LEE ENTERPRISES, Inc 10-Q

Item 1. Financial Statements LEE ENTERPRISES, INCORPORATED CONSOLIDATED BALANCE SHEETS (Unaudited) (Thousands of Dollars) December 28, 2025 September 28, 2025 ASSETS Current assets: Cash and cash equivalents 12,625 9,989 Accounts receivable, net 51,107 54,613 Inventories 4,827 4,696 Prepaid and other current assets 14,319 20,145 Total current assets 82,878 89,443 Investments: Associated companies 27,208 27,070 Other 6,176 6,118 Total investments 33,384 33,188 Property and equipment: Land and improvements 5,782 5,782 Buildings and improvements 64,880 64,880 Equipment 195,471 191,594 Construction in process 2,349 5,530 268,482 267,786 Less accumulated depreciation 233,967 232,225 Property and equipment, net 34,515 35,561 Operating lease right-of-use assets 23,515 25,155 Goodwill 323,858 323,858 Other intangible assets, net 50,149 51,926 Pension plan assets, net 11,316 10,828 Medical plan assets, net 22,809 22,407 Other 10,133 9,363 Total assets 592,557 601,729 The accompanying Notes are an integral part of the Consolidated Financial Statements. 2 Table of Contents (Unaudited) (Thousands of Dollars and Shares, Except Per Share Data) December 28, 2025 September 28, 2025 LIABILITIES AND EQUITY Current liabilities: Current portion of lease liabilities 7,222 7,301 Accounts payable 50,280 41,715 Compensation and other accrued liabilities 28,794 37,862 Unearned revenue 25,959 26,478 Total current liabilities 112,255 113,356 Long-term debt, net of current maturities 455,469 455,469 Operating lease liabilities 17,145 18,810 Pension obligations 493 508 Postretirement and postemployment benefit obligations 5,024 5,103 Deferred income taxes 22,437 22,477 Income taxes payable 3,218 3,161 Withdrawal liabilities and other 22,956 23,804 Total liabilities 638,997 642,688 Equity: Stockholders' equity (deficit): Serial convertible preferred stock, no par value; authorized 500 shares; none issued — — Common Stock, $ 0.01 par value; authorized 12,000 shares; issued and outstanding: 62 63 December 28, 2025; 6,244 shares; $ 0.01 par value September 28, 2025; 6,263 shares; $ 0.01 par value Class B Common Stock, $ 2 par value; authorized 3,000 shares; none issued — — Additional paid-in capital 264,067 263,812 Accumulated deficit ( 335,545 ) ( 329,934 ) Accumulated other comprehensive income 22,674 22,753 Total Lee Enterprises, Inc. Stockholders' deficit ( 48,742 ) ( 43,306 ) Non-controlling interests 2,302 2,347 Total deficit ( 46,440 ) ( 40,959 ) Total liabilities and deficit 592,557 601,729 The accompanying Notes are an integral part of the Consolidated Financial Statements. 3 Table of Contents LEE ENTERPRISES, INCORPORATED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (Unaudited) Three months ended (Thousands of Dollars, Except Per Common Share Data) December 28, 2025 December 29, 2024 Operating revenue: Advertising and marketing services 59,986 66,590 Subscription 57,702 64,997 Other 12,374 12,975 Total operating revenue 130,062 144,562 Operating expenses: Compensation 49,433 60,254 Newsprint and ink 2,963 3,616 Other operating expenses 68,814 74,680 Insurance proceeds ( 2,000 ) — Depreciation and amortization 3,579 6,265 Assets gain on sales, impairments and other, net ( 3 ) ( 929 ) Restructuring costs and other 3,148 5,150 Total operating expenses 125,934 149,036 Equity in earnings of associated companies 1,080 1,122 Operating income (loss) 5,208 ( 3,352 ) Non-operating (expense) income: Interest expense ( 10,248 ) ( 10,282 ) Pension and other post employment benefits ("OPEB") related and other, net 845 653 Total non-operating expense, net ( 9,403 ) ( 9,629 ) Loss before income taxes ( 4,195 ) ( 12,981 ) Income tax expense 931 3,243 Net loss ( 5,126 ) ( 16,224 ) Net income attributable to non-controlling interests ( 485 ) ( 524 ) Loss attributable to Lee Enterprises, Incorporated ( 5,611 ) ( 16,748 ) Other comprehensive loss, net of income taxes ( 79 ) ( 115 ) Comprehensive loss attributable to Lee Enterprises, Incorporated ( 5,690 ) ( 16,863 ) Loss per common share: Basic: ( 0.92 ) ( 2.80 ) Diluted: ( 0.92 ) ( 2.80 ) The accompanying Notes are an integral part of the Consolidated Financial Statements. 4 Table of Contents CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) (Thousands of Dollars) Accumulated Deficit Common Stock Additional paid-in capital Accumulated Other Comprehensive Income Non-Controlling Interests: Total September 28, 2025 ( 329,934 ) 63 263,812 22,753 2,347 ( 40,959 ) Shares redeemed — ( 1 ) ( 73 ) — — ( 74 ) Loss attributable to Lee Enterprises, Incorporated ( 5,611 ) — — — 485 ( 5,126 ) Stock compensation — — 328 — — 328 Other comprehensive loss — — — ( 104 ) — ( 104 ) Deferred income taxes, net — — — 25 — 25 Distributions to minority owners — — — — ( 530 ) ( 530 ) December 28, 2025 ( 335,545 ) 62 264,067 22,674 2,302 ( 46,440 ) (Thousands of Dollars) Accumulated Deficit Common Stock Additional paid-in capital Accumulated Other Comprehensive Income Non-Controlling Interests: Total September 29, 2024 ( 292,341 ) 62 262,470 19,920 2,555 ( 7,334 ) Shares redeemed — — ( 331 ) — — ( 331 ) Loss attributable to Lee Enterprises, Incorporated ( 16,748 ) — — — 524 ( 16,224 ) Stock compensation — — 430 — — 430 Other comprehensive loss — — — ( 151 ) — ( 151 ) Deferred income taxes, net — — — 36 — 36 Distributions to minority owners — — — — ( 603 ) ( 603 ) December 29, 2024 ( 309,089 ) 62 262,569 19,805 2,476 ( 24,177 ) The accompanying Notes are an integral part of the Consolidated Financial Statements. 5 Table of Contents LEE ENTERPRISES, INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three months ended (Thousands of Dollars) December 28, 2025 December 29, 2024 Cash (required for) provided by operating activities: Net loss ( 5,126 ) ( 16,224 ) Adjustments to reconcile net loss to net cash provided by (required for) operating activities: Depreciation and amortization 3,579 6,265 Bad debt expense 2,585 3,474 Stock compensation expense 328 430 Assets gain on sales, impairments and other, net ( 3 ) ( 929 ) Earnings, net of distributions, deemed returns on investment of TNI and MNI ( 6 ) 228 Deferred income taxes ( 15 ) ( 131 ) Other, net ( 530 ) ( 603 ) Changes in operating assets and liabilities: Decrease (increase) in receivables 921 ( 2,682 ) Decrease (increase) in inventories and other 463 ( 406 ) Increase in accounts payable, unearned revenue, other accrued liabilities and other working capital items 4,469 4,197 Decrease in pension and other postretirement and postemployment benefit obligations ( 1,087 ) ( 893 ) Change in income taxes payable 57 52 Other ( 1,164 ) ( 115 ) Net cash provided by (required for) operating activities 4,471 ( 7,337 ) Cash provided by (required for) investing activities: Purchases of property and equipment ( 758 ) ( 1,553 ) Proceeds from sales of assets 3 5,414 Net cash (required for) provided by investing activities ( 755 ) 3,861 Cash required for financing activities: Deferred offering costs ( 1,080 ) — Net cash required for financing activities ( 1,080 ) — Net increase (decrease) in cash and cash equivalents 2,636 ( 3,476 ) Cash and cash equivalents: Beginning of period 9,989 9,598 End of period 12,625 6,122 The accompanying Notes are an integral part of the Consolidated Financial Statements. 6 Table of Contents LEE ENTERPRISES, INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1 BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited interim Consolidated Financial Statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for quarterly reports. In the opinion of management, these financial statements contain all adjustments (consisting of only normal recurring items) necessary to present fairly the financial position of Lee Enterprises, Incorporated and its subsidiaries (the “Company”) as of December 28, 2025, and our results of operations and cash flows for the periods presented. The Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company's 2025 Annual Report on Form 10-K. Our fiscal year ends on the last Sunday in September. Fiscal year 2026 ends September 27, 2026, and fiscal year 2025 ended September 28, 2025. Fiscal year 2026 and 2025 includes 52 weeks of operations. Because of seasonal and other factors, the results of operations for the three months ended December 28, 2025, are not necessarily indicative of the results to be expected for the full year. The Consolidated Financial Statements include our accounts and those of our wholly owned subsidiaries, as well as our 82.5 % interest in INN Partners, L.C. (“BLOX Digital" formerly "TownNews”). Our 50 % interest in TNI Partners ("TNI") and our 50 % interest in Madison Newspapers, Inc. ("MNI") are accounted for using the equity method and are reported at cost, plus our share of undistributed earnings since acquisition less, for TNI, amortization of intangible assets. New accounting pronouncements not yet adopted In December 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2025-11 which focuses on various interim reporting improvements. The ASU is effective for interim periods within fiscal years beginning after December 15, 2027. We are still evaluating the guidance but we do not expect it will fundamentally change our interim reporting. In December 2025, the Financial Accounting Standards Board FASB issued ASU 2025-12 which the FASB's "Codification Improvements" update, making various technical corrections and clarifications to existing United States Generally Accepted Accounting Principles ("GAAP"), improving consistency and usability for preparers by refining guidance and making standards easier to apply. The ASU is effective for annual periods beginning after December 15, 2026. We are currently evaluating the updated guidance and assessing the impact on the Consolidated Financial Statements. In November 2023, the FASB issued guidance, ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures which enhances annual income tax disclosures. ASU 2023-09 requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 will be effective for annual periods beginning after December 15, 2024. We are currently evaluating the guidance and assessing the impact on the Consolidated Financial Statements. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”) . ASU 2024-03 requires additional disclosure of the nature of expenses included in the statement of operations as well as disclosures about specific types of expenses included in the expense captions presented in the statement of operations. ASU 2024-03, as clarified by ASU 2025-01, is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Both early adoption and retrospective 7 Table of Contents application are permitted. We expect to enhance annual expense disclosures based on the new requirements. In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810) - Amendments to SEC Paragraphs Pursuant to Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity . This update is effective for the annual period beginning after December 15, 2026, as well as interim periods within that period. We are currently evaluating the updated guidance and assessing the impact on the Consolidated Financial Statements. In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets , which provides new optional guidance relating to the estimation of expected credit losses on current accounts receivable and current contract assets. This ASU permits entities to apply a practical expedient when estimating credit losses and is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted, and should be applied prospectively. We are currently evaluating the provisions of the updated guidance and assessing the impact on the Consolidated Financial Statements. 2 REVENUE The following table presents our revenue disaggregated by source: Three months Ended (Thousands of Dollars) December 28, 2025 December 29, 2024 Operating revenue: Print advertising revenue 17,191 19,861 Digital advertising and marketing services revenue 42,795 46,729 Advertising and marketing services revenue 59,986 66,590 Print subscription revenue 34,996 43,432 Digital subscription revenue 22,706 21,565 Subscription revenue 57,702 64,997 Print other revenue 7,546 7,888 Digital other revenue 4,828 5,087 Other revenue 12,374 12,975 Total operating revenue 130,062 144,562 Recognition principles Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for goods or services. Revenues are recognized as performance obligations are satisfied either at a point in time, such as when an advertisement is published, or over time, such as audience subscription revenue. Advertising and marketing services revenue Print advertising revenue includes amounts charged to customers for retail, national, or classified advertising space purchased in our newspapers, advertising marketing services and other print advertising products such as preprint inserts and direct mail. Digital advertising revenue includes amounts for advertisements placed on our digital platforms, amounts charged to customers for digital marketing services which include: audience extension, search 8 Table of Contents engine optimization, search engine marketing, web and mobile production, social media services and reputation monitoring and management. Payments for print and digital advertising revenue are due upon completion of our performance obligations at previously agreed upon rates. In instances where the timing of revenue recognition differs from the timing of invoicing, such timing differences are not large. As a result, we have determined that our contracts do not include a significant financing component. Depending on the product, revenue is recognized over time or at the point in time in which performance obligations are met. Subscription revenue Print subscription revenue results from the sale of print editions of newspapers to individual subscribers and to sales outlets that resell the newspapers. Print subscriptions include full access to all forms of content provided. Single copy revenue is also included in subscription revenue. Subscription revenue from single copy and home delivery subscriptions are recognized at the point in time the publications are delivered. Digital subscription revenue results from the sale of digital-only access to our content delivered via digital products purchased. Digital subscription revenue is recognized over time as performance obligations are met throughout the subscription period. Payments for print and digital subscription revenue are typically collected in advance, or for contract periods of one year or less and result in an unearned revenue liability that is reduced when revenue is recognized. Other revenue Other revenue primarily consists of digital services, commercial printing and delivery of third party products. Digital services revenues, which are primarily delivered through BLOX Digital, are primarily comprised of contractual agreements to provide web hosting and content management services. As such, digital services revenue is recognized over the contract period. Prices for digital services are agreed upon in advance of the contract beginning and are typically billed in arrears on a monthly basis. Commercial printing and delivery revenue is recognized when the product is delivered to the customer or to the third party's subscriber. Contract Liabilities Our primary source of unearned revenue is from subscriptions paid in advance of the service provided. We expect to recognize the revenue related to unsatisfied performance obligations over the next twelve months in accordance with the terms of the subscriptions and other contracts with customers.The unearned revenue balances described herein are our only contract liability. Revenue recognized in the three months ended December 28, 2025, that was included in the contract liability as of September 28, 2025, was $ 16.4 million. Accounts receivable, excluding allowance for credit losses, was $ 55.2 million and $ 59.4 million as of December 28, 2025, and September 28, 2025 , respectively. Allowance for credit losses was $ 4.1 million and $ 4.8 million as of December 28, 2025, and September 28, 2025 , respectively. Valuation and qualifying account information related to the allowance for credit losses related to continuing operations is as follows: (Thousands of Dollars) December 28, 2025 September 28, 2025 Balance, beginning of period 4,827 6,514 Additions charged to expense 2,585 15,262 Deductions from reserves ( 3,326 ) ( 16,949 ) Balance, end of period 4,086 4,827 9 Table of Contents Practical expedients Sales commissions are expensed as incurred as the associated contractual periods are one year or less. These costs are recorded within "Compensation" on our Consolidated Statements of Loss and Comprehensive Loss. The vast majority of our contracts have original expected lengths of one year or less and revenue is earned at a rate and amount that corresponds directly with the value to the customer. 3 INVESTMENTS IN ASSOCIATED COMPANIES TNI Partners In Tucson, Arizona, TNI, acting as agent for our subsidiary, Star Publishing Company (“Star Publishing”), and Gannett Co., Inc.'s subsidiary Citizen Publishing Company (“Citizen”), is responsible for printing, delivery, advertising, and subscription activities of the Arizona Daily Star as well as the related digital platforms and specialty publications. TNI collects all receipts and income and pays substantially all operating expenses incidental to the partnership's operations and publication of the newspaper and other media. Income or loss of TNI (before income taxes) is allocated equally to Star Publishing and Citizen. Summarized results of TNI are as follows: Three months ended (Thousands of Dollars) December 28, 2025 December 29, 2024 Operating revenue 4,814 6,533 Operating expenses 3,605 5,206 Operating income 1,209 1,327 Net income 1,260 1,250 Equity in earnings of TNI 630 625 TNI makes periodic distributions of its earnings and for the three months ended December 28, 2025, and December 29, 2024, we received $ 0.5 million and $ 0.5 million in distributions, respectively. Madison Newspapers, Inc. We have a 50 % ownership interest in MNI, which publishes daily and Sunday newspapers, and other publications in Madison, Wisconsin, and other Wisconsin locations, and operates their related digital platforms. Net income or loss of MNI (after income taxes) is allocated equally to us and The Capital Times Company (“TCT”). MNI conducts its business under the trade name Capital Newspapers. 10 Table of Contents Summarized results of MNI are as follows: Three months ended (Thousands of Dollars) December 28, 2025 December 29, 2024 Operating revenue 9,470 9,759 Operating expenses, excluding restructuring costs, depreciation and amortization 7,233 7,455 Restructuring costs 34 — Depreciation and amortization 60 90 Operating income 2,143 2,214 Net income 900 994 Equity in earnings of MNI 450 497 MNI makes periodic distributions of its earnings and in the three months ended December 28, 2025, and December 29, 2024, we received $ 0.4 million and $ 0.9 million in distributions, respectively. 4 GOODWILL AND OTHER INTANGIBLE ASSETS All of our goodwill is attributed to a single reporting unit. Goodwill and identified intangible assets consist of the following: (Thousands of Dollars) December 28, 2025 September 28, 2025 Goodwill, beginning of period 323,858 328,040 Allocated to sold operations — ( 4,182 ) Goodwill, end of period 323,858 323,858 Non-amortized intangible assets: Mastheads 3,946 3,946 Amortizable intangible assets: Customer and newspaper subscriber lists 262,146 262,146 Less accumulated amortization ( 215,943 ) ( 214,166 ) 46,203 47,980 Total intangibles, net 374,007 375,784 The weighted average amortization period for amortizable assets is approximately nine years . 5 SEGMENTS We operate as a single operating and reportable segment. The Chief Executive Officer (“CEO”) serves as our Chief Operating Decision Maker (“CODM”) and is responsible for evaluating financial performance and allocating resources. The CODM reviews financial information and makes operating decisions on a consolidated basis. Our operations are organized into Strategic Business Units (“SBUs”) based on market. The SBU’s generally include one or more daily newspapers, several nondaily publications as well as the related digital operations. SBUs are internal, location-based operating components used for management purposes and do not represent separate operating or reportable segments. Separate operating results for each SBU are not reviewed by the CODM when assessing performance or making operating decisions. The CODM reviews our consolidated statements of (loss) income and balance sheets on a monthly basis and makes key decisions regarding resource allocation, including operating expenses and capital expenditures, primarily focusing on consolidated net (loss) income and consolidated total 11 Table of Contents assets. These consolidated statements are used by the CODM to monitor budget versus actual results and evaluate the return on assets. Significant segment expenses are separately disclosed and presented in the Consolidated Statements of Loss (Income) and Comprehensive Loss (Income). The measure of segment assets is reported on the Consolidated Balance Sheets as Total Assets. The accounting policies of our operating segment are the same as those described in Note 1. 6 DEBT We have debt consisting of a single 25 -year term loan with BH Finance LLC, with an aggregate principal balance of $ 455.5 million at a 9 % annual fixed rate and maturing on March 16, 2045 (referred to herein as “Credit Agreement” and “Term Loan”). On December 28, 2025, the fair value was $ 387.9 million, representing a Level 2 fair value measurement, which are fair values estimated using significant other observable inputs. During the three months ended December 28, 2025, we had no Net Cash Proceeds, as defined in our Credit Agreement, from asset sales and did not make any principal debt payments as a result of non-core asset sales. Future payments are contingent on our ability to generate future excess cash flow, as defined in the Credit Agreement. As of December 28, 2025, there was no Excess Cash payment due as we did not generate the defined level of excess cash flow. In February 2025, in an effort to provide short-term liquidity to fund the Cyber Incident's remediation efforts and other operations, BH Finance LLC waived the interest expense payment and BH Media Group, Inc. waived the lease payment due March 1, 2025, April 1, 2025, and May 1, 2025. As of September 28, 2025, the waivers increased the outstanding debt balance by $ 11.3 million and was treated as non-cash activity within the statement of cash flows. These waivers were treated as modifications to the existing Credit Agreement. In addition, the May 2025 waiver was accompanied by an amendment to the Credit Agreement which includes provisions requiring us to prepay the loan in an aggregate amount equal to 100 % of net cash proceeds received by us or our subsidiaries within three days following the receipt of net cash proceeds from asset sales and allowing BH Finance to assign its rights and obligations under the Credit Agreement to any person other than a natural person. Future payments are contingent on our ability to generate future Excess Cash Flow, as defined in the Credit Agreement. See Note 12 for changes to our Credit Agreement related to a Subsequent Event. 7 PENSION, POSTRETIREMENT AND POSTEMPLOYMENT DEFINED BENEFIT PLANS We are the sponsor of one single-employer defined benefit pension plan, the Lee Enterprises, Incorporated Pension Plan ("the Plan"). As previously announced to participants on October 22, 2025, we are executing a strategic termination of our fully funded benefit pension Plan, eliminating the long-term volatility tied to interest rate movement, mortality assumptions and asset performance, while preserving participant benefits and improving balance sheet flexibility. We terminated the Plan on December 28, 2025 and submitted a request for a determination of the Plan's qualified status to the United States Internal Revenue Service. We expect to complete the termination process, including payout, in late 2026. Additionally, we provide retiree medical and life insurance benefits under postretirement plans at several of our operating locations. Through December 28, 2025, our liability and related expense for benefits under the plans are recorded over the service period of employees based upon annual actuarial calculations. 12 Table of Contents The net periodic pension and postretirement cost (benefit) components for our plans are as follows: PENSION PLAN Three months ended (Thousands of Dollars) December 28, 2025 December 29, 2024 Service cost for benefits earned during the period 1 1 Interest cost on projected benefit obligation 1,977 2,034 Expected return on plan assets ( 2,467 ) ( 2,319 ) Amortization of prior service benefit 212 212 Net periodic pension benefit ( 277 ) ( 72 ) POSTRETIREMENT MEDICAL PLANS Three months ended (Thousands of Dollars) December 28, 2025 December 29, 2024 Service cost for benefits earned during the period — 1 Interest cost on projected benefit obligation 83 108 Expected return on plan assets ( 391 ) ( 410 ) Amortization of net gain ( 245 ) ( 292 ) Amortization of prior service benefit ( 71 ) ( 71 ) Net periodic postretirement benefit ( 624 ) ( 664 ) In the three months ended December 28, 2025 and December 29, 2024, we made no contributions to our pension plans. W e have no required contributions to our pension plans for 2026. Multi-employer Pension Plans In prior periods, we completed withdrawals from several multi-employer plans. As of December 28, 2025 and September 28, 2025, we had $ 22.0 million and $ 22.4 million of accrued withdrawal liabilities. The liabilities reflect the estimated value of payments to the funds, payable over 20 years. 8 INCOME TAXES We recorded an income tax expense of $ 0.9 million related to loss before taxes of $ 4.2 million for the three months ended December 28, 2025. We recorded an income tax expense of $ 3.2 million related to loss before taxes of $ 13.0 million for the three months ended December 29, 2024. The effective income tax rate for the three months ended December 28, 2025, was ( 21.4 )% . The effective income tax rate for the three months ended December 29, 2024, was ( 25.0 )%. The primary differences between these rates and the U.S. federal statutory rate of 21% are because of state taxes, non-deductible expenses, increase in valuation allowance, and adjustments to reserves for uncertain tax positions, including any related interest. We are evaluating the income tax impacts of the private placement financing and Second Amendment to the Credit Agreement as related to the subsequent events disclosed in Note 12. 13 Table of Contents 9 LOSS PER COMMON SHARE The following table sets forth the computation of basic and diluted earnings per common share: Three months ended (Thousands of Dollars and Shares, Except Per Share Data) December 28, 2025 December 29, 2024 Loss attributable to Lee Enterprises, Incorporated: ( 5,611 ) ( 16,748 ) Weighted average common shares 6,258 6,192 Less weighted average restricted Common Stock ( 139 ) ( 204 ) Basic average common shares 6,119 5,988 Dilutive restricted Common Stock — — Diluted average common shares 6,119 5,988 Loss per common share: Basic ( 0.92 ) ( 2.80 ) Diluted ( 0.92 ) ( 2.80 ) For the three months ended December 28, 2025 and December 29, 2024, no shares were considered in the computation of diluted earnings per common share because we recorded net losses. Rights Agreement On March 28, 2024, our Board of Directors adopted a stockholder rights plan (the “Rights Agreement”). Pursuant to the Rights Agreement, on March 28, 2024, our Board of Directors declared a dividend of one preferred share purchase right (a “Right”), payable on April 8, 2024, for each share of our Common Stock outstanding to the stockholders of record on that date. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series C Participating Convertible Preferred Stock, without par value (the “Preferred Shares”), of the Company at a price of $ 90.00 per one one-thousandth of a Preferred Share represented by a Right, subject to adjustment. The Rights will initially trade with our Common Stock and will generally become exercisable only if any person or group, other than certain exempt persons, acquires beneficial ownership of 15 % or more of our Common Stock outstanding. In the event the Rights become exercisable, each holder of a Right, other than the triggering person(s), will be entitled to purchase additional shares of our Common Stock at a 50 % discount or the Company may exchange each Right held by such holders for one share of our Common Stock. The Rights Agreement was to continue in effect until March 27, 2025, or unless earlier redeemed or terminated by the Company, as provided in the Rights Agreement. On March 27, 2025, the Board of Directors extended the termination date of the Rights Agreement to March 27, 2026. The Rights have no voting or dividend privileges, and, unless and until they become exercisable, have no dilutive effect on the earnings of the Company. The Rights Agreement applies equally to all current and future stockholders and is not intended to deter offers or preclude our Board of Directors from considering acquisition proposals that are fair and otherwise in the best interest of our stockholders. However, the overall effect of the Rights Agreement may render it more difficult or discourage a merger, tender offer, or other business combination involving us that is not supported by our Board of Directors. 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 12 for additional information related to the private placement. 14 Table of Contents 10 CYBERSECURITY INCIDENT On February 3, 2025, we experienced a cybersecurity incident that disrupted certain IT systems and resulted in unauthorized access to certain files (the “Cyber Incident”). We activated our incident-response plan, engaged third-party cybersecurity experts, notified law enforcement, and offered identity-protection services to affected customers and subscribers. The Cyber Incident adversely affected fiscal 2025 operating results; however, the incremental impact on revenues and certain operating expenses is not reasonably separable from other business factors. The incident remains under legal and forensic review, and we continue to implement security enhancements. Since the incident occurred, we have incurred $ 10.5 million loss of cash flows related to the Cyber Incident. Approximately $ 3.7 million of this was incurred expenses, which were recognized in "Restructuring and Other" in the Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income during the year ended September 28, 2025. We have filed insurance claims for the remaining $ 6.8 million to cover business interruption related and other expenses. We maintain cyber insurance with a $ 0.5 million deductible. For the year ended September 28, 2025, we had submitted $ 10.0 million of claims and received $ 2.0 million of reimbursements, which are presented as a reduction of related costs within “Restructuring and other.” For the three months ended December 28, 2025, we received an additional $ 2.0 million in business interruption reimbursements that were recorded on a separate line within "Operating Expenses". The remaining business-interruption claims remain under review. 11 COMMITMENTS AND CONTINGENT LIABILITIES 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 the 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. 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. The probable settlement liability and insurance receivable are recorded within “Compensation and other accrued liabilities” and “Prepaids and other” on the Consolidated Balance Sheets as of December 28, 2025. 15 Table of Contents 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 is expected to rule in the next 90 days. Discovery is ongoing in this case and the outcome is uncertain at this time. 12 SUBSEQUENT EVENTS PRIVATE PLACEMENT FINANCING AND RELATED AGREEMENTS On February 5, 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 $ 3.25 per share in a private placement pursuant to the private placement agreement by and among the Company and the investors. The aggregate gross proceeds from the private placement were approximately $ 50.0 million before deducting offering expenses. We expect to use the net proceeds for working capital and for other general corporate purposes. The investors have also agreed to a lock-up with respect to the shares for a period of 180 days and standstill period of twelve months , subject to certain exceptions. With respect to the standstill, certain investors are each able to purchase up to 600,000 shares of Common Stock during the standstill period. Further, in connection with the closing of the private placement, we amended our Certificate of Incorporation, increasing the number of authorized shares from 12,000,000 to 40,000,000 . Registration Rights Agreement 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 are required to use commercially reasonable efforts to file a registration statement with the Securities and Exchange Commission covering the resale by the investors of their shares within 60 days following the closing. President and Chief Executive Officer Transition In connection with the closing of the private placement agreement, Kevin Mowbray, our President and Chief Executive Officer, entered into an agreement to voluntarily retire from his positions at the Company and its subsidiaries and affiliates. Pursuant to this agreement, we have agreed to pay (i) a severance payment to Mr. Mowbray of $ 1,500,000 payable in thirty-six installments and (ii) COBRA medical premiums for a period of 18 months for Mr. Mowbray and his spouse. In addition, Mr. Mowbray agreed to provide consultation, advice and assistance in the transition and operation of the Company’s business as reasonably requested by the Company through May 31, 2026. In connection with the closing and the planned retirement of the Chief Executive Officer, Nathan Bekke, our current Chief Operating Officer, assumed the role of Interim Chief Executive Officer. Vice President, Chief Financial Officer Transition On November 17, 2025, Timothy R. Millage, Vice President, Chief Financial Officer informed us of his decision to resign from his positions with us to pursue an opportunity in church ministry. His resignation became effective February 3, 2026, and he has agreed to provide consulting services to the Company through May 31, 2026. In connection with Mr. Millage’s resignation, we and Mr. Millage entered into a separation agreement, dated November 20, 2025 (the “Separation Agreement”). Under the terms of the Separation Agreement, Mr. Millage will receive (a) his full compensation through the end of his consulting role, (b) a severance payment equaling twenty-six weeks of his base salary, (c) the vesting of all unvested stock awards on February 3, 2026, and (d) survival of the indemnification terms under his employment agreement and indemnity agreement. The Separation Agreement also includes customary 16 Table of Contents non-compete, non-solicitation, and release of claims provisions. We have initiated a search process to identify a new Chief Financial Officer. Joshua P. Rinehults, our current Vice President of Operations and Finance, has been appointed as Vice President, Interim Chief Financial Officer, and Treasurer, effective as of February 3, 2026. New Board Chairman In connection with the closing of the private placement agreement, David Hoffmann was appointed to our board of directors for a term ending at our 2028 annual meeting. Additionally, pursuant to our second amended and restated bylaws, the board of directors appointed Mr. Hoffmann as Chairman, replacing Mary E. Junck, who previously served in the role. Ms. Junck is expected to remain a director on the Company’s board through the expiration of her term at the Company’s 2028 annual meeting. Credit Agreement Amendment Additionally, 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 of the private placement agreement. 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 the minimum amount of cash-on hand held by us before being deemed Excess Cash Flow would be equal to $ 64.0 million for a five year period following the closing. Rights Agreement Amendment On February 4, 2026, in connection with the closing of the private placement agreement, 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. Financing costs Costs related to the transaction are approximately $ 4.7 million and will offset the financing proceeds in "Additional Paid-in Capital" on the Consolidated Balance Sheets once the private placement is completed. $ 1.1 million in costs were paid by December 28, 2025 and are recorded as "Deferred Offering Costs" in the financing activity section of our Consolidated Statement of Cash Flows. 17 Table of Contents