Lee Enterprises Inc (LEE) 2004 Q3 法說會逐字稿

Good morning ladies and gentlemen, and welcome to the Pulitzer Inc.

Third Quarter Earnings Conference Call.

Today's call is being recorded and will also be available via the web by going to www.pulitzerinc.com.

A replay for today's conference call will be available until Tuesday, October 26th, and the webcast will be available on Pulitzer's website until Friday, November 19th.

Before we begin, let me note that any comments made during the course of this conference call may include forward-looking statements.

These statements are subject to risks, uncertainties, and other factors such as overall advertising expenditures, competition, newsprint pricing, outcome of labor negotiations, and economic conditions that could cause future results to differ materially from management's current expectations.

For a discussion of these and other factors, please see the note to the company's press release issued earlier this morning, which is also available on Pulitzer's website and the company's reports filed with the SEC.

In addition, please see the company's press release for a reconciliation of the differences between non-GAAP financial measures presented during the conference call and the most directly comparable financial measures calculated and presented in accordance with GAAP.

Thank you.

Mr. Woodworth, you may begin your call.

Thank you, Nikka.

And good morning.

We appreciate you joining us.

I'm Bob Woodworth, President and CEO of Pulitzer Inc.

Joining me are Alan Silverglat, Senior Vice President and CFO, Terry Egger, Senior Vice President, Publisher of the St. Louis Post-Dispatch, and Mark Contreras, Senior Vice President with responsibility for Pulitzer Newspapers Inc., or PNI, and our operations in Tucson.

I'd like to spend the next few minutes providing some perspective on Pulitzer's third quarter results, which we released earlier this morning.

Following my remarks, Alan will briefly review the numbers.

And finally, we'll open up the call for questions and answers.

Please keep in mind that unless otherwise noted, the numbers we are presenting are comparable numbers.

They include our interests in the Tucson Joint Operating Agreement, and exclude the impact of acquisitions.

I should also note that when we discuss the retail and national revenue categories, both include pre-prints.

I'd like to begin by saying we're pleased by our overall performance during the quarter.

Some highlights include base earnings growth.

This is the ninth quarter out of the last 11 in which base earnings per share have grown.

I would also add that earnings growth in this quarter and in past quarters came without the benefit of share repurchases.

Both PNI and TNI demonstrated once again very, very strong momentum, while posting some pretty impressive results.

And in St. Louis, we continued to make significant progress on our growth initiatives.

We think these results are a clear indication that our core operating strategy is working, and working well.

By way of recap, our operating strategy is to expand our audience reach and increase our share of ad dollars in our markets, and to make investments that create value by strengthening our ability to grow revenue and earnings over the long-term.

Now, let's review the third quarter.

Total revenue increased 5.8 percent, with ad revenue up 6.9 percent.

Revenue gains were led by pre-prints, which include revenue from Local Values, our direct mail initiative in St. Louis.

Launched in March, Local Values was a significant contributor to our strength in retail pre-prints, which were up 14.9 percent.

Classified increased 9.2 percent for the quarter.

The gains in classified were led by recruitment, which was up 18.1 percent.

Real estate was up 9.3 percent.

Auto was down two-tenths of a percent, and I'll comment more on auto when we discuss St. Louis.

Retail advertising, including pre-prints, increased 7.4 percent.

Gains came from local advertisers, speciality stores, grocery, and financial categories, as well as Local Values.

National advertising, our smallest category, decreased 6.2 percent, primarily reflecting ongoing weakness in pharmaceutical, packaged goods, and travel.

Third quarter reported operating income increased by [5.6] percent.

With regard to operating expenses, absent the items Alan will discuss with you later in the call, non-newsprint operating expenses in the quarter increased 3.1 percent.

Now let's go into a bit more detail about the quarter, beginning with St. Louis.

While we didn't hit on all cylinders, we did continue to meet important targets in our long-term strategic plan to strengthen the St. Louis franchise.

Total ad revenue was up 5.3 percent, led by a 6.2 percent gain in classified.

Auto, which had been strong all year, was negatively impacted by a strike against 61 St. Louis area auto dealers.

The 11-week strike ended Friday, October 15th.

As a result of the strike, the third quarter St. Louis auto was down two percent.

Turning to other classified categories in St. Louis, we saw gains in real estate, which increased 6.7 percent, and help wanted, which was up a strong 11.8 percent.

St. Louis retail was up 8.2 percent, and national was down 8.9 percent.

We continue to see some softness in the majors, but we also continue to achieve solid growth in local territory revenue, a category over which we have the most control.

Local territory revenue was up 14.4 percent for the quarter, with the suburban journals in particular demonstrating impressive momentum.

As I indicated at the beginning of the call, Local Values is tracking according to plan and is projected to be profitable in 2005.

It's also a perfect example of the kind of investments we are making to increase market share, grow revenue and strengthen our long-term prospects.

I'd also like to call your attention to a six-year agreement reached between the Post-Dispatch and the Mailers, which is the second largest union at the newspaper.

We are extremely pleased to have resolved this issue ahead of the expiration of the contract.

The new contract is fair to both sides.

Under terms of this agreement, union employees will begin sharing 25 percent of all health care costs.

Together with the new five-year labor contracts with the Newspaper Guild announced in June, we are in a very good position to help mitigate increases associated with the cost of health care as we move forward into the fourth quarter and into 2005.

Now let's turn to PNI, which had another great quarter.

In fact, it was PNI's best-ever third quarter for total revenue, ad revenue, EBITDA, and EBITDA margins.

The third quarter record comes on top of its best-ever first and second quarters for ad revenue, total revenue, and EBITDA.

Total reported ad revenue, including acquisitions, was up 12.7 percent.

PNI ad revenue without acquisitions was up 10.1 percent.

Every PNI market reported growth in total ad revenue.

PNI, as has been the case all year, saw substantial strength in classified, which was up 16.5 percent on a comparable basis.

Gains came from help wanted and real estate, up 36.3 percent and 17.7 percent respectively.

Auto was down slightly at 3.1 percent, with the Midwest market begin weak.

Strategic acquisitions, an important an ongoing component of building PNI's market presence, played a positive role in the quarter.

Since July, we have included the results of two weekly publications serving the Santa Ynez Valley in Santa Barbara County, California.

Good day-to-day management has also played a role.

Highlights includes the successful launch of a new weekly in Napa, and in September we began implementing rate increases throughout PNI.

PNI margins were up 40 basis points in the quarter, and approximately 100 basis points for the first nine months.

EBITDA was up 11.1 percent for the quarter, and third quarter operating profit was up 9.6 percent on a reported basis.

Now let's turn to Tucson.

Things are not only going well, they are doing so on a consistent basis with appreciable momentum.

Mike Jameson joined the Tucson partnership in January as President and CEO.

Mike and his team are really making their mark.

Under his leadership, we are now seeing performance, especially in local territory revenue, that is consistent with the rest of the company.

Total ad revenue was up nine percent in the quarter, with classified up 11 percent overall.

Classified was led by help wanted, which was up 20.1 percent, followed by auto, which was up 16.3 percent.

The 20.1 percent increase in help wanted is all the more impressive when you consider that it is cycling against robust numbers in the third quarter a year ago.

Interestingly, real estate was down nine-tenths of a percent, but that's more a reflection of an extremely hot market in which houses sell almost as quickly as they are listed.

Although it's off a small base, national, including pre-prints, was up 37.9 percent, thanks in large part to strength in health care.

As you know, we are coming up to some tough comparisons in the fourth quarter.

Comparable ad revenues in the 2003 fourth quarter were up 5.7 percent.

Nonetheless, we are reaffirming the guidance we issued last December, for full year 2004 base earnings per fully diluted share of at least $2.10.

Before I turn things over to Alan, I'd like to spend a minute on our e-media operations and why we continue to be excited about it.

Our sites are by far number one in each of our markets.

Audience levels are continuing to grow.

Revenue growth is tracking with audience growth.

And we are reviewing the rates of our sites at least once a quarter and adjusting accordingly.

E-media is playing a key role in expanding our reach and increasing our share of ad dollars in our markets.

Now I'll turn the call over to Alan.

Thanks, Bob.

And good morning everyone.

I will spend the next few minutes concentrating on our expenses.

Reported operating expenses were up 6.9 percent in the third quarter, and reflect the following.

One, an 8.4 percent increase in newsprint, incorporating price increases of 9.2 percent in the third quarter of 2004.

Two, new operating expenses from our recent PNI acquisitions.

Three, increased postage, production and marketing costs associated with Local Values.

And four, a half-million dollar expense in St. Louis related to severance costs for employee termination inducements associated with positions that will not be staffed.

These increases were partially offset by reductions in employee benefits and bad debt reserves, reflecting good experience over the course of 2004.

Excluding newsprint expense increases, costs related to Local Values and PNI acquisitions, as well as termination inducements for permanently eliminated positions, comparable expenses increased 3.1 percent in the quarter, and 2.8 percent for the first nine months.

Given our experience so far this year with newsprint costs, we expect newsprint increases for the full year to come in at the very lower end of the guidance we gave earlier, or about 10 percent.

Pulitzer's financial position remains strong.

At quarter end, the company had cash and marketable securities of 209.7 million, and long-term debt net of cash, marketable securities and restricted funds, of 17.8 million.

We continue to expect capital expenditures in the $10 to $12 million range, but more likely towards the lower end of that range.

Finally, we lowered the effective tax rate in the quarter to drive a full-year rate of approximately 36 percent when stated as a percentage of pre-tax income; about 36.5 percent after recognizing minority interest.

This change reflects the tax-free nature of the Medicare Part B Drug Reimbursements incorporated in our post-retirement medical expense, and increased utilization of state net operating loss carry-forwards.

Thank you.

And now let me turn it back to Bob.

Thank you, Alan.

We'll be happy to take your questions.

At this time, ladies and gentlemen, if you wish to ask a question, please press star followed by 1 on your touch tone telephone.

If your question has been answered or you wish to withdraw your question, please press star followed by 2.

Questions will be taken in the order received.

Please press star 1 to begin.

Our first question comes from the line of Lauren Fine of Merrill Lynch.

Please proceed.

Thank you very much.

A couple of quick questions.

I'm wondering, in St. Louis, in September, where help wanted was a bit weaker, how much of that you think was just Labor Day?

And then, I guess related to that, could you discuss in St. Louis, PNI and TNI, what the October trends look like?

And then I have a follow-up.

Good morning, Lauren.

Hi, it's Bob.

I'll let Terry comment on help wanted and the October trends, and Mark talk about his responsibilities.

Good morning, Lauren.

In St. Louis, the -- your point about Labor Day is a big factor in the quarter.

Recruitment revenues were up 14 percent in the seventh period, up about 14 percent in the eighth period, and then only two percent in the ninth period.

And again, Labor Day falling directly -- it does impact classified on that weekend.

We are seeing a bit of a bounce back in October in that category.

And what about overall ad revenue in October?

Overall ad revenue in October, again, appears a bit better.

The thing that we're most encouraged by is getting that strike resolved on Friday.

That was a major deterrent on our ad -- our auto revenues.

And it -- the losses were increasing the longer the strike went, so having that behind us, we're pretty encouraged by that.

I'd say national is the category that is still the big question mark.

You know, before I actually move on to the other ones, I guess, as it related to the auto strike, you know, clearly we've seen weakness in auto that had, you know, in other areas, that had nothing to do with the auto strike.

Is there still an underlying weakness, notwithstanding the resolution of the strike?

Again, I think it is market-by-market.

We've had actually a pretty strong year up until the strike in auto.

And in our conversations with the dealers, things have slowed, but we also think there's been a pent up demand now in St. Louis because things have been so slow for the last 11 weeks.

So, it may not be the kind of growth that we saw here in St. Louis in the first two quarters, but we do anticipate it being far more positive than it's been in the last two periods.

Great.

Thanks.

Lauren, this is Mark.

Just overall for October, we have reason for encouragement, but I'm a little reluctant to quantify that.

Regarding auto, I think Terry is right.

In the third quarter we saw weakness in the Midwest markets but real strength in the West Coast.

So I do think it's kind of a region or a market-by-market phenomenon with auto.

Lauren, Bob.

I just had a quick comment about October and in the fourth quarter.

As I mentioned during the prepared comments, we're staring at some pretty tough comps, so we want to make sure we underscore that.

Having said that, you can see the kind of performance that particularly PNI has generated really this whole year in terms of ad revenue growth, and we're very encouraged at the momentum that's developing in Tucson.

We're paying attention to the right things there.

We've got full agreement with our partner to focus on this revenue growth and increase market share.

And we've got a pretty good team out in Tucson now, so we're very encouraged by that.

Great.

And I guess just one last question.

When you look at -- and I'm talking maybe out three years -- what kind of margins do you think you could have on Local Value?

Again, if you use that parameter, Local Values, what we've stated without that kind of specificity, but we believe that the margin characteristics on Local Values can be that of the newspaper.

And so, in the twenties for that on ongoing basis.

And again, we've hired some really good folks, and we have some folks on staff who are pretty experienced in that.

And we've identified exactly who has what money in the marketplace, and we've already shifted a good piece of that in just the first 10 months.

And we've got pretty clear targets for the balance of this year and next year to move some more of that.

We've stated that we will be profitable in '05, and again, I would say within, you know, our goals would be within that three-year window to have margin characteristics that are relatively the same as the base newspaper.

Great.

Thank you.

Our next question comes from the line of Peter Appert from Goldman Sachs.

Please proceed.

Hi.

Good morning.

Just staying on Local Values for a second, is it still the expectation that it will cost about a nickel a share this year?

That's number one.

Two, Terry, I was hoping maybe you could quantify for us how big it is from a revenue perspective in '04 and how big you think the market opportunity from a revenue perspective might be.

And then lastly, any interesting thoughts you can share with us in terms of competitor response so far?

That's a good question.

Well, so far we -- again, we believe that it will cost us about a nickel.

The model that we built, we're tracking to-- we're actually slightly ahead of that model, so that stays very consistent.

The size of the opportunity, we estimate, and we just got another look at market share, we estimate there's just over $50 million being spent in direct mail in St. Louis.

Of that, a little over $20 million of that is in the shared mail category that we're targeting.

And with that, even though we've moved a nice chunk to get us started this year, and again, the ramp up on that continues to be very nice, we know, for example, there's another $2 million in additional grocery in the market.

There's approximately $8 million in fast food that is in shared mail in the market.

There's about $4 million in furniture and home improvement in the market in shared mail.

So, we have that kind of detail and the specificity by account what they're spending with Advo and Money Mailers, et cetera.

And so those are the folks that we're targeting.

One of the things we try to focus on is looking at each individual zip code and looking at the weight in those zip codes to see whether or not we have reached our weight limit in those zip codes because to the degree that you understand that, you understand how you can go and push more business in those under-weighted zips and just get your bulk there, because you cover your fixed costs very quickly that way.

In terms of competitive response, again, I wouldn't speak to anything directly.

Now, I know that Advo, for example, did need to reduce some of their rates.

We think their rates were extremely high in the marketplace and we think that was one of the opportunities that we had to enter the space in the first place.

But, that said, we don't think any competitor will just sit by, and so we just need to be that much more aggressive.

Long term, we're really pleased that we're in this business.

It just gives all of our sales people one more thing to offer a customer in the marketplace.

Peter, this is Bob.

Just add a quick comment of color there.

I -- we believe this is one business where our very substantial sales force in St. Louis really is a tremendous advantage, because the real profit driver of this business is developing targeted inserts, calling on very local accounts.

And obviously, with the number of feet on the street, and our coverage of those accounts, we think we're positioned pretty well to make this a good business.

Great.

Thank you.

Alan, the tax rate reduction, should we think about 36.5 percent is the permanent rate on a go-forward basis?

That's about what we're looking at, Peter, 36.5 to 37.

Okay.

And last question, on the PNI business, given the success you guys have enjoyed there, any thought or opportunity to step up the pace of acquisition from what you've already been doing?

Peter, this is Mark.

We always -- well, we have opportunities yet to execute upon.

And, you know, we're just going to continue along the path that we've been on at taking opportunities as they come to us.

So, the answer in short is yes, we still feel that we have plenty of opportunities left in our markets to continue down that path.

Great.

Thanks, gentlemen.

Your next question comes from Michael Kupinski from A.G. Edwards.

Please proceed.

Okay.

Following along those lines, I was just looking at the sizeable increase in your cash balance due to your strong free cash flow, and I was just wondering what are the best uses of the company's cash at this time?

And then I have a few other follow-up questions.

Hi, Mike.

You know, as always, or as we've said in our, you know, prior conversations with all of you, we look to hold our cash in reserve, anticipating an acquisition opportunity that we expect will emerge in the next few years.

At some point, if that opportunity doesn't merge-- then I think we -- emerge -- then we have to evaluate other uses for the funds.

But that's where we're at today.

Okay.

I realize that national advertising is a very small portion of your ad dollars, but I'm wondering if you are seeing any signs of hope there?

Obviously, it was down almost 13 percent in this quarter and it's been negative since Q2 of '03, and I was just wondering if you're seeing anything that's positive?

Michael, this is Terry.

Good morning.

There really, quite candidly, have not seen nor heard anything that is particularly encouraging.

The national category, as you know, for newspapers, was soft for many, many years, and the last four or five years had come back quite nicely.

It -- as opposed to one or two particular segments, whether it would be travel or auto or pharmaceutical, right now there just seems to be a general softness across-the-board.

And, you know, national is generally a category where you have a little more long-term visibility on it.

I mean, you usually can see it coming.

And right now, there's just not a lot of optimism overall in the industry.

That being said, I do think that we've cycled now against, you know, almost nine months of some pretty tough national numbers.

So, I don't think that we're set to fall much further.

It's just a matter of whether we can pick up some traction.

And I don't see any tangible signs just yet.

Terry, can you remind me what department store advertising was in St. Louis for the quarter, how much that was down?

And I know that you cycled against now the weak department store from last year.

And it seems like a few department stores are beginning promotional strategies, gearing up for Christmas, and I was wondering if department stores as a category will swing positive in November and December, specifically in St. Louis?

Well again, we were -- I don't have the exact numbers, but we were soft, slightly soft in department stores in both the seventh and eighth periods, but actually were up in the ninth period.

And we've not been up in department stores in I want to say almost 19 months.

So, that was a bit of an encouragement.

That said, I don't see a spike of growth right now for the fourth quarter.

I don't see it falling back substantially, but I don't see a spike of growth in the department store category.

I mean, these realities in our industry again just underscore the importance of our emphasis on local territories, on pre-print growth, on Local Values, because the question isn't whether or not there's money in the market.

You know, there's still $500 million spent every year that isn't spent with us here in St. Louis.

And so we have to find ways to go beyond the traditional department store relationships and some of the other things.

We're not going to walk away from those, and we're going to try and help our partners in those categories as much as we can, but we absolutely can't wait for the swings to just come naturally.

We've got to be more aggressive pursuing the other business in the marketplace.

Just to clarify, Terry, you're saying that right now pacings of department stores look like it's up, though, for the balance of the year, just not spiking up, it's just -- but it looks like it's going to be up?

No, it was up for the ninth period, Michael.

It had not been up prior to that.

It was up strictly for the ninth period.

And I'm not predicting that as a trend for the balance of the year, but I don't think we'll see the degree of shortfall we had seen over the past two years.

Okay.

And then finally, in Tucson, you've begun to cross-sell the papers with the Phoenix paper, the Gannett paper there, and I was wondering if you can quantify the dollars that flow to you as a result of this effort in the latest quarter?

Michael, this is Mark.

It's relatively small dollars, but encouraging in terms of percentage increases, in the range of, for the quarter, a couple hundred thousand dollars.

But again, national, as Terry mentioned, generally both for Tucson and for PNI, is a relatively small chunk of our advertising revenue.

You know, it's under five percent, depending on what market you're looking at.

And for the third quarter, we did see encouraging trends.

Great.

Thanks very much.

And congratulations on the quarter.

Thanks.

Thanks, Mike.

Our next question comes from the line of John Janedis of Banc of America Securities.

Please proceed.

Hi.

Good morning.

Just a couple of brief questions.

First, back to the auto side.

Are you guys seeing any kind of pent-up demand post strike?

And then just secondly, can you give a little bit more detail on the termination inducements?

Thanks.

Hi John.

Again, our conversations, that's one of the things that Bob mentioned, the size of the sales force on the street.

And that's one of the advantages, you get to have a lot of conversations directly with the dealers, and there's no question that during the course of this strike, while the strike was directed in the service areas, the actual car sales themselves suffered as well.

So, in our conversations with them, we think it's pretty clear there has been a pent-up demand.

Auto dealers, again, one of the things we're hopeful of is they are, if nothing else, aggressive to try and pursue that opportunity promotionally, so they're going to want to get that business back.

So, we're going to try and work with them to advertise as much as possible to try and fulfill that pent-up demand.

You know, the question that Lauren asked earlier, is there an overall softening in the auto category, I think it's too early to call that yet on a sustained basis.

We liked the trend that we were seeing.

We know there's still a lot of money being spent on radio and television on auto in our marketplace, and that's the business we're going to continue to try to pursue.

Regarding the inducements, again, one of the things -- those were at the Post-Dispatch -- and as we assessed in the beginning of the quarter, just looking at overall structure and then needs in certain areas, we felt that it was prudent to reduce costs in some areas that we felt that we were able to get that work done with fewer employees.

So, those were primarily in our circulation department at the Post-Dispatch, but we don't see anything additional on the horizon at this point.

Okay.

And just one other quick one on Tucson -- clearly a pretty good quarter there.

Was there any kind of one-time benefit?

And if not, should we expect any kind of similar growth rate going forward for Q4?

John, this is Mark.

I would, you know, honestly, I would attribute that to just plain, good old-fashioned execution.

Where we saw growth was in local territories.

We saw it in classified, despite having some really tough comps in help wanted year-over-year.

So, the momentum that Bob mentioned in his remarks is real, tangible, and gives us great optimism in the near future.

So, you feel pretty good about the next couple of quarters?

We do.

Okay.

Thank you.

John, the other thing -- it's Bob -- the other thing I'd add there is there's a lot -- there's terrific focus on not only the blocking and tackling of ad revenue creation, but really boring into the rate structure, seeing areas where perhaps we're a bit undervalued.

It's the kind of arcane detail which isn't very glamorous, frankly, but it really drives revenue.

And so those are the kinds of basics that are taking place in Tucson, and again, encouraging.

Thanks, Bob.

Our next question comes from the line of John Kornreich of Sandler Capital.

Please proceed.

Yeah.

Hi.

Two things.

One -- three things, actually.

Can you give us some guidance, rough guidance, on where you think payroll and other personnel expenses will be growing in the next few years?

It's three to 3.5 percent this year.

I assume, assuming no change in headcount, that that's a pretty good number for the next few years.

Secondly, why are other expenses up 12 percent this year?

I know there's litigation and termination, but is there anything else in there?

What is the underlying growth in other expenses?

And finally, if the Yanks and the Cardinals both choke at the same time, do you think that you might do a joint editorial product with the New York Daily News?

John, you could have gone all morning without having to bring up the Cardinals.

We're in mourning here this morning.

Just get us a good sinker ball pitcher, we'll be all right.

John, let me take the less important first two points you raised, payroll and other costs.

In terms of a three-year outlook, we haven't publicly disclosed that, and we haven't really spoken to our, you know, even 2005 outlook.

But as Terry mentioned, we have signed long-term labor contracts with a good portion of our St. Louis workforce, and I don't see any reasons that would drive our cost increases beyond what you've seen historically.

Okay.

And then other expenses, a good piece of that is the labor -- pardon me, the litigation settlement that you referenced.

Okay.

And then that's also where a lot of the costs of Local Values reside.

Okay.

So there's no underlying problem here in this category?

Not that we see.

Yeah.

Okay.

Thanks a lot.

Appreciate it.

John, Bob again.

Just a quick comment on the payroll expenses, because I think it really illustrates a pretty good point in terms of the build-out of the platforms we have in St. Louis and at PNI.

It's not only our ability to cross-sell, which we've talked an awful lot about, but it's the ability to really focus on costs and wring out some efficiencies where there's some duplication of effort.

And that certainly impacted both St. Louis and PNI, not only this year, but in previous years.

But I think the point going forward is we're focused on that and we've still got some opportunities that we might want to explore.

I mean, you can see it in our FTE count, which on a comparable basis is down about 2.2 percent for the year.

And I think it's just another indication of really looking at these build-outs in St. Louis and in PNI and just constantly focusing on efficiency.

Okay.

Just one other thing I just remembered now.

Refresh my memory -- the equity and earnings of Tucson newspaper partnership is your share of the after-tax earnings?

No, John -- it's a good question -- it's our share of the pre-tax result of half of the partnership.

Okay.

Or, our share is half of the partnership.

So basically, when I see $12.2 million for nine months, that means the partnership -- the newspaper did $25 million pre-tax, roughly?

Roughly.

And it would be the newspapers, because it would be half of The Citizen and half of The Star.

Got you.

Thanks a lot.

You bet.

[Operator instructions] At this time, sir, you have no further questions.

Great.

Thanks again, Nikka.

Just before we go, I'd like to leave you with just a few takeaways.

We believe we had a solid quarter.

PNI and Tucson did very, very well.

And while the auto dealer strike in particular affected St. Louis, we still made significant progress on our strategic plan to strengthen the St. Louis franchise.

I hope you'll agree that this quarter's results are evidence that our core operating strategy is working.

We'll continue to focus on that strategy and increase our audience reach, and our share of ad dollars in our market, and we'll continue to make investments that create value by strengthening our ability to grow revenue and earnings over the long term.

Thanks again for joining us today.

Thank you for your participation in today's conference.

This concludes the presentation.

You may now disconnect.

Have a good day.