Lee Enterprises updates business outlook, plans more digital subscriptions
DAVENPORT, Iowa (March 21, 2012) -- Lee Enterprises, Incorporated (NYSE: LEE - News) expects revenue trends for the quarter ending March 25, 2012, to be similar to, or slightly better than, the December 2011 quarter, down in the range of 3% to 4%, with operating expenses, excluding depreciation and amortization, decreasing 4% to 5%, resulting in stable operating cash flow(1) and operating income.
In remarks prepared for Lee`s annual meeting of stockholders this morning, Carl Schmidt, vice president, chief financial officer and treasurer, said operating expenses, excluding depreciation and amortization, for the fiscal year ending September 30, 2012, are expected to decrease 3.5% to 4.5% from the comparable 2011 level, also excluding non-cash impairment charges in the prior year and a 53rd week of business activity in 2012, a significant improvement from previous guidance.
He said the additional week, which will be in September and which last occurred in 2007, will add $9-10 million to operating expenses for this year only, but it also will add an extra week of revenue, so the impact on cash flow and earnings should be positive.
Schmidt added that debt repayments in the quarter totaling $30.4 million made in conjunction with, and since the closing of the company`s debt refinancing on January 30 will reduce the remaining balance to $965.5 million.
Also in remarks prepared for the annual meeting, Mary Junck, chairman and chief executive officer, said Lee plans to introduce digital subscriber programs in more Lee markets within the next three months and expects to have paid digital content in most Lee markets by the end of the year.
She said reception of a digital subscriber program at six newspapers in Montana and Wyoming has been good. She said there has been no adverse effect on digital advertising revenue, that the number of unique visits has continued to grow, and that page views have remained strong.
"We`re excited about the opportunities we see for digital subscriptions," she said. "No other source can match the wealth of unique and indispensable local news and information that we provide around the clock, day in and day out. We see this development as an important part of our future."
She shared updated market studies showing that Lee`s newspapers and digital products reach 82% of the adults in its 12 largest markets over a week, including 80% of people 18-29 years old.
She said mobile and tablet audience growth has been "breathtaking," with page views up 225% in January 2012 compared with a year ago.
She added: "Next week, we`re rolling out another major update for our 104 smartphone apps. The update features an improved user interface, new content and new rich-media advertising, with more options for sharing across social media."
The complete presentation will be available later this morning at lee.net.
Lee Enterprises is a leading provider of local news and information, and a major platform for advertising, in its markets, with 48 daily newspapers and a joint interest in four others, rapidly growing digital products and nearly 300 specialty publications in 23 states. Lee`s newspapers have circulation of 1.3 million daily and 1.7 million Sunday, reaching nearly four million readers in print alone. Lee`s websites and mobile and tablet products attracted 22.7 million unique visitors in January 2012. Lee`s markets include St. Louis, MO; Lincoln, NE; Madison, WI; Davenport, IA; Billings, MT; Bloomington, IL; and Tucson, AZ. Lee Common Stock is traded on the New York Stock Exchange under the symbol LEE.
(1) Operating cash flow, which is defined as operating income before depreciation, amortization, impairment charges, curtailment gains, and equity in earnings of associated companies, is a non-GAAP (Generally Accepted Accounting Principles) financial measure. No non-GAAP financial measure should be considered as a substitute for any related GAAP financial measure. However, the company believes the use of non-GAAP financial measures provides meaningful supplemental information with which to evaluate its financial performance, or assist in forecasting and analyzing future periods. For further information, please refer to the most recent 10-K or 10-Q filing.
Davenport, IA 52801 Chairman, President and Chief Executive Officer
www.lee.net (563) 383-2100
January 23, 2012
Dear Lee Stockholders and Employees:
The comprehensive refinancing of Lee's debt will go into effect on January 30, 2012.
The achievement will mark the successful conclusion of a process that began nearly a year ago
in a difficult credit environment. The refinancing, along with our rapid digital growth, huge
audiences, intensive sales culture and ongoing strong cash flow, will keep Lee on solid financial
footing as we continue reshaping our company and improving our balance sheet.
The agreements extend our existing loan agreements to 2015 and 2017 on reasonable terms that
preserve stockholders' ownership interests with only 13% dilution. I am enclosing our news
release with additional details.
As I noted in my letter of December 2, 2011, completion of the refinancing required a voluntary,
prepackaged Chapter 11 process to bind a small minority of non-consenting creditors to
agreements that had been reached with an overwhelming majority of lenders. The process did
not affect employees, vendors, contractors, customers or any aspect of company operations.
Lee continues to be listed on the New York Stock Exchange, although the stock price currently
remains below the minimum average closing price of $1 per share. We expect investor sentiment
to improve with the conclusion of the refinancing. Regardless, NYSE rules allow the cure period
to extend through Lee's annual meeting in March 2012 because, if necessary, Lee could receive
shareholder approval to enact a reverse stock split. If Lee stock were to be removed from the
NYSE, it would be traded over the counter.
As you may have seen in our earnings report for the first quarter of our fiscal 2012, Lee continues
to gain headway in a still-uneven economy. We expect revenue trends to improve slowly in 2012,
as we press forward with more digital and print initiatives. Because of our intensive sales culture
and evolving array of products, Lee has outpaced the industry in advertising revenue
performance for 33 quarters in a row, and we expect to continue extending that string.
Even in a challenging economy, our print and digital media attract huge audiences. Continual,
extensive research shows that more than 80% percent of adults in our larger markets read or use
our products each week, including two-thirds of 18- to 29-year-olds. We believe the statistics are
even stronger in our smaller markets. That strength reflects the unique and indispensable role we
have earned in our communities and reinforces our optimism for the future.
With deep appreciation for your continuing support,
Chairman, President and Chief Executive Officer
Enc.: News release
Lee Enterprises Inc.
201 North Harrison Street
Davenport, IA 52801
Web Site: http://www.lee.net/
Index Membership: N/A
Industry: Publishing - Newspapers
Full Time Employees: 6,200
Lee Enterprises, Incorporated provides local news, information, and advertising primarily in midsize markets in the United States. It publishes 49 daily newspapers, as well as offers approximately 300 weekly newspapers and specialty publications in 23 states. The company also offers online services and advertising services. In addition, it provides online infrastructure and online publishing services for approximately 1,500 daily and weekly newspapers and shoppers. Further, Lee Enterprises has a joint interest in four newspapers. The company has a strategic alliance with Yahoo!, Inc., which offers its classified employment advertising customer base the opportunity to post job listings on Yahoo!'s HotJobs national platform. Lee Enterprises was founded in 1890 and is based in Davenport, Iowa.
Arizona Daily Sun, Flagstaff
Arizona Daily Star, Tucson
The Sentinel, Hanford
The Kingsburg Recorder, Kingsburg
Lemoore Advance, Lemoore
The Selma Enterprise, Selma
The Lompoc Record, Lompoc
Napa Valley Register, Napa
Inside Napa Valley, Napa
American Canyon Eagle, Napa
St. Helena Star, St. Helena
Weekly Calistogan, St. Helena
North County Times, Oceanside/Escondido
Santa Maria Times, Santa Maria
Adobe Press, Nipomo
El Tiempo, Santa Maria
Times Press Recorder, Arroyo Grande
Santa Ynez Valley News, Santa Maria
The Garden Island, Lihue, Kauai
Ag Weekly, Twin Falls
The Times-News, Twin Falls
The Pantagraph, Bloomington
The Southern Illinoisan, Carbondale
Journal Gazette and Times-Courier, Mattoon/Charleston
Herald & Review, Decatur
Prairie Shopper, Decatur
The Times, Munster
Iowa Farmer Today, Cedar Rapids
Quad-City Times, Davenport
Globe-Gazette, Mason City
Mason City Shopper, Mason City
Britt News-Tribune, Britt
Forest City Summit, Forest City
Winnebago/Hancock Shopper, Forest City
Mitchell County Press-News, Osage
Muscatine Journal, Muscatine
Classic Images / Films of the Golden Age, Muscatine
Sioux City Journal, Sioux City
The Courier, Waterloo-Cedar Falls
The Ledger Independent, Maysville
Minnesota Farm Guide, Bismarck, ND
Winona Daily News, Winona
Daily Journal, Park Hills
Democrat News, Fredericktown
The Farmington Press, Farmington
St. Louis Post-Dispatch, St. Louis
Suburban Journals, Greater St. Louis
Billings Gazette, Billings
Thrifty Nickel, Billings
Mini Nickel, Bozeman
The Montana Standard, Butte
The Prairie Star, Great Falls
Ravalli Republic, Hamilton
Independent Record, Helena
The Adit, Helena
Montana Magazine, Helena
Grizzly Nickel, Missoula
Sellitmt statewide classifieds
Beatrice Daily Sun, Beatrice
Columbus Telegram, Columbus
Fremont Tribune, Fremont
Lincoln Journal Star, Lincoln
Midwest Messenger, Tekamah
Midwest Producer, Tekamah
Plattsmouth Journal, Plattsmouth
Elko Daily Free Press, Elko
The Citizen, Auburn
Skaneateles Journal, Skaneateles
The Post-Star, Glens Falls
The Bismarck Tribune, Bismarck
Farm & Ranch Guide, Bismarck
Dickinson Finder, Dickinson
The Finder, Mandan
Mandan News, Mandan
The World, Coos Bay
Bandon Western World, Bandon
The Umpqua Post, Umpqua
Lebanon Express, Lebanon
The Sentinel, Carlisle
The Times and Democrat, Orangeburg
Rapid City Journal, Rapid City
Black HIlls Weekly Group, Black Hills
Tri-State Neighbor, Sioux Falls
The Daily Herald, Provo
Nebo Reporter, Payson
The Pyramid, Mt. Pleasant
Spanish Fork Press
The Daily News, Longview
Baraboo News Republic, Baraboo
The Chippewa Herald, Chippewa Falls
Chippewa Valley Newspapers, Chippewa region
Daily Citizen, Beaver Dam
Tradin' Post Buyer's Guide, Eau Claire
Foxxy Shopper, La Crosse
La Crosse Tribune, La Crosse
River Valley Newspapers, La Crosse-Winona region
Onalaska/Holmen Courier-Life News, Onalaska/Holmen
Wisconsin State Journal, Madison
Juneau County Star-Times, Mauston
The Chronicle, Melrose
Dunn County News, Menomonie
Portage Daily Register, Portage
The Journal Times, Racine
Reedsburg Times-Press, Reedsburg
Sauk Prairie Eagle, Sauk City
Foxxy Shopper, Sparta
Tomah Journal/Monitor Herald, Tomah
Vernon County Broadcaster, Viroqua
Coulee News, West Salem
Westby Times, Westby
Wisconsin Dells Events, Wisconsin Dells
Casper Star-Tribune, Casper
Casper Journal, Casper
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