There’s strong financial news this morning from Lee Enterprises, parent company to the Missoulian and our sister newspapers here in Montana: the Ravalli Republic, Helena Independent Record, Montana Standard and Billings Gazette.
Here’s the news release from the folks at Lee’s HQ in Davenport, Iowa:
DAVENPORT, Iowa (January 18, 2011) — Lee Enterprises, Incorporated (NYSE: LEE) reported today that for its first fiscal quarter ended December 26, 2010, digital advertising sales increased 37.8 percent compared with a year ago, while the decline in total revenue moderated to 1.0 percent, as forecast. Cash costs decreased 2.0 percent, more than forecast, and operating cash flow(1) increased 1.8 percent.
Earnings per diluted common share were 42 cents, compared with 62 cents a year ago. Excluding non-cash curtailment gains and other unusual matters in both years, adjusted earnings per diluted common share(2) increased to 29 cents from 22 cents a year ago.
Mary Junck, chairman and chief executive officer, said:
“Our digital growth continues at an aggressive pace. In addition to our 38 percent growth in digital advertising revenue, we’re up 25 percent in online unique visitors and 256 percent in mobile page views. As we introduce more new digital services and as the economy further recovers, we expect total revenue comparisons will continue to improve.
“In driving our strong digital growth, we have established robust mobile sites in all our markets, along with separate smartphone applications in most locations. Last fall we rolled out additional mobile apps in 19 markets providing in-depth coverage of local sports. Also, we have expanded our digital product portfolio to meet the increasing needs of our customers with capabilities for video, local business directories, digital couponing and search engine optimization.
“All by themselves, our newspapers remain, by far, the primary source of local news, information and advertising in our communities. Our online sites and digital products are expanding that reach through smartphones, e-readers and tablets. The result is a huge, growing audience spanning all ages. Our latest independent research shows that, over the course of a week, our newspapers and digital products touch 82 percent of all adults in our larger markets and 77 percent of 18- to 29-year-olds. In many of our smaller markets, our reach is even higher.”
FIRST QUARTER OPERATING RESULTS
Operating revenue for the quarter totaled $207.7 million, a decline of 1.0 percent compared with a year ago. Combined print and digital advertising revenue decreased 1.7 percent to $151.8 million, with retail advertising down 1.9 percent, national down 5.8 percent and classified down 0.2 percent. Combined print and digital employment advertising revenue increased 12.7 percent. Automotive increased 8.4 percent, real estate decreased 20.3 percent and other classified decreased 1.4 percent. Digital advertising revenue on a stand-alone basis increased 37.8 percent to $14.7 million, representing 9.7 percent of total advertising revenue. Digital retail advertising revenue increased 49.1 percent and digital classified advertising increased 7.3 percent.
Lee’s digital sites attracted 51.4 million unique visitors during the quarter, an increase of 25.1 percent from a year ago, with approximately 517.0 million page views. The number of mobile page views grew 256 percent to 25.8 million. Circulation revenue increased 0.8 percent, the company’s first quarterly increase since 2007.
Operating expenses, excluding depreciation and amortization, decreased 2.0 percent. Compensation declined 5.0 percent, with the average number of full-time equivalent employees down 3.2 percent. Newsprint and ink expense increased 23.5 percent, a result of higher prices partially offset by a reduction in newsprint volume of 2.8 percent. Other operating expenses decreased 2.9 percent. Despite the increased cost of newsprint, operating expenses, excluding depreciation, amortization and unusual matters, are expected to increase less than 1 percent for the year.
Operating cash flow increased 1.8 percent from a year ago to $54.1 million. Operating cash flow margin(1) increased to 26.1 percent from 25.3 percent a year ago. Including equity in earnings of associated companies, depreciation and amortization, as well as unusual matters in both years, operating income totaled $49.2 million, compared with $67.8 million a year ago, due to a smaller curtailment gain in the current year quarter. Operating income margin was 23.7 percent in the current year quarter. Non-operating expenses, primarily interest expense and debt financing costs, declined $5.9 million. Income attributable to Lee Enterprises, Incorporated totaled $18.9 million, compared with $27.9 million a year ago.