Lee Enterprises(LEE) - 2026 Q1 - Quarterly Report

Financial Performance - Total operating revenue for the three months ended December 28, 2025, was $130.1 million, a decrease of 10.0% compared to $144.6 million for the same period in 2024[92]. - Net loss for the quarter was $5.1 million, a significant improvement from a net loss of $16.2 million in the same quarter of the previous year, reflecting a 68.4% reduction[94]. - Adjusted EBITDA for the quarter was $12.3 million, representing a 61% increase compared to the previous year, driven by effective cost management[94]. - Cash provided by operating activities totaled $4.5 million for the three months ended December 28, 2025, compared to cash used of $7.3 million in the same period in 2024, an increase of $11.8 million[127]. - Cash Costs for the three months ended December 28, 2025, were $121.2 million, down from $138.6 million in the same period in 2024, a decrease of 12.6%[125]. - The company anticipates continued improvement in operating results into future quarters following a significant milestone in cyber recovery[132]. Revenue Breakdown - Digital revenue totaled $70.3 million, representing 54.1% of total operating revenue, with digital-only subscription revenue growing 5.3% year-over-year to $22.7 million[92][104]. - Digital advertising and marketing services revenue totaled $42.8 million, down 8.4% year-over-year, but represented 71.3% of total advertising and marketing services revenue[103]. Expenses and Cost Management - Total operating expenses were $125.9 million, down 15.5% from $149.0 million in the prior year, primarily due to cost reduction measures[93][108]. - Compensation expenses decreased by 18.0% to $49.4 million, reflecting reductions in full-time employees due to ongoing business transformation efforts[109]. Capital and Liquidity - Cash on the balance sheet totaled $12.6 million, while total debt, net of cash, was $443 million[95]. - The company issued 16,000,000 shares of common stock in a private placement, raising approximately $50.0 million for working capital and corporate purposes[86]. - The company plans to issue 15,384,615 shares at $3.25 per share in a private placement, expected to raise approximately $50.0 million before expenses[130]. - The company's liquidity totaled $12.6 million as of December 28, 2025, excluding future cash flows from operations[130]. Tax and Non-Operating Income - The company recorded an income tax expense of $0.9 million, or (21.4)% of pretax loss, for the three months ended December 28, 2025, compared to $3.2 million, or (25.0)%, for the same period in 2024[117]. - Non-operating income and expense decreased by $0.2 million, or 2.3%, primarily due to an increase in pension and OPEB related benefits[115]. Debt and Interest - The weighted average cost of debt was 9% at the end of both the three months ended December 28, 2025, and December 29, 2024[115].