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With its digital operations continuing to grow, Davenport-based Lee Enterprises reported improved earnings Friday for its fourth quarter and the fiscal year.

The publisher announced earnings of $4.4 million for its quarter, ended Sept. 30, or 7 cents per diluted common share. That compared with $3.5 million, or 6 cents per share, for the same quarter a year ago. Earnings in the fiscal year increased $18.4 million to $47 million, or 82 cents per share. In the prior year, Lee reported earnings of $28.6 million, or 50 cents a share.

"We are pleased with the fourth-quarter operating results," Kevin Mowbray, Lee's president and CEO, said in a news release. "Revenue was almost flat in the fourth quarter, driven by strong performance from local advertisers, significant revenue growth from TownNews, revenue from the BH Media Group management agreement, as well as an extra week of operations in 2018." 

TownNews is a content management platform that provides business partners with tools to reach web, print, mobile and social media audiences.

In July, Lee began to manage BH Media Group, Berkshire Hathaway’s newspaper and digital operations in 30 markets.

According to Mowbray, total digital revenue increased 12.6 percent in the quarter and totaled $112.8 million for the fiscal year.

He said TownNews posted a 34.5 percent increase in revenues in the quarter. The digital operation reported total revenue of $18.9 million in 2018 and has grown at a compound annual rate of 9.7 percent over the last seven years. "TownNews is growing revenue through increased market share and recent successes entering the broadcast space," Mowbray added.

Optimistic about the future, Mowbray said Lee is "at the top of the industry at managing the transition to digital." 

"Our margins have remained steady for more than a decade and are currently more than double the industry average. Also, based on third party research, we believe we capture more than twice the industry average in digital market share," he said. 

Lee has publications in 49 markets and is the parent company of the Quad-City Times, Moline Dispatch/Rock Island Argus, and the Muscatine Journal.

Mowbray also noted these financial highlights:

• Digital advertising revenue increased 8.5 percent for the quarter — representing 34.3 percent of total advertising revenue. For the fiscal year, it increased 2.9 percent.

• Digital retail advertising — 61.5 percent of total digital advertising in the quarter — grew 5.2 percent. 

• Monthly visits to Lee mobile, tablet, desktop and app sites averaged 79.8 million — up 12.4 percent over the prior year quarter.

• Subscription revenue increased 4.1 percent in the quarter. For the fiscal year, subscription revenue decreased 1.7 percent. Over the last three years, subscription revenue has grown 0.3 percent.

• On a same property basis, total revenue decreased 5.9 percent for the quarter.

Tim Millage, Lee vice president and chief financial officer, said the company has continued to aggressively reduce its debt. It reduced debt by $15.0 million in the quarter and $63.5 million in the fiscal year. Over the past three years, it has reduced debt by more than $240 million. As of Sept. 30, Lee's principal amount of debt was $484.9 million.

In November, the company also repaid the remaining balance of its 1st Lien Term Loan, almost five months ahead of its maturity, Millage said. He called the repayment "a testament to our strong operating performance, substantial cash flows as well as our commitment to using all available cash flows to repaying debt."

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