DAVENPORT, Iowa - Against “one of the toughest years ever” and a “slow start in 2008,” publisher Lee Enterprises remains positive about the future as its newspapers and online sites continue to expand readership, its revenue performance outpaces the industry, and its market reach continues to grow.
Despite the optimism, Mary Junck, Lee's chairman, president and chief executive officer, told shareholders Wednesday morning that there continues to be “a profound misunderstanding on Wall Street about the strengths and future of our business.”
“The result is that our share price has dropped to levels far below the true value of our company,” Junck told an audience of about 70 gathered for the annual meeting at Lee's corporate headquarters in downtown Davenport, Iowa.
Lee is the parent company of The Citizen and its sister publication, the Skaneateles Journal.
Steady circulation in Lee's print products as well as an increase in visitors to Lee's Web sites is helping Lee dominate its markets, Junck said. In October 2006, Lee's newspapers and Web sites reached 67 percent of all adults in its markets. By 2007, that had grown to 71 percent.
The growth, she added, is coming from people who read both the newspapers and the online sites.
Junck said analysts and investors are surprised by the data because of the misconception that newspapers are a dying breed. “We really are not losing readers. More people are using our Web sites and more people are reading our printed newspapers, too.”
The company even continues to see powerful growth among young adults, who have long been thought of as not reading the newspaper. Lee's reach to the 18-to-34-year-olds in its markets grew from 57 percent in 2006 to 66 percent in 2007.
“What we do matters. It matters to our readers. It matters to our online users, to our advertisers and our communities,” she told shareholders, company directors and Lee employees.
But the economy, the real estate downturn and the credit situation have cooled advertising in recent months, she said. “As you've seen in the headlines, retailers, auto dealers and others are facing a challenging environment as well. This has added up to a slow start in 2008 - particularly in real estate and employment.”
Carl Schmidt, Lee's chief financial officer and treasurer, shared statistics that indicate how Lee has led the industry in revenue performance. Citing a New York Times story, he said other newspaper companies saw a greater than 9 percent loss in advertising revenue in 2007 while Lee saw a 1.1 percent loss (the data was not for a full year). The story, he pointed out, said Lee “seems to be weathering the advertising crash.”
In the most recent quarter, Lee's advertising revenue fell by 6.5 percent. However, in 2006 it benefited from the World Series in St. Louis, where it owns the St. Louis Post-Dispatch, as well as an additional publishing day - a Sunday.
“Without these events, the decline from last year for the quarter would have been 4 percent,” Schmidt said. “Revenue growth is paramount Š and we've pulled out all the stops.”
Junck said with the hard work, creativity and great energy of Lee's employees “we believe we're dealing with the current economic slowdown head on.”
(The Quad-City Times is a Lee Enterprises newspaper)
“The result is that our share price has dropped to levels far below the true value of our company,” Junck told an audience of about 70 gathered for the annual meeting at Lee's corporate headquarters in downtown Davenport, Iowa.
Lee is the parent company of The Citizen and its sister publication, the Skaneateles Journal.
Steady circulation in Lee's print products as well as an increase in visitors to Lee's Web sites is helping Lee dominate its markets, Junck said. In October 2006, Lee's newspapers and Web sites reached 67 percent of all adults in its markets. By 2007, that had grown to 71 percent.
The growth, she added, is coming from people who read both the newspapers and the online sites.
Junck said analysts and investors are surprised by the data because of the misconception that newspapers are a dying breed. “We really are not losing readers. More people are using our Web sites and more people are reading our printed newspapers, too.”
The company even continues to see powerful growth among young adults, who have long been thought of as not reading the newspaper. Lee's reach to the 18-to-34-year-olds in its markets grew from 57 percent in 2006 to 66 percent in 2007.
“What we do matters. It matters to our readers. It matters to our online users, to our advertisers and our communities,” she told shareholders, company directors and Lee employees.
But the economy, the real estate downturn and the credit situation have cooled advertising in recent months, she said. “As you've seen in the headlines, retailers, auto dealers and others are facing a challenging environment as well. This has added up to a slow start in 2008 - particularly in real estate and employment.”
Carl Schmidt, Lee's chief financial officer and treasurer, shared statistics that indicate how Lee has led the industry in revenue performance. Citing a New York Times story, he said other newspaper companies saw a greater than 9 percent loss in advertising revenue in 2007 while Lee saw a 1.1 percent loss (the data was not for a full year). The story, he pointed out, said Lee “seems to be weathering the advertising crash.”
In the most recent quarter, Lee's advertising revenue fell by 6.5 percent. However, in 2006 it benefited from the World Series in St. Louis, where it owns the St. Louis Post-Dispatch, as well as an additional publishing day - a Sunday.
“Without these events, the decline from last year for the quarter would have been 4 percent,” Schmidt said. “Revenue growth is paramount Š and we've pulled out all the stops.”
Junck said with the hard work, creativity and great energy of Lee's employees “we believe we're dealing with the current economic slowdown head on.”
(The Quad-City Times is a Lee Enterprises newspaper)
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