Lee Enterprises Q1 Profit Plummets 69.3% - Update

Tuesday, news and advertising services provider Lee Enterprises Inc. (LEE), announced a 69.3% plunge in preliminary first-quarter profit, on workforce adjustment charges, losses on property and equipment, and a 13% decline in revenue. The company noted that preliminary amounts do not include the possible impact of additional impairment charges, which could affect reported earnings.

For the first quarter, net income available to common shareholders dropped to $6.8 million or $0.15 per share from $22.13 million or $0.48 per share in the year-ago period. Net income from continuing operations declined to $7.84 million or $0.15 per share from $21.79 million or $0.48 per share in the prior-year quarter.

Adjusted net income, excluding workforce adjustments, curtailment gain, and unrealized losses on property and equipment, declined to $9.42 million or $0.21 per share from $22.13 million or $0.48 per share in the corresponding year-ago quarter.

Total operating revenue decreased 13% to $243.56 million from $279.86 million in the previous year.

Mary Junck, Chairman and Chief Executive Officer, Lee Enterprises stated, "We reduced staffing by more than 10% in our first quarter and have since announced additional reductions in many locations."

Junck added that the company was conserving newsprint by moving to narrower page widths and have discontinued less profitable specialty publications. Consequently, the company anticipates reducing cash costs by 10-11% in 2009.

The company stated that in order to comply with the minimum bid price requirement of the New York Stock Exchange listing standards, Lee Enterprises would ask stockholders to authorize the board to implement a reverse stock split, if necessary.

Lee Enterprises noted that in fiscal 2008, it recorded after-tax non-cash charges totaling $893.7 million to reduce the carrying value of goodwill, other assets and the company's investment in TNI Partners.

LEE is currently trading at $0.3505, up $0.0095 or 2.64% on the NYSE.

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