LEE ENTERPRISES, Inc - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - May 6, 2016

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Exhibit 99.1 - Supplemental Financial Information – Second fiscal quarter ended March 27, 2016.

201 N. Harrison St.
Davenport, IA 52801
www.lee.net






13 Weeks Ended (unaudited)
 
 
 
 
 
 
 
 
March 27, 2016
 
March 29, 2015
(in thousands)
Consolidated
Lee Legacy
Pulitzer Inc.
 
Consolidated
Lee Legacy
Pulitzer Inc.
Operating revenue:
 
 
 
 
 
 
 
Advertising and marketing services
88,731

62,247

26,484

 
98,017

69,148

28,869

Subscription
46,658

32,300

14,358

 
48,111

32,513

15,598

Other
11,446

9,723

1,723

 
10,429

8,872

1,557

Total operating revenue
146,835

104,270

42,565

 
156,557

110,533

46,024

Operating expenses:
 
 
 
 
 
 
 
Compensation
58,850

44,754

14,096

 
61,236

46,273

14,963

Newsprint and ink
6,053

4,559

1,494

 
7,661

5,727

1,934

Other cash costs
54,107

30,970

23,137

 
56,866

32,327

24,539

Depreciation and amortization
10,941

7,673

3,268

 
11,566

7,884

3,682

Loss (gain) on sale of assets, net
(438
)
96

(534
)
 
5

4

1

Workforce adjustments
588

571

17

 
641

242

399

Total operating expenses
130,101

88,623

41,478

 
137,975

92,457

45,518

Equity in earnings of MNI and TNI
2,009

645

1,364

 
1,653

444

1,209

Operating income
18,743

16,292

2,451

 
20,235

18,520

1,715

Nonoperating income (expense), net
13,129

12,358

771

 
(17,476
)
(17,514
)
38

Income tax expense
12,389

11,218

1,171

 
717

80

637

Net income
19,483

17,432

2,051

 
2,042

926

1,116


Adjusted EBITDA is a non-GAAP financial measure. Below is a reconciliation of adjusted EBITDA to net income, the most directly comparable measure under GAAP:
Net Income
19,483

17,432

2,051

 
2,042

926

1,116

Adjusted to exclude
 
 
 
 
 
 
 
Nonoperating expenses, net
(13,129
)
(12,358
)
(771
)
 
17,476

17,514

(38
)
Income tax expense
12,389

11,218

1,171

 
717

80

637

Equity in earnings of TNI and MNI
(2,009
)
(645
)
(1,364
)
 
(1,653
)
(444
)
(1,209
)
Depreciation and amortization
10,941

7,673

3,268

 
11,566

7,884

3,682

Loss (gain) on sale of assets, net
(438
)
96

(534
)
 
5

4

1

Workforce adjustments
588

571

17

 
641

242

399

Stock compensation
594

594

—

 
640

640

—

Add:
 
 
 
 
 
 
 
Ownership share of TNI and MNI EBITDA (50%)
2,711

1,242

1,469

 
2,212

898

1,314

Adjusted EBITDA
31,130

25,823

5,307

 
33,646

27,744

5,902

 
 
 
 
 
 
 
 
Supplemental cash flow information
 
 
 
 
 
Distributions from MNI and TNI
4,501

2,250

2,251

 
3,128

1,250

1,878

Capital expenditures
(1,801
)
(1,644
)
(157
)
 
(2,128
)
(1,438
)
(690
)
Pension contributions
(744
)
—

(744
)
 
(435
)
—

(435
)
Cash income tax refunds (payments)
(282
)
(282
)
—

 
68

157

(89
)
Interest income
110

110

—

 
102

102

—

Interest to be settled in cash
(16,281
)
(12,151
)
(4,130
)
 
(18,403
)
(18,084
)
(319
)
Debt financing and administrative costs
—

—

—

 
(65
)
(65
)
—





26 Weeks Ended (unaudited)
 
 
 
 
 
 
 
 
March 27, 2016
 
March 29, 2015
(in thousands)
Consolidated
Lee Legacy
Pulitzer Inc.
 
Consolidated
Lee Legacy
Pulitzer Inc.
Operating revenue:
 
 
 
 
 
 
 
Advertising and marketing services
194,368

134,685

59,683

 
213,847

149,342

64,505

Subscription
97,089

66,839

30,250

 
98,510

66,059

32,451

Other
23,783

20,130

3,653

 
21,409

17,940

3,469

Total operating revenue
315,240

221,654

93,586

 
333,766

233,341

100,425

Operating expenses:
 
 
 
 
 
 
 
Compensation
117,514

89,601

27,913

 
123,173

92,519

30,654

Newsprint and ink
12,738

9,706

3,032

 
16,507

12,250

4,257

Other cash costs
112,977

65,038

47,939

 
117,103

66,330

50,773

Depreciation and amortization
21,884

15,308

6,576

 
23,061

15,834

7,227

Loss (gain) on sale of assets, net
(1,409
)
133

(1,542
)
 
(252
)
(75
)
(177
)
Workforce adjustments
1,192

1,114

78

 
852

314

538

Total operating expenses
264,896

180,900

83,996

 
280,444

187,172

93,272

Equity in earnings of MNI and TNI
4,808

1,828

2,980

 
4,410

1,556

2,854

Operating income
55,152

42,582

12,570

 
57,732

47,725

10,007

Nonoperating income (expense), net
(4,626
)
(6,098
)
1,472

 
(38,468
)
(38,541
)
73

Income tax expense
19,535

14,435

5,100

 
7,215

3,553

3,662

Net income
30,991

22,049

8,942

 
12,049

5,631

6,418


Adjusted EBITDA is a non-GAAP financial measure. Below is a reconciliation of adjusted EBITDA to net income, the most directly comparable measure under GAAP:
Net Income
30,991

22,049

8,942

 
12,049

5,631

6,418

Adjusted to exclude
 
 
 
 
 
 
 
Nonoperating expenses, net
4,626

6,098

(1,472
)
 
38,468

38,541

(73
)
Income tax expense
19,535

14,435

5,100

 
7,215

3,553

3,662

Equity in earnings of TNI and MNI
(4,808
)
(1,828
)
(2,980
)
 
(4,410
)
(1,556
)
(2,854
)
Depreciation and amortization
21,884

15,308

6,576

 
23,061

15,834

7,227

Loss (gain) on sale of assets, net
(1,409
)
133

(1,542
)
 
(252
)
(75
)
(177
)
Workforce adjustments
1,192

1,114

78

 
852

314

538

Stock compensation
1,164

1,164

—

 
1,083

1,083

—

Add:
 
 
 
 
 
 
 
Ownership share of TNI and MNI EBITDA (50%)
6,519

3,330

3,189

 
5,969

2,906

3,063

Adjusted EBITDA
79,694

61,803

17,891

 
84,035

66,231

17,804

 
 
 
 
 
 
 
 
Supplemental cash flow information:
 
 
 
 
 
Distributions from MNI and TNI
7,729

4,000

3,729

 
6,072

3,000

3,072

Capital expenditures
(3,271
)
(2,846
)
(425
)
 
(5,675
)
(3,518
)
(2,157
)
Pension contributions
(1,488
)
—

(1,488
)
 
(435
)
—

(435
)
Cash income tax refunds (payments)
(271
)
(271
)
—

 
64

153

(89
)
Interest income
185

185

—

 
180

180

—

Interest to be settled in cash
(33,423
)
(25,035
)
(8,388
)
 
(37,193
)
(36,414
)
(779
)
Debt financing and administrative costs
(44
)
—

(44
)
 
(82
)
(82
)
—



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