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Lee Enterprises, Inc., a major provider of local news, information and advertising in 50 markets headquartered in Davenport, today reported preliminary results for its fourth fiscal quarter and fiscal year ended Sept. 27, 2015.

Fourth quarter financial highlights include:

• Fourth quarter operating cash flow growth of 5.0% and 7.5% adjusted EBITDA growth.

• Subscription revenue increased 6.1% excluding the subscription-related expense reclassification.

• Total digital revenue, including subscription and TownNews, grew 23.9%.

• Digital ad revenue was up 5.1%, representing 21.6% of total advertising revenue in the quarter.

• Mobile advertising revenue, which is included in digital advertising, increased 10.6%.

• Digital services revenue, primarily TownNews, increased 11.3% to $3.3 million.

• Overall revenue on a comparable basis decreased 4.4% in fourth quarter, which is an improvement from the June quarterly trend. Total advertising and marketing services revenue decreased 9.0%.

• Total cash costs excluding the subscription-related expense reclassification and workforce adjustment costs decreased 7.8%, exceeding previously announced guidance of down 5.5%-6.0%.

“We are very pleased with our fourth quarter results, especially our cash flow growth,” Mary Junck, chairman and chief executive officer said. "We continue to see revenue growth in digital advertising, digital services, and subscription revenue from our full access and premium day initiatives as compared to the same quarter of the prior year. These growing revenue categories made up almost 47% of our total revenue, for the quarter."

Junck said several key initiatives launched in 2015 helped drive fourth quarter results and also should impact 2016. Those include:

• Accelerating digital revenue growth with expanded audience reach and advertising services.

• Redesigning all of our products including mobile, desktop and print throughout 2016 to improve reader engagement, drive revenue and provide cost efficiencies.

• Phase 2 of the Lee Design Centers through the "daVinci Project."

• Implemented a sweeps program that drives programmatic digital advertising revenue by increasing page views and reader engagement at attractive advertising rates.

• Circulation revenue growth with continued increases in digital subscription activation along with selective price increases and premium days.

"We have very strong local audiences across all age groups," Junck said. "In the markets we serve, we reach 76% of adults with our print and digital platforms, including more than 70% of those under forty years old. We'll continue to refine and develop our products to best meet the needs of our readers and provide large, relevant audiences to our advertisers — both print and digital."

"We also had outstanding results at two of our larger newspaper subsidiaries — Madison Newspapers (MNI) and Tucson Newspapers (TNI), which are accounted for under the equity method," Junck added. "Combined, our share of EBITDA from these operations for the quarter grew 4.3% in the fourth quarter of 2015. The company received $2.9 million in dividends from MNI and TNI in the quarter and $11.0 million for the year."

Earnings of 18 cents per diluted common share were reported for the quarter compared to earnings of 6 cents a year ago. Excluding unusual matters, adjusted earnings per diluted common share totaled 10 cents, compared with earnings of 2 cents a year ago.

Ron Mayo, chief financial officer and treasurer, said the company will continue to use substantially all of its free cash flow to reduce debt and strengthen the company's capital structure.

"We reduced debt by $19.1 million in the fourth quarter and $78.9 million in the 2015 fiscal year," he said. "And, we expect to continue to repay debt at a similar pace in 2016."

Mayo also noted:

• As of Sept. 27, 2015, the principal amount of debt was $725.9 million.

• Interest expense to be settled in cash was reduced $4.9 million in 2015 as a result of debt reductions, which provides additional free cash flow that will be used for future debt reductions.

• Approximately $3.3 million of the September quarter Pulitzer excess cash flow payment was not rejected, and accordingly, in November of 2015, $3.3 million of 2nd Lien Term Loan was repaid at par.

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