Advertising sales for Lee Enterprises, Incorporated (NYSE: LEE),
strengthened in November for the third month in a row. As a result of
the continuing improved outlook, Lee expects operating revenue to
decline by 14 to 15 percent year over year for the quarter ending Dec.
27, 2009. In comparison, revenue declined an average of 20 percent in
the March, June and September 2009 quarters.
"Based on trends through early December, we’re hopeful that the
turnaround has begun,” said Mary Junck, Lee chairman and chief executive
officer. "Although it’s premature to guess when year-over-year revenue
comparisons will turn positive, we expect our aggressive cost reductions
will enable meaningful earnings growth when they do.”
She said Lee expects cash costs, excluding unusual items, to decrease
17-18 percent in the December quarter versus a year ago, an improvement
from earlier guidance, and reaffirmed a 6-7 percent decrease in fiscal
2010.
Lee’s Annual Report on Form 10-K is being filed today with the
Securities and Exchange Commission. Included in the filing will be two
notable matters:
Lee’s independent registered public accounting firm, KPMG LLP, will
exclude from its audit opinion the explanatory paragraph included in the
opinion a year ago that raised doubt about Lee’s ability to continue as
a going concern. The change is primarily a result of Lee’s successful
debt refinancing in February 2009, the company’s continuing compliance
with its debt covenants, adequate liquidity, and now improving business
conditions.
Also, in the December 2009 quarter, Lee made changes to its
postretirement medical plans for certain groups of employees, including
increases in premium cost sharing and elimination of coverage for
certain participants. The changes are expected to reduce annual net
periodic postretirement medical cost beginning in 2010 and will reduce
the benefit obligation liability by up to $30 million. Lee may recognize
non-cash gains related to certain of the changes in 2010.
Lee Enterprises is a leading provider of local news, information and
advertising in primarily midsize markets, with 49 daily newspapers and a
joint interest in four others, online sites and nearly 300 specialty
publications in 23 states. Lee’s newspapers have circulation of 1.4
million daily and 1.7 million Sunday, reaching nearly four million
readers daily. Lee’s online sites attract 15 million unique visits
monthly, and Lee’s weekly publications have distribution of four million
households. Lee’s markets include St. Louis, Mo.; Lincoln, Neb.;
Madison, Wis.; Davenport, Iowa; Billings, Mont.; Bloomington, Ill.; and
Tucson, Ariz. Lee 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 news release contains information that may be deemed
forward-looking, that is based largely on Lee Enterprises,
Incorporated’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, which in some instances are beyond its control, are the
Company’s ability to generate cash flows and maintain liquidity
sufficient to service its debt, and comply with or obtain amendments or
waivers of the financial covenants contained in its credit facilities,
if necessary. Other risks and uncertainties include the impact and
duration of continuing adverse economic conditions, changes in
advertising demand, potential changes in newsprint and other commodity
prices, energy costs, interest rates and the availability of credit due
to instability in the credit markets, labor costs, legislative and
regulatory rulings, difficulties in achieving planned expense
reductions, maintaining employee and customer relationships, increased
capital costs, competition and other risks detailed from time to time in
the Company’s publicly filed documents, including the Company Annual
Report on Form 10-K for the year ended September 27, 2009. 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 report. The Company does not undertake to publicly update
or revise its forward-looking statements.
