Lee Enterprises(LEE) - 2025 Q3 - Quarterly Results

Financial & Operational Highlights Lee Enterprises reported strong Q3 2025 results, with 92% sequential Adjusted EBITDA growth and digital revenue comprising 55% of total operating revenue Q3 2025 Key Financial Metrics | Metric | Value (million USD) | Year-over-Year Change | | :--- | :--- | :--- | | Total Operating Revenue | $141 | -6.2% | | Total Digital Revenue | $78 | +3% | | Digital-Only Subscription Revenue | $23 | +13% | | Adjusted EBITDA | $15 | +1% | | Net Loss | $2 | Improvement from $3.7M loss | - Digital revenue now represents 55% of the company's total operating revenue, underscoring the ongoing strategic shift to digital[1][2] - Digital-only subscribers reached 670,000, with same-store digital subscription revenue growing 16% YoY, driven by higher average rates[1][2] - Amplified Digital Agency revenue grew by an industry-leading 10% on a same-store basis over the prior year, reaching $29 million[1] - The company achieved significant reductions in print-related expenses and corporate overhead, which contributed to the expansion of Adjusted EBITDA[1] Financial Condition The company reported $455 million in outstanding debt with favorable terms, with recent payments funded by organic free cash flow Debt and Liquidity as of June 29, 2025 | Metric | Value (million USD) | | :--- | :--- | | Principal Amount of Debt | $455 | | Cash on Balance Sheet | $14 | | Debt, Net of Cash | $441 | - The company's debt is under a Credit Agreement with BH Finance, featuring a 25-year maturity, a 9.0% fixed annual interest rate, no fixed principal payments, and no financial performance covenants[3] - As a result of a cyber event, interest and rent payments for March, April, and May 2025 were waived and added to the principal. However, since May 2025, all principal and interest payments have been satisfied through organic free cash flow[4][1] - Fiscal year 2025 outlook includes up to $5 million in capital expenditures and $3 million to $9 million in cash paid for income taxes. No material pension contributions are expected[4] Consolidated Financial Statements This section presents the company's consolidated statements of operations, including revenue, expenses, net loss, and a detailed revenue composition Consolidated Statements of Operations Q3 2025 reported total operating revenue of $141.3 million, an operating income of $4.7 million, and a net loss of $1.7 million, showing improvement year-over-year Q3 Statement of Operations Highlights (in thousands) | Account | Q3 2025 (thousand USD) | Q3 2024 (thousand USD) | | :--- | :--- | :--- | | Total Operating Revenue | $141,294 | $150,578 | | Total Operating Expenses | $137,318 | $146,775 | | Operating Income | $4,662 | $4,925 | | Net Loss | $(1,676) | $(3,691) | | Loss Per Share (Basic) | $(0.31) | $(0.73) | Nine Months Statement of Operations Highlights (in thousands) | Account | Nine Months 2025 (thousand USD) | Nine Months 2024 (thousand USD) | | :--- | :--- | :--- | | Total Operating Revenue | $423,235 | $452,806 | | Operating Loss | $(3,193) | $8,206 | | Net Loss | $(29,915) | $(14,094) | | Loss Per Share (Basic) | $(5.16) | $(2.68) | Revenue Composition Q3 2025 Total Digital Revenue grew to $77.9 million, partially offsetting print declines, with digital now representing 55% of total operating revenue Q3 Revenue Composition (in thousands) | Revenue Type | Q3 2025 (thousand USD) | Q3 2024 (thousand USD) | % Change | | :--- | :--- | :--- | :--- | | Total Digital Revenue | $77,907 | $75,754 | +2.8% | | Total Print Revenue | $63,387 | $74,824 | -15.3% | | Total Operating Revenue | $141,294 | $150,578 | -6.2% | Nine Months Revenue Composition (in thousands) | Revenue Type | Nine Months 2025 (thousand USD) | Nine Months 2024 (thousand USD) | % Change | | :--- | :--- | :--- | :--- | | Total Digital Revenue | $223,843 | $217,406 | +3.0% | | Total Print Revenue | $199,392 | $235,400 | -15.3% | | Total Operating Revenue | $423,235 | $452,806 | -6.5% | Reconciliation of Non-GAAP Financial Measures This section reconciles non-GAAP financial measures such as Adjusted EBITDA, Cash Costs, and Same-store revenues to their GAAP equivalents Adjusted EBITDA Reconciliation Q3 2025 Adjusted EBITDA was $14.9 million, a slight increase year-over-year, reconciled from net loss with various non-cash and non-operating adjustments Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Description | Q3 2025 (thousand USD) | Q3 2024 (thousand USD) | | :--- | :--- | :--- | | Net Loss | $(1,676) | $(3,691) | | Adjustments (Net) | $16,620 | $18,515 | | Adjusted EBITDA | $14,944 | $14,824 | Cash Costs Reconciliation Q3 2025 Cash Costs decreased by 7% to $128.0 million, derived by adjusting total operating expenses for non-cash items and certain restructuring costs Reconciliation of Operating Expenses to Cash Costs (in thousands) | Description | Q3 2025 (thousand USD) | Q3 2024 (thousand USD) | | :--- | :--- | :--- | | Operating Expenses | $137,318 | $146,775 | | Adjustments (Non-Cash) | $(9,362) | $(9,224) | | Cash Costs | $127,956 | $137,551 | Same-Store Revenue Reconciliation Q3 2025 same-store total operating revenue was $141.3 million, with digital subscription revenue growing strongly by 15.6% year-over-year Same-Store Revenue Highlights (in thousands) | Revenue Category | Q3 2025 (thousand USD) | Q3 2024 (thousand USD) | % Change | | :--- | :--- | :--- | :--- | | Same-store, Digital Subscription Revenue | $23,482 | $20,322 | +15.6% | | Same-store, Digital Advertising Revenue | $49,097 | $49,597 | -1.0% | | Same-store, Total Operating Revenue | $141,297 | $149,235 | -5.3% | Company Information & Disclosures This section provides a corporate overview of Lee Enterprises, outlines key business risks, and defines non-GAAP financial measures used in the report - Lee Enterprises is a subscription and advertising platform and a leading provider of local news, serving 72 markets in 25 states[6] - Key business risks include managing declining print revenue, changes in advertising demand, significant cyber security breaches, and competition[10] - The report utilizes non-GAAP measures like Adjusted EBITDA, Cash Costs, and Same-store revenues to provide a clearer understanding of the company's core operating performance, excluding unusual or non-cash items[16]