LEE ENTERPRISES, Inc 10-K

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion includes comments and analysis relating to our results of operations and financial condition as of and for the year ended September 28, 2025, and for fiscal years 2024 and 2023. This discussion should be read in conjunction with the Consolidated Financial Statements and related Notes thereto, included herein. EXECUTIVE OVERVIEW Our 2025 total operating revenue was $562 million, while total Digital Revenue was $298 million, flat to the prior year. Total Print Revenue was $264 million, a 15% decrease to the prior year, representing a 10 percentage-point improvement over the prior year's decline. We continued to deliver positive performance in our digital-only subscription business, driving year-over-year revenue growth of 12%. Through yield management, expanded rates and disciplined subscriber acquisition, we are nearing $100 million in digital-only subscription revenue. Another key piece of our digital business, Amplified Digital® agency, surpassed $100 million in revenue during the year, with growth of 4%. Operating expenses totaled $571 million and Cash Costs (a non-GAAP financial measure) totaled $524 million, a 7% and 5% decrease compared to the prior year, respectively. Operating expenses in FY25 included $3.7 million of cyber restoration expenses, which are included in the line "Restructuring costs and other". Net loss totaled $36 million and Adjusted EBITDA (a non-GAAP financial measure) totaled $45 million. Cash on the balance sheet totaled $10 million. Debt, net of cash on the balance sheet, totaled $445 million. Since May 2025, we have satisfied all principal and interest payments through organic free cash flow generation. RECENT DEVELOPMENTS Proposed Rights Offering In addition to the Charter Amendments, we previously disclosed that our board of directors has been considering, among various other financing and capital markets transactions, consummating a proposed rights offering of our common stock to existing stockholders, and on November 10, 2025, we filed a registration statement with respect to a proposed rights offering (the “proposed rights offering”). As set forth in the registration statement, we intend to use the proceeds of the proposed rights offering, if the proposed rights offering is consummated, for general corporate purposes, including capital expenditures and working capital, as well as other activities necessary for our operations, such as investments in technology with respect to advertising strategies, audience outreach, our internal operations, and digital products. Further, in connection with the proposed rights offering, we have an agreement in-principle with our term loan lender that, if we successfully raise the aggregate proposed rights offering amount of $50.0 million in gross proceeds, we will receive a reduction in our annual interest rate from 9% to 5% for five years, resulting in interest savings of approximately $18 million annually and up to $90 million over the five-year period. The consummation of the proposed rights offering, however, is not conditioned on receipt of this interest rate reduction. While our term lender has agreed in-principle to a reduction in our interest expense (and certain other related amendments to our term loan), subject to definitive documentation, there is no assurance that we may be able to enter into any amendments to our term loan on the terms described herein or at all. The proposed rights offering will be commenced only following effectiveness of the registration statement relating to the proposed rights offering and will be made only by means of a prospectus. We reserve the right to modify, postpone or cancel the proposed rights offering at any time. There is no assurance that the proposed rights offering will be completed on the terms described in this Annual Report, or at all, including with respect to any reduction in our interest expense (or any other related amendments to our term loan), as the terms of which are subject to definitive documentation with our term loan lender. 16 Table of Contents CRITICAL ACCOUNTING ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ significantly from those estimates. We believe the following discussion addresses our most critical accounting estimates, which are those that are important to the presentation of our financial condition and results of operations and require management's most subjective and complex judgments. Intangible Assets, Other Than Goodwill Local mastheads (e.g., publishing periodical titles, web site domain names, and trade names) are not subject to amortization. Non-amortized intangible assets are tested for impairment annually during the fourth fiscal quarter or more frequently if events or changes in circumstances suggest the asset might be impaired. The quantitative impairment test consists of comparing the fair value of each masthead with its carrying amount. We use a relief from royalty approach which utilizes a discounted cash flow model to determine the fair value of each masthead. Management's judgments and estimates of future operating results in determining the intangibles fair values are consistently applied to each underlying business in determining the fair value of each intangible asset. In 2025, 2024, and 2023, we recognized impairment charges of $7.0 million, $7.8 million, and $7.7 million, respectively. As of September 28, 2025 the masthead carrying value is $3.9 million. Our amortizable intangible assets consist mainly of customer relationships including subscriber lists and advertiser relationships. These asset values are amortized systematically over their estimated useful lives. Intangible assets subject to amortization are tested for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. The carrying amount of each asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of such asset group. There were no indicators of impairment on intangible assets subject to amortization in 2025, 2024 or 2023. Our quantitative impairment analysis includes several inputs that are considered estimates, these include royalty rates, discount rates, five-year revenue forecast, and long term growth rates. All of these estimates are subject to uncertainty as future results may not be achieved. In 2025, the royalty rates utilized a range from 0% to 1.0%; a 50-basis point decrease in royalty rates would result in an additional $1.5 million of impairment. Our discount rate utilized in the analysis has ranged from 12.5% in 2024 to 13.0% in 2025, depending on market conditions. Increasing the discount rate by 100 basis points would result in an additional $0.1 million of impairment. We have used various forecasts in the analysis over different years. Future decreases in our market value, or significant differences in revenue, expenses or cash flows from estimates used to determine fair value, could result in additional intangible asset impairment charges in the future. For information related to our Goodwill impairment analysis, refer to Note 4 to the Consolidated Financial Statements. Pension, Postretirement and Postemployment Benefit Plans We, along with our subsidiaries, have various defined benefit retirement plans, postretirement plans and postemployment plans, under which substantially all of the benefits have been frozen in previous years. We account for our pension, postretirement and postemployment plans in accordance with the applicable accounting guidance, which requires us to include the funded status of our pension plans in our balance sheets and to recognize, as a component of other comprehensive (loss) income, the gains or losses that arise during the period but are not recognized in pension expense. The service cost component of net period benefit cost is reported on the Consolidated Statements of Income and Comprehensive (Loss) Income and included in Compensation while all other components are included in other non-operating income/expense. The determination of pension and postretirement plan obligations and expense is based on a number of actuarial assumptions. Two critical assumptions are the discount rates applied to pension and postretirement plan obligations and the expected long-term rate of return on plan assets. 17 Table of Contents The discount rate assumption is based on investment yields available at year-end on corporate bonds rated AA and above with a maturity to match the expected benefit payment stream. To determine the expected long-term rate of return of assets, we consider the current and expected asset allocations, as well as historical and expected returns on various categories of plan assets, input from the actuaries and investment consultants and long- term inflation assumptions. In 2025, we used an expected return of assets assumption of 5.5% for our pension plan assets and 6.0% for our postretirement and postemployment benefit plan assets. A 50-basis point decrease in discount rates would result in an increase of $8.4 million to pension and $0.1 million to postretirement and postemployment benefits liabilities. A 50-basis point decrease in expected rate of return of assets results would result in an increase of $0.9 million to pension and $0.1 million postretirement and postemployment benefits expense. Income Taxes We are subject to income taxes in the U.S. and record our tax provision based on the expected tax consequences of our operations. Tax laws are complex and open to interpretation, requiring significant judgment in determining our current and deferred income tax provisions, as well as any valuation allowance on deferred tax assets, if any. Our current and deferred income tax provisions are calculated based on estimates and assumptions that could differ from the actual results reflected in income tax returns filed during the subsequent year. We review these estimates throughout the year and record adjustments when actual results are known. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using currently enacted tax rates. Deferred tax assets and liabilities are based on differences between the financial reporting and tax bases of assets and liabilities, using enacted tax rates. Deferred income tax assets are reduced by a valuation allowance when, in our opinion, it is more likely than not that some portion or all of the deferred income tax assets will not be realized. These balances are adjusted for the effects of changes in tax laws and rates on the date of enactment. We recognize the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are recorded in the period of change. Interest and penalties on unrecognized tax benefits are included in income tax expense. IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS See Note 1 to the Consolidated Financial Statements for a description of new accounting standards issued and/or adopted in the year ended September 28, 2025. 18 Table of Contents OPERATIONS Operating results, as reported in the Consolidated Financial Statements, are summarized below: (Thousands of Dollars, Except Per Common Share Data) 2025 2024 Percent Change 2023 Percent Change Operating revenue: Print Advertising revenue 69,168 81,488 (15.1) % 125,804 (35.2) % Digital Advertising and marketing services revenue 183,823 194,213 (5.3) % 193,173 0.5 % Advertising and marketing services revenue 252,991 275,701 (8.2) % 318,977 (13.6) % Print Subscription revenue 164,172 197,584 (16.9) % 252,591 (21.8) % Digital Subscription revenue 94,242 84,331 11.8 % 60,700 38.9 % Subscription revenue 258,414 281,915 (8.3) % 313,291 (10.0) % Print Other revenue 30,861 33,257 (7.2) % 39,508 (15.8) % Digital Other revenue 20,075 20,507 (2.1) % 19,362 5.9 % Other revenue 50,936 53,764 (5.3) % 58,870 (8.7) % Total operating revenue 562,341 611,380 (8.0) % 691,138 (11.5) % Operating expenses: Compensation 216,017 234,581 (7.9) % 266,907 (12.1) % Newsprint and ink 12,961 16,813 (22.9) % 25,346 (33.7) % Other operating expenses 294,642 301,950 (2.4) % 323,067 (6.5) % Depreciation and amortization 18,843 27,616 (31.8) % 30,621 (9.8) % Assets loss on sales, impairments and other, net 2,956 11,193 (73.6) % 1,882 494.7 % Restructuring costs and other 25,850 19,253 34.3 % 12,673 51.9 % Total operating expenses 571,269 611,406 (6.6) % 660,496 (7.4) % Equity in earnings of associated companies 4,278 4,572 (6.4) % 6,527 (30.0) % Operating (loss) income (4,650) 4,546 (202.3) % 37,169 (87.8) % Non-operating (expense) income: Interest expense (40,505) (41,232) (1.8) % (41,471) (0.6) % Pension withdrawal cost — — NM (1,200) NM Pension and OPEB related benefit and other, net 2,506 1,910 31.2 % 2,420 (21.1) % Curtailment/Settlement gain — 3,593 NM — NM Total non-operating expense, net (37,999) (35,729) 6.4 % (40,251) (11.2) % Loss before income taxes (42,649) (31,183) NM (3,082) NM Income tax benefit (6,903) (7,610) NM (349) NM Net loss (35,746) (23,573) NM (2,733) NM Loss per common share: Basic (6.20) (4.35) 42.5 % (0.90) NM Diluted (6.20) (4.35) 42.5 % (0.90) NM We disposed of certain properties in each of 2025, 2024 and 2023. 19 Table of Contents Discussions of the year ended September 29, 2024 and comparison of the years ended September 29, 2024 and September 24, 2023 can be found in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of our Annual Report on Form 10-K for the year ended September 29, 2024, filed on December 12, 2024 which section is incorporated by reference herein. To facilitate a comparison of our results without the impact of the 53rd week of revenues and expenses, certain revenue and expense trends, as described below, are presented on a comparable basis which is calculated by removing the 53rd week of revenue or expense in 2024. OPERATING REVENUE Total operating revenue totaled $562.3 million in 2025, down $49.0 million, or 8.0%, compared to 2024. On a comparable basis, total operating revenue declined 6.5%. Advertising and marketing services revenue totaled $253.0 million in 2025, down $22.7 million, or 8.2% compared to 2024. On a comparable basis, advertising and marketing services revenue declined 6.8%. Print advertising revenues were $69.2 million in 2025, down $12.3 million, or 15.1% compared to 2024. On a comparable basis, print advertising revenue was down 13.3%. The decline is due to continued secular declines in demand for print advertising and impacts from the Cyber Incident, which limited capacity for print advertising for certain publications for several months. Digital advertising revenue totaled $183.8 million in 2025, down $10.4 million, or 5.3% compared to 2024. On a comparable basis, revenue declined 4.0%. Digital advertising revenue represented 72.7% of 2025 total advertising and marketing services revenue compared to 70.4% in 2024. The decline in digital advertising revenue is mainly attributed to the traditional classified categories, programmatic, digital advertising tied to legacy print campaigns, and the cyber incident. Partially offsetting these declines, digital marketing services revenue increased 3.0% compared to the prior year. Subscription revenue totaled $258.4 million in 2025, down $23.5 million , or 8.3%, compared to 2024. The decline in subscription revenue was driven by secular reductions in demand for print subscriptions. Print volumes declined during 2025, consistent with historical and industry trends. Digital-only subscription revenue is up nearly 12% over 2024 on a reported basis. Other revenue, which primarily consists of digital services from BLOX Digital and commercial printing revenue, totaled $50.9 million, a 5.3% decrease compared to 2024. On a comparable basis, other revenue decreased 4.2%. Digital services revenue totaled $20.1 million in 2025, a 2.1% decrease compared to 2024. On a comparable basis digital services revenue decreased 1.6%. Commercial printing revenue totaled $16.2 million in 2025, a 7.4% decline compared to 2024, primarily driven by reduction in print volumes from our partners. On a comparable basis, commercial printing revenue was down 5.8%. Total digital revenue including digital advertising revenue, digital-only subscription revenue and digital services revenue totaled $298.1 million in 2025, flat to 2024, and represented 53.0% of our total operating revenue in 2025, compared to 48.9% in 2024. OPERATING EXPENSES Total operating expenses totaled $571.3 million, a 6.6% decrease compared to 2024. Cash Costs (a non-GAAP financial measure discussed below) were $523.6 million, a 5.4% decrease compared to 2024. Compensation expense totaled $216.0 million in 2025, a 7.9% decrease compared to 2024. The decrease is attributable to reductions in full-time employees ("FTEs") due to continued business transformation efforts, partially offset by investments in digital talent. Newsprint and ink costs totaled $13.0 million in 2025, a 22.9% decrease compared to 2024. This decrease was attributable to declines in newsprint volumes. Other operating expenses totaled $294.6 million in 2025, down 2.4% compared to 2024. Other operating expenses include all operating costs not considered to be compensation, newsprint, depreciation and amortization, restructuring costs and assets loss on 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 20 Table of Contents expenses. The decrease is primarily attributable to lower delivery and other print-related costs due to lower volumes of our print edition, partially offset by increases in digital cost of goods sold. Depreciation expense decreased $2.8 million, or 26.6%, in 2025. Amortization expense decreased $6.0 million, or 34.9%, in 2025. The decrease in both is attributable to assets becoming fully depreciated or amortized. Assets loss on sales, impairments and other totaled $3.0 million in 2025 compared to $11.2 million in 2024. Impairments within this category were $7.0 million in 2025 and $7.8 million in 2024, respectively, related to mastheads. Additionally, $4.2 million of goodwill was allocated to the sale of certain non-core operations in 2025 and $1.3 million in 2024. Restructuring costs and other totaled $25.9 million and $19.3 million in 2025 and 2024, respectively. The increase is primarily driven from costs associated with recovering from the Cyber Incident, closing down outsourced production facilities, ongoing business transformation efforts, and severance. Restructuring costs and other include severance costs, litigation expenses, restructuring expenses, cyber restoration costs, and advisor expenses. The factors noted above resulted in an operating loss of $4.7 million in 2025 compared to a gain of $4.5 million in 2024. NON-OPERATING INCOME AND EXPENSES Non-operating expense increased by $2.3 million , or 6.4%, primarily due to the absence of a $3.6 million pension curtailment gain recognized in 2024. Interest expense decreased $0.7 million, or 1.8%, to $40.5 million in 2025, compared to the same period last year. The decrease was due to a lower average outstanding balance on our debt. Our weighted average cost of debt was 9% at September 28, 2025 and September 29, 2024. INCOME TAXES We recorded income tax benefit of $6.9 million, or 16.2% of pretax loss in 2025 and $7.6 million, or 24.4% of pretax loss in 2024 . See Note 13 of the Notes to the Consolidated Financial Statements, included herein, for a discussion of the difference between the expected federal income tax rate and the actual tax rates. NET LOSS AND EARNINGS PER SHARE Net loss was $35.7 million in 2025 compared to net loss of $23.6 million in 2024. Loss per common share was $6.20 in 2025 compared to a loss of $4.35 per share in 2024. The change reflects the various items discussed above. 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, ongoing 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. 21 Table of Contents 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, assets loss (gain) on 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. 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, the most directly comparable GAAP measure: (Thousands of Dollars) 2025 2024 2023 Net loss (35,746) (23,573) (2,733) Adjusted to exclude Income tax benefit (6,903) (7,610) (349) Non-operating expenses, net 37,999 35,729 40,251 Equity in earnings of TNI and MNI (4,278) (4,572) (6,527) Assets loss on sales, impairments and other, net 2,956 11,193 1,882 Depreciation and amortization 18,843 27,616 30,621 Restructuring costs and other 25,850 19,253 12,673 Stock compensation 1,757 1,751 1,806 Add: Ownership share of TNI and MNI EBITDA (50%) 4,901 5,519 7,604 Adjusted EBITDA 45,379 65,306 85,228 The table below reconciles the non-GAAP financial performance measure of Cash Costs to Operating expenses, the most directly comparable GAAP measure: (Thousands of Dollars) 2025 2024 2023 Operating expenses 571,269 611,406 660,496 Adjustments Depreciation and amortization 18,843 27,616 30,621 Assets loss on sales, impairments and other, net 2,956 11,193 1,882 Restructuring costs and other 25,850 19,253 12,673 Cash Costs 523,620 553,344 615,320 22 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Our primary cash requirements are related to working capital, debt service obligations, and capital expenditures. We expect to meet these needs through cash generated from operations, supplemented by our existing cash balances. Our ability to operate as a going concern is dependent on our ability to remain in compliance with debt covenants and to repay, refinance or amend our debt agreements as they become due. Our Credit Agreement has only limited affirmative covenants with which we are required to maintain compliance and there are no leverage or financial performance covenants. We are in compliance with our debt covenants at September 28, 2025. We continue to take proactive steps to reduce our cost structure and preserve liquidity. Recent actions include targeted cost-reduction and cash-management initiatives such as lowering discretionary and capital spending, tightening control of print-related operating costs, and enhancing collection efforts to improve working capital. We also received temporary lease and interest payment waivers during the second quarter as part of our cyber-recovery plan. Management is actively evaluating additional strategic initiatives and financing and capital markets transactions designed to ensure adequate cash flow and capital resources to support ongoing operations and meet debt obligations. While there can be no assurance that all initiatives will be implemented as planned, delays or unforeseen challenges in executing these measures could adversely affect our financial position and results of operations. Operating Activities Cash used in operating activities totaled $5.5 million in 2025 and $3.2 million in 2023, while cash provided by operating activities totaled $1.1 million in 2024. Our primary sources of cash from operations are receipts from digital and print subscribers, advertising and marketing services customers, and commercial printing and delivery contracts. The primary uses of operating cash include compensation and benefits, newsprint and ink purchases, distribution costs, and payments for third-party services. The year-over-year decrease in cash provided by operating activities was primarily driven by lower operating results, reflecting a $20.1 million decline in operating performance (net loss adjusted for non-working capital items). This was partially offset by $10.1 million of non-cash interest expense related to a waiver of three monthly interest payments owed to BH Finance LLC as a result of the February cyber incident (additional disclosure can be found in Note 6 - Debt). We saw a $3.3 million increase in working capital largely influenced by the February cyber incident, which temporarily elevated both accounts payable and accounts receivable balances. We continue to focus on initiatives to enhance operating cash flows through improved working capital management, disciplined cost control, and targeted investment in digital growth areas. Investing Activities Cash provided by investing activities totaled $7.7 million in 2025, $3.7 million in 2024 and $8.6 million in 2023 and is driven by cash received from asset sales of $9.3 million in 2025 offset by purchases capital expenditures during the year of $1.5 million. Proceeds from asset sales totaled $9.3 million in 2025, compared to $13.5 million in 2024 and $12.0 million in 2023. We continue to pursue opportunities to monetize non-core assets, primarily excess real estate, as part of our broader capital optimization efforts. Financing Activities Cash used in financing activities totaled $1.8 million in 2025, compared to $9.8 million in 2024 and 7.1 million in 2023. Debt reduction accounted for the majority of cash used in financing activities. We continue to prioritize deleveraging and disciplined capital management to strengthen the balance sheet and maintain flexibility to invest in our digital transformation strategy. Additional Information on Liquidity At September 28, 2025, cash and cash equivalents totaled $10.0 million. Liquidity was negatively affected by lower cash generation during the year, transformation-related investments, and temporary disruption from the February 2025 cyber incident. 23 Table of Contents We continue to take proactive steps to reduce our cost structure and preserve liquidity. Recent actions include targeted cost-reduction and cash-management initiatives such as lowering discretionary and capital spending, tightening control of print-related operating costs, and enhancing collection efforts to improve working capital. We also received temporary lease and interest payment waivers during the second quarter as part of our cyber-recovery plan. Management is actively evaluating additional strategic initiatives designed to ensure adequate cash flow and capital resources to support ongoing operations and meet debt obligations. While there can be no assurance that all initiatives will be implemented as planned, delays or unforeseen challenges in executing these measures could adversely affect our financial position and results of operations. To preserve liquidity, we implemented targeted cost-reduction and cash-management initiatives, including lower discretionary and capital spending, tighter control of print-related operating costs, and enhanced collection efforts to reduce outstanding accounts receivable. We also received temporary rent and interest payment waivers during the second quarter as part of our cyber-recovery plan. These actions contributed to improved operating performance in the second half of fiscal 2025, enabling all mandatory and principal debt payments since May 2025 to be funded entirely from operating cash flows. Based on current projections, we believe our liquidity will be sufficient to fund operations and meet debt service requirements for at least the next twelve months. SEASONALITY Advertising and marketing services revenue is seasonal and generally correlates with retail spending patterns in the markets we serve. Historically, retail advertising activity peaks during the December and June quarters, driven by holiday and mid-year promotional periods, while the March quarter typically represents the lowest advertising volume of the year. Subscription and digital revenue streams are less seasonal but can experience modest fluctuations tied to promotional activity and consumer spending trends. INFLATION We evaluate the impact of inflation on our cost base and, when appropriate, implement price changes for our products and services. In parallel, we pursue productivity improvements, sourcing efficiencies, and targeted cost reductions to help offset inflationary pressure. Because pricing and cost actions do not always align in timing, inflation may affect margins in certain periods. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Information with respect to this Item is included herein under the caption “Consolidated Financial Statements”. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.