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):  December 13, 2019

 

---

LEE ENTERPRISES, INCORPORATED

(Exact name of Registrant as specified in its charter)

 

 

---

 

Commission File Number 1-6227

 

Delaware (State of Incorporation)

42-0823980 (I.R.S. Employer Identification No.)

 

4600 E. 53rd Street, Davenport, Iowa 52807

(Address of Principal Executive Offices)

 

(563) 383-2100

Registrant’s telephone number, including area code

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.01 per share	LEE	New York Stock Exchange

 

 

 

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))

 

Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

Item 7.01.

Regulation FD Disclosure.

 

The supplemental financial information is furnished as Exhibit 99.1 to this Form 8-K and is hereby incorporated by reference. The information in this report shall not be treated as filed for purposes of the Securities Exchange Act of 1934, as amended.

 

Lee Legacy only and Pulitzer Inc. ("Pulitzer") only supplemental financial information is being provided because it is a required reporting covenant in the debt agreements of the Company. Lee Legacy constitutes the business of the Company, including its 50% interest in Madison Newspapers, Inc. ("MNI"), but excluding Pulitzer and the Company’s 50% interest in TNI Partners ("TNI").

 

The Lee Legacy and Pulitzer separate income statement presentations are not prepared in accordance with Generally Accepted Accounting Principles ("GAAP") as non-operating income (expense) and income tax expense are allocations of the consolidated balances and have not been prepared in accordance with Accounting Standards Codification 280: Segment Reporting. This presentation is only intended to be used for purposes of complying with covenants under the Company's debt agreements and should not be used as a substitute for the Company's consolidated financial statements prepared in accordance with GAAP. Refer to the Company's consolidated financial statements prepared in accordance with GAAP as periodically filed on Form 10-Q and Form 10-K with the Securities and Exchange Commission.

 

 

Item 9.01.

Financial Statements and Exhibits.

 

(d)	Exhibits
	99.1	Supplemental Financial Information – Fourth fiscal quarter ended September 29, 2019

 

 

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:	December 13, 2019	By:	/s/ Timothy R. Millage
			Timothy R. Millage
			Vice President, Chief Financial Officer and Treasurer

 

Exhibit 99.1

 

Exhibit 99.1 - Supplemental Financial Information – Fourth fiscal quarter ended September 29, 2019.

 

 

4600 E 53rd Street.

Davenport, IA 52807

www.lee.net

 

 

Quarter Ended (unaudited)

		September 29, 2019												September 30, 2018
(in thousands)		Consolidated				Lee Legacy				Pulitzer Inc.				Consolidated				Lee Legacy				Pulitzer Inc.
Operating revenue:
Advertising and marketing services			61,282				42,846				18,436				73,695				51,702				21,993
Subscription			48,726				34,012				14,714				52,703				36,904				15,799
Other			13,657				12,109				1,548				13,348				11,792				1,556
Total operating revenue			123,665				88,967				34,698				139,746				100,398				39,348
Operating expenses:
Compensation			42,672				31,699				10,973				49,614				37,334				12,280
Newsprint and ink			4,843				3,245				1,598				7,028				4,836				2,192
Other operating expenses			47,793				29,188				18,605				50,824				30,148				20,676
Depreciation and amortization			7,069				4,619				2,450				7,794				5,082				2,712
Assets loss (gain) on sales, impairments, and other			2,676				2,361				315				7,626				695				6,931
Restructuring costs and other			6,022				3,294				2,728				1,400				1,021				379
Total operating expenses			111,075				74,406				36,669				124,286				79,116				45,170
Equity in earnings of associated companies			1,823				1,183				640				3,679				2,605				1,074
Operating income			14,413				15,744				(1,331	)			19,139				23,887				(4,748	)
Non-operating income (expense), net			(11,310	)			(14,433	)			3,123				(14,140	)			(17,558	)			3,418
Income tax expense (benefit)			1,758				1,310				448				561				1,044				(483	)
Net income			1,345				1				1,344				4,438				5,285				(847	)

 

Adjusted EBITDA is a non-GAAP financial measure. Below is a reconciliation of adjusted EBITDA to net income, the most directly comparable measure under GAAP:

 

Net Income			1,345				1				1,344				4,438				5,285				(847	)
Adjusted to exclude
Non-operating expenses (income), net			11,310				14,433				(3,123	)			14,140				17,558				(3,418	)
Income tax expense (benefit)			1,758				1,310				448				561				1,044				(483	)
Equity in earnings of TNI and MNI			(1,823	)			(1,183	)			(640	)			(3,679	)			(2,605	)			(1,074	)
Depreciation and amortization			7,069				4,619				2,450				7,794				5,082				2,712
Assets loss (gain) on sales, impairments, and other			2,676				2,361				315				7,626				695				6,931
Restructuring costs and other			6,022				3,294				2,728				1,400				1,021				379
Stock compensation			428				428				—				417				417				—
Add:
Ownership share of TNI and MNI EBITDA (50%)			2,325				1,580				745				2,449				1,270				1,179
Adjusted EBITDA			31,110				26,843				4,267				35,146				29,767				5,379
Supplemental cash flow information
Distributions from MNI and TNI			2,007				1,000				1,007				2,339				900				1,439
Capital expenditures			(2,148	)			(1,606	)			(542	)			(1,744	)			(1,529	)			(215	)
Cash income tax payments			(2,097	)			(2,097	)			—				(35	)			(30	)			(5	)
Interest income			165				(2,245	)			2,410				154				(2,556	)			2,710
Interest to be settled in cash			(11,232	)			(8,305	)			(2,927	)			(13,004	)			(10,046	)			(2,958	)
Debt financing and administrative costs			159				159				—				(4	)			(4	)			—

 

 

Year Ended (unaudited)
		September 29, 2019												September 30, 2018
(in thousands)		Consolidated				Lee Legacy				Pulitzer Inc.				Consolidated				Lee Legacy				Pulitzer Inc.
Operating revenue:
Advertising and marketing services			265,933				184,648				81,285				303,446				212,265				91,181
Subscription			186,691				129,053				57,638				195,108				135,309				59,799
Other			57,230				51,077				6,153				45,401				38,543				6,858
Total operating revenue			509,854				364,778				145,076				543,955				386,117				157,838
Operating expenses:
Compensation			182,869				137,172				45,697				199,164				149,924				49,240
Newsprint and ink			22,237				15,172				7,065				24,949				17,591				7,358
Other operating expenses			193,709				118,738				74,971				199,653				119,673				79,980
Depreciation and amortization			29,332				19,135				10,197				31,766				20,676				11,090
Assets loss (gain) on sales, impairments, and other			2,464				2,247				217				6,429				(475	)			6,904
Restructuring costs and other			11,635				7,118				4,517				5,550				4,587				963
Total operating expenses			442,246				299,582				142,664				467,511				311,976				155,535
Equity in earnings of associated companies			7,121				2,885				4,236				9,249				4,629				4,620
Operating income			74,729				68,081				6,648				85,693				78,770				6,923
Non-operating income (expense), net			(50,889	)			(64,596	)			13,707				(54,873	)			(67,071	)			12,198
Income tax expense (benefit)			7,931				2,842				5,089				(16,228	)			(23,173	)			6,945
Net income			15,909				643				15,266				47,048				34,872				12,176

 

Adjusted EBITDA is a non-GAAP financial measure. Below is a reconciliation of adjusted EBITDA to net income, the most directly comparable measure under GAAP:

 

Net Income			15,909				643				15,266				47,048				34,872				12,176
Adjusted to exclude
Non-operating expenses (income), net			50,889				64,596				(13,707	)			54,873				67,071				(12,198	)
Income tax expense (benefit)			7,931				2,842				5,089				(16,228	)			(23,173	)			6,945
Equity in earnings of TNI and MNI			(7,121	)			(2,885	)			(4,236	)			(9,249	)			(4,629	)			(4,620	)
Depreciation and amortization			29,332				19,135				10,197				31,766				20,676				11,090
Assets loss (gain) on sales, impairments, and other			2,464				2,247				217				6,429				(475	)			6,904
Restructuring costs and other			11,635				7,118				4,517				5,550				4,587				963
Stock compensation			1,638				1,638				—				1,857				1,857				—
Add:
Ownership share of TNI and MNI EBITDA (50%)			8,811				4,157				4,654				9,883				4,845				5,038
Adjusted EBITDA			121,488				99,491				21,997				131,929				105,631				26,298
Supplemental cash flow information:
Distributions from MNI and TNI			7,595				3,350				4,245				9,214				3,400				5,814
Capital expenditures			(5,901	)			(4,794	)			(1,107	)			(6,025	)			(4,660	)			(1,365	)
Cash income tax payments			(8,439	)			(8,440	)			1				(464	)			(396	)			(68	)
Interest income			655				(10,204	)			10,859				489				(8,879	)			9,368
Interest to be settled in cash			(47,488	)			(36,821	)			(10,667	)			(52,842	)			(39,988	)			(12,854	)
Debt financing and administrative costs			(1,773	)			(1,773	)			—				(437	)			(437	)			—