UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE
SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended June 30, 2004
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-6227
LEE ENTERPRISES, INCORPORATED
(Exact name of Registrant as specified in its Charter)
Delaware
42-0823980
(State
or other jurisdiction of (I.R.S.
Employer Identification No.)
incorporation or organization)
201 N. Harrison Street, Suite 600, Davenport, Iowa
52801
(Address of principal executive offices)
(563) 383-2100
(Registrant’s telephone number, including
area code)
| Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [ ] | |
| Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [x] No [ ] | |
| As of June 30, 2004, 36,641,955 shares of Common Stock and 8,526,240 shares of Class B Common Stock of the Registrant were outstanding. |
|
TABLE OF CONTENTS
|
PAGE
| ||||||
| PART I | FINANCIAL INFORMATION | ||||||
| Item 1. | Financial Statements | ||||||
| Consolidated Statements of Income - | 1 | ||||||
| Three months and nine months ended June 30, 2004 and 2003 |
|||||||
| Consolidated Balance Sheets - | 2 | ||||||
| June 30, 2004 and September 30, 2003 | |||||||
| Consolidated Statements of Cash Flows - | 3 | ||||||
| Nine months ended June 30, 2004 and 2003 | |||||||
| Notes to Consolidated Financial Statements | 4 | ||||||
| Item 2. | Management's Discussion and Analysis of | 7 | |||||
| Financial Condition and Results of Operations | |||||||
| Item 3. | Quantitative and Qualitative Disclosures About | 15 | |||||
| Market Risk | |||||||
| Item 4. | Controls and Procedures | 15 | |||||
PART II |
OTHER INFORMATION | ||||||
| Item 2(e). | Issuer Purchases of Equity Securities | 16 | |||||
| Item 6. | Exhibits and Reports on Form 8-K | 16 | |||||
SIGNATURES |
16 | ||||||
EXHIBITS |
31 | Rule 13a-14(a)/15d-14(a) Certifications | |||||
| 32 | Section 1350 Certifications | ||||||
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| Three Months Ended | Nine Months Ended | ||||||||||||||||
| June 30 | June 30 | ||||||||||||||||
| (Thousands, Except Per Common Share Data) | 2004 | 2003 | 2004 | 2003 | |||||||||||||
Operating revenue: | |||||||||||||||||
| Advertising | $ | 131,377 | $ | 121,890 | $ | 376,929 | $ | 354,886 | |||||||||
| Circulation | 32,363 | 32,312 | 97,872 | 97,566 | |||||||||||||
| Other | 12,226 | 10,762 | 34,493 | 32,096 | |||||||||||||
| 175,966 | 164,964 | 509,294 | 484,548 | ||||||||||||||
| Operating expenses: | |||||||||||||||||
| Compensation | 68,838 | 66,649 | 206,196 | 200,141 | |||||||||||||
| Newsprint and ink | 16,334 | 14,912 | 46,556 | 42,272 | |||||||||||||
| Depreciation | 5,179 | 4,418 | 14,801 | 13,497 | |||||||||||||
| Amortization of intangible assets | 6,855 | 6,758 | 20,520 | 20,210 | |||||||||||||
| Other operating expenses | 40,097 | 36,203 | 116,171 | 109,128 | |||||||||||||
| 137,303 | 128,940 | 404,244 | 385,248 | ||||||||||||||
| Operating income, before equity in net | |||||||||||||||||
| income of associated companies | 38,663 | 36,024 | 105,050 | 99,300 | |||||||||||||
| Equity in net income of associated companies | 2,209 | 1,962 | 6,090 | 5,733 | |||||||||||||
| Operating income | 40,872 | 37,986 | 111,140 | 105,033 | |||||||||||||
| Nonoperating income (expense), net: | |||||||||||||||||
| Financial income | 243 | 373 | 808 | 916 | |||||||||||||
| Financial expense | (2,867 | ) | (4,072 | ) | (9,801 | ) | (13,032 | ) | |||||||||
| Other, net | - | (408 | ) | (294 | ) | (795 | ) | ||||||||||
| (2,624 | ) | (4,107 | ) | (9,287 | ) | (12,911 | ) | ||||||||||
| Income from continuing operations before income taxes | 38,248 | 33,879 | 101,853 | 92,122 | |||||||||||||
| Income tax expense | 13,696 | 12,475 | 36,632 | 33,763 | |||||||||||||
| Income from continuing operations | 24,552 | 21,404 | 65,221 | 58,359 | |||||||||||||
| Discontinued operations: | |||||||||||||||||
| Income (expense) from discontinued operations, net | |||||||||||||||||
| of income tax effect | - | 54 | (149 | ) | 200 | ||||||||||||
| Loss on disposition, net of income tax effect | (88 | ) | - | (315 | ) | (19 | ) | ||||||||||
| (88 | ) | 54 | (464 | ) | 181 | ||||||||||||
| Net income | $ | 24,464 | $ | 21,458 | $ | 64,757 | $ | 58,540 | |||||||||
Earnings per common share: | |||||||||||||||||
| Basic: | |||||||||||||||||
| Continuing operations | $ | 0.55 | $ | 0.48 | $ | 1.46 | $ | 1.32 | |||||||||
| Discontinued operations | - | - | (0.01 | ) | - | ||||||||||||
| Net income | $ | 0.55 | $ | 0.48 | $ | 1.45 | $ | 1.32 | |||||||||
Diluted: | |||||||||||||||||
| Continuing operations | $ | 0.54 | $ | 0.48 | $ | 1.45 | $ | 1.31 | |||||||||
| Discontinued operations | - | - | (0.01 | ) | - | ||||||||||||
| Net income | $ | 0.54 | $ | 0.48 | $ | 1.44 | $ | 1.32 | |||||||||
Dividends per common share | $ | 0.18 | $ | 0.17 | $ | 0.54 | $ | 0.51 | |||||||||
The accompanying Notes are an integral part of the Consolidated Financial Statements.
1
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| June 30 | September 30 | ||||||||||
| (Thousands, Except Per Common Share Data) | 2004 | 2003 | |||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 8,251 | $ | 11,064 | |||||||
| Accounts receivable, net | 62,113 | 58,050 | |||||||||
| Receivable from associated companies | - | 1,500 | |||||||||
| Inventories | 10,111 | 9,413 | |||||||||
| Assets of discontinued operations | - | 25,203 | |||||||||
| Other | 9,540 | 8,979 | |||||||||
| Total current assets | 90,015 | 114,209 | |||||||||
| Investments | 32,203 | 29,472 | |||||||||
| Property and equipment, net | 197,599 | 198,117 | |||||||||
| Goodwill | 620,101 | 606,411 | |||||||||
| Other intangible assets | 460,748 | 469,484 | |||||||||
| Other | 1,717 | 3,684 | |||||||||
| $ | 1,402,383 | $ | 1,421,377 | ||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Notes payable and current maturities of long-term debt | $ | 11,600 | $ | 36,600 | |||||||
| Accounts payable | 19,315 | 19,790 | |||||||||
| Compensation and other accrued liabilities | 32,675 | 33,007 | |||||||||
| Income taxes payable | 7,061 | 16,553 | |||||||||
| Dividends payable | 6,033 | - | |||||||||
| Liabilities of discontinued operations | - | 8,675 | |||||||||
| Unearned revenue | 28,906 | 27,291 | |||||||||
| Total current liabilities | 105,590 | 141,916 | |||||||||
| Long-term debt, net of current maturities | 223,000 | 268,600 | |||||||||
| Deferred items | 213,161 | 207,884 | |||||||||
| Other | 496 | 821 | |||||||||
| 542,247 | 619,221 | ||||||||||
| Stockholder' equity: | |||||||||||
| Serial convertible preferred stock, no par value; | - | - | |||||||||
| authorized 500 shares: none issued | |||||||||||
| Common Stock, $2 par value; authorized 60,000 | 73,284 | 70,994 | |||||||||
| shares; issued and outstanding: | |||||||||||
| June 30, 2004 36,642 shares; | |||||||||||
| September 30, 2003 35,497 shares | |||||||||||
| Class B Common Stock, $2 par value; authorized | 17,052 | 18,248 | |||||||||
| 30,000 shares; issued and outstanding: | |||||||||||
| June 30, 2004 8,526 shares; | |||||||||||
| September 30, 2003 9,124 shares | |||||||||||
| Additional paid-in capital | 97,847 | 78,697 | |||||||||
| Unearned compensation | (4,656 | ) | (2,457 | ) | |||||||
| Retained earnings | 676,609 | 636,674 | |||||||||
| 860,136 | 802,156 | ||||||||||
| $ | 1,402,383 | $ | 1,421,377 | ||||||||
The accompanying Notes are an integral part of the Consolidated Financial Statements.
2
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)