LEE ENTERPRISES, Inc 10-Q

Item 2. 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 nine months ended June 25, 2023. This discussion should be read in conjunction with the Consolidated Financial Statements and related Notes thereto, included herein, and our 2022 Annual Report on Form 10-K. Statements that are not historical are forward-looking and involve risks and uncertainties. See "Forward-Looking Statements" at the end of this section for further information. EXECUTIVE OVERVIEW Lee Enterprises, Incorporated, together with its subsidiaries, is a digital-first subscription platform providing local markets with valuable, high quality, trusted, intensely local news, information, advertising and marketing services. We are a rapidly growing digital subscription platform with more than 606,000 digital subscribers serving 75 mid-sized local communities in 26 states. Our core strategy aims to grow digital audiences and engagement through continuous improvements to subscriber experience, while offering a full suite of omni-channel advertising and marketing solutions local advertisers desire. Our product portfolio includes digital subscription platforms, daily, weekly and monthly newspapers and niche publications, all delivering original local news and information. Our products offer print and digital editions, and our content and advertising is available in real time through our websites and mobile apps. We operate in predominately mid-sized communities with products ranging from large daily newspapers and associated digital products, such as the St. Louis Post-Dispatch and The Buffalo News, to non-daily newspapers with news websites and digital platforms serving smaller communities. We have made talent and technology investments to improve user experience, content, data visualization, and marketing to align with the shift in spending habits to digital products by both consumers and advertisers. We aim to grow our business through three main categories: subscriptions to our product offerings, advertising and marketing solutions to local advertisers, and digital services to a diverse set of customers. Execution of this strategy is expected to transform Lee into a vibrant, digitally centric company. • Our digital subscription platforms are the fastest growing digital subscription platforms in local media. • Amplified Digital ® , our digital marketing services agency, offers a full suite of digital marketing solutions to local advertisers. • BLOX Digital (formerly known as TownNews), our software as a service (SaaS) content platform, is one of the largest web-hosting and content management SaaS providers in North America. BLOX Digital represents a powerful opportunity to drive additional digital revenue by providing state-of-the-art web hosting and content management services to more than 2,000 customers who rely on BLOX Digital for their web, over-the-top display, mobile, video and social media products. We generate revenue primarily through advertising and marketing services, subscriptions to our digital and print products, and digital services, primarily through our majority-owned subsidiary, BLOX DIgital. Our operations also provide printing and distribution of third-party publications. STRATEGY We are a major subscription and advertising platform, a trusted local news provider and innovative, digitally-focused marketing solutions company. Our focus is on the local market - including local news and information, local advertising and marketing services to top local accounts, and digital services to local content curators. To align with the core strength of our Company, our operating strategy is locally focused around three pillars: • Grow digital audiences by transforming the way we present local news and information • Expand our digital subscription base and revenue through audience growth and continued conversion of our massive digital audiences. • Diversify and expand offerings for advertisers by launching a portfolio of video advertising initiatives and e-commerce sales strategies through Amplified Digital ® that will enable advertisers to leverage our vast data-rich digital audiences and reach consumers in new ways. 13 RESULTS OF OPERATIONS Three Months Ended June 25, 2023 Operating results are summarized below. (Thousands of Dollars, Except Per Common Share Data) 2023 2022 Percent Change Operating revenue: Print advertising revenue 29,216 44,814 (34.8) % Digital advertising revenue 49,904 46,187 8.0 % Advertising and marketing services revenue 79,120 91,001 (13.1) % Print subscription revenue 61,842 78,079 (20.8) % Digital subscription revenue 15,715 10,969 43.3 % Subscription revenue 77,557 89,048 (12.9) % Print other revenue 9,773 10,671 (8.4) % Digital other revenue 4,860 4,317 12.6 % Other revenue 14,633 14,988 (2.4) % Total operating revenue 171,310 195,037 (12.2) % Operating expenses: Compensation 63,582 78,126 (18.6) % Newsprint and ink 6,346 7,542 (15.9) % Other operating expenses 80,010 88,004 (9.1) % Depreciation and amortization 7,478 8,818 (15.2) % Assets (gain) loss on sales, impairments and other, net (900) 1,086 (182.9) % Restructuring costs and other 3,780 6,072 (37.7) % Total operating expenses 160,296 189,648 (15.5) % Equity in earnings of associated companies 1,194 1,050 13.7 % Operating income 12,208 6,439 89.6 % Non-operating income (expense): Interest expense (10,235) (10,292) (0.6) % Pension and OPEB related benefit (cost) and other, net 555 4,205 (86.8) % Total non-operating expense, net (9,680) (6,087) 59.0 % Income before income taxes 2,528 352 618.2 % Income tax expense 394 156 152.6 % Net income 2,134 196 988.8 % Earnings (loss) per common share: Basic 0.26 (0.05) NM Diluted 0.25 (0.05) NM References to the “2023 Quarter” refer to the three months ended June 25, 2023. Similarly, references to the “2022 Quarter” refer to the three months ended June 26, 2022. Operating Revenue Total operating revenue was $171.3 million in the 2023 Quarter, down $23.7 million, or 12.2%, compared to the prior year. 14 Advertising and marketing services revenue totaled $79.1 million in the 2023 Quarter, down 13.1% compared to the 2022 Quarter. Advertising revenue, print and digital, was adversely affected by a broader, industry-wide pull back in advertising spending. Print advertising revenues were $29.2 million in the 2023 Quarter, down 34.8% compared to the 2022 Quarter due to the soft advertising environment and a continued secular declines in demand for print advertising. Digital advertising and marketing services totaled $49.9 million in the 2023 Quarter, up 8.0% compared to the 2022 Quarter. These gains resulted from an increase in Amplified Digital ® revenue of $3.2 million or 15% compared to the 2022 Quarter. Digital advertising and marketing services represented 63.1% of the 2023 Quarter total advertising and marketing services revenue, compared to 50.8% in the same period last year. Subscription revenue totaled $77.6 million in the 2023 Quarter, down 12.9% compared to the 2022 Quarter. Decline in full access volume, consistent with historical and industry trends was partially offset by marketing efforts driving price yield on our full access subscriptions, growth in digital-only subscribers and price increases on digital subscriptions. Digital-only subscribers grew 21.0% since the 2022 Quarter and now total 606,000, and revenue from digital-only subscribers totaled $15.7 million, up 43.3% compared to the 2022 Quarter. Other revenue, which primarily consists of commercial printing revenue and digital services from BLOX Digital, decreased $0.4 million, or 2.4%, in the 2023 Quarter compared to the 2022 Quarter. Digital services revenue totaled $4.9 million in the 2023 Quarter, a 12.6% increase compared to the 2022 Quarter. Commercial printing revenue totaled $5.1 million in the 2023 Quarter, a 5.0% decrease compared to the 2022 Quarter, primarily driven by reduction in print volumes from our partners. Total Digital Revenue including digital advertising revenue, digital subscription revenue and digital services revenue totaled $70.5 million in the 2023 Quarter, an increase of 14.7% over the 2022 Quarter, and represented 41.1% of our total operating revenue in the 2023 Quarter. Equity in earnings of TNI and MNI increased $0.1 million in the 2023 Quarter. Operating Expenses Total operating expenses were $160.3 million in the 2023 Quarter, a 15.5% decrease compared to the 2022 Quarter. Cash Costs, a non-GAAP financial measure used to summarize certain operating expense (see reconciliation of non-GAAP financial measures below), were down 13.7% in the 2023 Quarter. Compensation expense decreased $14.5 million in the 2023 Quarter, or 18.6%, compared to the 2022 Quarter from reductions in headcount due to continued business transformation efforts, partially offset by investments in digital talent. Newsprint and ink costs decreased $1.2 million in the 2023 Quarter, or 15.9%, compared to the 2022 Quarter. The decrease is attributable to declines in newsprint volumes offset by higher newsprint prices. See Item 3, “Commodities”, included herein, for further discussion and analysis of the impact of newsprint on our business. Other operating expenses decreased $8.0 million in the 2023 Quarter, or 9.1%, compared to the 2022 Quarter. 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. The largest components are costs associated with printing and distribution of our printed products, digital costs of goods sold and facility expenses. The decrease is attributable to lower delivery and other print-related costs due to lower volumes of our print editions partially offset by investments to fund our digital growth strategy. Restructuring costs and other totaled $3.8 million and $6.1 million in the 2023 Quarter and 2022 Quarter, respectively. Restructuring costs and other include severance costs, litigation expenses, restructuring expenses, and advisor expenses. Restructuring costs in the 2023 Quarter are predominately severance related to our ongoing business transformation tied to our Three Pillar digital growth strategy, while restructuring costs in the 2022 quarter also include costs associated with the unsolicited offer in November 2021. Depreciation and amortization expense decreased $1.3 million, or 15.2%, in the 2023 Quarter. The decrease in both is attributable to assets becoming fully depreciated or amortized. 15 Assets gain on sales, impairments and other, was a net gain of $0.9 million in the 2023 Quarter compared to a net loss of $1.1 million in the 2022 Quarter. Assets gain on sales, impairments and other in the 2023 Quarter and in the 2022 Quarter were the result of the disposition of non-core assets, including real estate. The factors noted above resulted in an operating income of $12.2 million in the 2023 Quarter compared to operating income of $6.4 million in the 2022 Quarter. Non-operating Income and Expense Interest expense was down 1.0% at $10.2 million in the 2023 Quarter, compared to the same period last year. Our weighted average cost of debt was 9.0% at the end of the 2023 Quarter and 2022 Quarter. Other non-operating income and expense consists of benefits associated with our pension and other postretirement plans. We recorded $0.3 million periodic pension and other postretirement benefits in the 2023 Quarter compared to $3.6 million in the 2022 Quarter. Income Tax Expense (Benefit) We recorded an income tax expense of $0.4 million, or 15.6% of pretax income in the 2023 Quarter. In the 2022 Quarter, we recognized an income tax expense of $0.2 million, or 44.3% of pretax income. Net Income (Loss) and Earnings (Losses) Per Share Net income was $2.1 million and diluted earnings per share were $0.25 for the 2023 Quarter compared to net income of $0.2 million and diluted losses per share of $0.05 for the 2022 Quarter. The change reflects the various items discussed above. 16 Nine Months Ended June 25, 2023 Operating results, as reported in the Consolidated Financial Statements, are summarized below. (Thousands of Dollars, Except Per Common Share Data) June 25, 2023 June 26, 2022 Percent Change Operating revenue: Print advertising revenue 102,503 145,032 (29.3) % Digital advertising revenue 143,903 132,356 8.7 % Advertising and marketing services revenue 246,406 277,388 (11.2) % Print subscription revenue 193,799 234,962 (17.5) % Digital subscription revenue 42,039 28,953 45.2 % Subscription revenue 235,838 263,915 (10.6) % Print other revenue 30,542 32,430 (5.8) % Digital other revenue 14,343 13,600 5.5 % Other revenue 44,885 46,030 (2.5) % Total operating revenue 527,129 587,333 (10.3) % Operating expenses: Compensation 207,859 246,333 (15.6) % Newsprint and ink 20,244 22,254 (9.0) % Other operating expenses 249,353 258,665 (3.6) % Depreciation and amortization 23,097 27,445 (15.8) % Assets gain on sales, impairments and other (4,255) (11,340) (62.5) % Restructuring costs and other 8,120 19,862 (59.1) % Total operating expenses 504,418 563,219 (10.4) % Equity in earnings of associated companies 3,534 4,211 (16.1) % Operating income 26,245 28,325 (7.3) % Non-operating income (expense): Interest expense (31,144) (31,478) (1.1) % Curtailment gain — 1,027 (100.0) % Pension withdrawal cost — (2,335) (100.0) % Pension and OPEB related benefit and other, net 2,255 13,525 (83.3) % Total non-operating expense, net (28,889) (19,261) 50.0 % (Loss) income before income taxes (2,644) 9,064 (129.2) % Income tax (benefit) expense (1,237) 2,363 (152.3) % Net (loss) income (1,407) 6,701 (121.0) % Earnings (loss) per common share: Basic (0.56) 0.89 (162.8) % Diluted (0.56) 0.87 (164.3) % References to the “2023 Period” refer to the nine months ended June 25, 2023. Similarly, references to the “2022 Period” refer to the nine months ended June 26, 2022. Operating Revenue Total operating revenue was $527.1 million in the 2023 Period, down $60.2 million, or 10.3%, compared to the 2022 Period. 17 Advertising and marketing services revenue totaled $246.4 million in the 2023 Period, down 11.2% compared to the prior year. Advertising revenue, print and digital, was adversely affected by a broader, industry-wide pull back in advertising spending. Print advertising revenues were $102.5 million in the 2023 Period, down 29.3% compared to the prior year due to the soft advertising environment and a continued secular decline in demand for print advertising. Digital advertising and marketing services totaled $143.9 million in the 2023 Period, up 8.7% compared to the prior year. These gains resulted from an 24.8% increase in Amplified Digital ® revenue and an increase in advertising on our owned and operated sites. Digital advertising and marketing services represented 58.4% of the 2022 Period total advertising and marketing services revenue, compared to 47.7% in the same period last year. Subscription revenue totaled $235.8 million in the 2023 Period, down 10.6% compared to the 2022 Period. The decline in full access volume, consistent with historical and industry trends were partially offset by growth in digital only subscribers and marketing efforts driving price yield on our full access subscriptions. Digital only subscribers grew 21.0% since the 2022 Period and now total 606,000. Other revenue, which primarily consists of commercial printing revenue and digital services from BLOX Digital, decreased $1.1 million, or 2.5%, in the 2023 Period compared to the 2022 Period. Digital services revenue totaled $14.3 million in the 2023 Period, a 5.5% increase compared to the 2022 Period. Commercial printing revenue totaled $15.3 million in the 2023 Period, a 5.6% decrease compared to the 2022 Period primarily driven by reduction in print volumes from our partners. Total digital revenue including digital advertising revenue, digital subscription revenue and digital services revenue totaled $200.3 million in the 2023 Period, an increase of 14.5% over the 2022 Period, and represented 38.0% of our total operating revenue in the 2023 Period. Equity in earnings of TNI and MNI decreased $0.7 million in the 2023 Period. Operating Expenses Total operating expenses were $504.4 million in the 2023 Period, a 10.4% decrease compared to the 2022 Period. Cash Costs, a non-GAAP financial measure (see reconciliation of non-GAAP financial measures below), were $477.5 million, a 9.4% decrease compared to the 2022 Period. Compensation expense decreased $38.5 million in the 2023 Period, or 15.6%, compared to the 2022 Period attributable to reductions in FTE's due to continued business transformation efforts partially offset by investments in digital talent and increasing average compensation levels. Newsprint and ink costs decreased $2.0 million in the 2023 Period, or 9.0%, compared to the 2022 Period. The decrease is attributable to declines in newsprint volumes offset by higher newsprint prices. See Item 3, “Commodities”, included herein, for further discussion and analysis of the impact of newsprint on our business. Other operating expenses decreased $9.3 million in the 2023 Period, or 3.6%, compared to the 2022 Period. 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. The largest components are costs associated with printing and distribution of our printed products, digital cost of goods sold and facility expenses. The decrease is attributable to lower delivery and other print-related costs due to lower volumes of our print editions increases partially offset by increases to digital costs of goods sold from Amplified Digital ® growth, higher input costs due to inflation and investments to fund our digital growth strategy. Restructuring costs and other totaled $8.1 million and $19.9 million in the 2023 Period and 2022 Period, respectively. Restructuring costs and other include severance costs, litigation costs, restructuring expenses, and advisor expenses in the 2022 Period associated with an unsolicited takeover offer received in November 2021. Restructuring costs in the 2023 Period are predominately severance related to our ongoing business transformation. Depreciation and amortization expense decreased $4.3 million, or 15.8%, in the 2023 Period. The decrease in both is attributable to assets becoming fully depreciated or amortized. 18 Assets (gain) loss on sales, impairments and other, was a net gain of $4.3 million in the 2023 Period compared to a net gain of $11.3 million in the 2022 Period. The gains and losses in the 2023 Period and 2022 Period were the result of the disposition of non-core assets, including real estate. The factors noted above resulted in operating income of $26.2 million in the 2023 Period compared to $28.3 million in the 2022 Period. Non-operating Income and Expense Interest expense decreased $0.3 million, or 1.1%, to $31.1 million in the 2023 Period, compared to the same period last year. The decrease was due to a lower outstanding balance on our Term Loan. Our weighted average cost of debt was 9.0% at the end of the 2023 Period and 2022 Period. Other non-operating income and expense consists of benefits associated with our pension and other postretirement plans. We recorded $0.9 million periodic pension and other postretirement benefits in the 2023 Period compared to $11.6 million in the 2022 Period. We recognized a non-cash curtailment gain of $1.0 million in the 2022 Period as a result of freezing certain pension plans. We recognized pension withdrawal costs in the 2022 Period of $2.3 million in connection with the withdrawal from a pension plan that covered certain employees. This withdrawal liability will be paid in equal quarterly installments over the next 20 years. Income Tax Expense (Benefit) We recorded an income tax benefit of $1.2 million or 46.8% of pretax loss, in the 2023 Period. In the 2022 Period, we recognized an income tax expense of $2.4 million or 26.1% of pretax income. Net Income (Loss) and Earnings (Losses) Per Share Net loss was $1.4 million and diluted losses per share were $0.56 for the 2023 Period, compared to net income of $6.7 million and diluted earnings per share of $0.87 for the 2022 Period. The change reflects the various items discussed above. NON-GAAP FINANCIAL MEASURES We use non-GAAP financial performance measures to supplement the financial information presented on a GAAP basis. These non-GAAP financial measures should not be considered in isolation or as a substitute for the relevant GAAP measures and should be read in conjunction with information presented on a GAAP basis. In this report, we present Adjusted EBITDA and Cash Costs which are non-GAAP financial performance measures that exclude from our reported GAAP results the impact of certain items consisting primarily of restructuring charges and non-cash charges. We believe such expenses, charges and gains are not indicative of normal, ongoing operations, and their inclusion in results makes for more difficult comparisons between years and with peer group companies. In the future, however, we are likely to incur expenses, charges and gains similar to the items for which the applicable GAAP financial measures have been adjusted and to report non-GAAP financial measures excluding such items. Accordingly, exclusion of those or similar items in our non-GAAP presentations should not be interpreted as implying the items are non-recurring, infrequent, or unusual. We define our non-GAAP measures, which may not be comparable to similarly titled measures reported by other companies, as follows: Adjusted EBITDA is a non-GAAP financial performance measure that enhances financial statement users' overall understanding of the operating performance of the Company. The measure isolates unusual, infrequent, or non-cash transactions from the operating performance of the business. This allows users to easily compare operating performance among various fiscal periods and how management measures the performance of the business. This measure also provides users with a benchmark that can be used when forecasting future operating performance of the Company that excludes unusual, nonrecurring or one-time transactions. Adjusted EBITDA is also a component of the calculation used by stockholders and analysts to determine the value of our business when using the market approach, which applies a market multiple to financial metrics. It is also a 19 measure used to calculate the leverage ratio of the Company, which is a key financial ratio monitored and used by the Company and its investors. Adjusted EBITDA is defined as net income (loss), plus non-operating expenses, income tax expense, depreciation and amortization, assets loss (gain) on sales, impairments and other, restructuring costs and other, stock compensation and our 50% share of EBITDA from TNI and MNI, minus equity in earnings of TNI and MNI. Cash Costs represent a non-GAAP financial performance measure of operating expenses which are measured on an accrual basis and settled in cash. This measure is useful to investors in understanding the components of the Company’s cash-settled operating costs. Generally, the Company provides forward-looking guidance of Cash Costs, which can be used by financial statement users to assess the Company's ability to manage and control its operating cost structure. Cash Costs are defined as compensation, newsprint and ink and other operating expenses. Depreciation and amortization, assets loss (gain) on sales, impairments and other, other non-cash operating expenses and other expenses are excluded. Cash Costs also exclude restructuring costs and other, which are typically settled in cash. Adjusted EBITDA and Cash Costs are reconciled to net income (loss) and operating expenses, below, the closest comparable numbers under GAAP. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) The table below reconciles the non-GAAP financial performance measure of Adjusted EBITDA to net income, the most directly comparable GAAP measure: Three months ended Nine months ended (Thousands of Dollars) June 25, 2023 June 26, 2022 June 25, 2023 June 26, 2022 Net income (loss) 2,134 196 (1,407) 6,701 Adjusted to exclude Income tax expense (benefit) 394 156 (1,237) 2,363 Non-operating expenses, net 9,680 6,087 28,889 19,261 Equity in earnings of TNI and MNI (1,194) (1,050) (3,534) (4,211) Depreciation and amortization 7,478 8,818 23,097 27,445 Restructuring costs and other 3,780 6,072 8,120 19,862 Assets (gain) loss on sales, impairments and other, net (900) 1,086 (4,255) (11,340) Stock compensation 462 327 1,384 1,026 Add: Ownership share of TNI and MNI EBITDA (50%) 1,406 1,268 4,128 4,864 Adjusted EBITDA 23,240 22,960 55,185 65,971 20 The table below reconciles the non-GAAP financial performance measure of Cash Costs to Operating expenses, the most directly comparable GAAP measure: Three months ended Nine months ended (Thousands of Dollars) June 25, 2023 June 26, 2022 June 25, 2023 June 26, 2022 Operating expenses 160,296 189,648 504,418 563,219 Adjustments Depreciation and amortization 7,478 8,818 23,097 27,445 Assets gain on sales, impairments and other, net (900) 1,086 (4,255) (11,340) Restructuring costs and other 3,780 6,072 8,120 19,862 Cash Costs 149,938 173,672 477,456 527,252 LIQUIDITY AND CAPITAL RESOURCES Our operations have historically generated strong positive cash flow and are expected to provide sufficient liquidity, together with cash on hand, to meet our requirements, primarily operating expenses, interest expense and capital expenditures. A summary of our cash flows is included in the narrative below. Operating Activities Cash required by operating activities totaled $1.5 million in 2023 compared to cash provided by operating activities of $0.7 million in 2022, a change of $2.2 million. The change was driven by a decrease in operating results of $10.5 million, (defined as net income (loss) adjusted for non-working capital items), partially offset by an increase in working capital of $8.3 million primarily related to favorable changes to accounts payable and other accrued liabilities. Investing Activities Cash provided by investing activities totaled $5.1 million in the 2023 Period compared to cash provided by investing activities of $8.5 million in the 2022 Period. 2023 and 2022 included $7.2 million and $14.8 million, respectively, in proceeds from the sale of assets as the Company divested non-core real estate. We anticipate that funds necessary for capital expenditures, which are expected to total up to $5.0 million in 2023, and other requirements, will be available from internally generated funds. Financing Activities Cash required for financing activities totaled $2.8 million in the 2023 Period compared to $19.7 million in the 2022 Period. Debt reduction accounted for nearly all the usage of funds in both periods. We expect to make a $2.0 million principal payment in the 4th quarter related to disposition of non-core assets. Additional Information on Liquidity Our liquidity, consisting of cash on the balance sheet, totaled $17.0 million on June 25, 2023. This liquidity amount excludes any future cash flows from operations. We expect all interest and principal payments due in the next twelve months will be satisfied by existing cash and our cash flows, which will allow us to maintain an adequate level of liquidity. CHANGES IN LAWS AND REGULATIONS Wage Laws The United States and various state and local governments are considering increasing their respective minimum wage rates. Most of our employees are paid more than the current United States or state minimum wage rates. However, until changes to such rates are enacted, the impact of the changes cannot be determined. 21 FORWARD-LOOKING STATEMENTS The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. This report contains information that may be deemed forward-looking that is based largely on our current expectations, and is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those anticipated. Among such risks, trends and other uncertainties, which in some instances are beyond our control, are: • The overall impact the COVID-19 pandemic has on the Company's revenues and costs; • The long-term or permanent changes the COVID-19 pandemic may have on the publishing industry, which may result in permanent revenue reductions and other risks and uncertainties; • We may be required to indemnify the previous owners of the BH Media or Buffalo News for unknown legal and other matters that may arise; • Our ability to manage declining print revenue and circulation subscribers; • The impact and duration of adverse conditions in certain aspects of the economy affecting our business; • Changes in advertising and subscription demand; • Changes in technology that impact our ability to deliver digital advertising; • Potential changes in newsprint, other commodities and energy costs; • Interest rates; • Labor costs; • Significant cyber security breaches or failure of our information technology systems; • Our ability to achieve planned expense reductions and realize the expected benefit of our acquisitions; • Our ability to maintain employee and customer relationships; • Our ability to manage increased capital costs; • Our ability to maintain our listing status on NASDAQ; • Competition; and • Other risks detailed from time to time in our publicly filed documents. Any statements that are not statements of historical fact (including statements containing the words “may”, “will”, “would”, “could”, “believes”, “expects”, “anticipates”, “intends”, “plans”, “projects”, “considers” and similar expressions) generally should be considered forward-looking statements. Statements regarding our plans, strategies, prospects and expectations regarding our business and industry, including statements regarding the impacts that the COVID-19 pandemic and our responses thereto may have on our future operations, are forward-looking statements. They reflect our expectations, are not guarantees of performance and speak only as of the date the statement is made. Readers are cautioned not to place undue reliance on such forward-looking statements, which are made as of the date of this report. We do not undertake to publicly update or revise our forward-looking statements, except as required by law.