false000005836100000583612024-12-122024-12-120000058361us-gaap:CommonStockMember2024-12-122024-12-120000058361lee:PreferredSharePurchaseRightsMember2024-12-122024-12-12

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 12, 2024
_______________________________________________________________________________________
LEE ENTERPRISES, INCORPORATED
(Exact name of Registrant as specified in its charter)
_______________________________________________________________________________________
Delaware1-622742-0823980
(State of Incorporation)(Commission File Number)(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 shareLEEThe Nasdaq Global Select Market
Preferred Share Purchase RightsLEEThe Nasdaq Global Select Market
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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


Item 2.02.    Results of Operations and Financial Condition.
On December 12, 2024, Lee Enterprises, Incorporated (the “Company”) reported its preliminary results for the four quarter ended September 29, 2024. In connection with the preliminary results, the Company issued a news release, which is attached hereto as Exhibit 99.1 (“News Release”). The Company also prepared presentation materials which were presented by management during the Company’s earnings conference call, which are attached hereto as Exhibit 99.2 and have been made available on the Company’s website, investors.lee.net (“Presentation Materials”). In addition to the information in the News Release, the Presentation Materials include content and financial figures showing its expectation to be sustainable without reliance on print media within five years.
The information furnished by and incorporated by reference in this Item 2.02, including the attached Exhibits, shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 7.01. Regulation FD Disclosure
The disclosure contained in Item 2.02 is incorporated herein by reference.
Item 9.01.    Financial Statements and Exhibits.
(d)Exhibits
99.1
99.2
104Cover Page Interactive Data File (embedded within the Inline XBRL document)


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
Date:December 12, 2024By:/s/ Timothy R. Millage
Timothy R. Millage
Vice President, Chief Financial Officer and Treasurer


leelogo.jpg
Lee Enterprises Reports Fourth Quarter and Full-Year FY24 results

Total Digital Revenue(1) was 51% of revenue in the quarter, representing $82M
Digital-only subscription revenue increased 30%(2) in the quarter
Amplified Digital® Agency revenue totaled $28M in the quarter, up 21% YOY(2), approaching $100M for the fiscal year

DAVENPORT, Iowa (December 12, 2024) — Lee Enterprises, Incorporated (NASDAQ: LEE), a digital-first subscription platform providing high quality, trusted, local news, information and a major platform for advertising in 73 markets, today reported preliminary fourth quarter fiscal 2024 financial results(3) for the period ended September 29, 2024.

“The team achieved significant milestones in FY24, driving 41% revenue growth(2) in digital subscriptions and approaching $100 million in Amplified Digital® revenue for the fiscal year,” said Kevin Mowbray, Lee’s President and Chief Executive Officer. “We successfully met our digital subscription unit target and laid a robust foundation for our digital transformation through talent investments in AI, technology expertise, and complex IT infrastructure. While these accomplishments reflect strong execution of our strategy, we are not satisfied with the overall operating metrics, as we fell short of our Adjusted EBITDA target,” Mowbray added.

Key Fiscal Year 2024 Highlights:

•Total operating revenue was $611 million.
•Total Digital Revenue was $299 million, a 11% increase over the prior year(2), and represented about half of our total operating revenue.
•Total Print Revenue was $312 million, a 21% decrease over the prior year(2).
•Operating expenses totaled $611 million and Cash Costs(4) totaled $553 million, a 7% and 10% decrease compared to the prior year, respectively.
•Adjusted EBITDA(4) totaled $65 million.

"As we look ahead to FY25, we remain confident in the strength of our core strategy and the opportunities it presents. We are uniquely positioned to lead the growth of local advertising driven by advancements in AI. With our vast library of hyper-local content and strong relationships with over 25,000 local advertisers, we have an unparalleled foundation to capitalize on this shift. Through strategic partnerships with leading AI and technology companies, like Perplexity and ProRata.ai, that were recently announced, we aim to scale rapidly and further solidify our dominant position in the local market, unlocking new growth opportunities and delivering enhanced value to our stakeholders," said Mowbray.

Key Fourth Quarter Highlights:
•Total operating revenue was $159 million.
•Total Digital Revenue was $82 million, a 13% increase over the prior year(2), and represented 51% of our total operating revenue.
•Revenue from digital-only subscribers totaled $24 million, up 30% over the prior year(2).
•Digital advertising and marketing services revenue represented 73% of our total advertising revenue and totaled $52 million. Revenue at Amplified increased 21%(2) and totaled $28 million.
1

•Digital services revenue, which is predominantly from BLOX Digital, totaled $5 million in the quarter.
•Operating expenses totaled $163 million and Cash Costs totaled $143 million, a 4% and 4% increase compared to the prior year, respectively.
•Adjusted EBITDA totaled $17 million.
2025 Fiscal Year Outlook:
Total Digital Revenue
YOY growth in the range of 7% - 10%
Adjusted EBITDA
YOY growth in the low-single digits
Debt and Free Cash Flow:
The Company has $446 million of debt outstanding under our Credit Agreement(5) with BH Finance. The financing has favorable terms including a 25-year maturity, a fixed annual interest rate of 9.0%, no fixed principal payments, and no financial performance covenants.
As of and for the period ended September 29, 2024:
•The principal amount of debt totaled $446 million, a reduction of $10 million for the fiscal year.
•Cash on the balance sheet totaled $10 million. Debt, net of cash on the balance sheet, totaled $436 million.
•Capital expenditures totaled $9 million in FY24. We expect capital expenditures in FY25 to be approximately $12 million.
•For fiscal year 2024, cash paid for income taxes totaled $7 million. We expect cash paid for income taxes to total between $4 million and $10 million in FY25.
•We made no pension contributions in the fiscal year.
Conference Call Information:
As previously announced, we will hold an earnings conference call and audio webcast today at 9 a.m. Central Time. The live webcast will be accessible at www.lee.net and will be available for replay 24 hours later. Analysts have been invited to ask questions on the call. Questions from other participants may be submitted by participating in the webcast. To participate in the live conference call via telephone, please register here. Upon registering, a dial-in number and unique PIN will be provided to join the conference call.

About Lee:
Lee Enterprises is a major subscription and advertising platform and a leading provider of local news and information, with daily newspapers, rapidly growing digital products and nearly 350 weekly and specialty publications serving 73 markets in 26 states. Our core commitment is to provide valuable, intensely local news and information to the communities we serve. Our markets include St. Louis, MO; Buffalo, NY; Omaha, NE; Richmond, VA; Lincoln, NE; Madison, WI; Davenport, IA; and Tucson, AZ. Lee Common Stock is traded on NASDAQ under the symbol LEE. For more information about Lee, please visit www.lee.net.
FORWARD-LOOKING STATEMENTS — The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. This release 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 BH Media or The 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;
2

•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 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.
Contact:
IR@lee.net
(563) 383-2100
3

CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

Three months endedTwelve months ended
(Thousands of Dollars, Except Per Share Data)September 29, 2024September 24, 2023September 29, 2024September 24, 2023
Operating revenue:
Print Advertising revenue19,370 23,302 81,488 125,804 
Digital Advertising revenue52,466 49,270 194,213 193,173 
Advertising and marketing services revenue71,836 72,572 275,701 318,977 
Print Subscription revenue49,141 58,792 197,584 252,591 
Digital Subscription revenue23,902 18,661 84,331 60,700 
Subscription revenue73,043 77,453 281,915 313,291 
Print Other revenue8,418 8,966 33,257 39,508 
Digital Other revenue5,276 5,020 20,507 19,362 
Other revenue13,694 13,986 53,764 58,870 
Total operating revenue158,573 164,011 611,380 691,138 
Operating expenses:
Compensation58,824 59,048 234,581 266,907 
Newsprint and ink3,712 5,102 16,813 25,346 
Other operating expenses80,704 73,714 301,950 323,067 
Depreciation and amortization6,178 7,524 27,616 30,621 
Assets loss (gain) on sales, impairments and other, net6,466 6,137 11,193 1,882 
Restructuring costs and other7,054 4,552 19,253 12,673 
Operating expenses162,938 156,077 611,406 660,496 
Equity in earnings of associated companies703 2,993 4,572 6,527 
Operating income(3,662)10,927 4,546 37,169 
Non-operating (expense) income:
Interest expense(10,805)(10,326)(41,232)(41,471)
Pension withdrawal cost— (1,200)— (1,200)
 Pension and OPEB related benefit (cost) and other, net814 162 1,910 2,420 
 Curtailment/Settlement gain— — 3,593 — 
Non-operating expenses, net(9,991)(11,364)(35,729)(40,251)
Income (loss) before income taxes(13,653)(437)(31,183)(3,082)
Income tax (benefit) expense(4,172)888 (7,610)(349)
Net (loss) income(9,481)(1,325)(23,573)(2,733)
Net income attributable to non-controlling interests(609)(659)(2,272)(2,534)
Loss attributable to Lee Enterprises, Incorporated(10,090)(1,984)(25,845)(5,267)
Loss per common share:
Basic(1.69)(0.32)(4.35)(0.90)
Diluted(1.69)(0.32)(4.35)(0.90)
4

DIGITAL / PRINT REVENUE COMPOSITION
(UNAUDITED)
Three months endedTwelve months ended
(Thousands of Dollars)September 29,
2024		September 24,
2023		September 29,
2024		September 24,
2023
Digital Advertising and Marketing Services Revenue52,466 49,270 194,213 193,173 
Digital Only Subscription Revenue 23,902 18,661 84,331 60,700 
Digital Services Revenue5,276 5,020 20,507 19,362 
Total Digital Revenue81,644 72,951 299,051 273,235 
Print Advertising Revenue19,370 23,302 81,488 125,804 
Print Subscription Revenue49,141 58,792 197,584 252,591 
Other Print Revenue8,418 8,966 33,257 39,508 
Total Print Revenue 76,929 91,060 312,329 417,903 
Total Operating Revenue158,573 164,011 611,380 691,138 

5

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
The table below reconciles the non-GAAP financial performance measure of Adjusted EBITDA to Net loss, its most directly comparable U.S. GAAP measure:
Three months endedTwelve months ended
(Thousands of Dollars)September 29, 2024September 24, 2023September 29, 2024September 24, 2023
Net loss(9,481)(1,325)(23,573)(2,733)
Adjusted to exclude
Income tax (benefit) expense(4,172)888 (7,610)(349)
Non-operating expenses, net9,991 11,364 35,729 40,251 
Equity in earnings of TNI and MNI(6)
(703)(2,993)(4,572)(6,527)
Assets loss on sales, impairments and other, net6,466 6,137 11,193 1,882 
Depreciation and amortization6,178 7,524 27,616 30,621 
Restructuring costs and other7,054 4,552 19,253 12,673 
Stock compensation553 421 1,751 1,806 
Add:
Ownership share of TNI and MNI EBITDA (50%)874 3,476 5,519 7,604 
Adjusted EBITDA16,760 30,044 65,306 85,228 
The table below reconciles the non-GAAP financial performance measure of Cash Costs to Operating expenses, the most directly comparable U.S. GAAP measure:
Three months endedTwelve months ended
(Thousands of Dollars)September 29, 2024September 24, 2023September 29, 2024September 24, 2023
Operating expenses162,938 156,077 611,406 660,496 
Adjustments
Depreciation and amortization6,178 7,524 27,616 30,621 
Assets loss (gain) on sales, impairments and other, net6,466 6,137 11,193 1,882 
Restructuring costs and other7,054 4,552 19,253 12,673 
Cash Costs143,240 137,864 553,344 615,320 

6

The table below reconciles the non-GAAP financial performance measure of Same-store Revenues to Operating Revenues, its most directly comparable U.S. GAAP measure:

Three months ended
Twelve months ended
(Thousands of Dollars)
September 29, 2024
September 24, 2023
September 29, 2024
September 24, 2023
Print Advertising Revenue
19,370
23,302
81,488
125,804
Exited operations
9
(790)
(900)
(19,051)
Same-store, Print Advertising Revenue
19,379
22,512
80,588
106,753
Digital Advertising and Marketing Services Revenue
52,466
49,270
194,213
193,173
Exited operations
(1)
(443)
(96)
(2,897)
Same-store, Digital Advertising and Marketing Services Revenue
52,465
48,827
194,117
190,276
Total Advertising Revenue
71,836
72,572
275,701
318,977
Exited operations
8
(1,233)
(996)
(21,948)
Same-store, Total Advertising Revenue
71,844
71,339
274,705
297,029
Print Subscription Revenue
49,141
58,792
197,584
252,591
Exited operations
—
(373)
(174)
(2,163)
Same-store, Print Subscription Revenue
49,141
58,419
197,410
250,428
Digital Subscription Revenue
23,902
18,661
84,331
60,700
Exited operations
—
(262)
(84)
(1,038)
Same-store, Digital Subscription Revenue
23,902
18,399
84,247
59,662
Total Subscription Revenue
73,043
77,453
281,915
313,291
Exited operations
—
(635)
(258)
(3,201)
Same-store, Total Subscription Revenue
73,043
76,818
281,657
310,090
Print Other Revenue
8,418
8,966
33,257
39,508
Exited operations
—
(73)
(1)
(396)
Same-store, Print Other Revenue
8,418
8,893
33,256
39,112
Digital Other Revenue
5,276
5,020
20,507
19,362
Exited operations
—
—
—
—
Same-store, Digital Other Revenue
5,276
5,020
20,507
19,362
Total Other Revenue
13,694
13,986
53,764
58,870
Exited operations
—
(74)
(1)
(396)
Same-store, Total Other Revenue
13,694
13,912
53,763
58,474
Total Operating Revenue
158,573
164,011
611,380
691,138
Exited operations
8
(1,942)
(1,255)
(25,545)
Same-store, Total Operating Revenue
158,581
162,069
610,125
665,593

7

NOTES
(1)Total Digital Revenue is defined as digital advertising and marketing services revenue (including Amplified Digital® Agency), digital-only subscription revenue and digital services revenue.
(2)Same-store revenues is a non-GAAP performance measure based on U.S. GAAP revenues for Lee for the current period, excluding exited operations. Exited operations include (1) business divestitures and (2) the elimination of stand-alone print products discontinued within our markets.
(3)This earnings release is a preliminary report of results for the periods included. The reader should refer to the Company's most recent reports on Form 10-Q and on Form 10-K for definitive information.
(4)The following are non-GAAP (Generally Accepted Accounting Principles) financial measures for which reconciliations to relevant U.S GAAP measures are included in tables accompanying this release:
•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 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 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. Periodically, 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 paid in cash.
(5)The Company's debt is the $576 million term loan under a credit agreement with BH Finance LLC dated January 29, 2020 (the "Credit Agreement"). Excess Cash Flow is defined under the Credit Agreement as any cash greater than $20,000,000 on the balance sheet in accordance with U.S. GAAP at the end of each fiscal quarter, beginning with the quarter ending June 28, 2020.
(6)TNI refers to TNI Partners publishing operations in Tucson, AZ. MNI refers to Madison Newspapers, Inc. publishing operations in Madison, WI.
8
FOURTH QUARTER FY2024 EARNINGS DECEMBER 12, 2024

 
2 SAFE HARBOR The information provided in this presentation may include forward-looking statements relating to future events or the future financial performance of the Company. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Words such as “aims”, “anticipates,” “plans,” “expects,” “intends,” “will,” “potential,” “hope” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon current expectations of the Company and involve assumptions that may never materialize or may prove to be incorrect. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of various risks and uncertainties. Detailed information regarding factors that may cause actual results to differ materially from the results expressed or implied by statements relating to the Company may be found in the Company’s periodic filings with the Commission, including the factors described in the sections entitled “Risk Factors,” copies of which may be obtained from the SEC’s website at www.sec.gov. The Company does not undertake any obligation to update forward-looking statements contained in this presentation.

 
3 FOURTH QUARTER AND FULL YEAR 2024 RESULTS Q4 Revenue (1) Same-store revenues is a non-GAAP performance measure based on U.S. GAAP revenues for Lee for the current period, excluding exited operations. Exited operations include (1) business divestitures and (2) the elimination of stand-alone print products discontinued within our markets. (2) Adjusted EBITDA and Cash Costs are non-GAAP financial measures. See appendix. Total Operating Revenue $159M, down 2% YOY(1) Total Digital Revenue $82M, up 13%(1) • Digital subscription $24M, up 30%(1) • Digital advertising $52M, up 8%(1) • Amplified Digital® Agency $28M, up 21%(1) Total print revenue $77M, down 14%(1) Q4 Cash Costs(2) • Total Cash Costs $143M, up 4% YOY Q4 Adjusted EBITDA(2) • Adjusted EBITDA $17M FY24 Revenue Total Operating Revenue $611M, down 8% YOY(1) Total Digital Revenue $299M, up 11%(1) • Digital subscription $84M, up 41%(1) • Digital advertising $194M, up 2%(1) • Amplified Digital® Agency $99M, up 11%(1) Total print revenue $312M, down 21%(1) FY24 Cash Costs(2) • Total Cash Costs $553M, down 10% YOY FY24 Adjusted EBITDA(2) • Adjusted EBITDA $65M

 
4 Digital Sub Revenue Growth Leads Industry Digital Agency Revenue Growth Leads Industry Total Digital Revenue Growing Significantly $84M LTM Digital Sub Revenue $99M LTM Amplified Digital® Agency $299M LTM Total Digital Revenue Industry-leading 41% YOY(1) LTM growth Q4 2024 3-Year CAGR Industry-leading 11% YOY(1) LTM growth Q4 2024 3-Year CAGR 11% YOY(1) LTM annual growth 2024 3-Year CAGR 17% INDUSTRY-LEADING DIGITAL GROWTH 2021 2024 (1) Same-store revenues is a non-GAAP performance measure based on U.S. GAAP revenues for Lee for the current period, excluding exited operations. Exited operations include (1) business divestitures and (2) the elimination of stand-alone print products discontinued within our markets. $299M $189M

 
5 STRONG TRACK RECORD OF SUSTAINABLE COST MANAGEMENT KEY TAKEAWAYS • Proficient in driving efficiencies • Current base of $187M of direct costs associated with our legacy revenue streams that will be managed with associated revenue trends • Ongoing initiatives aimed at optimizing manufacturing, distribution, and corporate services • Digital transformation fueled by thoughtful investments • Significant investments in talent and technology of $10M funded successful execution of Lee’s Three Pillar Digital Growth Strategy • Incremental investments in marketing & branding of $1M drove $24M of Digital Subscription revenue growth • Digital COGS increased $8M YOY to support revenue growth at BLOX Digital, Amplified Digital® Agency, and other Digital Advertising $1.0B $705M $693M $615M $553M 2017 2020 2022 2023 2024 Total Cash Costs(1) $615M $553M$82M $20M Managing legacy business & investing in digital future (1) Adjusted EBITDA and Cash Costs are non-GAAP financial measures. See appendix.

 
6 Q2 2020 Q4 2024 CREDIT AGREEMENT REPRESENTS STRATEGIC ASSET • $130M debt reduction since refinancing in March 2020 • Favorable credit agreement with Berkshire Hathaway • 25-year runway with no breakage costs or prepayment penalties • Fixed annual interest rate, no financial performance covenants and no fixed amortization • Pension plans now frozen and fully funded in the aggregate with no material pension contributions in 2024 • Asset sales more than $13M for the year • Identified approximately $25M of noncore assets to monetize Monetization of noncore assets will propel debt reduction $576M $446M Significant Gross Debt Reduction

 
7 FY21 FY22 FY23 FY24 FY25E FY26E FY27E FY28E Digital Margin SG&A Digital transformation Digital sustainability LEE NEARS SUSTAINABILITY FROM DIGITAL REVENUE KEY HIGHLIGHTS • Digital revenue replacing print revenue and growing at 17% CAGR since 2021 • Digital gross margin(1) growing at a 13% CAGR since 2021 • Digital subscription revenue and gross margin growing at a 44% CAGR since 2021 • Amplified Digital® Agency revenue growing at a 34% CAGR since 2021 • Digital gross margin(1) expected to exceed total SG&A costs in FY26 • Digital gross margin(1) remains strong at 72% margin GROSS MARGIN FY24 Total Company Gross Margin (1) Digital Gross Margin is a non-GAAP performance measure calculated by Digital Revenue less Cost of Good Sold (“COGS”) directly tied to digital products. Digital Margin excludes all Selling, General, and Administrative (“SG&A”) costs.

 
8 DIGITAL REVENUE GROWTH IS FUELED BY AMPLIFIED AND DIGITAL SUBSCRIPTION GROWTH • Amplified Digital® Agency will drive digital marketing services revenue growth • Our owned & operated digital products provide a unique opportunity to grow high margin digital advertising revenue • We expect significant growth in digital subscribers • Expect 1.2 million digital subscribers by 2028, assuming modest penetration of the current addressable market • We expect to drive digital subscription revenue even faster • Expect ARPU expansion as introductory pricing becomes a smaller piece of the subscriber base • Maximizing ARPU through data and sophisticated analytics $169M $189M $240M $273M $299M $324M $450M $M $100M $200M $300M $400M $500M FY20 FY21 FY22 FY23 FY24 FY25(1) FY28 LONG-TERM OUTLOOK: DIGITAL REVENUE Lee expects $450 million in Digital Revenue in 2028 (1) FY25 represents the midpoint of our FY25 Outlook.

 
9 2025 OUTLOOK (1) Adjusted EBITDA is a non-GAAP financial measure. See appendix. Key Metric 2025 Outlook Total Digital Revenue YOY growth in the range of 7% - 10% Adjusted EBITDA(1) YOY growth in the low-single digits

 
10 THE TIME TO ACT IS NOW TECTONIC SHIFT IN TECHNOLOGY & LEE’S MARKET LEADERSHIP DIGITAL BEHAVIOR • Traditional search declining • AI search rapidly growing • Content production costs dropping • Hyper-personalized commerce growing OTHER STRATEGIES • “Fair-Use” lawsuits • News industry government initiatives WINNING STRATEGIES • Lee taking the leadership position • Partnerships to build AI foundations • Hyper-local search & content • Disintermediating Google in the “Last Mile” • AI paywall subscriptions • AI-driven ad creative • AI-enhanced news content CONSUMER ADOPTION ACCELERATING AI INVESTMENT PROVIDES (1) Data conglomerated from various sources. See appendix for additional details.

 
11 AI CREATES A NEW ECONOMIC MODEL PARTNERSHIPS DRIVE THE MODEL LEE ADVERTISING & AUDIENCE 2020 20282025 AI PARTNERS LLM’s, GPTs, SLMs, PLATFORMS NEWS & MEDIA LANDSCAPE EVOLUTION SEARCH ENGINE ANSWER ENGINE AD NETWORK AGENCY PRODUCTS NEW VALUE DRIVERS DATA SERVICES GOOGLE & SOCIAL AI SEARCH - ANSWER AI APP NETWORKS CONTENT CHANNEL & AD NETWORK PERPLEXITY PRORATA.AI AMAZON WEB SERVICES ADDITIONAL AI PARTNERS

 

 
13 NON-GAAP RECONCILIATION The Company uses non-GAAP financial performance measures to supplement the financial information presented on a U.S. GAAP basis. These non-GAAP financial measures, which may not be comparable to similarly titled measures reported by other companies, should not be considered in isolation from or as a substitute for the related U.S. GAAP measures and should be read together with financial information presented on a U.S. GAAP basis. The Company defines its non-GAAP measures 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 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 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. Periodically, 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 paid in cash. Same-store revenues is a non-GAAP performance measure based on U.S. GAAP revenues for Lee for the current period, excluding exited operations. Exited operations include (1) business divestitures and (2) the elimination of stand-alone print products discontinued within our markets. Gross Margin is a non-GAAP financial performance measure that enhances financial statement users overall understanding of the operating performance of the Company. The measure isolates operating costs that directly support revenue. Depreciation and amortization, assets loss (gain) on sales, impairments and other, net, other non-cash operating expenses, Selling, General, and Administrative (“SG&A”) compensation and SG&A other operating expenses are excluded from Gross Margin. TNI and MNI – TNI refers to TNI Partners publishing operations in Tucson, AZ. MNI refers to Madison Newspapers, Inc. publishing operations in Madison, WI. Management’s Use of Non-GAAP Measures These Non-GAAP Measures are not measurements of financial performance under U.S. GAAP and should not be considered in isolation or as an alternative to income from operations, net income (loss), revenues, or any other measure of performance or liquidity derived in accordance with U.S. GAAP. We believe these non-GAAP financial measures, as we have defined them, are helpful in identifying trends in our day-to-day performance because the items excluded have little or no significance on our day-to-day operations. These measures provide an assessment of controllable expenses and afford management the ability to make decisions which are expected to facilitate meeting current financial goals as well as achieve optimal financial performance. We use these Non-GAAP measures of our day-to-day operating performance, which is evidenced by the publishing and delivery of news and other media and excludes certain expenses that may not be indicative of our day-to-day business operating results. Limitations of Non-GAAP Measures Each of our non-GAAP measures have limitations as analytical tools. They should not be viewed in isolation or as a substitute for U.S. GAAP measures of earnings. Material limitations in making the adjustments to our earnings to calculate Adjusted EBITDA using these non-GAAP financial measures as compared to U.S. GAAP net income (loss) include: the cash portion of interest / financing expense, income tax (benefit) provision, and charges related to asset impairments, which may significantly affect our financial results. Management believes these items are important in evaluating our performance, results of operations, and financial position. We use non-GAAP financial measures to supplement our U.S. GAAP results in order to provide a more complete understanding of the factors and trends affecting our business.

 
14 QUARTERLY REVENUE COMPOSITION (1) Same-store revenues is a non-GAAP performance measure based on U.S. GAAP revenues for Lee for the current period, excluding exited operations. Exited operations include (1) business divestitures and (2) the elimination of stand-alone print products discontinued within our markets. (2)Total Digital Revenue is defined as digital advertising and marketing services revenue (including Amplified), digital-only subscription revenue and digital services revenue. Rounding – Items may not foot due to rounding. (Millions of Dollars) Q1 FY2023 Q2 FY2023 Q3 FY2023 Q4 FY2023 FY 2023 Q1 FY2024 Q2 FY2024 Q3 FY2024 Q4 FY2024 FY 2024 Digital Advertising and Marketing Services 47.7 46.3 49.9 49.3 193.2 46.5 45.4 49.9 52.5 194.2 YoY % (1) 11.3% 6.2% 7.8% 1.1% 6.4% -1.1% -0.2% 1.6% 7.5% 2.0% Digital Only Subscription Revenue 12.3 14.0 15.7 18.7 60.7 19.5 20.3 20.7 23.9 84.3 YoY % (1) 56.2% 38.7% 43.3% 67.5% 51.4% 60.2% 47.6% 34.1% 29.9% 41.2% Digital Services Revenue 4.7 4.8 4.9 5.0 19.4 5.0 5.1 5.2 5.3 20.5 YoY % (1) 2.2% 2.1% 12.6% 15.3% 7.8% 4.9% 7.6% 6.0% 5.1% 5.9% Total Digital Revenue(2) 64.8 65.0 70.5 73.0 273.2 70.9 70.8 75.8 81.6 299.1 YoY % (1) 16.9% 11.5% 14.4% 13.6% 14.1% 11.0% 10.7% 9.2% 13.0% 11.0% % of Total Revenue 35.0% 38.1% 41.1% 44.5% 39.5% 45.5% 48.3% 50.3% 51.5% 48.9% Print Advertising Revenue 41.8 31.5 29.2 23.3 125.8 24.4 18.7 18.9 19.4 81.5 YoY % (1) -24.3% -23.2% -26.9% -30.2% -26.0% -27.6% -29.4% -24.8% -13.9% -24.5% Print Subscription Revenue 67.4 64.6 61.8 58.8 252.6 51.9 49.0 47.6 49.1 197.6 YoY % (1) -15.4% -16.3% -20.7% -25.0% -19.3% -22.5% -23.5% -22.4% -15.9% -21.2% Other Print Revenue 11.1 9.6 9.8 9.0 39.5 8.5 8.1 8.3 8.4 33.3 YoY % (1) -2.2% -6.7% -8.3% -14.8% -7.9% -22.8% -15.5% -14.4% -5.3% -15.0% Total Print Revenue 120.3 105.7 100.8 91.1 417.9 84.8 75.8 74.8 76.9 312.3 YoY % (1) -17.2% -17.5% -21.4% -25.5% -20.3% -24.0% -24.3% -22.2% -14.3% -21.5% Total Revenue 185.1 170.7 171.3 164.0 691.1 155.7 146.5 150.6 158.6 611.4 YoY % (1) -7.4% -8.2% -9.6% -12.1% -9.3% -11.3% -10.6% -9.1% -2.2% -8.3%

 
15 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES 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 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 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. TNI and MNI – TNI refers to TNI Partners publishing operations in Tucson, AZ. MNI refers to Madison Newspapers, Inc. publishing operations in Madison, WI. Rounding – Items may not visually foot due to rounding. (Millions of Dollars) Q4 FY2024 Net loss (9.5) Adjusted to exclude Income tax benefit (4.2) Non-operating expenses, net 10.0 Equity in earnings of TNI and MNI (0.7) Depreciation and amortization 6.2 Restructuring costs and other 7.1 Assets loss on sales, impairments and other, net 6.5 Stock compensation 0.6 Add Ownership share of TNI and MNI EBITDA (50%) 0.9 Adjusted EBITDA 16.8

 
16 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES 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. Periodically, 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 paid in cash. Rounding – Items may not visually foot due to rounding. (Millions of Dollars) Q4 FY2024 Q4 FY2023 Operating Expenses 162.9 156.1 Adjusted to exclude Depreciation and amortization 6.2 7.5 Assets loss on sales, impairments and other, net 6.5 6.1 Restructuring costs and other 7.1 4.6 Cash Costs 143.2 137.9

 
17 Q4 SAME-STORE NON-GAAP REVENUE RECONCILIATION(1) (Millions of Dollars) Q4 FY2024 Q4 FY2023 $ Change % Change Print Other Revenue 8.4 9.0 (0.5) -6.1% Exited operations - (0.1) 0.1 NM Same-store, Print Other Revenue 8.4 8.9 (0.5) -5.3% Digital Other Revenue 5.3 5.0 0.3 5.1% Exited operations - - - NM Same-store, Digital Other Revenue 5.3 5.0 0.3 5.1% Total Other Revenue 13.7 14.0 (0.3) -2.1% Exited operations - (0.1) 0.1 NM Same-store, Total Other Revenue 13.7 13.9 (0.2) -1.6% (Millions of Dollars) Q4 FY2024 Q4 FY2023 $ Change % Change Total Operating Revenue 158.6 164.0 (5.4) -3.3% Exited operations 0.0 (1.9) 1.9 NM Same-store, Total Operating Revenue 158.6 162.1 (3.5) -2.2% (Millions of Dollars) Q4 FY2024 Q4 FY2023 $ Change % Change Print Advertising Revenue 19.4 23.3 (3.9) -16.9% Exited operations 0.0 (0.8) 0.8 NM Same-store, Print Advertising Revenue 19.4 22.5 (3.1) -13.9% Digital Advertising and Marketing Services Revenue 52.5 49.3 3.2 6.5% Exited operations (0.0) (0.4) 0.4 NM Same-store, Digital Advertising and Marketing Services 52.5 48.8 3.6 7.5% Total Advertising Revenue 71.8 72.6 (0.7) -1.0% Exited operations 0.0 (1.2) 1.2 NM Same-store, Total Advertising Revenue 71.8 71.3 0.5 0.7% (Millions of Dollars) Q4 FY2024 Q4 FY2023 $ Change % Change Print Subscription Revenue 49.1 58.8 (9.7) -16.4% Exited operations (0.0) (0.4) 0.4 NM Same-store, Print Subscription Revenue 49.1 58.4 (9.3) -15.9% Digital Subscription Revenue 23.9 18.7 5.2 28.1% Exited operations - (0.3) 0.3 NM Same-store, Digital Subscription Revenue 23.9 18.4 5.5 29.9% Total Subscription Revenue 73.0 77.5 (4.4) -5.7% Exited operations (0.0) (0.6) 0.6 NM Same-store, Total Subscription Revenue 73.0 76.8 (3.8) -4.9% (1) Same-store revenues is a non-GAAP performance measure based on U.S. GAAP revenues for Lee for the periods presented, excluding exited operations. Exited operations include (1) businesses divested and (2) the elimination of stand-alone print products discontinued within our markets. FY24 includes the 53rd fiscal week. Rounding – Items may not foot due to rounding.

 
18 FY24 SAME-STORE NON-GAAP REVENUE RECONCILIATION(1) (1) Same-store revenues is a non-GAAP performance measure based on U.S. GAAP revenues for Lee for the periods presented, excluding exited operations. Exited operations include (1) businesses divested and (2) the elimination of stand-alone print products discontinued within our markets. FY24 includes the 53rd fiscal week. Rounding – Items may not foot due to rounding. (Millions of Dollars) FY2024 FY2023 $ Change % Change Print Advertising Revenue 81.5 125.8 (44.3) -35.2% Exited operations (0.9) (19.1) 18.2 NM Same-store, Print Advertising Revenue 80.6 106.8 (26.2) -24.5% Digital Advertising and Marketing Services Revenue 194.2 193.2 1.0 0.5% Exited operations (0.1) (2.9) 2.8 NM Same-store, Digital Advertising and Marketing Services 194.1 190.3 3.8 2.0% Total Advertising Revenue 275.7 319.0 (43.3) -13.6% Exited operations (1.0) (21.9) 21.0 NM Same-store, Total Advertising Revenue 274.7 297.0 (22.3) -7.5% (Millions of Dollars) FY2024 FY2023 $ Change % Change Print Subscription Revenue 197.6 252.6 (55.0) -21.8% Exited operations (0.2) (2.2) 2.0 NM Same-store, Print Subscription Revenue 197.4 250.4 (53.0) -21.2% Digital Subscription Revenue 84.3 60.7 23.6 38.9% Exited operations (0.1) (1.0) 1.0 NM Same-store, Digital Subscription Revenue 84.2 59.7 24.6 41.2% Total Subscription Revenue 281.9 313.3 (31.4) -10.0% Exited operations (0.3) (3.2) 2.9 NM Same-store, Total Subscription Revenue 281.7 310.1 (28.4) -9.2% (Millions of Dollars) FY2024 FY2023 $ Change % Change Print Other Revenue 33.3 39.5 (6.3) -15.8% Exited operations (0.0) (0.4) 0.4 NM Same-store, Print Other Revenue 33.3 39.1 (5.9) -15.0% Digital Other Revenue 20.5 19.4 1.1 5.9% Exited operations - - - NM Same-store, Digital Other Revenue 20.5 19.4 1.1 5.9% Total Other Revenue 53.8 58.9 (5.1) -8.7% Exited operations (0.0) (0.4) 0.4 NM Same-store, Total Other Revenue 53.8 58.5 (4.7) -8.1% (Millions of Dollars) FY2024 FY2023 $ Change % Change Total Operating Revenue 611.4 691.1 (79.8) -11.5% Exited operations (1.3) (25.5) 24.3 NM Same-store, Total Operating Revenue 610.1 665.6 (55.5) -8.3%

 
19 EXTERNAL SOURCE LINKS https://www.abiresearch.com/news-resources/chart-data/report-artificial-intelligence-market-size-global/ https://www.nextmsc.com/report/artificial-intelligence-market https://www.grandviewresearch.com/industry-analysis/artificial-intelligence-ai-market https://www.marketsandmarkets.com/Market-Reports/artificial-intelligence-market-74851580.html https://www.statista.com/forecasts/1474143/global-ai-market-size https://explodingtopics.com/blog/ai-statistics https://www.pwc.com/gx/en/issues/artificial-intelligence/publications/artificial-intelligence-study.html https://www.forbes.com/councils/forbestechcouncil/2023/07/10/as-ai-becomes-mainstream-who-will-remain-in-the-fourth-stage-of-technological-business-development/ https://explodingtopics.com/blog/perplexity-ai-stats?t https://productify.substack.com/p/how-perplexitys-growth-is-changing?t= https://whatsthebigdata.com/perplexity-ai-stats/?t https://whatsthebigdata.com/claude-ai-statistics/?t https://www.cnbc.com/2024/12/04/openais-active-user-count-soars-to-300-million-people-per-week.html?t https://www.namepepper.com/chatgpt-users?t

 
v3.24.3
Cover
Dec. 12, 2024
Document Information [Line Items]  
Document Type 8-K
Document Period End Date Dec. 12, 2024
Entity Registrant Name LEE ENTERPRISES, INC
Entity Incorporation, State or Country Code DE
Entity File Number 1-6227
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
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0000058361
Common Stock, par value $.01 per share  
Document Information [Line Items]  
Title of 12(b) Security Common Stock, par value $.01 per share
Trading Symbol LEE
Security Exchange Name NASDAQ
Preferred Share Purchase Rights  
Document Information [Line Items]  
Title of 12(b) Security Preferred Share Purchase Rights
Trading Symbol LEE
Security Exchange Name NASDAQ
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