Davenport-based newspaper publisher Lee Enterprises is showing progress for future growth in the company’s “digital transformation.”
That’s the word from Lee’s president and CEO after the company released its preliminary fourth quarter and full fiscal year report Wednesday, Nov. 26.
However, that report fell short of analyst expectations as total revenue declined by about 14% from the same quarter last year, print revenue fell to $64.8 million from $76.9 million a year earlier, and advertising and subscription revenues fell, according to Investing.com, a financial news website.
For the full year, also included as part of the earnings release, Lee reported total operating revenue of $562 million. That was down from $611 million in the previous fiscal year.
For the year, total print revenue fell to $264.2 million from $312.3 million.
For the fourth quarter, Lee posted a net loss of $6 million. The results for the full-year showed a net loss of $36 million.
In the Quad Cities region, Lee is the publisher of the Quad-City Times, The Dispatch and Rock Island Argus, and Muscatine Journal newspapers. It publishes more than 70 daily papers and 350 weekly and specialty publications serving 73 markets in 26 U.S. states.
The fourth quarter report also states Lee is eliminating the company pension plan. “The company is executing a strategic termination of our fully funded benefit pension plan, eliminating the long-term volatility tied to interest rate movement, mortality assumptions and asset performance, while preserving participant benefits and improving balance sheet flexibility,” the earnings release said.
The fiscal report also shows operating expenses decreased 13% to $142 million compared to the prior year. Total digital revenue for the quarter was $74 million, down from $81,644 million.
For the full year, total digital revenue was $298 million, down from $299 million.
Digital only subscription revenue was up in both the quarter and the year.
“We are pleased with our fourth quarter results as we continued to outperform the industry,” Kevin Mowbray, Lee’s president and CEO, said in the release. “Digital subscription revenue increased 16% on a same-store basis, marking five consecutive years of industry-leading performance. This consistent strength reflects the effectiveness of our Three Pillar Digital Growth Strategy and the exceptional execution of our team.”
In early trading today, Wednesday, Nov. 26, investors appeared to agree with Mr. Mowbray on Lee’s fiscal position. Lee’s stock was up nearly 7% in early trading, going for $4.65 a share. However, by noon those early gains were gone, and the stock was down to $4.16 a share.
Mr. Mowbray added: “This progress strengthens our position as a growing, sustainable, and digitally focused organization — one that is well positioned to capture long-term value and lead the next chapter of our digital transformation. … We expect the momentum to continue, delivering strong adjusted … growth in fiscal 2026.”
In Lee’s third quarter report, released in August, he stated the publishing company was making “significant progress in our transformation strategy” from print products to digital.
Here are some of the highlights of the fourth quarter report:
- Total operating revenue was $139 million; down from about $158 million a year ago.
- Total digital revenue was $74 million and represents 53% of Lee’s total operating revenue. That compared to $81.6 million from the same quarter last year.
- Revenue from digital-only subscribers totaled $25 million, up 6% over the prior year, or up 16% on a same-store basis. Digital-only subscription revenue increased 32% annually over the past three years. Digital-only subscribers totaled 633,000 at the end of the quarter.
- Digital advertising and marketing services revenue of $44 million represented 74% of Lee’s total advertising revenue. Amplified Digital Agency revenue totaled more than $100 million in the fiscal year, growing 5% for the year.
- Digital services revenue, which is predominantly from BLOX Digital, totaled $5 million.
- Total print revenue was about $65 million, down from $76.9 million a year earlier.
- Print subscription revenue was about $41.5 million, down from about $49 million a year ago.
- Print advertising revenue is at about $15.3 million, a decrease from $19.3 million from previous year.
- Total subscription revenue was nearly $67 million compared to $73 million a year ago.
- Net loss totaled $6 million and Adjusted EBITDA totaled $15 million.
Highlights for the fiscal year include:
- Total operating revenue is at $562 million, compared to $611 million for prior year.
- Total digital revenue is $298 million, flat to prior year.
- Total print revenue was $264 million, down 15% from the prior year.
- Operating expenses totaled $571 million and cash costs totaled $524 million, a 7% and 5% decrease from prior year, respectively.
- Net loss for the fiscal year was $36 million.
- The company made no pension contributions in the fiscal year.
“Solid top-line performance combined with disciplined cost actions drove our profitability gains. Two consecutive quarters of adjusted … growth, coupled with our continued leadership in digital subscriptions and Amplified Digital Agency’s strong track record, demonstrate the strong momentum we’re building across the company,” Mr. Mowbray said.
