4th quarter earnings out; expect more cuts

Lee reported a profit in its fourth quarter of about 4 cents per share, or $1.8 million. Operating cash flow grew 10.5 percent and operating expenses were cut 25.5 percent. Furloughs and layoffs cut compensation by 23.5 percent, and the number of full-time employees by 15.1 percent.

Lee will cut costs even more: 15 percent to 16 percent in the current quarter, and 6 percent to 7 percent overall in fiscal year 2010, according to the earnings report.

"While we can't predict the timing of the economic recovery, we believe our streamlining of costs, aggressive sales programs and unmatched delivery of local news, information and advertising have positioned Lee to emerge strong," CEO Mary Junck said in a statement. “In 2009, we increased local market share by taking millions of advertising dollars from competitors, and in 2010 we expect to gain further share through our rollout of online behavioral targeting advertising and other intensive sales programs.”

Junck said September and October were the best months for advertising revenue in fiscal year 2009, but there has been a 19.7 percent drop in retail ad revenue, a 24.7 percent drop in online ad revenue and a 31.8 percent drop in classified advertising. Circulation revenue fell 6.3 percent.

Lee did reduce its debt ... to $1.1 billion.

See the full fourth quarter report.