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Lee Enterprises Inc. Reports Operating Results (10-Q)

August 11, 2010 | About:

Lee Enterprises Inc. (NYSE:LEE) filed Quarterly Report for the period ended 2010-06-27.

Lee Enterprises Inc. has a market cap of $131.9 million; its shares were traded at around $2.94 with a P/E ratio of 4.9 and P/S ratio of 0.2. Lee Enterprises Inc. had an annual average earning growth of 5.9% over the past 10 years.LEE is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

In the 2010 Quarter, advertising revenue decreased $7,221,000, or 4.9%. On a combined basis, print and digital retail advertising decreased 4.4%. Print retail revenue decreased $5,603,000, or 6.6%, in the 2010 Quarter. A 2.8% decrease in daily newspaper retail advertising lineage contributed to the overall decrease. Average retail rates, excluding preprint insertions, decreased 6.9% in the 2010 Quarter. Retail preprint insertion revenue decreased 3.7%. Digital retail advertising increased 34.3%, partially offsetting print declines.

On a combined basis, print and digital classified revenue decreased 4.7%. Print classified advertising revenue decreased $2,885,000, or 7.1%, in the 2010 Quarter. Higher rate print employment advertising in our daily newspapers decreased 1.1%, reflecting high unemployment nationally, but was more than offset by a 13.1% increase in digital employment advertising. As a result, this category increased 3.5% overall, the first increase since 2007. Print automotive advertising decreased 14.6%. Print real estate advertising decreased 21.4% in a weak housing market nationally, which also negatively impacted the home improvement, furniture and home electronics categories of retail revenue. Other daily newspaper print classified advertising decreased 0.2%. Classified advertising rates decreased 7.1%. Digital classified advertising increased 13.2%, partially offsetting print declines.

National advertising decreased $1,107,000, or 13.3%, due to a 3.5% decrease in lineage and a 16.1% decrease in average national rate. Advertising in niche publications decreased 6.0%.

Circulation revenue decreased $248,000, or 0.5%, in the 2010 Quarter. Our unaudited average daily newspaper circulation units, including TNI and MNI, decreased 2.5% and Sunday circulation decreased 3.1% for the 2010 Quarter, compared to the 2009 Quarter. Selective price increases largely offset revenue losses from declines in units sold. Research in our larger markets indicates we are reaching an increasingly larger audience in these markets through the combination of stable newspaper readership and digital growth.

As a result of the factors noted above, operating cash flow increased 3.7% in the 2010 Quarter compared to the 2009 Quarter. Operating cash flow margin increased to 23.6% from 21.9% in the 2009 Quarter reflecting a smaller percentage decrease in operating revenue than the decrease in operating expenses.

under the Credit Agreement will be priced at the applicable LIBOR minimum plus 287.5 basis points and no payment-in-kind interest will be incurred. The interest rate on the Pulitzer Notes increased 1% to 9.05% in February 2009 and increased 0.5% in April 2010 to 9.55% The interest rate will increase by 0.5% per year thereafter.

Read the The complete Report

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Charlie Tian, Ph.D. - Founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

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