What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-05-08 compared with 2026-02-11 · 187 added, 117 removed, 106 unchanged (74% of the section changed)

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 three months ended December 28, 2025.

The following discussion includes comments and analysis relating to our results of operations and financial condition as of and for the three and six months ended March 29, 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 March 29, 2026, our total operating revenue was $122.0 million, down 11.2% from the three months ended March 30, 2025.

Total Digital Revenue was $67.8 million and represented 55.6% of our total operating revenue.

Total Print Revenue was $54.2 million, a 16.4% decrease to the three months ended March 30, 2025.

Our digital-only subscription business totaled $22.3 million in the quarter.

The year-over-year revenue decline of 6.3% is 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 $22.8 million in the quarter.

Total operating expenses were $114.4 million, a 20.0% decrease in the three months ended March 29, 2026, compared to the three months ended March 30, 2025.

The decrease reflects continued disciplined cost management, the absence of prior-year Cyber Incident response costs, and $3.8 million of business interruption insurance recoveries recognized in the current quarter.

Cash Costs of $112.0 million, a non-GAAP financial measure used to summarize certain operating expenses (see reconciliation of non-GAAP financial measures below), were down 14.6% in the three months ended March 29, 2026, reflecting continued disciplined cost management.

Net loss totaled $1.7 million, an 85.8% improvement compared to a net loss of $12.0 million in the prior-year period.

Adjusted EBITDA (a non-GAAP financial measure) totaled $15.1 million, a 94.7% increase over the prior-year period.

The improvements reflect the cost actions and business interruption insurance recoveries described above and the non-recurrence of prior-year Cyber Incident costs.

Cash on the balance sheet totaled $53.3 million including the net proceeds from the February 5, 2026 Private Placement.

Debt, net of cash on the balance sheet, totaled $402.2 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

1 unchanged sentence

Private Placement Agreement

At the closing of the private placement 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 through the private placement.

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.

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 $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

At the closing, in connection with the private placement 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.

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.

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 period of five years.

Rights Agreement Amendment

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 2 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

As discussed in Note 12, in connection and concurrently with the closing of the private placement, 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 our business as reasonably requested by us 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.

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, 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 non-compete, non-solicitation, and release of claims provisions.

We have initiated a search process to identify a new Chief Financial Officer.

Josh Rinehults, the Company’s 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.

EXECUTIVE OVERVIEW

RESULTS OF OPERATIONS

For the three months ended December 28, 2025, our total operating revenue was $130.1 million, down 10.0% from the three months ended December 29, 2024.

Total Digital Revenue was $70.3 million and represented 54.1% of our total operating revenue.

Total Print Revenue was $59.7 million, a 16.1% decrease to the three months ended December 29, 2024.

We continued to deliver positive performance in our digital-only subscription business totaling $22.7 million, driving year-over-year revenue growth of 5.3%.

Another key piece of our digital business, Amplified Digital® agency revenue totaled $23.6 million in the quarter.

Operating expenses totaled $125.9 million and Cash Costs (a non-GAAP financial measure) totaled $121.2 million, a 15.5% decrease and a 12.5% decrease, respectively, compared to the three months ended December 29, 2024 due to continued strong cost management, particularly in legacy revenue streams.

Operating expenses during the quarter included $2.0 million in business interruption insurance reimbursements related to the Cyber claim.

The remaining business-interruption claims remain under review.

See Note 10 for further discussion.

Net loss totaled $5.1 million and Adjusted EBITDA (a non-GAAP financial measure) totaled $12.3 million, a 68% and 61% increase, respectively, due primarily to the cost reduction actions noted above.

Net loss for the quarter included $2.0 million in insurance reimbursements discussed above.

Cash on the balance sheet totaled $12.6 million.

Debt, net of cash on the balance sheet, totaled $443 million.

Since May 2025, we have satisfied all principal and interest payments through organic free cash flow generation.

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.

We are a leading digital-first subscription and marketing services company committed to delivering high-quality, trusted, and deeply local news and information.

5 unchanged sentences

RESULTS OF OPERATIONS

Three Months Ended December 28, 2025

Three Months Ended

Operating results are summarized below.

(Thousands of Dollars, Except Per Common Share Data) December 28, 2025 December 29, 2024 Percent

(Thousands of Dollars, Except Per Common Share Data) March 29, 2026 March 30, 2025 Percent

Operating revenue:

12 unchanged sentences

Newsprint and ink 2,520 3,111 (19.0) %

Other operating expenses 62,750 71,455 (12.2) %

Insurance proceeds (3,840) — 100.0 %

Depreciation and amortization 3,515 5,171 (32.0) %

(Gain) loss on asset sales, impairments and other, net (900) 126 ***

Restructuring costs and other 3,640 6,516 (44.1) %

Total operating expenses 114,430 143,038 (20.0) %

Equity in earnings of associated companies 1,008 1,155 (12.7) %

Operating income (loss) 8,542 (4,503) ***

Non-operating income (expense):

Interest expense (7,629) (9,950) (23.3) %

Pension and other post employment benefits ("OPEB") related and other, net 826 658 25.5 %

Total non-operating expense, net (6,803) (9,292) (26.8) %

Income (loss) before income taxes 1,739 (13,795) ***

Income tax expense (benefit) 3,448 (1,780) ***

Net loss (1,709) (12,015) (85.8) %

Loss per common share:

Basic (0.16) (2.07) (92.5) %

Diluted (0.16) (2.07) (92.5) %

*** Indicates an absolute value percentage change greater than 100.

Quarterly Results of Operations

Operating Revenue

Total operating revenue was $122.0 million in the three months ended March 29, 2026, down $15.4 million, or 11.2%, compared to the three months ended March 30, 2025.

Advertising and marketing services revenue totaled $55.0 million, down 9.1% in the three months ended March 29, 2026, compared to the prior-year period.

Print advertising revenues were $14.3 million, down 13.7% in the three months ended March 29, 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 21.7% compared to the prior-year period.

Digital advertising and marketing services revenue totaled $40.7 million, down 7.4% in the three months ended March 29, 2026 compared to the prior-year period.

Digital advertising and marketing services represented 74.0% of the three months ended March 29, 2026 total advertising and marketing services revenue, compared to 72.7% in the prior-year period.

Subscription revenue totaled $55.2 million, down 14.9% in the three months ended March 29, 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 18.8% to 591,000 at March 29, 2026 compared to 728,000 at March 30, 2025.

Digital-only subscription revenue declined 6.3% compared to the prior-year period.

Other revenue, which primarily consists of digital services from BLOX Digital of $4.8 million, commercial printing revenue of $3.7 million and third party delivery of $1.4 million, decreased $0.2 million, or 1.9%, in the three months ended March 29, 2026 compared to the prior-year period.

Digital services revenue decreased 0.9% in the three months ended March 29, 2026 compared to the prior-year period.

Commercial printing revenue decreased 2.4% in the three months ended March 29, 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 $67.8 million, a decrease of 6.6%, in the three months ended March 29, 2026 compared to the prior-year period, and represented 55.6% of our total operating revenue in the three months ended March 29, 2026.

Operating Expenses

Total operating expenses were $114.4 million, a 20.0% decrease in the three months ended March 29, 2026, compared to the three months ended March 30, 2025.

Compensation expense decreased $9.9 million, or 17.5%, in the three months ended March 29, 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 $0.6 million, or 19.0%, in the three months ended March 29, 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 $8.7 million, or 12.2%, in the three months ended March 29, 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 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 expenses.

Insurance proceeds were a net gain of $3.8 million in the three months ended March 29, 2026 which represent business interruption insurance recoveries recognized in the current quarter related to the prior-year Cyber Incident.

Restructuring costs and other decreased $2.9 million, or 44.1% in the three months ended March 29, 2026, compared to the prior-year period due primarily to $1.9 million of expenses related to the Cyber incident included in the prior year and current year reimbursements of $0.8 million.

Depreciation and amortization expense decreased $1.7 million, or 32.0%, in the three months ended March 29, 2026.

This decrease is attributable to assets being fully depreciated or amortized.

(Gain) loss on asset sales, impairments and other, net, was a net gain of $0.9 million in the three months ended March 29, 2026 compared to a net loss of $0.1 million in the prior-year period.

The gain in 2026 was primarily related to the sale of two properties.

Operating income of $8.5 million, increased $13.0 million in the three months ended March 29, 2026 compared to an operating loss of $4.5 million in the prior-year period.

This increase is related to decreases in compensation expense and other operating expenses which includes $3.8 million in business interruption reimbursements in the current year period.

Non-operating Income and Expense

Non-operating income and expense decreased by $2.5 million, or 26.8% in the three months ended March 29, 2026 compared to the prior-year period.

The decrease is primarily driven by a decrease in interest expense related to the rate reduction on our debt described in Note 7.

Our weighted average cost of debt was 8.0% and 9.0% as of the three months ended March 29, 2026 and the three months ended March 30, 2025.

Income Tax Expense/Benefit

We recorded an income tax expense of $3.4 million in the three months ended March 29, 2026 compared to an income tax benefit of $1.8 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 loss and Loss Per Share

Net loss was $1.7 million and diluted loss per share was $0.16 for the three months ended March 29, 2026 compared to net loss of $12.0 million and diluted losses per share of $2.07 for the prior-year period.

The improvement reflects the cost reduction actions, the non-recurrence of prior-year Cyber Incident costs, and business interruption insurance recoveries discussed above.

Six Months Ended

Operating results are summarized below.

(Thousands of Dollars, Except Per Common Share Data) March 29, 2026 March 30, 2025 Percent Change

Operating revenue:

Print advertising revenue 31,465 36,393 (13.5) %

Digital advertising revenue 83,488 90,670 (7.9) %

Advertising and marketing services revenue 114,953 127,063 (9.5) %

Print subscription revenue 67,898 84,511 (19.7) %

Digital subscription revenue 44,985 45,354 (0.8) %

Subscription revenue 112,883 129,865 (13.1) %

Print other revenue 14,578 15,101 (3.5) %

Digital other revenue 9,612 9,913 (3.0) %

Other revenue 24,190 25,014 (3.3) %

Total operating revenue 252,026 281,942 (10.6) %

Operating expenses:

Compensation 96,178 116,913 (17.7) %

Newsprint and ink 5,483 6,727 (18.5) %

Other operating expenses 131,564 146,135 (10.0) %

Insurance proceeds (5,840) — 100.0 %

Depreciation and amortization 7,094 11,436 (38.0) %

Assets gain on sales, impairments and other (3) (929) (99.7) %

Gain on asset sales, impairments and other, net (903) (803) 12.5 %

Restructuring costs and other 6,788 11,666 (41.8) %

1 unchanged sentence

Equity in earnings of associated companies 2,088 2,277 (8.3) %

Operating income 5,208 (3,352) ***

Operating (loss) income 13,750 (7,855) ***

Non-operating income (expense):

3 unchanged sentences

Loss before income taxes (2,456) (26,776) (90.8) %

Income tax benefit 931 3,243 (71.3) %

Income tax expense 4,379 1,463 ***

Net loss (6,835) (28,239) (75.8) %

4 unchanged sentences

Operating Revenue

Total operating revenue was $130.1 million in the three months ended December 28, 2025, down $14.5 million, or 10.0%, compared to the the three months ended December 29, 2024.

Advertising and marketing services revenue totaled $60.0 million in the three months ended December 28, 2025, down 9.9% compared to the three months ended December 29, 2024.

Print advertising revenues were $17.2 million in the three months ended December 28, 2025, down 13.4% compared to the three months ended December 29, 2024 related to continued secular declines in demand for print advertising.

Digital advertising and marketing services totaled $42.8 million in the three months ended December 28, 2025, down 8.4% compared to the three months ended December 29, 2024.

Digital advertising and marketing services represented 71.3% of the three months ended December 28, 2025 total advertising and marketing services revenue, compared to 70.2% in the same period last year.

Subscription revenue totaled $57.7 million in the three months ended December 28, 2025, down 11.2% compared to the three months ended December 29, 2024.

Total operating revenue was $252.0 million, down $29.9 million, or 10.6% in the six months ended March 29, 2026 compared to the six months ended March 30, 2025.

Advertising and marketing services revenue totaled $115.0 million, down 9.5% in the six months ended March 29, 2026 compared to the prior-year period.

Print advertising revenues were $31.5 million, down 13.5% in the six months ended March 29, 2026 compared to the prior-year period driven by continued secular declines and elimination of unprofitable print products.

Digital advertising and marketing services totaled $83.5 million, down 7.9% in the six months ended March 29, 2026 compared to the prior-year period.

Digital advertising and marketing services represented 72.6% of the six months ended March 29, 2026 total advertising and marketing services revenue, compared to 71.4% in the prior-year period.

Subscription revenue totaled $112.9 million, down 13.1% in the six months ended March 29, 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 now total 609,000 as December 28, 2025.

Digital-only subscription revenue grew 5.3% compared to the the three months ended December 29, 2024.

Other revenue, which primarily consists of commercial printing revenue and digital services from BLOX Digital, decreased $0.6 million, or 4.6%, in the three months ended December 28, 2025 compared to the three months ended December 29, 2024.

Digital services revenue totaled $4.8 million in the three months ended December 28, 2025, a 5.1% decrease compared to the three months ended December 29, 2024.

Commercial printing revenue totaled $3.9 million in the three months ended December 28, 2025, a 5.7% decrease compared to the three months ended December 29, 2024, primarily driven by lower print volumes from our partners.

Total digital revenue including digital advertising revenue, digital subscription revenue and digital services revenue totaled $70.3 million in the three months ended December 28, 2025, a decrease of 4.2% over the three months ended December 29, 2024, and represented 54.1% of our total operating revenue in the the three months ended December 28, 2025

Equity in earnings of TNI and MNI in the three months ended December 28, 2025 is essentially flat to the three months ended December 29, 2024.

Digital-only subscribers decreased 18.8% to 591,000 as March 29, 2026.

Digital-only subscription revenue declined 0.8% compared to the prior-year period.

Other revenue, which primarily consists of digital services from BLOX Digital of $9.6 million, commercial printing revenue of $7.6 million and third party delivery of $3.1 million, decreased $0.8 million, or 3.3%, in the six months ended March 29, 2026 compared to the prior-year period.

Digital services revenue decreased by 3.0% in the six months ended March 29, 2026 compared to the prior-year period.

Commercial printing revenue decreased 4.1% in the six months ended March 29, 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 $138.1 million, a decrease of 5.4% in the six months ended March 29, 2026 over the prior-year period, and represented 54.8% of our total operating revenue in the six months ended March 29, 2026

Operating Expenses

Total operating expenses were $125.9 million in the three months ended December 28, 2025, a 15.5% decrease compared to the three months ended December 29, 2024.

Cash Costs, a non-GAAP financial measure used to summarize certain operating expense (see reconciliation of Non-GAAP financial measures below), were down 12.5% in the three months ended December 28, 2025.

These decreases were primarily due to cost reduction actions put in place in year ended September 28, 2025.

Compensation expense decreased $10.8 million in the three months ended December 28, 2025, or 18.0%, compared to the three months ended December 29, 2024 from reductions in full time employees due to continued business transformation efforts.

Newsprint and ink costs decreased $0.7 million in the three months ended December 28, 2025, or 18.1%, compared to the three months ended December 29, 2024.

The decrease is attributable to declines in newsprint volumes and delivery costs.

Other operating expenses decreased $5.9 million in the three months ended December 28, 2025, or 7.9%, compared to the three months ended December 29, 2024.

Other operating expenses include all operating costs not considered to be compensation, newsprint, depreciation and amortization, or restructuring costs and assets loss on sales, impairments, and other, net.

Total operating expenses were $240.4 million, a 17.7% decrease in the six months ended March 29, 2026, compared to the six months ended March 30, 2025.

The decrease reflects continued disciplined cost management, the absence of prior-year Cyber Incident response costs, and $5.8 million of business interruption insurance recoveries recognized in the current period.

Cash Costs of $233.2 million, a non-GAAP financial measure used to summarize certain operating expenses (see reconciliation of non-GAAP financial measures below), were down 13.5% in the six months ended March 29, 2026, reflecting continued disciplined cost management.

Compensation expense decreased $20.7 million, or 17.7% in the six months ended March 29, 2026 compared to the prior-year period from reductions in full time employees due to continued business transformation efforts.

Newsprint and ink costs decreased $1.2 million, or 18.5% in the six months ended March 29, 2026, compared to the prior-year period.

The decrease is attributable to declines in newsprint volumes.

Other operating expenses decreased $14.6 million, or 10.0%, in the six months ended March 29, 2026 compared to the prior-year period.

The largest components are costs associated with printing and distribution of our printed products, digital cost of goods sold and facility expenses.

Restructuring costs and other decreased $2.0 million, or 38.9% in the three months ended December 28, 2025, compared to the three months ended December 29, 2024.

The prior year quarter included significant costs associated with the shutdown of one of our production facilities.

Depreciation and amortization expense decreased $2.7 million, or 42.9%, in the three months ended December 28, 2025.

Insurance proceeds were a net gain of $5.8 million in the six months ended March 29, 2026 which represent business interruption insurance recoveries related to the prior-year Cyber Incident.

Restructuring costs and other decreased $4.9 million, or 41.8% in the six months ended March 29, 2026, compared to the six months ended March 30, 2025.

The prior year period included $1.9 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 $4.3 million, or 38.0%, in the six months ended March 29, 2026 compared to the prior-year period.

The decrease in both is attributable to assets being fully depreciated or amortized.

Assets gain on sales, impairments and other, was de minimis in the three months ended December 28, 2025 (a net gain of $0.0 million) compared to a net gain of $0.9 million in the the three months ended December 29, 2024.

Total operating expenses during the quarter included $2.0 million in business interruption reimbursements.

The factors noted above resulted in an operating income of $5.2 million in the three months ended December 28, 2025 compared to an operating loss of $3.4 million in the three months ended December 29, 2024.

(Gain) loss on asset sales, impairments and other, net, was $0.9 million in the six months ended March 29, 2026 compared to a net gain of $0.8 million in the prior-year period.

Current year gains on sales was related to the sale of two properties.

The factors noted above resulted in an operating income of $13.8 million in the six months ended March 29, 2026 compared to an operating loss of $7.9 million in the prior-year period primarily due to decreases in compensation expense and other operating expenses which includes $5.8 million in business interruption reimbursements.

Non-operating Income and Expense

Non-operating income and expense decreased by $0.2 million, or 2.3%.

The decrease is primarily driven by an increase in Pension and OPEB related benefits.

Our weighted average cost of debt was 9% at the end of both the three months ended December 28, 2025 and the three months ended December 29, 2024.

Income Tax Benefit

We recorded an income tax expense of $0.9 million, or (21.4)% of pretax loss in the three months ended December 28, 2025.

In the three months ended December 29, 2024, we recorded an income tax expense of $3.2 million, or (25.0)% of pretax loss.

Non-operating income and expense decreased by $2.7 million, or 14.3% compared to the six months ended March 30, 2025.

The decrease is primarily driven by decrease in interest expense related to the rate reduction on our debt described in Note 7.

Our weighted average cost of debt was 8.0% and 9.0% at the end of the six months ended March 29, 2026 and the prior-year period.

Income Tax Expense

We recorded an income tax expense of $4.4 million in the six months ended March 29, 2026 compared to $1.5 million in the six months ended March 30, 2025.

Net loss and Loss Per Share

Net loss was $5.1 million and diluted loss per share were $0.92 for the three months ended December 28, 2025 compared to net loss of $16.2 million and diluted losses per share of $2.80 for the the three months ended December 29, 2024.

Net loss was $6.8 million and diluted loss per share was $0.78 for the six months ended March 29, 2026 compared to net loss of $28.2 million and diluted losses per share of $4.87 for the prior-year period.

The change reflects the various items discussed above.

15 unchanged sentences

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.

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.

Adjusted EBITDA and Cash Costs are reconciled to net loss and operating expenses, below, the closest comparable numbers under GAAP.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

The table below reconciles the non-GAAP financial performance measure of Adjusted EBITDA to net income, the most directly comparable GAAP measure:

Three months ended

(Thousands of Dollars) December 28, 2025 December 29, 2024

The table below reconciles the non-GAAP financial performance measure of Adjusted EBITDA to net loss, the most directly comparable GAAP measure:

Three months ended Six months ended

(Thousands of Dollars) March 29, 2026 March 30, 2025 March 29, 2026 March 30, 2025

Net loss (1,709) (12,015) (6,835) (28,239)

Adjusted to exclude

Income tax expense 931 3,243

Income tax expense (benefit) 3,448 (1,780) 4,379 1,463

Non-operating expenses, net 6,803 9,292 16,206 18,921

2 unchanged sentences

Restructuring costs and other 3,640 6,516 6,788 11,666

Assets gain on sales, impairments and other, net (3) (929)

(Gain) loss on asset sales, impairments and other, net (900) 126 (903) (803)

Stock compensation 213 358 541 788

2 unchanged sentences

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

(Thousands of Dollars) December 28, 2025 December 29, 2024

Three months ended Six months ended

(Thousands of Dollars) March 29, 2026 March 30, 2025 March 29, 2026 March 30, 2025

Operating expenses 114,430 143,038 240,364 292,074

Depreciation and amortization 3,515 5,171 7,094 11,436

Assets gain on sales, impairments and other, net (3) (929)

(Gain) loss on asset sales, impairments and other, net (900) 126 (903) (803)

Restructuring costs and other 3,640 6,516 6,788 11,666

4 unchanged sentences

Operating Activities

Cash provided by operating activities totaled $4.5 million in the three months ended December 28, 2025 compared to cash used by operating activities of $7.3 million in the three months ended December 29, 2024, an increase of $11.8 million.

The increase was primarily driven by an increase in operating results of $8.3 million (defined as net loss adjusted for non-working capital items) and an increase in working capital of $3.5 million.

The increase in working capital is primarily related to elevated prepaid offering costs and accrued liabilities related to the private offering transaction.

Cash used in operating activities totaled $1.8 million in the six months ended March 29, 2026 down $6.4 million compared to cash used in operating activities of $8.1 million in the six months ended March 30, 2025.

The improvement was primarily driven by an increase in operating results of $7.8 million (defined as net loss adjusted for non-working capital items) offset primarily by a decrease in working capital of $1.5 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 $0.8 million in the three months ended December 28, 2025 compared to cash provided by investing activities of $3.9 million in the in the three months ended December 29, 2024.

The three months ended December 29, 2024 included $5.4 million in proceeds from the sale of assets as we divested non-core real estate.

Cash used in investing activities totaled $0.3 million in the six months ended March 29, 2026 compared to cash provided by investing activities of $3.2 million in the six months ended March 30, 2025.

The six months ended March 30, 2025 included $6.1 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 required for financing activities was $1.1 million for the three months ended December 28, 2025 due to offering costs that will offset the proceeds from the private placement.

Cash provided by financing activities was $45.3 million for the six months ended March 29, 2026 from net Private Placement proceeds described in Note 2.

Additional Information on Liquidity

PRIVATE PLACEMENT FINANCING AND RELATED AGREEMENTS

As discussed in Note 12, on December 30, 2025, we entered into an agreement pursuant to which we agreed to issue and sell an aggregate of 15,384,615 shares of our common stock at a purchase price of $3.25 per share in a private placement.

The aggregate gross proceeds from the private placement are expected to be approximately $50.0 million, before deducting offering expenses.

We expect to use the net proceeds for working capital and for other general corporate purposes.

Our liquidity, consisting of cash on the balance sheet, totaled $12.6 million on December 28, 2025.

This liquidity amount excludes any future cash flows from operations.

For the three months ending December 28, 2025, cash provided by operating activities totaled $4.5 million.

The current operating environment, business transformation spending, and impacts from the Cyber Incident have reduced net cash flows and put pressure on our liquidity.

In response to the current challenges, we have implemented specific plans to maintain sufficient liquidity for the foreseeable future, including for at least the next 12 months.

Our plan includes reducing operating and capital spending and reducing outstanding accounts receivable.

Reductions in operating expenses and capital spending largely impact our print businesses and future products that are not generating revenue today.

We executed our plan in the quarter ended December 28, 2025, resulting in an improvement in operating results (defined as net loss adjusted for non-working capital items).

This improvement marked a significant milestone in the cyber recovery, as all mandatory and principal payments were funded through cash from operations since May 2025.

We anticipate the improvement to continue into future quarters.

Please see “Recent Developments” for discussion of the Credit Agreement Amendment, which became operative upon the closing of the private placement.

As discussed in Note 2, 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 March 29, 2026, our liquidity, consisting of cash on hand, was $53.3 million.

For the six months ended March 29, 2026, net cash used in operating activities was $1.8 million, down from $8.1 million used in the six months ended March 30, 2025.

This increase is primarily attributable to the improved operating results and working capital management 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

4 unchanged sentences

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation of our senior management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q (the “Evaluation Date”).

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of the Evaluation Date, our disclosure controls and procedures were effective.

Under the supervision and with the participation of our senior management, including our President and Chief Executive Officer and Vice President, Chief Financial Officer and Treasurer, we conducted an evaluation of the

effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q (the “Evaluation Date”).

Based on this evaluation, our President and Chief Executive Officer and Vice President, Chief Financial Officer and Treasurer concluded that as of the Evaluation Date, our disclosure controls and procedures were effective.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have been no changes in our internal control over financial reporting that occurred during the 13 weeks ended December 28, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no changes in our internal control over financial reporting that occurred during the three months ended March 29, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis