Lee Enterprises Files 10-Q for Q1 2025

Ticker: LEE · Form: 10-Q · Filed: Feb 7, 2025 · CIK: 58361

Sentiment: neutral

Topics: 10-Q, financials, reporting

TL;DR

LEE 10-Q filed. Financials for Q1 2025 are in.

AI Summary

Lee Enterprises, Inc. filed its 10-Q for the period ending December 29, 2024. The filing details the company's financial performance and position. Key financial data points and disclosures relevant to investors and stakeholders are presented within this report.

Why It Matters

This 10-Q filing provides investors with a crucial update on Lee Enterprises' financial health and operational performance for the first quarter of fiscal year 2025.

Risk Assessment

Risk Level: medium — As a media company, Lee Enterprises faces industry-specific risks related to digital disruption and advertising revenue.

Key Numbers

Key Players & Entities

FAQ

What is the reporting period for this 10-Q filing?

The reporting period for this 10-Q filing is the quarter ended December 29, 2024.

When was this 10-Q filed with the SEC?

This 10-Q was filed on February 7, 2025.

What is the company's primary industry classification?

The company's Standard Industrial Classification is NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING [2711].

Where is Lee Enterprises, Inc. headquartered?

Lee Enterprises, Inc. is located at 4600 E. 53RD STREET, DAVENPORT, IA 52807.

What is the fiscal year end for Lee Enterprises?

The fiscal year end for Lee Enterprises is September 29.

Filing Stats: 4,599 words · 18 min read · ~15 pages · Grade level 16.3 · Accepted 2025-02-07 17:16:32

Filing Documents

FORWARD LOOKING STATEMENTS

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

Financial Statements (Unaudited)

Financial Statements (Unaudited) 2 Consolidated Balance Sheets 2 Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income 4 Consolidated Statements of Deficit 5 Consolidated Statements of Cash Flows 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 13 Item 3.

Controls and Procedures

Controls and Procedures 18 PART II OTHER INFORMATION 19 Item 1.

Legal Proceedings

Legal Proceedings 19 Item 1.A.

Risk Factors

Risk Factors 19 Item 5 . Other Information 19 Item 6. Exhibits 20

SIGNATURES

SIGNATURES 21 Table of Contents References to "we", "our", "us" and the like throughout this document refer to Lee Enterprises, Incorporated (the "Company"). References to "2025", "2024" 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: 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 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 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 ma

Financial Statements

Item 1. Financial Statements LEE ENTERPRISES, INCORPORATED CONSOLIDATED BALANCE SHEETS (Unaudited) (Thousands of Dollars) December 29, 2024 September 29, 2024 ASSETS Current assets: Cash and cash equivalents 6,122 9,598 Accounts receivable, net 59,539 60,648 Inventories 6,231 5,643 Prepaid and other current assets 20,409 21,884 Total current assets 92,301 97,773 Investments: Associated companies 27,713 27,941 Other 6,090 6,042 Total investments 33,803 33,983 Property and equipment: Land and improvements 6,377 6,420 Buildings and improvements 69,821 70,152 Equipment 191,923 196,312 Construction in process 7,165 5,625 275,286 278,509 Less accumulated depreciation 232,454 234,137 Property and equipment, net 42,832 44,372 Operating lease right-of-use assets 31,886 34,882 Goodwill 323,858 328,040 Other intangible assets, net 66,600 70,075 Pension plan assets, net 4,962 4,663 Medical plan assets, net 23,729 23,300 Other 12,997 12,083 Total assets 632,968 649,171 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 29, 2024 September 29, 2024 LIABILITIES AND EQUITY Current liabilities: Current portion of lease liabilities 7,818 8,139 Current maturities of long-term debt — — Accounts payable 44,795 36,290 Compensation and other accrued liabilities 36,088 39,170 Unearned revenue 30,285 31,755 Total current liabilities 118,986 115,354 Long-term debt, net of current maturities 445,943 445,943 Operating lease liabilities 26,962 29,769 Pension obligations 552 561 Postretirement and postemployment benefit obligations 7,516 7,520 Deferred income taxes 28,236 28,403 Income taxes payable 3,509 3,456 Withdrawal liabilities and other 25,441 25,499 Total liabilities 657,145 656,505 Commitments and Contingent Liabilities (Note 9) Equity: Stockholders' equity: Serial convertible preferred stock,

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 29, 2024, 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 2024 Annual Report on Form 10-K. The Company's fiscal year ends on the last Sunday in September. Fiscal year 2025 ends September 28, 2025, and fiscal year 2024 ended September 29, 2024. Fiscal year 2025 includes 52 weeks of operations and 2024 included 53 weeks of operations. Because of seasonal and other factors, the results of operations for the three months ended December 29, 2024, 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. 2 REVENUE The following table presents our revenue disaggregated by source: Three months Ended (Thousands of Dollars) December 29, 2024 December 24, 2023 Operating revenue: Print advertising revenue 19,861 24,435

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 except for the case described below, which amounts are recognized in "Prepaids and Other" and "Compensation and other accrued liabilities" on the Consolidated Balance Sheets, 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. The Company was named as a defendant by a group of Plaintiffs acting on behalf of a proposed class of digital subscribers in a lawsuit in 2022. The lawsuit alleged that the Company violated the Video Privacy Protection Act ("VPPA") by using pixels to track subscribers' video viewing activity on Company websites and sharing it with Meta without consent. The Company has agreed to a preliminary settlement with the Plaintiffs for $ 9.5 million, subject to required court approval. The entire settlement amount will be paid by the Company's insurance carriers. The settlement liability and insurance receivable are recorded within "Compensation and other accrued liabilities" and "Prepaids and other" on the Consolidated Balance Sheets as of December 29, 2024 and September 29, 2024, respectively. 12 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 29, 2024. This discussion should be read in conjunction with the Consolidated Financial Statements and related Notes thereto, included herein, and our 2024 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 72 mid-sized local communities in 25 states with a rapidly growing digi

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