LEE Filings — Lee Enterprises, Inc

LEE Filings — Lee Enterprises, Inc - FilingSpy

10-Q · Quarter ended Jun 28, 2026 · SEC filing ↗

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Original filing text

Management's Discussion and Analysis

The following discussion includes comments and analysis relating to our results of operations and financial condition as of and for the three and nine months ended June 28, 2026. This discussion should be read in conjunction with the Consolidated Financial Statements and related Notes thereto, included herein, and our 2025 Annual Report on Form 10-K. Share and dollar amounts are presented on an actual basis unless otherwise noted. EXECUTIVE OVERVIEW QUARTERLY RESULTS OF OPERATIONS For the three months ended June 28, 2026, our total operating revenue was $126.0 million, down 10.8% from the three months ended June 29, 2025. Total Digital Revenue was $71.6 million and represented 56.8% of our total operating revenue. Total Print Revenue was $54.4 million, a 14.2% decrease to the three months ended June 29, 2025. Our digital-only subscription revenue totaled $21.8 million in the quarter, a 7.0% decline year-over-year driven by lasting impact from last year's Cyber Incident and accelerated churn following inflationary surcharges implemented in the prior fiscal year. Another key piece of our digital business, Amplified Digital® agency revenue totaled $27.1 million in the quarter. Total operating expenses were $118.3 million, a 13.9% decrease in the three months ended June 28, 2026, compared to the three months ended June 29, 2025. The decrease reflects continued disciplined cost management and the absence of prior-year Cyber Incident response costs (see Note 12). Cash Costs of $109.4 million, a non-GAAP financial measure used to summarize certain operating expenses (see reconciliation of non-GAAP financial measures below), were down 14.5% in the three months ended June 28, 2026, reflecting continued disciplined cost management. Net income totaled $5.2 million compared to a net loss of $1.7 million in the prior-year period. Adjusted EBITDA (a non-GAAP financial measure) totaled $18.4 million, a 23.0% increase over the prior-year period. The improvements reflect the cost actions described above and the non-recurrence of prior-year Cyber Incident costs. Cash on the balance sheet totaled $59.4 million including the net proceeds from the February 5, 2026 Private Placement. Debt, net of cash on the balance sheet, totaled $395.3 million. As discussed above, with the execution of the Private Placement, the applicable margin on our 25-year term loan was reduced from 9.00% to 5.00% for a period of five years. Together, the Private Placement proceeds, the reduction in our applicable interest rate margin, and continued cost discipline have strengthened our liquidity and financial flexibility as we execute our digital-first growth strategy. RECENT DEVELOPMENTS AGREEMENT WITH HOFFMANN MEDIA GROUP ("HMG") On May 14, 2026, we entered into a five-year management agreement with HMG, effective June 1, 2026, under which we manage certain HMG-owned newspaper publications and related digital properties. HMG is owned by David Hoffmann, our Chairman and majority shareholder. Under the agreement, we receive a fixed management fee of $135,000 per fiscal quarter, a variable fee based on the EBITDA of certain acquired publications, and reimbursement of shared service costs at cost. HMG retains ownership of the publications and all related revenues and remains responsible for working capital and operating obligations. PRIVATE PLACEMENT FINANCING AND RELATED AGREEMENTS Private Placement Agreement During the three months ended March 29, 2026, we issued an aggregate of 16,000,000 shares of Common Stock, consisting of 15,384,615 shares of Common Stock to certain investors and 615,385 shares of Common Stock to service providers as reimbursement for certain expenses incurred by certain investors, at a price of 19 Table of Contents $3.25 per share through the Private Placement. The aggregate gross proceeds from the Private Placement were $50.0 million, before deducting offering expenses. Further, in connection with the closing, we amended our Certificate of Incorporation, increasing the number of authorized shares from 12,000,000 to 40,000,000. Registration Rights Agreement and Amendment At the closing of the Private Placement on February 5, 2026, we entered into a registration rights agreement pursuant to which we will agree to provide certain customary registration rights, including the registration of the Shares for resale. We filed a registration statement on Form S-3 with the Securities and Exchange Commission covering the resale by the investors of their shares on March 6, 2026. On February 4, 2026, in connection with the closing of the Private Placement, the Board of Directors amended the termination date of the Rights Agreement to February 4, 2026, causing each Right to expire and to be extinguished and for the Rights Agreement to be terminated. See Note 3 of the unaudited condensed consolidated financial statements for additional discussion. Credit Agreement Amendment Concurrently with the execution of the Private Placement agreement, we entered into the Second Amendment to Credit Agreement. The amendments became operative concurrently with the closing. The amendments include among other things, a reduction of the applicable margin on our 25-year term loan from 9.00% to 5.00% for a period of five years following the closing and amending the definition of “Excess Cash Flow” such that any cash-on-hand balance above $64.0 million held by us would be deemed Excess Cash Flow for a period of five years. These amendments were treated as modifications to the existing Credit Agreement. PRESIDENT AND CHIEF EXECUTIVE OFFICER TRANSITION Also, concurrently with the closing of the Private Placement on February 5, 2026, Kevin Mowbray, our previous President and Chief Executive Officer, entered into an agreement to voluntarily retire from his positions at the Company and its subsidiaries and affiliates. Nathan Bekke, our previous Chief Operating Officer, assumed the role of President and Interim Chief Executive Officer. On April 23, 2026, the Board of Directors appointed Mr. Bekke as President and Chief Executive Officer of the Company. VICE PRESIDENT, CHIEF FINANCIAL OFFICER TRANSITION On November 17, 2025, Timothy R. Millage resigned from his position as Vice President, Chief Financial Officer, effective February 3, 2026. Josh Rinehults was appointed Vice President, Interim Chief Financial Officer and Treasurer, effective February 3, 2026. On April 23, 2026, the Board appointed Mr. Rinehults as Vice President, Chief Financial Officer and Treasurer. STRATEGY We are a leading digital-first subscription and marketing services company committed to delivering high-quality, trusted, and deeply local news and information. Our mission is to strengthen and enrich the communities we serve by providing compelling local content, superior subscriber experiences, and innovative, data-driven advertising and marketing solutions. Through a premium, high-margin portfolio of digital products and marketing services — including owned-and-operated platforms, branded content, over-the-top advertising, AI-powered solutions, and targeted print — we enable more than 15,000 local advertisers to meaningfully engage customers, strengthen their brands, and accelerate growth. Our core strategy is to expand audiences and deepen engagement by delivering robust, hyper-local content that informs and connects our communities. We are committed to creating, collecting, and distributing trusted local news and information across platforms designed to meet audiences wherever they are — print, web, mobile, social, and emerging channels. At the same time, we are investing in world-class digital products that elevate the subscriber experience through personalization, seamless access, and continuous innovation. 20 Table of Contents RESULTS OF OPERATIONS Three Months Ended Operating results are summarized below. (Thousands of Dollars, Except Per Common Share Data) June 28, 2026 June 29, 2025 Percent Change Operating revenue: Print advertising revenue 14,478 17,474 (17.1) % Digital advertising and marketing revenue 44,846 49,097 (8.7) % Advertising and marketing services revenue 59,324 66,571 (10.9) % Print subscription revenue 32,918 38,076 (13.5) % Digital subscription revenue 21,829 23,482 (7.0) % Subscription revenue 54,747 61,558 (11.1) % Print other revenue 6,967 7,837 (11.1) % Digital other revenue 4,932 5,328 (7.4) % Other revenue 11,899 13,165 (9.6) % Total operating revenue 125,970 141,294 (10.8) % Operating expenses: Compensation 44,810 47,436 (5.5) % Newsprint and ink 2,521 3,268 (22.9) % Other operating expenses 62,076 77,252 (19.6) % Insurance proceeds (560) — *** Depreciation and amortization 3,527 3,783 (6.8) % Gain on asset sales, impairments and other, net (73) (1,562) (95.3) % Restructuring costs and other 5,959 7,141 (16.6) % Total operating expenses 118,260 137,318 (13.9) % Equity in earnings of associated companies 922 686 34.4 % Operating income (loss) 8,632 4,662 85.2 % Non-operating income (expense): Interest expense (5,558) (10,132) (45.1) % Pension and other post employment benefits ("OPEB") related and other, net 1,169 1,050 11.3 % Settlement gain 2,330 — *** Total non-operating expense, net (2,059) (9,082) (77.3) % Income (loss) before income taxes 6,573 (4,420) *** Income tax expense (benefit) 1,400 (2,744) *** Net income (loss) 5,173 (1,676) *** Earnings (loss) per common share: Basic 0.21 (0.31) *** Diluted 0.21 (0.31) *** *** Indicates an absolute value percentage change greater than 100. 21 Table of Contents Quarterly Results of Operations Operating Revenue Total operating revenue was $126.0 million in the three months ended June 28, 2026, down $15.3 million, or 10.8%, compared to the three months ended June 29, 2025. Advertising and marketing services revenue totaled $59.3 million, down 10.9% in the three months ended June 28, 2026, compared to the prior-year period. Print advertising revenues were $14.5 million, down 17.1% in the three months ended June 28, 2026 compared to the prior-year period related to continued secular declines in demand for print advertising related to the decline in print subscribers by 19.3% to 221,000 compared to the prior-year period of 274,000. Digital advertising and marketing services revenue totaled $44.8 million, down 8.7% in the three months ended June 28, 2026 compared to the prior-year period. Digital advertising and marketing services represented 75.6% of the total advertising and marketing services revenue for the three months ended June 28, 2026, compared to 73.8% in the prior-year period. Subscription revenue totaled $54.7 million, down 11.1% in the three months ended June 28, 2026 compared to the prior-year period. Declines in volumes, consistent with historical and industry trends, were partially offset by strategic rate increases. Digital-only subscribers decreased 12.8% to 584,000 at June 28, 2026 compared to 670,000 at June 29, 2025. Digital-only subscription revenue declined 7.0% compared to the prior-year period driven by lasting impact from last year's Cyber Incident and accelerated churn following inflationary surcharges implemented in the prior fiscal year. Other revenue, which consists of digital services from BLOX Digital of $4.9 million, commercial printing revenue of $3.6 million and third party delivery and other of $3.4 million, decreased $1.3 million, or 9.6%, in the three months ended June 28, 2026 compared to the prior-year period. Digital services revenue decreased 7.4% in the three months ended June 28, 2026 compared to the prior-year period. Commercial printing revenue decreased 14.4% in the three months ended June 28, 2026 compared to the prior-year period, primarily driven by lower print volumes from our partners. Total digital revenue including digital advertising revenue, digital subscription revenue and digital services revenue totaled $71.6 million, a decrease of 8.1%, in the three months ended June 28, 2026 compared to the prior-year period, and represented 56.8% of our total operating revenue in the three months ended June 28, 2026. Operating Expenses Total operating expenses were $118.3 million, a 13.9% decrease in the three months ended June 28, 2026, compared to the three months ended June 29, 2025. The decrease reflects continued disciplined cost management and the absence of prior-year Cyber Incident response costs. Cash Costs of $109.4 million, a non-GAAP financial measure used to summarize certain operating expenses (see reconciliation of non-GAAP financial measures below), were down 14.5% in the three months ended June 28, 2026, reflecting continued disciplined cost management. Compensation expense decreased $2.6 million, or 5.5%, in the three months ended June 28, 2026 compared to the prior-year period. The decrease reflects continued headcount reductions as we execute our digital transformation strategy. Newsprint and ink costs decreased $0.7 million, or 22.9%, in the three months ended June 28, 2026 compared to the prior-year period. The decrease is attributable to lower print volumes, consistent with continued secular declines in demand for print. Other operating expenses decreased $15.2 million, or 19.6%, in the three months ended June 28, 2026 compared to the prior-year period. Other operating expenses include all operating costs not considered to be compensation, newsprint, insurance proceeds, depreciation and amortization, or restructuring costs and (gain) loss on asset sales, impairments, and other, net. The largest components are costs associated with printing and distribution of our printed products, digital cost of goods sold and facility expenses. 22 Table of Contents Insurance proceeds were a net gain of $0.6 million in the three months ended June 28, 2026 which represent business interruption insurance recoveries recognized in the current quarter related to the prior-year Cyber Incident. See further information in Note 12. Restructuring costs and other decreased $1.2 million, or 16.6% in the three months ended June 28, 2026, compared to the prior-year period due primarily to higher expenses related to the Cyber incident included in the prior year. Depreciation and amortization expense decreased $0.3 million, or 6.8%, in the three months ended June 28, 2026. This decrease is attributable to assets being fully depreciated or amortized. Gain on asset sales, impairments and other, net, was $0.1 million in the three months ended June 28, 2026 compared to $1.6 million in the prior-year period, a decrease of $1.5 million driven by fewer property sales in the current year quarter. Operating income was $8.6 million, an increase of $4.0 million from $4.7 million in the prior-year period, primarily reflecting lower compensation and other operating expenses. Non-operating Income and Expense Non-operating expense decreased by $7.0 million, or 77.3% in the three months ended June 28, 2026 compared to the prior-year period. The decrease is primarily driven by a settlement gain in our Postretirement benefit plans as we irrevocably transferred certain postretirement life insurance obligations to a third-party insurer described in Note 9 and a decrease in interest expense related to the rate reduction on our debt described in Note 8. Income Tax Expense/Benefit We recorded an income tax expense of $1.4 million in the three months ended June 28, 2026 compared to an income tax benefit of $2.7 million in the prior-year period. The increase in income tax expense for the current period is mainly due to a higher valuation allowance related to additional interest expense carryforwards that are not expected to be fully realized. Net income (loss) and Net income (loss) Per Share Net income was $5.2 million and diluted income per share was $0.21 for the three months ended June 28, 2026 compared to net loss of $1.7 million and diluted losses per share of $0.31 for the prior-year period. The improvement reflects the cost reduction actions, the interest rate reduction, the non-recurrence of prior-year Cyber Incident costs discussed above and a settlement gain in our Postretirement benefit plans. 23 Table of Contents Nine Months Ended Operating results are summarized below. (Thousands of Dollars, Except Per Common Share Data) June 28, 2026 June 29, 2025 Percent Change Operating revenue: Print advertising revenue 45,943 53,867 (14.7) % Digital advertising and marketing revenue 128,334 139,766 (8.2) % Advertising and marketing services revenue 174,277 193,633 (10.0) % Print subscription revenue 100,816 122,587 (17.8) % Digital subscription revenue 66,814 68,836 (2.9) % Subscription revenue 167,630 191,423 (12.4) % Print other revenue 21,545 22,938 (6.1) % Digital other revenue 14,544 15,241 (4.6) % Other revenue 36,089 38,179 (5.5) % Total operating revenue 377,996 423,235 (10.7) % Operating expenses: Compensation 140,989 164,349 (14.2) % Newsprint and ink 8,005 9,996 (19.9) % Other operating expenses 193,640 223,387 (13.3) % Insurance proceeds (6,401) — *** Depreciation and amortization 10,621 15,218 (30.2) % Gain on asset sales, impairments and other, net (976) (2,365) (58.7) % Restructuring costs and other 12,746 18,806 (32.2) % Total operating expenses 358,624 429,391 (16.5) % Equity in earnings of associated companies 3,010 2,963 1.6 % Operating income (loss) 22,382 (3,193) *** Non-operating income (expense): Interest expense (23,435) (30,365) (22.8) % Pension and other post employment benefits ("OPEB") related and other, net 2,840 2,362 20.2 % Settlement gain 2,330 — *** Total non-operating expense, net (18,265) (28,003) (34.8) % Income (loss) before income taxes 4,117 (31,196) *** Income tax expense (benefit) 5,779 (1,281) *** Net loss (1,662) (29,915) (94.4) % Loss per common share: Basic (0.22) (5.16) (95.7) % Diluted (0.22) (5.16) (95.7) % *** Indicates an absolute value percentage change greater than 100. Operating Revenue Total operating revenue was $378.0 million, down $45.2 million, or 10.7% in the nine months ended June 28, 2026 compared to the nine months ended June 29, 2025. 24 Table of Contents Advertising and marketing services revenue totaled $174.3 million, down 10.0% in the nine months ended June 28, 2026 compared to the prior-year period. Print advertising revenues were $45.9 million, down 14.7% in the nine months ended June 28, 2026 compared to the prior-year period driven by continued secular declines and elimination of unprofitable print products. Digital advertising and marketing services totaled $128.3 million, down 8.2% in the nine months ended June 28, 2026 compared to the prior-year period. Digital advertising and marketing services represented 73.6% of the nine months ended June 28, 2026 total advertising and marketing services revenue, compared to 72.2% in the prior-year period. Subscription revenue totaled $167.6 million, down 12.4% in the nine months ended June 28, 2026 compared to the prior-year period. Declines in volumes, consistent with historical and industry trends, were partially offset by strategic rate increases. Digital-only subscribers decreased 12.8% to 584,000 as of June 28, 2026. Digital-only subscription revenue declined 2.9% compared to the prior-year period. Other revenue, which consists of digital services from BLOX Digital of $14.5 million, commercial printing revenue of $11.1 million and third party delivery and other of $10.4 million, decreased $2.1 million, or 5.5%, in the nine months ended June 28, 2026 compared to the prior-year period. Digital services revenue decreased by 4.6% in the nine months ended June 28, 2026 compared to the prior-year period. Commercial printing revenue decreased 7.7% in the nine months ended June 28, 2026 compared to the prior-year period, primarily driven by lower print volumes from our partners. Total digital revenue including digital advertising revenue, digital subscription revenue and digital services revenue totaled $209.7 million, a decrease of 6.3% in the nine months ended June 28, 2026 over the prior-year period, and represented 55.5% of our total operating revenue in the nine months ended June 28, 2026. Operating Expenses Total operating expenses were $358.6 million, a 16.5% decrease in the nine months ended June 28, 2026, compared to the nine months ended June 29, 2025. The decrease reflects continued disciplined cost management, the absence of prior-year Cyber Incident response costs, and $6.4 million of business interruption insurance recoveries recognized in the current period (see Note 12). Cash Costs of $342.6 million, a non-GAAP financial measure used to summarize certain operating expenses (see reconciliation of non-GAAP financial measures below), were down 13.9% in the nine months ended June 28, 2026, reflecting continued disciplined cost management. Compensation expense decreased $23.4 million, or 14.2% in the nine months ended June 28, 2026 compared to the prior-year period from reductions in full time employees due to continued business transformation efforts. Newsprint and ink costs decreased $2.0 million, or 19.9% in the nine months ended June 28, 2026, compared to the prior-year period. The decrease is attributable to declines in newsprint volumes. Other operating expenses decreased $29.7 million, or 13.3%, in the nine months ended June 28, 2026 compared to the prior-year period. Other operating expenses include all operating costs not considered to be compensation, newsprint, insurance proceeds, depreciation and amortization, or restructuring costs and (gain) loss on asset sales, impairments, and other, net. The largest components are costs associated with printing and distribution of our printed products, digital cost of goods sold and facility expenses. Insurance proceeds were a net gain of $6.4 million in the nine months ended June 28, 2026 which represent business interruption insurance recoveries related to the prior-year Cyber Incident (see Note 12). Restructuring costs and other decreased $6.1 million, or 32.2% in the nine months ended June 28, 2026, compared to the nine months ended June 29, 2025. The prior year period included $3.1 million of expenses related to the Cyber Incident and costs associated with the shutdown of one of our production facilities. Depreciation and amortization expense decreased $4.6 million, or 30.2%, in the nine months ended June 28, 2026 compared to the prior-year period. The decrease in both is attributable to assets being fully depreciated or amortized. Gain on asset sales, impairments and other, net, was $1.0 million in the nine months ended June 28, 2026 compared to a net gain of $2.4 million in the prior-year period. Current year gains on sales were primarily related to the sale of properties. 25 Table of Contents The factors noted above resulted in an operating income of $22.4 million in the nine months ended June 28, 2026 compared to an operating loss of $3.2 million in the prior-year period primarily due to lower compensation and other operating expenses together with $6.4 million of business-interruption recoveries recognized in the period. Non-operating Income and Expense Non-operating expense decreased by $9.7 million, or 34.8% compared to the nine months ended June 29, 2025. The decrease is primarily driven by a settlement gain in our Postretirement benefit plans as we irrevocably transferred certain postretirement life insurance obligations to a third-party insurer described in Note 9 and a decrease in interest expense related to the rate reduction on our debt described in Note 8. Income Tax Expense We recorded an income tax expense of $5.8 million in the nine months ended June 28, 2026 compared to $1.3 million benefit in the nine months ended June 29, 2025. The increase in income tax expense for the current period is mainly due to a higher valuation allowance related to additional interest expense carryforwards that are not expected to be fully realized. Net loss and Net loss Per Share Net loss was $1.7 million and diluted loss per share was $0.22 for the nine months ended June 28, 2026 compared to net loss of $29.9 million and diluted losses per share of $5.16 for the prior-year period. The improvement reflects the cost reduction actions, the interest rate reduction, the non-recurrence of prior-year Cyber Incident costs discussed above and a settlement gain in our Postretirement benefit plans. NON-GAAP FINANCIAL MEASURES We use non-GAAP financial performance measures to supplement the financial information presented on a GAAP basis. These non-GAAP financial measures should not be considered in isolation or as a substitute for the relevant GAAP measures and should be read in conjunction with information presented on a GAAP basis. In this report, we present Adjusted EBITDA and Cash Costs which are non-GAAP financial performance measures that exclude from our reported GAAP results the impact of certain items consisting primarily of restructuring charges and non-cash charges. We believe such expenses, charges and gains are not indicative of normal, on-going operations, and their inclusion in results makes for more difficult comparisons between years and with peer group companies. In the future, however, we are likely to incur expenses, charges and gains similar to the items for which the applicable GAAP financial measures have been adjusted and to report non-GAAP financial measures excluding such items. Accordingly, exclusion of those or similar items in our non-GAAP presentations should not be interpreted as implying the items are non-recurring, infrequent, or unusual. We define our non-GAAP measures, which may not be comparable to similarly titled measures reported by other companies, as follows: Adjusted EBITDA is a non-GAAP financial performance measure that enhances financial statement users' overall understanding of our operating performance. The measure isolates unusual, infrequent, or non-cash transactions from the operating performance of the business. This allows users to easily compare operating performance among various fiscal periods and how management measures the performance of the business. This measure also provides users with a benchmark that can be used when forecasting our future operating performance that excludes unusual, nonrecurring or one-time transactions. Adjusted EBITDA is also a component of the calculation used by stockholders and analysts to determine the value of our business when using the market approach, which applies a market multiple to financial metrics. It is also a measure used to calculate our leverage ratio, which is a key financial ratio monitored and used by us and our investors. Adjusted EBITDA is defined as net income (loss), plus non-operating expenses, net, income tax expense (benefit), depreciation and amortization, (gain) loss on asset sales, impairments and other, restructuring costs and other, stock compensation and our 50% share of EBITDA from TNI and MNI, minus equity in earnings of TNI and MNI. 26 Table of Contents Cash Costs represent a non-GAAP financial performance measure of operating expenses which are measured on an accrual basis and settled in cash. This measure is useful to investors in understanding the components of our cash-settled operating costs. Generally, we provide forward-looking guidance of Cash Costs, which can be used by financial statement users to assess our ability to manage and control its operating cost structure. Cash Costs are defined as compensation, newsprint and ink and other operating expenses and exclude restructuring costs and other, which are typically settled in cash. Adjusted EBITDA and Cash Costs are reconciled to net income (loss) and operating expenses, below, the closest comparable numbers under GAAP. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) The table below reconciles the non-GAAP financial performance measure of Adjusted EBITDA to net income (loss), the most directly comparable GAAP measure: Three months ended Nine months ended (Thousands of Dollars) June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Net income (loss) 5,173 (1,676) (1,662) (29,915) Adjusted to exclude Income tax expense (benefit) 1,400 (2,744) 5,779 (1,281) Non-operating expenses, net 2,059 9,082 18,265 28,003 Equity in earnings of TNI and MNI (922) (686) (3,010) (2,963) Depreciation and amortization 3,527 3,783 10,621 15,218 Restructuring costs and other 5,959 7,141 12,746 18,806 Gain on asset sales, impairments and other, net (73) (1,562) (976) (2,365) Stock compensation 181 540 722 1,328 Add: Ownership share of TNI and MNI EBITDA (50%) 1,071 1,066 3,296 3,488 Adjusted EBITDA 18,375 14,944 45,781 30,319 The table below reconciles the non-GAAP financial performance measure of Cash Costs to Operating expenses, the most directly comparable GAAP measure: Three months ended Nine months ended (Thousands of Dollars) June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 Operating expenses 118,260 137,318 358,624 429,391 Adjustments Depreciation and amortization 3,527 3,783 10,621 15,218 Gain on asset sales, impairments and other, net (73) (1,562) (976) (2,365) Restructuring costs and other 5,959 7,141 12,746 18,806 Insurance proceeds (560) — (6,401) — Cash Costs 109,407 127,956 342,634 397,732 LIQUIDITY AND CAPITAL RESOURCES A summary of our cash flows is included in the narrative below. 27 Table of Contents Operating Activities Cash provided by operating activities totaled $6.1 million in the nine months ended June 28, 2026 compared to $0.8 million in the nine months ended June 29, 2025. The improvement was primarily driven by an increase in operating results of $8.2 million (defined as net loss adjusted for non-working capital items) offset primarily by a decrease in working capital of $2.8 million. The decrease in working capital is primarily related to higher payments related to the Private Placement expenses offset by improved accounts receivable driven by lower revenue in the period. Investing Activities Cash used in investing activities totaled $1.3 million in the nine months ended June 28, 2026 compared to cash provided by investing activities of $5.1 million in the nine months ended June 29, 2025. The nine months ended June 29, 2025 included $8.7 million in proceeds from the sale of assets as we divested non-core real estate compared to only $1.1 million in asset sale proceeds in the current period. Financing Activities Cash provided by financing activities was $44.6 million for the nine months ended June 28, 2026 from net Private Placement proceeds described in Note 3. Additional Information on Liquidity PRIVATE PLACEMENT FINANCING AND RELATED AGREEMENTS As discussed in Note 3, we issued an aggregate of 16,000,000 shares of our Common Stock in a Private Placement at a price of $3.25 per share, consisting of 15,384,615 shares issued to certain investors and 615,385 shares issued to service providers as reimbursement for certain expenses incurred by such investors. The aggregate gross proceeds from the Private Placement were $50.0 million, before deducting offering expenses. Additionally, concurrently with the execution of the Private Placement, we entered into the Second Amendment to Credit Agreement. The amendments include, among other items, a reduction of the applicable margin on our 25-year term loan from 9.00% to 5.00% for a period of five years following the closing and amending the definition of “Excess Cash Flow” such that any cash on hand balance held by us above $64.0 million will be deemed Excess Cash Flow for a five year period following the closing. As of June 28, 2026, our liquidity, consisting of cash on hand, was $59.4 million. For the nine months ended June 28, 2026, net cash provided by operating activities was $6.1 million, up from $0.8 million in the nine months ended June 29, 2025. This increase is primarily attributable to the improved operating results compared to the prior-year period. The current operating environment, expenditures related to our business transformation initiatives, and the impacts of the Cyber Incident have adversely affected our net cash flows and placed pressure on our liquidity. However, we believe that cash generated from operating activities, along with the proceeds from the Private Placement financing will be sufficient to fund our operations and meet our obligations for at least the next 12 months from the date of this filing. CHANGES IN LAWS AND REGULATIONS Wage Laws The United States and various state and local governments are considering increasing their respective minimum wage rates. Most of our employees are paid more than the current United States or state minimum wage rates. However, until changes to such rates are enacted, the impact of the changes cannot be determined.

Legal Proceedings

We are involved in a variety of legal actions that arise in the normal course of business. Insurance coverage mitigates potential loss for certain of these matters. While we are unable to predict the ultimate outcome of these legal actions, it is our opinion that the disposition of these matters will not have a material adverse effect on our Consolidated Financial Statements, taken as a whole. Stoudemire et al. v. Lee Enterprises, Incorporated (Video Privacy Claim). On December 19, 2022, named Plaintiffs filed a Complaint in the U.S. District Court for the Southern District of Iowa alleging our news websites violate the Video Privacy Protection Act by disclosing to third parties certain data about users’ video-watching habits. In particular, the Complaint alleged the websites use Facebook Pixel, a technology that allegedly links a user’s Facebook profile to videos the user watches on our website. The claimants are asserting class action claims and allege statutory damages of $2,500 per class member, punitive damages, and attorneys’ fees. In July 2023, the Court denied our Motion to Dismiss. This claim was submitted for coverage under our media insurance policy. The parties successfully mediated the case on November 5, 2024, and the court granted final approval of the class action settlement on August 14, 2025. The entire $9.5 million settlement amount was paid by our insurance carriers in October 2025. Payments to class members went out in October 2025. This case is now closed. Fetes et al. v. Lee Enterprises. Incorporated (Cyber Incident). On June 12, 2025, Sarah Fetes filed a Complaint in the U.S. District Court for the Southern District of Iowa alleging claims arising out of a February 2025 cybersecurity incident, during which a third-party threat actor potentially accessed personal information of past and present Company employees existing on Company systems. Fetes and five additional named Plaintiffs filed a Consolidated Complaint on August 11, 2025. Plaintiffs allege that we failed to properly secure and safeguard personally identifiable information collected as part of our regular business practices. Plaintiffs sought damages for invasion of privacy and misuse of the compromised data, on behalf of themselves and a class consisting of approximately 39,700 individuals who received data breach notifications. This claim was submitted for coverage under our media insurance policy. The parties have reached a tentative settlement, all of which will be paid by our insurance carriers, in an amount that will be publicly disclosed through the court process. The settlement is subject to required court approval and open to objection by class members. We anticipate final approval of the settlement by August 2026. Lineup Systems Corporation v. Lee Enterprises, Incorporated. In July 2025, Lineup filed suit against us for breach of contract, breach of the covenant of good faith and fair dealing, and quantum meruit arising from the contract between Lee and Lineup for the purchase and installation of software. The suit claims $7.0 million in damages for failure to pay owed amounts, attorneys' fees and interest. We filed a counter claim alleging breach of contract and fraudulent inducement. Trial has been set for October 18, 2027. Lineup filed a Motion for Judgment on the Pleadings for various counts and oral arguments were heard by the Court on the Motion for Judgment on the Pleadings on January 16, 2026. The Court rendered an opinion in favor of defendants denying the motion. Discovery is ongoing in this case and the outcome is uncertain at this time. The Associated Press v. Lee Enterprises, Incorporated. In June 2026, The Associated Press ("AP") filed a lawsuit against us in New York State Court alleging that we breached the parties' agreement. AP seeks to recover alleged damages, including amounts purportedly due under the agreement, together with interest, 29 Table of Contents attorneys' fees, and other relief requested in the complaint. At this stage of the proceedings, loss is not reasonably estimable.

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Risk Factors

Our status as a “controlled company” will concentrate control with our majority owner and may limit your ability to influence corporate matters and result in corporate governance that differs from that of other public companies. As of June 28, 2026, David H. Hoffmann, our Chairman of the Board, ("Mr. Hoffmann") beneficially owns 54.5% of the aggregate voting power of our outstanding capital stock. As a result, we are a “controlled company” under the corporate-governance standards of The Nasdaq Stock Market LLC (“Nasdaq”) for so long as more than 50% of the voting power of our outstanding capital stock is held by Mr. Hoffmann. We will effectively be a closely held corporation with a single stockholder (together with his affiliates) exercising substantial control over our affairs. Under Nasdaq rules applicable to controlled companies, we are permitted to rely on certain exemptions from Nasdaq’s corporate-governance requirements, including exemptions from the requirements that a majority of our Board be independent and that our compensation and nominating and corporate-governance committees be composed entirely of independent directors. Although we do not currently rely on these exemptions, we could elect to do so in the future. If we rely on one or more of these exemptions, you may not have the same protections afforded to stockholders of companies that are subject to all of Nasdaq’s corporate-governance requirements. Even if we do not rely on the controlled-company exemptions, the concentration of voting power with Mr. Hoffmann will allow him to exert significant influence over all matters submitted to a vote of our stockholders, including the election and removal of directors, amendments to our organizational documents, mergers and asset sales, and other significant corporate transactions. Mr. Hoffmann's interests may conflict with, and may not always be aligned with, those of our other stockholders. For example, they may be more focused on long-term strategic objectives, liquidity for his own holdings, tax or estate-planning considerations or other factors than maximizing short-term stock price performance. This concentrated control could discourage, delay, or prevent a change of control that stockholders may consider favorable, limit your ability to influence our corporate policies and adversely affect the market price and liquidity of our common stock. Investors who do not agree with the decisions of our controlling stockholder will be limited in their ability to change our management or strategy.

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