LEE Enterprises, Inc. Files 10-Q for Period Ending December 24, 2023

TL;DR

<b>LEE Enterprises, Inc. has filed its quarterly report (10-Q) for the period ending December 24, 2023, detailing financial performance and segment data.</b>

AI Summary

LEE ENTERPRISES, Inc (LEE) filed a Quarterly Report (10-Q) with the SEC on February 2, 2024. LEE Enterprises, Inc. filed a 10-Q report for the period ending December 24, 2023. The filing covers the first quarter of fiscal year 2024. The company's fiscal year ends on September 26. Key financial data points such as retained earnings, common stock, and additional paid-in capital are detailed for various periods. The report includes segment information for Advertising and Marketing Services, Subscription and Circulation, and Product and Service Other.

Why It Matters

For investors and stakeholders tracking LEE ENTERPRISES, Inc, this filing contains several important signals. This filing provides investors with a timely update on LEE Enterprises' financial health and operational performance for the first quarter of fiscal year 2024. Understanding the segment revenues and changes in equity accounts is crucial for assessing the company's strategic direction and financial stability.

Risk Assessment

Risk Level: medium — LEE ENTERPRISES, Inc shows moderate risk based on this filing. The company operates in the newspaper publishing industry, which faces ongoing challenges from digital media and declining print advertising, posing a medium-term risk to revenue and profitability.

Analyst Insight

Investors should analyze the segment revenue trends, particularly in Advertising and Marketing Services and Subscription and Circulation, to gauge the company's ability to adapt to market shifts.

Revenue Breakdown

Key Numbers

• 2023-12-24 — Period End Date (CONFORMED PERIOD OF REPORT)
• 2024-02-02 — Filing Date (FILED AS OF DATE)
• 2023-09-29 — Fiscal Year End (Fiscal Year End)

Key Players & Entities

• LEE ENTERPRISES, Inc (company) — FILER
• 0000058361 (company) — CENTRAL INDEX KEY
• 2711 (company) — STANDARD INDUSTRIAL CLASSIFICATION
• DE (company) — STATE OF INCORPORATION
• 420823980 (company) — IRS NUMBER
• IA (company) — STATE OF INCORPORATION
• 5633832100 (company) — BUSINESS PHONE
• 20231224 (date) — CONFORMED PERIOD OF REPORT

Forward-Looking Statements

• Lee Enterprises will continue to face revenue pressure in its advertising and subscription segments. (LEE ENTERPRISES, Inc) — high confidence, target: 2024-09-26

FAQ

Key Dates

• 2024-02-02: Filing Date — Submission of the 10-Q report for the period ending December 24, 2023.
• 2023-12-24: Reporting Period End — End date for the financial reporting period covered by the 10-Q.

Filing Documents

• lee-20231224.htm (10-Q) — 527KB
• lee-20231224xex311.htm (EX-31.1) — 9KB
• lee-20231224xex312.htm (EX-31.2) — 9KB
• lee-20231224xex321.htm (EX-32.1) — 6KB
• lee-20231224xex322.htm (EX-32.2) — 5KB
• 0001628280-24-003010.txt (&nbsp;) — 3358KB
• lee-20231224.xsd (EX-101.SCH) — 23KB
• lee-20231224_cal.xml (EX-101.CAL) — 69KB
• lee-20231224_def.xml (EX-101.DEF) — 140KB
• lee-20231224_lab.xml (EX-101.LAB) — 338KB
• lee-20231224_pre.xml (EX-101.PRE) — 222KB
• lee-20231224_htm.xml (XML) — 287KB

FORWARD LOOKING STATEMENTS

FORWARD LOOKING STATEMENTS 1 PART I FINANCIAL INFORMATION 2 Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) 2 Consolidated Balance Sheets - December 2 4 , 202 3 , and September 2 4 , 20 23 2 Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) -Three months ended December 2 4 , 202 3 and December 2 5 , 20 22 4 Consolidated Statements of Stockholder's Equity - Three months ended December 2 4 , 202 3 , and December 2 5 , 20 22 5 Consolidated Statements of Cash Flows - Three months ended December 2 4 , 202 3 , and December 2 5 , 20 2 2 6

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 7 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 12 Item 3 .

Controls and Procedures

Controls and Procedures 17 PART II OTHER INFORMATION 18 Item 1.

Legal Proceedings

Legal Proceedings 18 Item 1.A.

Risk Factors

Risk Factors 18 Item 6. Exhibits 18

SIGNATURES

SIGNATURES 20 Table of Contents 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

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,

Financial Statements

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 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 2,453 307,708 311,673 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 Pension plan assets, net 11,095 10,843 Medical plan assets, net 21,821 21,565 Other 14,195 12,741 Total assets 702,509 711,617 The accompanying Notes are an integral part of the Consolidated Financial Statements. 2 Table of Contents (Unaudited) (Thousands of Dollars and Shares, Except Per Share Data) December 24, 2023 September 24, 2023 LIABILITIES AND EQUITY 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 Equity: Stockholders' equity: Serial convertible preferred stock, no par value; authorized 500 shares; none issued — — Common S

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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), acc

Legal Proceedings

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. 11 Table of Contents

Management's Discussion and Analysis of Financial Condition and Results of Operations

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

View Full Filing

View this 10-Q filing on SEC EDGAR