Lee Enterprises, Incorporated (NYSE: LEE), a leading provider of
high quality, trusted, local news, information and a major platform
for advertising in 50 markets, today reported fourth quarter and
year to date financial results(1) for the period ended September
29, 2019.
Fourth quarter highlights:(2)(5)
-
Total digital revenue was $36.2 million and represented 29.3% of our operating revenue.
-
Digital advertising revenue on a same property basis increased 2.5% in the quarter and represented 41.0% of total advertising revenue.
-
Revenue at TownNews increased 10.7% in the fourth quarter, excluding the 53rd week of operations in 2018, and revenue over the last twelve
months totaled $22.6 million.
-
Subscription revenue on a same property basis decreased 4.6% in the quarter. Digital only subscribers increased 79.1% and now total
91,000.
-
Total revenues were $123.7 million in the fourth quarter, compared to $139.7 million in the prior year quarter. Excluding the impact of
acquisitions and the 53rd week of operations last year, total revenue on a same property basis decreased 8.2%.
-
Net income totaled $1.3 million and Adjusted EBITDA(3) totaled $31.1 million.
"We made great progress on our digital transformation in 2019,
as we saw positive results in digital advertising, continued
double-digit growth at TownNews and solid digital-only subscriber
growth,” said Kevin Mowbray, President and Chief Executive Officer.
“In the fourth quarter, total digital revenue, which includes
digital advertising, digital subscription revenue and digital
services revenue, totaled $36.2 million, or 29.3% of our total
operating revenue. Digital advertising revenue comprised more than
40% of our total advertising revenue in the fourth quarter, and
print advertising accounted for less than 30% of our total
operating revenue. Also, based on third party research, we believe
we capture more than twice the industry average in digital market
share."
“Digital advertising revenue on a same property basis increased
2.5% in the fourth quarter due to an enhanced focus on local retail
accounts and the expansion of our Amplified Agency,” said Mowbray.
“Revenue at the Amplified Agency increased 28.6% compared to
the prior year.”
“Revenue at TownNews increased 10.7% in the fourth quarter due
to gains in market share, product enhancements and the acquisition
of GTxcel’s CMS business; consistent with its eight year
compounded annual growth rate of 10.9%,” Mowbray said.
“We are really excited about the sustained, significant growth at
TownNews, and we expect additional growth in 2020.”
“On the cost side, we made significant changes to our business
in the fourth quarter that will have a significant impact into
2020,” said Tim Millage, Vice President, Chief Financial Officer
and Treasurer. “Operating expenses were down 10.6% in the fourth
quarter and cash costs(3) on a same property basis were down 8.1%.
For the fiscal year, cash costs were down 5.9%, exceeding the upper
bound of our previously announced guidance. For 2020, we expect
cash costs to be down between 5.5% and 6.5%.”
Fiscal Year 2019 Financial Highlights:(2)(5)
-
Total revenue was $509.9 million in the fiscal year compared to $544.0 million in the prior year. On a same property basis, revenue
decreased 6.1%.
-
Total digital revenue was $144.6 million and increased 4.3% on a same property basis in fiscal year 2019. Digital advertising revenue on a
same property basis increased 4.6%, digital-only subscription revenue increased 43.3% and digital services revenue, which is predominantly
TownNews, increased 15.8%.
-
Revenue from the management agreement with BH Media Group totaled $12.6 million, compared to $1.3 million a year ago.
-
Net income totaled $15.9 million and Adjusted EBITDA(1) totaled $121.5 million.
-
Debt was reduced $41.2 million in 2019 and leverage, net of cash was 3.6x at September 29, 2019.
-
Monthly visits to Lee mobile, tablet, desktop and app sites averaged 73.9 million, and page views per visit, one metric we use to monitor
engagement, increased 10.2%.
FOURTH QUARTER OPERATING RESULTS(2)(5)
Operating revenue for the 13 weeks ended September 29, 2019
totaled $123.7 million, compared to $139.7 million in the prior
year quarter. On a same property basis, revenue decreased 8.2% in
the quarter.
Advertising and marketing services revenue decreased 13.1% on a
same property basis. The decrease in advertising and marketing
services revenue is due to softness in print advertising demand
resulting in reduced advertising volume primarily from large
retail, big box stores and classifieds. Partially offsetting print
declines, digital advertising and marketing services revenue
increased 2.5% on a same property basis to $24.6 million and
represented 41.0% of total advertising revenue.
Subscription revenue decreased 4.6% on a same
property basis. Lower paid circulation units were partially offset
by strategic pricing programs and premium content and growth in
digital only subscribers. Average daily newspaper circulation,
including TNI and MNI(4) and digital subscribers, totaled
0.7 million in the current quarter. Sunday circulation totaled
1.0 million. Digital only subscribers increased 79.1% in
the quarter and totaled 91,000 at the end of 2019.
Other revenue, which primarily consists of digital services
revenue, management agreement revenue, commercial printing
revenue and revenue from delivery of third party products,
increased 2.3% in the current year quarter. The increase was
partially due to growth at TownNews and $2.6 million of
management agreement revenue in the current quarter compared to
$1.3 million in the prior year quarter.
Total digital revenue, including digital advertising, digital
subscriptions and digital services, was $36.2 million for the
quarter and represented 29.3% of our total operating revenue.
Operating expenses for the 13 weeks ended September 29, 2019
decreased 10.6%. Cash costs decreased 8.1% on a same property
basis. Compensation decreased 9.7%. Newsprint and ink expense
decreased 25.9% due to lower prices and lower volumes from
print unit declines. Other operating expenses decreased
4.2% primarily driven by lower legacy print costs and offset
in part by higher costs associated with growing digital revenue and
increases in other cash costs from outsourcing.
Restructuring costs and other totaled $6.0 million and
$1.4 million in the 2019 quarter and 2018 quarter,
respectively. $3.8 million of the current year quarter expense
relates to withdrawals from certain of our multiemployer pension
plans.
Including equity in earnings of associated companies,
depreciation and amortization, assets loss (gain) on sales,
impairments and other, operating income totaled $14.4 million in
the current year quarter, compared with $19.1 million a year
ago.
Interest expense decreased 13.6%, or $1.8 million, in the
current quarter due to lower debt balances. The Company recognized
non-operating income of $0.2 million in the current year
quarter compared to operating expense of $0.8 million in the
same quarter of the prior year due to a change in fair value of
stock warrants. The Company recognized $1.2 million of debt
refinancing and administrative costs in the current quarter and
$1.3 million in the same quarter of the prior year. The vast
majority of the debt financing and administrative costs represent
amortization of refinancing costs paid in 2014.
Income attributable to Lee Enterprises, Incorporated for
the quarter totaled $0.8 million, compared with income of
$4.1 million a year ago. Adjusted EBITDA for the quarter was
$31.1 million.
|
|
|
|
|
Quarter Ended |
|
|
September 29 |
|
September 30 |
|
|
2019 |
|
2018 |
|
(Thousands of Dollars, Except Per Share Data) |
Amount |
|
Per Share |
|
Amount |
|
Per Share |
|
|
|
|
|
|
|
|
|
|
Income attributable to Lee
Enterprises, Incorporated, as reported |
819 |
|
0.03 |
|
4,066 |
|
0.07 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Warrants fair value adjustment |
(223 |
) |
0.01 |
|
756 |
|
0.01 |
|
Income
attributable to Lee Enterprises, Incorporated, as adjusted |
596 |
|
0.01 |
|
4,822 |
|
0.09 |
|
FISCAL YEAR OPERATING RESULTS(2)(5)
Operating revenue for the 52 weeks ended September 29,
2019 totaled $509.9 million compared to $544.0 million for
53 weeks ended September 30, 2018. Excluding the extra week of
operations in 2018 and acquisitions, revenue on a same property
basis decreased 6.1%.
Advertising and marketing services revenue decreased 12.0% on a
same property basis. Partially offsetting print declines, digital
advertising and marketing services revenue increased 4.6% on a same
property basis to $99.4 million and represented 37.9% of total
advertising revenue.
Subscription revenue decreased 4.3% on a same property basis.
Lower paid circulation units were partially offset by strategic
pricing programs and premium content and growth in digital only
subscribers.
Other revenue, which consists of digital services, management
agreement revenue, commercial printing revenue and revenue from
delivery of third party products, increased 26.1% in the
current year. The increase was partially due to revenue growth at
TownNews and $12.6 million in management agreement revenue
compared to $1.3 million in the prior year.
Total digital revenue, including digital advertising, digital
subscriptions and digital services, was $144.6 million in 2019
and represented 28.4% of our total operating revenue. On a
standalone basis, revenue at TownNews totaled $22.6 million
for the twelve months ended September 29, 2019, a
20.1% increase over the prior year, excluding the extra week
in the prior year.
Operating expenses for 2019 decreased 5.4%. Cash costs decreased
5.9% on a same property basis. Compensation decreased 7.8%,
primarily as a result of a decrease in the average number of
full-time equivalent employees of 10.9%. Due to volume declines,
newsprint and ink expense decreased 8.9%. Other operating expenses
decreased 3.7%.
Restructuring costs and other, which are primarily severance
costs and costs associated with withdrawals from multiemployer
pensions, totaled $11.6 million and $5.6 million in 2019 and
2018, respectively.
Including equity in earnings of associated companies,
depreciation and amortization, assets loss (gain) on sales,
impairments and other, in both years, operating income was
$74.7 million in 2019, compared with $85.7 million a year
ago.
Interest expense decreased 10.1%, or $5.4 million, in the
current year due to lower debt balances. We recognized
non-operating income of $0.6 million in the current year
compared to non-operating expense of $0.2 million in the prior
year due to the change in fair value of stock warrants. In
the current fiscal year, $7.2 million of debt financing
and administrative costs were expensed compared to
$5.3 million in the same period a year ago. Amortization
increased as a result of debt repurchases totaling
$21.6 million in the 2019 period. The majority of the
debt financing and administrative costs are mainly amortization of
costs paid as part of our refinancing in 2014.
Income attributable to Lee Enterprises, Incorporated for the
year totaled $14.3 million, compared to income of
$45.8 million a year ago.
Adjusted EBITDA for the 52 weeks ended September 29,
2019 was $121.5 million, compared to $131.9 million for
the 53 weeks ended September 30, 2018.
The following table summarizes the estimated impact from the
2017 Tax Act as well as the warrant fair value adjustments on
income attributable to Lee Enterprises, Incorporated and earnings
per diluted common share.(3)
|
|
|
|
|
Year Ended |
|
|
September 29 |
|
September 30 |
|
|
2019 |
|
2018 |
|
(Thousands of Dollars, Except Per Share Data) |
Amount |
|
Per Share |
|
Amount |
|
Per Share |
|
|
|
|
|
|
|
|
|
|
Income attributable to Lee
Enterprises, Incorporated, as reported |
14,268 |
|
0.25 |
|
45,766 |
|
0.82 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Warrants fair value adjustment |
(612 |
) |
0.01 |
|
226 |
|
— |
|
Adjusted income before income tax impacts |
13,656 |
|
0.24 |
|
45,992 |
|
0.82 |
|
Income tax effect of 2017 Tax
Act |
— |
|
— |
|
(24,872 |
) |
(0.44 |
) |
Income
attributable to Lee Enterprises, Incorporated, as adjusted |
13,656 |
|
0.24 |
|
21,120 |
|
0.38 |
|
DEBT AND FREE CASH FLOW
As of September 29, 2019, the principal amount of debt was
$443.6 million. Debt was reduced $14.9 million in the quarter
and $41.2 million in the current year. The principal amount of
our debt, net of cash, is 3.6 times our adjusted EBITDA for
the past 12 months ended September 29, 2019.
At September 29, 2019, including $8.6 million in cash and
availability under our revolving facility(4), liquidity totaled
$26.3 million. Excluding future excess cash flow payments,
there are no required debt principal payments over the next twelve
months.
CONFERENCE CALL INFORMATION
As previously announced, we will hold an earnings conference
call and audio webcast today at 9 a.m. Central Time. The live
webcast will be accessible at www.lee.net and will be available for
replay two hours later. Several analysts have been invited to ask
questions on the call. Questions from other participants may be
submitted by participating in the webcast. The call also may be
monitored on a listen-only conference line by dialing (toll free)
800-309-1256 and entering a conference passcode
of 821203 at least five minutes before the scheduled
start. Participants on the listen-only line will not have the
opportunity to ask questions.
ABOUT LEE Lee Enterprises is a leading provider of
local news and information, and a major platform for advertising,
with daily newspapers, rapidly growing digital products and over
200 weekly and specialty publications serving 50 markets in 20
states. Year to date, Lee's newspapers have average circulation of
0.7 million daily and 1.0 million Sunday, and are
estimated to reach almost three million readers in print alone.
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. For more information about Lee, please visit
www.lee.net.
FORWARD-LOOKING STATEMENTS — 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 that is based largely on our 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,
which in some instances are beyond our control, are:
-
Our ability to generate cash flows and maintain liquidity sufficient to service our debt;
-
Our ability to comply with the financial covenants in our credit facilities;
-
Our ability to refinance our debt as it comes due;
-
Our ability to manage declining print revenue;
-
That the warrants issued in our refinancing will not be exercised;
-
The impact and duration of adverse conditions in certain aspects of the economy affecting our business;
-
Changes in advertising and subscription demand;
-
Changes in technology that impact our ability to deliver digital advertising;
-
Potential changes in newsprint, other commodities and energy costs;
- Interest rates;
- Labor costs;
-
Significant cyber security breaches or failure of our information technology systems;
- Legislative and regulatory rulings;
-
Our ability to achieve planned expense reductions;
-
Our ability to maintain employee and customer relationships;
-
Our ability to manage increased capital costs;
-
Our ability to maintain our listing status on the NYSE;
- Competition; and
-
Other risks detailed from time to time in our publicly filed documents.
Any statements that are not statements of historical fact
(including statements containing the words “may”, “will”, “would”,
“could”, “believes”, “expects”, “anticipates”, “intends”, “plans”,
“projects”, “considers” and similar expressions) generally should
be considered 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. We do not undertake to
publicly update or revise our forward-looking statements, except as
required by law.
Contact:IR@lee.net(563) 383-2100
CONSOLIDATED STATEMENTS OF
OPERATIONS(UNAUDITED)
|
13 Weeks Ended |
|
|
14 Weeks Ended |
|
|
|
|
|
52 Weeks Ended |
|
|
53 Weeks Ended |
|
|
|
|
(Thousands of Dollars, Except Per Share Data) |
September 29 2019 |
|
|
September 30 2018 |
|
|
Percent Change |
|
|
September 29 2019 |
|
|
September 30 2018 |
|
|
Percent Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advertising and marketing
services |
61,282 |
|
|
73,695 |
|
|
(16.8 |
) |
|
265,933 |
|
|
303,446 |
|
|
(12.4 |
) |
Subscription |
48,726 |
|
|
52,703 |
|
|
(7.5 |
) |
|
186,691 |
|
|
195,108 |
|
|
(4.3 |
) |
Other |
13,657 |
|
|
13,348 |
|
|
2.3 |
|
|
57,230 |
|
|
45,401 |
|
|
26.1 |
|
Total
operating revenue |
123,665 |
|
|
139,746 |
|
|
(11.5 |
) |
|
509,854 |
|
|
543,955 |
|
|
(6.3 |
) |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation |
42,672 |
|
|
49,614 |
|
|
(14.0 |
) |
|
182,869 |
|
|
199,164 |
|
|
(8.2 |
) |
Newsprint and ink |
4,843 |
|
|
7,028 |
|
|
(31.1 |
) |
|
22,237 |
|
|
24,949 |
|
|
(10.9 |
) |
Other operating expenses |
47,793 |
|
|
50,824 |
|
|
(6.0 |
) |
|
193,709 |
|
|
199,653 |
|
|
(3.0 |
) |
Cash
costs |
95,308 |
|
|
107,466 |
|
|
(11.3 |
) |
|
398,815 |
|
|
423,766 |
|
|
(5.9 |
) |
Total operating revenue less
cash costs |
28,357 |
|
|
32,280 |
|
|
(12.2 |
) |
|
111,039 |
|
|
120,189 |
|
|
(7.6 |
) |
Depreciation and amortization |
7,069 |
|
|
7,794 |
|
|
(9.3 |
) |
|
29,332 |
|
|
31,766 |
|
|
(7.7 |
) |
Assets loss (gain) on sales, impairments and other, net |
2,676 |
|
|
7,626 |
|
|
(64.9 |
) |
|
2,464 |
|
|
6,429 |
|
|
(61.7 |
) |
Restructuring costs and other |
6,022 |
|
|
1,400 |
|
|
NM |
|
|
11,635 |
|
|
5,550 |
|
|
NM |
|
Operating expenses |
111,075 |
|
|
124,286 |
|
|
(10.6 |
) |
|
442,246 |
|
|
467,511 |
|
|
(5.4 |
) |
Equity in earnings of
associated companies |
1,823 |
|
|
3,679 |
|
|
(50.4 |
) |
|
7,121 |
|
|
9,249 |
|
|
(23.0 |
) |
Operating income |
14,413 |
|
|
19,139 |
|
|
(24.7 |
) |
|
74,729 |
|
|
85,693 |
|
|
(12.8 |
) |
Non-operating income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
(11,232 |
) |
|
(13,004 |
) |
|
(13.6 |
) |
|
(47,488 |
) |
|
(52,842 |
) |
|
(10.1 |
) |
Debt financing and administrative costs |
(1,160 |
) |
|
(1,251 |
) |
|
(7.3 |
) |
|
(7,214 |
) |
|
(5,311 |
) |
|
35.8 |
|
Other, net |
1,082 |
|
|
115 |
|
|
NM |
|
|
3,813 |
|
|
3,280 |
|
|
16.3 |
|
Non-operating expenses, net |
(11,310 |
) |
|
(14,140 |
) |
|
(20.0 |
) |
|
(50,889 |
) |
|
(54,873 |
) |
|
(7.3 |
) |
Income before income
taxes |
3,103 |
|
|
4,999 |
|
|
(37.9 |
) |
|
23,840 |
|
|
30,820 |
|
|
(22.6 |
) |
Income
tax expense (benefit) |
1,758 |
|
|
561 |
|
|
NM |
|
|
7,931 |
|
|
(16,228 |
) |
|
NM |
|
Net income |
1,345 |
|
|
4,438 |
|
|
(69.7 |
) |
|
15,909 |
|
|
47,048 |
|
|
(66.2 |
) |
Net
income attributable to non-controlling interests |
(526 |
) |
|
(372 |
) |
|
41.4 |
|
|
(1,641 |
) |
|
(1,282 |
) |
|
28.0 |
|
Income
attributable to Lee Enterprises, Incorporated |
819 |
|
|
4,066 |
|
|
(79.9 |
) |
|
14,268 |
|
|
45,766 |
|
|
(68.8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
0.01 |
|
|
0.07 |
|
|
(85.7 |
) |
|
0.26 |
|
|
0.84 |
|
|
(69.3 |
) |
Diluted |
0.01 |
|
|
0.07 |
|
|
(85.7 |
) |
|
0.25 |
|
|
0.82 |
|
|
(69.3 |
) |
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES(UNAUDITED)
The table below reconciles the non-GAAP financial performance
measure of adjusted EBITDA to net income, its most directly
comparable GAAP measure:
|
13 Weeks Ended |
|
14 Weeks Ended |
|
52 Weeks Ended |
|
53 Weeks Ended |
|
(Thousands of Dollars) |
September 29 2019 |
|
September 30 2018 |
|
September 29 2019 |
|
September 30 2018 |
|
|
|
|
|
|
|
|
|
|
Net Income |
1,345 |
|
4,438 |
|
15,909 |
|
47,048 |
|
Adjusted to exclude |
|
|
|
|
|
|
|
|
Income tax expense (benefit) |
1,758 |
|
561 |
|
7,931 |
|
(16,228 |
) |
Non-operating expenses (income), net |
11,310 |
|
14,848 |
|
50,889 |
|
54,873 |
|
Equity in earnings of TNI and MNI |
(1,823 |
) |
(3,679 |
) |
(7,121 |
) |
(9,249 |
) |
Loss (gain) on sale of assets and other, net |
2,676 |
|
7,626 |
|
2,464 |
|
6,429 |
|
Depreciation and amortization |
7,069 |
|
7,794 |
|
29,332 |
|
31,766 |
|
Restructuring costs and other |
6,022 |
|
1,400 |
|
11,635 |
|
5,550 |
|
Stock compensation |
428 |
|
417 |
|
1,638 |
|
1,857 |
|
Add: |
|
|
|
|
|
|
|
|
Ownership share of TNI and MNI EBITDA (50%) |
2,325 |
|
2,449 |
|
8,811 |
|
9,883 |
|
Adjusted EBITDA |
31,110 |
|
35,854 |
|
121,488 |
|
131,929 |
|
SELECTED BALANCE SHEET INFORMATION
(Thousands of Dollars) |
September 29 2019 |
|
September 30 2018 |
|
Cash |
8,645 |
|
5,380 |
|
Debt (Principal Amount): |
|
|
|
|
1st Lien Term Loan |
— |
|
6,303 |
|
Notes |
363,420 |
|
385,000 |
|
2nd Lien Term Loan |
80,207 |
|
93,556 |
|
|
443,627 |
|
484,859 |
|
SELECTED STATISTICAL INFORMATION
|
13 Weeks Ended |
14 Weeks Ended |
52 Weeks Ended |
53 Weeks Ended |
|
|
September 29 2019 |
September 30 2018 |
September 29 2019 |
September 30 2018 |
|
|
|
|
|
|
|
Capital expenditures
(Thousands of Dollars) |
2,148 |
1,744 |
5,901 |
6,025 |
|
Average common shares - basic
(Thousands of Shares) |
55,770 |
55,005 |
55,565 |
54,702 |
|
Average
common shares - diluted (Thousands of Shares) |
57,046 |
56,599 |
56,884 |
55,948 |
|
Shares
outstanding at end of period (Thousands of Shares) |
|
|
57,646 |
57,141 |
|
NOTES
(1) |
This earnings release
is a preliminary report of results for the periods included.
The reader should refer to the Company's most recent reports on
Form 10-Q and on Form 10-K for definitive information. |
|
|
|
(2) |
To facilitate a comparison of our results to prior periods, certain
revenue and expense trends are presented on a same property basis
and exclude the impact of acquisitions, dispositions and the 53rd
week of revenues and expenses in the computation of the
trends. |
|
|
|
(3) |
The following are
non-GAAP (Generally Accepted Accounting Principles) financial
measures for which reconciliations to relevant GAAP measures are
included in tables accompanying this release: |
|
|
|
|
• |
Adjusted EBITDA is a non-GAAP financial performance measure
that enhances financial statement users overall understanding of
the operating performance of the Company. The measure isolates
unusual, infrequent or non-cash transactions from the operating
performance of the business. This allows users to easily compare
operating performance among various fiscal periods and how
management measures the performance of the business. This measure
also provides users with a benchmark that can be used when
forecasting future operating performance of the Company that
excludes unusual, nonrecurring or one time transactions. Adjusted
EBITDA is also a component of the calculation used by stockholders
and analysts to determine the value of our business when using the
market approach, which applies a market multiple to financial
metrics. It is also a measure used to calculate the leverage ratio
of the Company, which is a key financial ratio monitored and used
by the Company and its investors. Adjusted EBITDA is defined as net
income (loss), plus nonoperating expenses, income tax expense
(benefit), depreciation and amortization, assets loss (gain) on
sales, impairments and other, restructuring costs and other, stock
compensation and our 50% share of EBITDA from TNI and MNI, minus
equity in earnings of TNI and MNI and curtailment gains. |
|
|
|
|
• |
Adjusted Income (Loss)
and Adjusted Earnings (Loss) Per Common Share are
non-GAAP financial performance measures that we believe offer a
useful metric to evaluate overall performance of the Company by
providing financial statement users the operating performance of
the Company on a per share basis excluding the impact of changes in
the warrant valuation as well as unusual and infrequent
transactions. It is defined as income (loss) attributable to Lee
Enterprises, Incorporated and earnings (loss) per common share
adjusted to exclude the impact of the warrant valuation and the
impact of the 2017 Tax Act. |
|
|
|
|
• |
Cash Costs represent a
non-GAAP financial performance measure of operating expenses which
are measured on an accrual basis and settled in cash. This measure
is useful to investors in understanding the components of the
Company’s cash-settled operating costs. Generally, the Company
provides forward-looking guidance of Cash Costs, which can be used
by financial statement users to assess the Company's ability to
manage and control its operating cost structure. Cash Costs are
defined as compensation, newsprint and ink and other operating
expenses. Depreciation and amortization, assets loss (gain) on
sales, impairments and other, other non-cash operating expenses and
other expenses are excluded. Cash Costs also exclude restructuring
costs and other, which are typically paid in cash. |
|
|
|
(4) |
The 1st Lien Term
Loan is the $250 million first lien term loan and $40 million
revolving facility (Revolving Facility) under a First Lien Credit
Agreement dated as of March 31, 2014. The Notes are the $400
million senior secured notes pursuant to an indenture dated March
31, 2014. The 2nd Lien Term Loan is the $150 million second lien
term loan under the Second Lien Loan Agreement dated as of March
31, 2014. TNI refers to TNI Partners publishing operations in
Tucson, AZ. MNI refers to Madison Newspapers, Inc. publishing
operations in Madison, WI. |
|
|
|
(5) |
Certain amounts as
previously reported have been reclassified to conform with the
current period presentation. The prior periods have been adjusted
for comparative purposes, and the reclassifications have no impact
on earnings. |
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