Earnings grew 5.6 percent over 36 cents per diluted share a year ago, resulting largely from higher investment income on proceeds from the sale of Lee’s broadcast group in October 2000. The proceeds contributed 8 cents per diluted share to net income in the quarter.
The sale of publishing operations during the quarter resulted in a pretax loss of $1.5 million, or 2 cents per share, due to the non-cash write-off of intangible assets. The loss reduced reported diluted earnings per share to 36 cents. Total annual revenue of the operations sold is approximately $4 million.
Revenue for the June quarter increased 1.0 percent from the prior year to $111.0 million, a result of revenue from acquisitions offsetting the continuing advertising slowdown. EBITDA decreased 11.4 percent to $30.9 million, and operating income decreased 17.9 percent to $22.9 million.
Mary Junck, president and chief executive officer, said the operating results reflect the prolonged advertising downturn. In light of the picture across the country, we think we’ve taken the right steps to weather this storm, she said, and we’re pleased that our results compare favorably with the industry as a whole. We moved early and aggressively on expenses, including targeted workforce reductions. We have not seen any pickup in the advertising environment, and accordingly we’ll continue to manage our costs tightly.
She added: We’re focused on driving revenue, especially local revenue, which we believe will position us well when the economy rebounds. We’re continuing to emphasize readership and circulation, strong local news reporting, and online growth. All of these actions continue to build the relative strength of our newspapers in our local markets for the long term. Meanwhile, we intend to use our strong balance sheet to pursue reasonable acquisition opportunities, particularly those involving daily newspapers with circulation of 30,000 or more.
On an operations basis and excluding the effects of acquisitions and dispositions, advertising revenue for the June quarter decreased 3.7 percent from the prior year. Retail advertising revenue decreased 1.5 percent. National advertising revenue, which accounts for less than 5 percent of total advertising revenue, grew 0.2 percent. Classified advertising revenue decreased 6.9 percent, primarily in the higher margin employment category. Circulation revenue decreased 1.4 percent. Online revenue grew 29.9 percent. Total revenue decreased 2.2 percent.
On July 17, Lee completed the sale of its last broadcasting station, KMAZ-TV in El Paso, Texas. Gross proceeds of the sale totaled approximately $8 million. The after-tax gain of $4 million on the sale will be reflected in results of discontinued operations in the quarter ending Sept. 30, 2001.
