Despite a doubling of digital-only subscriptions to Lee Enterprise newspapers from a year ago, the company's first quarter earnings fell nearly 50 percent compared with the same period last year.
The company, owner of the Quad City Times and Dispatch/Argus, earned $5.7 million (9 cents per share) for the three months ended December 29, compared with $10.7 million (19 cents per share) for the same period in 2019.
Digital subscriptions were reported to have ballooned from 57,000 a year ago to 105,000 in the just completed quarter, but overall subscription revenues fell 10 percent from a year ago.
"Due to timing of strategic pricing actions and print unit declines, subscription revenue was off trend, reflecting the challenging conditions in print," the company news release stated.
Overall operating revenues in the first quarter fell more than 12 percent to $122 million, compared with $136 million for the prior year, while advertising and marketing service revenue fell more than 13 percent. Offsetting some of the revenue decline was an 8 percent drop in compensation (personnel) costs and a 25 percent decline in newsprint and ink costs.
The company's TownNews, which sells and maintains content management system software platforms for newspapers and broadcast companies, saw revenue grow nearly 18 percent from a year ago.
A week ago, Lee announced it would acquire Berkshire Hathaway's BH Media for $140 million with the help of a $546-million loan from Berkshire Hathaway. BH Media owns 31 daily newspapers and their online news sites, and Lee has managed those properties since July 2018.
The Berkshire Hathaway loan will not only pay for the BH Media, but refinance Lee's existing $433 million debt and provide sufficient cash to terminate Lee's existing revolving credit line.
CLICK HERE to download Lee's first quarter earnings report.
