Lee Enterprises, Inc. – owner of the Quad City Times and Daily Dispatch-Argus newspapers – lost $12.6 million in its second quarter and reported it obtained waivers to avoid having to make payments in April and March on its $453-million loan.
The Davenport-based company operates some 70 newspapers and online news sites including the St. Louis Post-Dispatch, Buffalo News and Omaha World-Herald.
For the quarter ended March 30, Lee reported a loss of $12.6 million, or $2.07 per share, compared to a loss of $12.3 million, $2.06 per share, for the same period a year ago.
“Our company experienced a cyber security incident in February that had a significant impact on our quarterly operating results," Kevin Mowbray, Lee's President and Chief Executive Officer, stated in the company earnings news release. "We incurred $2 million in restoration costs in the quarter related to the cyber incident, and second quarter advertising revenue was impacted as our product portfolio was limited for a period of time. On the subscription side, our normal process for activating new digital subscribers was hampered, significantly impacting units in the quarter."
Digital subscription revenue grew 15 percent in the second quarter to $23.8 million compared to a year ago. But print subscription revenue fell by 17 percent to $41 million for the three-month period compared to a year ago. Overall digital revenue, which includes advertising and marketing services, fell to $43.9 million in the second quarter. That compares to $45.4 million for the same period a year ago.
The company's loan from BH (Berkshire-Hathaway) Finance has a fixed 9 percent interest rate with a 25-year maturity, no fixed principal payments and no financial performance covenants, the company stated.
"In an effort to provide short-term liquidity, the company sole lender, BH Finance, waived payments of the company's March 2025 and April 2025 interest and basic rent payments," according to the Lee's news release. "Waived interest and basic rent payments were added to the principal amount due under the credit agreement."
CLICK HERE to download the full second quarter financial report.
