LEE ENTERPRISES, Inc 10-Q

Item 1. Financial Statements LEE ENTERPRISES, INCORPORATED CONSOLIDATED BALANCE SHEETS (Unaudited) (Thousands of Dollars) June 29, 2025 September 29, 2024 ASSETS Current assets: Cash and cash equivalents 14,125 9,598 Accounts receivable, net 57,107 60,648 Inventories 5,269 5,643 Prepaid and other current assets 20,368 21,884 Total current assets 96,869 97,773 Investments: Associated companies 28,223 27,941 Other 6,055 6,042 Total investments 34,278 33,983 Property and equipment: Land and improvements 5,787 6,420 Buildings and improvements 66,180 70,152 Equipment 191,444 196,312 Construction in process 9,086 5,625 272,497 278,509 Less accumulated depreciation 232,764 234,137 Property and equipment, net 39,733 44,372 Operating lease right-of-use assets 27,162 34,882 Goodwill 323,858 328,040 Other intangible assets, net 60,907 70,075 Pension plan assets, net 5,534 4,663 Medical plan assets, net 25,013 23,300 Other 9,298 12,083 Total assets 622,652 649,171 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) June 29, 2025 September 29, 2024 LIABILITIES AND EQUITY Current liabilities: Current portion of lease liabilities 7,389 8,139 Current maturities of long-term debt 406 — Accounts payable 47,459 36,290 Compensation and other accrued liabilities 35,480 39,170 Unearned revenue 27,142 31,755 Total current liabilities 117,876 115,354 Long-term debt, net of current maturities 455,469 445,943 Operating lease liabilities 22,364 29,769 Pension obligations 536 561 Postretirement and postemployment benefit obligations 7,549 7,520 Deferred income taxes 28,020 28,403 Income taxes payable 4,286 3,456 Withdrawal liabilities and other 24,749 25,499 Total liabilities 660,849 656,505 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: 63 62 June 29, 2025; 6,264 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 263,383 262,470 Accumulated deficit ( 323,520 ) ( 292,341 ) Accumulated other comprehensive income 19,575 19,920 Total Lee Enterprises, Inc. Stockholders' deficit ( 40,499 ) ( 9,889 ) Non-controlling interests 2,302 2,555 Total deficit ( 38,197 ) ( 7,334 ) Total liabilities and deficit 622,652 649,171 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 Nine months ended (Thousands of Dollars, Except Per Common Share Data) June 29, 2025 June 23, 2024 June 29, 2025 June 23, 2024 Operating revenue: Advertising and marketing services 66,571 68,844 193,633 203,865 Subscription 61,558 68,306 191,423 208,872 Other 13,165 13,428 38,179 40,069 Total operating revenue 141,294 150,578 423,235 452,806 Operating expenses: Compensation 47,436 59,278 164,349 175,757 Newsprint and ink 3,268 4,096 9,996 13,101 Other operating expenses 77,252 74,177 223,387 221,247 Depreciation and amortization 3,783 6,850 15,218 21,438 Assets (gain) loss on sales, impairments and other, net ( 1,562 ) ( 1,421 ) ( 2,365 ) 4,727 Restructuring costs and other 7,141 3,795 18,806 12,199 Total operating expenses 137,318 146,775 429,391 448,469 Equity in earnings of associated companies 686 1,122 2,963 3,869 Operating (loss) income 4,662 4,925 ( 3,193 ) 8,206 Non-operating (expense) income: Interest expense ( 10,132 ) ( 10,082 ) ( 30,365 ) ( 30,427 ) Pension and OPEB related benefit and other, net 1,050 617 2,362 1,096 Curtailment/Settlement gains — — — 3,593 Total non-operating expense, net ( 9,082 ) ( 9,465 ) ( 28,003 ) ( 25,738 ) Loss before income taxes ( 4,420 ) ( 4,540 ) ( 31,196 ) ( 17,532 ) Income tax benefit ( 2,744 ) ( 849 ) ( 1,281 ) ( 3,438 ) Net loss ( 1,676 ) ( 3,691 ) ( 29,915 ) ( 14,094 ) Net income attributable to non-controlling interests ( 244 ) ( 575 ) ( 1,264 ) ( 1,663 ) Loss attributable to Lee Enterprises, Incorporated ( 1,920 ) ( 4,266 ) ( 31,179 ) ( 15,757 ) Other comprehensive loss, net of income taxes ( 115 ) ( 147 ) ( 230 ) ( 2,609 ) Comprehensive loss attributable to Lee Enterprises, Incorporated ( 2,035 ) ( 4,413 ) ( 31,409 ) ( 18,366 ) Loss per common share: Basic: ( 0.31 ) ( 0.73 ) ( 5.16 ) ( 2.68 ) Diluted: ( 0.31 ) ( 0.73 ) ( 5.16 ) ( 2.68 ) 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 ) Shares issued (redeemed) — 1 ( 84 ) — — ( 83 ) Loss attributable to Lee Enterprises, Incorporated ( 1,920 ) — — — 244 ( 1,676 ) Stock compensation — — 540 — — 540 Other comprehensive loss — — — ( 151 ) ( 151 ) Deferred income taxes, net — — — 36 36 Distributions to minority owners — — — — ( 765 ) ( 765 ) June 29, 2025 ( 323,520 ) 63 263,383 19,575 2,302 ( 38,197 ) 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 Shares issued (redeemed) — 1 — — — 1 Income attributable to Lee Enterprises, Incorporated ( 4,266 ) — — — 575 ( 3,691 ) Stock compensation — — 474 — — 474 Other comprehensive income — — — ( 191 ) — ( 191 ) Deferred income taxes, net — — — 44 — 44 Distributions to minority owners — — — — ( 566 ) ( 566 ) June 23, 2024 ( 282,253 ) 62 261,925 24,234 2,524 6,492 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) Nine months ended (Thousands of Dollars) June 29, 2025 June 23, 2024 Cash (required for) provided by operating activities: Net loss ( 29,915 ) ( 14,094 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 15,218 21,438 Bad debt expense 10,853 9,511 Curtailment/Settlement gain — ( 3,593 ) Stock compensation expense 1,328 1,189 Assets (gain) loss on sales, impairments and other, net ( 2,365 ) 4,727 Earnings, net of distributions, deemed returns on investment of TNI and MNI 304 ( 163 ) Non-cash interest 10,118 — Deferred income taxes ( 273 ) ( 542 ) Return of letters of credit collateral — 894 Other, net ( 1,518 ) ( 1,602 ) Changes in operating assets and liabilities: Increase in receivables ( 7,628 ) ( 1,946 ) Decrease in inventories and other 419 1,069 Increase (decrease) in accounts payable and other accrued liabilities 7,749 ( 12,786 ) Decrease in pension and other postretirement and postemployment benefit obligations ( 3,033 ) ( 1,835 ) Change in income taxes payable 830 596 Other ( 1,322 ) ( 1,485 ) Net cash provided by (required for) operating activities 765 1,378 Cash provided by investing activities: Purchases of property and equipment ( 3,539 ) ( 6,552 ) Proceeds from sales of assets 8,673 7,087 Other, net — ( 21 ) Net cash provided by investing activities 5,134 514 Cash required for financing activities: Principal payments on long-term debt ( 1,372 ) ( 3,015 ) Net cash required for financing activities ( 1,372 ) ( 3,015 ) Net increase (decrease) in cash and cash equivalents 4,527 ( 1,123 ) Cash and cash equivalents: Beginning of period 9,598 14,548 End of period 14,125 13,425 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 June 29, 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 nine months ended June 29, 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. Following the containment of the initial threat and as a result of a subsequent, comprehensive review with a third-party vendor, the Company determined certain files may have been accessed or acquired on February 1, 2025, including customers' and subscribers personal information. The Company reported the Incident to relevant law enforcement and will cooperate with any resulting investigation or efforts to hold the perpetrators accountable. In addition, through a data breach and recovery services vendor, the Company is offering identity theft protection services to those customers and subscribers potentially involved in the data breach. See Footnote 9. During the three months ended June 29, 2025, the Company incurred $ 1.2 million of expenses related to the Cyber Incident. During the nine months ended June 29, 2025, the Company incurred $ 3.1 million 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 incident continues to have a significant negative impact on the Company's 2025 operating results. Various revenue lines were impacted, certain operating expenses are trending higher than they were prior to the incident, and many projects underway were significantly delayed. 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 8 Table of Contents Incident. To date, $ 707,000 reimbursements have been received, however the claims processing is ongoing as of the date of this filing. 2 REVENUE The following table presents our revenue disaggregated by source: Three months Ended Nine months ended (Thousands of Dollars) June 29, 2025 June 23, 2024 June 29, 2025 June 23, 2024 Operating revenue: Print advertising revenue 17,474 18,941 53,867 62,118 Digital advertising revenue 49,097 49,903 139,766 141,747 Advertising and marketing services revenue 66,571 68,844 193,633 203,865 Print subscription revenue 38,076 47,605 122,587 148,443 Digital subscription revenue 23,482 20,701 68,836 60,429 Subscription revenue 61,558 68,306 191,423 208,872 Print other revenue 7,837 8,278 22,938 24,839 Digital other revenue 5,328 5,150 15,241 15,230 Other revenue 13,165 13,428 38,179 40,069 Total operating revenue 141,294 150,578 423,235 452,806 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 nine months ended June 29, 2025, that was included in the contract liability as of September 29, 2024, was $ 28.2 million. Accounts receivable, excluding allowance for credit losses was $ 62.1 million and $ 67.2 million as of June 29, 2025, and September 29, 2024 , respectively. Allowance for credit losses was $ 5.0 million and $ 6.5 million as of June 29, 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) June 29, 2025 September 29, 2024 Balance, beginning of period 6,514 5,260 Additions charged to expense 10,853 13,633 Deductions from reserves ( 12,370 ) ( 12,379 ) Balance, end of period 4,997 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 9 Table of Contents 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. 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 Nine months ended (Thousands of Dollars) June 29, 2025 June 23, 2024 June 29, 2025 June 23, 2024 Operating revenue 5,320 6,667 17,609 21,018 Operating expenses 3,764 5,076 13,050 15,207 Operating income 1,556 1,591 4,559 5,811 Net income 1,529 1,544 4,596 5,764 Equity in earnings of TNI 765 772 2,298 2,882 TNI makes periodic distributions of its earnings and for the three months ended June 29, 2025, and June 23, 2024, we received $ 0.7 million and $ 0.6 million in distributions, respectively. In the nine months ended June 29, 2025 and June 23, 2024, we received $ 2.4 million and $ 2.7 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. 10 Table of Contents Summarized results of MNI are as follows: Three months ended Nine months ended (Thousands of Dollars) June 29, 2025 June 23, 2024 June 29, 2025 June 23, 2024 Operating revenue 9,136 10,136 27,974 30,560 Operating expenses, excluding restructuring costs, depreciation and amortization 7,252 7,829 21,720 23,275 Restructuring costs 95 4 118 113 Depreciation and amortization 89 121 269 361 Operating income 1,700 2,182 5,867 6,811 Net income ( 157 ) 699 1,330 1,973 Equity in earnings of MNI ( 79 ) 350 665 987 MNI makes periodic distributions of its earnings and in the three months ended June 29, 2025 and June 23, 2024, we received zero and $ 0.4 million in distributions, respectively. In the nine months ended June 29, 2025 and June 23, 2024, we received distributions of $ 0.9 million and $ 1.0 million, respectively. 4 GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill and identified intangible assets consist of the following: (Thousands of Dollars) June 29, 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 ( 212,156 ) ( 203,084 ) 49,990 59,158 Total intangibles, net 384,765 398,115 The weighted average amortization period for amortizable assets is approximately ten years . During the nine months ended June 29, 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 $ 455.9 million at a 9 % annual fixed rate and maturing on March 16, 2045 (referred to herein as “Credit Agreement” and “Term Loan”). On June 29, 2025, the fair value was $ 375.6 million, representing a Level 2 fair value measurement, which are fair values estimated using significant other observable inputs. 11 Table of Contents During the nine months ended June 29, 2025, Net Cash Proceeds, as defined in our Credit Agreement, from asset sales totaled $ 6.5 million. The Company made $ 1.4 million principal debt payments as a result of non-core asset sales, and the remaining net cash 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 June 29, 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 due in April and May 2025. As of June 29, 2025, the waivers increased the outstanding debt balance by $ 11.3 million and is treated as non-cash activity within the statement of cash flows. These waivers were treated as modifications to the existing credit agreement. In addition, the May 2025 waiver was accompanied by an amendment to the Credit Agreement which includes provisions requiring the Company to prepay the loan in an aggregate amount equal to 100 % of net cash proceeds received by the Company or its subsidiaries within three days following the receipt of such net cash proceeds and allowing BH Finance to assign its rights and obligations under the Credit Agreement to any person other than a natural person. 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 June 29, 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 Nine months ended (Thousands of Dollars) June 29, 2025 June 23, 2024 June 29, 2025 June 23, 2024 Service cost for benefits earned during the period 1 1 3 3 Interest cost on projected benefit obligation 2,034 2,253 6,103 7,021 Expected return on plan assets ( 2,319 ) ( 2,310 ) ( 6,956 ) ( 7,073 ) Amortization of net (gain) loss — ( 1 ) — ( 4 ) Amortization of prior service benefit 212 212 636 636 Settlement gain — — — ( 2,409 ) Net periodic pension (benefit) cost ( 72 ) 155 ( 214 ) ( 1,826 ) POSTRETIREMENT MEDICAL PLANS Three months ended Nine months ended (Thousands of Dollars) June 29, 2025 June 23, 2024 June 29, 2025 June 23, 2024 Service cost for benefits earned during the period 1 13 2 38 Interest cost on projected benefit obligation 108 149 325 447 Expected return on plan assets ( 410 ) ( 320 ) ( 1,231 ) ( 959 ) Amortization of net gain ( 292 ) ( 308 ) ( 876 ) ( 925 ) Amortization of prior service benefit ( 71 ) ( 94 ) ( 214 ) ( 282 ) Curtailment gain — — — ( 1,184 ) Net periodic postretirement benefit ( 664 ) ( 560 ) ( 1,994 ) ( 2,865 ) 12 Table of Contents In the nine months ended June 29, 2025 and June 23, 2024, we made no contributions to our pension plans. W e have no required contributions to our pension plans for 2025. During the nine months ended June 23, 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 June 29, 2025 and September 29, 2024, we had $ 22.7 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 $ 2.7 million related to loss before taxes of $ 4.4 million for the three months ended June 29, 2025, and an income tax benefit of $ 1.3 million related to loss before income taxes of $ 31.2 million for the nine months ended June 29, 2025. We recorded an income tax benefit of $ 0.8 million related to loss before taxes of $ 4.5 million for the three months ended June 23, 2024, and an income tax benefit of $ 3.4 million related to a loss before income taxes of $ 17.5 million for the nine months ended June 23, 2024. The effective income tax rate for the three and nine months ended June 29, 2025, was 61.4 % and 4.2 %, respectively. The effective income tax rate for the three and nine months ended June 23, 2024, were 18.7 % and 19.6 %, respectively. 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. On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act ("OBBBA"). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. We are currently evaluating the impact of the OBBBA and expect the results of such evaluation to be reflected in our Annual Report on Form 10K for the year ended September 28, 2025. 13 Table of Contents 8 LOSS PER COMMON SHARE The following table sets forth the computation of basic and diluted earnings per common share: Three months ended Nine months ended (Thousands of Dollars and Shares, Except Per Share Data) June 29, 2025 June 23, 2024 June 29, 2025 June 23, 2024 Loss attributable to Lee Enterprises, Incorporated: ( 1,920 ) ( 4,266 ) ( 31,179 ) ( 15,757 ) Weighted average common shares 6,232 6,080 6,214 6,080 Less weighted average restricted Common Stock ( 120 ) ( 215 ) ( 171 ) ( 195 ) Basic average common shares 6,112 5,865 6,043 5,885 Dilutive restricted Common Stock — — — — Diluted average common shares 6,112 5,865 6,043 5,885 Loss per common share: Basic ( 0.31 ) ( 0.73 ) ( 5.16 ) ( 2.68 ) Diluted ( 0.31 ) ( 0.73 ) ( 5.16 ) ( 2.68 ) For the three months ended June 29, 2025 and June 23, 2024, no shares were considered in the computation of diluted earnings per common share because the Company recorded net losses. For the nine months ended June 29, 2025 and June 23, 2024, no shares were considered in the computation of diluted earnings per common share because the Company recorded net losses. 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. 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 14 Table of Contents 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. Video Privacy Protection Act Litigation and Settlement. 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 June 29, 2025 and September 29, 2024, respectively . Cybersecurity Incident Litigation. As previously disclosed, the Company experienced a cybersecurity incident during the second quarter of 2025, which involved unauthorized access to certain systems and data. Following public disclosure of the incident, the Company was named as a defendant in several putative class action lawsuits filed in or around June 2025, in the United States District Court for the Southern District of Iowa on behalf of all individuals affected by the cybersecurity incident, including those who received notice of the incident. These lawsuits generally allege, among other things, that the Company failed to adequately protect personal or sensitive information and seek unspecified damages and other relief. The Company is vigorously defending against these claims. Given the early stage of these proceedings, the outcome of these matters is uncertain, and the Company is unable to estimate a possible loss or range of loss at this time. The Company maintains cyber liability and other applicable insurance coverage and believes that any potential losses associated with these claims, if adverse outcomes were to occur, would be covered, subject to applicable deductibles and policy limits. 15 Table of Contents