Here's a short wrap-up of recent news concerning Lee Enterprises, parent company of the Journal Times, and the JT itself.
1. Lee has not yet announced, but we learned on good authority, that today's annual meeting did approve the proposed reverse stock split (which will turn anywhere from four to ten existing shares into one share). The move is contemplated to bring Lee back into compliance with New York Stock Exchange rules requiring listed companies' stock to be trading at more than $1 per share. Lee stock currently is trading at 28 cents. (So a 4-1 reverse split would be cutting things rather close...)
The annual meeting gave the Board of Directors authority to make the reverse split; the board might or might not actually do it. Under the NYSE's temporary rules, Lee is still in compliance -- and, in any case, will have a tougher time meeting the stock exchange's minimum capitalization requirement of $25 million -- another rule that is temporarily suspended, lowered through June 30 to $15 million -- but also under long-term review, given the growing number of companies that would be affected, and de-listed. Lee's current capitalization is $12.8 million
2. Donna Melby, advertising director, of the Journal Times has, in her own words, "some exciting news coming this spring at the Journal Times."
On April 14, the paper will get smaller: roughly an inch and one-half narrower (tabloid products, like the Pennysaver, will instead get shorter). "We're confident Journal Times readers and advertisers will be pleased with a newspaper that is easier to handle and read," Melby writes.
But wait, here's the really exciting part: Although advertisers' ads will get smaller, ad rates will not change!
The paper's new page size will be 11" wide, down from the current 12" or so. The Journal Times is not alone in shrinking its page size; many newspapers across the country have shrunk in response to high newsprint prices and general economic conditions.
3. Your newspaper carrier -- alas, the PC Police no longer permit the sexist term "newsboy" -- may or may not be changing. Regardless, there's an important change afoot for everyone who gets more than one newspaper -- say the Wall Street Journal, Milwaukee Sentinel or New York Times along with the Journal Times in the morning.
Until now, there were at least two delivery services: the Journal Times' and the Milwaukee Journal Sentinel handling itself and the other papers. But Journal Times carriers were notified on Feb. 10 that they would henceforth be handling all those other papers, and also USA Today, Investor's Business Daily, Financial Times and Barron's. Carriers who couldn't handle the larger distribution, and bigger routes in general, were given the pink slip.
We spoke to Kevin Barz, who had delivered about 60 papers in North Bay since 2001; he said he was offered a larger route -- one with 300 papers and a larger geographic area -- but he had to turn it down due to health issues, and his route was terminated. Barz, a grandfather who handled his route with the 15-year-old grandson he had hoped to turn the route over to when the boy gets his driver's license this summer, was disappointed. He also wonders what will happen to the 15 or so elderly customers he had for whom his grandson put the paper between their front doors or on the porch, or wherever they wanted it, instead of just throwing it in the driveway.
4. Lee also announced today that 70 percent of adults in its 12 largest markets read the newspaper or visit the newspaper's online website over the course of a week, compared with 67 percent the previous year. The Journal Times is not among those 12 largest papers, although Madison's Wisconsin State Journal is. Melby says the newspaper and its website reach 75% of Racine County adults every week. At least once during the week, that is...
President and CEO Mary Junck also said the earnings outlook for 2009 "remains weak," and Lee is prepared to reduce cash costs 12-13 percent below 2008's, a cut of more than $100 million.