Distressed newspaper company could face stock delisting
Lee Enterprises Inc., the Davenport, Iowa-based parent company of The Journal Times in Racine, has been notified by the New York Stock Exchange that it has fallen below the NYSE’s continued listing standard relating to average share price.
Lee also owns half of Madison-based Capital Newspapers, publisher of the Wisconsin State Journal and The Capital Times.
The stock exchange standard requires a minimum average closing price of $1 per share over a consecutive 30-trading-day period.
The NYSE also noted that Lee was nearing non-compliance with its market capitalization standard, which requires a 30-trading-day average of $25 million. The NYSE said it reserves the right to re-evaluate continued listing determinations regarding other standards, including whether the stock trades at sustained levels that are considered to be abnormally low.
Lee intends to notify the NYSE within the required period of 10 business days of its plans to return to compliance.
Under the NYSE rules related to the average share price, Lee common stock is allowed to continue to be listed on the exchange during a six-month cure period. Suspension and delisting procedures could begin sooner if other standards, such as the $25 million average market capitalization, are not met.
Lee operates 49 daily newspapers and a joint interest in four others, online sites and more than 300 weekly newspapers and specialty publications in 23 states.
Daily newspapers throughout the nation are facing significant economic distress.
Journal Communications Inc., the parent company of the Milwaukee Journal Sentinel, recently announced it expects to take a fourth-quarter charge of as much as $240.4 million to reflect a decline in the value of its assets.
State closes year with record budget deficit
The Wisconsin state government closed its books on fiscal year 2008 with a $2.5 billion deficit, the largest in the state’s history, according to the Wisconsin Taxpayers Alliance, a nonprofit, nonpartisan group dedicated to policy research and citizen education.
The deficit figure was reported in the state’s Comprehensive Annual Financial Report (CAFR) prepared by the state controller and audited by the Legislative Audit Bureau.
"It usually goes unnoticed, but each year at this time, the state issues its Comprehensive Annual Financial Report (CAFR) prepared by the state controller using generally accepted accounting principles (GAAP). This year’s CAFR puts the state’s 2008 GAAP deficit at $2.5 billion. Relative to population or state income, Wisconsin has the largest GAAP deficit of all 50 states," the Wisconsin Taxpayers Alliance reported.
Wisconsin has reported GAAP deficits for almost two decades, regardless of who was governor or which party controlled the legislature. A new development, however, is the size of the deficit and the direction it is headed.
To obtain a copy of the Wisconsin Taxpayers Alliance’s report, titled, "Unmentioned news story of 2008?" send an e-mail to wistax@wistax.org.
Consumer confidence plummets with home prices
The Conference Board Consumer Confidence Index declined to a new all-time low in December.
The index now stands at 38.0 (1985=100), down from 44.7 in November. The Present Situation Index plummeted to 29.4 from 42.3 last month. The Expectations Index decreased to 43.8 from 46.2 in November.
The Consumer Confidence Survey is based on a sample of 5,000 U.S. households.
Lynn Franco, director of The Conference Board Consumer Research Center, said, "The further erosion of the Consumer Confidence Index reflects the rapid and steep deterioration of economic conditions that occurred in the fourth quarter of 2008. The Present Situation Index is now close to levels last seen in the months following the 1990-91 recession, but is not as low as levels reached during the 1981-82 recession. Declines in the Expectations Index appear to be moderating, but this index continues to hover at historical lows. Both sub-indexes bear careful watching over the next several months to see if they are starting to show signs of approaching a bottom. In the meantime, however, the overall economic outlook remains quite dismal for the first half of 2009, and only a modest recovery is expected in the second half."
Consumers claiming business conditions are "bad" increased to 46.0 percent from 40.6 percent, while those claiming business conditions are "good" declined to 7.7 percent from 10.1 percent last month.
Consumers’ assessment of the labor market also was considerably more negative than a month ago. Those saying jobs are "hard to get" rose to 42.0 percent from 37.1 percent in November, while those claiming jobs are "plentiful" decreased to 6.2 percent from 8.7 percent.
Meanwhile, the Standard & Poor’s/Case-Shiller 20-city housing index fell by a record 18 percent from October last year, the largest drop since its inception in 2000.
