EBITDA jumps as Lee Enterprises (NASDAQ: LEE) cuts interest costs
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Lee Enterprises reported preliminary second quarter 2026 results showing sharply improved profitability despite lower revenue. Total operating revenue was about $122 million, down from roughly $137 million a year earlier, as print advertising and subscription sales continued to decline.
Profitability improved meaningfully. Adjusted EBITDA rose to $15 million, up 95% year over year, helped by $4 million of business interruption insurance reimbursements and substantial cost cuts that reduced operating expenses by 20%. Even excluding these reimbursements, management highlighted 45% Adjusted EBITDA growth.
The company narrowed its net loss to $2 million, an improvement of $10 million from the prior-year quarter. Digital revenue reached $68 million, representing 56% of total revenue, with 591,000 digital-only subscribers. Lee ended the quarter with $53 million in cash and $455 million of debt, after an amendment that cut its term-loan rate to 5% from 9%, which is expected to save about $18 million of interest annually. Management reaffirmed guidance for year-over-year Adjusted EBITDA growth in fiscal 2026.
Positive
- Adjusted EBITDA nearly doubled, rising to $15.1M in Q2 2026, a 95% year-over-year increase, reflecting cost reductions, insurance reimbursements and improving underlying operating performance.
- Interest burden and liquidity improved, with the $455M term loan’s fixed rate cut from 9% to 5% for five years, expected to save about $18M annually, and quarter-end cash increasing to $53M.
Negative
- Revenue continues to contract, as total operating revenue declined to $121.9M from $137.4M year over year, with print subscription revenue down nearly 20% and print advertising also lower.
- The company remains unprofitable on a net income basis, posting a Q2 2026 net loss of $1.7M, despite improved margins and lower interest expense.
Insights
Profitability and capital structure improved, but revenue and print trends remain pressured.
Lee delivered strong margin gains in Q2 2026. Adjusted EBITDA increased to $15.1M, up 95% year over year, aided by $3.8M of business interruption insurance and significant cost reductions that lowered operating expenses to $114.4M from $143.0M. Cash Costs fell 15% to $112.0M, underscoring effective expense control.
At the same time, the revenue base is still shrinking. Total operating revenue declined to $121.9M from $137.4M, with print subscription revenue down nearly 20% and print advertising also lower. Digital remains the growth engine in mix terms, reaching 56% of revenue, though absolute digital revenue of $67.8M was modestly below the prior year.
Balance-sheet dynamics improved as the $455M term loan’s fixed interest rate dropped to 5% from 9%, with expected savings of about $18M annually and quarter-end cash of $53M. Management reaffirmed mid-single-digit year-over-year Adjusted EBITDA growth for FY26, but actual outcomes will depend on sustaining cost discipline while managing ongoing print declines and stabilizing digital growth.
8-K Event Classification
3 items: 2.02, 7.01, 9.01
3 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 7.01
Regulation FD Disclosure
Disclosure
Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Total operating revenue Q2 2026: $121.9M
Total operating revenue Q2 2025: $137.4M
Adjusted EBITDA Q2 2026: $15.1M
+5 more
8 metrics
Total operating revenue Q2 2026
$121.9M
Three months ended March 29, 2026
Total operating revenue Q2 2025
$137.4M
Three months ended March 30, 2025
Adjusted EBITDA Q2 2026
$15.1M
Three months ended March 29, 2026; up 95% YoY
Net loss Q2 2026
$1.7M
Three months ended March 29, 2026; improved from $12.0M prior year
Total digital revenue Q2 2026
$67.8M
56% of total operating revenue in Q2 2026
Debt outstanding
$455M
Principal amount under Credit Agreement as of March 29, 2026
Cash balance
$53M
Cash on balance sheet as of March 29, 2026
Term loan interest rate
5% fixed
Reduced from 9% for five years following February 2026 private placement
Key Terms
Adjusted EBITDA, Cash Costs, Same-store Revenues, business interruption insurance, +2 more
6 terms
Adjusted EBITDA financial
"Adjusted EBITDA totaled $15 million, an increase of $7 million, or 95%, over the prior year quarter."
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
Cash Costs financial
"Operating expenses totaled $114 million and Cash Costs(1) totaled $112 million, representing 20% and 15% decreases compared to the prior year"
Cash costs are the actual cash outflows a business incurs to produce goods or deliver services during a period, excluding non‑cash accounting items like depreciation, amortization, or stock‑based pay. For investors, cash costs show the real, recurring money needed to run operations and are useful for comparing efficiency and profitability — like comparing the weekly grocery bill (cash costs) rather than the long‑term cost of a kitchen appliance (non‑cash accounting), so you can judge how much cash the business needs and generates.
Same-store Revenues financial
"The table below reconciles the non-GAAP financial performance measure of Same-store Revenues to Operating Revenues"
Same-store revenues measure how much money a company’s existing locations or units made during a given period compared with the same period earlier, excluding sales from newly opened outlets, acquisitions or closures. Investors care because it isolates organic demand — like checking whether a long-running shop is attracting more customers rather than just growing by opening new branches — making it easier to judge whether underlying business performance is improving or weakening.
business interruption insurance financial
"operating expenses were reduced by $4 million due to business interruption insurance recoveries(6)"
Business interruption insurance is a policy that helps a company replace lost revenue and cover ongoing expenses when normal operations are halted by a covered event, such as property damage, supply-chain disruption, or other insured perils. For investors it acts like a financial safety net that preserves cash flow and reduces the chance of long-term harm after a shock, influencing a firm’s revenue stability, credit risk, and valuation.
defined benefit pension plan financial
"The Company is executing a strategic termination of our fully funded benefit pension plan"
A defined benefit pension plan is a retirement program that promises participants a specific monthly payment in retirement, usually based on salary and years worked, with the employer responsible for funding and making up any shortfall. Think of it as the company guaranteeing a steady paycheck in retirement while handling the investments and risks. Investors care because shortfalls become long-term liabilities that can require large cash contributions, affect profitability and borrowing costs, and add uncertainty to a company’s financial health.
Excess Cash Flow financial
"Excess Cash Flow was previously defined under the Credit Agreement as any cash greater than $20.0 million on the balance sheet"
Earnings Snapshot
Total operating revenue: $121.9M · Guidance included
Q2 FY2026
Total operating revenue
$121.9M
-9.4% YoY same-store
Adjusted EBITDA
$15.1M
+95% YoY
Net loss attributable to Lee
$2.1M
Improved from $12.5M prior year
Digital revenue mix
56%
+270 bps YoY
Basic EPS
-$0.16
Improved from -$2.07 prior year
Guidance
Company reaffirms fiscal 2026 outlook for year-over-year Adjusted EBITDA growth in the mid-single digits.
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):May 7, 2026
_______________________________________________________________________________________
(Exact name of Registrant as specified in its charter)
_______________________________________________________________________________________
| (State of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
| (Address of Principal Executive Offices) | ||||||||
Registrant’s telephone number, including area code | ||||||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
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:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-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 May 7, 2026, Lee Enterprises, Incorporated (the “Company”) reported its preliminary results for the second quarter ended March 29, 2026. In connection with the preliminary results, the Company issued an earnings release, which is attached hereto as Exhibit 99.1 (“Earnings 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 Earnings Release, the Presentation Materials include content and financial figures demonstrating the Company’s expectation to be sustainable without reliance on print media as a long-term objective.
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 | Earnings Release | |||||||
| 99.2 | Presentation Materials | |||||||
| 104 | Cover 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: | May 7, 2026 | By: | /s/ Joshua P. Rinehults | ||||||||||||||
Joshua P. Rinehults | |||||||||||||||||
Vice President, Interim Chief Financial Officer and Treasurer | |||||||||||||||||
Lee Enterprises Reports Strong Second Quarter Results
95% YOY Adjusted EBITDA(1) growth in Q2
Digital revenue(2) represents 56% of total revenue in Q2
Improved capital structure; $53M in cash & interest rate(3) reduced to 5%
Reaffirms guidance of YOY Adjusted EBITDA growth in FY26
DAVENPORT, Iowa (May 7, 2026) — Lee Enterprises, Incorporated (NASDAQ: LEE), a digital-first subscription platform providing high quality, trusted, local news, information and a major platform for advertising in 114 markets, today reported preliminary second quarter fiscal 2026 financial results(4) for the period ended March 29, 2026.
"Our second quarter results reflect continued momentum in the business and disciplined execution across our operations," said Nathan Bekke, Lee’s President and Chief Executive Officer. "Adjusted EBITDA increased $7 million, or 95%, over the prior year quarter, marking our fourth consecutive quarter of Adjusted EBITDA growth on a comparable basis(5). Our 2026 results continue to benefit from insurance reimbursements related to last year's cyber event, contributing $4 million to Adjusted EBITDA in the quarter. Excluding these reimbursements, our underlying operating performance still drove Adjusted EBITDA growth of 45% year-over-year, highlighting the strength of our core business. These results reinforce our confidence that we will deliver year-over-year Adjusted EBITDA growth in fiscal 2026, while highlighting the resilience, momentum and ongoing evolution of our business model."
“In the quarter, we continued to take proactive steps to align our cost structure with the ongoing shift in our revenue mix,” added Bekke. “These actions include further optimization of our operating footprint, streamlining of workflows, reduction in corporate overhead and continued prioritization of investments that support digital growth. As a result, we are realizing meaningful efficiencies while maintaining our focus on delivering high-quality local journalism and content. We expect these efforts to continue supporting margin improvement and enhancing the scalability of our business over time.”
"We are also beginning to realize benefits from the strategic investment completed in February," said Bekke. "The amendment to our credit agreement reduced our interest rate mid-quarter, which will drive meaningful interest expense savings going forward. We expect these savings to total approximately $18 million annually, or up to $90 million over the next five years, further strengthening our capital structure and enhancing our financial flexibility as we continue to invest in digital growth. Additionally, we finished the quarter with $53 million in cash on our balance sheet, up $49 million year-over-year. This improved liquidity, combined with lower interest expense, positions us well to accelerate our strategic priorities and further strengthen our balance sheet over time."
"Net loss for the quarter totaled $2 million, an improvement of $10 million, or 86%, compared to the prior year quarter. The year-over-year improvement was driven by higher Adjusted EBITDA, lower interest expense following the strategic investment, and continued cost discipline," added Bekke.
“Our progress continues to reflect the strength of our strategy and advances we are making in our digital transformation," Bekke added. "We remain focused on expanding recurring digital revenue while maintaining disciplined cost management to support margin improvement. We are highly encouraged by our performance through the first half of the fiscal year and remain confident in our strategy and our ability to deliver continued growth in the quarters ahead."
For the second quarter ended March 29, 2026:
•Total operating revenue was $122 million.
•Total Digital Revenue was $68 million and represented 56% of our total operating revenue.
1
•Revenue from digital-only subscribers totaled $22 million. Digital-only subscription revenue increased 17% annually over the past three years. Digital-only subscribers totaled 591,000 at the end of the quarter.
•Digital advertising and marketing services revenue represented 74% of our total advertising revenue and totaled $41 million. Amplified Digital® Agency revenue totaled $23 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 $114 million and Cash Costs(1) totaled $112 million, representing 20% and 15% decreases compared to the prior year, respectively. During the quarter, operating expenses were reduced by $4 million due to business interruption insurance recoveries(6), recorded in the Insurance proceeds line item and included in Adjusted EBITDA. Operating expenses were further reduced by $1 million from insurance recoveries related to expenses incurred in response to the prior year cyber incident, recorded in Restructuring costs and other. Excluding these business interruption insurance proceeds and expense reimbursements, operating expenses decreased 17% compared to the prior year.
•Net loss totaled $2 million, an improvement of $10 million, or 86%, over the prior year quarter.
•Adjusted EBITDA totaled $15 million, an increase of $7 million, or 95%, over the prior year quarter.
2026 Fiscal Year Outlook:
| Adjusted EBITDA | YOY growth in the mid-single digits | ||||
Debt and Free Cash Flow:
The Company has $455 million of debt outstanding under our Credit Agreement with BH Finance. The financing has favorable terms including a 25-year maturity, a fixed annual interest rate, no fixed principal payments, and no financial performance covenants. The $50 million private placement of common stock closed in February 2026 made operative certain amendments to the Credit Agreement with BH Finance, resulting in the fixed annual interest rate dropping to 5% from 9% for a five-year period(3).
As of and for the period ended March 29, 2026:
•The principal amount of debt totaled $455 million.
•Cash on the balance sheet totaled $53 million. Debt, net of cash on the balance sheet, totaled $402 million.
•Capital expenditures totaled $1 million for the quarter. We expect up to $8 million of capital expenditures in FY26.
•We expect cash paid for income taxes to total between $2 million and $8 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 9 a.m. Central Time. The live webcast will be accessible at www.lee.net and will be available for replay 24 hours later. Questions from other participants may be submitted by participating in the webcast. To participate in the live
2
conference call via telephone, please register at www.lee.net. Upon registering, a dial-in number and unique PIN will be provided to join the conference call.
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
3
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Three months ended | Six months ended | |||||||||||||
| (Thousands of Dollars, Except Per Common Share Data) | March 29, 2026 | March 30, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||
| Operating revenue: | ||||||||||||||
| Print advertising revenue | 14,274 | 16,532 | 31,465 | 36,393 | ||||||||||
| Digital advertising revenue | 40,693 | 43,941 | 83,488 | 90,670 | ||||||||||
| Advertising and marketing services revenue | 54,967 | 60,473 | 114,953 | 127,063 | ||||||||||
| Print subscription revenue | 32,902 | 41,079 | 67,898 | 84,511 | ||||||||||
| Digital subscription revenue | 22,279 | 23,789 | 44,985 | 45,354 | ||||||||||
| Subscription revenue | 55,181 | 64,868 | 112,883 | 129,865 | ||||||||||
| Print other revenue | 7,032 | 7,213 | 14,578 | 15,101 | ||||||||||
| Digital other revenue | 4,784 | 4,826 | 9,612 | 9,913 | ||||||||||
| Other revenue | 11,816 | 12,039 | 24,190 | 25,014 | ||||||||||
| Total operating revenue | 121,964 | 137,380 | 252,026 | 281,942 | ||||||||||
| Operating expenses: | ||||||||||||||
| Compensation | 46,745 | 56,659 | 96,178 | 116,913 | ||||||||||
| Newsprint and ink | 2,520 | 3,111 | 5,483 | 6,727 | ||||||||||
| Other operating expenses | 62,750 | 71,455 | 131,564 | 146,135 | ||||||||||
| Insurance proceeds | (3,840) | — | (5,840) | — | ||||||||||
| Depreciation and amortization | 3,515 | 5,171 | 7,094 | 11,436 | ||||||||||
| (Gain) loss on asset sales, impairments and other, net | (900) | 126 | (903) | (803) | ||||||||||
| Restructuring costs and other | 3,640 | 6,516 | 6,788 | 11,666 | ||||||||||
| Total operating expenses | 114,430 | 143,038 | 240,364 | 292,074 | ||||||||||
| Equity in earnings of associated companies | 1,008 | 1,155 | 2,088 | 2,277 | ||||||||||
| Operating income (loss) | 8,542 | (4,503) | 13,750 | (7,855) | ||||||||||
| Non-operating (expense) income: | ||||||||||||||
| Interest expense | (7,629) | (9,950) | (17,877) | (20,232) | ||||||||||
| Pension and OPEB related benefit and other, net | 826 | 658 | 1,671 | 1,311 | ||||||||||
| Curtailment/Settlement gains | — | — | — | — | ||||||||||
| Total non-operating expense, net | (6,803) | (9,292) | (16,206) | (18,921) | ||||||||||
| Income (loss) before income taxes | 1,739 | (13,795) | (2,456) | (26,776) | ||||||||||
| Income tax expense (benefit) | 3,448 | (1,780) | 4,379 | 1,463 | ||||||||||
| Net loss | (1,709) | (12,015) | (6,835) | (28,239) | ||||||||||
| Net loss attributable to non-controlling interests | (439) | (496) | (924) | (1,020) | ||||||||||
| Loss attributable to Lee Enterprises, Incorporated | (2,148) | (12,511) | (7,759) | (29,259) | ||||||||||
| Other comprehensive loss, net of income taxes | (79) | (115) | (158) | (230) | ||||||||||
| Comprehensive loss attributable to Lee Enterprises, Incorporated | (2,227) | (12,626) | (7,917) | (29,489) | ||||||||||
| Loss per common share: | ||||||||||||||
| Basic: | (0.16) | (2.07) | (0.78) | (4.87) | ||||||||||
| Diluted: | (0.16) | (2.07) | (0.78) | (4.87) | ||||||||||
4
DIGITAL / PRINT REVENUE COMPOSITION
(UNAUDITED)
| Three months Ended | Six months ended | |||||||||||||
| (Thousands of Dollars) | March 29, 2026 | March 30, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||
| Digital Advertising and Marketing Services Revenue | 40,693 | 43,941 | 83,488 | 90,670 | ||||||||||
| Digital Only Subscription Revenue | 22,279 | 23,789 | 44,985 | 45,354 | ||||||||||
| Digital Services Revenue | 4,784 | 4,826 | 9,612 | 9,913 | ||||||||||
| Total Digital Revenue | 67,756 | 72,556 | 138,085 | 145,937 | ||||||||||
| Print Advertising Revenue | 14,274 | 16,532 | 31,465 | 36,393 | ||||||||||
| Print Subscription Revenue | 32,902 | 41,079 | 67,898 | 84,511 | ||||||||||
| Other Print Revenue | 7,032 | 7,213 | 14,578 | 15,101 | ||||||||||
| Total Print Revenue | 54,208 | 64,824 | 113,941 | 136,005 | ||||||||||
| Total Operating Revenue | 121,964 | 137,380 | 252,026 | 281,942 | ||||||||||
5
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 U.S. GAAP measure:
| Three months ended | Six months ended | |||||||||||||
| (Thousands of Dollars) | March 29, 2026 | March 30, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||
| Net loss | (1,709) | (12,015) | (6,835) | (28,239) | ||||||||||
| Adjusted to exclude | ||||||||||||||
| Income tax expense (benefit) | 3,448 | (1,780) | 4,379 | 1,463 | ||||||||||
| Non-operating expenses, net | 6,803 | 9,292 | 16,206 | 18,921 | ||||||||||
| Equity in earnings of TNI and MNI | (1,008) | (1,155) | (2,088) | (2,277) | ||||||||||
| Depreciation and amortization | 3,515 | 5,171 | 7,094 | 11,436 | ||||||||||
| Restructuring costs and other | 3,640 | 6,516 | 6,788 | 11,666 | ||||||||||
| (Gain) loss on asset sales, impairments and other, net | (900) | 126 | (903) | (803) | ||||||||||
| Stock compensation | 213 | 358 | 541 | 788 | ||||||||||
| Add: | ||||||||||||||
| Ownership share of TNI and MNI EBITDA (50%) | 1,123 | 1,255 | 2,224 | 2,422 | ||||||||||
| Adjusted EBITDA | 15,125 | 7,768 | 27,406 | 15,377 | ||||||||||
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 ended | Six months ended | |||||||||||||
| (Thousands of Dollars) | March 29, 2026 | March 30, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||
| Operating expenses | 114,430 | 143,038 | 240,364 | 292,074 | ||||||||||
| Adjustments | ||||||||||||||
| Depreciation and amortization | 3,515 | 5,171 | 7,094 | 11,436 | ||||||||||
| (Gain) loss on asset sales, impairments and other, net | (900) | 126 | (903) | (803) | ||||||||||
| Restructuring costs and other | 3,640 | 6,516 | 6,788 | 11,666 | ||||||||||
| Insurance proceeds | (3,840) | — | (5,840) | — | ||||||||||
| Cash Costs | 112,015 | 131,225 | 233,225 | 269,775 | ||||||||||
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 | Six months ended | |||||||||||||
| (Thousands of Dollars) | March 29, 2026 | March 30, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||
Print Advertising Revenue | 14,274 | 16,532 | 31,465 | 36,393 | ||||||||||
Exited operations | (568) | (2,108) | (2,400) | (4,487) | ||||||||||
Same-store, Print Advertising Revenue | 13,706 | 14,424 | 29,065 | 31,906 | ||||||||||
| Digital Advertising Revenue | 40,693 | 43,941 | 83,488 | 90,670 | ||||||||||
Exited operations | (168) | (1,483) | (770) | (3,060) | ||||||||||
Same-store, Digital Advertising Revenue | 40,525 | 42,458 | 82,718 | 87,610 | ||||||||||
Total Advertising Revenue | 54,967 | 60,473 | 114,953 | 127,063 | ||||||||||
Exited operations | (736) | (3,590) | (3,169) | (7,548) | ||||||||||
Same-store, Total Advertising Revenue | 54,231 | 56,883 | 111,784 | 119,515 | ||||||||||
Print Subscription Revenue | 32,902 | 41,079 | 67,898 | 84,511 | ||||||||||
Exited operations | — | (50) | (2) | (109) | ||||||||||
Same-store, Print Subscription Revenue | 32,902 | 41,029 | 67,896 | 84,402 | ||||||||||
Digital Subscription Revenue | 22,279 | 23,789 | 44,985 | 45,354 | ||||||||||
Exited operations | — | — | (1) | (2) | ||||||||||
Same-store, Digital Subscription Revenue | 22,279 | 23,789 | 44,984 | 45,352 | ||||||||||
Total Subscription Revenue | 55,181 | 64,868 | 112,883 | 129,865 | ||||||||||
Exited operations | — | (50) | (3) | (111) | ||||||||||
Same-store, Total Subscription Revenue | 55,181 | 64,818 | 112,880 | 129,754 | ||||||||||
Print Other Revenue | 7,032 | 7,213 | 14,578 | 15,101 | ||||||||||
Exited operations | — | — | — | — | ||||||||||
Same-store, Print Other Revenue | 7,032 | 7,213 | 14,578 | 15,101 | ||||||||||
Digital Other Revenue | 4,784 | 4,826 | 9,612 | 9,913 | ||||||||||
Exited operations | — | — | — | — | ||||||||||
Same-store, Digital Other Revenue | 4,784 | 4,826 | 9,612 | 9,913 | ||||||||||
Total Other Revenue | 11,816 | 12,039 | 24,190 | 25,014 | ||||||||||
Exited operations | — | — | — | — | ||||||||||
Same-store, Total Other Revenue | 11,816 | 12,039 | 24,190 | 25,014 | ||||||||||
Total Operating Revenue | 121,964 | 137,380 | 252,026 | 281,942 | ||||||||||
Exited operations | (736) | (3,640) | (3,172) | (7,658) | ||||||||||
Same-store, Total Operating Revenue | 121,228 | 133,740 | 248,854 | 274,284 | ||||||||||
7
NOTES
(1)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.
(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)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 was previously defined under the Credit Agreement as any cash greater than $20.0 million 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. Concurrently with the execution of the Stock Purchase Agreement, we entered into the Second Amendment to the Credit Agreement. The amendments set forth therein became operative upon the Company's receipt of the proceeds from the Private Placement at the Closing. The amendments include a reduction of the applicable margin on our 25-year term loan from 9% to 5% for a period of five years following the closing and amending the definition of Excess Cash Flow such that the minimum amount of cash on hand held by us before being deemed Excess Cash Flow would be equal to $64.0 million.
(4)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.
(5)Comparable basis is a non-GAAP performance measure based on U.S. GAAP trends for Lee for the current period, excluding the extra week in fiscal 2024. The fourth quarter and full year of fiscal 2025 consisted of 13 weeks and 52 weeks, respectively. The fourth quarter and full year of fiscal 2024 consisted of 14 weeks and 53 weeks, respectively.
(6)FY25 revenue and Adjusted EBITDA were materially impacted by a cyber incident in February 2025. The FY25 impact on revenue and Adjusted EBITDA was approximately $12M and $8M, respectively. These metrics exclude any potential reimbursement from cyber insurance carrier in FY25. For the six months ended March 29, 2026, we received $5.8 million in business interruption reimbursements that
8
were recorded on their own line in "Operating Expenses" and included in Adjusted EBITDA. The remaining business-interruption claims remain under review.
(7)TNI refers to TNI Partners publishing operations in Tucson, AZ. MNI refers to Madison Newspapers, Inc. publishing operations in Madison, WI.
9
SECOND QUARTER FY2026 EARNINGS MAY 7, 2026
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 LEE ENTERPRISES: AT-A-GLANCE Breaking newsServing 114 local markets across the USIntensely local content Lee Enterprises is a leading provider of high quality, trusted, local news and information. Our robust local and national digital media and advertising platforms are the fastest growing in the industry. Today, as throughout our history, in every one of the communities we serve, no competitor can match the indispensable local news, information and advertising we deliver to huge audiences of all ages.
4 DIGITAL-FIRST SUBSCRIPTION PLATFORM Total Revenue $532M LTM March 2026 Digital Mix of Total Revenue 56% Q2 FY26 Adjusted EBITDA(1) $57M(2) LTM March 2026 Digital Subscribers 591,000 March FY26 Digital Subscription Revenue $94M LTM March FY26 Lee is a dominant source of local news, information, and advertising in midsized markets Digital Agency Revenue $100M LTM March FY26 (1) Adjusted EBITDA and Cash Costs are non-GAAP financial measures. See appendix. (2) LTM Adjusted EBITDA includes $6 million of business interruption insurance proceeds from the February 2025 cyber incident. (3) Same-store revenues is a non-GAAP performance measure based on U.S. GAAP revenues for Lee for the current period, excluding exited operations. See appendix.
5 ADJUSTED EBITDA GROWTH (1) Adjusted EBITDA is a non-GAAP financial measure. See appendix. (2) Q1 Adjusted EBITDA includes $2 million of business interruption insurance proceeds from the February 2025 cyber incident. Q1 YOY Adjusted EBITDA is +35% without insurance proceeds. (3) Q2 Adjusted EBITDA includes $4 million of business interruption insurance proceeds from the February 2025 cyber incident. Q2 YOY Adjusted EBITDA is +45% without insurance proceeds.. $15M $13M $8M $8M $15M $15M $12M $15M Q3 FY25 Q4 FY25 Q1 FY26 Q2 FY26 Adjusted EBITDA(1), last four quarters 1% 14% 61% 95% Q3 FY25 Q4 FY25 Q1 FY26 Q2 FY26 Adjusted EBITDA YOY %, last four quarters 78% Adjusted EBITDA growth YOY in 1st Half FY26
6 52.8% 55.6% Q2 FY25 Q2 FY26 SECOND QUARTER 2026 BUSINESS HIGHLIGHTS Adjusted EBITDA and Adjusted EBITDA margin grew over prior year • Adjusted EBITDA(1) grew 95% to $15 million • Adjusted EBITDA margin grew 670 basis points YOY to 12.4% • Cash Costs(1) declined $19 million, or 15%, over prior year driven by reduced compensation and legacy print costs Saw positive momentum in digital revenue mix Improved capital structure • Significant year-over-year improvement in Digital Revenue mix – by 270 basis points • 74% of total advertising revenue sourced from digital revenue streams; up 140 basis points from PY • $53 million of cash on the Balance Sheet to finish March • Interest rate reduction from 9% to 5% effective mid-Q2. Expected to provide $18 million in annual savings • New Chairman of the Board, CEO, CFO, and refreshed Board of Directors (1) Adjusted EBITDA and Cash Costs are non-GAAP financial measures. See appendix. (2) Q2 Adjusted EBITDA includes $4 million of business interruption insurance proceeds from the February 2025 cyber incident. Q2 YOY Adjusted EBITDA is +45% without insurance proceeds.. Interest ExpenseDigital Revenue as a % of Total Revenue $7.8M $15.1M Q2 FY25 Q2 FY26 Adjusted EBITDA Up 95% from PY $10.0M $7.6M Q3 FY24 Q3 FY25 Down 23% to PY 270 bps
7 STRATEGIES TO DRIVE DIGITAL SUBSCRIPTION REVENUE Addressable Market Anonymous Users 13 million Known Users 4 million Subscribers 591,000 Addressable Market as of Q2 FY26 1. High-quality Local Audience: • Shift toward high-intent users to deliver stronger engagement & monetization 2. Strengthen Conversion & Retention: • Use data, analytics and product improvements to improve conversion rates and maximize lifetime value 3. Scalable & Efficient Growth: • Leverage AI & optimized workflows to grow revenue while lowering cost to acquire users Key Themes More valuable subscriber base drives more efficient growth
8 STRATEGIES TO EXPAND DIGITAL ADVERTISING REVENUE 1. Recurring Revenue: • Move from transactional sales to predictable & performance-based deals 2. Integrated Solutions: • End-to-end marketing services that drive deeper client relationships 3. Data-driven Growth: • Utilize owned platforms and product innovation to create a scalable competitive advantage Key Themes Driving profitable, recurring revenue
9 BUILDING SUSTAINABLE DIGITAL REVENUE (1) CAGR represents the compounded annual growth rate from LTM March FY23 to LTM March FY26. Scaling high-quality, recurring digital revenue streams $48M $94M LTM Mar FY23 LTM Mar FY26 $86M $100M LTM Mar FY23 LTM Mar FY26 $256M $290M LTM Mar FY23 LTM Mar FY26 Digital Subscription Revenue +25%(1) Digital Agency Revenue +5%(1) +4%(1) Total Digital Revenue
10 STRATEGY IS TRANSFORMING THE COMPOSITION OF REVENUE Early stages of Digital Transformation Industry-leading digital revenue growth is transforming the mix of revenue FY2020 REVENUE MIX % Digital 7% 21% Q2 FY2026 56% From print-dependent to digital-dominant
11 FY21 FY25 FY26E FY27E FY28E FY29E FY30E EXECUTION OF DIGITAL TRANSFORMATION DRIVES SUSTAINABILITY & GROWTH Digital Transformation Digital Sustainability Digital transformation is nearing sustainability Digital gross margin(1) SG&A Key Takeaways ✓ Digital revenue replacing print revenue and growing at 9% CAGR(2) ✓ Digital subscription revenue and gross margin growing at a 28% CAGR(2) ✓ Amplified Digital® Agency revenue growing at a 21% CAGR(2) ✓ Nearing digital sustainability: Digital gross margin(1) expected to surpass SG&A costs within the next three years. (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 Gross Margin excludes all Selling, General, and Administrative (“SG&A”) costs. (2) CAGR represents the compounded annual growth rate from March FY21 YTD to March FY26 YTD.
12 STRONG TRACK RECORD OF SUSTAINABLE COST MANAGEMENT Cost discipline driving profitability and strategic reinvestment (1) Adjusted EBITDA and Cash Costs are non-GAAP financial measures. See appendix. $686M $524M FY21 FY22 FY23 FY24 FY25 Total Cash Costs(1) Last Five Years Digital Costs Print Costs SG&A Total Cash Costs $45M $44M $81M $68M $144M $121M 1H FY25 1H FY26 Total Cash Costs(1) First Half Digital Costs Print Costs SG&A Down 14%(1) $233M $270M
13 Q2 2020 Q2 2026 CREDIT AGREEMENT REPRESENTS STRATEGIC ASSET • $121 million debt reduction since refinancing in March 2020 • Favorable credit agreement with Berkshire Hathaway • Fixed annual interest rate reduced to 5% from 9% for five years post private placement transaction in February 2026, generating expected interest savings of approximately $18 million annually* • 25-year runway with no breakage costs or prepayment penalties • No financial performance covenants and no fixed amortization • Executing strategic termination of the company’s fully funded defined 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 • Identified noncore assets with an estimated value of up to $20 million for monetization $576M $455M Debt Reduction Significant Interest Savings Over Next 5 Years *Annual interest paid estimated based on current outstanding debt ($455 million) 9% 5% $41M $23M 2025 *Annual estimate
14 REAFFIRMING 2026 OUTLOOK (1) Adjusted EBITDA is a non-GAAP financial measure. See appendix. Key Metric FY26 Outlook Adjusted EBITDA(1) YOY growth in the mid-single digits
16 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, (gain) loss on asset 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. Comparable basis is a non-GAAP performance measure based on U.S. GAAP trends for Lee for the current period, excluding the extra week in fiscal 2024. The fourth quarter and full year of fiscal 2025 consisted of 13 weeks and 52 weeks, respectively. The fourth quarter and full year of fiscal 2024 consisted of 14 weeks and 53 weeks, respectively. 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.
17 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 and the extra week in FY24. 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 FY2025 Q2 FY2025 Q3 FY2025 Q4 FY2025 FY 2025 Q1 FY2026 Q2 FY2026 Digital Advertising and Marketing Services 46.7 43.9 49.1 44.1 183.8 42.8 40.7 YoY % (1) 1.7% -2.5% -1.0% -11.0% -3.3% -6.6% -4.6% Digital Only Subscription Revenue 21.6 23.8 23.5 25.4 94.2 22.7 22.3 YoY % (1) 13.5% 19.7% 15.5% 16.4% 16.3% 5.3% -6.3% Digital Services Revenue 5.1 4.8 5.3 4.8 20.1 4.8 4.8 YoY % (1) 2.6% -5.7% 3.5% -6.5% -1.6% -5.1% -0.9% Total Digital Revenue (2) 73.4 72.6 77.9 74.3 298.1 70.3 67.8 YoY % (1) 4.9% 3.6% 3.8% -2.9% 2.3% -2.9% -4.9% % of Total Revenue 50.8% 52.8% 55.1% 53.4% 53.0% 54.1% 55.6% Print Advertising Revenue 19.9 16.5 17.5 15.3 69.2 17.2 14.3 YoY % (1) -15.8% -9.1% -5.8% -11.5% -10.9% -12.1% -5.0% Print Subscription Revenue 43.4 41.1 38.1 41.6 164.2 35.0 32.9 YoY % (1) -15.5% -15.6% -19.6% -8.4% -14.9% -19.3% -19.8% Other Print Revenue 7.9 7.2 7.8 7.9 30.9 7.5 7.0 YoY % (1) -7.0% -10.3% -5.3% -0.1% -5.7% -4.3% -2.5% Total Print Revenue 71.2 64.8 63.4 64.8 264.2 59.7 54.2 YoY % (1) -14.8% -13.5% -14.5% -8.2% -12.9% -15.8% -14.4% Total Revenue 144.6 137.4 141.3 139.1 562.3 130.1 122.0 YoY % (1) -5.8% -5.2% -5.3% -5.4% -5.4% -9.2% -9.4%
18 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Millions of Dollars) Q2 FY26 Q2 FY25 Net loss (1.7) (12.0) Adjusted to exclude Income tax expense (benefit) 3.4 (1.8) Non-operating expenses, net 6.8 9.3 Equity in earnings of TNI and MNI (1.0) (1.2) Depreciation and amortization 3.5 5.2 Restructuring costs and other 3.6 6.5 (Gain) loss on asset sales, impairments and other, net (0.9) 0.1 Stock compensation and other 0.2 0.4 Add Ownership share of TNI and MNI EBITDA (50%) 1.1 1.3 Adjusted EBITDA 15.1 7.8 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.
19 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) 1H FY26 1H FY25 Net loss (6.8) (28.2) Adjusted to exclude Income tax expense (benefit) 4.4 1.5 Non-operating expenses, net 16.2 18.9 Equity in earnings of TNI and MNI (2.1) (2.3) Depreciation and amortization 7.1 11.4 Restructuring costs and other 6.8 11.7 (Gain) loss on asset sales, impairments and other, net (0.9) (0.8) Stock compensation and other 0.5 0.8 Add Ownership share of TNI and MNI EBITDA (50%) 2.2 2.4 Adjusted EBITDA 27.4 15.4
20 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) Q2 FY26 Q2 FY25 Operating Expenses 114.4 143.0 Adjusted to exclude Depreciation and amortization 3.5 5.2 (Gain) loss on asset sales, impairments and other, net (0.9) 0.1 Restructuring costs and other 3.6 6.5 Insurance proceeds (3.8) -- Cash Costs 112.0 131.2
21 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) 1H FY26 1H FY25 Operating Expenses 240.4 292.1 Adjusted to exclude Depreciation and amortization 7.1 11.4 (Gain) loss on asset sales, impairments and other, net (0.9) (0.8) Restructuring costs and other 6.8 11.7 Insurance proceeds (5.8) -- Cash Costs 233.2 269.8
22 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. Rounding – Items may not foot due to rounding. (Millions of Dollars) Q2 FY2026 Q2 FY2025 $ Change % Change Total Operating Revenue 122.0 137.4 (15.4) -11.2% Exited operations (0.7) (3.6) 2.9 NM Same-store, Total Operating Revenue 121.2 133.7 (12.5) -9.4% (Millions of Dollars) Q2 FY2026 Q2 FY2025 $ Change % Change Print Other Revenue 7.0 7.2 (0.2) -2.5% Exited operations - (0.0) 0.0 NM Same-store, Print Other Revenue 7.0 7.2 (0.2) -2.5% Digital Other Revenue 4.8 4.8 (0.0) -0.9% Exited operations - - - NM Same-store, Digital Other Revenue 4.8 4.8 (0.0) -0.9% Total Other Revenue 11.8 12.0 (0.2) -1.9% Exited operations - (0.0) 0.0 NM Same-store, Total Other Revenue 11.8 12.0 (0.2) -1.9% (Millions of Dollars) Q2 FY2026 Q2 FY2025 $ Change % Change Print Advertising Revenue 14.3 16.5 (2.3) -13.7% Exited operations (0.6) (2.1) 1.5 NM Same-store, Print Advertising Revenue 13.7 14.4 (0.7) -5.0% Digital Advertising and Marketing Services Revenue 40.7 43.9 (3.2) -7.4% Exited operations (0.2) (1.5) 1.3 NM Same-store, Digital Advertising and Marketing Services 40.5 42.5 (1.9) -4.6% Total Advertising Revenue 55.0 60.5 (5.5) -9.1% Exited operations (0.7) (3.6) 2.9 NM Same-store, Total Advertising Revenue 54.2 56.9 (2.7) -4.7% (Millions of Dollars) Q2 FY2026 Q2 FY2025 $ Change % Change Print Subscription Revenue 32.9 41.1 (8.2) -19.9% Exited operations 0.0 (0.0) 0.0 NM Same-store, Print Subscription Revenue 32.9 41.0 (8.1) -19.8% Digital Subscription Revenue 22.3 23.8 (1.5) -6.3% Exited operations - 0.0 (0.0) NM Same-store, Digital Subscription Revenue 22.3 23.8 (1.5) -6.3% Total Subscription Revenue 55.2 64.9 (9.7) -14.9% Exited operations 0.0 (0.0) 0.1 NM Same-store, Total Subscription Revenue 55.2 64.8 (9.6) -14.9%
23 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. Rounding – Items may not foot due to rounding. (Millions of Dollars) 1H FY2026 1H FY2025 $ Change % Change Print Other Revenue 14.6 15.1 (0.5) -3.5% Exited operations - (0.0) 0.0 NM Same-store, Print Other Revenue 14.6 15.1 (0.5) -3.5% Digital Other Revenue 9.6 9.9 (0.3) -3.0% Exited operations - - - NM Same-store, Digital Other Revenue 9.6 9.9 (0.3) -3.0% Total Other Revenue 24.2 25.0 (0.8) -3.3% Exited operations - (0.0) 0.0 NM Same-store, Total Other Revenue 24.2 25.0 (0.8) -3.3% (Millions of Dollars) 1H FY2026 1H FY2025 $ Change % Change Total Operating Revenue 252.0 281.9 (29.9) -10.6% Exited operations (3.2) (7.7) 4.5 NM Same-store, Total Operating Revenue 248.9 274.3 (25.4) -9.3% (Millions of Dollars) 1H FY2026 1H FY2025 $ Change % Change Print Advertising Revenue 31.5 36.4 (4.9) -13.5% Exited operations (2.4) (4.5) 2.1 NM Same-store, Print Advertising Revenue 29.1 31.9 (2.8) -8.9% Digital Advertising and Marketing Services Revenue 83.5 90.7 (7.2) -7.9% Exited operations (0.8) (3.1) 2.3 NM Same-store, Digital Advertising and Marketing Services 82.7 87.6 (4.9) -5.6% Total Advertising Revenue 115.0 127.1 (12.1) -9.5% Exited operations (3.2) (7.5) 4.4 NM Same-store, Total Advertising Revenue 111.8 119.5 (7.7) -6.5% (Millions of Dollars) 1H FY2026 1H FY2025 $ Change % Change Print Subscription Revenue 67.9 84.5 (16.6) -19.7% Exited operations (0.0) (0.1) 0.1 NM Same-store, Print Subscription Revenue 67.9 84.4 (16.5) -19.6% Digital Subscription Revenue 45.0 45.4 (0.4) -0.8% Exited operations (0.0) (0.0) 0.0 NM Same-store, Digital Subscription Revenue 45.0 45.4 (0.4) -0.8% Total Subscription Revenue 112.9 129.9 (17.0) -13.1% Exited operations (0.0) (0.1) 0.1 NM Same-store, Total Subscription Revenue 112.9 129.8 (16.9) -13.0%
24 DIRECT COSTS RECONCILIATION (Millions of Dollars) Q2 FY26 Q2 FY25 Operating expenses 114.4 143.0 Adjusted to exclude Depreciation and amortization 3.5 5.2 (Gain) loss on asset sales, impairments & other, net (0.9) 0.1 Restructuring costs and other 3.6 6.5 Insurance proceeds (3.8) -- Selling, General, and Administrative (SG&A) 57.6 69.8 Direct Costs 54.4 61.5 Direct Costs 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”) are excluded. Rounding – Items may not visually foot due to rounding. (Millions of Dollars) Q2 FY26 Q2 FY25 Print Direct Costs 33.0 38.8 Digital Direct Costs 21.4 22.6 Total Direct Costs 54.4 61.5
25 DIRECT COSTS RECONCILIATION (Millions of Dollars) 1H FY26 1H FY25 Operating expenses 240.4 292.1 Adjusted to exclude Depreciation and amortization 7.1 11.4 (Gain) loss on asset sales, impairments & other, net (0.9) (0.8) Restructuring costs and other 6.8 11.7 Insurance proceeds (3.8) -- Selling, General, and Administrative (SG&A) 121.2 144.0 Direct Costs 112.0 125.7 Direct Costs 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”) are excluded. Rounding – Items may not visually foot due to rounding. (Millions of Dollars) 1H FY26 1H FY25 Print Direct Costs 68.4 80.6 Digital Direct Costs 43.6 45.2 Total Direct Costs 112.0 125.7
FAQ
How did Lee Enterprises (LEE) perform financially in Q2 2026?
Lee Enterprises reported Q2 2026 operating revenue of about $122 million, down from roughly $137 million a year earlier. However, Adjusted EBITDA rose to $15.1 million, a 95% year-over-year increase, and the net loss narrowed to $1.7 million from $12.0 million.
What drove the improvement in Lee Enterprises’ Q2 2026 profitability?
Profitability improved mainly because Adjusted EBITDA nearly doubled to $15.1 million while operating expenses fell to $114.4 million from $143.0 million. Cost reductions, lower compensation and legacy print costs, plus $3.8 million of business interruption insurance proceeds, all contributed to the margin expansion.
How important is digital revenue to Lee Enterprises’ business now?
Digital is central to Lee’s model, generating $67.8 million of revenue in Q2 2026 and representing 56% of total revenue. The company had 591,000 digital-only subscribers, and digital advertising and marketing services contributed $40.7 million, or 74% of total advertising revenue.
What changes were made to Lee Enterprises’ debt and interest costs?
Lee reported $455 million of debt under its Credit Agreement and $53 million in cash at quarter end. An amendment reduced the term loan’s fixed interest rate from 9% to 5% for five years, which is expected to save about $18 million of interest expense annually.
What is Lee Enterprises’ outlook for fiscal 2026 Adjusted EBITDA?
The company reaffirmed its fiscal 2026 outlook for year-over-year Adjusted EBITDA growth in the mid-single digits. This guidance builds on Q2 2026 results, where Adjusted EBITDA reached $15.1 million, and first-half Adjusted EBITDA totaled $27.4 million, up notably from $15.4 million a year earlier.
How are Lee Enterprises’ print revenues trending compared to digital?
Print revenues are declining, with Q2 2026 print subscription revenue falling to $32.9 million from $41.1 million and print advertising down to $14.3 million from $16.5 million. In contrast, digital now accounts for 56% of total revenue, underscoring the shift toward digital-first operations.