[PART I FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section presents the company's unaudited consolidated financial statements, management's discussion and analysis, market risk disclosures, and internal controls assessment [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The unaudited consolidated financial statements for the quarterly period ended December 25, 2022, show a significant decrease in net income to $1.8 million from $13.2 million in the prior-year period, with total operating revenue declining to $185.1 million [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet shows a slight increase in total assets and equity, with long-term debt remaining stable Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 25, 2022 | Sep 25, 2022 | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **$747,696** | **$744,042** | **+$3,654** | | Cash and cash equivalents | $18,346 | $16,185 | +$2,161 | | Goodwill | $329,504 | $329,504 | No Change | | **Total Liabilities** | **$729,278** | **$726,805** | **+$2,473** | | Long-term debt, net | $462,554 | $462,554 | No Change | | **Total Equity** | **$18,418** | **$17,237** | **+$1,181** | [Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Income%20%28Loss%29%20and%20Comprehensive%20Income%20%28Loss%29) The income statement reflects an 8.5% decline in total operating revenue and a substantial 86.2% decrease in net income year-over-year Consolidated Statement of Income Highlights (in thousands, except per share data) | Metric | Three months ended Dec 25, 2022 | Three months ended Dec 26, 2021 | YoY Change | | :--- | :--- | :--- | :--- | | Total operating revenue | $185,131 | $202,282 | -8.5% | | Operating income | $11,178 | $25,114 | -55.5% | | Net income | $1,824 | $13,199 | -86.2% | | Diluted EPS | $0.19 | $2.17 | -91.2% | - The significant drop in net income was driven by lower operating revenue and a smaller gain on asset sales compared to the prior-year quarter[15](index=15&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The cash flow statement indicates a shift from operating cash inflow to outflow, with reduced cash from investing activities and lower cash required for financing activities Consolidated Statement of Cash Flows Highlights (in thousands) | Cash Flow Activity | Three months ended Dec 25, 2022 | Three months ended Dec 26, 2021 | | :--- | :--- | :--- | | Net cash (required for) provided by operating activities | ($1,692) | $570 | | Net cash provided by investing activities | $4,021 | $11,954 | | Net cash required for financing activities | ($168) | ($20,051) | | **Net increase (decrease) in cash** | **$2,161** | **($7,527)** | - The company experienced a net cash outflow from operating activities of **$1.7 million**, a reversal from a **$0.6 million** inflow in the prior year, primarily due to lower net income and unfavorable changes in working capital[18](index=18&type=chunk) - Investing activities provided less cash due to lower proceeds from asset sales[18](index=18&type=chunk) - Financing activities required significantly less cash as there were no major debt repayments in the quarter, unlike the prior year[18](index=18&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the company's accounting policies and provide breakdowns of key financial statement items, highlighting a revenue shift from print to digital and stable debt structure Revenue by Source (in thousands) | Revenue Source | Q1 2023 (ended Dec 25, 2022) | Q1 2022 (ended Dec 26, 2021) | YoY Change | | :--- | :--- | :--- | :--- | | Print advertising | $41,836 | $55,970 | -25.3% | | Digital advertising | $47,749 | $42,784 | +11.6% | | Print subscription | $67,370 | $79,628 | -15.4% | | Digital subscription | $12,329 | $7,891 | +56.2% | | **Total operating revenue** | **$185,131** | **$202,282** | **-8.5%** | - The company's debt consists of a single 25-year term loan with BH Finance LLC, with a principal balance of **$462.6 million** at a **9%** annual fixed rate, maturing in 2045[34](index=34&type=chunk)[35](index=35&type=chunk) - No principal debt payments were made in the quarter[35](index=35&type=chunk) - The effective income tax rate for the quarter was **19.4%**, compared to **28.8%** in the prior-year quarter[39](index=39&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=14&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the 8.5% decline in total operating revenue, attributing it to secular declines in print advertising and subscriptions, partially offset by strong digital growth, and outlines liquidity expectations [Strategy](index=14&type=section&id=Strategy) The company's post-pandemic operating strategy is locally focused and built on three pillars - The company's post-pandemic operating strategy is locally focused and built on three pillars[49](index=49&type=chunk) - Grow digital audiences by transforming the presentation of local news[51](index=51&type=chunk) - Expand the digital subscription base through audience growth and conversion[51](index=51&type=chunk) - Diversify advertiser offerings with video and e-commerce initiatives via Amplified Digital[51](index=51&type=chunk) [Results of Operations](index=15&type=section&id=Results%20of%20Operations) Operating results show an 8.5% decrease in total operating revenue and a 55.5% decline in operating income, despite strong growth in digital segments - Total operating revenue decreased **8.5%** YoY to **$185.1 million**, while operating income fell **55.5%** to **$11.2 million**[54](index=54&type=chunk)[56](index=56&type=chunk) - Digital advertising and marketing services revenue grew **11.6%** to **$47.7 million**, representing **53.3%** of total advertising revenue, up from **43.3%** in the prior year[57](index=57&type=chunk) - Digital-only subscribers grew **25.3%** to **564,000**, with revenue from this segment increasing **56%** to **$12.3 million**[58](index=58&type=chunk) - Total digital revenue (advertising, subscriptions, services) increased **17.2%** to **$64.8 million**, now comprising **35.0%** of total operating revenue[60](index=60&type=chunk) - Compensation expense decreased **10.9%** (**$9.2 million**) due to reductions in full-time employees as part of business transformation efforts[63](index=63&type=chunk) [Non-GAAP Financial Measures](index=17&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) This section provides reconciliations of non-GAAP financial measures, including Adjusted EBITDA and Cash Costs Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Metric | Three months ended Dec 25, 2022 | Three months ended Dec 26, 2021 | YoY Change | | :--- | :--- | :--- | :--- | | Net income | $1,824 | $13,199 | -86.2% | | **Adjusted EBITDA** | **$17,619** | **$26,087** | **-32.5%** | Reconciliation of Operating Expenses to Cash Costs (in thousands) | Metric | Three months ended Dec 25, 2022 | Three months ended Dec 26, 2021 | YoY Change | | :--- | :--- | :--- | :--- | | Operating expenses | $175,621 | $178,922 | -1.8% | | **Cash Costs** | **$169,652** | **$178,320** | **-4.9%** | [Liquidity and Capital Resources](index=19&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company's liquidity stood at $18.3 million in cash, with operating activities requiring cash and capital expenditures expected to be funded internally - Cash required for operating activities was **$1.7 million**, a **$2.3 million** decrease from the **$0.6 million** provided in the prior year, driven by lower operating results[85](index=85&type=chunk) - The company's liquidity, consisting of cash on the balance sheet, totaled **$18.3 million** as of December 25, 2022[91](index=91&type=chunk) - Capital expenditures are expected to total up to **$10.0 million** in fiscal year 2023, funded by internally generated funds[87](index=87&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=19&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk exposure is primarily related to newsprint prices, with minimal interest rate risk due to its fixed-rate debt structure - The company's debt is entirely fixed rate, eliminating the potential impact of an increase in interest rates[95](index=95&type=chunk) - Newsprint prices are expected to remain steady after increases in 2022, with the supply chain challenged by significant capacity reductions[96](index=96&type=chunk) - A **$10 per tonne** increase in newsprint price would result in an annualized reduction in income before taxes of approximately **$0.3 million**[99](index=99&type=chunk) [Item 4. Controls and Procedures](index=20&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were not effective due to unremediated material weaknesses in internal controls over financial reporting - The company concluded that its disclosure controls and procedures were not effective as of the end of the reporting period[101](index=101&type=chunk) - Material weaknesses were identified in three areas: IT general controls related to user access, controls over data provided by third-party service organizations without SOC 1 reports, and controls to validate the accuracy of the tax basis for certain deferred tax assets and liabilities[103](index=103&type=chunk) - Management is committed to remediating the weaknesses and has initiated several actions, including a complete user access review, enhancing controls around third-party data, and improving controls over tax basis validation[102](index=102&type=chunk)[103](index=103&type=chunk)[110](index=110&type=chunk) [PART II OTHER INFORMATION](index=21&type=section&id=PART%20II%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, and exhibits filed with the quarterly report [Item 1. Legal Proceedings](index=21&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various routine legal actions, which management believes will not have a material adverse effect on its financial statements - The company is involved in routine legal actions, and management does not expect them to have a material adverse effect on its financial statements[107](index=107&type=chunk) [Item 1.A. Risk Factors](index=21&type=section&id=Item%201.A.%20Risk%20Factors) No material changes have occurred in the company's risk factors since the 2022 Form 10-K, though strategic growth initiatives carry inherent risks - No material changes have occurred in the risk factors disclosed in the 2022 Form 10-K[108](index=108&type=chunk) - The company highlights that strategic growth initiatives, such as acquisitions and joint ventures, carry inherent risks that could adversely affect the business[109](index=109&type=chunk) [Item 6. Exhibits](index=21&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - The exhibits filed with this report include certifications from the Chief Executive Officer and Chief Financial Officer, as well as Interactive Data Files (XBRL)[112](index=112&type=chunk) [Signatures](index=23&type=section&id=SIGNATURES) This section contains the required certifications and signatures for the quarterly report

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Fiscal Year Ended September 25, 2022 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-6227 LEE ENTERPRISES, INCORPORATED (Exact name of Registrant as specified in its Charter) Delaware 42-0823980 (State of incorporation) (I.R.S. Employer Identific ...

Financial Data and Key Metrics Changes - In Q4 2022, total operating revenue was $194 million, flat compared to the prior year, as digital revenue growth offset print revenue decline [17] - Adjusted EBITDA totaled $30 million in Q4, an increase of 17% year-over-year, while net loss was $5.8 million due to noncash impairments [20] - For the full fiscal year, total operating revenue was $781 million, down less than 2% compared to the prior year, with net income totaling $1 million [20][21] Business Line Data and Key Metrics Changes - Digital Only subscribers grew by 32% in Q4, totaling 532,000 subscribers, with digital subscription revenue up 46% year-over-year [9][17] - Digital Advertising and Marketing Services revenue reached $49 million in Q4, a 33% increase over the prior year, representing 55% of total advertising revenue [18] - Print revenue declined by 11% in Q4 to $129 million due to ongoing secular declines in print demand [18] Market Data and Key Metrics Changes - Total digital revenue for the fiscal year was $240 million, up 27% compared to the prior year, with digital revenue representing 31% of total revenue, up from 24% [21][13] - Amplified Digital revenue grew 82% in Q4 and 83% for the full year, totaling $76 million for the fiscal year [10][12] Company Strategy and Development Direction - The company is focused on a Three Pillar Digital Growth Strategy aimed at expanding digital audiences, growing digital subscriptions, and diversifying offerings for local advertisers [23][25] - The goal is to achieve $435 million of recurring sustainable digital revenue by 2026, with significant progress made in digital transformation [25][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the digital transformation and the resilience of the business model despite headwinds [8][16] - The company expects continued digital revenue growth and a reduction in cash costs by 2% to 3% in fiscal year 2023 [39][36] Other Important Information - The principal amount of debt at the end of Q4 was $463 million, down $113 million since refinancing, with favorable credit agreement terms [40] - The company plans to invest $25 million in fiscal year 2023 to support its digital growth strategy [37] Q&A Session Summary Question: Were there any significant changes that may have driven digital subscriptions growth? - Management indicated no changes in the paywall but emphasized the use of sophisticated data analytics to convert users at the paywall [48] Question: What is the guidance for Digital Only Subscription revenue? - Management expects continued significant growth in digital subscription revenue, driven by both unit growth and rate growth [49] Question: What is the outlook for print advertising revenue? - Management noted choppiness in national advertising but strong relationships with local advertisers, indicating potential stability [51] Question: Can you provide more details on Amplified's growth? - Video was a significant driver for Amplified's growth, with success in selling services both within and outside of Lee's markets [53] Question: Are there signs of moderation in cost trends? - Management confirmed signs of moderation in costs, particularly in newsprint, which may stabilize or decrease [54] Question: Is the $25 million in savings for fiscal 2023 factored into cost moderation trends? - Management clarified that the $25 million savings are from actions taken last year and do not include potential cost moderation trends [55]

Financial Data and Key Metrics Changes - In Q3 2022, total operating revenue was $195 million, down less than 1% compared to the prior year, as digital revenue growth almost offset the decline in print revenue [25] - Total digital revenue increased 27% in Q3 to $61 million, now representing 32% of total operating revenue, up from 25% a year ago [26][22] - Adjusted EBITDA for Q3 totaled $23 million, with a reaffirmed full-year guidance of $95 million to $98 million [30][38] Business Line Data and Key Metrics Changes - Digital subscribers grew by 49% year-over-year, reaching 501,000, exceeding the year-end target of 495,000 a quarter early [15][26] - Digital-only subscription revenue increased 50% to $11 million in Q3, with a total of $37 million over the last 12 months, surpassing the full-year target of $33 million [26][21] - Amplified Digital revenue grew by 74% in Q3, totaling $21 million, with a total of $66 million over the last 12 months, exceeding the fiscal year-end estimate of $65 million [28][21] Market Data and Key Metrics Changes - Total print revenue was $134 million in Q3, a 10% decline compared to the same quarter a year ago, attributed to secular declines and supply chain constraints [29] - Digital advertising revenue increased 27% to $46 million in Q3, with digital advertising and marketing services now representing 51% of total advertising revenue [27] Company Strategy and Development Direction - The company is focused on a Three Pillar Digital Growth strategy aimed at expanding digital audiences, increasing digital-only subscriptions, and diversifying offerings for advertisers [10][12] - The goal is to achieve $435 million in digital revenue by 2026, driven by increased digital subscriptions and advertising revenue [12][46] - Investments in digital talent and technology are prioritized to support the digital transformation and long-term sustainable revenue growth [34][35] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges such as supply chain shortages, declining print advertising demand, and inflation affecting costs [23] - The company remains confident in achieving its digital revenue targets and reaffirmed its adjusted EBITDA outlook for the fiscal year [39][38] - The leadership team emphasized the importance of the Vision platform in driving local advertising success and strong retention rates [55] Other Important Information - The principal amount of debt at the end of the quarter was $463 million, down $113 million since refinancing in March 2020 [40] - The company aims to achieve a long-term leverage target of under 2.5 times by the end of 2026 [41] Q&A Session Summary Question: Growth in Amplified Digital - Management highlighted the success of the Vision platform in enabling local sales reps to create effective omnichannel marketing campaigns, leading to strong growth and retention [55][56] Question: Cost Reductions Implementation - Cost reduction actions began in April and were focused on optimizing the cost structure related to print revenue streams [57][58] Question: Digital-only Subscription Rates - The average rate for digital-only subscriptions is just under $7 per month, with a focus on data-driven marketing strategies [60] Question: Expectations for Margin Expansion - Management expects to see margin expansion in late 2023 and into 2024 as returns on digital investments materialize [64]

| --- | --- | --- | --- | |-------------------------------------------------------------|-------|-------|-------| | | | | | | | | | | | | | | | | UPDATE ON LEE'S DIGITAL | | | | | TRANSFORMATION THIRD QUARTER FY2022 EARNINGS \| AUGUST 2022 | | | | | | | | | SAFE HARBOR The information provided in this presentation may include forward-looking statements relating to future events or the future financial performance of the Company. Because such statements are subject to risks and uncertainties, actual results ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Delaware 42-0823980 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 4600 E. 53rd Street, Davenport, Iowa 52807 (Address of principal executive offices) (563) 383-2100 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: For The ...

| --- | --- | --- | --- | --- | --- | |-----------------------------------------------------------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | UPDATE ON LEE'S DIGITAL | | | | | | | TRANSFORMATION SECOND QUARTER FY2022 EARNINGS \| MAY 2022 | | | | | | | | | | | | | SAFE HARBOR The information provided in this presentation may include forward-looking statements relating to future events or the future financial performance of the Company. Because such statements are sub ...

Lee Enterprises, Incorporated (NASDAQ:LEE) Q2 2022 Results Earnings Conference Call May 5, 2022 10:00 AM ET Company Participants Josh Rinehults - Vice President-FP&A Kevin Mowbray - President and Chief Executive Officer Timothy Millage - Vice President, Chief Financial Officer and Treasurer Conference Call Participants Michael Kupinski - NOBLE Capital Markets Operator Welcome to the Lee Enterprises 2022 Second Quarter Webcast and Conference Call. [Operator Instructions] Now I will turn the call over to your ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Quarterly Period Ended March 27, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-6227 LEE ENTERPRISES, INCORPORATED (Exact name of Registrant as specified in its Charter) Delaware 42-0823980 (State or other jurisdiction of incorporation or organization) (I ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Quarterly Period Ended December 26, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-6227 LEE ENTERPRISES, INCORPORATED Delaware 42-0823980 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 4600 E. 53rd Stre ...