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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Lee Enterprises Inc | NYSE:LEE | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 28.50 | 0 | 01:00:00 |
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Delaware
|
42-0823980
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(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
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Table Of Contents
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PAGE
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FORWARD LOOKING STATEMENTS
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PART I
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FINANCIAL INFORMATION
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Item 1.
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Financial Statements (Unaudited)
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Consolidated Balance Sheets - June 25, 2017 and September 25, 2016
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Consolidated Statements of Income and Comprehensive Income - 13 weeks and 39 weeks ended June 25, 2017 and June 26, 2016
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Consolidated Statements of Cash Flows - 39 weeks ended June 25, 2017 and June 26, 2016
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Notes to Consolidated Financial Statements
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Item 2.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 4.
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Controls and Procedures
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PART II
|
OTHER INFORMATION
|
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Item 1.
|
Legal Proceedings
|
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Item 6.
|
Exhibits
|
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|
SIGNATURES
|
|
|
(Thousands of Dollars)
|
June 25
2017 |
|
September 25
2016 |
|
|
|
|
||
ASSETS
|
|
|
||
|
|
|
||
Current assets:
|
|
|
||
Cash and cash equivalents
|
24,972
|
|
16,984
|
|
Accounts receivable, net
|
48,765
|
|
51,334
|
|
Inventories
|
3,695
|
|
4,252
|
|
Other
|
5,359
|
|
4,683
|
|
Total current assets
|
82,791
|
|
77,253
|
|
Investments:
|
|
|
||
Associated companies
|
29,368
|
|
29,716
|
|
Other
|
10,497
|
|
9,488
|
|
Total investments
|
39,865
|
|
39,204
|
|
Property and equipment:
|
|
|
||
Land and improvements
|
20,520
|
|
21,028
|
|
Buildings and improvements
|
172,863
|
|
174,164
|
|
Equipment
|
278,655
|
|
279,770
|
|
Construction in process
|
1,514
|
|
823
|
|
|
473,552
|
|
475,785
|
|
Less accumulated depreciation
|
355,468
|
|
347,223
|
|
Property and equipment, net
|
118,084
|
|
128,562
|
|
Goodwill
|
243,979
|
|
243,729
|
|
Other intangible assets, net
|
139,489
|
|
158,354
|
|
Medical plan assets, net
|
15,145
|
|
14,063
|
|
Other
|
1,660
|
|
1,690
|
|
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
Total assets
|
641,013
|
|
662,855
|
|
(Thousands of Dollars and Shares, Except Per Share Data)
|
June 25
2017 |
|
September 25
2016 |
|
|
|
|
||
LIABILITIES AND EQUITY
|
|
|
||
|
|
|
||
Current liabilities:
|
|
|
||
Current maturities of long-term debt
|
32,138
|
|
25,070
|
|
Accounts payable
|
15,113
|
|
18,143
|
|
Compensation and other accrued liabilities
|
20,705
|
|
23,884
|
|
Accrued interest
|
11,086
|
|
2,895
|
|
Income taxes payable
|
322
|
|
665
|
|
Unearned revenue
|
28,171
|
|
28,361
|
|
Total current liabilities
|
107,535
|
|
99,018
|
|
Long-term debt, net of current maturities
|
513,218
|
|
565,826
|
|
Pension obligations
|
53,302
|
|
55,148
|
|
Postretirement and postemployment benefit obligations
|
5,446
|
|
10,717
|
|
Deferred income taxes
|
47,128
|
|
38,308
|
|
Income taxes payable
|
5,436
|
|
5,016
|
|
Warrants and other
|
9,606
|
|
16,363
|
|
Total liabilities
|
741,671
|
|
790,396
|
|
Equity (deficit):
|
|
|
||
Stockholders' equity (deficit):
|
|
|
||
Serial convertible preferred stock, no par value; authorized 500 shares; none issued
|
—
|
|
—
|
|
Common Stock, $0.01 par value; authorized 120,000 shares; issued and outstanding:
|
567
|
|
558
|
|
June 25, 2017: 56,717 shares;
|
|
|
||
September 25, 2016: 55,771 shares
|
|
|
||
Class B Common Stock, $2 par value; authorized 30,000 shares; none issued
|
—
|
|
—
|
|
Additional paid-in capital
|
251,272
|
|
249,740
|
|
Accumulated deficit
|
(331,709
|
)
|
(356,005
|
)
|
Accumulated other comprehensive loss
|
(21,775
|
)
|
(22,778
|
)
|
Total stockholders' deficit
|
(101,645
|
)
|
(128,485
|
)
|
Non-controlling interests
|
987
|
|
944
|
|
Total deficit
|
(100,658
|
)
|
(127,541
|
)
|
Total liabilities and deficit
|
641,013
|
|
662,855
|
|
|
13 Weeks Ended
|
|
39 Weeks Ended
|
|
||||
(Thousands of Dollars, Except Per Common Share Data)
|
June 25
2017 |
|
June 26
2016 |
|
June 25
2017 |
|
June 26
2016 |
|
|
|
|
|
|
||||
Operating revenue:
|
|
|
|
|
||||
Advertising and marketing services
|
81,247
|
|
92,294
|
|
251,815
|
|
286,662
|
|
Subscription
|
47,410
|
|
47,160
|
|
141,306
|
|
144,249
|
|
Other
|
10,698
|
|
11,492
|
|
33,610
|
|
35,275
|
|
Total operating revenue
|
139,355
|
|
150,946
|
|
426,731
|
|
466,186
|
|
Operating expenses:
|
|
|
|
|
|
|||
Compensation
|
51,577
|
|
57,218
|
|
159,047
|
|
174,733
|
|
Newsprint and ink
|
6,123
|
|
6,604
|
|
19,216
|
|
19,343
|
|
Other operating expenses
|
48,571
|
|
53,356
|
|
150,109
|
|
166,332
|
|
Depreciation
|
4,011
|
|
4,323
|
|
12,090
|
|
12,975
|
|
Amortization of intangible assets
|
6,285
|
|
6,545
|
|
18,903
|
|
19,777
|
|
Gain on sales of assets and other, net
|
(61
|
)
|
(354
|
)
|
(3,777
|
)
|
(1,763
|
)
|
Workforce adjustments and other
|
3,902
|
|
424
|
|
6,372
|
|
1,616
|
|
Total operating expenses
|
120,408
|
|
128,116
|
|
361,960
|
|
393,013
|
|
Equity in earnings of associated companies
|
1,616
|
|
1,825
|
|
6,034
|
|
6,633
|
|
Operating income
|
20,563
|
|
24,655
|
|
70,805
|
|
79,806
|
|
Non-operating income (expense):
|
|
|
|
|
||||
Financial income
|
77
|
|
141
|
|
261
|
|
326
|
|
Interest expense
|
(14,331
|
)
|
(15,783
|
)
|
(43,919
|
)
|
(49,206
|
)
|
Debt financing and administrative costs
|
(1,438
|
)
|
(1,196
|
)
|
(3,463
|
)
|
(4,563
|
)
|
Gain on insurance settlement
|
—
|
|
—
|
|
—
|
|
30,646
|
|
Other, net
|
3,259
|
|
(413
|
)
|
10,674
|
|
920
|
|
Total non-operating income (expense), net
|
(12,433
|
)
|
(17,251
|
)
|
(36,447
|
)
|
(21,877
|
)
|
Income before income taxes
|
8,130
|
|
7,404
|
|
34,358
|
|
57,929
|
|
Income tax expense
|
1,843
|
|
3,037
|
|
9,253
|
|
22,571
|
|
Net income
|
6,287
|
|
4,367
|
|
25,105
|
|
35,358
|
|
Net income attributable to non-controlling interests
|
(292
|
)
|
(275
|
)
|
(809
|
)
|
(801
|
)
|
Income attributable to Lee Enterprises, Incorporated
|
5,995
|
|
4,092
|
|
24,296
|
|
34,557
|
|
Other comprehensive income (loss), net of income taxes
|
55
|
|
(43
|
)
|
1,004
|
|
(129
|
)
|
Comprehensive income attributable to Lee Enterprises, Incorporated
|
6,050
|
|
4,049
|
|
25,300
|
|
34,428
|
|
Earnings per common share:
|
|
|
|
|
||||
Basic:
|
0.11
|
|
0.08
|
|
0.45
|
|
0.65
|
|
Diluted:
|
0.11
|
|
0.08
|
|
0.44
|
|
0.64
|
|
|
39 Weeks Ended
|
|
||
(Thousands of Dollars)
|
June 25
2017 |
|
June 26
2016 |
|
|
|
|
||
Cash provided by operating activities:
|
|
|
||
Net income
|
25,105
|
|
35,358
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
||
Depreciation and amortization
|
30,989
|
|
32,752
|
|
Net (gain) on sales of assets and insurance settlement
|
(35
|
)
|
(32,409
|
)
|
Curtailment gains
|
(3,741
|
)
|
—
|
|
Stock compensation expense
|
1,564
|
|
1,714
|
|
Distributions greater than earnings of MNI
|
504
|
|
3,072
|
|
Deferred income tax expense
|
8,056
|
|
20,693
|
|
Debt financing and administrative costs
|
3,463
|
|
4,563
|
|
Gain on extinguishment of debt
|
—
|
|
(1,250
|
)
|
Pension contributions
|
—
|
|
(2,314
|
)
|
Changes in operating assets and liabilities:
|
|
|
||
Decrease in receivables
|
2,569
|
|
5,614
|
|
Decrease (Increase) in inventories and other
|
253
|
|
(440
|
)
|
Increase (decrease) in accounts payable, compensation and other accrued liabilities and unearned revenue
|
2,067
|
|
(1,592
|
)
|
Decrease in pension, postretirement and postemployment benefit obligations
|
(2,691
|
)
|
(3,440
|
)
|
Change in income taxes receivable or payable
|
77
|
|
1,604
|
|
Other, net
|
(8,747
|
)
|
1,902
|
|
Net cash provided by operating activities
|
59,433
|
|
65,827
|
|
Cash provided by (required for) investing activities:
|
|
|
||
Purchases of property and equipment
|
(3,232
|
)
|
(5,793
|
)
|
Insurance settlement
|
—
|
|
30,646
|
|
Proceeds from sales of assets
|
1,830
|
|
3,983
|
|
Distributions greater (less) than earnings of TNI
|
(156
|
)
|
1,275
|
|
Other, net
|
(798
|
)
|
(500
|
)
|
Net cash provided by (required for) investing activities
|
(2,356
|
)
|
29,611
|
|
Cash provided by (required for) financing activities:
|
|
|
||
Proceeds from long-term debt
|
—
|
|
5,000
|
|
Payments on long-term debt
|
(48,687
|
)
|
(89,340
|
)
|
Debt financing costs paid
|
(371
|
)
|
(420
|
)
|
Common stock transactions, net
|
(31
|
)
|
60
|
|
Net cash required for financing activities
|
(49,089
|
)
|
(84,700
|
)
|
Net increase in cash and cash equivalents
|
7,988
|
|
10,738
|
|
Cash and cash equivalents:
|
|
|
||
Beginning of period
|
16,984
|
|
11,134
|
|
End of period
|
24,972
|
|
21,872
|
|
1
|
BASIS OF PRESENTATION
|
|
13 Weeks Ended
|
|
39 Weeks Ended
|
|
||||
(Thousands of Dollars)
|
June 25
2017 |
|
June 26
2016 |
|
June 25
2017 |
|
June 26
2016 |
|
|
|
|
|
|
||||
Operating revenue
|
11,330
|
|
12,231
|
|
37,151
|
|
41,053
|
|
Operating expenses
|
9,178
|
|
10,073
|
|
28,948
|
|
32,515
|
|
Operating income
|
2,152
|
|
2,158
|
|
8,203
|
|
8,538
|
|
Company's 50% share of operating income
|
1,076
|
|
1,080
|
|
4,102
|
|
4,269
|
|
Less amortization of intangible assets
|
105
|
|
105
|
|
314
|
|
314
|
|
Equity in earnings of TNI
|
971
|
|
975
|
|
3,788
|
|
3,955
|
|
|
13 Weeks Ended
|
|
39 Weeks Ended
|
|
||||
(Thousands of Dollars)
|
June 25
2017 |
|
June 26
2016 |
|
June 25
2017 |
|
June 26
2016 |
|
|
|
|
|
|
||||
Operating revenue
|
15,070
|
|
16,263
|
|
46,493
|
|
49,602
|
|
Operating expenses, excluding workforce adjustments, depreciation and amortization
|
12,649
|
|
13,160
|
|
38,576
|
|
39,819
|
|
Workforce adjustments
|
81
|
|
13
|
|
236
|
|
32
|
|
Depreciation and amortization
|
348
|
|
410
|
|
1,044
|
|
1,303
|
|
Operating income
|
1,992
|
|
2,680
|
|
6,637
|
|
8,448
|
|
Net income
|
1,291
|
|
1,699
|
|
4,492
|
|
5,347
|
|
Equity in earnings of MNI
|
645
|
|
850
|
|
2,246
|
|
2,678
|
|
3
|
GOODWILL AND OTHER INTANGIBLE ASSETS
|
|
39 Weeks Ended
|
|
(Thousands of Dollars)
|
June 25
2017 |
|
|
|
|
Goodwill, gross amount
|
1,532,458
|
|
Accumulated impairment losses
|
(1,288,729
|
)
|
Goodwill, beginning of period
|
243,729
|
|
Goodwill acquired in business combinations
|
250
|
|
Goodwill, end of period
|
243,979
|
|
(Thousands of Dollars)
|
June 25
2017 |
|
September 25
2016 |
|
|
|
|
||
Nonamortized intangible assets:
|
|
|
||
Mastheads
|
23,644
|
|
23,644
|
|
Amortizable intangible assets:
|
|
|
||
Customer and newspaper subscriber lists
|
687,221
|
|
687,182
|
|
Less accumulated amortization
|
571,376
|
|
552,472
|
|
|
115,845
|
|
134,710
|
|
Noncompete and consulting agreements
|
28,524
|
|
28,524
|
|
Less accumulated amortization
|
28,524
|
|
28,524
|
|
|
—
|
|
—
|
|
Other intangible assets, net
|
139,489
|
|
158,354
|
|
4
|
DEBT
|
•
|
$400,000,000
aggregate principal amount of
9.5%
Senior Secured Notes (the “Notes”), pursuant to an Indenture dated as of March 31, 2014 (the “Indenture”).
|
•
|
$250,000,000
first lien term loan (the "1
st
Lien Term Loan") and
$40,000,000
revolving facility (the "Revolving Facility") under a First Lien Credit Agreement dated as of March 31, 2014 (together the “1
st
Lien Credit Facility”).
|
•
|
$150,000,000
second lien term loan under a Second Lien Loan Agreement dated as of March 31, 2014 (the “2
nd
Lien Term Loan”).
|
|
|
|
Interest Rates
(%)
|
||
(Thousands of Dollars)
|
June 25
2017 |
|
September 26
2016 |
|
June 25
2017 |
|
|
|
|
||
Revolving Facility
|
—
|
|
—
|
|
6.72
|
1
st
Lien Term Loan
|
58,984
|
|
101,304
|
|
7.29
|
Notes
|
385,000
|
|
385,000
|
|
9.50
|
2
nd
Lien Term Loan
|
124,496
|
|
130,863
|
|
12.00
|
|
568,480
|
|
617,167
|
|
|
Unamortized debt issue costs
|
(23,124
|
)
|
(26,271
|
)
|
|
Less current maturities of long-term debt
|
32,138
|
|
25,070
|
|
|
Total long-term debt
|
513,218
|
|
565,826
|
|
|
Period Beginning
|
Percentage of Principal Amount
|
|
|
March 15, 2018
|
104.75
|
March 15, 2019
|
102.38
|
March 15, 2020
|
100.00
|
|
13 Weeks Ended
|
13 Weeks Ending
|
|
|||||
(Thousands of Dollars)
|
December 25
2016 |
|
March 26
2017 |
|
June 25
2017 |
|
September 24
2017 |
|
|
|
|
|
|
||||
Mandatory
|
6,250
|
|
6,250
|
|
6,250
|
|
6,250
|
|
Voluntary
|
11,000
|
|
7,500
|
|
5,000
|
|
—
|
|
Excess cash flow payment
|
70
|
|
—
|
|
—
|
|
1,589
|
|
|
17,320
|
|
13,750
|
|
11,250
|
|
7,839
|
|
For the Period Ending
(Thousands of Dollars)
|
Pulitzer Excess Cash Flow
|
|
Payment Date
|
Payment Amount
(not rejected)
|
|
|
|
|
|
||
June 26, 2016
|
1,583
|
|
Q4 2016
|
299
|
|
September 25, 2016
|
—
|
|
Q1 2017
|
—
|
|
December 25, 2016
|
930
|
|
Q2 2017
|
174
|
|
March 26, 2017
|
4,488
|
|
Q3 2017
|
4,488
|
|
5
|
PENSION, POSTRETIREMENT AND POSTEMPLOYMENT DEFINED BENEFIT PLANS
|
PENSION PLANS
|
13 Weeks Ended
|
|
39 Weeks Ended
|
|
||||
(Thousands of Dollars)
|
June 25
2017 |
|
June 26
2016 |
|
June 25
2017 |
|
June 26
2016 |
|
|
|
|
|
|
||||
Service cost for benefits earned during the period
|
21
|
|
49
|
|
63
|
|
147
|
|
Interest cost on projected benefit obligation
|
1,349
|
|
1,515
|
|
4,047
|
|
4,545
|
|
Expected return on plan assets
|
(1,969
|
)
|
(2,174
|
)
|
(5,907
|
)
|
(6,522
|
)
|
Amortization of net loss
|
736
|
|
599
|
|
2,208
|
|
1,797
|
|
Amortization of prior service benefit
|
(34
|
)
|
(34
|
)
|
(102
|
)
|
(102
|
)
|
Pension expense (benefit)
|
103
|
|
(45
|
)
|
309
|
|
(135
|
)
|
|
|
|
|
|
||||
POSTRETIREMENT MEDICAL PLANS
|
13 Weeks Ended
|
|
39 Weeks Ended
|
|
||||
(Thousands of Dollars)
|
June 25
2017 |
|
June 26
2016 |
|
June 25
2017 |
|
June 26
2016 |
|
|
|
|
|
|
||||
Service cost for benefits earned during the period
|
—
|
|
16
|
|
12
|
|
48
|
|
Interest cost on projected benefit obligation
|
91
|
|
156
|
|
323
|
|
468
|
|
Expected return on plan assets
|
(264
|
)
|
(331
|
)
|
(792
|
)
|
(993
|
)
|
Amortization of net gain
|
(254
|
)
|
(273
|
)
|
(734
|
)
|
(819
|
)
|
Amortization of prior service benefit
|
(365
|
)
|
(365
|
)
|
(1,095
|
)
|
(1,095
|
)
|
Curtailment gains
|
—
|
|
—
|
|
(3,741
|
)
|
—
|
|
Postretirement medical benefit
|
(792
|
)
|
(797
|
)
|
(6,027
|
)
|
(2,391
|
)
|
6
|
INCOME TAXES
|
7
|
EARNINGS PER COMMON SHARE
|
|
13 Weeks Ended
|
|
39 Weeks Ended
|
|
||||
(Thousands of Dollars and Shares, Except Per Share Data)
|
June 25
2017 |
|
June 26
2016 |
|
June 25
2017 |
|
June 26
2016 |
|
|
|
|
|
|
||||
Income attributable to Lee Enterprises, Incorporated:
|
5,995
|
|
4,092
|
|
24,296
|
|
34,557
|
|
Weighted average common shares
|
56,668
|
|
55,735
|
|
56,401
|
|
55,398
|
|
Less weighted average restricted Common Stock
|
(2,515
|
)
|
(2,524
|
)
|
(2,491
|
)
|
(2,222
|
)
|
Basic average common shares
|
54,153
|
|
53,211
|
|
53,910
|
|
53,176
|
|
Dilutive stock options and restricted Common Stock
|
1,302
|
|
1,114
|
|
1,492
|
|
783
|
|
Diluted average common shares
|
55,455
|
|
54,325
|
|
55,402
|
|
53,959
|
|
Earnings per common share:
|
|
|
|
|
||||
Basic
|
0.11
|
|
0.08
|
|
0.45
|
|
0.65
|
|
Diluted
|
0.11
|
|
0.08
|
|
0.44
|
|
0.64
|
|
8
|
STOCK OWNERSHIP PLANS
|
(Thousands of Dollars and Shares, Except Per Share Data)
|
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Term
(Years)
|
Aggregate
Intrinsic
Value
|
|
|
|
|
|
|
|||
Outstanding, September 25, 2016
|
1,698
|
|
2.42
|
|
|
|
|
Exercised
|
(336
|
)
|
1.54
|
|
|
|
|
Cancelled
|
(88
|
)
|
14.02
|
|
|
|
|
Outstanding, June 25, 2017
|
1,274
|
|
1.85
|
|
3.9
|
437
|
|
|
|
|
|
|
|||
Exercisable, June 25, 2017
|
1,274
|
|
1.85
|
|
3.9
|
437
|
|
(Thousands of Shares, Except Per Share Data)
|
Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|
|
|
|
||
Outstanding, September 25, 2016
|
2,462
|
|
2.74
|
|
Vested
|
(741
|
)
|
3.59
|
|
Granted
|
823
|
|
3.34
|
|
Cancelled
|
(50
|
)
|
2.89
|
|
Outstanding, June 25, 2017
|
2,494
|
|
2.69
|
|
9
|
FAIR VALUE MEASUREMENTS
|
10
|
COMMITMENTS AND CONTINGENT LIABILITIES
|
|
13 Weeks Ended
|
|
39 Weeks Ended
|
|
||||
(Thousands of Dollars)
|
June 25
2017 |
|
June 26
2016 |
|
June 25
2017 |
|
June 26
2016 |
|
|
|
|
|
|
||||
Net Income
|
6,287
|
|
4,367
|
|
25,105
|
|
35,358
|
|
Adjusted to exclude
|
|
|
|
|
||||
Income tax expense
|
1,843
|
|
3,037
|
|
9,253
|
|
22,571
|
|
Non-operating expenses, net
|
12,433
|
|
17,251
|
|
36,447
|
|
21,877
|
|
Equity in earnings of TNI and MNI
|
(1,616
|
)
|
(1,825
|
)
|
(6,034
|
)
|
(6,633
|
)
|
Loss (gain) on sale of assets, net
|
(61
|
)
|
(354
|
)
|
(3,777
|
)
|
(1,763
|
)
|
Depreciation and amortization
|
10,296
|
|
10,868
|
|
30,993
|
|
32,752
|
|
Workforce adjustments and other
|
3,902
|
|
424
|
|
6,372
|
|
1,616
|
|
Stock compensation
|
481
|
|
550
|
|
1,564
|
|
1,714
|
|
Add:
|
|
|
|
|
||||
Ownership share of TNI and MNI EBITDA (50%)
|
2,246
|
|
2,625
|
|
7,943
|
|
9,145
|
|
Adjusted EBITDA
|
35,811
|
|
36,943
|
|
107,866
|
|
116,637
|
|
•
|
47 daily and 35 Sunday newspapers with print and digital subscribers totaling
0.8 million
and
1.1 million
, respectively, for the 13 weeks ended
June 25, 2017
. We estimate that almost three million people read our printed daily newspapers each day; and
|
•
|
Nearly 300 weekly newspapers and classified and niche publications.
|
•
|
$400,000,000
aggregate principal amount of 9.5% Senior Secured Notes (the “Notes”), pursuant to an Indenture dated as of March 31, 2014 (the “Indenture”), of which
$385,000,000
is outstanding at
June 25, 2017
;
|
•
|
$250,000,000
first lien term loan (the "1st Lien Term Loan") and
$40,000,000
revolving facility (the "Revolving Facility") under a First Lien Credit Agreement dated as of March 31, 2014 (together, the “1
st
Lien Credit Facility”), of which
$58,984,000
is outstanding at
June 25, 2017
; and
|
•
|
$150,000,000
second lien term loan under a Second Lien Loan Agreement dated as of March 31, 2014 (the “ 2
nd
Lien Term Loan”), of which
$124,496,000
is outstanding at
June 25, 2017
.
|
|
13 Weeks Ended
|
|
||||||
(Thousands of Dollars, Except Per Share Data)
|
June 25
2017 |
|
June 26
2016 |
|
Percent
Change
|
|
Same Property
|
|
|
|
|
|
|
||||
Advertising and marketing services revenue:
|
|
|
|
|
||||
Retail
|
51,946
|
|
58,937
|
|
(11.9
|
)
|
(10.6
|
)
|
Classified
|
22,434
|
|
25,707
|
|
(12.7
|
)
|
(11.8
|
)
|
National
|
4,273
|
|
4,626
|
|
(7.6
|
)
|
(6.3
|
)
|
Niche publications and other
|
2,594
|
|
3,024
|
|
(14.2
|
)
|
(14.3
|
)
|
Total advertising and marketing services revenue
|
81,247
|
|
92,294
|
|
(12.0
|
)
|
(10.8
|
)
|
Subscription
|
47,410
|
|
47,160
|
|
0.5
|
|
1.6
|
|
Digital services
|
3,435
|
|
3,541
|
|
(3.0
|
)
|
(2.2
|
)
|
Commercial printing
|
2,521
|
|
3,116
|
|
(19.1
|
)
|
(17.6
|
)
|
Other
|
4,742
|
|
4,835
|
|
(1.9
|
)
|
(1.6
|
)
|
Total operating revenue
|
139,355
|
|
150,946
|
|
(7.7
|
)
|
(6.6
|
)
|
Operating expenses:
|
|
|
|
|
||||
Compensation
|
51,577
|
|
57,218
|
|
(9.9
|
)
|
(9.1
|
)
|
Newsprint and ink
|
6,123
|
|
6,604
|
|
(7.3
|
)
|
(7.4
|
)
|
Other operating expenses
|
48,571
|
|
53,356
|
|
(9.0
|
)
|
(6.8
|
)
|
Workforce adjustments and other
|
3,902
|
|
424
|
|
NM
|
|
NM
|
|
Cash costs
|
110,173
|
|
117,602
|
|
(6.3
|
)
|
(4.9
|
)
|
|
29,182
|
|
33,344
|
|
(12.5
|
)
|
(12.2
|
)
|
Depreciation and amortization
|
10,296
|
|
10,868
|
|
(5.3
|
)
|
|
|
Gain on sales of assets and other, net
|
(61
|
)
|
(354
|
)
|
NM
|
|
|
|
Equity in earnings of associated companies
|
1,616
|
|
1,825
|
|
(11.5
|
)
|
|
|
Operating income
|
20,563
|
|
24,655
|
|
(16.6
|
)
|
|
|
Non-operating expense, net
|
(12,433
|
)
|
(17,251
|
)
|
(27.9
|
)
|
|
|
Income before income taxes
|
8,130
|
|
7,404
|
|
9.8
|
|
|
|
Income tax expense
|
1,843
|
|
3,037
|
|
(39.3
|
)
|
|
|
Net income
|
6,287
|
|
4,367
|
|
44.0
|
|
|
|
Net income attributable to non-controlling interests
|
(292
|
)
|
(275
|
)
|
6.2
|
|
|
|
Income attributable to Lee Enterprises, Incorporated
|
5,995
|
|
4,092
|
|
46.5
|
|
|
|
Other comprehensive income (loss), net of income taxes
|
55
|
|
(43
|
)
|
NM
|
|
|
|
Comprehensive income attributable to Lee Enterprises, Incorporated
|
6,050
|
|
4,049
|
|
49.4
|
|
|
|
Earnings per common share:
|
|
|
|
|
||||
Basic
|
0.11
|
|
0.08
|
|
37.5
|
|
|
|
Diluted
|
0.11
|
|
0.08
|
|
37.5
|
|
|
|
13 Weeks Ended
|
|
||||||
|
June 25
2017 |
|
June 26
2016 |
|
||||
(Thousands of Dollars, Except Per Share Data)
|
Amount
|
|
Per Share
|
|
Amount
|
|
Per Share
|
|
|
|
|
|
|
||||
Income attributable to Lee Enterprises, Incorporated, as reported
|
5,995
|
|
0.11
|
|
4,092
|
|
0.08
|
|
Adjustments:
|
|
|
|
|
||||
Warrants fair value adjustment
|
(3,040
|
)
|
|
415
|
|
|
||
|
(3,040
|
)
|
(0.05
|
)
|
415
|
|
0.01
|
|
Income attributable to Lee Enterprises, Incorporated, as adjusted
|
2,955
|
|
0.05
|
|
4,507
|
|
0.08
|
|
|
39 Weeks Ended
|
|
||||||
(Thousands of Dollars, Except Per Share Data)
|
June 25
2017 |
|
June 26
2016 |
|
Percent
Change
|
|
Same Property
|
|
|
|
|
|
|
||||
Operating revenue:
|
|
|
|
|
||||
Retail
|
162,822
|
|
184,302
|
|
(11.7
|
)
|
(10.0
|
)
|
Classified
|
66,457
|
|
76,548
|
|
(13.2
|
)
|
(12.2
|
)
|
National
|
14,977
|
|
17,006
|
|
(11.9
|
)
|
(10.8
|
)
|
Niche publications and other
|
7,559
|
|
8,806
|
|
(14.2
|
)
|
(13.8
|
)
|
Total advertising and marketing services revenue
|
251,815
|
|
286,662
|
|
(12.2
|
)
|
(10.8
|
)
|
Subscription
|
141,306
|
|
144,249
|
|
(2.0
|
)
|
(1.0
|
)
|
Digital services
|
10,390
|
|
10,271
|
|
1.2
|
|
1.4
|
|
Commercial printing
|
7,818
|
|
9,385
|
|
(16.7
|
)
|
(15.5
|
)
|
Other
|
15,402
|
|
15,619
|
|
(1.4
|
)
|
(1.2
|
)
|
Total operating revenue
|
426,731
|
|
466,186
|
|
(8.5
|
)
|
(7.2
|
)
|
Operating expenses:
|
|
|
|
|
||||
Compensation
|
159,047
|
|
174,733
|
|
(9.0
|
)
|
(8.0
|
)
|
Newsprint and ink
|
19,216
|
|
19,343
|
|
(0.7
|
)
|
(0.7
|
)
|
Other operating expenses
|
150,109
|
|
166,332
|
|
(9.8
|
)
|
(7.5
|
)
|
Workforce adjustments
|
6,372
|
|
1,616
|
|
NM
|
|
NM
|
|
Cash costs
|
334,744
|
|
362,024
|
|
(7.5
|
)
|
(6.0
|
)
|
|
91,987
|
|
104,162
|
|
(11.7
|
)
|
(11.4
|
)
|
Depreciation and amortization
|
30,993
|
|
32,752
|
|
(5.4
|
)
|
|
|
Gain on sales of assets and other, net
|
(3,777
|
)
|
(1,763
|
)
|
NM
|
|
|
|
Equity in earnings of associated companies
|
6,034
|
|
6,633
|
|
(9.0
|
)
|
|
|
Operating income
|
70,805
|
|
79,806
|
|
(11.3
|
)
|
|
|
Non-operating expense, net
|
(36,447
|
)
|
(21,877
|
)
|
66.6
|
|
|
|
Income before income taxes
|
34,358
|
|
57,929
|
|
(40.7
|
)
|
|
|
Income tax expense
|
9,253
|
|
22,571
|
|
(59.0
|
)
|
|
|
Net income
|
25,105
|
|
35,358
|
|
(29.0
|
)
|
|
|
Net income attributable to non-controlling interests
|
(809
|
)
|
(801
|
)
|
1.0
|
|
|
|
Income attributable to Lee Enterprises, Incorporated
|
24,296
|
|
34,557
|
|
(29.7
|
)
|
|
|
Other comprehensive loss, net of income taxes
|
1,004
|
|
(129
|
)
|
NM
|
|
|
|
Comprehensive income attributable to Lee Enterprises, Incorporated
|
25,300
|
|
34,428
|
|
(26.5
|
)
|
|
|
Earnings per common share:
|
|
|
|
|
||||
Basic
|
0.45
|
|
0.65
|
|
(30.8
|
)
|
|
|
Diluted
|
0.44
|
|
0.64
|
|
(31.3
|
)
|
|
|
|
|
39 Weeks Ended
|
|
||||
|
June 25
2017 |
|
June 26
2016 |
|
||||
(Thousands of Dollars, Except Per Share Data)
|
Amount
|
|
Per Share
|
|
Amount
|
|
Per Share
|
|
|
|
|
||||||
Income attributable to Lee Enterprises, Incorporated, as reported
|
24,296
|
|
0.44
|
|
34,557
|
|
0.64
|
|
Adjustments:
|
|
|
|
|
||||
Warrants fair value adjustment
|
(10,418
|
)
|
|
404
|
|
|
||
Gain on insurance settlement
|
—
|
|
|
(30,646
|
)
|
|
||
|
(10,418
|
)
|
|
(30,242
|
)
|
|
||
Income tax effect of adjustments, net
|
—
|
|
|
10,726
|
|
|
||
|
(10,418
|
)
|
(0.19
|
)
|
(19,516
|
)
|
(0.36
|
)
|
Income attributable to Lee Enterprises, Incorporated, as adjusted
|
13,878
|
|
0.25
|
|
15,041
|
|
0.28
|
|
Number
|
|
Description
|
|
|
|
31.1
|
|
Rule 13a-14(a)/15d-14(a) certification
|
31.2
|
|
Rule 13a-14(a)/15d-14(a) certification
|
32
|
|
Section 1350 certification
|
|
|
|
LEE ENTERPRISES, INCORPORATED
|
|
|
|
|
|
/s/ Ronald A. Mayo
|
|
August 4, 2017
|
Ronald A. Mayo
|
|
|
Vice President, Chief Financial Officer and Treasurer
|
|
|
(Principal Financial and Accounting Officer)
|
|
|
1 Year Lee Enterprises Chart |
1 Month Lee Enterprises Chart |
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