LEE ENTERPRISES, Inc 10-Q

Item 1. Financial Statements LEE ENTERPRISES, INCORPORATED CONSOLIDATED BALANCE SHEETS (Unaudited) (Thousands of Dollars) March 30, 2025 September 29, 2024 ASSETS Current assets: Cash and cash equivalents 4,664 9,598 Accounts receivable, net 62,340 60,648 Inventories 5,618 5,643 Prepaid and other current assets 20,220 21,884 Total current assets 92,842 97,773 Investments: Associated companies 27,694 27,941 Other 5,963 6,042 Total investments 33,657 33,983 Property and equipment: Land and improvements 6,157 6,420 Buildings and improvements 68,627 70,152 Equipment 191,850 196,312 Construction in process 8,535 5,625 275,169 278,509 Less accumulated depreciation 233,498 234,137 Property and equipment, net 41,671 44,372 Operating lease right-of-use assets 29,604 34,882 Goodwill 323,858 328,040 Other intangible assets, net 63,131 70,075 Pension plan assets, net 5,246 4,663 Medical plan assets, net 24,465 23,300 Other 9,457 12,083 Total assets 623,931 649,171 The accompanying Notes are an integral part of the Consolidated Financial Statements. 2 Table of Contents (Unaudited) (Thousands of Dollars and Shares, Except Per Share Data) March 30, 2025 September 29, 2024 LIABILITIES AND EQUITY Current liabilities: Current portion of lease liabilities 7,668 8,139 Accounts payable 44,313 36,290 Compensation and other accrued liabilities 35,669 39,170 Unearned revenue 28,675 31,755 Total current liabilities 116,325 115,354 Long-term debt, net of current maturities 453,451 445,943 Operating lease liabilities 24,683 29,769 Pension obligations 544 561 Postretirement and postemployment benefit obligations 7,552 7,520 Deferred income taxes 28,040 28,403 Income taxes payable 4,281 3,456 Withdrawal liabilities and other 25,153 25,499 Total liabilities 660,029 656,505 Equity: Stockholders' equity (deficit): Serial convertible preferred stock, no par value; authorized 500 shares; none issued — — Common Stock, $ 0.01 par value; authorized 12,000 shares; issued and outstanding: 62 62 March 30, 2025; 6,220 shares; $ 0.01 par value September 29, 2024; 6,190 shares; $ 0.01 par value Class B Common Stock, $ 2 par value; authorized 3,000 shares; none issued — — Additional paid-in capital 262,927 262,470 Accumulated deficit ( 321,600 ) ( 292,341 ) Accumulated other comprehensive income 19,690 19,920 Total Lee Enterprises, Inc. Stockholders' deficit ( 38,921 ) ( 9,889 ) Non-controlling interests 2,823 2,555 Total deficit ( 36,098 ) ( 7,334 ) Total liabilities and deficit 623,931 649,171 The accompanying Notes are an integral part of the Consolidated Financial Statements. 3 Table of Contents LEE ENTERPRISES, INCORPORATED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (Unaudited) Three months ended Six months ended (Thousands of Dollars, Except Per Common Share Data) March 30, 2025 March 24, 2024 March 30, 2025 March 24, 2024 Operating revenue: Advertising and marketing services 60,473 64,134 127,063 135,021 Subscription 64,868 69,227 129,865 140,566 Other 12,039 13,189 25,014 26,641 Total operating revenue 137,380 146,550 281,942 302,228 Operating expenses: Compensation 56,659 56,803 116,913 116,479 Newsprint and ink 3,111 4,162 6,727 9,005 Other operating expenses 71,455 72,294 146,135 147,070 Depreciation and amortization 5,171 7,293 11,436 14,588 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 Total operating expenses 143,038 152,308 292,074 301,694 Equity in earnings of associated companies 1,155 1,206 2,277 2,747 Operating (loss) income ( 4,503 ) ( 4,552 ) ( 7,855 ) 3,281 Non-operating (expense) income: Interest expense ( 9,950 ) ( 10,214 ) ( 20,232 ) ( 20,345 ) Pension and OPEB related benefit and other, net 658 293 1,311 479 Curtailment/Settlement gains — — — 3,593 Total non-operating expense, net ( 9,292 ) ( 9,921 ) ( 18,921 ) ( 16,273 ) 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 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 per common share: Basic: ( 2.07 ) ( 2.06 ) ( 4.87 ) ( 1.94 ) Diluted: ( 2.07 ) ( 2.06 ) ( 4.87 ) ( 1.94 ) The accompanying Notes are an integral part of the Consolidated Financial Statements. 4 Table of Contents CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) (Thousands of Dollars) Accumulated Deficit Common Stock Additional paid-in capital Accumulated Other Comprehensive Income Non-Controlling Interests: Total September 30, 2024 ( 292,341 ) 62 262,470 19,920 2,555 ( 7,334 ) Shares redeemed — — ( 331 ) — — ( 331 ) Loss attributable to Lee Enterprises, Incorporated ( 16,748 ) — — — 524 ( 16,224 ) Stock compensation — — 430 — — 430 Other comprehensive loss — — — ( 151 ) — ( 151 ) Deferred income taxes, net — — — 36 — 36 Distributions to minority owners — — — — ( 603 ) ( 603 ) December 29, 2024 ( 309,089 ) 62 262,569 19,805 2,476 ( 24,177 ) 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 ) 5 Table of Contents (Thousands of Dollars) Accumulated Deficit Common Stock Additional paid-in capital Accumulated Other Comprehensive Income Non-Controlling Interests: Total September 25, 2023 ( 266,496 ) 61 260,832 26,843 2,466 23,706 Shares redeemed — — ( 96 ) — — ( 96 ) Income attributable to Lee Enterprises, Incorporated 688 — — — 545 1,233 Stock compensation — — 214 — — 214 Other comprehensive loss — — — ( 2,286 ) — ( 2,286 ) Deferred income taxes, net — — — ( 28 ) — ( 28 ) Distributions to minority owners — — — — ( 553 ) ( 553 ) 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. 6 Table of Contents LEE ENTERPRISES, INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six months ended (Thousands of Dollars) March 30, 2025 March 24, 2024 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: Depreciation and amortization 11,436 14,588 Bad debt expense 6,590 6,579 Curtailment/Settlement gain — ( 3,593 ) Stock compensation expense 788 715 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 ) Other, net ( 752 ) ( 1,036 ) Changes in operating assets and liabilities: (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 ) Change in income taxes payable 824 ( 8,944 ) Other ( 427 ) ( 1,382 ) Net cash (required for) provided by operating activities ( 8,127 ) 3,280 Cash provided by investing activities: Purchases of property and equipment ( 2,923 ) ( 2,978 ) Proceeds from sales of assets 6,116 3,155 Other, net — ( 22 ) Net cash provided by investing activities 3,193 155 Cash provided by (required for) financing activities: Principal payments on long-term debt — ( 2,097 ) Common stock transactions, net — 221 Net cash provided by (required for) financing activities — ( 1,876 ) Net (decrease) increase in cash and cash equivalents ( 4,934 ) 1,559 Cash and cash equivalents: Beginning of period 9,598 14,548 End of period 4,664 16,107 The accompanying Notes are an integral part of the Consolidated Financial Statements. 7 Table of Contents LEE ENTERPRISES, INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1 BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited, interim, Consolidated Financial Statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for quarterly reports. In the opinion of management, these financial statements contain all adjustments (consisting of only normal recurring items) necessary to present fairly the financial position of Lee Enterprises, Incorporated and its subsidiaries (the “Company”) as of 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. The Company's fiscal year ends on the last Sunday in September. Fiscal year 2025 ends September 28, 2025, and fiscal year 2024 ended September 29, 2024. 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 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. (“BLOX Digital" formerly "TownNews”). Our 50 % interest in TNI Partners ("TNI") and our 50 % interest in Madison Newspapers, Inc. ("MNI") are accounted for using the equity method and are reported at cost, plus our share of undistributed earnings since acquisition less, for TNI, amortization of intangible assets. 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. 8 Table of Contents 2 REVENUE The following table presents our revenue disaggregated by source: Three months Ended Six months Ended (Thousands of Dollars) March 30, 2025 March 24, 2024 March 30, 2025 March 24, 2024 Operating revenue: Print advertising revenue 16,532 18,742 36,393 43,177 Digital advertising revenue 43,941 45,392 90,670 91,844 Advertising and marketing services revenue 60,473 64,134 127,063 135,021 Print subscription revenue 41,079 48,966 84,511 100,838 Digital subscription revenue 23,789 20,261 45,354 39,728 Subscription revenue 64,868 69,227 129,865 140,566 Print other revenue 7,213 8,069 15,101 16,561 Digital other revenue 4,826 5,120 9,913 10,080 Other revenue 12,039 13,189 25,014 26,641 Total operating revenue 137,380 146,550 281,942 302,228 Recognition principles: Revenue is recognized when a performance obligation is satisfied by the transfer of control of the contracted goods or services to our customers, in an amount that reflects the consideration we expect to receive in exchange for those goods or services. Contract Liabilities: 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 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) March 30, 2025 September 29, 2024 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 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" 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. 9 Table of Contents 3 INVESTMENTS IN ASSOCIATED COMPANIES TNI Partners In Tucson, Arizona, TNI, acting as agent for our subsidiary, Star Publishing Company (“Star Publishing”), and Gannett Co., Inc.'s subsidiary Citizen Publishing Company (“Citizen”), is responsible for printing, delivery, advertising, and subscription activities of the Arizona Daily Star as well as the related digital platforms and specialty publications. TNI collects all receipts and income and pays substantially all operating expenses incident to the partnership's operations and publication of the newspaper and other media. Income or loss of TNI (before income taxes) is allocated equally to Star Publishing and Citizen. Summarized results of TNI are as follows: Three months ended Six months ended (Thousands of Dollars) March 30, 2025 March 24, 2024 March 30, 2025 March 24, 2024 Operating revenue 5,756 7,360 12,289 14,351 Operating expenses 4,080 5,450 9,286 10,131 Operating income 1,676 1,910 3,003 4,220 Net income 1,817 1,910 3,067 4,220 Equity in earnings of TNI 909 955 1,534 2,110 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 platforms. Net income or loss of MNI (after income taxes) is allocated equally to us and The Capital Times Company (“TCT”). MNI conducts its business under the trade name Capital Newspapers. Summarized results of MNI are as follows: Three months ended Six months ended (Thousands of Dollars) March 30, 2025 March 24, 2024 March 30, 2025 March 24, 2024 Operating revenue 9,079 9,822 18,838 20,424 Operating expenses, excluding restructuring costs, depreciation and amortization 7,013 7,636 14,468 15,446 Restructuring costs 23 48 23 109 Depreciation and amortization 90 120 180 240 Operating income 1,953 2,018 4,167 4,629 Net income 493 502 1,487 1,274 Equity in earnings of MNI 247 251 744 637 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. In the six 10 Table of Contents 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) March 30, 2025 September 29, 2024 Goodwill, beginning of period 328,040 329,504 Allocated to sold operations ( 4,182 ) ( 1,464 ) Goodwill, end of period 323,858 328,040 Non-amortized intangible assets: Mastheads 10,917 10,917 Amortizable intangible assets: Customer and newspaper subscriber lists 262,146 262,242 Less accumulated amortization ( 209,932 ) ( 203,084 ) 52,214 59,158 Total intangibles, net 386,989 398,115 The weighted average amortization period for amortizable assets is approximately ten years . 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. 5 DEBT 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 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 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 We have one defined benefit pension plan that covers certain employees, including plans established under collective bargaining agreements. Additionally, we provide retiree medical and life insurance benefits under postretirement plans at several of our operating locations. 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. 11 Table of Contents The net periodic pension and postretirement cost (benefit) components for our plans are as follows: PENSION PLANS Three months ended Six months ended (Thousands of Dollars) March 30, 2025 March 24, 2024 March 30, 2025 March 24, 2024 Service cost for benefits earned during the period 1 1 2 2 Interest cost on projected benefit obligation 2,034 2,253 4,068 4,768 Expected return on plan assets ( 2,319 ) ( 2,310 ) ( 4,637 ) ( 4,763 ) Amortization of net (gain) loss — ( 1 ) — ( 3 ) Amortization of prior service benefit 212 212 424 424 Settlement gain — — — ( 2,409 ) Net periodic pension (benefit) cost ( 72 ) 155 ( 143 ) ( 1,981 ) POSTRETIREMENT MEDICAL PLANS Three months ended Six months ended (Thousands of Dollars) March 30, 2025 March 24, 2024 March 30, 2025 March 24, 2024 Service cost for benefits earned during the period 1 13 2 25 Interest cost on projected benefit obligation 108 149 217 298 Expected return on plan assets ( 410 ) ( 320 ) ( 821 ) ( 639 ) Amortization of net gain ( 292 ) ( 308 ) ( 584 ) ( 617 ) Amortization of prior service benefit ( 71 ) ( 94 ) ( 142 ) ( 188 ) Curtailment gain — — — ( 1,184 ) Net periodic postretirement benefit ( 664 ) ( 560 ) ( 1,328 ) ( 2,305 ) 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 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 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. 12 Table of Contents The primary differences between these rates and the U.S. federal statutory rate of 21% are because of state taxes, non-deductible expenses, increase in valuation allowance, and adjustments to reserves for uncertain tax positions, including any related interest. We file a consolidated federal tax return, as well as combined and separate tax returns in approximately 27 state and local jurisdictions. We do not currently have any federal or material state income tax examinations in progress. Our income tax returns have generally been audited or closed to audit through 2016. 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, 2024 Loss attributable to Lee Enterprises, Incorporated: ( 12,511 ) ( 12,179 ) ( 29,259 ) ( 11,491 ) Weighted average common shares 6,217 6,080 6,207 6,080 Less weighted average restricted Common Stock ( 185 ) ( 170 ) ( 198 ) ( 170 ) Basic average common shares 6,032 5,910 6,009 5,910 Dilutive restricted Common Stock — — — — Diluted average common shares 6,032 5,910 6,009 5,910 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 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 On March 28, 2024, our Board of Directors adopted a stockholder rights plan (the “Rights Agreement”). Pursuant to the Rights Agreement, on March 28, 2024, our Board of Directors declared a dividend of one preferred share purchase right (a “Right”), payable on April 8, 2024, for each share of our Common Stock outstanding to the stockholders of record on that date. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series C Participating Convertible Preferred Stock, without par value (the “Preferred Shares”), of the Company at a price of $ 90.00 per one one-thousandth of a Preferred Share represented by a Right, subject to adjustment. The Rights will initially trade with our Common Stock and will generally become exercisable only if any person or group, other than certain exempt persons, acquires beneficial ownership of 15 % or more of our Common Stock outstanding. In the event the Rights become exercisable, each holder of a Right, other than the triggering person(s), will be entitled to purchase additional shares of our Common Stock at a 50 % discount or the Company may exchange each Right held by such holders for one share of our Common Stock. The Rights Agreement was to continue in effect until March 27, 2025, or unless earlier redeemed or terminated by the Company, as provided in the Rights Agreement. On March 27, 2025, the Board of Directors extended the termination date of the Rights Agreement to March 27, 2026. The Rights have no voting or dividend privileges, and, unless and until they become exercisable, have no dilutive effect on the earnings of the Company. 13 Table of Contents 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. 9 COMMITMENTS AND CONTINGENT LIABILITIES Legal Proceedings We are involved in a variety of legal actions that arise in the normal course of business. Insurance coverage mitigates potential loss for certain of these matters. While we are unable to predict the ultimate outcome of these legal actions, it is our opinion that the disposition of these matters will not have a material adverse effect on our Consolidated Financial Statements, taken as a whole. 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. The lawsuit alleged that the Company violated the Video Privacy Protection Act (“VPPA”) by using pixels to track subscribers’ video viewing activity on Company websites and sharing it with Meta without consent. The Company has agreed to a preliminary settlement with the Plaintiffs for $ 9.5 million, subject to required court approval. 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 March 30, 2025 and September 29, 2024, respectively . 14 Table of Contents