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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended December 24, 2023
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)
Delaware42-0823980
(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:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $.01 per share
LEE
The Nasdaq Global Select Market
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x No o
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files.    Yes x No o
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
o
Accelerated filer
x
Non-accelerated filer
o
Smaller reporting company
x
Emerging growth company
o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes o  No x
As of January 31, 2024, 6,143,119 shares of Common Stock of the Registrant were outstanding.

PAGE

References to “we”, “our”, “us” and the like throughout this document refer to Lee Enterprises, Incorporated (the “Company”). References to “2024”, “2023" and the like refer to the fiscal years ended the last Sunday in September.
FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. This report contains information that may be deemed forward-looking that is based largely on our current expectations, and is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those anticipated. Among such risks, trends and other uncertainties, which in some instances are beyond our control, are:
•The long-term or permanent changes the COVID-19 pandemic may have on the publishing industry; which may result in permanent revenue reductions and other risks and uncertainties;
•We may be required to indemnify the previous owners of the BH Media or Buffalo News for unknown legal and other matters that may arise;
•Our ability to manage declining print revenue and circulation subscribers;
•The impact and duration of adverse conditions in certain aspects of the economy affecting our business;
•Changes in advertising and subscription demand;
•Changes in technology that impact our ability to deliver digital advertising;
•Potential changes in newsprint, other commodities and energy costs;
•Interest rates;
•Labor costs;
•Significant cyber security breaches or failure of our information technology systems;
•Our ability to achieve planned expense reductions and realize the expected benefit of our acquisitions;
•Our ability to maintain employee and customer relationships;
•Our ability to manage increased capital costs;
•Our ability to maintain our listing status on NASDAQ;
•Competition; and
•Other risks detailed from time to time in our publicly filed documents.
Any statements that are not statements of historical fact (including statements containing the words “may”, “will”, “would”, “could”, “believes”, “expects”, “anticipates”, “intends”, “plans”, “projects”, “considers” and similar expressions) generally should be considered forward-looking statements. Statements regarding our plans, strategies, prospects and expectations regarding our business and industry, including statements regarding the impacts that the COVID-19 pandemic and our responses thereto may have on our future operations, are forward-looking statements. They reflect our expectations, are not guarantees of performance and speak only as of the date the statement is made. Readers are cautioned not to place undue reliance on such forward-looking statements, which are made as of the date of this report. We do not undertake to publicly update or revise our forward-looking statements, except as required by law.
1
PART I
FINANCIAL INFORMATION
Item 1.    Financial Statements
LEE ENTERPRISES, INCORPORATED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Thousands of Dollars)December 24,
2023		September 24,
2023
ASSETS
Current assets:
Cash and cash equivalents15,365 14,548 
Accounts receivable and contract assets, net68,103 69,104 
Inventories7,637 7,504 
Prepaid and other current assets14,761 15,373 
Total current assets105,866 106,529 
Investments:
Associated companies27,741 27,819 
Other5,569 5,572 
Total investments33,310 33,391 
Property and equipment:
Land and improvements11,995 12,366 
Buildings and improvements82,989 83,140 
Equipment211,356 213,714 
Construction in process1,368 2,453 
307,708 311,673 
Less accumulated depreciation248,530 250,439 
Property and equipment, net59,178 61,234 
Operating lease right-of-use assets38,417 40,822 
Goodwill328,243 329,504 
Other intangible assets, net90,384 94,988 
Pension plan assets, net11,095 10,843 
Medical plan assets, net21,821 21,565 
Other14,195 12,741 
Total assets702,509 711,617 
The accompanying Notes are an integral part of the Consolidated Financial Statements.
2
(Unaudited)
(Thousands of Dollars and Shares, Except Per Share Data)December 24,
2023		September 24,
2023
LIABILITIES AND EQUITY
Current liabilities:
Current portion of lease liabilities7,602 7,755 
Accounts payable38,537 36,290 
Compensation and other accrued liabilities26,960 29,448 
Unearned revenue39,550 40,843 
Total current liabilities112,649 114,336 
Long-term debt, net of current maturities454,161 455,741 
Operating lease liabilities34,160 36,580 
Pension obligations561 586 
Postretirement and postemployment benefit obligations7,427 8,618 
Deferred income taxes40,735 41,351 
Income taxes payable5,980 5,809 
Withdrawal liabilities and other24,646 24,890 
Total liabilities680,319 687,911 
Equity:
Stockholders' equity:
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:
61 61 
December 24, 2023; 6,143 shares; $0.01 par value
September 24, 2023; 6,063 shares; $0.01 par value
Class B Common Stock, $2 par value; authorized 3,000 shares; none issued
— — 
Additional paid-in capital260,950 260,832 
Accumulated deficit(265,808)(266,496)
Accumulated other comprehensive income24,529 26,843 
Total stockholders' equity19,732 21,240 
Non-controlling interests2,458 2,466 
Total equity22,190 23,706 
Total liabilities and equity702,509 711,617 
The accompanying Notes are an integral part of the Consolidated Financial Statements.
3
LEE ENTERPRISES, INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
Three months ended
(Thousands of Dollars, Except Per Common Share Data)December 24,
2023		December 25,
2022
Operating revenue:
Advertising and marketing services70,887 89,585 
Subscription71,339 79,699 
Other13,452 15,847 
Total operating revenue155,678 185,131 
Operating expenses:
Compensation59,676 75,446 
Newsprint and ink4,843 7,432 
Other operating expenses74,776 86,774 
Depreciation and amortization7,295 7,886 
Assets gain on sales, impairments and other, net(1,469)(2,563)
Restructuring costs and other4,265 646 
Total operating expenses149,386 175,621 
Equity in earnings of associated companies1,541 1,668 
Operating income7,833 11,178 
Non-operating (expense) income:
Interest expense(10,131)(10,408)
Pension and OPEB related benefit and other, net186 1,494 
Curtailment/Settlement gains3,593 — 
Total non-operating expense, net(6,352)(8,914)
Income before income taxes1,481 2,264 
Income tax expense248 440 
Net income1,233 1,824 
Net income attributable to non-controlling interests(545)(725)
Income attributable to Lee Enterprises, Incorporated688 1,099 
Other comprehensive loss, net of income taxes(2,314)(140)
Comprehensive (loss) income attributable to Lee Enterprises, Incorporated(1,626)959 
Earnings per common share:
Basic:0.12 0.19 
Diluted:0.12 0.19 
The accompanying Notes are an integral part of the Consolidated Financial Statements.
4
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(Unaudited)
(Thousands of Dollars)Accumulated
Deficit		Common StockAdditional
paid-in capital		Accumulated
Other
Comprehensive
Income		Total
September 25, 2023(266,496)61 260,832 26,843 21,240 
Shares redeemed— — (96)— (96)
Income attributable to Lee Enterprises, Incorporated688 — — — 688 
Stock compensation— — 214 — 214 
Other comprehensive loss— — — (2,286)(2,286)
Deferred income taxes, net— — — (28)(28)
December 24, 2023(265,808)61 260,950 24,529 19,732 
(Thousands of Dollars)Accumulated
Deficit		Common StockAdditional
paid-in capital		Accumulated
Other
Comprehensive
Income		Total
September 26, 2022(261,229)60 259,521 16,653 15,005 
Shares redeemed— — (383)— (383)
Income attributable to Lee Enterprises, Incorporated1,099 — — — 1,099 
Stock compensation— — 349 — 349 
Other comprehensive loss— — — (200)(200)
Deferred income taxes, net— — — 60 60 
December 25, 2022(260,130)60 259,487 16,513 15,930 
The accompanying Notes are an integral part of the Consolidated Financial Statements.
5
LEE ENTERPRISES, INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended
(Thousands of Dollars)December 24,
2023		December 25,
2022
Cash (required for) provided by operating activities:
Net income1,233 1,824 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization7,295 7,886 
Bad debt expense3,724 1,936 
Curtailment/Settlement gain(3,593)— 
Stock compensation expense214 349 
Assets gain on sales, impairments and other, net(1,469)(2,563)
Earnings net of distributions deemed returns on investment of TNI and MNI(59)(522)
Gain on sale of investment— (1,408)
Deferred income taxes(645)(216)
Return of letters of credit collateral— 778 
Other, net(550)(459)
Changes in operating assets and liabilities:
Increase in receivables and contract assets(3,040)(8,034)
(Increase) decrease in inventories and other(66)153 
Increase (decrease) in accounts payable and other accrued liabilities64 (1,738)
Decrease in pension and other postretirement and postemployment benefit obligations(418)(192)
Change in income taxes payable(2,105)570 
Other(505)(578)
Net cash provided by (required for) operating activities80 (2,214)
Cash provided by (required for) investing activities:
Purchases of property and equipment(1,030)(1,187)
Proceeds from sales of assets3,145 4,052 
Other, net(20)1,678 
Net cash provided by investing activities2,095 4,543 
Cash required for financing activities:
Principal payments on long-term debt(1,580)— 
Common stock transactions, net221 (168)
Net cash required for financing activities(1,359)(168)
Net increase in cash and cash equivalents816 2,161 
Cash and cash equivalents:
Beginning of period14,548 16,185 
End of period15,364 18,346 
The accompanying Notes are an integral part of the Consolidated Financial Statements.
6

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 December 24, 2023, 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 2023 Annual Report on Form 10-K.
The Company's fiscal year ends on the last Sunday in September. Fiscal year 2024 ends on September 24, 2024, and fiscal year 2023 ended September 24, 2023. Fiscal year 2024 includes 53 weeks of operations and 2023 included 52 weeks of operations. Because of seasonal and other factors, the results of operations for the three months ended December 24, 2023, 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.
In 2024, certain prior period amounts within the consolidated financial statements have been adjusted to conform with current period presentation. These matters did not change operating revenues, net income (loss), accumulated deficit, and earnings per share in all periods presented.
2    REVENUE
The following table presents our revenue disaggregated by source:
Three months Ended
(Thousands of Dollars)December 24,
2023		December 25,
2022
Operating revenue:
Print advertising revenue24,435 41,836 
Digital advertising revenue46,452 47,749 
Advertising and marketing services revenue70,887 89,585 
Print subscription revenue51,872 67,370 
Digital subscription revenue19,467 12,329 
Subscription revenue71,339 79,699 
Print other revenue8,492 11,120 
Digital other revenue4,960 4,727 
Other revenue13,452 15,847 
Total operating revenue155,678 185,131 
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.
7
Arrangements with multiple performance obligations: We have various advertising and subscription agreements which include both print and digital performance obligations. Revenue from sales agreements that contain multiple performance obligations are allocated to each obligation based on the relative standalone selling price. We determine standalone selling prices based on observable prices charged to customers.
Contract Assets and 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 three months ended December 24, 2023, that was included in the contract liability as of September 24, 2023, was $27.2 million.
Accounts receivable, excluding allowance for credit losses was $74.3 million and $74.4 million as of December 24, 2023, and September 24, 2023, respectively. Allowance for credit losses was $6.2 million and $5.3 million as of December 24, 2023, and September 24, 2023, respectively.
Sales commissions are expensed as incurred as the associated contractual periods are one year or less. These costs are recorded within compensation. 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 Gannets 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
(Thousands of Dollars)December 24,
2023		December 25,
2022
Operating revenue6,991 8,814 
Operating expenses4,681 6,285 
Operating income2,310 2,529 
Company's 50% share of operating income
1,155 1,265 
Equity in earnings of TNI1,155 1,265 
TNI makes periodic distributions of its earnings and for the three months ended December 24, 2023, and December 25, 2022, we received $1.2 million and $0.9 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.
8
Summarized results of MNI are as follows:
Three months ended
(Thousands of Dollars)December 24,
2023		December 25,
2022
Operating revenue10,602 11,904 
Operating expenses, excluding restructuring costs, depreciation and amortization7,810 9,346 
Restructuring costs61 26 
Depreciation and amortization120 137 
Operating income2,611 2,395 
Net income772 807 
Equity in earnings of MNI386 404 
MNI makes periodic distributions of its earnings and in the three months ended December 24, 2023 and December 25, 2022, we received $0.4 million and $0.3 million in distributions, respectively.
4    GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill and identified intangible assets consist of the following:
(Thousands of Dollars)December 24,
2023		September 24,
2023
Goodwill, beginning of period329,504 329,504 
Allocated to sold operations(1,261)— 
Goodwill, end of period328,243 329,504 
Non-amortized intangible assets:
Mastheads18,675 18,675 
Amortizable intangible assets:
Customer and newspaper subscriber lists305,100 306,766 
Less accumulated amortization(233,391)(230,453)
71,709 76,313 
Total intangibles, net418,627 424,492 
The weighted average amortization period for amortizable assets is 11.2 years.
During the three months ended December 24, 2023 the Company sold non-core operations. Goodwill was allocated on a pro-rata basis to these operations, which totaled $1.3 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 $454.2 million at a 9% annual fixed rate and maturing on March 16, 2045 (referred to herein as “Credit Agreement” and “Term Loan”). On December 24, 2023, the fair value is $382.2 million. This represents a level 2 fair value measurement.
During the three months ended December 24, 2023, we made $1.6 million principal debt payments as a result of non-core asset sales. Future payments are contingent on the Company's ability to generate future excess cash flow, as defined in the Credit Agreement. As of December 24, 2023, there was no excess cash flow payment due.
9
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 December 24, 2023, our liability and related expense for benefits under the plans are recorded over the service period of employees based upon annual actuarial calculations.
During the three months ended December 24, 2023, 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 Income (Loss) and Comprehensive Income (Loss). Pension plan assets and liabilities were reduced by $22.6 million.
During the three months ended December 24, 2023, the Company completed the outsourcing of certain printing operations, which ceased postretirement medical benefits for a group of employees. The Company recognized a non-cash curtailment gain of $1.2 million, which is reflected within "Curtailment/Settlement gains" on the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss).
The net periodic pension and postretirement cost (benefit) components for our plans are as follows:
PENSION PLANSThree months ended
(Thousands of Dollars)December 24,
2023		December 25,
2022
Service cost for benefits earned during the period1 5 
Interest cost on projected benefit obligation2,515 2,592 
Expected return on plan assets(2,453)(2,548)
Amortization of net (gain) loss(2)2 
Amortization of prior service benefit212 213 
Settlement gain(2,409)— 
Net periodic pension (benefit) cost(2,136)264 
POSTRETIREMENT MEDICAL PLANSThree months ended
(Thousands of Dollars)December 24,
2023		December 25,
2022
Service cost for benefits earned during the period13 17 
Interest cost on projected benefit obligation149 149 
Expected return on plan assets(320)(295)
Amortization of net gain(308)(254)
Amortization of prior service benefit(94)(162)
Curtailment gain(1,184)— 
Net periodic postretirement benefit(1,744)(545)
In the three months ended December 24, 2023 and December 25, 2022, we made no contributions to our pension plans. We have no required contributions to our pension plans for 2024.
Multiemployer Pension Plans
In prior periods, the Company effectuated withdrawals from several multiemployer plans. As of December 24, 2023 and September 24, 2023, we had $24.8 million and $25.1 million of accrued
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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 expense of $0.2 million related to income before taxes of $1.5 million for the three months ended December 24, 2023. We recorded an income tax expense of $0.4 million related to income before taxes of $2.3 million for the three months ended December 25, 2022. The effective income tax rate for the three months ended December 24, 2023, was 16.7%. The effective income tax rate for the three months ended December 25, 2022, was 19.4%.
The primary differences between these rates and the U.S. federal statutory rate of 21% are because of state taxes, non-deductible expenses 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 2015.
8    EARNINGS PER COMMON SHARE
The following table sets forth the computation of basic and diluted earnings per common share:
Three months ended
(Thousands of Dollars and Shares, Except Per Share Data)December 24,
2023		December 25,
2022
Income attributable to Lee Enterprises, Incorporated:688 1,099 
Weighted average common shares6,080 5,996 
Less weighted average restricted Common Stock(170)(171)
Basic average common shares5,910 5,825 
Dilutive restricted Common Stock26 71 
Diluted average common shares5,936 5,896 
Earnings per common share:  
Basic0.12 0.19 
Diluted0.12 0.19 
For the three months ended December 24, 2023 and December 25, 2022, 128,019 and 74,304 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.
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.
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Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion includes comments and analysis relating to our results of operations and financial condition as of and for the three months ended December 24, 2023. This discussion should be read in conjunction with the Consolidated Financial Statements and related Notes thereto, included herein, and our 2023 Annual Report on Form 10-K.
EXECUTIVE OVERVIEW
Lee Enterprises, Incorporated, together with its subsidiaries, is a digital-first subscription business providing local markets with valuable, high quality, trusted, intensely local news, information, advertising and marketing services. We inform consumers in 73 mid-sized local communities in 26 states with a rapidly growing digital subscription platform including 735,000 digital subscribers. Our core strategy aims to grow audiences and engagement through creating, collecting, and distributing trusted local news and information, continuous improvements to subscriber experience, and offering a full suite of omni-channel advertising and marketing to more than 30,000 local advertisers.
Our product portfolio includes digital subscription platforms, daily, weekly and monthly newspapers and niche products, all delivering original local news and information as well as national and international news. Our products offer digital and print editions, and our content and advertising is available in real time through our websites and mobile apps. We operate in predominately mid-sized communities with products ranging from large daily newspapers and associated digital products, such as the St. Louis Post-Dispatch and The Buffalo News, to non-daily newspapers with news websites and digital platforms serving smaller communities.
We have made investments in talent and technology to improve user experience, content, data visualization and marketing to align with the shift in spending habits by both consumers and advertisers toward digital products.
We aim to grow our business through three main categories: subscriptions to our product offerings, advertising and marketing solutions to local advertisers, and digital services to a diverse set of customers. Execution of this strategy is expected to transform Lee into a growing and sustainable local media organization.
•Our digital subscription platforms are the fastest growing digital subscription platforms in local media.
•Amplified Digital® ("Amplified"), our digital marketing services agency, offers a full suite of digital marketing solutions to local advertisers.
•BLOX Digital (formerly known as TownNews), our software as a service (SaaS) content platform, is one of the largest web-hosting and content management SaaS providers in North America. BLOX Digital represents a powerful opportunity to drive additional digital revenue by providing state-of-the-art web hosting and content management services to more than 2,000 customers who rely on BLOX Digital for their web, over-the-top display, mobile, video and social media products.
We generate revenue primarily through advertising and marketing services, subscriptions to our digital and print products, and digital services, primarily through our majority-owned subsidiary, BLOX Digital.
STRATEGY
We are a major subscription and advertising platform, a trusted local news provider and innovative, digitally-focused marketing solutions company. Our focus is on the local market - including local news and information, local advertising and marketing services to top local accounts, and digital services to local content curators. To align with the core strength of our Company, our operating strategy is locally focused around three pillars:
•Grow digital audiences by transforming the way we present local news and information
•Expand our digital subscription base and revenue through audience growth and continued conversion of our massive digital audiences.
•Diversify and expand offerings for advertisers through our vast array of rapidly growing digital products, our large digitally adapt sales force, and Amplified, our full-service digital agency.
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RESULTS OF OPERATIONS
Three Months Ended December 24, 2023
Operating results are summarized below.
(Thousands of Dollars, Except Per Common Share Data)December 24, 2023December 25, 2022Percent Change
Operating revenue:
Print advertising revenue24,435 41,836 (41.6)%
Digital advertising revenue46,452 47,749 (2.7)%
Advertising and marketing services revenue70,887 89,585 (20.9)%
Print subscription revenue51,872 67,370 (23.0)%
Digital subscription revenue19,467 12,329 57.9 %
Subscription revenue71,339 79,699 (10.5)%
Print other revenue8,492 11,120 (23.6)%
Digital other revenue4,960 4,727 4.9 %
Other revenue13,452 15,847 (15.1)%
Total operating revenue155,678 185,131 (15.9)%
Operating expenses:
Compensation59,676 75,446 (20.9)%
Newsprint and ink4,843 7,432 (34.8)%
Other operating expenses74,776 86,774 (13.8)%
Depreciation and amortization7,295 7,886 (7.5)%
Assets gain on sales, impairments and other(1,469)(2,563)(42.7)%
Restructuring costs and other4,265 646 NM
Total operating expenses149,386 175,621 (14.9)%
Equity in earnings of associated companies1,541 1,668 (7.6)%
Operating income7,833 11,178 (29.9)%
Non-operating income (expense):
Interest expense(10,131)(10,408)(2.7)%
Pension and OPEB related benefit (cost) and other, net186 1,494 (87.6)%
Curtailment/Settlement gains3,593 — NM
Total non-operating expense, net(6,352)(8,914)(28.7)%
Income before income taxes1,481 2,264 (34.6)%
Income tax expense248 440 (43.6)%
Net Income1,233 1,824 (32.4)%
Earnings (loss) per common share:
Basic0.12 0.19(91.4)%
Diluted0.12 0.19(91.2)%
References to the “2024 Quarter” refer to the three months ended December 24, 2023. Similarly, references to the “2023 Quarter” refer to the three months ended December 25, 2022.
Operating Revenue
Total operating revenue was $155.7 million in the 2024 Quarter, down $29.5 million, or 15.9%, compared to the prior year.
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Advertising and marketing services revenue totaled $70.9 million in the 2024 Quarter, down 20.9% compared to the 2023 Quarter. Print advertising revenues were $24.4 million in the 2024 Quarter, down 41.6% compared to the 2023 Quarter due to continued secular declines in demand for print advertising and a reduced product portfolio through sales and elimination of products that do not met profitability standards. Digital advertising and marketing services totaled $46.5 million in the 2024 Quarter, down 2.7% compared to the 2023 Quarter. Digital advertising and marketing services represented 65.5% of the 2024 Quarter total advertising and marketing services revenue, compared to 53.3% in the same period last year.
Subscription revenue totaled $71.3 million in the 2024 Quarter, down 10.5% compared to the 2023 Quarter. Decline in full access volume, consistent with historical and industry trends were partially offset by selective increases on our full access subscriptions, growth in digital-only subscribers and price increases on digital subscriptions. Digital-only subscribers grew 30.4% since the 2023 Quarter and now total 735,000, and revenue from digital-only subscribers totaled $19.5 million, up 57.9% compared to the 2023 Quarter.
Other revenue, which primarily consists of commercial printing revenue and digital services from BLOX Digital, decreased $2.4 million, or 15.1%, in the 2024 Quarter compared to the 2023 Quarter. Digital services revenue totaled $5.0 million in the 2024 Quarter, a 4.9% increase compared to the 2023 Quarter. Commercial printing revenue totaled $4.5 million in the 2024 Quarter, a 16.7% decrease compared to the 2023 Quarter, primarily driven by reduction in print volumes from our partners.
Total digital revenue including digital advertising revenue, digital subscription revenue and digital services revenue totaled $70.9 million in the 2024 Quarter, an increase of 9.4% over the 2023 Quarter, and represented 45.5% of our total operating revenue in the 2024 Quarter.
Equity in earnings of TNI and MNI decreased 0.1 in the 2024 Quarter.
Operating Expenses
Total operating expenses were $149.4 million in the 2024 Quarter, a 14.9% decrease compared to the 2023 Quarter. Cash Costs, a non-GAAP financial measure used to summarize certain operating expense (see reconciliation of Non-GAAP financial measures below), were down 17.9% in the 2024 Quarter.
Compensation expense decreased $15.8 million in the 2024 Quarter, or 20.9%, compared to the 2023 Quarter from reductions in full time employees ("FTEs") due to continued business transformation efforts, partially offset by investments in digital talent.
Newsprint and ink costs decreased $2.6 in the 2024 Quarter, or 34.8%, compared to the 2023 Quarter. The decrease is attributable to declines in newsprint volumes.
Other operating expenses decreased $12.0 in the 2024 Quarter, or 13.8%, compared to the 2023 Quarter. Other operating expenses include all operating costs not considered to be compensation, newsprint, depreciation and amortization, or restructuring costs and assets loss on sales, impairments, and other, net. The largest components are costs associated with printing and distribution of our printed products, digital cost of goods sold and facility expenses. The decrease is attributable to lower delivery and other print-related costs due to lower volumes of our print edition, partially increases in investments to fund our digital growth strategy partially offset by
Restructuring costs and other totaled $4.3 million and $0.6 million in the 2024 Quarter and 2023 Quarter, respectively. Restructuring costs and other include severance costs, litigation expenses, restructuring expenses, and advisor expenses. Restructuring costs in the 2024 and 2023 Quarter's are predominately severance related to our ongoing business transformation.
Depreciation and amortization expense decreased $0.6 million, or 7.5%, in the 2024 Quarter. The decrease in both is attributable to assets becoming fully depreciated or amortized.
Assets gain on sales, impairments and other, was a net gain of $1.5 million in the 2024 Quarter compared to a net gain of $2.6 million in the 2023 Quarter. Assets gain on sales, impairments and other in the 2024 Quarter and in the 2023 Quarter were the result of the disposition of non-core assets, including real estate.
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The factors noted above resulted in an operating income of $7.8 million in the 2024 Quarter compared to operating income of $11.2 million in the 2023 Quarter.
Non-operating Income and Expense
Interest expense decreased $0.3 million, or 2.7%, to $10.1 million in the 2024 Quarter, compared to the same period last year. The decrease was due to a lower outstanding balance on our Term Loan. Our weighted average cost of debt was 9.0% at the end of the 2024 Quarter and 2023 Quarter.
Other non-operating income and expense consists of benefits associated with our pension and other postretirement plans and the fair value adjustment of our Warrants. We recorded $3.9 million periodic pension and other postretirement benefits in the 2024 Quarter compared to $0.3 million in the 2023 Quarter. The increase was a result of recognized a non-cash curtailment gain of $1.2 million in the 2023 Quarter as a result of outsourcing certain postemployment defined benefit plan functions. Additionally, during the Quarter, the Company completed a voluntary lump sum payment of future benefits to terminated vested participants. The offer was accepted by 522 participants representing $22.6 million in plan liabilities. As a result of the offer, a non-cash settlement gain of $2.4 million was recorded in Curtailment/Settlement gain on the Consolidated Statements of Income and Comprehensive Income. Both assets and liabilities of the plan were reduced by $22.6 million.
Income Tax Expense
We recorded an income tax expense of $0.2 million, or 16.7% of pretax income in the 2024 Quarter. In the 2023 Quarter, we recognized an income tax expense of $0.4 million, or 19.4% of pretax income.
Net Income and Earnings Per Share
Net income was $1.2 million and diluted earnings per share were $0.12 for the 2024 Quarter compared to net income of $1.8 million and diluted earnings per share of $0.19 for the 2023 Quarter. The change reflects the various items discussed above.
NON-GAAP FINANCIAL MEASURES
We use non-GAAP financial performance measures to supplement the financial information presented on a GAAP basis. These non-GAAP financial measures should not be considered in isolation or as a substitute for the relevant GAAP measures and should be read in conjunction with information presented on a GAAP basis.
In this report, we present Adjusted EBITDA and Cash Costs which are non-GAAP financial performance measures that exclude from our reported GAAP results the impact of certain items consisting primarily of restructuring charges and non-cash charges. We believe such expenses, charges and gains are not indicative of normal, ongoing operations, and their inclusion in results makes for more difficult comparisons between years and with peer group companies. In the future, however, we are likely to incur expenses, charges and gains similar to the items for which the applicable GAAP financial measures have been adjusted and to report non-GAAP financial measures excluding such items. Accordingly, exclusion of those or similar items in our non-GAAP presentations should not be interpreted as implying the items are non-recurring, infrequent, or unusual.
We define our non-GAAP measures, which may not be comparable to similarly titled measures reported by other companies, as follows:
Adjusted EBITDA is a non-GAAP financial performance measure that enhances financial statement users' overall understanding of the operating performance of the Company. The measure isolates unusual, infrequent, or non-cash transactions from the operating performance of the business. This allows users to easily compare operating performance among various fiscal periods and how management measures the performance of the business. This measure also provides users with a benchmark that can be used when forecasting future operating performance of the Company that excludes unusual, nonrecurring or one-time transactions. Adjusted EBITDA is also a component of the calculation used by stockholders and analysts to determine the value of our business when using the market approach, which applies a market multiple to financial metrics. It is also a measure used to calculate the leverage ratio of the Company, which is a key financial ratio monitored and used by the Company and its investors. Adjusted EBITDA is defined as net income (loss), plus non-operating expenses, income tax expense, depreciation and amortization, assets loss (gain) on sales, impairments and
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other, restructuring costs and other, stock compensation and our 50% share of EBITDA from TNI and MNI, minus equity in earnings of TNI and MNI.
Cash Costs represent a non-GAAP financial performance measure of operating expenses which are measured on an accrual basis and settled in cash. This measure is useful to investors in understanding the components of the Company’s cash-settled operating costs. Generally, the Company provides forward-looking guidance of Cash Costs, which can be used by financial statement users to assess the Company's ability to manage and control its operating cost structure. Cash Costs are defined as compensation, newsprint and ink and other operating expenses. Depreciation and amortization, assets loss (gain) on sales, impairments and other, other non-cash operating expenses and other expenses are excluded. Cash Costs also exclude restructuring costs and other, which are typically settled in cash.
Adjusted EBITDA and Cash Costs are reconciled to net income (loss) and operating expenses, below, the closest comparable numbers under GAAP.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
The table below reconciles the non-GAAP financial performance measure of Adjusted EBITDA to net income, the most directly comparable GAAP measure:
Three months ended
(Thousands of Dollars)December 24, 2023December 25, 2022
Net income1,233 1,824 
Adjusted to exclude
Income tax expense248 440 
Non-operating expenses, net6,352 8,914 
Equity in earnings of TNI and MNI(1,541)(1,668)
Depreciation and amortization7,295 7,886 
Restructuring costs and other4,265 646 
Assets gain on sales, impairments and other, net(1,469)(2,563)
Stock compensation214 349 
Add:
Ownership share of TNI and MNI EBITDA (50%)2,052 1,791 
Adjusted EBITDA18,649 17,619 
The table below reconciles the non-GAAP financial performance measure of Cash Costs to Operating expenses, the most directly comparable GAAP measure:
Three months ended
(Thousands of Dollars)December 24, 2023December 25, 2022
Operating expenses149,386 175,621 
Adjustments
Depreciation and amortization7,295 7,886 
Assets gain on sales, impairments and other, net(1,469)(2,563)
Restructuring costs and other4,265 646 
Cash Costs139,295 169,652 
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LIQUIDITY AND CAPITAL RESOURCES
Our operations have historically generated strong positive cash flow and are expected to provide sufficient liquidity, together with cash on hand, to meet our requirements, primarily operating expenses, interest expense and capital expenditures. A summary of our cash flows is included in the narrative below.
Operating Activities
Cash provided by operating activities totaled $0.1 million in 2024 compared to cash required for operating activities of $2.2 million in 2023, an increase of $2.3 million. The increase was driven by an increase in working capital of $3.7 million, primarily related to favorable change in accounts receivable and accounts payable, partially offset by a decrease in operating results of $1.5 million (defined as net income (loss) adjusted for non-working capital items).
Investing Activities
Cash provided by investing activities totaled $2.1 million in the 2024 Period compared to cash provided by investing activities of $4.5 million in the 2023 Period. 2024 and 2023 included $3.1 million and $4.1 million, respectively, in proceeds from the sale of assets as the Company divested non-core real estate.
We anticipate that funds necessary for capital expenditures, which are expected to total up to $10.0 million in 2024, and other requirements, will be available from internally generated funds.
Financing Activities
Cash required for financing activities totaled $1.4 million in the 2024 Period compared to $0.2 million in the 2023 Period. Debt reduction accounted for nearly all the usage of funds in 2024.
Additional Information on Liquidity
Our liquidity, consisting of cash on the balance sheet, totaled $15.4 million on December 24, 2023. This liquidity amount excludes any future cash flows from operations. We expect all interest and principal payments due in the next twelve months will be satisfied by existing cash and our cash flows, which will allow us to maintain an adequate level of liquidity.
CHANGES IN LAWS AND REGULATIONS
Wage Laws
The United States and various state and local governments are considering increasing their respective minimum wage rates. Most of our employees are paid more than the current United States or state minimum wage rates. However, until changes to such rates are enacted, the impact of the changes cannot be determined.
Item 3.    Controls and Procedures
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
As of September 24, 2023, under the supervision and with the participation of our senior management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on that evaluation the Company has concluded that, because the material weakness in the Company's internal control that existed as of September 24, 2023 and have not been remediated by the end of the period covered by this report, our disclosure controls and procedures were not effective.
The material weakness identified by the Company is described below:
•Management did not design and implement controls to assess the reliability of certain internally generated information, or evaluate information received from certain third-party service providers, that are relevant to certain revenue recognized in the Company's Consolidated Financial Statements.
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Remediation Plans and Actions
Management is committed to remediating the material weakness that has been identified and maintaining an effective system of disclosure controls and procedures. During fiscal 2023, management executed certain actions steps to remediate the material weakness, including:

•Established a project team to review, evaluate and remediate the material weakness in internal controls over financial reporting. The Company's recently expanded Corporate Compliance function is leading management's efforts related to effective control design, documentation and implementation, as well as remediate ineffective controls.

•Enhanced the design of internal controls around evaluating data provided by third-parties, which included the initial implementation of a new revenue IT system.

Management will continue to execute the remediation steps outlined above until the material weakness is remediated. The material weakness will not be considered remediated until the remediated and/or newly implemented internal controls operate for a sufficient period of time and management has concluded, through testing, that these internal controls are operating effectively. We are working to have the material weakness remediated as soon as possible.
PART II
OTHER INFORMATION

Item 1.    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.
Item 1A    Risk Factors
Except as otherwise described herein, there have been no material changes in the risk factors previously disclosed in “Part I, Item 1A. Risk Factors” of our 2023 Form 10-K.
In addition, the Company may, from time to time, evaluate and pursue other opportunities for growth, including through strategic investments, joint ventures, and other acquisitions. These strategic initiatives involve various inherent risks, including, without limitation, general business risk, integration and synergy risk, market acceptance risk and risks associated with the potential distraction of management. Such transactions and initiatives may not ultimately create value for us or our stockholders and may harm our reputation and materially adversely affect our business, financial condition, and results of operations.
Item 6.    Exhibits
Exhibits marked with an asterisk (*) are incorporated by reference to documents previously filed by us with the SEC, as indicated. Exhibits marked with a plus (+) are management contracts or compensatory plan contracts
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or arrangements filed pursuant to Item 601(b)(10)(iii)(A) of Regulation S-K. All other documents listed are filed with this Quarterly Report on Form 10-Q.
NumberDescription
31.1Attached
31.2Attached
32.1Attached
32.2Attached
101.INSInline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)Attached
101.SCHInline XBRL Taxonomy Extension Schema DocumentAttached
101.CALInline XBRL Taxonomy Extension Calculation Linkbase DocumentAttached
101.DEFInline XBRL Taxonomy Extension Definition Linkbase DocumentAttached
101.LABInline XBRL Taxonomy Extension Label Linkbase DocumentAttached
101.PREInline XBRL Taxonomy Extension Presentation Linkbase DocumentAttached
104Cover Page Interactive Data File (formatted as Inline XBRL and embedded within the Inline XBRL document)Attached
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
LEE ENTERPRISES, INCORPORATED
/s/ Timothy R. Millage
February 2, 2024
Timothy R. Millage
Vice President, Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)
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Exhibit 31.1
CERTIFICATION
I, Kevin D. Mowbray, certify that:
1I have reviewed this Quarterly report on Form 10-Q ("Quarterly Report") of Lee Enterprises, Incorporated ("Registrant");
2Based on my knowledge, this Quarterly Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report;
3Based on my knowledge, the Consolidated Financial Statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Quarterly Report;
4The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Quarterly Report is being prepared;
b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this Quarterly Report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this Quarterly Report based on such evaluation; and
d)disclosed in this Quarterly Report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an Annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and
5The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the Audit Committee of Registrant's Board of Directors (or persons performing the equivalent functions):
a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and
b)any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.
Date: February 2, 2024
/s/ Kevin D. Mowbray
Kevin D. Mowbray
President and Chief Executive Officer


Exhibit 31.2
CERTIFICATION
I, Timothy R. Millage, certify that:
1I have reviewed this Quarterly report on Form 10-Q ("Quarterly Report") of Lee Enterprises, Incorporated ("Registrant");
2Based on my knowledge, this Quarterly Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report;
3Based on my knowledge, the Consolidated Financial Statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Quarterly Report;
4The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Quarterly Report is being prepared;
b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this Quarterly Report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this Quarterly Report based on such evaluation; and
d)disclosed in this Quarterly Report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an Annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and
5The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the Audit Committee of Registrant's Board of Directors (or persons performing the equivalent functions):
a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and
b)any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.
Date: February 2, 2024
/s/ Timothy R. Millage
Timothy R. Millage
Vice President, Chief Financial Officer and Treasurer


Exhibit 32.1
The following statement is being furnished to the Securities and Exchange Commission solely for purposes of Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350), which carries with it certain criminal penalties in the event of a knowing or willful misrepresentation.
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Re: Lee Enterprises, Incorporated
Ladies and Gentlemen:
In accordance with the requirements of Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350), the undersigned hereby certifies that to his knowledge:
(i)this Quarterly report on Form 10-Q for the period ended December 24, 2023 ("Quarterly Report"), fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(ii)the information contained in this Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of Lee Enterprises, Incorporated for the periods presented in the Quarterly Report.
Date: February 2, 2024
/s/ Kevin D. Mowbray 
Kevin D. Mowbray 
President and Chief Executive Officer 
A signed original of this written statement required by Section 906 has been provided to Lee Enterprises, Incorporated and will be retained by Lee Enterprises, Incorporated and furnished to the Securities and Exchange Commission upon request.


Exhibit 32.2
The following statement is being furnished to the Securities and Exchange Commission solely for purposes of Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350), which carries with it certain criminal penalties in the event of a knowing or willful misrepresentation.
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Re: Lee Enterprises, Incorporated
Ladies and Gentlemen:
In accordance with the requirements of Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350), the undersigned hereby certifies that to his knowledge:
(i)this Quarterly report on Form 10-Q for the period ended December 24, 2023 ("Quarterly Report"), fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(ii)the information contained in this Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of Lee Enterprises, Incorporated for the periods presented in the Quarterly Report.
Date: February 2, 2024
/s/ Timothy R. Millage
Timothy R. Millage
Vice President, Chief Financial Officer and Treasurer
A signed original of this written statement required by Section 906 has been provided to Lee Enterprises, Incorporated and will be retained by Lee Enterprises, Incorporated and furnished to the Securities and Exchange Commission upon request.

v3.24.0.1
Document And Entity Information - shares
 3 Months Ended
Dec. 24, 2023
Jan. 31, 2024
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Dec. 24, 2023  
Document Transition Report false  
Entity File Number 1-6227  
Entity Registrant Name LEE ENTERPRISES, INC  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 42-0823980  
Entity Address, Address Line One 4600 E. 53rd Street  
Entity Address, City or Town Davenport  
Entity Address, State or Province IA  
Entity Address, Postal Zip Code 52807  
City Area Code 563  
Local Phone Number 383-2100  
Title of 12(b) Security Common Stock, par value $.01 per share  
Trading Symbol LEE  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   6,143,119
Entity Central Index Key 0000058361  
Current Fiscal Year End Date --09-29  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q1  
Amendment Flag false  
v3.24.0.1
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Dec. 24, 2023
Sep. 24, 2023
Current assets:    
Cash and cash equivalents $ 15,365 $ 14,548
Accounts receivable and contract assets, net 68,103 69,104
Inventories 7,637 7,504
Prepaid and other current assets 14,761 15,373
Total current assets 105,866 106,529
Investments:    
Associated companies 27,741 27,819
Other 5,569 5,572
Total investments 33,310 33,391
Property and equipment:    
Land and improvements 11,995 12,366
Buildings and improvements 82,989 83,140
Equipment 211,356 213,714
Construction in process 1,368 2,453
Property and equipment, gross 307,708 311,673
Less accumulated depreciation 248,530 250,439
Property and equipment, net 59,178 61,234
Operating lease right-of-use assets 38,417 40,822
Goodwill 328,243 329,504
Other intangible assets, net 90,384 94,988
Other 14,195 12,741
Total assets 702,509 711,617
Current liabilities:    
Current portion of lease liabilities 7,602 7,755
Accounts payable 38,537 36,290
Compensation and other accrued liabilities 26,960 29,448
Unearned revenue 39,550 40,843
Total current liabilities 112,649 114,336
Long-term debt, net of current maturities 454,161 455,741
Operating lease liabilities 34,160 36,580
Pension obligations 561 586
Postretirement and postemployment benefit obligations 7,427 8,618
Deferred income taxes 40,735 41,351
Income taxes payable 5,980 5,809
Withdrawal liabilities and other 24,646 24,890
Total liabilities 680,319 687,911
Stockholders' equity:    
Serial convertible preferred stock, no par value; authorized 500 shares; none issued 0 0
Additional paid-in capital 260,950 260,832
Accumulated deficit (265,808) (266,496)
Accumulated other comprehensive income 24,529 26,843
Total stockholders' equity 19,732 21,240
Non-controlling interests 2,458 2,466
Total equity 22,190 23,706
Total liabilities and equity 702,509 711,617
Common Class A    
Stockholders' equity:    
Common stock 61 61
Common Class B    
Stockholders' equity:    
Common stock 0 0
Pension Plan    
Property and equipment:    
Pension and medical plan assets 11,095 10,843
Medical Plan    
Property and equipment:    
Pension and medical plan assets $ 21,821 $ 21,565
v3.24.0.1
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
shares in Thousands
Dec. 24, 2023
Sep. 24, 2023
Preferred stock, par value (in dollars per share) $ 0 $ 0
Preferred stock, shares authorized (in shares) 500 500
Preferred stock, shares issued (in shares) 0 0
Common Class A    
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized (in shares) 12,000 12,000
Common stock, shares outstanding (in shares) 6,143 6,063
Common stock, shares issued (in shares) 6,143 6,063
Common Class B    
Common stock, par value (in dollars per share) $ 2 $ 2
Common stock, shares authorized (in shares) 3,000 3,000
Common stock, shares issued (in shares) 0 0
v3.24.0.1
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended
Dec. 24, 2023
Dec. 25, 2022
Operating revenue:    
Total operating revenue $ 155,678 $ 185,131
Operating expenses:    
Compensation 59,676 75,446
Newsprint and ink 4,843 7,432
Other operating expenses 74,776 86,774
Depreciation and amortization 7,295 7,886
Assets gain on sales, impairments and other, net (1,469) (2,563)
Restructuring costs and other 4,265 646
Total operating expenses 149,386 175,621
Equity in earnings of associated companies 1,541 1,668
Operating income 7,833 11,178
Non-operating (expense) income:    
Interest expense (10,131) (10,408)
Pension and OPEB related benefit and other, net 186 1,494
Curtailment/Settlement gains 3,593 0
Total non-operating expense, net (6,352) (8,914)
Income before income taxes 1,481 2,264
Income tax expense 248 440
Net income 1,233 1,824
Net income attributable to non-controlling interests (545) (725)
Income attributable to Lee Enterprises, Incorporated 688 1,099
Other comprehensive loss, net of income taxes (2,314) (140)
Comprehensive (loss) income attributable to Lee Enterprises, Incorporated $ (1,626) $ 959
Earnings per common share:    
Basic (in dollars per share) $ 0.12 $ 0.19
Diluted (in dollars per share) $ 0.12 $ 0.19
Advertising and marketing services    
Operating revenue:    
Total operating revenue $ 70,887 $ 89,585
Subscription    
Operating revenue:    
Total operating revenue 71,339 79,699
Other    
Operating revenue:    
Total operating revenue $ 13,452 $ 15,847
v3.24.0.1
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($)
$ in Thousands
Total
Accumulated Deficit
Common Stock
Additional paid-in capital
Accumulated Other Comprehensive Income
Beginning Balance at Sep. 25, 2022 $ 15,005 $ (261,229) $ 60 $ 259,521 $ 16,653
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Shares redeemed (383)     (383)  
Income attributable to Lee Enterprises, Incorporated 1,099 1,099      
Stock compensation 349     349  
Other comprehensive loss (200)       (200)
Deferred income taxes, net 60       60
Ending Balance at Dec. 25, 2022 15,930 (260,130) 60 259,487 16,513
Beginning Balance at Sep. 24, 2023 21,240 (266,496) 61 260,832 26,843
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Shares redeemed (96)     (96)  
Income attributable to Lee Enterprises, Incorporated 688 688      
Stock compensation 214     214  
Other comprehensive loss (2,286)       (2,286)
Deferred income taxes, net (28)       (28)
Ending Balance at Dec. 24, 2023 $ 19,732 $ (265,808) $ 61 $ 260,950 $ 24,529
v3.24.0.1
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended
Dec. 24, 2023
Dec. 25, 2022
Cash (required for) provided by operating activities:    
Net income $ 1,233 $ 1,824
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 7,295 7,886
Bad debt expense 3,724 1,936
Curtailment/Settlement gain (3,593) 0
Stock compensation expense 214 349
Assets gain on sales, impairments and other, net (1,469) (2,563)
Earnings net of distributions deemed returns on investment of TNI and MNI (59) (522)
Gain on sale of investment 0 (1,408)
Deferred income taxes (645) (216)
Return of letters of credit collateral 0 778
Other, net (550) (459)
Changes in operating assets and liabilities:    
Increase in receivables and contract assets (3,040) (8,034)
(Increase) decrease in inventories and other (66) 153
Increase (decrease) in accounts payable and other accrued liabilities 64 (1,738)
Decrease in pension and other postretirement and postemployment benefit obligations (418) (192)
Change in income taxes payable (2,105) 570
Other (505) (578)
Net cash provided by (required for) operating activities 80 (2,214)
Cash provided by (required for) investing activities:    
Purchases of property and equipment (1,030) (1,187)
Proceeds from sales of assets 3,145 4,052
Other, net (20) 1,678
Net cash provided by investing activities 2,095 4,543
Cash required for financing activities:    
Principal payments on long-term debt (1,580) 0
Common stock transactions, net 221 (168)
Net cash required for financing activities (1,359) (168)
Net increase in cash and cash equivalents 816 2,161
Cash and cash equivalents:    
Beginning of period 14,548 16,185
End of period $ 15,364 $ 18,346
v3.24.0.1
Basis of Presentation and Summary of Significant Accounting Policies
 3 Months Ended
Dec. 24, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation and Summary of Significant Accounting Policies 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 December 24, 2023, 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 2023 Annual Report on Form 10-K.
The Company's fiscal year ends on the last Sunday in September. Fiscal year 2024 ends on September 24, 2024, and fiscal year 2023 ended September 24, 2023. Fiscal year 2024 includes 53 weeks of operations and 2023 included 52 weeks of operations. Because of seasonal and other factors, the results of operations for the three months ended December 24, 2023, 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.
In 2024, certain prior period amounts within the consolidated financial statements have been adjusted to conform with current period presentation. These matters did not change operating revenues, net income (loss), accumulated deficit, and earnings per share in all periods presented.
v3.24.0.1
Revenue
 3 Months Ended
Dec. 24, 2023
Revenue from Contract with Customer [Abstract]  
Revenue REVENUE
The following table presents our revenue disaggregated by source:
Three months Ended
(Thousands of Dollars)December 24,
2023		December 25,
2022
Operating revenue:
Print advertising revenue24,435 41,836 
Digital advertising revenue46,452 47,749 
Advertising and marketing services revenue70,887 89,585 
Print subscription revenue51,872 67,370 
Digital subscription revenue19,467 12,329 
Subscription revenue71,339 79,699 
Print other revenue8,492 11,120 
Digital other revenue4,960 4,727 
Other revenue13,452 15,847 
Total operating revenue155,678 185,131 
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.
Arrangements with multiple performance obligations: We have various advertising and subscription agreements which include both print and digital performance obligations. Revenue from sales agreements that contain multiple performance obligations are allocated to each obligation based on the relative standalone selling price. We determine standalone selling prices based on observable prices charged to customers.
Contract Assets and 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 three months ended December 24, 2023, that was included in the contract liability as of September 24, 2023, was $27.2 million.
Accounts receivable, excluding allowance for credit losses was $74.3 million and $74.4 million as of December 24, 2023, and September 24, 2023, respectively. Allowance for credit losses was $6.2 million and $5.3 million as of December 24, 2023, and September 24, 2023, respectively.
Sales commissions are expensed as incurred as the associated contractual periods are one year or less. These costs are recorded within compensation. 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.
v3.24.0.1
Investments In Associated Companies
 3 Months Ended
Dec. 24, 2023
Equity Method Investments and Joint Ventures [Abstract]  
Investments In Associated Companies INVESTMENTS IN ASSOCIATED COMPANIES
TNI Partners
In Tucson, Arizona, TNI, acting as agent for our subsidiary, Star Publishing Company (“Star Publishing”), and Gannets 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
(Thousands of Dollars)December 24,
2023		December 25,
2022
Operating revenue6,991 8,814 
Operating expenses4,681 6,285 
Operating income2,310 2,529 
Company's 50% share of operating income
1,155 1,265 
Equity in earnings of TNI1,155 1,265 
TNI makes periodic distributions of its earnings and for the three months ended December 24, 2023, and December 25, 2022, we received $1.2 million and $0.9 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
(Thousands of Dollars)December 24,
2023		December 25,
2022
Operating revenue10,602 11,904 
Operating expenses, excluding restructuring costs, depreciation and amortization7,810 9,346 
Restructuring costs61 26 
Depreciation and amortization120 137 
Operating income2,611 2,395 
Net income772 807 
Equity in earnings of MNI386 404 
MNI makes periodic distributions of its earnings and in the three months ended December 24, 2023 and December 25, 2022, we received $0.4 million and $0.3 million in distributions
v3.24.0.1
Goodwill and Other Intangible Assets
 3 Months Ended
Dec. 24, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill And Other Intangible Assets GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill and identified intangible assets consist of the following:
(Thousands of Dollars)December 24,
2023		September 24,
2023
Goodwill, beginning of period329,504 329,504 
Allocated to sold operations(1,261)— 
Goodwill, end of period328,243 329,504 
Non-amortized intangible assets:
Mastheads18,675 18,675 
Amortizable intangible assets:
Customer and newspaper subscriber lists305,100 306,766 
Less accumulated amortization(233,391)(230,453)
71,709 76,313 
Total intangibles, net418,627 424,492 
The weighted average amortization period for amortizable assets is 11.2 years.
During the three months ended December 24, 2023 the Company sold non-core operations. Goodwill was allocated on a pro-rata basis to these operations, which totaled $1.3 million.
v3.24.0.1
Debt
 3 Months Ended
Dec. 24, 2023
Debt Disclosure [Abstract]  
Debt DEBT
The Company has debt consisting of a single 25-year term loan with BH Finance LLC, with an aggregate principal balance of $454.2 million at a 9% annual fixed rate and maturing on March 16, 2045 (referred to herein as “Credit Agreement” and “Term Loan”). On December 24, 2023, the fair value is $382.2 million. This represents a level 2 fair value measurement.
During the three months ended December 24, 2023, we made $1.6 million principal debt payments as a result of non-core asset sales. Future payments are contingent on the Company's ability to generate future excess cash flow, as defined in the Credit Agreement. As of December 24, 2023, there was no excess cash flow payment due.
v3.24.0.1
Pension, Postretirement and Postemployment Defined Benefit Plans
 3 Months Ended
Dec. 24, 2023
Retirement Benefits [Abstract]  
Pension, Postretirement and Postemployment Defined Benefit Plans 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 December 24, 2023, our liability and related expense for benefits under the plans are recorded over the service period of employees based upon annual actuarial calculations.
During the three months ended December 24, 2023, 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 Income (Loss) and Comprehensive Income (Loss). Pension plan assets and liabilities were reduced by $22.6 million.
During the three months ended December 24, 2023, the Company completed the outsourcing of certain printing operations, which ceased postretirement medical benefits for a group of employees. The Company recognized a non-cash curtailment gain of $1.2 million, which is reflected within "Curtailment/Settlement gains" on the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss).
The net periodic pension and postretirement cost (benefit) components for our plans are as follows:
PENSION PLANSThree months ended
(Thousands of Dollars)December 24,
2023		December 25,
2022
Service cost for benefits earned during the period1 5 
Interest cost on projected benefit obligation2,515 2,592 
Expected return on plan assets(2,453)(2,548)
Amortization of net (gain) loss(2)2 
Amortization of prior service benefit212 213 
Settlement gain(2,409)— 
Net periodic pension (benefit) cost(2,136)264 
POSTRETIREMENT MEDICAL PLANSThree months ended
(Thousands of Dollars)December 24,
2023		December 25,
2022
Service cost for benefits earned during the period13 17 
Interest cost on projected benefit obligation149 149 
Expected return on plan assets(320)(295)
Amortization of net gain(308)(254)
Amortization of prior service benefit(94)(162)
Curtailment gain(1,184)— 
Net periodic postretirement benefit(1,744)(545)
In the three months ended December 24, 2023 and December 25, 2022, we made no contributions to our pension plans. We have no required contributions to our pension plans for 2024.
Multiemployer Pension Plans
In prior periods, the Company effectuated withdrawals from several multiemployer plans. As of December 24, 2023 and September 24, 2023, we had $24.8 million and $25.1 million of accrued
withdrawal liabilities. The liabilities reflect the estimated value of payments to the fund, payable over 20-years.
v3.24.0.1
Income Taxes
 3 Months Ended
Dec. 24, 2023
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
We recorded an income tax expense of $0.2 million related to income before taxes of $1.5 million for the three months ended December 24, 2023. We recorded an income tax expense of $0.4 million related to income before taxes of $2.3 million for the three months ended December 25, 2022. The effective income tax rate for the three months ended December 24, 2023, was 16.7%. The effective income tax rate for the three months ended December 25, 2022, was 19.4%.
The primary differences between these rates and the U.S. federal statutory rate of 21% are because of state taxes, non-deductible expenses 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 2015.
v3.24.0.1
Earnings Per Common Share
 3 Months Ended
Dec. 24, 2023
Earnings Per Share [Abstract]  
Earnings Per Common Share EARNINGS PER COMMON SHARE
The following table sets forth the computation of basic and diluted earnings per common share:
Three months ended
(Thousands of Dollars and Shares, Except Per Share Data)December 24,
2023		December 25,
2022
Income attributable to Lee Enterprises, Incorporated:688 1,099 
Weighted average common shares6,080 5,996 
Less weighted average restricted Common Stock(170)(171)
Basic average common shares5,910 5,825 
Dilutive restricted Common Stock26 71 
Diluted average common shares5,936 5,896 
Earnings per common share:  
Basic0.12 0.19 
Diluted0.12 0.19 
For the three months ended December 24, 2023 and December 25, 2022, 128,019 and 74,304 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.
v3.24.0.1
Commitments and Contingent Liabilities
 3 Months Ended
Dec. 24, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingent Liabilities 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.
v3.24.0.1
Basis of Presentation and Summary of Significant Accounting Policies (Policies)
 3 Months Ended
Dec. 24, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation
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 December 24, 2023, 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 2023 Annual Report on Form 10-K.
The Company's fiscal year ends on the last Sunday in September. Fiscal year 2024 ends on September 24, 2024, and fiscal year 2023 ended September 24, 2023. Fiscal year 2024 includes 53 weeks of operations and 2023 included 52 weeks of operations. Because of seasonal and other factors, the results of operations for the three months ended December 24, 2023, 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.
In 2024, certain prior period amounts within the consolidated financial statements have been adjusted to conform with current period presentation. These matters did not change operating revenues, net income (loss), accumulated deficit, and earnings per share in all periods presented.
v3.24.0.1
Revenue (Tables)
 3 Months Ended
Dec. 24, 2023
Revenue from Contract with Customer [Abstract]  
Revenue Disaggregated by Source
The following table presents our revenue disaggregated by source:
Three months Ended
(Thousands of Dollars)December 24,
2023		December 25,
2022
Operating revenue:
Print advertising revenue24,435 41,836 
Digital advertising revenue46,452 47,749 
Advertising and marketing services revenue70,887 89,585 
Print subscription revenue51,872 67,370 
Digital subscription revenue19,467 12,329 
Subscription revenue71,339 79,699 
Print other revenue8,492 11,120 
Digital other revenue4,960 4,727 
Other revenue13,452 15,847 
Total operating revenue155,678 185,131 
v3.24.0.1
Investments In Associated Companies (Tables)
 3 Months Ended
Dec. 24, 2023
Equity Method Investments and Joint Ventures [Abstract]  
Summarized Results of TNI and MNI
Summarized results of TNI are as follows:
Three months ended
(Thousands of Dollars)December 24,
2023		December 25,
2022
Operating revenue6,991 8,814 
Operating expenses4,681 6,285 
Operating income2,310 2,529 
Company's 50% share of operating income
1,155 1,265 
Equity in earnings of TNI1,155 1,265 
Summarized results of MNI are as follows:
Three months ended
(Thousands of Dollars)December 24,
2023		December 25,
2022
Operating revenue10,602 11,904 
Operating expenses, excluding restructuring costs, depreciation and amortization7,810 9,346 
Restructuring costs61 26 
Depreciation and amortization120 137 
Operating income2,611 2,395 
Net income772 807 
Equity in earnings of MNI386 404 
v3.24.0.1
Goodwill and Other Intangible Assets (Tables)
 3 Months Ended
Dec. 24, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Goodwill and Intangible Assets
Goodwill and identified intangible assets consist of the following:
(Thousands of Dollars)December 24,
2023		September 24,
2023
Goodwill, beginning of period329,504 329,504 
Allocated to sold operations(1,261)— 
Goodwill, end of period328,243 329,504 
Non-amortized intangible assets:
Mastheads18,675 18,675 
Amortizable intangible assets:
Customer and newspaper subscriber lists305,100 306,766 
Less accumulated amortization(233,391)(230,453)
71,709 76,313 
Total intangibles, net418,627 424,492 
v3.24.0.1
Pension, Postretirement and Postemployment Defined Benefit Plans (Tables)
 3 Months Ended
Dec. 24, 2023
Retirement Benefits [Abstract]  
Schedule of Net Periodic Pension and Postretirement Cost (Benefit) Components
The net periodic pension and postretirement cost (benefit) components for our plans are as follows:
PENSION PLANSThree months ended
(Thousands of Dollars)December 24,
2023		December 25,
2022
Service cost for benefits earned during the period1 5 
Interest cost on projected benefit obligation2,515 2,592 
Expected return on plan assets(2,453)(2,548)
Amortization of net (gain) loss(2)2 
Amortization of prior service benefit212 213 
Settlement gain(2,409)— 
Net periodic pension (benefit) cost(2,136)264 
POSTRETIREMENT MEDICAL PLANSThree months ended
(Thousands of Dollars)December 24,
2023		December 25,
2022
Service cost for benefits earned during the period13 17 
Interest cost on projected benefit obligation149 149 
Expected return on plan assets(320)(295)
Amortization of net gain(308)(254)
Amortization of prior service benefit(94)(162)
Curtailment gain(1,184)— 
Net periodic postretirement benefit(1,744)(545)
v3.24.0.1
Earnings Per Common Share (Tables)
 3 Months Ended
Dec. 24, 2023
Earnings Per Share [Abstract]  
Schedule of Earnings Per Share, Basic and Diluted
The following table sets forth the computation of basic and diluted earnings per common share:
Three months ended
(Thousands of Dollars and Shares, Except Per Share Data)December 24,
2023		December 25,
2022
Income attributable to Lee Enterprises, Incorporated:688 1,099 
Weighted average common shares6,080 5,996 
Less weighted average restricted Common Stock(170)(171)
Basic average common shares5,910 5,825 
Dilutive restricted Common Stock26 71 
Diluted average common shares5,936 5,896 
Earnings per common share:  
Basic0.12 0.19 
Diluted0.12 0.19 
v3.24.0.1
Basis of Presentation and Summary of Significant Accounting Policies (Details)
Dec. 24, 2023
Dec. 25, 2022
TNI Partners    
Noncontrolling Interest [Line Items]    
Equity method investment, ownership percentage 50.00% 50.00%
MNI    
Noncontrolling Interest [Line Items]    
Equity method investment, ownership percentage 50.00%  
INN Partners, L.C.    
Noncontrolling Interest [Line Items]    
Noncontrolling interest, ownership percentage by parent 82.50%  
v3.24.0.1
Revenue - Disaggregation of Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended
Dec. 24, 2023
Dec. 25, 2022
Operating revenue:    
Total operating revenue $ 155,678 $ 185,131
Advertising and marketing services revenue    
Operating revenue:    
Total operating revenue 70,887 89,585
Advertising and marketing services revenue | Print advertising revenue    
Operating revenue:    
Total operating revenue 24,435 41,836
Advertising and marketing services revenue | Digital advertising revenue    
Operating revenue:    
Total operating revenue 46,452 47,749
Subscription revenue    
Operating revenue:    
Total operating revenue 71,339 79,699
Subscription revenue | Print advertising revenue    
Operating revenue:    
Total operating revenue 51,872 67,370
Subscription revenue | Digital advertising revenue    
Operating revenue:    
Total operating revenue 19,467 12,329
Other revenue    
Operating revenue:    
Total operating revenue 13,452 15,847
Other revenue | Print advertising revenue    
Operating revenue:    
Total operating revenue 8,492 11,120
Other revenue | Digital advertising revenue    
Operating revenue:    
Total operating revenue $ 4,960 $ 4,727
v3.24.0.1
Revenue - Narrative (Details) - USD ($)
$ in Millions
 3 Months Ended
Dec. 24, 2023
Sep. 24, 2023
Revenue from Contract with Customer [Abstract]    
Contract liability revenue recognized $ 27.2  
Accounts receivable, excluding allowance for credit loss 74.3 $ 74.4
Allowance for credit loss $ 6.2 $ 5.3
v3.24.0.1
Investments In Associated Companies - Summarized Financial Results (Details) - USD ($)
$ in Thousands
 3 Months Ended
Dec. 24, 2023
Dec. 25, 2022
Schedule of Equity Method Investments [Line Items]    
Operating revenue $ 155,678 $ 185,131
Operating expenses 149,386 175,621
Restructuring costs 4,265 646
Depreciation and amortization 7,295 7,886
Operating income 7,833 11,178
Net income 1,233 1,824
Equity in earnings 1,541 1,668
TNI Partners    
Schedule of Equity Method Investments [Line Items]    
Operating revenue 6,991 8,814
Operating expenses 4,681 6,285
Operating income 2,310 2,529
MNI    
Schedule of Equity Method Investments [Line Items]    
Operating revenue 10,602 11,904
Operating expenses 7,810 9,346
Restructuring costs 61 26
Depreciation and amortization 120 137
Operating income 2,611 2,395
Net income 772 807
TNI Partners    
Schedule of Equity Method Investments [Line Items]    
Company's 50% share of operating income 1,155 1,265
Equity in earnings $ 1,155 $ 1,265
Percentage of share 50.00% 50.00%
MNI    
Schedule of Equity Method Investments [Line Items]    
Equity in earnings $ 386 $ 404
Percentage of share 50.00%  
v3.24.0.1
Investments In Associated Companies - Narrative (Details) - USD ($)
$ in Thousands
 3 Months Ended
Dec. 24, 2023
Dec. 25, 2022
MNI    
Schedule of Equity Method Investments [Line Items]    
Equity method investments, ownership percentage 50.00%  
TNI Partners    
Schedule of Equity Method Investments [Line Items]    
Distribution from equity method investments $ 1,200 $ 900
MNI    
Schedule of Equity Method Investments [Line Items]    
Distribution from equity method investments $ 400 $ 300
v3.24.0.1
Goodwill and Other Intangible Assets -Schedule of Goodwill and Identified Intangible Assets (Details) - USD ($)
$ in Thousands
 3 Months Ended
Dec. 24, 2023
Dec. 25, 2022
Sep. 24, 2023
Goodwill [Roll Forward]      
Goodwill, beginning of period $ 329,504 $ 329,504  
Allocated to sold operations (1,261) $ 0  
Goodwill, end of period 328,243    
Amortizable intangible assets:      
Total intangibles, net 418,627   $ 424,492
Customer and newspaper subscriber lists      
Amortizable intangible assets:      
Customer and newspaper subscriber lists 305,100   306,766
Less accumulated amortization (233,391)   (230,453)
Amortizable intangible assets, net 71,709   76,313
Mastheads      
Non-amortized intangible assets:      
Mastheads $ 18,675   $ 18,675
v3.24.0.1
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($)
$ in Thousands
 3 Months Ended
Dec. 24, 2023
Dec. 25, 2022
Goodwill and Intangible Assets Disclosure [Abstract]    
Weighted average amortization period (in years) 11 years 2 months 12 days  
Allocated to sold operations $ 1,261 $ 0
v3.24.0.1
Debt (Details) - USD ($)
$ in Thousands
 3 Months Ended
Dec. 24, 2023
Dec. 25, 2022
Debt Instrument [Line Items]    
Principal payments on long-term debt $ 1,580 $ 0
Credit Agreement | Secured Term Loan | BH Finance    
Debt Instrument [Line Items]    
Long-term debt, term (years) 25 years  
Long-term debt $ 454,200  
Long-term debt, interest rate 9.00%  
Principal payments on long-term debt $ 1,600  
Credit Agreement | Secured Term Loan | BH Finance | Fair Value, Inputs, Level 2    
Debt Instrument [Line Items]    
Long-term debt, fair value $ 382,200  
v3.24.0.1
Pension, Postretirement and Postemployment Defined Benefit Plans - Narrative (Details)
 3 Months Ended
Dec. 24, 2023
USD ($)
plan
participant
Dec. 25, 2022
USD ($)
Sep. 24, 2023
USD ($)
Defined Benefit Plan Disclosure [Line Items]      
Number of defined benefit plans | plan 1    
Multiemployer plans, withdrawal obligation $ 24,800,000   $ 25,100,000
Multiemployer plans, withdrawal obligation, period (years) 20 years    
Pension Plan      
Defined Benefit Plan Disclosure [Line Items]      
Defined benefit plan, benefit obligation, voluntary settlement, number of participants | participant 522    
Defined benefit plan, benefit obligation, lump sum payment for settlement $ 22,600,000    
Settlement gain 2,409,000 $ 0  
Defined benefit plan, plan assets, period increase (decrease) (22,600,000)    
Defined benefit plan, plan assets, contributions by employer 0 0  
Defined benefit plan, expected future employer contributions, next fiscal year 0    
Medical Plan      
Defined Benefit Plan Disclosure [Line Items]      
Curtailment gain $ 1,184,000 $ 0  
v3.24.0.1
Pension, Postretirement and Postemployment Defined Benefit Plans - Net Periodic Cost (Benefit) (Details) - USD ($)
$ in Thousands
 3 Months Ended
Dec. 24, 2023
Dec. 25, 2022
Pension Plan    
Defined Benefit Plan Disclosure [Line Items]    
Service cost for benefits earned during the period $ 1 $ 5
Interest cost on projected benefit obligation 2,515 2,592
Expected return on plan assets (2,453) (2,548)
Amortization of net gain (loss) (2) 2
Amortization of prior service benefit 212 213
Settlement gain (2,409) 0
Pension and postretirement medical benefit (2,136) 264
Postretirement Medical Plans    
Defined Benefit Plan Disclosure [Line Items]    
Service cost for benefits earned during the period 13 17
Interest cost on projected benefit obligation 149 149
Expected return on plan assets (320) (295)
Amortization of net gain (loss) (308) (254)
Amortization of prior service benefit (94) (162)
Curtailment gain (1,184) 0
Pension and postretirement medical benefit $ (1,744) $ (545)
v3.24.0.1
Income Taxes (Details)
$ in Thousands
 3 Months Ended
Dec. 24, 2023
USD ($)
jurisdiction
Dec. 25, 2022
USD ($)
Income Tax Disclosure [Abstract]    
Income tax expense $ 248 $ 440
Income before taxes $ 1,500 $ 2,300
Effective income tax rate 16.70% 19.40%
Number of state and local jurisdictions | jurisdiction 27  
v3.24.0.1
Earnings Per Common Share - Computation of Basic and Diluted Earnings Per Common Share (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended
Dec. 24, 2023
Dec. 25, 2022
Earnings Per Share [Abstract]    
Income attributable to Lee Enterprises, Incorporated: $ 688 $ 1,099
Weighted average common shares (in shares) 6,080 5,996
Less weighted average restricted Common Stock (in shares) (170) (171)
Basic average common shares (in shares) 5,910 5,825
Dilutive stock options and restricted Common Stock (in shares) 26 71
Diluted average common shares (in shares) 5,936 5,896
Earnings per common share:    
Basic (in dollars per share) $ 0.12 $ 0.19
Diluted (in dollars per share) $ 0.12 $ 0.19
v3.24.0.1
Earnings Per Common Share - Narrative (Details) - shares
 3 Months Ended
Dec. 24, 2023
Dec. 25, 2022
Earnings Per Share [Abstract]    
Anti-dilutive shares excluded (in shares) 128,019 74,304
Lee Enterprises (NASDAQ:LEE)
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