LEE ENTERPRISES, Inc - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - FORM 8-K - LEE ENTERPRISES, Inc	lee20191101_8k.htm

Exhibit 99.1

Exhibit 99.1 - Supplemental Financial Information – Fourth fiscal quarter ended September 29, 2019.

4600 E 53rd Street.

Davenport, IA 52807

www.lee.net

Quarter Ended (unaudited)

	September 29, 2019									September 30, 2018
(in thousands)	Consolidated			Lee Legacy			Pulitzer Inc.			Consolidated			Lee Legacy			Pulitzer Inc.
Operating revenue:
Advertising and marketing services		61,282			42,846			18,436			73,695			51,702			21,993
Subscription		48,726			34,012			14,714			52,703			36,904			15,799
Other		13,657			12,109			1,548			13,348			11,792			1,556
Total operating revenue		123,665			88,967			34,698			139,746			100,398			39,348
Operating expenses:
Compensation		42,672			31,699			10,973			49,614			37,334			12,280
Newsprint and ink		4,843			3,245			1,598			7,028			4,836			2,192
Other operating expenses		47,793			29,188			18,605			50,824			30,148			20,676
Depreciation and amortization		7,069			4,619			2,450			7,794			5,082			2,712
Assets loss (gain) on sales, impairments, and other		2,676			2,361			315			7,626			695			6,931
Restructuring costs and other		6,022			3,294			2,728			1,400			1,021			379
Total operating expenses		111,075			74,406			36,669			124,286			79,116			45,170
Equity in earnings of associated companies		1,823			1,183			640			3,679			2,605			1,074
Operating income		14,413			15,744			(1,331	)		19,139			23,887			(4,748	)
Non-operating income (expense), net		(11,310	)		(14,433	)		3,123			(14,140	)		(17,558	)		3,418
Income tax expense (benefit)		1,758			1,310			448			561			1,044			(483	)
Net income		1,345			1			1,344			4,438			5,285			(847	)

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	1,345		1		1,344		4,438		5,285		(847	)
Adjusted to exclude
Non-operating expenses (income), net	11,310		14,433		(3,123	)	14,140		17,558		(3,418	)
Income tax expense (benefit)	1,758		1,310		448		561		1,044		(483	)
Equity in earnings of TNI and MNI	(1,823	)	(1,183	)	(640	)	(3,679	)	(2,605	)	(1,074	)
Depreciation and amortization	7,069		4,619		2,450		7,794		5,082		2,712
Assets loss (gain) on sales, impairments, and other	2,676		2,361		315		7,626		695		6,931
Restructuring costs and other	6,022		3,294		2,728		1,400		1,021		379
Stock compensation	428		428		—		417		417		—
Add:
Ownership share of TNI and MNI EBITDA (50%)	2,325		1,580		745		2,449		1,270		1,179
Adjusted EBITDA	31,110		26,843		4,267		35,146		29,767		5,379

Supplemental cash flow information
Distributions from MNI and TNI	2,007		1,000		1,007		2,339		900		1,439
Capital expenditures	(2,148	)	(1,606	)	(542	)	(1,744	)	(1,529	)	(215	)
Cash income tax payments	(2,097	)	(2,097	)	—		(35	)	(30	)	(5	)
Interest income	165		(2,245	)	2,410		154		(2,556	)	2,710
Interest to be settled in cash	(11,232	)	(8,305	)	(2,927	)	(13,004	)	(10,046	)	(2,958	)
Debt financing and administrative costs	159		159		—		(4	)	(4	)	—

Year Ended (unaudited)
	September 29, 2019								September 30, 2018
(in thousands)	Consolidated			Lee Legacy			Pulitzer Inc.		Consolidated			Lee Legacy			Pulitzer Inc.
Operating revenue:
Advertising and marketing services		265,933			184,648			81,285		303,446			212,265			91,181
Subscription		186,691			129,053			57,638		195,108			135,309			59,799
Other		57,230			51,077			6,153		45,401			38,543			6,858
Total operating revenue		509,854			364,778			145,076		543,955			386,117			157,838
Operating expenses:
Compensation		182,869			137,172			45,697		199,164			149,924			49,240
Newsprint and ink		22,237			15,172			7,065		24,949			17,591			7,358
Other operating expenses		193,709			118,738			74,971		199,653			119,673			79,980
Depreciation and amortization		29,332			19,135			10,197		31,766			20,676			11,090
Assets loss (gain) on sales, impairments, and other		2,464			2,247			217		6,429			(475	)		6,904
Restructuring costs and other		11,635			7,118			4,517		5,550			4,587			963
Total operating expenses		442,246			299,582			142,664		467,511			311,976			155,535
Equity in earnings of associated companies		7,121			2,885			4,236		9,249			4,629			4,620
Operating income		74,729			68,081			6,648		85,693			78,770			6,923
Non-operating income (expense), net		(50,889	)		(64,596	)		13,707		(54,873	)		(67,071	)		12,198
Income tax expense (benefit)		7,931			2,842			5,089		(16,228	)		(23,173	)		6,945
Net income		15,909			643			15,266		47,048			34,872			12,176

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	15,909		643		15,266		47,048		34,872		12,176
Adjusted to exclude
Non-operating expenses (income), net	50,889		64,596		(13,707	)	54,873		67,071		(12,198	)
Income tax expense (benefit)	7,931		2,842		5,089		(16,228	)	(23,173	)	6,945
Equity in earnings of TNI and MNI	(7,121	)	(2,885	)	(4,236	)	(9,249	)	(4,629	)	(4,620	)
Depreciation and amortization	29,332		19,135		10,197		31,766		20,676		11,090
Assets loss (gain) on sales, impairments, and other	2,464		2,247		217		6,429		(475	)	6,904
Restructuring costs and other	11,635		7,118		4,517		5,550		4,587		963
Stock compensation	1,638		1,638		—		1,857		1,857		—
Add:
Ownership share of TNI and MNI EBITDA (50%)	8,811		4,157		4,654		9,883		4,845		5,038
Adjusted EBITDA	121,488		99,491		21,997		131,929		105,631		26,298

Supplemental cash flow information:
Distributions from MNI and TNI	7,595		3,350		4,245		9,214		3,400		5,814
Capital expenditures	(5,901	)	(4,794	)	(1,107	)	(6,025	)	(4,660	)	(1,365	)
Cash income tax payments	(8,439	)	(8,440	)	1		(464	)	(396	)	(68	)
Interest income	655		(10,204	)	10,859		489		(8,879	)	9,368
Interest to be settled in cash	(47,488	)	(36,821	)	(10,667	)	(52,842	)	(39,988	)	(12,854	)
Debt financing and administrative costs	(1,773	)	(1,773	)	—		(437	)	(437	)	—

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