||||||||||
5
| Income tax expense |
6,910 | 5,845 | 18.2 | 39,740 | 40,458 | (1.8 | ) | |||||||||||||
| Minority interest |
340 | 14 | NM | 1,231 | 160 | NM | ||||||||||||||
| Income from continuing operations |
14,985 | 11,410 | 31.3 | 71,136 | 70,862 | 0.4 | ||||||||||||||
| Discontinued operations |
(4,069 | ) | 1,696 | NM | (304 | ) | 6,016 | NM | ||||||||||||
| Net income |
$ | 10,916 | $ | 13,106 | (16.7 | )% | $ | 70,832 | $ | 76,878 | (7.9 | )% | ||||||||
| Earnings per common share: |
||||||||||||||||||||
| Basic: |
||||||||||||||||||||
| Continuing operations |
$ | 0.33 | $ | 0.25 | 32.0 | % | $ | 1.57 | $ | 1.57 | - | % | ||||||||
| Discontinued operations |
(0.09 | ) | 0.04 | NM | (0.01 | ) | 0.13 | NM | ||||||||||||
| $ | 0.24 | $ | 0.29 | (17.2 | )% | $ | 1.56 | $ | 1.70 | (8.2 | )% | |||||||||
| Diluted: |
||||||||||||||||||||
| Continuing operations |
$ | 0.33 | $ | 0.25 | 32.0 | % | $ | 1.56 | $ | 1.56 | - | % | ||||||||
| Discontinued operations |
(0.09 | ) | 0.04 | NM | (0.01 | ) | 0.13 | NM | ||||||||||||
| $ | 0.24 | $ | 0.29 | (17.2 | )% | $ | 1.56 | $ | 1.70 | (8.2 | )% | |||||||||
| Average common shares: |
||||||||||||||||||||
| Basic |
45,546 | 45,201 | 45,421 | 45,118 | ||||||||||||||||
| Diluted |
45,657 | 45,459 | 45,546 | 45,348 | ||||||||||||||||
| SELECTED BALANCE SHEET INFORMATION | ||||||||||||||||||||
| Sept. 30 | ||||||||||||||||||||
| (Thousands) |
2006 | 2005 | ||||||||||||||||||
| Cash |
$ | 8,638 | $ | 7,543 | ||||||||||||||||
| Restricted cash and investments |
96,060 | 81,060 | ||||||||||||||||||
| Debt (principal amount) |
1,525,000 | 1,688,000 | ||||||||||||||||||
| SELECTED STATISTICAL INFORMATION | ||||||||||||||||||||
| Three Months Ended Sept. 30 | Year Ended Sept. 30 | |||||||||||||||||||
| (Dollars in thousands) |
2006 | 2005 | % | 2006 | 2005 | % | ||||||||||||||
| Capital expenditures: |
$ | 13,128 | $ | 12,654 | 3.7 | % | $ | 32,458 | $ | 25,455 | 27.5 | % | ||||||||
| Same property newsprint volume (tonnes) |
24,752 | 26,033 | (4.9 | ) | 101,302 | 103,332 | (2.0 | ) | ||||||||||||
| Same property full-time equivalent employees |
5,378 | 5,413 | (0.6 | ) | 5,378 | 5,398 | (0.4 | ) | ||||||||||||
NOTES:
| (1) | Same property comparisons exclude acquisitions (including Pulitzer) and divestitures made in the current and prior year. Same property revenue also excludes revenue of Madison Newspapers, Inc., in which Lee owns a 50% share. It is reported using the equity method of accounting. Same property comparisons also exclude corporate office costs. |
| (2) | Operating cash flow, which is defined as operating income before depreciation, amortization and equity in earnings of associated companies, is a non-GAAP financial measure. 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. |
| (3) | 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. |
| (4) | The Company disclaims responsibility for updating information beyond the release date. |
6
Lee Enterprises is a premier publisher of local news, information and advertising in primarily midsize markets, with 51 daily newspapers and a joint interest in five others, rapidly growing online sites and more than 300 weekly newspapers and specialty publications in 23 states. Lee’s newspaper markets include St. Louis, Mo.; Lincoln, Neb.; Madison, Wis.; Davenport, Iowa; Billings, Mont.; Bloomington, Ill.; Tucson, Ariz.; and Napa, Calif. Lee is based in Davenport, Iowa, and its stock is traded on the New York Stock Exchange under the symbol LEE. For more information about Lee Enterprises, please visit www.lee.net.
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, energy costs, 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: dan.hayes@lee.net, (563) 383-2100
7
Exhibit 99.2
Lee Enterprises, Incorporated
Revenue, Restated to Exclude Discontinued Operations
Year Ended September 30, 2006
(Thousands)
| Month Ended | Month Ended | Month Ended | Qtr Ended | Month Ended | Month Ended | Month Ended | Qtr Ended | |||||||||
| Oct 05 | Nov 05 | Dec 05 | Dec 05 | Jan 06 | Feb 06 | Mar 06 | Mar 06 | |||||||||
| Advertising: |
||||||||||||||||
| Retail |
43,408 | 44,669 | 43,269 | 131,346 | 34,517 | 33,183 | 36,464 | 104,164 | ||||||||
| National |
6,222 | 5,581 | 5,855 | 17,659 | 5,516 | 4,178 | 4,427 | 14,121 | ||||||||
| Classified: |
||||||||||||||||
| Daily newspapers |
||||||||||||||||
| Employment |
8,537 | 6,384 | 5,170 | 20,091 | 8,006 | 7,031 | 7,700 | 22,738 | ||||||||
| Automotive |
5,536 | 4,548 | 4,128 | 14,212 | 4,990 | 4,571 | 5,012 | 14,573 | ||||||||
| Real estate |
6,389 | 4,849 | 4,149 | 15,387 | 5,052 | 4,789 | 5,121 | 14,962 | ||||||||
| All other |
3,479 | 2,910 | 2,788 | 9,177 | 3,027 | 2,873 | 3,252 | 9,151 | ||||||||
| Other publications |
4,011 | 3,327 | 3,142 | 10,479 | 3,433 | 3,341 | 4,139 | 10,913 | ||||||||
| Total classified |
27,952 | 22,018 | 19,377 | 69,346 | 24,508 | 22,605 | 25,224 | 72,337 | ||||||||
| Online |
2,670 | 2,317 | 2,148 | 7,134 | 2,600 | 2,680 | 2,905 | 8,185 | ||||||||
| Niche |
1,009 | 1,234 | 1,170 | 3,414 | 1,839 | 1,131 | 1,505 | 4,476 | ||||||||
| Total advertising |
81,261 | 75,819 | 71,819 | 228,899 | 68,980 | 63,777 | 70,525 | 203,283 | ||||||||
| Circulation |
18,807 | 16,505 | 16,275 | 51,587 | 18,514 | 15,778 | 16,601 | 50,893 | ||||||||
| Commercial printing |
1,445 | 1,418 | 1,377 | 4,240 | 1,235 | 1,238 | 1,594 | 4,068 | ||||||||
| Online services and other |
2,206 | 2,662 | 2,571 | 7,439 | 2,151 | 2,376 | 2,925 | 7,451 | ||||||||
| Total same property |
103,719 | 96,404 | 92,042 | 292,165 | 90,880 | 83,169 | 91,645 | 265,695 | ||||||||
| Acquired/divested properties: |
||||||||||||||||
| Acquisitions |
- | - | - | - | - | 23 | 393 | 416 | ||||||||
| Divestitures |
20 | 27 | 32 | 80 | 34 | 25 | 20 | 79 | ||||||||
| Total acquired/divested properties |
20 | 27 | 32 | 80 | 34 | 48 | 413 | 495 | ||||||||
| Total publishing revenue |
103,739 | 96,431 | 92,074 | 292,245 | 90,914 | 83,217 | 92,058 | 266,190 | ||||||||
| Month Ended | Month Ended | Month Ended | Qtr Ended | Month Ended | Month Ended | Month Ended | Qtr Ended | Year Ended | ||||||||||
| Apr 06 | May 06 | Jun 06 | Jun 06 | Jul 06 | Aug 06 | Sep 06 | Sep 06 | Sep 06 | ||||||||||
| Advertising: |
||||||||||||||||||
| Retail |
41,087 | 40,291 | 36,609 | 117,987 | 36,740 | 36,515 | 37,149 | 110,402 | 463,898 | |||||||||
| National |
5,366 | 4,119 | 4,377 | 13,861 | 4,621 | 3,744 | 3,864 | 12,229 | 57,869 | |||||||||
| Classified: |
||||||||||||||||||
| Daily newspapers |
||||||||||||||||||
| Employment |
8,701 | 7,764 | 7,528 | 23,994 | 8,515 | 7,891 | 7,243 | 23,649 | 90,472 | |||||||||
| Automotive |
5,729 | 4,973 | 5,263 | 15,964 | 6,096 | 4,985 | 5,123 | 16,204 | 60,953 | |||||||||
| Real estate |
5,888 | 5,263 | 5,355 | 16,505 | 6,197 | 5,430 | 5,321 | 16,947 | 63,802 | |||||||||
| All other |
3,712 | 3,570 | 3,531 | 10,814 | 3,446 | 3,359 | 3,305 | 10,113 | 39,253 | |||||||||
| Other publications |
4,293 | 3,796 | 4,264 | 12,354 | 4,093 | 4,000 | 3,981 | 12,073 | 45,819 | |||||||||
| Total classified |
28,323 | 25,366 | 25,941 | 79,631 | 28,347 | 25,665 | 24,973 | 78,986 | 300,299 | |||||||||
| Online |
3,442 | 3,339 | 3,270 | 10,050 | 3,430 | 3,601 | 3,369 | 10,400 | 35,769 | |||||||||
| Niche |
1,425 | 1,513 | 1,474 | 4,411 | 1,359 | 1,097 | 1,824 | 4,279 | 16,580 | |||||||||
| Total advertising |
79,643 | 74,628 | 71,671 | 225,940 | 74,497 | 70,622 | 71,179 | 216,296 | 874,415 | |||||||||
| Circulation |
18,682 | 16,725 | 16,218 | 51,626 | 18,372 | 16,461 | 16,738 | 51,571 | 205,677 | |||||||||
| Commercial printing |
1,579 | 1,569 | 1,353 | 4,501 | 1,286 | 1,472 | 1,363 | 4,121 | 16,931 | |||||||||
| Online services and other |
2,308 | 2,561 | 2,373 | 7,242 | 2,292 | 2,233 | 1,958 | 6,484 | 28,619 | |||||||||
| Total same property |
102,212 | 95,483 | 91,615 | 289,309 | 96,447 | 90,788 | 91,238 | 278,472 | 1,125,642 | |||||||||
| Acquired/divested properties: |
||||||||||||||||||
| Acquisitions |
358 | 478 | 301 | 1,137 | 361 | 400 | 357 | 1,119 | 2,672 | |||||||||
| Divestitures |
29 | 29 | 41 | 98 | 22 | 34 | 22 | 78 | 334 | |||||||||
| Total acquired/divested properties |
387 | 507 | 342 | 1,235 | 383 | 434 | 379 | 1,197 | 3,006 | |||||||||
| Total publishing revenue |
102,599 | 95,990 | 91,957 | 290,544 | 96,830 | 91,222 | 91,617 | 279,669 | 1,128,648 | |||||||||
Same property data includes all 2005 acquisitions, including Pulitzer Inc.
Exhibit 99.3
Lee Enterprises, Incorporated
Earnings, Restated to Exclude Discontinued Operations
Year Ended September 30, 2006
(Thousands)
| Quarter Ended | Year Ended | ||||||||||||||
| Dec 05 | Mar 06 | Jun 06 | Sep 06 | Sep 06 | |||||||||||
| Advertising: |
|||||||||||||||
| Retail |
131,346 | 104,188 | 118,016 | 110,441 | 463,991 | ||||||||||
| National |
17,658 | 14,121 | 13,861 | 12,229 | 57,869 | ||||||||||
| Classified: |
|||||||||||||||
| Daily newspapers |
|||||||||||||||
| Employment |
20,091 | 22,738 | 23,994 | 23,649 | 90,472 | ||||||||||
| Automotive |
14,212 | 14,573 | 15,964 | 16,204 | 60,953 | ||||||||||
| Real estate |
15,388 | 14,962 | 16,505 | 16,947 | 63,802 | ||||||||||
| All other |
9,175 | 9,151 | 10,814 | 10,113 | 39,253 | ||||||||||
| Other publications |
10,478 | 10,926 | 12,371 | 12,093 | 45,868 | ||||||||||
| Total classified |
69,344 | 72,350 | 79,648 | 79,006 | 300,348 | ||||||||||
| Online |
7,134 | 8,185 | 10,050 | 10,400 | 35,769 | ||||||||||
| Niche |
3,414 | 4,476 | 4,422 | 4,279 | 16,591 | ||||||||||
| Total advertising |
228,896 | 203,320 | 225,997 | 216,355 | 874,568 | ||||||||||
| Circulation |
51,587 | 50,903 | 51,643 | 51,585 | 205,718 | ||||||||||
| Commercial printing |
4,320 | 4,146 | 4,599 | 4,200 | 17,265 | ||||||||||
| Online services and other |
7,442 | 7,821 | 8,305 | 7,529 | 31,097 | ||||||||||
| Total operating revenue |
292,245 | 266,190 | 290,544 | 279,669 | 1,128,648 | ||||||||||
| Operating expenses |
|||||||||||||||
| Compensation |
110,924 | 109,393 | 108,337 | 107,182 | 435,836 | ||||||||||
| Newsprint and ink |
30,159 | 28,511 | 30,766 | 30,755 | 120,191 | ||||||||||
| Other operating expenses |
70,483 | 66,893 | 69,852 | 72,790 | 280,018 | ||||||||||
| Transition costs |
352 | 801 | 1,677 | 1,759 | 4,589 | ||||||||||
| Early retirement program |
8,373 | 281 | - | - | 8,654 | ||||||||||
| Operating expenses, excluding depreciation and amortization |
220,291 | 205,879 | 210,632 | 212,486 | 849,288 | ||||||||||
| Operating cash flow |
71,954 | 60,311 | 79,912 | 67,183 | 279,360 | ||||||||||
| Depreciation |
8,034 | 8,005 | 8,578 | 9,286 | 33,903 | ||||||||||
| Amortization |
13,847 | 13,924 | 19,330 | 15,066 | 62,167 | ||||||||||
| Equity in earnings of associated companies |
|||||||||||||||
| Tucson partnership |
4,138 | 3,550 | 2,621 | 2,573 | 12,882 | ||||||||||
| Madison Newspapers |
2,165 | 1,467 | 2,226 | 1,999 | 7,857 | ||||||||||
| Operating income |
56,376 | 43,399 | 56,851 | 47,403 | 204,029 | ||||||||||
| Non-operating income (expense) |
|||||||||||||||
| Financial income |
1,356 | 1,610 | 1,579 | 1,509 | 6,054 | ||||||||||
| Financial expense |
(24,038 | ) | (23,694 | ) | (23,567 | ) | (24,640 | ) | (95,939 | ) | |||||
| Other, net |
- | - | - | (2,037 | ) | (2,037 | ) | ||||||||
| (22,682 | ) | (22,084 | ) | (21,988 | ) | (25,168 | ) | (91,922 | ) | ||||||
| Income from continuing operations before income taxes |
33,694 | 21,315 | 34,863 | 22,235 | 112,107 | ||||||||||
| Income tax expense |
12,041 | 7,614 | 13,175 | 6,910 | 39,740 | ||||||||||
| Minority interest |
259 | 264 | 369 | 340 | 1,231 | ||||||||||
| Income from continuing operations |
21,394 | 13,437 | 21,319 | 14,985 | 71,136 | ||||||||||
| Discontinued operations |
1,370 | 998 | 1,398 | (4,069 | ) | (304 | ) | ||||||||
| Net income |
22,764 | 14,435 | 22,717 | 10,916 | 70,832 | ||||||||||
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