Delivered Net Income of
23% YOY Adjusted EBITDA(1) growth in Q3
Digital revenue(2) represents 57% of total revenue in Q3
Ended Q3 with
Increased fiscal 2026 Adjusted EBITDA(1) outlook
"Our third quarter results demonstrate the continued execution of our digital-first strategy and the meaningful progress we are making across the business," said
“Based on our performance through the first nine months of the fiscal year and continued confidence in our operating momentum, we are increasing our outlook for fiscal 2026 Adjusted EBITDA,” added Bekke. “We now expect to finish the year with year-over-year growth between 22% and 28%. Excluding the insurance proceeds received this year related to last year’s cyber event, that still translates to year-over-year Adjusted EBITDA growth near 10%. The updated outlook reflects continued execution of our strategy, sustained operational discipline, and confidence in continued profitability through the remainder of the fiscal year.”
"Our return to positive net income reflects the progress we've made in strengthening the business and improving our financial foundation," added
"Our operational focus remains centered on improving profitability while continuing to invest in the products, technology and journalism that support long-term digital growth," Bekke added. "Throughout the quarter, we continued to optimize our workflows and align resources with the evolving needs of our business. These initiatives are driving greater efficiency, supporting margin expansion and positioning Lee to operate with increased scale as our digital business continues to evolve."
"During the quarter, we also announced a new management agreement with
"We remain focused on building a more resilient, scalable business that delivers sustainable long-term value," Bekke concluded. "We are encouraged by our performance through the first nine months of the fiscal year combined with the expansion of our operating platform which reinforces our confidence in the direction of the business. We believe Lee is well positioned to continue driving long-term profitability and creating lasting value for our shareholders."
For the third quarter ended
- Total operating revenue was
$126 million . - Total Digital Revenue was
$72 million and represented 57% of our total operating revenue. - Revenue from digital-only subscribers totaled
$22 million . Digital-only subscription revenue increased 20% annually over the past three years. Digital-only subscribers totaled 584,000 at the end of the quarter. - Digital advertising and marketing services revenue represented 76% of our total advertising revenue and totaled
$45 million . Amplified Digital® Agency revenue totaled$27 million in the quarter. - Digital services revenue, which is predominantly from BLOX Digital, totaled
$5 million . - Total Print Revenue was
$54 million . - Operating expenses totaled
$118 million and Cash Costs(1) totaled$109 million , representing 14% and 14% decreases compared to the prior year, respectively. - Net income totaled
$5 million , an improvement of$7 million over the prior year quarter. - Adjusted EBITDA totaled
$18 million , an increase of$3 million , or 23%, over the prior year quarter.
2026 Fiscal Year Outlook:
| Adjusted EBITDA | 22% to 28% YOY growth |
Debt and Free Cash Flow:
The Company has
As of and for the period ended
- The principal amount of debt totaled
$455 million . - Cash on the balance sheet totaled
$59 million . Debt, net of cash on the balance sheet, totaled$395 million . - Capital expenditures totaled
$1 million for the quarter. We expect up to$7 million of capital expenditures in FY26. - We expect cash paid for income taxes to total between
$3 million and$9 million in FY26. - We do not expect any pension contributions in the fiscal year.
- The Company is executing a strategic termination of our fully funded benefit pension plan, eliminating the long-term volatility tied to interest rate movement, mortality assumptions and asset performance, while preserving participant benefits and improving balance sheet flexibility.
Conference Call Information:
As previously announced, we will hold an earnings conference call and audio webcast today at
About Lee:
Lee Enterprises is a leading provider of local news and information and a major subscription and advertising platform, with daily and weekly newspapers and rapidly expanding digital products serving 114 markets across 25 states. Lee's 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:
- 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;
- 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;
- The impacts of changes to our leadership and corporate governance; 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
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Three months ended | Nine months ended | |||||||
| (Thousands of Dollars, Except Per Common Share Data) | ||||||||
| Operating revenue: | ||||||||
| Print advertising revenue | 14,478 | 17,474 | 45,943 | 53,867 | ||||
| Digital advertising revenue | 44,846 | 49,097 | 128,334 | 139,766 | ||||
| Advertising and marketing services revenue | 59,324 | 66,571 | 174,277 | 193,633 | ||||
| Print subscription revenue | 32,918 | 38,076 | 100,816 | 122,587 | ||||
| Digital subscription revenue | 21,829 | 23,482 | 66,814 | 68,836 | ||||
| Subscription revenue | 54,747 | 61,558 | 167,630 | 191,423 | ||||
| Print other revenue | 6,967 | 7,837 | 21,545 | 22,938 | ||||
| Digital other revenue | 4,932 | 5,328 | 14,544 | 15,241 | ||||
| Other revenue | 11,899 | 13,165 | 36,089 | 38,179 | ||||
| Total operating revenue | 125,970 | 141,294 | 377,996 | 423,235 | ||||
| Operating expenses: | ||||||||
| Compensation | 44,810 | 47,436 | 140,989 | 164,349 | ||||
| Newsprint and ink | 2,521 | 3,268 | 8,005 | 9,996 | ||||
| Other operating expenses | 62,076 | 77,252 | 193,640 | 223,387 | ||||
| Insurance proceeds | (560 | ) | — | (6,401 | ) | — | ||
| Depreciation and amortization | 3,527 | 3,783 | 10,621 | 15,218 | ||||
| Gain on asset sales, impairments and other, net | (73 | ) | (1,562 | ) | (976 | ) | (2,365 | ) |
| Restructuring costs and other | 5,959 | 7,141 | 12,746 | 18,806 | ||||
| Total operating expenses | 118,260 | 137,318 | 358,624 | 429,391 | ||||
| Equity in earnings of associated companies | 922 | 686 | 3,010 | 2,963 | ||||
| Operating income (loss) | 8,632 | 4,662 | 22,382 | (3,193 | ) | |||
| Non-operating (expense) income: | ||||||||
| Interest expense | (5,558 | ) | (10,132 | ) | (23,435 | ) | (30,365 | ) |
| Pension and other post employment benefits ("OPEB") related and other, net | 1,169 | 1,050 | 2,840 | 2,362 | ||||
| Settlement gains | 2,330 | — | 2,330 | — | ||||
| Total non-operating expense, net | (2,059 | ) | (9,082 | ) | (18,265 | ) | (28,003 | ) |
| Income (loss) before income taxes | 6,573 | (4,420 | ) | 4,117 | (31,196 | ) | ||
| Income tax expense (benefit) | 1,400 | (2,744 | ) | 5,779 | (1,281 | ) | ||
| Net income (loss) | 5,173 | (1,676 | ) | (1,662 | ) | (29,915 | ) | |
| Net income attributable to non-controlling interests | (498 | ) | (244 | ) | (1,423 | ) | (1,264 | ) |
| Income (loss) attributable to | 4,675 | (1,920 | ) | (3,085 | ) | (31,179 | ) | |
| Other comprehensive loss, net of income taxes | (1,611 | ) | (115 | ) | (1,769 | ) | (230 | ) |
| Comprehensive income (loss) attributable to | 3,064 | (2,035 | ) | (4,854 | ) | (31,409 | ) | |
| Earnings (loss) per common share: | ||||||||
| Basic: | 0.21 | (0.31 | ) | (0.22 | ) | (5.16 | ) | |
| Diluted: | 0.21 | (0.31 | ) | (0.22 | ) | (5.16 | ) | |
DIGITAL / PRINT REVENUE COMPOSITION
(UNAUDITED)
| Three months Ended | Nine months ended | |||
| (Thousands of Dollars) | ||||
| 44,846 | 49,097 | 128,334 | 139,766 | |
| Digital Only Subscription Revenue | 21,829 | 23,482 | 66,814 | 68,836 |
| Digital Services Revenue | 4,932 | 5,328 | 14,544 | 15,241 |
| Total Digital Revenue | 71,607 | 77,907 | 209,692 | 223,843 |
| Print Advertising Revenue | 14,478 | 17,474 | 45,943 | 53,867 |
| Print Subscription Revenue | 32,918 | 38,076 | 100,816 | 122,587 |
| Other Print Revenue | 6,967 | 7,837 | 21,545 | 22,938 |
| Total Print Revenue | 54,363 | 63,387 | 168,304 | 199,392 |
| Total Operating Revenue | 125,970 | 141,294 | 377,996 | 423,235 |
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
The tables below reconcile the non-GAAP financial performance measure of Adjusted EBITDA to Net loss, its most directly comparable
| Three months ended | Nine months ended | |||||||
| (Thousands of Dollars) | ||||||||
| Net income (loss) | 5,173 | (1,676 | ) | (1,662 | ) | (29,915 | ) | |
| Adjusted to exclude | ||||||||
| Income tax expense (benefit) | 1,400 | (2,744 | ) | 5,779 | (1,281 | ) | ||
| Non-operating expenses, net | 2,059 | 9,082 | 18,265 | 28,003 | ||||
| Equity in earnings of TNI and MNI | (922 | ) | (686 | ) | (3,010 | ) | (2,963 | ) |
| Depreciation and amortization | 3,527 | 3,783 | 10,621 | 15,218 | ||||
| Restructuring costs and other | 5,959 | 7,141 | 12,746 | 18,806 | ||||
| Gain on asset sales, impairments and other, net | (73 | ) | (1,562 | ) | (976 | ) | (2,365 | ) |
| Stock compensation | 181 | 540 | 722 | 1,328 | ||||
| Add: | ||||||||
| Ownership share of TNI and MNI EBITDA (50%) | 1,071 | 1,066 | 3,296 | 3,488 | ||||
| Adjusted EBITDA | 18,375 | 14,944 | 45,781 | 30,319 | ||||
The table below reconciles the non-GAAP financial performance measure of Cash Costs to Operating expenses, the most directly comparable
| Three months ended | Nine months ended | |||||||
| (Thousands of Dollars) | ||||||||
| Operating expenses | 118,260 | 137,318 | 358,624 | 429,391 | ||||
| Adjustments | ||||||||
| Depreciation and amortization | 3,527 | 3,783 | 10,621 | 15,218 | ||||
| Gain on asset sales, impairments and other, net | (73 | ) | (1,562 | ) | (976 | ) | (2,365 | ) |
| Restructuring costs and other | 5,959 | 7,141 | 12,746 | 18,806 | ||||
| Insurance proceeds | (560 | ) | — | (6,401 | ) | — | ||
| Cash Costs | 109,407 | 127,956 | 342,634 | 397,732 | ||||
The table below reconciles the non-GAAP financial performance measure of Same-store Revenues to Operating Revenues, its most directly comparable
| Three months ended | Nine months ended | ||||||
| (Thousands of Dollars) | |||||||
| Print Advertising Revenue | 14,478 | 17,474 | 45,943 | 53,867 | |||
| Exited operations | — | (2,189 | ) | (2,399 | ) | (6,676 | ) |
| Same-store, Print Advertising Revenue | 14,478 | 15,285 | 43,544 | 47,191 | |||
| Digital Advertising Revenue | 44,846 | 49,097 | 128,334 | 139,766 | |||
| Exited operations | — | (1,144 | ) | (770 | ) | (4,204 | ) |
| Same-store, Digital Advertising Revenue | 44,846 | 47,953 | 127,564 | 135,562 | |||
| Total Advertising Revenue | 59,324 | 66,571 | 174,277 | 193,633 | |||
| Exited operations | — | (3,333 | ) | (3,169 | ) | (10,880 | ) |
| Same-store, Total Advertising Revenue | 59,324 | 63,238 | 171,108 | 182,753 | |||
| Print Subscription Revenue | 32,918 | 38,076 | 100,816 | 122,587 | |||
| Exited operations | — | (34 | ) | (3 | ) | (142 | ) |
| Same-store, Print Subscription Revenue | 32,918 | 38,042 | 100,813 | 122,445 | |||
| Digital Subscription Revenue | 21,829 | 23,482 | 66,814 | 68,836 | |||
| Exited operations | — | — | — | (2 | ) | ||
| Same-store, Digital Subscription Revenue | 21,829 | 23,482 | 66,814 | 68,834 | |||
| Total Subscription Revenue | 54,747 | 61,558 | 167,630 | 191,423 | |||
| Exited operations | — | (34 | ) | (3 | ) | (144 | ) |
| Same-store, Total Subscription Revenue | 54,747 | 61,524 | 167,627 | 191,279 | |||
| Print Other Revenue | 6,967 | 7,837 | 21,545 | 22,938 | |||
| Exited operations | — | — | — | — | |||
| Same-store, Print Other Revenue | 6,967 | 7,837 | 21,545 | 22,938 | |||
| Digital Other Revenue | 4,932 | 5,328 | 14,544 | 15,241 | |||
| Exited operations | — | — | — | — | |||
| Same-store, Digital Other Revenue | 4,932 | 5,328 | 14,544 | 15,241 | |||
| Total Other Revenue | 11,899 | 13,165 | 36,089 | 38,179 | |||
| Exited operations | — | — | — | — | |||
| Same-store, Total Other Revenue | 11,899 | 13,165 | 36,089 | 38,179 | |||
| Total Operating Revenue | 125,970 | 141,294 | 377,996 | 423,235 | |||
| Exited operations | — | (3,367 | ) | (3,172 | ) | (11,024 | ) |
| Same-store, Total Operating Revenue | 125,970 | 137,927 | 374,824 | 412,211 | |||
NOTES
(1) The following are non-GAAP (Generally Accepted Accounting Principles) financial measures for which reconciliations to relevant
- 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.
(2) Total Digital Revenue is defined as digital advertising and marketing services revenue (including Amplified Digital®), digital-only subscription revenue and digital services revenue.
(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 Company's current debt balance is
(5) Comparable basis is a non-GAAP performance measure based on
(6) FY25 revenue and Adjusted EBITDA were materially impacted by a cyber incident in
(7) TNI refers to
