References to “we”, “our”, “us” and the like throughout this document refer to Lee Enterprises, Incorporated (the “Company”). References to “2021”“2022”, “2020”“2021" and the like refer to the fiscal years ended the last Sunday in September.

FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. This report contains information that may be deemed forward-looking that is based largely on our current expectations, and is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those anticipated. Among such risks, trends and other uncertainties, which in some instances are beyond our control, are:

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, including statements regarding the impacts that the COVID-19 pandemic 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.

PART I

FINANCIAL INFORMATION

Item 1.       Financial Statements

LEE ENTERPRISES, INCORPORATED

CONSOLIDATED BALANCE SHEETS

The accompanying Notes are an integral part of the Consolidated Financial Statements.

Prior period results have been adjusted to reflect the one-for-ten reverse stock split in March 2021. See Note 1 for details.

The accompanying Notes are an integral part of the Consolidated Financial Statements.

LEE ENTERPRISES, INCORPORATED

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

Prior period results have been adjusted to reflect the one-for-ten reverse stock split in March 2021. See Note 1 for details.

The accompanying Notes are an integral part of the Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

(Unaudited)

Prior period results have been adjusted to reflect the one-for-ten reverse stock split in March 2021. See Note 1 for details.

The accompanying Notes are an integral part of the Consolidated Financial Statements.

LEE ENTERPRISES, INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

The accompanying Notes are an integral part of the Consolidated Financial Statements.

LEE ENTERPRISES, INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Basis of Presentation

The accompanying unaudited, interim, Consolidated Financial Statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for quarterly reports. In the opinion of management, these financial statements contain all adjustments (consisting of only normal recurring items) necessary to present fairly the financial position of Lee Enterprises, Incorporated and its subsidiaries (the “Company”) as of March 27, 202228,2021, and our results of operations and cash flows for the periods presented. The Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company's 20202021 Annual Report on Form 10-K.

The Company's fiscal year ends on the last Sunday in September. Fiscal year 2022 ends on September 25, 2022 and fiscal year 2021 ended September 26, 2021. Fiscal year 2022 and 2021 are 52-week years with 13 weeks in each quarter. Because of seasonal and other factors, the results of operations for the 13three and 26six weeksmonths ended March 27, 2022, 28,2021are not necessarily indicative of the results to be expected for the full year.

References to “we”, “our”, “us” and the like throughout the Consolidated Financial Statements refer to the Company. References to “2022”,2021“2021””, “2020” and the like refer to the fiscal years ended the last Sunday in September.

The Consolidated Financial Statements include our accounts and those of our wholly owned subsidiaries, all of which are wholly-owned, except foras well as our 82.5% interest in INN Partners, L.C. (“TownNews.com”),.

Our 50% interest in TNI Partners (“TNI”("TNI") and our 50% interest in Madison Newspapers, Inc. (“MNI”("MNI").

Investments in TNI and MNI are accounted for using the equity method and are reported at cost, plus our share of undistributed earnings since acquisition less, for TNI, amortization of intangible assets.

Certain amounts in prior period Consolidated Financial Statements have been reclassified to conform to On March 16, 2020, the current year presentation. Pursuant to ourCompany completed the acquisition of BHMGBH Media Group, Inc. and theThe Buffalo News, we realignedInc. for a combined purchase price of $140,000,000 (collectively, the presentation of certain home delivery print revenue and certain other Subscription revenue from Other revenue to Subscription revenue on the Consolidated Statements of Income (loss) and Comprehensive Income (loss). As a result of this updated presentation, Subscription revenue increased and Other revenue decreased for the 13 weeks ended March 29, 2020 by $500,000, the 26 weeks ended March 29, 2020 by $975,000 and the 13 weeks ended December 27,2020 by $794,000. Operating revenues, net income (loss), accumulated deficit, and earnings per share remained unchanged. 

On February 25, 2021, our Board of Directors declared a one-for-10 split of the Company's common stock effected (the "Reverse Stock Split""Transactions"). Effective March 15, 2021 the Company's shares began trading on a post reverse split basis. Prior period results have been adjusted to reflect the one-for-ten reverse stock split in March 2021. The split did not change the Company's Common Stock Par value but changed opening Common Stock and Additional Paid in Capital balances by offsetting amounts. Additionally, in March 29, 2020, we had outstanding shares of 58,135,910 which were adjusted to 5,813,591 to give effect to the Reverse Stock Split.

Use of Estimates

The preparation of the Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. We evaluate these estimates and judgments on an ongoing basis.

We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Business Combinations

The Company accounts for acquisitions in accordance with the provisions of Accounting Standards Codification 805 “Business Combinations” (“ASC 805”), which provides guidance for recognition and measurement of identifiable assets and goodwill acquired, liabilities assumed, and any noncontrolling interest in the acquiree at fair value. In a business combination, the assets acquired, liabilities assumed and non-controlling interest in the acquiree are recorded as of the date of acquisition at their respective fair values with limited exceptions. Any excess of the purchase price (consideration transferred) over the estimated fair values of net assets acquired is recorded as goodwill. Transaction costs are expensed as incurred. The operating results of the acquired business are reflected in the Company’s Consolidated Financial Statements from the date of the acquisition.

COVID-19 Pandemic

The ongoing COVID-19 pandemic and related measures to contain its spread have resulted in significant volatility and economic uncertainty, which is expected to continue in the near term. The COVID-19 pandemic has had and the Company currently expects that it will continue to have a significant negative impact, in the near term, on the Company’s business and operating results. The long-term impact of the COVID-19 pandemic will depend on the length, severity and recurrence of the pandemic, the availability of antiviral medications and vaccinations, the duration and extent of government actions designed to combat the pandemic, as well as changes in consumer behavior, all of which are highly uncertain. Despite the significant negative impacts on our operating results, we have operated uninterrupted in providing local news, information and advertising in our print and digital editions.

Recently Issued Accounting Standards - Standards Adopted in 2021

In June 2016, the FASB issued a new standard to replace the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a wider array of reasonable and supportable information to inform and develop credit loss estimates ("ASC 326"). We are required to use a forward-looking expected credit loss model for both accounts receivables and other financial instruments. The new standard was adopted on September 28, 2020 using a modified retrospective approach. This standard did not have a material impact on our Consolidated Financial Statements.

In August 2018, the FASB issued new guidance that changes disclosure requirements related to fair value measurements as part of the disclosure framework project. The disclosure framework project aims to improve the effectiveness of disclosures in the notes to the financial statements by focusing on requirements that clearly communicate the most important information to users of the financial statements ("ASU 2018-14"). The new guidance was adopted on September 28, 2020 and did not have a material impact on our Consolidated Financial Statements.

In December 2019, the FASB issued new guidance that simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Accounting Standards Codification ("ASC") 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition for deferred tax liabilities for outside basis differences. The standard also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. This new guidance was adopted September 28, 2020 and did not have a material impact on our Consolidated Financial Statements.

Recently Issued Accounting Standards - Standards Not Yet Adopted

In August 2018, FASB issued a new standard to amend disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans ("ASU 2018-13"). The new standard will be adopted beginning September 27, 2021 using a retrospective approach. The Company is still evaluating the impacts to our financial statement disclosures.

In October 2020, FASB issued new guidance containing amendments that improve consistency of the Codification. Many of the amendments arose because the FASB provided an option to give certain information either on the face of the financial statements or in the notes to financial statements. The Company is still evaluating the impacts to our financial statement disclosures.

The following table presents our revenue disaggregated by source:

Recognition principles: Revenue is recognized when a performance obligation is satisfied by the transfer of control of the contracted goods or services to our customers, in an amount that reflects the consideration we expect to receive in exchange for those goods or services.

Total Digital Revenue in the prior year was reclassified to conform to the current year presentation. Total Digital Revenue is defined as digital advertising and marketing services revenue (including Amplified), digital-only subscription revenue and digital services revenue.

Arrangements with multiple performance obligations: We have various advertising and subscription agreements which include both print and digital performance obligations. Revenue from sales agreements that contain multiple performance obligations are allocated to each obligation based on the relative standalone selling price. We determine standalone selling prices based on observable prices charged to customers.

Contract Assets and Liabilities: The Company’s primary source of contract liabilities is unearned revenue from subscriptions paid in advance of the service provided. The Company expects to recognize the revenue related to unsatisfied performance obligations over the next twelve months in accordance with the terms of the subscriptions and other contracts with customers. The unearned revenue balances described herein are the Company's only contract liability. Unearned revenue was $63,870,000 as of March 28,2021 and $60,271,000 as of September 27, 2020. Revenue recognized in the 13six and 26 weeksmonths ended March 28, 202127, 2022 that was included in the contract liability as of September 27, 202026, 2021 was $12,548,000 and $48,562,000, respectively.$47,340,000.

Accounts receivable, excluding allowance for credit losses was $69,289,000$74,422,000 and $66,029,000$71,644,000 as of March 28,202127, 2022 and September 27, 202026, 2021, , respectively. Allowance for credit losses was $9,138,000$6,688,000 and $13,431,000$6,574,000 as of March 28,202127, 2022 and September 27, 202026, 2021, , respectively.

Practical expedients:Sales commissions are expensed as incurred as the associated contractual periods are one year or less. These costs are recorded within compensation. The vast majority of our contracts have original expected lengths of one year or less and revenue is earned at a rate and amount that corresponds directly with the value to the customer.

TNI Partners

In Tucson, Arizona, TNI, acting as agent for our subsidiary, Star Publishing Company (“Star Publishing”), and Gannets Co. Inc.'s subsidiary Citizen Publishing Company (“Citizen”), a subsidiary of Gannett Co. Inc., is responsible for printing, delivery, advertising, and subscription activities of the Arizona Daily Star as well as the related digital platforms and specialty publications. TNI collects all receipts and income and pays substantially all operating expenses incident to the partnership's operations and publication of the newspaper and other media.

Income or loss of TNI (before income taxes) is allocated equally to Star Publishing and Citizen.

Summarized results of TNI are as follows:

TNI makes weeklyperiodic distributions of its earnings and for the 13three weeksmonths endedMarch 27, 2022 and March 28, 2021, and March 29, 2020 we received $1,561,000$1,401,000 and $953,000$1,561,000 in distributions, respectively. In the 26six weeksmonths endedMarch 27, 2022 and March 28, 2021, and March 29, 2020, we received $2,617,000$2,259,000 and $1,691,000$2,617,000 in distributions, respectively.

Madison Newspapers, Inc.

We have a 50% ownership interest in MNI, which publishes daily and Sunday newspapers, and other publications in Madison, Wisconsin, and other Wisconsin locations, and operates their related digital platforms. Net income or loss of MNI (after income taxes) is allocated equally to us and The Capital Times Company (“TCT”). MNI conducts its business under the trade name Capital Newspapers.

Summarized results of MNI are as follows:

MNI makes quarterlyperiodic distributions of its earnings and in the 13three weeksmonths endedMarch 27, 2022 and March 28, 2021, we received $500,000 and $1,150,000, respectively. In the six months ended March 27, 2022 and March 29, 2020,28, 2021, we received dividends of $1,150,000$800,000 and $1,000,000, respectively. In the 26 weeks ended March 28, 2021 and March 29, 2020, we received dividends of $1,150,000, and $1,000,000 respectively.

Changes in the carrying amount of goodwill are as follows:

Identified intangible assets consist of the following:

The Company recognized $27,620,000 of advertiser relationships, $27,850,000 of subscriber relationships, $19,560,000 of commercial print relationships and $20,390,000 of indefinite-lived masthead assets as part of the Transactions as defined in Note 7.

Annual amortization of intangible assets for the five years ending December 2022 to December 2026 is estimated to be $22,250,000, $20,427,000, $18,738,000, $14,745,000, and $7,651,000, respectively. The weighted average amortization period for those amortizable assets acquired as part of the Transactions is 14.013 years.

The Company recognized $79,896,000 of Goodwill as part of the Transactions as defined in Note 7. The value of the acquired Goodwill is primarily related to an assembled workforce and expected synergies from combining operations. For tax purposes, the amount of Goodwill that is expected to be deductible is $42,442,000. Refer to Note 7 for more information regarding final purchase accounting for the Transactions.

On March 16, 2020 in connection with the closingThe Company has debt consisting of the Transactions as defined in Note 7, the Company completed a comprehensive refinancing of its debt (the “2020 Refinancing”). The 2020 Refinancing consists of asingle 25-year term loan with BH Finance LLC, (“BH Finance”), an affiliate of Berkshire, in an aggregate principal amountbalance of $576,000,000$462,554,000 at a 9% annual rate (referredand matures on March 16, 2045 (referred to herein as “Credit Agreement” and “Term Loan”). The proceeds ofAt March 27, 2022, based on market quotations, the Term Loan were used, along with cash on hand, to repay the Company's $431,502,000 in existing debt as well as to fund the acquisition of the BH Media Newspaper Business assets and the stock of the Buffalo News for $140,000,000 in cash. With the closing of this refinancing, BH Finance became Lee's sole lender. The Credit Agreement documents the primary terms of the Term Loan. The Term Loan matures onfair value approximates carrying value. This represents a level March 16, 2045.2 fair value measurement.

As of March 28,2021, the Company had $498,915,000 in aggregate principal outstanding under the Term Loan. The weighted average cost of debt at March 28,2021 is 9.0%. During the 13three weeksmonths ended March 28, 202127, 2022 the Companywe made a voluntary prepayment on the Term Loan of $7,500,000.

For0 principal debt payments. During the 13six-weeks months ended March 27, 2022, 28,2021 excess cash flow (as such term is defined in the Term Loan) totaled $13,753,000 and was used to paywe made principal debt in April 2021. This balance was recognized in current maturitiespayments of long-term debt as of March 28,2021 in the Consolidated Balance Sheets.$20,062,000.  Future payments are contingent on the Company's ability to generate future excess cash flow, as defined in the Credit Agreement.

The Credit Agreement contains certain customary representations and warranties, certain affirmative and negative covenants and certain conditions, including restrictions on incurring additional indebtedness, creating certain liens, making certain investments or acquisitions, issuing dividends, repurchasing shares As of stock of the Company and certain other capital transactions. Certain existing and future direct and indirect material domestic subsidiaries of the Company are guarantors of the Company’s obligations under the Credit Agreement.

The Credit Agreement restricts us from paying dividends on our Common Stock. This restriction does notMarch 27, 2022  apply to dividends issued with the Company’s Equity Interests or from the proceeds of a sale of the Company’s Equity Interests. Further, the Credit Agreement restricts or limits, among other things, subject to certain exceptions, the ability of the Company and its subsidiaries to: (i) incur additional indebtedness, (ii) make certain investments, (iii) enter into mergers, acquisitions and asset sales, (iv) incur or create liens and (v) enter into transactions with certain affiliates. The Credit Agreement contains various representations and warranties by the Company and may be terminated upon the occurrence of certain events of default, including non-payment. The Credit Agreement also contains cross-default provisions tied to other agreements with BH Finance entered into by the Company and its subsidiaries in connection with the 2020 Refinancing.

Principal Payments

Voluntary payments under the Credit Agreement are not subject to call premiums and are payable at par.

There arethere was no scheduled mandatory principal payments required under the Credit Agreement. The Companyexcess cash flow payment due (as such term is required to make mandatory pre-payments ofdefined in the Term Loan as follows:

The Company may, upon notice to BH Finance, at any time or from time to time, voluntarily prepay the Term Loan in whole or in part, at par, provided that any voluntary prepayments of the Term Loan shall be accompanied by payment of all accrued interest on the amount of principal prepaid to the date of prepayment.

Warrants

In connection with the 2^nd Lien Term Loan, weWe entered into a Warrant Agreement dated as of March 31, 2014 (the “Warrant Agreement”). Under the Warrant Agreement, certain affiliates or designees of the 2^nd Lien Lenderswarrant holders received on March 31, 2014 their pro rata share of warrants to purchase, in cash, an initial aggregate of 600,000 shares of Common Stock, subject to adjustment pursuant to anti-dilution provisions and at an exercise price of $41.90 per share (the “Warrants”). The Warrants represent, when fully exercised, approximately 10.4% of shares of Common Stock outstanding atexpired on March 30, 2014 on a fully diluted basis. The exercise price of the Warrants is $41.90 per share. The Warrants are set to expire in March31, 2022.Shares and exercise price have been adjusted to reflect the reverse stock split as defined in Note 1.

The Warrant Agreement contains provisions requiringrequired the Warrants to be measured at fair value and included in warrants and other liabilities in our Consolidated Balance Sheets. The initial fair value of the Warrants was $16,930,000. We re-measure the fair value of the liability each reporting period with changesusing the Black-Scholes option pricing model. The change in value of $71,000 is reported as income in other, net non-operating income (expense). The initial

In connection with the issuance of the Warrants, we entered into a Registration Rights Agreement dated as of March 31, 2014 (the “Registration Rights Agreement”). The Registration Rights Agreement requires,required, among other matters, that we use our commercially reasonable efforts to maintain the effectiveness for certain specified periods of a shelf registration statement related to the shares of Common Stock to be issued upon exercise of the Warrants.

We have several noncontributory defined benefit pension plans that together cover selectedcertain employees, including plans established under collective bargaining agreements. OurAt the end of September 2021 two of seven plans had benefits under the plan frozen and no new participants are permitted. Additionally, we provide retiree medical and life insurance benefits under postretirement plans at several of our operating locations. Through March 27, 2022, our liability and related expense for benefits under the plans are recorded over the service period of employees based upon annual actuarial calculations. Plan funding strategies are influenced by government regulations. Plan assets consist primarily of domestic and foreign corporate equity securities, government and corporate bonds, hedge fund investments and cash.

We provide retiree medical and life insurance benefits under postretirement plans at several of our operating locations. Our liability and related expense for benefits under the postretirement plans are recorded over the service period of active employees based upon annual actuarial calculations. We accrue postemployment disability benefits when it becomes probable that such benefits will be paid and when sufficient information exists to make reasonable estimates of the amounts to be paid.

With the exception of defined benefit plans acquired in the Transactions as defined in Note 7, effective in 2012, substantially all benefits are frozen. Our liability and related expenses for benefits under the plans are recorded over the service period of employees based upon annual actuarial calculations. Plan funding strategies are influenced by government regulations. Plan assets consist primarily of domestic and foreign corporate equity securities, government and corporate bonds, hedge fund investments and cash.

During the quarter ended 13December 26, 2021, we notified participants in four weeksof our defined benefit plans of changes to be made to the plans. The Company froze future benefits for an additional four of the defined benefit plans. The freeze of future benefits resulted in a non-cash curtailment gain of $1,027,000 related to the four plans. In connection with the freeze the Company provided certain plan enhancements that resulted in an increase to our net pension liability and a decrease to Accumulated Other Comprehensive income of $6,507,000. Additionally, the Company merged the six frozen plans into one defined benefit plan effective in the second quarter of fiscal 2022.

During the quarter ended December 27, 2020 we notified certain participants inone of our post-employment benefit plans of changes to be made to the plans, including elimination of coverage for certain participants. The changes resulted in a non-cash curtailment gain of $23,830,000 and a reduction in our benefit obligation liability by $23,830,000. This is recorded within Curtailment gain and Postretirement and postemployment benefit obligations.

We use a fiscal year end measurement date for all of our Pension and postretirement medical plan obligations.

The net periodic pension and postretirement cost (benefit) components for our plans are as follows:

In the 26six weeksmonths ended March 27, 2022, we had 0 required contributions to our pension plans. In the 28,six months ended March 28, 2021we contributed $965,000 to our pension plans. InWe have no required contributions to our pension plans for March 2021, 2022The American Rescue Plan Act was signed into law. Among other things, the law changed how companies compute minimum required pension contributions. As a result we and therefore do not expect to make 0 additional contributions to our pension trust during the remainder of fiscal 2021.2022.

Multiemployer Pension Plans

During the 13 weeks ended December 27, 2020, we withdrewThe Company has effecuated withdrawals from aseveral multiemployer pension plan and recorded a $12,310,000 liability reflecting an estimateplans. We record estimates of withdrawal liabilities as of the time the contracts agreeing to withdraw from those plans are ratified. As of March 27, 2022 and September 26, 2021, we had $25,253,000 and $23,471,000 withdrawal from the fund. The withdrawal liability isliabilities recorded in Warrants and other andOther Liabilities in our Consolidated Balance Sheets. The liabilities reflect the expense is included within Pension withdrawal cost. The liability will be paid over 20 years.

On March 16, 2020, the Company completed the Asset and Stock Purchase Agreement dated asestimated value of January 29, 2020 with Berkshire Hathaway Inc., a Delaware corporation (“Berkshire”) and BH Media Group, Inc., a Delaware corporation (“BHMG”) (“Purchase Agreement”). As part of the Purchase Agreement, the Company purchased certain assets and assumed certain liabilities of BHMG’s newspapers and related community publications business (“BH Media Newspaper Business”), excluding real estate and fixtures such as production equipment, and all of the issued and outstanding capital stock of The Buffalo News, Inc., a Delaware corporation (“Buffalo News”) for a combined purchase price of $140,000,000 (collectively, the “Transactions”). BHMG includes 30 daily newspapers and digital operations, in addition to 49 paid weekly newspapers with websites and 32 other print products. Buffalo News is a provider of local print and digital newspayments to the Buffalo, NY area. The rationale for the acquisition was primarily the attractive nature of the various publications, businesses, and digital platforms as well as the revenue growth and operating expense synergy opportunities.

The allocation of the purchase price is final. As part of the Transactions, the Company also entered into the Credit Agreement and the BH Lease, as described below. The Company concluded that these agreements were not separate from the Transactions and evaluated these agreements for off-market terms and no such terms were identified. As such, the consideration for the acquisitions was limited to cash consideration, as shown below. The accounting for the Credit Agreement is described in Note 5 and the BH Lease in the following paragraph:

In connection with the Transactions, the Company entered into a lease agreement between BHMG, as Landlord, and the Company, as Tenant, providing for the leasing of 68 properties and related fixtures (including production equipment) used in the BH Media Newspaper Business (the “BH Lease”). The BH Lease was signed and commenced on March 16, 2020. The BH Lease requires the Company to pay annual rent of $8,000,000,fund, payable in equal monthly payments, as well as all operating costs relating to the properties (including maintenance, repairs, property taxes and insurance). Rent payments will be subject to a Rent Credit (as defined in the BH Lease) equal to 8.00% of the net consideration for any leased real estate sold by BH Media during the term of the BH Lease.

The following table summarizes the final determination of fair values of the assets and liabilities for the Transactions.

^(a) As previously reported in the Company's Quarterly Report on Form 10-Q for the period ended March 29,2020.

The Company recorded several adjustments in the 13-week period ended March 28, 2021 related to IRS penalties of $634,000, FIN 48 of $138,000, and decreasing customer relationships for $710,000 resulting from changes in the valuation. 

For the 13 weeks ended March 28,2021, the revenue and net loss included in the Consolidated Income Statement related to the acquirees was $97,770,000 and $7,181,000, respectively. For the 26 weeks ended March 28, 2021, the revenue and net income in the Consolidated Income Statement related to the acquirees was $206,831,000 and $15,951,000, respectively.

Pro Forma Information

The following table sets forth unaudited pro forma results of operations assuming the Transactions, along with the credit arrangements necessary to finance the Transactions, occurred on September 30, 2019, the first day of fiscal year 2020.

Prior period results have been adjusted to reflect the one-for-10 reverse stock split in March 2021. See Note 1 for details.

This pro forma financial information is based on historical results of operations, adjusted for the allocation of the purchase price and other acquisition accounting adjustments. This pro forma information is not necessarily indicative of what our results would have been had we operated the businesses since the beginning of the periods presented. The pro forma adjustments reflect the income statement effects of depreciation expense and amortization of intangibles related to the fair value adjustments of the assets acquired, acquisition-related costs, incremental interest expense related to the financing of the Transactions and 2020 Refinancing, the BH Lease entered into as part of the Transactions, the elimination of certain intercompany activity and the related tax effects of the adjustments.

The only material, nonrecurring adjustment made relates to the write-off of previously unamortized debt-issuance costs as of October 1, 2019 which resulted in an $8,002,000 increase to net income for the 13 weeks ended March 29,2020 and a $8,900,000 increase to net income for the 26 weeks ended March 29, 2020.

over 20-years.

We recorded an income tax benefit of $3,144,000 related to a loss before taxes of $9,838,000 for the three months ended March 27, 2022, and income tax expense of $2,207,000 related to income before taxes of $8,712,000 for the six months ended March 27, 2022. We recorded an income tax benefit of $571,000 related to a loss before taxes of $1,179,000 for the 13three weeksmonths ended March 28, 2021, and income tax expense of $5,740,000 related to income before taxes of $21,535,000 for the 26six weeksmonths ended March 28, 2021.We recorded an income tax benefit of $2,331,000 related to a loss before taxes of $7,321,000 for the 13 weeks ended March 29, 2020, and income tax benefit of $460,000 related to income before taxes of $268,000 for the 26 weeks ended March 29, 2020. The effective income tax rates for the 13three weeks and 26six weeksmonths ended March 27, 2022 was negative 32% and 25.3%, respectively. The effective income tax rate for the three and six months ended March 28, 2021 was 48.4% and 26.7%, respectively. The effective income tax rate for the 13 and 26 weeks ended March 29^th, 2020 was 31.8% and negative 171.6%.

The primary differences between these rates and the U.S. federal statutory rate of 21% are due to the effect of state taxes, non-deductible expenses, adjustments to reserves for uncertain tax positions, including any related interest, and mark-to-market adjustments to value stock warrants.

We file a consolidated federal tax return, as well as combined and separate tax returns in approximately 27 state and local jurisdictions.  We do not currently have any federal or material state income tax examinations in progress. Our income tax returns have generally been audited or closed to audit through 2013.2014.

At

The following table sets forth the computation of basic and diluted earnings per common share as adjusted to give effect to the reverse stock split:share:

For the 13three and 26six weeksmonths ended March 27, 2022 and March 28,2021, 600,000 shares were not considered in the computation of diluted earnings per common share because their inclusion would result in an anti-dilutive effect on per share amounts.

Rights Agreement

On November 24, 2021, our Board of Directors adopted a stockholder rights plan (the “Rights Agreement”). Pursuant to the exercise pricesRights Agreement, on November 24, 2021, our Board of Directors declared a dividend of 1 preferred share purchase right (a “Right”), payable on December 6, 2021, for each share of our Common Stock outstanding to the stockholders of record on that date. Each Right entitles the registered holder to purchase from the Company one-thousandth of a share of Series B Participating Convertible Preferred Stock, without par value (the “Preferred Shares”), of the related stock optionsCompany at a price of $120.00 per one one-thousandth of a Preferred Share represented by a Right, subject to adjustment.

The Rights will initially trade with our Common Stock and Warrants werewill generally become exercisable only if any person or group, other than certain exempt persons, acquires beneficial ownership of 10% (or 20% in excessthe case of certain passive investors) or more of our Common Stock outstanding. In the fair market valueevent the Rights become exercisable, each holder of a Right, other than the triggering person(s), will be entitled to purchase additional shares of our Common Stock at a 50% discount or the Company may exchange each Right held by such holders for one share of our Common Stock. ForThe Rights Agreement will continue in effect until November 23, 2022, or unless earlier redeemed or terminated by the Company, as provided in the Rights Agreement. The Rights have 13no voting or dividend privileges, and, 26 weeks ended March 29, 2020, 695,430unless and 639,397 shares, respectively, wereuntil they become exercisable, have 0 dilutive effect on the earnings of the Company.

The Rights Agreement applies equally to all current and future stockholders and is not consideredintended to deter offers or preclude our Board of Directors from considering acquisition proposals that are fair and otherwise in the computationbest interest of diluted earnings per common share becauseour stockholders. However, the Company recorded net losses.