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Item 2. Management’s Discussion and Analysis

2026-08-07 compared with 2026-05-08 · 108 added, 113 removed, 180 unchanged (55% 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 and six months ended March 29, 2026.

The following discussion includes comments and analysis relating to our results of operations and financial condition as of and for the three and nine months ended June 28, 2026.

This discussion should be read in conjunction with the Consolidated Financial Statements and related Notes thereto, included herein, and our 2025 Annual Report on Form 10-K.

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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.

For the three months ended June 28, 2026, our total operating revenue was $126.0 million, down 10.8% from the three months ended June 29, 2025.

Total Digital Revenue was $71.6 million and represented 56.8% of our total operating revenue.

Total Print Revenue was $54.2 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.

Total Print Revenue was $54.4 million, a 14.2% decrease to the three months ended June 29, 2025.

Our digital-only subscription revenue totaled $21.8 million in the quarter, a 7.0% decline year-over-year driven by lasting impact from last year's Cyber Incident and accelerated churn following inflationary surcharges implemented in the prior fiscal year.

Another key piece of our digital business, Amplified Digital® agency revenue totaled $27.1 million in the quarter.

Total operating expenses were $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.

Total operating expenses were $118.3 million, a 13.9% decrease in the three months ended June 28, 2026, compared to the three months ended June 29, 2025.

The decrease reflects continued disciplined cost management and the absence of prior-year Cyber Incident response costs (see Note 12).

Cash Costs of $109.4 million, a non-GAAP financial measure used to summarize certain operating expenses (see reconciliation of non-GAAP financial measures below), were down 14.5% in the three months ended June 28, 2026, reflecting continued disciplined cost management.

Net income totaled $5.2 million compared to a net loss of $1.7 million in the prior-year period.

Adjusted EBITDA (a non-GAAP financial measure) totaled $18.4 million, a 23.0% increase over the prior-year period.

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

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

Cash on the balance sheet totaled $59.4 million including the net proceeds from the February 5, 2026 Private Placement.

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RECENT DEVELOPMENTS

AGREEMENT WITH HOFFMANN MEDIA GROUP ("HMG")

On May 14, 2026, we entered into a five-year management agreement with HMG, effective June 1, 2026, under which we manage certain HMG-owned newspaper publications and related digital properties.

HMG is owned by David Hoffmann, our Chairman and majority shareholder.

Under the agreement, we receive a fixed management fee of $135,000 per fiscal quarter, a variable fee based on the EBITDA of certain acquired publications, and reimbursement of shared service costs at cost.

HMG retains ownership of the publications and all related revenues and remains responsible for working capital and operating obligations.

PRIVATE PLACEMENT FINANCING AND RELATED AGREEMENTS

Private Placement Agreement

During the three months ended March 29, 2026, we issued an aggregate of 16,000,000 shares of Common Stock, consisting of 15,384,615 shares of Common Stock to certain investors and 615,385 shares of Common Stock to service providers as reimbursement for certain expenses incurred by certain investors, at a price of $3.25 per share through the Private Placement.

$3.25 per share through the Private Placement.

The aggregate gross proceeds from the Private Placement were $50.0 million, before deducting offering expenses.

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Operating results are summarized below.

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

(Thousands of Dollars, Except Per Common Share Data) June 28, 2026 June 29, 2025 Percent

Operating revenue:

Print advertising revenue 14,478 17,474 (17.1) %

Digital advertising revenue 40,693 43,941 (7.4) %

Digital advertising and marketing revenue 44,846 49,097 (8.7) %

Advertising and marketing services revenue 59,324 66,571 (10.9) %

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Depreciation and amortization 3,527 3,783 (6.8) %

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

Gain on asset sales, impairments and other, net (73) (1,562) (95.3) %

Restructuring costs and other 5,959 7,141 (16.6) %

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Pension and other post employment benefits ("OPEB") related and other, net 1,169 1,050 11.3 %

Settlement gain 2,330 — ***

Total non-operating expense, net (2,059) (9,082) (77.3) %

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Income tax expense (benefit) 1,400 (2,744) ***

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

Loss per common share:

Net income (loss) 5,173 (1,676) ***

Earnings (loss) per common share:

Basic 0.21 (0.31) ***

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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.

Total operating revenue was $126.0 million in the three months ended June 28, 2026, down $15.3 million, or 10.8%, compared to the three months ended June 29, 2025.

Advertising and marketing services revenue totaled $59.3 million, down 10.9% in the three months ended June 28, 2026, compared to the prior-year period.

Print advertising revenues were $14.5 million, down 17.1% in the three months ended June 28, 2026 compared to the prior-year period related to continued secular declines in demand for print advertising related to the decline in print subscribers by 19.3% to 221,000 compared to the prior-year period of 274,000.

Digital advertising and marketing services revenue totaled $44.8 million, down 8.7% in the three months ended June 28, 2026 compared to the prior-year period.

Digital advertising and marketing services represented 75.6% of the total advertising and marketing services revenue for the three months ended June 28, 2026, compared to 73.8% in the prior-year period.

Subscription revenue totaled $54.7 million, down 11.1% in the three months ended June 28, 2026 compared to the prior-year period.

Declines in volumes, consistent with historical and industry trends, were partially offset by strategic rate increases.

Digital-only subscribers decreased 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.

Digital-only subscribers decreased 12.8% to 584,000 at June 28, 2026 compared to 670,000 at June 29, 2025.

Digital-only subscription revenue declined 7.0% compared to the prior-year period driven by lasting impact from last year's Cyber Incident and accelerated churn following inflationary surcharges implemented in the prior fiscal year.

Other revenue, which consists of digital services from BLOX Digital of $4.9 million, commercial printing revenue of $3.6 million and third party delivery and other of $3.4 million, decreased $1.3 million, or 9.6%, in the three months ended June 28, 2026 compared to the prior-year period.

Digital services revenue decreased 7.4% in the three months ended June 28, 2026 compared to the prior-year period.

Commercial printing revenue decreased 14.4% in the three months ended June 28, 2026 compared to the prior-year period, primarily driven by lower print volumes from our partners.

Total digital revenue including digital advertising revenue, digital subscription revenue and digital services revenue totaled $71.6 million, a decrease of 8.1%, in the three months ended June 28, 2026 compared to the prior-year period, and represented 56.8% of our total operating revenue in the three months ended June 28, 2026.

Operating Expenses

Total operating expenses were $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.

Total operating expenses were $118.3 million, a 13.9% decrease in the three months ended June 28, 2026, compared to the three months ended June 29, 2025.

The decrease reflects continued disciplined cost management and the absence of prior-year Cyber Incident response costs.

Compensation expense decreased $2.6 million, or 5.5%, in the three months ended June 28, 2026 compared to the prior-year period.

The decrease reflects continued headcount reductions as we execute our digital transformation strategy.

Newsprint and ink costs decreased $0.6 million, or 19.0%, in the three months ended March 29, 2026 compared to the prior-year period.

Newsprint and ink costs decreased $0.7 million, or 22.9%, in the three months ended June 28, 2026 compared to the prior-year period.

The decrease is attributable to lower print volumes, consistent with continued secular declines in demand for print.

Other operating expenses decreased $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.

Other operating expenses decreased $15.2 million, or 19.6%, in the three months ended June 28, 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.

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.

Insurance proceeds were a net gain of $0.6 million in the three months ended June 28, 2026 which represent business interruption insurance recoveries recognized in the current quarter related to the prior-year Cyber Incident.

See further information in Note 12.

Restructuring costs and other decreased $1.2 million, or 16.6% in the three months ended June 28, 2026, compared to the prior-year period due primarily to higher expenses related to the Cyber incident included in the prior year.

Depreciation and amortization expense decreased $0.3 million, or 6.8%, in the three months ended June 28, 2026.

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

(Gain) 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.

Gain on asset sales, impairments and other, net, was $0.1 million in the three months ended June 28, 2026 compared to $1.6 million in the prior-year period, a decrease of $1.5 million driven by fewer property sales in the current year quarter.

Operating income was $8.6 million, an increase of $4.0 million from $4.7 million in the prior-year period, primarily reflecting lower compensation and other operating expenses.

Non-operating Income and Expense

Non-operating 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.

Non-operating expense decreased by $7.0 million, or 77.3% in the three months ended June 28, 2026 compared to the prior-year period.

The decrease is primarily driven by a settlement gain in our Postretirement benefit plans as we irrevocably transferred certain postretirement life insurance obligations to a third-party insurer described in Note 9 and a decrease in interest expense related to the rate reduction on our debt described in Note 8.

Income Tax Expense/Benefit

We recorded an income tax expense of $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.

We recorded an income tax expense of $1.4 million in the three months ended June 28, 2026 compared to an income tax benefit of $2.7 million in the prior-year period.

The increase in income tax expense for the current period is mainly due to a higher valuation allowance related to additional interest expense carryforwards that are not expected to be fully realized.

Net 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

Net income (loss) and Net income (loss) Per Share

Net income was $5.2 million and diluted income per share was $0.21 for the three months ended June 28, 2026 compared to net loss of $1.7 million and diluted losses per share of $0.31 for the prior-year period.

The improvement reflects the cost reduction actions, the interest rate reduction, the non-recurrence of prior-year Cyber Incident costs discussed above and a settlement gain in our Postretirement benefit plans.

Nine Months Ended

Operating results are summarized below.

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

(Thousands of Dollars, Except Per Common Share Data) June 28, 2026 June 29, 2025 Percent Change

Operating revenue:

Print advertising revenue 45,943 53,867 (14.7) %

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

Digital advertising and marketing revenue 128,334 139,766 (8.2) %

Advertising and marketing services revenue 174,277 193,633 (10.0) %

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Equity in earnings of associated companies 3,010 2,963 1.6 %

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

Operating income (loss) 22,382 (3,193) ***

Non-operating income (expense):

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Pension and other post employment benefits ("OPEB") related and other, net 2,840 2,362 20.2 %

Settlement gain 2,330 — ***

Total non-operating expense, net (18,265) (28,003) (34.8) %

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

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

Income (loss) before income taxes 4,117 (31,196) ***

Income tax expense (benefit) 5,779 (1,281) ***

Net loss (1,662) (29,915) (94.4) %

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Operating Revenue

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.

Total operating revenue was $378.0 million, down $45.2 million, or 10.7% in the nine months ended June 28, 2026 compared to the nine months ended June 29, 2025.

Advertising and marketing services revenue totaled $174.3 million, down 10.0% in the nine months ended June 28, 2026 compared to the prior-year period.

Print advertising revenues were $45.9 million, down 14.7% in the nine months ended June 28, 2026 compared to the prior-year period driven by continued secular declines and elimination of unprofitable print products.

Digital advertising and marketing services totaled $128.3 million, down 8.2% in the nine months ended June 28, 2026 compared to the prior-year period.

Digital advertising and marketing services represented 73.6% of the nine months ended June 28, 2026 total advertising and marketing services revenue, compared to 72.2% in the prior-year period.

Subscription revenue totaled $167.6 million, down 12.4% in the nine months ended June 28, 2026 compared to the prior-year period.

Declines in volumes, consistent with historical and industry trends, were partially offset by strategic rate increases.

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

Digital-only subscribers decreased 12.8% to 584,000 as of June 28, 2026.

Digital-only subscription revenue declined 2.9% compared to the prior-year period.

Other revenue, which 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

Other revenue, which consists of digital services from BLOX Digital of $14.5 million, commercial printing revenue of $11.1 million and third party delivery and other of $10.4 million, decreased $2.1 million, or 5.5%, in the nine months ended June 28, 2026 compared to the prior-year period.

Digital services revenue decreased by 4.6% in the nine months ended June 28, 2026 compared to the prior-year period.

Commercial printing revenue decreased 7.7% in the nine months ended June 28, 2026 compared to the prior-year period, primarily driven by lower print volumes from our partners.

Total digital revenue including digital advertising revenue, digital subscription revenue and digital services revenue totaled $209.7 million, a decrease of 6.3% in the nine months ended June 28, 2026 over the prior-year period, and represented 55.5% of our total operating revenue in the nine months ended June 28, 2026.

Operating Expenses

Total operating expenses were $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.

Total operating expenses were $358.6 million, a 16.5% decrease in the nine months ended June 28, 2026, compared to the nine months ended June 29, 2025.

The decrease reflects continued disciplined cost management, the absence of prior-year Cyber Incident response costs, and $6.4 million of business interruption insurance recoveries recognized in the current period (see Note 12).

Cash Costs of $342.6 million, a non-GAAP financial measure used to summarize certain operating expenses (see reconciliation of non-GAAP financial measures below), were down 13.9% in the nine months ended June 28, 2026, reflecting continued disciplined cost management.

Compensation expense decreased $23.4 million, or 14.2% in the nine months ended June 28, 2026 compared to the prior-year period from reductions in full time employees due to continued business transformation efforts.

Newsprint and ink costs decreased $2.0 million, or 19.9% in the nine months ended June 28, 2026, compared to the prior-year period.

The decrease is attributable to declines in newsprint volumes.

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

Other operating expenses decreased $29.7 million, or 13.3%, in the nine months ended June 28, 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.

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.

Insurance proceeds were a net gain of $6.4 million in the nine months ended June 28, 2026 which represent business interruption insurance recoveries related to the prior-year Cyber Incident (see Note 12).

Restructuring costs and other decreased $6.1 million, or 32.2% in the nine months ended June 28, 2026, compared to the nine months ended June 29, 2025.

The prior year period included $3.1 million of expenses related to the Cyber Incident and costs associated with the shutdown of one of our production facilities.

Depreciation and amortization expense decreased $4.3 million, or 38.0%, in the six months ended March 29, 2026 compared to the prior-year period.

Depreciation and amortization expense decreased $4.6 million, or 30.2%, in the nine months ended June 28, 2026 compared to the prior-year period.

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

(Gain) 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.

Gain on asset sales, impairments and other, net, was $1.0 million in the nine months ended June 28, 2026 compared to a net gain of $2.4 million in the prior-year period.

Current year gains on sales were primarily related to the sale of properties.

The factors noted above resulted in an operating income of $22.4 million in the nine months ended June 28, 2026 compared to an operating loss of $3.2 million in the prior-year period primarily due to lower compensation and other operating expenses together with $6.4 million of business-interruption recoveries recognized in the period.

Non-operating Income and Expense

Non-operating 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.

Non-operating expense decreased by $9.7 million, or 34.8% compared to the nine months ended June 29, 2025.

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.

We recorded an income tax expense of $5.8 million in the nine months ended June 28, 2026 compared to $1.3 million benefit in the nine months ended June 29, 2025.

Net loss and Loss Per Share

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.

Net loss and Net loss Per Share

Net loss was $1.7 million and diluted loss per share was $0.22 for the nine months ended June 28, 2026 compared to net loss of $29.9 million and diluted losses per share of $5.16 for the prior-year period.

NON-GAAP FINANCIAL MEASURES

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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.

Adjusted EBITDA is defined as net income (loss), plus non-operating expenses, net, income tax expense (benefit), depreciation and amortization, (gain) loss on asset sales, impairments and other, restructuring costs and other, stock compensation and our 50% share of EBITDA from TNI and MNI, minus equity in earnings of TNI and MNI.

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 loss and operating expenses, below, the closest comparable numbers under GAAP.

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

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)

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

Three months ended Nine months ended

(Thousands of Dollars) June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025

Net income (loss) 5,173 (1,676) (1,662) (29,915)

Adjusted to exclude

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Restructuring costs and other 5,959 7,141 12,746 18,806

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

Gain on asset sales, impairments and other, net (73) (1,562) (976) (2,365)

Stock compensation 181 540 722 1,328

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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 Six months ended

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

Three months ended Nine months ended

(Thousands of Dollars) June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025

Operating expenses 118,260 137,318 358,624 429,391

Depreciation and amortization 3,527 3,783 10,621 15,218

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

Gain on asset sales, impairments and other, net (73) (1,562) (976) (2,365)

Restructuring costs and other 5,959 7,141 12,746 18,806

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Operating Activities

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.

Cash provided by operating activities totaled $6.1 million in the nine months ended June 28, 2026 compared to $0.8 million in the nine months ended June 29, 2025.

The improvement was primarily driven by an increase in operating results of $8.2 million (defined as net loss adjusted for non-working capital items) offset primarily by a decrease in working capital of $2.8 million.

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Investing Activities

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.

Cash used in investing activities totaled $1.3 million in the nine months ended June 28, 2026 compared to cash provided by investing activities of $5.1 million in the nine months ended June 29, 2025.

The nine months ended June 29, 2025 included $8.7 million in proceeds from the sale of assets as we divested non-core real estate compared to only $1.1 million in asset sale proceeds in the current period.

Financing Activities

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

Cash provided by financing activities was $44.6 million for the nine months ended June 28, 2026 from net Private Placement proceeds described in Note 3.

Additional Information on Liquidity

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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.

As of June 28, 2026, our liquidity, consisting of cash on hand, was $59.4 million.

For the nine months ended June 28, 2026, net cash provided by operating activities was $6.1 million, up from $0.8 million in the nine months ended June 29, 2025.

This increase is primarily attributable to the improved operating results compared to the prior-year period.

The current operating environment, expenditures related to our business transformation initiatives, and the impacts of the Cyber Incident have adversely affected our net cash flows and placed pressure on our liquidity.

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However, until changes to such rates are enacted, the impact of the changes cannot be determined.

Controls and Procedures

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

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 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