Davenport-based newspaper publisher Lee Enterprises is reporting more digital revenue money, a $50 million capital infusion and enhanced financial stability in its first quarter financial report released Tuesday, Feb. 10.
The fiscal 2026 quarterly report is for the period that ended Dec. 28, 2025.
That report, however, also showed that Lee’s print revenues and print subscriptions continue to fall by double-digit figures during the company’s “digital transformation.”
In the Quad Cities region, Lee is the publisher of the Quad-City Times, The Moline 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.
Lee executives said they were pleased with the first quarter results
“Our core business delivered operating results in the first quarter that exceeded our expectations,” Nathan Bekke, Lee’s president and interim CEO, said in the earnings release. “Adjusted growth of $5 million puts us in a great position to achieve our expectations for year-over-year growth in fiscal 2026. … These results validate our focus on building durable, recurring revenue streams while continuing to actively manage the cost structure tied to legacy revenue.”
He added: “We are also pleased to announce the company closed on a transformational $50 million private placement of common stock last week led by David Hoffmann. This transaction strengthens the company’s balance sheet which will further fuel our digital transformation and drive long-term shareholder value.”
Mr. Hoffmann is a renowned entrepreneur and philanthropist. As the founder and chairman of Hoffmann Family of Companies, he oversees a family-owned network of enterprises that employs more than 17,000 people worldwide and includes more than 200 distinct brands and properties spanning 30 countries.
As part of the recent transaction closing with Lee, Mr. Hoffmann joined the company’s board of directors as its chairman. Mr. Bekke replaced former president and CEO Kevin Mowbray, who announced his retirement in late December.
Future interest savings
“A key component of the transaction is an amendment to the company’s credit agreement that reduces the annual interest rate on the company’s outstanding debt to 5% from 9% for a five-year period,” Mr. Bekke said. “This rate reduction is expected to result in interest savings of approximately $18 million annually or up to $90 million over the five-year period, further improving the company’s capital structure and strengthening the balance sheet.”
He added that “the $50 million capital infusion and up to $90 million of interest savings sets Lee up for an exciting future as we drive sustainable growth and create long-term value for our shareholders.”
Some of the highlights of the first quarter report include:
- Total operating revenue was $130 million for the quarter. That’s about a 10% decrease from the end of 2024, when it was about $144 million.
- Total digital revenue was $70 million and represented 54% of total operating revenue.
- Revenue from digital-only subscribers totaled $23 million, up 5% over the prior year. Digital-only subscription revenue increased 23% annually over the past three years. Digital-only subscribers totaled 609,000 at the end of the quarter.
- Digital advertising and marketing services revenue represented 71% of total advertising revenue, totaling $43 million.
- Operating expenses totaled $126 million and cash costs totaled $121 million, a 16% and 13% decrease respectively compared to the prior year.
- Total print revenue was listed at about $60 million for the quarter. That’s about a 16% decrease from the end of 2024 when it was about $71 million.
- Print advertising revenue was about $17 million, which was about a 13% decrease from the end of 2024 when it was about $19.8 million.
- Print subscription revenue was listed at about $35 million. That’s about a 19% decrease from the end of 2024 when it was about $43.4 million.
