Lee touts cost reductions at lender confo; decline reflects 44% reduction in employment since 2007

Lee Enterprises executives touted their 39 percent reduction in costs since 2007 at an Arizona lenders' conference last month, a decline which tracks the steady decline in employment at the Davenport-based firm from more than 8,100 to just over 4,500 full-time employees.

The presentation at Deutsche Bank's Leveraged Finance Conference September 29 may have helped contribute to recent gains in the price of its stock, which has climbed nearly a dollar per share since hitting a 52-week low of $1.36 per share Sept. 10.

The numbers provided analysts by Lee showed overall cash costs dropped $305 million, or nearly 39 percent, from $791 million in 2007 to $486 million for the latest 12-month period ended in June.

The biggest chunk of that cost reduction – $168 million – came from lower compensation (pay) for employees. Compensation costs declined 41 percent over that same 7-year period to $243 million during the latest 12-month period.

A comparison of full-time equivalent employees at Lee shows a similar drop – 44 percent – since 2007, falling to 4,515 at the end of the company's fiscal 2014, compared to 8,108 full-time employees as of Sept. 30, 2007.

During that same period of cost reductions, Lee officials pointed out the company has maintained "consistently high margins" of more than 20 percent. Thanks to the continued strong cash flow over the past seven years, the company said it has been able to reduce its debt from $1.7 billion in September of 2005 to $745 million as of June of this year.

Newsprint costs at the company also have fallen dramatically since 2007, declining 68 percent to $33 million for the most recent 12-month period compared to $104 million seven years ago.

Lee owns 46 daily newspapers, including the Quad City Times, and has a joint interest in four other newspapers.

CLICK HERE to download the full Lee lenders' conference presentation.

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