Davenport-based Lee Enterprises, Inc. posted net income of $1.8 million – 3 cents per share – for its second quarter ended March 29, thanks in part to higher subscription revenues and lower newsprint and interest expenses.
The owner of the Quad City Times and 45 other daily newspapers reported net income of $1.49 million – 3 cents per share – for the same period a year ago when the company had fewer shares outstanding.
Total revenue for the quarter was $155.5 million, up 1 percent from the $154.1 million for the same period a year ago. Subscription revenue was up nearly 15 percent to $48 million for the second quarter.
Interest expense on the company's $764-million debt totaled $18.4 million for the period, compared with $20.55 million for the second quarter of 2014. Newsprint and ink expenses fell to $7.66 million, nearly 18 percent lower than the same quarter a year ago.
Lee is completing a conversion of its subscribers from separate newspaper and digital subscriptions to a combined subscription fee model. While subscribers can sign up for only the online digital news product, newspaper subscribers must pay for a combined print/digital subscription. The company also has erected so-called "paywalls" to force digital users to subscribe to its news web sites after viewing a limited number of online pages.
The company highlighted its nearly 9 percent increase in "digital services and other" revenue, totaling $6.98 million for the second quarter. However, the newspaper chain's traditional ad revenue base – retail and classified print advertising – continued to decline. For the second quarter, the retail/display and classified advertising totaled $97.67 million, down 5 percent from the $102.7 million during the second quarter of 2014.
Employee compensation costs increased 1.6 percent compared with a year ago, but the average number of full-time employees was 3.9 percent lower, 4,312 employees at the end of March this year compared with 4,486 at the end of the second quarter of 2014.
CLICK HERE to download the Lee earnings news release and second quarter financials.
