What changed in this filing

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Item 1. Financial Statements

2025-05-09 compared with 2025-02-07 · 132 added, 85 removed, 270 unchanged (45% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

(Thousands of Dollars) December 29,

(Thousands of Dollars) March 30,

2025 September 29,

24 unchanged sentences

The accompanying Notes are an integral part of the Consolidated Financial Statements.

(Thousands of Dollars and Shares, Except Per Share Data) December 29,

(Thousands of Dollars and Shares, Except Per Share Data) March 30,

2025 September 29,

2 unchanged sentences

Current portion of lease liabilities 7,668 8,139

Current maturities of long-term debt — —

Accounts payable 44,313 36,290

10 unchanged sentences

Total liabilities 660,029 656,505

Commitments and Contingent Liabilities (Note 9)

Stockholders' equity:

Stockholders' equity (deficit):

Serial convertible preferred stock, no par value;

3 unchanged sentences

issued and outstanding:

December 29, 2024;

March 30, 2025;

6,220 shares;

15 unchanged sentences

LEE ENTERPRISES, INCORPORATED

CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND COMPREHENSIVE (LOSS) INCOME

Three months ended

(Thousands of Dollars, Except Per Common Share Data) December 29,

2024 December 24,

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

Three months ended Six months ended

(Thousands of Dollars, Except Per Common Share Data) March 30,

2025 March 24,

2024 March 30,

2025 March 24,

Operating revenue:

8 unchanged sentences

Depreciation and amortization 5,171 7,293 11,436 14,588

Assets gain on sales, impairments and other, net ( 929 ) ( 1,469 )

Assets loss (gain) on sales, impairments and other, net 126 7,617 ( 803 ) 6,148

Restructuring costs and other 6,516 4,139 11,666 8,404

7 unchanged sentences

Total non-operating expense, net ( 9,292 ) ( 9,921 ) ( 18,921 ) ( 16,273 )

(Loss) income before income taxes ( 12,981 ) 1,481

Income tax expense 3,243 248

Net (loss) income ( 16,224 ) 1,233

Loss before income taxes ( 13,795 ) ( 14,473 ) ( 26,776 ) ( 12,992 )

Income tax (benefit) expense ( 1,780 ) ( 2,837 ) 1,463 ( 2,589 )

Net loss ( 12,015 ) ( 11,636 ) ( 28,239 ) ( 10,403 )

Net income attributable to non-controlling interests ( 496 ) ( 543 ) ( 1,020 ) ( 1,088 )

(Loss) income attributable to Lee Enterprises, Incorporated ( 16,748 ) 688

Loss attributable to Lee Enterprises, Incorporated ( 12,511 ) ( 12,179 ) ( 29,259 ) ( 11,491 )

Other comprehensive loss, net of income taxes ( 115 ) ( 148 ) ( 230 ) ( 2,462 )

Comprehensive loss attributable to Lee Enterprises, Incorporated ( 12,626 ) ( 12,327 ) ( 29,489 ) ( 13,953 )

(Loss) earnings per common share:

Loss per common share:

( 2.07 ) ( 2.06 ) ( 4.87 ) ( 1.94 )

1 unchanged sentence

The accompanying Notes are an integral part of the Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF DEFICIT

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Thousands of Dollars) Accumulated

12 unchanged sentences

December 29, 2024 ( 309,089 ) 62 262,569 19,805 2,476 ( 24,177 )

Loss attributable to Lee Enterprises, Incorporated ( 12,511 ) — — — 496 ( 12,015 )

Stock compensation — — 358 — — 358

Other comprehensive loss — — — ( 152 ) — ( 152 )

Deferred income taxes, net — — — 37 — 37

Distributions to minority owners — — — — ( 149 ) ( 149 )

March 30, 2025 ( 321,600 ) 62 262,927 19,690 2,823 ( 36,098 )

(Thousands of Dollars) Accumulated

12 unchanged sentences

December 24, 2023 ( 265,808 ) 61 260,950 24,529 2,458 22,190

Loss attributable to Lee Enterprises, Incorporated ( 12,179 ) — — — 543 ( 11,636 )

Stock compensation — — 501 — — 501

Other comprehensive loss — — — ( 192 ) — ( 192 )

Deferred income taxes, net — — — 44 — 44

Distributions to minority owners — — — — ( 486 ) ( 486 )

March 24, 2024 ( 277,987 ) 61 261,451 24,381 2,515 10,421

The accompanying Notes are an integral part of the Consolidated Financial Statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended

(Thousands of Dollars) December 29,

2024 December 24,

Cash provided by (required for) operating activities:

Net (loss) income ( 16,224 ) 1,233

Six months ended

(Thousands of Dollars) March 30,

2025 March 24,

Cash (required for) provided by operating activities:

Net loss ( 28,239 ) ( 10,403 )

Adjustments to reconcile net loss to net cash (required for) provided by operating activities:

3 unchanged sentences

Stock compensation expense 788 715

Assets gain on sales, impairments and other, net ( 929 ) ( 1,469 )

Assets (loss) gain on sales, impairments and other, net ( 803 ) 6,148

Earnings, net of distributions, deemed returns on investment of TNI and MNI 247 ( 26 )

Non-cash interest 6,808 —

Deferred income taxes ( 290 ) ( 577 )

1 unchanged sentence

Changes in operating assets and liabilities:

Increase in receivables ( 2,682 ) ( 3,040 )

Increase in inventories and other ( 406 ) ( 66 )

(Decrease) increase in accounts payable and other accrued liabilities 4,197 64

(Increase) decrease in receivables ( 8,599 ) 3,022

(Increase) decrease in inventories and other 26 ( 110 )

Increase (decrease) in accounts payable and other accrued liabilities 6,299 ( 506 )

Decrease in pension and other postretirement and postemployment benefit obligations ( 2,035 ) ( 1,195 )

7 unchanged sentences

Net cash provided by investing activities 3,193 155

Cash required for financing activities:

Cash provided by (required for) financing activities:

Principal payments on long-term debt — ( 2,097 )

Common stock transactions, net — 221

Net cash required for financing activities — ( 1,359 )

Net cash provided by (required for) financing activities — ( 1,876 )

Net (decrease) increase in cash and cash equivalents ( 4,934 ) 1,559

7 unchanged sentences

The accompanying unaudited, interim, Consolidated Financial Statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for quarterly reports.

In the opinion of management, these financial statements contain all adjustments (consisting of only normal recurring items) necessary to present fairly the financial position of Lee Enterprises, Incorporated and its subsidiaries (the “Company”) as of December 29, 2024, and our results of operations and cash flows for the periods presented.

In the opinion of management, these financial statements contain all adjustments (consisting of only normal recurring items) necessary to present fairly the financial position of Lee Enterprises, Incorporated and its subsidiaries (the “Company”) as of March 30, 2025, and our results of operations and cash flows for the periods presented.

The Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company's 2024 Annual Report on Form 10-K.

2 unchanged sentences

Fiscal year 2025 includes 52 weeks of operations and 2024 included 53 weeks of operations.

Because of seasonal and other factors, the results of operations for the three months ended December 29, 2024, are not necessarily indicative of the results to be expected for the full year.

Because of seasonal and other factors, the results of operations for the three and six months ended March 30, 2025, are not necessarily indicative of the results to be expected for the full year.

The Consolidated Financial Statements include our accounts and those of our wholly owned subsidiaries, as well as our 82.5 % interest in INN Partners, L.C.

2 unchanged sentences

("MNI") are accounted for using the equity method and are reported at cost, plus our share of undistributed earnings since acquisition less, for TNI, amortization of intangible assets.

Cybersecurity Incident

On February 3, 2025, the Company experienced a systems outage caused by a cybersecurity attack by threat actors who unlawfully accessed the Company's network, encrypted critical applications, and exfiltrated certain files (the "Cyber Incident").

Upon discovery, the Company promptly activated its incident response plan, engaging both internal teams and third-party cybersecurity experts.

In coordination with legal counsel, the Company notified the relevant law enforcement about the matter, and will notify relevant federal and state regulatory bodies, and applicable consumer protection agencies, as necessary.

During the three months ended March 30, 2025, the Company incurred $ 1,900,000 of expenses related to the Cyber Incident.

These expenses are recognized in "Restructuring and Other" in the Consolidated Statements of Loss and Comprehensive Loss.

The Cyber Incident remains under legal and forensic investigation, including evaluation of the extent and potential risk related to unauthorized access to sensitive data.

The Company maintains cyber insurance coverage to limit its exposure to losses such as those related to the Cyber Incident, subject to a $ 500,000 deductible.

Coverage includes, among other things, the cost of recovery and restoration as well as business interruption.

The Company has submitted claims to its insurers for reimbursement of certain costs, expenses, and losses stemming from the Cyber Incident.

To date, no reimbursements have been received, however the claims processing is ongoing as of the date of this filing.

The following table presents our revenue disaggregated by source:

Three months Ended

(Thousands of Dollars) December 29,

2024 December 24,

Three months Ended Six months Ended

(Thousands of Dollars) March 30,

2025 March 24,

2024 March 30,

2025 March 24,

Operating revenue:

Print advertising revenue 16,532 18,742 36,393 43,177

Digital advertising and marketing services revenue 46,729 46,452

Digital advertising revenue 43,941 45,392 90,670 91,844

Advertising and marketing services revenue 60,473 64,134 127,063 135,021

10 unchanged sentences

The Company’s primary source of contract liabilities is unearned revenue from subscriptions paid in advance of the service provided.

The Company expects to recognize the revenue related to unsatisfied performance obligations over the next twelve months in accordance with the terms

of the subscriptions and other contracts with customers.

Revenue recognized in the three months ended December 29, 2024, that was included in the contract liability as of September 29, 2024, was $ 19.4 million.

Accounts receivable, excluding allowance for credit losses was $ 65.4 million and $ 67.2 million as of December 29, 2024, and September 29, 2024 , respectively.

Allowance for credit losses was $ 5.9 million and $ 6.5 million as of December 29, 2024, and September 29, 2024 , respectively.

The Company expects to recognize the revenue related to unsatisfied performance obligations over the next twelve months in accordance with the terms of the subscriptions and other contracts with customers.

Revenue recognized in the six months ended March 30, 2025, that was included in the contract liability as of September 29, 2024, was $ 24.8 million.

Accounts receivable, excluding allowance for credit losses was $ 68.2 million and $ 67.2 million as of March 30, 2025, and September 29, 2024 , respectively.

Allowance for credit losses was $ 5.9 million and $ 6.5 million as of March 30, 2025, and September 29, 2024 , respectively.

Valuation and qualifying account information related to the allowance for credit losses related to continuing operations is as follows:

(Thousands of Dollars) December 29,

(Thousands of Dollars) March 30,

2025 September 29,

Balance, beginning of year 6,514 5,260

Balance, beginning of period 6,514 5,260

Additions charged to expense 6,590 13,633

Deductions from reserves ( 7,241 ) ( 12,379 )

Balance, end of year 5,865 6,514

Balance, end of period 5,863 6,514

Sales commissions are expensed as incurred as the associated contractual periods are one year or less.

These costs are recorded within compensation.

These costs are recorded within "Compensation" on the Consolidated Statements of Loss and Comprehensive Loss.

Most of our contracts have original expected lengths of one year or less and revenue is earned at a rate and amount that corresponds directly with the value to the customer.

4 unchanged sentences

Summarized results of TNI are as follows:

Three months ended

(Thousands of Dollars) December 29,

2024 December 24,

Three months ended Six months ended

(Thousands of Dollars) March 30,

2025 March 24,

2024 March 30,

2025 March 24,

Operating revenue 5,756 7,360 12,289 14,351

3 unchanged sentences

Equity in earnings of TNI 909 955 1,534 2,110

TNI makes periodic distributions of its earnings and for the three months ended December 29, 2024, and December 24, 2023, we received $ 0.5 million and $ 1.2 million in distributions, respectively.

TNI makes periodic distributions of its earnings and for the three months ended March 30, 2025, and March 24, 2024, we received $ 1.2 million and $ 0.9 million in distributions, respectively.

In the six months ended March 30, 2025 and March 24, 2024, we received $ 1.7 million and $ 2.1 million in distributions, respectively.

Madison Newspapers, Inc.

We have a 50 % ownership interest in MNI, which publishes daily and Sunday newspapers, and other publications in Madison, Wisconsin, and other Wisconsin locations, and operates their related digital

We have a 50 % ownership interest in MNI, which publishes daily and Sunday newspapers, and other publications in Madison, Wisconsin, and other Wisconsin locations, and operates their related digital platforms.

Net income or loss of MNI (after income taxes) is allocated equally to us and The Capital Times Company (“TCT”).

1 unchanged sentence

Summarized results of MNI are as follows:

Three months ended

(Thousands of Dollars) December 29,

2024 December 24,

Three months ended Six months ended

(Thousands of Dollars) March 30,

2025 March 24,

2024 March 30,

2025 March 24,

Operating revenue 9,079 9,822 18,838 20,424

5 unchanged sentences

Equity in earnings of MNI 247 251 744 637

MNI makes periodic distributions of its earnings and in the three months ended December 29, 2024 and December 24, 2023, we received $ 0.9 million and $ 0.4 million in distributions, respectively.

MNI makes periodic distributions of its earnings and in the three months ended March 30, 2025 and March 24, 2024, we received $ 0.0 million and $ 0.2 million in distributions, respectively.

months ended March 30, 2025 and March 24, 2024, we received distributions of $ 0.9 million and $ 0.6 million, respectively.

4 GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and identified intangible assets consist of the following:

(Thousands of Dollars) December 29,

(Thousands of Dollars) March 30,

2025 September 29,

10 unchanged sentences

The weighted average amortization period for amortizable assets is approximately ten years .

During the three months ended December 29, 2024, the Company sold certain non-core operations.

During the six months ended March 30, 2025, the Company sold non-core operations.

Goodwill was allocated to these operations, which totaled $ 4.2 million.

The Company has debt consisting of a single 25 -year term loan with BH Finance LLC, with an aggregate principal balance of $ 453.5 million at a 9 % annual fixed rate and maturing on March 16, 2045 (referred to herein as “Credit Agreement” and “Term Loan”).

On December 29, 2024, the fair value was $ 383.3 million, representing a Level 2 fair value measurement, which are fair values estimated using significant other observable inputs for similar instruments.

During the three months ended December 29, 2024, we made no principal debt payments.

On March 30, 2025, the fair value was $ 372.4 million, representing a Level 2 fair value measurement, which are fair values estimated using significant other observable inputs.

During the six months ended March 30, 2025, net cash proceeds from asset sales totaled $ 6.1 million.

The Company made zero principal debt payments as a result of non-core asset sales, and the proceeds remain payable to BH Finance.

Future payments are contingent on the Company's ability to generate future excess cash flow, as defined in the Credit Agreement.

As of December 29, 2024, $ — million was recognized as current maturities of long-term debt in the Consolidated Balance Sheets due to non-core asset monetization.

As of March 30, 2025, there was no excess cash flow payment due.

In an effort to provide short-term liquidity to fund the Cyber Incident's remediation efforts and other operations, in February 2025, BH Finance LLC waived the current payment of the interest and BH Media Group, Inc.

waived the lease payment due March 1, 2025.

A similar waiver was provided for payments made in April and May 2025.

As of March 30, 2025, the waivers increased the outstanding balance by $ 7.5 million and is treated as non-cash activity within the statement of cash flows.

These waivers were treated as a modification to the existing credit agreement.

6 PENSION, POSTRETIREMENT AND POSTEMPLOYMENT DEFINED BENEFIT PLANS

1 unchanged sentence

Additionally, we provide retiree medical and life insurance benefits under postretirement plans at several of our operating locations.

Through December 29, 2024, our liability and related expense for benefits under the plans are recorded over the service period of employees based upon annual actuarial calculations.

Through March 30, 2025, our liability and related expense for benefits under the plans are recorded over the service period of employees based upon annual actuarial calculations.

The net periodic pension and postretirement cost (benefit) components for our plans are as follows:

PENSION PLANS Three months ended

(Thousands of Dollars) December 29,

2024 December 24,

PENSION PLANS Three months ended Six months ended

(Thousands of Dollars) March 30,

2025 March 24,

2024 March 30,

2025 March 24,

Service cost for benefits earned during the period 1 1 2 2

5 unchanged sentences

Net periodic pension (benefit) cost ( 72 ) 155 ( 143 ) ( 1,981 )

POSTRETIREMENT MEDICAL PLANS Three months ended

(Thousands of Dollars) December 29,

2024 December 24,

POSTRETIREMENT MEDICAL PLANS Three months ended Six months ended

(Thousands of Dollars) March 30,

2025 March 24,

2024 March 30,

2025 March 24,

Service cost for benefits earned during the period 1 13 2 25

5 unchanged sentences

Net periodic postretirement benefit ( 664 ) ( 560 ) ( 1,328 ) ( 2,305 )

In the three months ended December 29, 2024 and December 24, 2023, we made no contributions to our pension plans.

In the six months ended March 30, 2025 and March 24, 2024, we made no contributions to our pension plans.

W e have no required contributions to our pension plans for 2025.

During the six months ended March 24, 2024, the Company offered a voluntary lump sum payment of future benefits to terminated vested participants in the defined benefit pension plan.

The offer was accepted by 522 participants, representing a $ 22.6 million settlement of related pension plan liability.

The Company recognized a non-cash settlement gain of $ 2.4 million, which is reflected within "Curtailment/Settlement gains" on the Consolidated Statements of Loss and Comprehensive Loss.

Pension plan assets and liabilities were reduced by $ 22.6 million.

Multiemployer Pension Plans

In prior periods, the Company effectuated withdrawals from several multiemployer plans.

As of December 29, 2024 and September 29, 2024, we had $ 23.3 million and $ 23.6 million of accrued withdrawal liabilities.

As of March 30, 2025 and September 29, 2024, we had $ 23.1 million and $ 23.6 million of accrued withdrawal liabilities.

The liabilities reflect the estimated value of payments to the fund, payable over 20 -years.

7 INCOME TAXES

We recorded an income tax expense of $ 3.2 million related to loss before taxes of $ 13.0 million for the three months ended December 29, 2024.

We recorded an income tax expense of $ 0.2 million related to income before taxes of $ 1.5 million for the three months ended December 24, 2023.

The effective

income tax rate for the three months ended December 29, 2024, was 25.0 %.

The effective income tax rate for the three months ended December 24, 2023, was 16.7 %.

We recorded an income tax benefit of $ 1.8 million related to loss before taxes of $ 13.8 million for the three months ended March 30, 2025, and an income tax expense of $ 1.5 million related to loss before income taxes of $ 26.8 million for the six months ended March 30, 2025.

We recorded an income tax benefit of $ 2.8 million related to loss before taxes of $ 14.5 million for the three months ended March 24, 2024, and an income tax benefit of $ 2.6 million related to a loss before income taxes of $ 13.0 million for the six months ended March 24, 2024.

The effective income tax rate for the three and six months ended March 30, 2025, was 12.9 % and ( 5.5 )%, respectively.

The effective income tax rate for the three and six months ended March 24, 2024, were 19.6 % and 19.9 %, respectively.

The primary differences between these rates and the U.S.

federal statutory rate of 21% are because of state taxes, non-deductible expenses, changes in valuation allowance, and adjustments to reserves for uncertain tax positions, including any related interest.

federal statutory rate of 21% are because of state taxes, non-deductible expenses, increase in valuation allowance, and adjustments to reserves for uncertain tax positions, including any related interest.

We file a consolidated federal tax return, as well as combined and separate tax returns in approximately 27 state and local jurisdictions.

1 unchanged sentence

Our income tax returns have generally been audited or closed to audit through 2016.

8 (LOSS) EARNINGS PER COMMON SHARE

The following table sets forth the computation of basic and diluted (loss) earnings per common share:

Three months ended

(Thousands of Dollars and Shares, Except Per Share Data) December 29,

2024 December 24,

(Loss) income attributable to Lee Enterprises, Incorporated:

8 LOSS PER COMMON SHARE

The following table sets forth the computation of basic and diluted earnings per common share:

Three months ended Six months ended

(Thousands of Dollars and Shares, Except Per Share Data) March 30,

2025 March 24,

2024 March 30,

2025 March 24,

Loss attributable to Lee Enterprises, Incorporated:

( 12,511 ) ( 12,179 ) ( 29,259 ) ( 11,491 )

4 unchanged sentences

Diluted average common shares 6,032 5,910 6,009 5,910

(Loss) earnings per common share:

Loss per common share:

Basic ( 2.07 ) ( 2.06 ) ( 4.87 ) ( 1.94 )

Diluted ( 2.07 ) ( 2.06 ) ( 4.87 ) ( 1.94 )

For the three months ended December 29, 2024 and December 24, 2023 we had no and 128,019 weighted average shares, respectively, not considered in the computation of diluted earnings per share because the Company recorded net losses.

For the three months ended March 30, 2025 and March 24, 2024, zero and 66,249 shares, respectively, were not considered in the computation of diluted earnings per common share because their inclusion would result in an anti-dilutive effect on per share amounts.

For the six months ended March 30, 2025 and March 24, 2024, zero and 66,249 shares, respectively, were not considered in the computation of diluted earnings per common share because their inclusion would result in an anti-dilutive effect on per share amounts.

Rights Agreement

4 unchanged sentences

In the event the Rights become exercisable, each holder of a Right, other than the triggering person(s), will be entitled to purchase additional shares of our Common Stock at a 50 % discount or the Company may exchange each Right held by such holders for one share of our Common Stock.

The Rights Agreement will continue in effect until March 27, 2025, or unless earlier redeemed or terminated by the Company, as provided in the Rights Agreement.

The Rights Agreement was to continue in effect until March 27, 2025, or unless earlier redeemed or terminated by the Company, as provided in the Rights Agreement.

On March 27, 2025, the Board of Directors extended the termination date of the Rights Agreement to March 27, 2026.

The Rights have no voting or dividend privileges, and, unless and until they become exercisable, have no dilutive effect on the earnings of the Company.

The Rights Agreement applies equally to all current and future stockholders and is not intended to deter offers or preclude our Board of Directors from considering acquisition proposals that are fair and

otherwise in the best interest of our stockholders.

However, the overall effect of the Rights Agreement may render it more difficult or discourage a merger, tender offer, or other business combination involving us that is not supported by our Board of Directors.

3 unchanged sentences

Insurance coverage mitigates potential loss for certain of these matters.

While we are unable to predict the ultimate outcome of these legal actions except for the case described below, which amounts are recognized in "Prepaids and Other" and "Compensation and other accrued liabilities" on the Consolidated Balance Sheets, it is our opinion that the disposition of these matters will not have a material adverse effect on our Consolidated Financial Statements, taken as a whole.

While we are unable to predict the ultimate outcome of these legal actions, it is our opinion that the disposition of these matters will not have a material adverse effect on our Consolidated Financial Statements, taken as a whole.

The Company was named as a defendant by a group of Plaintiffs acting on behalf of a proposed class of digital subscribers in a lawsuit in 2022.

2 unchanged sentences

The entire settlement amount will be paid by the Company’s insurance carriers.

The settlement liability and insurance receivable are recorded within “Compensation and other accrued liabilities” and “Prepaids and other” on the Consolidated Balance Sheets as of December 29, 2024 and September 29, 2024, respectively.

The settlement liability and insurance receivable are recorded within “Compensation and other accrued liabilities” and “Prepaids and other” on the Consolidated Balance Sheets as of March 30, 2025 and September 29, 2024, respectively .

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 1. Financial Statements