UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For The Quarterly Period Ended June ~~27, 2021~~26, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-6227

LEE ENTERPRISES, INCORPORATED

(Exact name of Registrant as specified in its Charter)

Delaware	42-0823980
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

4600 E. 53rd Street, Davenport, Iowa 52807

(Address of principal executive offices)

(563) 383-2100

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.01 per share	LEE	The Nasdaq Global Select Market
Preferred Share Purchase Rights	LEE	The Nasdaq Global Select Market

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit ~~and post~~ such files.

Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐☒
Non-accelerated filer	☒☐	Smaller reporting company	☒
		Emerging growth company	☐

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. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of July 31, ~~2021,~~2022, ~~5,888,983~~5,977,315 shares of Common Stock of the Registrant were outstanding.

Table of Contents

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.

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.

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

		(Unaudited)						(Unaudited)
		June 27,			September 27,			June 26,			September 26,
(Thousands of Dollars and Shares, Except Per Share Data)	2021			2020			2022			2021

LIABILITIES AND EQUITY

Current liabilities:
Current portion of lease liabilities		8,803			8,577			7,811			8,612
Current maturities of long-term debt		1,070			13,733			0			6,112
Accounts payable		17,788			17,163			34,656			20,420
Compensation and other accrued liabilities		47,625			44,278			43,316			45,076
Unearned revenue		62,255			60,271			56,749			61,404
Total current liabilities		137,541			144,022			142,532			141,624
Long-term debt, net of current maturities		484,092			524,557			462,554			476,504
Operating lease liabilities		59,016			62,374			49,918			57,683
Pension obligations		70,622			75,656			928			22,444
Postretirement and postemployment benefit obligations		14,481			39,543			11,404			11,008
Deferred income taxes		14,625			15,208			37,295			40,295
Income taxes payable		19,921			18,048			9,543			9,174
Warrants and other		28,958			14,282
Other								26,047			28,121
Total liabilities		829,256			893,690			740,221			786,853
Equity (deficit):
Stockholders' equity (deficit):
Equity:
Stockholders' equity:
Serial convertible preferred stock, no par value; authorized 500 shares; none issued		0			0			0			0
Common Stock, $0.01 par value; authorized 12,000 shares; issued and outstanding:		59			58			60			59
June 27, 2021; 5,889 shares; $0.01 par value
September 27, 2020; 5,835 shares; $0.01 par value
June 26, 2022; 5,977 shares; $0.01 par value
September 26, 2021; 5,889 shares; $0.01 par value
Class B Common Stock, $2 par value; authorized 3,000 shares; none issued		0			0			0			0
Additional paid-in capital		257,851			256,957			259,221			258,063
Accumulated deficit		(250,534	)		(268,529	)		(240,631	)		(245,744	)
Accumulated other comprehensive loss		(17,953	)		(20,050	)
Total stockholders' deficit		(10,577	)		(31,564	)
Accumulated other comprehensive income								33,741			42,187
Total stockholders' equity								52,391			54,565
Non-controlling interests		2,114			1,931			2,224			2,133
Total deficit		(8,463	)		(29,633	)
Total liabilities and deficit		820,793			864,057
Total equity								54,615			56,698
Total liabilities and equity								794,836			843,551

~~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.

	13 Weeks Ended						39 Weeks Ended						Three months ended						Nine months ended
	June 27,			June 28,			June 27,			June 28,			June 26,			June 27,			June 26,			June 27,
(Thousands of Dollars, Except Per Common Share Data)	2021			2020			2021			2020			2022			2021			2022			2021

Operating revenue:
Advertising and marketing services		91,122			77,754			279,326			204,426			91,001			91,122			277,388			279,326
Subscription		88,792			89,115			269,905			178,234			89,048			88,792			263,915			269,905
Other		16,576			15,659			51,505			43,578			14,988			16,576			46,030			51,505
Total operating revenue		196,490			182,528			600,736			426,238			195,037			196,490			587,333			600,736
Operating expenses:
Compensation		82,731			72,396			250,048			164,330			78,126			82,731			246,333			250,048
Newsprint and ink		7,051			7,572			22,222			16,629			7,542			7,051			22,254			22,222
Other operating expenses		82,117		��	77,440			243,749			178,744			88,004			82,117			258,665			243,749
Depreciation and amortization		10,836			11,201			33,794			25,196			8,818			10,836			27,445			33,794
Assets loss (gain) on sales, impairments and other, net		242			147			6,938			(5,153	)		1,086			242			(11,340	)		6,938
Restructuring costs and other		1,419			2,865			5,880			6,422			6,072			1,419			19,862			5,880
Total operating expenses		184,396			171,621			562,631			386,168			189,648			184,396			563,219			562,631
Equity in earnings of associated companies		1,689			842			4,902			3,773			1,050			1,689			4,211			4,902
Operating income		13,783			11,749			43,007			43,843			6,439			13,783			28,325			43,007
Non-operating income (expense):
Non-operating (expense) income:
Interest expense		(11,010	)		(13,135	)		(34,129	)		(35,377	)		(10,292	)		(11,010	)		(31,478	)		(34,129	)
Debt financing and administrative costs		0			0			0			(11,865	)
Curtailment gain		0			0			23,830			0			0			0			1,027			23,830
Pension withdrawal cost		0			0			(12,310	)		0			0			0			(2,335	)		(12,310	)
Other, net		2,330			1,027			6,240			3,309			4,205			2,330			13,525			6,240
Total non-operating expense, net		(8,680	)		(12,108	)		(16,369	)		(43,933	)
Income (loss) before income taxes		5,103			(359	)		26,638			(90	)
Income tax (benefit) expense		1,366			368			7,106			(92	)
Net income (loss)		3,737			(727	)		19,532			2
Total non-operating (expense) income, net														(6,087	)		(8,680	)		(19,261	)		(16,369	)
Income before income taxes														352			5,103			9,064			26,638
Income tax expense														156			1,366			2,363			7,106
Net income														196			3,737			6,701			19,532
Net income attributable to non-controlling interests		(510	)		(548	)		(1,537	)		(1,322	)		(465	)		(510	)		(1,588	)		(1,537	)
Income (loss) attributable to Lee Enterprises, Incorporated		3,227			(1,275	)		17,995			(1,320	)
Other comprehensive income, net of income taxes		477			317			2,097			950
(Loss) Income attributable to Lee Enterprises, Incorporated														(269	)		3,227			5,113			17,995
Other comprehensive (loss) income, net of income taxes														(1,167	)		477			(8,446	)		2,097
Comprehensive (loss) income attributable to Lee Enterprises, Incorporated		3,704			(958	)		20,092			(370	)		(1,436	)		3,704			(3,333	)		20,092
Earnings per common share:
Basic:		0.56			(0.23	)		3.15			(0.23	)		(0.05	)		0.56			0.89			3.15
Diluted:		0.55			(0.23	)		3.10			(0.23	)		(0.05	)		0.55			0.87			3.10

~~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.

~~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.

	39 Weeks Ended						Nine months ended
	June 27,			June 28,			June 26,			June 27,
(Thousands of Dollars)	2021			2020			2022			2021

Cash provided by operating activities:
Net income		19,532			2			6,701			19,532
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		33,794			25,196			27,445			33,794
Curtailment gain		(23,830	)		0			(1,027	)		(23,830	)
Pension withdrawal cost		12,310			0			2,335			12,310
Stock compensation expense		639			1,042			1,026			639
Assets loss (gain) on sales, impairments and other, net		6,938			(5,153	)
Assets (gain) loss on sales, impairments and other, net								(11,340	)		6,938
Deferred income taxes		(398	)		(8,377	)		62			(398	)
Debt financing and administrative costs		0			11,865
Pension contributions		(965	)		0			0			(965	)
Return of collateral on (Payments to collateralize) letters of credit		1,686			(6,105	)
Return of (Payments to collateralize) letters of credit								2,451			1,686
Other, net		(147	)		(316	)		(1,492	)		(147	)
Changes in operating assets and liabilities:
(Increase) decrease in receivables and contract assets		(8,720	)		24,173			(8,004	)		(8,720	)
Decrease in inventories and other		1,080			855
(Increase) decrease in inventories and other								(2,369	)		1,080
Increase (decrease) in accounts payable and other accrued liabilities		2,494			(7,893	)		1,775			2,494
Decrease in pension and other postretirement and postemployment benefit obligations		(4,807	)		(3,947	)		(13,910	)		(4,807	)
Change in income taxes payable		2,459			6,875			(2,986	)		2,459
Other, including warrants		706			(207	)
Other								49			706
Net cash provided by operating activities		42,771			38,010			716			42,771
Cash required for investing activities:
Cash provided by investing activities:
Purchases of property and equipment		(5,350	)		(7,297	)		(5,738	)		(5,350	)
Proceeds from sales of assets		3,095			17,649			14,824			3,095
Acquisitions, net of cash acquired		0			(130,985	)
Distributions greater (less) than earnings of TNI and MNI		159			(154	)
Distributions (less) greater than earnings of TNI and MNI								(276	)		159
Other, net		(369	)		(350	)		(295	)		(369	)
Net cash required for investing activities		(2,465	)		(121,137	)
Cash provided by (required for) financing activities:
Proceeds from long term debt		0			576,000
Net cash provided by (required for) investing activities								8,515			(2,465	)
Cash required for financing activities:
Payments on long-term debt		(53,128	)		(443,627	)		(20,062	)		(53,128	)
Debt financing and administrative costs paid		0			(609	)
Common stock transactions, net		159			(572	)		380			159
Net cash (required for) provided by financing activities		(52,969	)		131,192
Net cash required for financing activities								(19,682	)		(52,969	)
Net (decrease) increase in cash and cash equivalents		(12,663	)		48,065			(10,451	)		(12,663	)
Cash and cash equivalents:
Beginning of period		33,733			8,645			26,112			33,733
End of period		21,070			56,710			15,661			21,070

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

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 June 26, 2022~~27,~~~~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 ~~2020~~2021 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 39nine ~~weeks~~months ended June 26, 2022, ~~27,~~~~2021,~~are 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 “~~~~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 for~~as well as our 82.5% interest in INN Partners, L.C. (“~~TownNews.com”~~TownNews”),.

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 our~~Company completed the acquisition of BH Media Group, Inc. ~~a Delaware corporation, ("BHMG")~~ and The Buffalo News, Inc. for a Delaware corporation ("Buffalo News"), we realigned 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~~ ~~June 28, 2020~~ ~~by $598,000, the~~ 39 ~~weeks ended~~ ~~June~~ ~~28,~~~~2020~~ ~~by $1,579,000 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"). 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.~~

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.~~

~~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 thecombined purchase price ~~(consideration transferred) over~~of $140,000,000 (collectively, 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.

~~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 on the Company’s business and operating results in the near term. While vaccines have become widely available in the United States, the long-term impact of the COVID-19 pandemic remains uncertain and unpredictable as it will depend on the pace of vaccine distribution, government responses to future outbreaks, the spread of variants, 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.

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"~~"Transactions"). ~~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~~-~~13"~~~~). 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~~-~~14"~~~~). 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.

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 revenue from our wholly owned digital marketing agency Amplified Digital TM("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 $62,255,000 as of~~ ~~June~~ ~~27,~~~~2021~~ ~~and $60,271,000 as of~~ ~~September 27, 2020~~. Revenue recognized in the 13nine ~~and~~ 39 ~~weeks~~months ended June ~~27,~~26, ~~2021~~2022, that was included in the contract liability as of September ~~27, 2020~~26, 2021, was ~~$5,489,000 and $53,992,000, respectively.~~$52,718,000.

Accounts receivable, excluding allowance for credit losses was ~~$70,558,000~~$82,369,000 and ~~$66,029,000~~$71,644,000 as of June 26, 2022~~27,~~~~2021~~, and September ~~27, 2020~~26, 2021, , respectively. Allowance for credit losses was ~~$8,473,000~~$7,458,000 and ~~$13,431,000~~$6,574,000 as of June 26, 2022~~27,~~~~2021~~, and September ~~27, 2020~~26, 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~~Most 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.

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.

TNI makes ~~weekly~~periodic distributions of its earnings and for the 13three ~~weeks~~months endedJune 26,2022, and June 27, 2021, ~~and~~ ~~June~~ ~~28,~~~~2020~~we received ~~$544,000~~$676,000 and ~~$959,000~~$544,000 in distributions, respectively. In the 39nine ~~weeks~~months endedJune 26,2022, and June 27, 2021, ~~and~~ ~~June~~ ~~28,~~~~2020,~~we received ~~$3,161,000~~$2,935,000 and ~~$2,650,000~~$3,161,000 in distributions, respectively.

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.

MNI makes ~~quarterly~~periodic distributions of its earnings and in the 13three ~~weeks~~months endedJune 26,2022 and June 27, 2021, ~~and~~ ~~June~~ ~~28,~~~~2020,~~we received ~~dividends of~~$200,000 and $750,000, ~~and $0,~~ respectively. In the 39nine ~~weeks~~months endedJune 26, 2022, and June 27, 2021, ~~and~~ ~~June~~ ~~28,~~~~2020,~~we received dividends of ~~$1,900,000~~$1,000,000 and ~~$1,000,000~~$1,900,000, respectively.

~~Identified~~Goodwill and 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 $21,494,000, $20,081,000, $18,043,000, $12,707,000, and $7,218,000, respectively.~~ The weighted average amortization period for ~~those~~ amortizable assets ~~acquired as part of the Transactions~~ is ~~13.7~~12.7 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 closing~~The 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 a~~single 25-year term loan with BH Finance LLC, ~~(“BH Finance”), an affiliate of Berkshire, in~~with an aggregate principal ~~amount~~balance of ~~$576,000,000~~$462,554,000 at a 9% annual rate ~~(referred~~and maturing on March 16, 2045 (referred to herein as “Credit Agreement” and “Term Loan”). ~~The proceeds of~~OnJune 26,2022, 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 incurred in~~fair value approximates carrying value. This represents a level ~~2014~~2 ~~(the~~ ~~"2014~~ Refinancing") 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 on ~~March 16, 2045.~~fair value measurement.

~~As of~~ ~~June 27, 2021,~~ ~~the Company had $485,162,000 in aggregate principal outstanding under the Term Loan. The weighted average cost of debt at~~ ~~June~~ ~~27,~~~~2021~~ ~~is 9.0%.~~

~~For~~During the 13three~~-weeks~~ months ended June ~~27,~~26, ~~2021~~2022, we made 0 principal debt payments. During the nine months ended June 26, 2022, we made principal debt payments of $20,062,000.For the nine months ended, payments consisted of $10,450,000 from the sale of non-core assets, $6,112,000 from September 26, 2021 excess cash flow, ~~(as such term is defined~~and $3,500,000 in ~~the Term Loan) totaled $1,070,000 and was used to pay debt in~~ ~~July~~ ~~2021.~~ ~~This balance was recognized in current maturities of long-term debt as of~~ ~~June~~ ~~27,~~~~2021~~ ~~in the Consolidated Balance Sheets.~~voluntary prepayments. 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~~ ~~not~~June 26, 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~~2022, ~~Refinancing.~~

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

~~There are~~there was no ~~scheduled mandatory principal payments required under the Credit Agreement. The Company is required to make mandatory pre-payments of 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.~~due.

~~In connection with the~~ 2^nd ~~Lien Term Loan, we~~We 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 Lenders~~warrant 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 at~~expired 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~~ ~~March~~31, 2022.~~Shares and exercise price have been adjusted to reflect the reverse stock split as described in Note~~ 1.

The Warrant Agreement ~~contains provisions requiring~~required 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 changes~~using the Black-Scholes option pricing model. The change in fair value of $71,000 for the nine months ended June 26, 2022 is reported as income in other, net non-operating income (expense).

In connection with the issuance of the Warrants, ~~entered into in the~~ ~~2014~~ ~~Refinancing,~~ 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 ~~selected~~certain employees, including plans established under collective bargaining agreements. ~~Our~~As of September 26, 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 June 26, 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 ~~weeks~~of 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 39nine ~~weeks~~months ended June 26,2022, we had 0 required contributions to our pension plans. In the nine months ended June 27, 2021, we contributed $965,000 to our pension plans. InWe have no required contributions to our pension plans for ~~March 2021,~~ 2022~~The 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.

~~During~~In prior periods, the 13 ~~weeks ended~~ ~~December 27, 2020,~~ ~~we withdrew~~Company effectuated withdrawals from aseveral multiemployer ~~pension plan and~~plans. We recorded ~~a $12,310,000 liability reflecting an estimate~~estimates of withdrawal liabilities as of the time the contracts agreeing to withdraw from those plans are ratified. As of June 26,2022, and September 26, 2021, we had $24,337,020 and $23,471,000 withdrawal ~~from the fund. The withdrawal liability is~~liabilities recorded in ~~Warrants and other and~~Other Liabilities in our Consolidated Balance Sheets. The liabilities reflect the ~~expense is included within Pension withdrawal cost. The liability will be paid~~estimated value of payments to the fund, payable over ~~20 years.~~

On ~~March 16, 2020,~~ ~~the Company completed the Asset and Stock Purchase Agreement dated as of~~ ~~January 29, 2020~~ with Berkshire Hathaway Inc., a Delaware corporation (“Berkshire”) and BH Media Group, Inc., a Delaware corporation (“BH Media Group”) (“Purchase Agreement”). As part of the Purchase Agreement, the Company purchased certain assets and assumed certain liabilities of BH Media'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 news 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 fair values of the assets and liabilities for the Transactions were finalized during the ~~second~~ ~~quarter of~~ ~~2021.~~

In connection with the Transactions, the Company entered into a lease agreement between BH Media, 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, 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 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 $8,900,000 increase to net income for the~~ 39 ~~weeks ended~~ ~~June 28, 2020.~~

We recorded an income tax expense of $156,000 related to income before taxes of $352,000 for the three months ended June 26,2022, and income tax expense of $2,363,000 related to income before taxes of $9,064,000 for the nine months ended June 26,2022.We recorded an income tax expense of $1,366,000 related to income before taxes of $5,103,000 for the 13three ~~weeks~~months ended June 27, 2021, and income tax expense of $7,106,000 related to income before taxes of ~~$26,636,000~~$26,638,000 for the 39nine ~~weeks~~months ended June 27, 2021. ~~We recorded an income tax expense of $368,000 related to a loss before taxes of $359,000 for the~~ 13 ~~weeks ended~~ ~~June~~ ~~27,~~~~2020,~~ ~~and income tax benefit of $92,000 related to a loss before taxes of $90,000 for the~~ 39 ~~weeks ended~~ ~~June~~ ~~28,~~~~2020.~~ The effective income tax rates for the 13three ~~weeks~~ and 39nine ~~weeks~~months ended June ~~27, 2021~~ ~~was 26.8%~~26,2022, were 44.3% and ~~26.7%~~26.1%, respectively. The effective income tax rate for the 13three and 39nine ~~weeks~~months ended June ~~28,~~27, ~~2020~~2021, ~~was negative 102.5%~~were 26.8% and ~~102.2%~~26.7%, respectively.

The primary differences between these rates and the U.S. federal statutory rate of 21% are ~~due to the effect~~because 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.

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~~ 39 ~~weeks~~months ended June ~~27,~~~~2021~~26, 2022 ~~, 600,000~~no shares were~~not~~ ~~considered in the computation of diluted earnings per common share~~ ~~because the exercise prices of the related stock options and Warrants were in excess of the fair market value of our Common Stock. For the~~ 13 ~~and~~ 39 ~~weeks ended~~ ~~June~~ ~~28,~~~~2020,~~ ~~813,497 and 737,200 shares, respectively, were~~ ~~not~~ considered in the computation of diluted earnings per common share because the Company recorded net losses. For the nine months endedJune 26,2022, 74,804 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. For the three and nine months ended June 27, 2021, 600,000 anti-dilutive shares were excluded.

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

~~A summary~~On November 24, 2021, our Board of ~~stock option activity during the~~ 39 ~~weeks ended~~ ~~June~~ ~~27,~~~~2021~~ ~~follows, as adjusted to give effect~~Directors adopted a stockholder rights plan (the “Rights Agreement”). Pursuant to the ~~reverse stock split:~~

~~Restricted~~Rights 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 Company at a price of $120.00 per one one-thousandth of a Preferred Share represented by a Right, subject to adjustment.

The ~~table below summarizes restricted~~Rights will initially trade with our Common Stock ~~activity during~~and will generally become exercisable only if any person or group, other than certain exempt persons, acquires beneficial ownership of 10% (or 20% in the 39 ~~weeks ended~~ ~~June~~ ~~27,~~~~2021~~case of certain passive investors) or more of our Common Stock outstanding. In the event the Rights become exercisable, each holder of a Right, other than the triggering person(s), ~~as adjusted~~will be entitled to ~~give effect to the reverse stock split:~~

~~Total unrecognized compensation expense for unvested restricted~~purchase additional shares of our Common Stock at a 50% discount or the Company ~~June~~may exchange each Right held by such holders for one share of our Common Stock. The Rights Agreement will continue in effect until ~~27,~~November 23, 2022, or unless earlier redeemed or terminated by the Company, as provided in the Rights Agreement. The Rights have no ~~2021~~ ~~is $1,115,000, which will be recognized over a weighted average period of~~ ~~1.4~~ ~~years.~~

~~We utilize FASB ASC Topic~~ ~~820,~~ ~~Fair Value Measurements~~voting or dividend privileges, and, ~~Disclosures~~~~, to measure~~unless and ~~report fair value. FASB ASC Topic~~ ~~820~~ ~~defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. FASB ASC Topic~~ ~~820~~ ~~establishes a~~ ~~three~~~~-level hierarchy of fair value measurements based~~until they become exercisable, have 0 dilutive effect on ~~whether~~ the ~~inputs to those measurements are observable or unobservable, which consists~~earnings of the ~~following levels:~~Company.

~~Level~~The Rights Agreement applies equally to all current and future stockholders and is 1not ~~- Quoted prices for identical instruments in active markets.~~

~~Level~~ 2 ~~- Quoted prices for similar instruments in active markets; quoted prices for identical~~ intended to deter offers or ~~similar instruments in markets~~preclude our Board of Directors from considering acquisition proposals that are fair and otherwise in the best interest of our stockholders. However, the overall effect of the Rights Agreement may render it more difficult or discourage a merger, tender offer, or other business combination involving us that is not ~~active; and model-derived valuations in which all significant inputs are observable in active markets.~~

~~Level~~ 3 ~~- Valuations derived from valuation techniques in which~~ ~~one~~ ~~or more significant inputs are unobservable.~~

~~The following methods and assumptions are used to estimate the fair value~~supported by our Board of ~~each class of financial instruments for which it is practicable to estimate value.~~

~~The carrying amounts of cash equivalents, accounts receivable and accounts payable approximate fair value because of the short maturity of those instruments. Investments totaling $4,226,000, including our 17%~~ ~~ownership of the non-voting common stock of TCT, are carried at cost. Fair value of the remaining investments are carried at cost.~~

~~Our fixed rate debt consists of $485,162,000~~ ~~principal amount of the Term Loan recorded at carrying value. At~~ ~~June~~ ~~27,~~~~2021,~~ ~~based on market quotations, the fair value approximates carrying value. This represents a level~~ 2 ~~fair value measurement.~~

~~As discussed more fully in Note~~ 5, we recorded a liability for the Warrants issued in connection with the Warrant Agreement. The liability was initially measured at its fair value and we measure the liability to fair value each reporting period, with changes reported in other non-operating income (expense). The initial fair value of the Warrants was $16,930,000. The fair value of Warrants at ~~June~~~~27,~~~~2021,~~ ~~and~~~~September 27, 2020~~~~,are $1,317,000 and~~ ~~$363,000, respectively. Fair value is determined using the Black-Scholes option pricing model. These represent level~~ 2 ~~fair value measurements.~~

~~Commitments exclude unrecognized tax benefits to be recorded in accordance with FASB ASC Topic~~ ~~740,~~~~Income Taxes~~~~. We are unable to reasonably estimate the ultimate amount or timing of cash settlements with the respective taxing authorities for such matters. See Note~~ 8.

~~We file income tax returns with the Internal Revenue Service (“IRS”) and various state tax jurisdictions. From time to time, we are subject to routine audits by those agencies and those audits~~ ~~may~~ ~~result in proposed adjustments. We have considered the alternative interpretations that~~ ~~may~~ be assumed by the various taxing agencies, believe our positions taken regarding our filings are valid, and that adequate tax liabilities have been recorded to resolve such matters. However, the actual outcome cannot be determined with certainty and the difference could be material, either positively or negatively, to the Consolidated Statements of Operations and Comprehensive Income in the periods in which such matters are ultimately determined. We do ~~not~~ ~~believe the final resolution of such matters will be material to our consolidated financial position or cash flows.~~

~~We have various income tax examinations ongoing and at various stages of completion, but generally our income tax returns have been audited or closed to audit through~~ ~~2013.~~

We are involved in a variety of legal actions that arise in the normal course of business. Insurance coverage mitigates potential loss for certain of these matters. While we are unable to predict the ultimate outcome of these legal actions, it is our opinion that the disposition of these matters will not have a material adverse effect on our Consolidated Financial Statements, taken as a whole.

~~We have recognized $1,419,000 and $5,880,000, respectively of expense related to restructuring costs and other for the~~ 13 ~~and~~ 39 ~~weeks ended~~ ~~June~~ ~~27,~~~~2021~~ ~~and $2,865,000 and $6,422,000 for the~~ 13 ~~and~~ 39 ~~weeks ended~~ ~~June 28, 2020.~~ ~~The amounts consist of $907,000 and $4,074,000 for~~ ~~June 27, 2021~~ ~~and $1,484,000 and $2,534,000 for~~ ~~June 28, 2020,~~ ~~respectively of severance expense. We did~~ ~~not~~ ~~have a significant restructuring liability as of~~ ~~June~~ ~~27,~~~~2021~~ or ~~June 28, 2020.~~

~~We have evaluated subsequent events through~~ ~~August~~ 6,~~2021.~~No ~~events have occurred subsequent to~~ ~~June~~ ~~27,~~~~2021~~ ~~that require disclosure or recognition in these financial statements.~~

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion includes comments and analysis relating to our results of operations and financial condition as of and for the 13three and ~~39 weeks~~nine months ended June ~~27, 2021.~~26, 2022. This discussion should be read in conjunction with the Consolidated Financial Statements and related Notes thereto, included herein, and our ~~2020~~2021 Annual Report on Form 10-K.

We use non-GAAP financial performance measures to supplement the financial information presented on a GAAP basis. These non-GAAP financial measures should not be considered in isolation or as a substitute for the relevant GAAP measures and should be read in conjunction with information presented on a GAAP basis.

In this report, we present Adjusted EBITDA, Cash Costs, and Total Operating Revenue Less Cash Costs which are non-GAAP financial performance measures that exclude from our reported GAAP results the impact of certain items consisting primarily of restructuring charges and non-cash charges. We believe such expenses, charges and gains are not indicative of normal, ongoing operations, and their inclusion in results makes for more difficult comparisons between years and with peer group companies. In the future, however, we are likely to incur expenses, charges and gains similar to the items for which the applicable GAAP financial measures have been adjusted and to report non-GAAP financial measures excluding such items. Accordingly, exclusion of those or similar items in our non-GAAP presentations should not be interpreted as implying the items are non-recurring, infrequent, or unusual.

~~We define our non-GAAP measures, which may not be comparable to similarly titled measures reported by other companies, 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 also 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. Generally, 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 settled in cash.

~~Total Operating Revenue Less Cash Costs~~, or “margin”, represents a non-GAAP financial performance measure of revenue less total Cash Costs, also a non-GAAP financial measure. This measure is useful to investors in understanding the profitability of the Company after direct Cash Costs related to the production and delivery of products are paid. Margin is also useful in developing opinions and expectations about the Company’s ability to manage and control its operating cost structure in relation to its peers.

~~The subtotals of operating expenses representing Cash Costs and Total Operating Revenue Less Cash Costs can be found in tables~~ ~~included herein, under the caption “Continuing Operations”. Adjusted EBITDA is reconciled to net income, below, its closest comparable number under GAAP.~~

~~The table below reconciles the non-GAAP financial performance measure of Adjusted EBITDA to net income, the most directly comparable GAAP measure:~~

Lee Enterprises, Incorporated is ~~a major subscription and advertising platform and~~ a leading provider of high quality, trusted, local news and information in the markets we ~~serve.~~serve with rapidly growing digital subscription and advertising platforms.

We reach nearly 70% of all adults in our larger markets through a combination of our print and digital content offerings.

Our products include daily newspapers, websites and mobile applications, mobile news and advertising, video products, a digital marketing agency, digital services including web hosting and content management, niche publications and community newspapers. Our local media operations range from large daily newspapers and their associated digital products, such as the St. Louis Post-Dispatch and the Buffalo News, to non-daily newspapers with news websites and digital platforms serving smaller communities.

We also operate Amplified Digital, a full service digital marketing agency offering omnichannel marketing solutions, audience targeted display, social audience targeting, social media management, email marketing, banners, video streaming and much more. Amplified Digital serves more than 4,500 customers in 49 states.

We also operate TownNews ~~through our 82.5% owned subsidiary INN Partners, L.C. TownNews~~which provides state-of-the-art web hosting, content management services and video management services to nearly 2,200 other media organizations including broadcast.

We are a major subscription and advertising platform, a trusted local news provider and innovative, ~~digitally focused~~digitally-focused marketing solutions company. Our focus is on the local market - including local news and information, local advertising and marketing services to top local accounts, ~~and SMBs,~~ and digital services to local content curators. To align with the core strength of our Company, our post-pandemic operating strategy is locally focused around three pillars:

On March 16, 2020, the Company completed the Asset and Stock Purchase Agreement dated as of January 29, 2020 with Berkshire Hathaway Inc., a Delaware corporation (“Berkshire”) and BH Media Group, Inc., a Delaware corporation (“BHMG”) (the “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”). The Transactions were financed pursuant to a credit agreement dated as of January 29, 2020 between the Company and BH Finance LLC, a Delaware limited liability company affiliated with Berkshire (the “Credit Agreement”).

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 news to the Buffalo, NY area. Between July 2, 2018 and March 16, 2020, the Company managed the BH Media Newspaper Business pursuant to a Management Agreement between BHMG and the Company dated June 26, 2018 (the “Management Agreement”).

In connection with the Transactions, the Management Agreement terminated on March 16, 2020. As part of the settlement of the preexisting relationship, the Company received $5,425,000 at closing. This amount represented $1,245,000 in fixed fees pro-rated under the contract and $4,180,000 in variable fees based upon the pro-rated annual target. The Company did not recognize a gain or loss as a result of the settlement of this preexisting relationship.

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, 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 BHMG during the term of the BH Lease.

We have significant amounts of goodwill and identified intangible assets. Since 2007 we have recorded impairment charges totaling almost $1.3 billion to reduce the value of certain of these assets. Future decreases in our market value, or significant differences in revenue, expenses or cash flows from estimates used to determine fair value, could result in additional impairment charges in the future.

~~The following items affect period-over-period comparisons from 2021 to 2020 and will continue to affect period-over-period comparisons for future results:~~

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 on the Company’s business and operating results in the near term. While vaccines have become widely available in the United States, the long-term impact of the COVID-19 pandemic remains uncertain and unpredictable as it will depend on the pace of vaccine distribution, government responses to future outbreaks, the spread of variants, 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.

We have evaluated the current economic environment as of June 27, 2021, and have concluded that there is no event or circumstance that has occurred to trigger an impairment assessment of our long-lived or indefinite-lived assets.

Operating results ~~as reported in the Consolidated Financial Statements,~~ are summarized below.

		June 27,			June 28,			Percent			June 26,			June 27,			Percent
(Thousands of Dollars, Except Per Share Data)	2021			2020			Change			2022			2021			Change
Advertising and marketing services		91,122			77,754			17.2
Subscription		88,792			89,115			(0.4	)
Other		16,576			15,659			5.9

Operating revenue:
Print											44,814			54,632			(18.0	)
Digital											46,187			36,490			26.6
Advertising and marketing services revenue											91,001			91,122			(0.1	)
Print											78,079			81,483			(4.2	)
Digital											10,969			7,309			50.1
Subscription revenue											89,048			88,792			0.3
Print											10,671			11,880			(10.2	)
Digital											4,317			4,696			(8.1	)
Other revenue											14,988			16,576			(9.6	)
Total operating revenue		196,490			182,528			7.6			195,037			196,490			(0.7	)
Operating expenses:
Compensation		82,731			72,396			14.3			78,126			82,731			(5.6	)
Newsprint and ink		7,051			7,572			(6.9	)		7,542			7,051			7.0
Other operating expenses		82,117			77,440			6.0			88,004			82,117			7.2
Cash costs		171,899			157,408			9.2
Total operating revenue less cash costs		24,591			25,120			(2.1	)
Depreciation and amortization		10,836			11,201			(3.3	)		8,818			10,836			(18.6	)
Assets loss (gain) on sales, impairments and other, net		242			147			64.6
Assets loss on sales, impairments and other, net											1,086			242			NM
Restructuring costs and other		1,419			2,865			(50.5	)		6,072			1,419			NM
Operating expenses		184,396			171,621			7.4			189,648			184,396			2.8
Equity in earnings of associated companies		1,689			842			NM			1,050			1,689			(37.8	)
Operating income		13,783			11,749			17.3			6,439			13,783			(53.3	)
Non-operating income (expense):
Interest expense		(11,010	)		(13,135	)		(16.2	)		(10,292	)		(11,010	)		(6.5	)
Other, net		2,330			1,027			NM			4,205			2,330			80.5
Non-operating expenses, net		(8,680	)		(12,108	)		(28.3	)		(6,087	)		(8,680	)		(29.9	)
Income (loss) before income taxes		5,103			(359	)		NM
Income tax expense (benefit)		1,366			368			NM
Net income (loss)		3,737			(727	)		NM
Net income attributable to non-controlling interests		(510	)		(548	)		(6.9	)
Income (loss) attributable to Lee Enterprises, Incorporated		3,227			(1,275	)		NM
Other comprehensive income, net of income taxes		477			317			50.5
Comprehensive income (loss) attributable to Lee Enterprises, Incorporated		3,704			(958	)		NM
Income before income taxes											352			5,103			(93.1	)
Income tax expense											156			1,366			(88.6	)
Net income											196			3,737			(94.8	)

Earnings per common share:
Basic		0.56			(0.23	)		NM			(0.05	)		0.56			NM
Diluted		0.55			(0.23	)		NM			(0.05	)		0.55			NM

References to the “2022 Quarter” refer to the three months ended June 26, 2022. Similarly, references to the “2021 Quarter” refer to the ~~13 weeks~~three months ended June 27, 2021. Similarly, references to the “2020 Quarter” refer to the 13 weeks ended June 28, 2020. Prior period results have been adjusted to reflect the one-for-ten reverse stock split in March 2021. See Note 1 to the financial statements for details.

Total operating revenue was ~~$196,490,000~~$195,037,000 in the ~~2021~~2022 Quarter, ~~up $13,962,000,~~down $1,453,000, or ~~7.6%~~0.7%, compared to the prior year.

Advertising and marketing services revenue totaled ~~$91,122,000~~$91,001,000 in the ~~2021~~2022 Quarter, ~~up 17.2%~~down 0.1% compared to the ~~prior year. The increase is due to rapid growth at Amplified Digital Agency ("Amplified") and stabilization of our legacy business as we emerge from the pandemic.~~2021 Quarter. Print advertising revenues were ~~$55,401,000~~$44,814,000 in the 2022 Quarter, down 18% compared to the 2021 Quarter ~~up 10.3% compared~~due to ~~the prior year.~~continued secular declines in demand for print advertising. Digital advertising and marketing services totaled ~~$35,719,000~~$46,187,000 in the ~~2021~~2022 Quarter, up ~~30.8%~~26.6% compared to the ~~prior year. The majority of these~~2021 Quarter. These gains ~~come~~resulted from an increase in Amplified Digital revenue and an increase in digital advertising on our owned and operated sites. Digital advertising and marketing services represented ~~39.2%~~50.8% of the ~~2021~~2022 Quarter total advertising and marketing services revenue, compared to ~~35%~~40.1% in the same period last year.

Subscription revenue totaled ~~$88,792,000~~$89,048,000 in the ~~2021~~2022 Quarter, ~~down 0.4%~~up 0.3% compared to the ~~2020~~2021 Quarter. ~~The growth in digital only subscribers, digital only revenue, and selective price~~Selective increases on our full access subscriptions, growth in digital-only subscribers and price increases on digital subscriptions, were partially offset by a decline in full access volume, consistent with historical and industry trends. ~~Digital only~~Digital-only subscribers grew ~~50.5%~~48.6% since the ~~2020~~2021 Quarter and now total ~~337,000.~~501,000.

Other revenue, which primarily consists of ~~digital services revenue from TownNews and~~ commercial printing revenue ~~increased $917,000,~~and digital services from TownNews, decreased $1,588,000, or ~~5.9%~~9.6%, in the ~~2021~~2022 Quarter compared to the ~~2020~~2021 Quarter. Digital services revenue totaled ~~$4,713,000~~$4,317,000 in the ~~2021~~2022 Quarter, ~~a 5.9%~~an 8.1% decrease compared to the ~~2020~~2021 Quarter. ~~On a stand-alone basis, revenue at TownNews increased 8.7% compared to the prior year.~~ Commercial printing revenue totaled ~~$6,333,000~~$5,341,000 in the ~~2021~~2022 Quarter, a ~~16.8% increase~~15.7% decrease compared to the ~~2020~~2021 Quarter, primarily driven by ~~new customers and improved spending post pandemic.~~reduction in print volumes from our partners.

Total digital revenue including digital advertising revenue, digital subscription revenue and digital services revenue totaled ~~$65,627,000~~$61,473,000 in the ~~2021~~2022 Quarter, an increase of ~~48.3%~~26.8% over the ~~2020~~2021 Quarter, and represented ~~33.4%~~31.5% of our total operating revenue in the ~~2021~~2022 Quarter.

Equity in earnings of TNI and MNI ~~increased $847,000~~decreased $639,000 in the ~~2021~~2022 Quarter.

Total operating expenses were ~~$184,396,000~~$189,648,000 in the ~~2021~~2022 Quarter, a ~~7.4%~~2.8% increase compared to the ~~2020~~2021 Quarter. Operating expenses include compensation expense, newsprint and ink, other operating expenses, depreciation, amortization, restructuring and other expenses, assets loss (gain) on sales, and impairments. Cash Costs a non-GAAP financial measure used to summarize certain operating expense (see reconciliation of Non-GAAP financial measures below) were ~~$171,899,000, a 9.2% increase compared to~~up 1.0% in the ~~2020~~2022 Quarter.

Compensation expense ~~increased $10,335,000~~decreased $4,605,000 in the ~~2021~~2022 Quarter, or ~~14.3%~~5.6%, compared to the ~~2020 Quarter. The 2020~~2021 Quarter ~~experienced a one-time furlough and compensation reduction for all employees driving cost~~from reductions in ~~response~~full time employees ("FTEs") due to ~~COVID-19.~~continued business transformation efforts, partially offset by investments in digital talent.

Newsprint and ink costs ~~decreased $521,000~~increased $491,000 in the ~~2021~~2022 Quarter, or ~~6.9%~~7.0%, compared to the ~~2020~~2021 Quarter. The ~~decrease~~increase is attributable to higher newsprint prices offset by declines in newsprint ~~volumes partially offset by higher newsprint prices.~~volumes. See Item 3, “Commodities”, included herein, for further discussion and analysis of the impact of newsprint on our business.

Other operating expenses increased ~~$4,677,000~~$5,887,000 in the ~~2021~~2022 Quarter, or ~~6.0%~~7.2%, compared to the ~~2020~~2021 Quarter. Other operating expenses include all operating costs not considered to be compensation, newsprint, depreciation and amortization, or restructuring costs and ~~other.~~assets loss on sales, impairments, and other, net. The largest components are costs associated with printing and distribution of our printed products, digital cost of goods sold and facility expenses. The increase is attributable to increases in investments to fund our digital growth strategy partially offset by lower delivery and other print-related costs due to lower volumes of our print editions.

Restructuring costs and other totaled ~~$1,419,000~~$6,072,000 and ~~$2,865,000~~$1,419,000 in the 2022 Quarter and 2021 Quarter, respectively. Restructuring costs and ~~2020 Quarter, respectively.~~other include severance costs, litigation expenses, restructuring expenses, and advisor expenses in the 2022 quarter associated with the unsolicited offer in November 2021. Restructuring costs in the 2021 ~~and 2020 Quarters~~Quarter are predominately severance related to our ongoing business transformation.

Depreciation ~~expense increased $420,000, or 9.7%,~~ and amortization expense decreased ~~$785,000,~~$2,018,000, or ~~11.5%~~18.6%, in the ~~2021~~2022 Quarter. The decrease in both is attributable to assets becoming fully depreciated or amortized.

Assets loss ~~(gain)~~ on sales, impairments and other, was a net loss of ~~$242,000~~$1,086,000 in the ~~2021~~2022 Quarter compared to a net loss of ~~$147,000~~$242,000 in the ~~2020~~2021 Quarter. The gains and losses and impairments in the ~~2021~~2022 Quarter and in the ~~2020~~2021 Quarter were the result of the disposition of non-core assets, including real estate.

The factors noted above resulted in an operating income of $6,439,000 in the 2022 Quarter compared to operating income of $13,783,000 in the 2021 ~~Quarter compared to $11,749,000 in the 2020~~ Quarter.

Interest expense decreased ~~$2,125,000,~~$718,000, or ~~16.2%~~6.5%, to ~~$11,010,000~~$10,292,000 in the ~~2021~~2022 Quarter, compared to the same period last year. The decrease was due to a lower outstanding balance on our Term Loan. ~~Debt has been reduced by $90.8 million since our refinancing in March 2020.~~ Our weighted average cost of debt ~~excluding amortization of debt financing costs,~~ was 9.0% at the end of the 2022 Quarter and 2021 Quarter.

Other non-operating income and expense consists of benefits associated with our pension and other postretirement plans and the fair value adjustment of our Warrants. We recorded ~~$2,228,000~~$3,598,000 periodic pension and other postretirement benefits in the ~~2021~~2022 Quarter ~~and $1,370,000~~compared to $2,228,000 in the ~~2020~~2021 Quarter. We recorded non-operating income of $0 in the 2022 Quarter and non-operating expense of $237,000 in the 2021 ~~Quarter and non-operating expense of $271,000 in the 2020~~ Quarter, related to the changes in the value of the Warrants.

We recorded an income tax expense of ~~$1,366,000,~~$156,000, or ~~26.8%~~44.3% of pretax income in the ~~2021~~2022 Quarter. In the ~~2020~~2021 Quarter, we recognized an income tax expense of ~~$368,000,~~$1,366,000, or ~~102.5%~~26.8% of pretax ~~income.~~loss.

Net income was $196,000 and diluted losses per share were $0.05 for the 2022 Quarter compared to net income of $3,737,000 and diluted earnings per share ~~were~~of $0.55 for the 2021 ~~Quarter compared to net loss of $727,000 and diluted losses per share of $0.23 for the 2020 Quarter as adjusted for the reverse stock split, described in Note 1 to the financial statements.~~Quarter. The change reflects the various items discussed above.

Operating results, as reported in the Consolidated Financial Statements, are summarized below.

	June 27,			June 28,			Percent			June 26,			June 27,			Percent
(Thousands of Dollars, Except Per Share Data)	2021			2020			Change			2022			2021			Change
Advertising and marketing services		279,326			204,426			36.6
Subscription		269,905			178,234			51.4
Other		51,505			43,578			18.2

Operating revenue:
Print											145,032			174,933			(17.1	)
Digital											132,356			104,393			26.8
Advertising and marketing services revenue											277,388			279,326			(0.7	)
Print											234,962			249,332			(5.8	)
Digital											28,953			20,573			40.7
Subscription revenue											263,915			269,905			(2.2	)
Print											32,430			37,177			(12.8	)
Digital											13,600			14,328			(5.1	)
Other revenue											46,030			51,505			(10.6	)
Total operating revenue		600,736			426,238			40.9			587,333			600,736			(2.2	)
Operating expenses:
Compensation		250,048			164,330			52.2			246,333			250,048			(1.5	)
Newsprint and ink		22,222			16,629			33.6			22,254			22,222			0.1
Other operating expenses		243,749			178,744			36.4			258,665			243,749			6.1
Cash costs		516,019			359,703			43.5
Total operating revenue less cash costs		84,717			66,535			27.3
Depreciation and amortization		33,794			25,196			34.1			27,445			33,794			(18.8	)
Assets loss (gain) on sales, impairments and other, net		6,938			(5,153	)		NM
Assets (gain) loss on sales, impairments and other, net											(11,340	)		6,938			NM
Restructuring costs and other		5,880			6,422			(8.4	)		19,862			5,880			NM
Operating expenses		562,631			386,168			45.7			563,219			562,631			0.1
Equity in earnings of associated companies		4,902			3,773			29.9			4,211			4,902			(14.1	)
Operating income		43,007			43,843			(1.9	)		28,325			43,007			(34.1	)
Non-operating income (expense):
Interest expense		(34,129	)		(35,377	)		(3.5	)		(31,478	)		(34,129	)		(7.8	)
Debt financing and administrative cost		—			(11,865	)		NM
Curtailment Gain		23,830			—			NM
Curtailment gain											1,027			23,830			(95.7	)
Pension withdrawal cost		(12,310	)		—			NM			(2,335	)		(12,310	)		(81.0	)
Other, net		6,240			3,309			88.6			13,525			6,240			NM
Non-operating expenses, net		(16,369	)		(43,933	)		(62.7	)		(19,261	)		(16,369	)		17.6
Income (loss) before income taxes		26,638			(90	)		NM
Income tax expense (benefit)		7,106			(92	)		NM
Income before income taxes											9,064			26,638			(66.0	)
Income tax expense											2,363			7,106			(66.7	)
Net income		19,532			2			NM			6,701			19,532			(65.7	)
Net income attributable to non-controlling interests		(1,537	)		(1,322	)		16.3
Income (loss) attributable to Lee Enterprises, Incorporated		17,995			(1,320	)		NM
Other comprehensive income, net of income taxes		2,097			950			NM
Comprehensive income (loss) attributable to Lee Enterprises, Incorporated		20,092			(370	)		NM

Earnings per common share:
Basic		3.15			(0.23	)		NM			0.89			3.15			(71.8	)
Diluted		3.10			(0.23	)		NM			0.87			3.10			(71.8	)

References to the “2022 Period” refer to the nine months ended June 26, 2022. Similarly, references to the “2021 Period” refer to the ~~39 weeks~~nine months ended June 27, 2021. Similarly, references to the “2020 Period” refer to the 39 weeks ended June 28, 2020. Prior period results have been adjusted to reflect the one-for-ten reverse stock split in March 2021. See Note 1 to the financial statements for details.

Included in the analysis below are impacts from the Transactions.. The impacts include the revenue and expenses generated from the acquisition in the current year from September 28, 2020 through March 16, 2021.

Total operating revenue was ~~$600,736,000~~$587,333,000 in the ~~2021~~2022 Period, ~~up $174,498,000,~~down $13,403,000, or ~~40.9%~~2.2%, ~~which included $207,936,000 in revenue from the Transactions. Total operating revenue on a pro forma basis was down 4.7%~~ compared to the ~~2020~~2021 Period.

Advertising and marketing services revenue totaled ~~$279,326,000~~$277,388,000 in the ~~2021~~2022 Period, ~~up 36.6%~~down 0.7% compared to the prior year. Print advertising revenues were $145,032,000 in the 2022 Period, down 17.1% compared to the prior year ~~with $87,274,000 attributable~~due to ~~acquisitions. Print advertising revenues were $177,212,000~~continued secular declines in ~~the 2021 Period, up $49,188,000 or 38.4% compared to the prior year, with $65,402,000 attributable to acquired~~demand for print ~~advertising revenue.~~advertising. Digital advertising and marketing services totaled ~~$102,114,000~~$132,356,000 in the ~~2021~~2022 Period, up ~~33.7%~~26.8% compared to the prior ~~year, with $21,854,000 attributable to acquired digital~~year. These gains resulted from an 83.1% increase in Amplified Digital revenue and an increase in advertising on our owned and ~~marketing services revenue.~~operated sites. Digital advertising and marketing services represented ~~36.6%~~47.7% of the ~~2021~~2022 Period total advertising and marketing services revenue, compared to 37.4% in the 2020 Period. On a pro forma basis, Advertising and marketing services revenue was down 9.3% in the 2021 Period. The decline is due to the secular downward trend in print advertising, partially offset by growth in digital marketing services revenue at Amplified.same period last year.

Subscription revenue totaled ~~$269,905,000~~$263,915,000 in the ~~2021~~2022 Period, ~~up 51.4%~~down 2.2% compared to the ~~2020 Period, including $102,601,000 of acquired subscription revenue.~~2021 Period. The ~~acquired subscription revenue, growth in digital-only subscribers and digital-only revenue and selective price increases on our full access subscriptions, were partially offset by a~~ decline in full access volume, consistent with historical and industry ~~trends.~~trends were partially offset by growth in digital only subscribers and selective price increases on our full access subscriptions. Digital only subscribers grew 48.6% since the 2021 Period and now total 501,000.

Other revenue, which primarily consists of ~~digital services revenue from TownNews and~~ commercial printing revenue ~~increased $7,927,000,~~and digital services from TownNews, decreased $5,475,000, or ~~18.2%~~10.6%, in the ~~2021~~2022 Period compared to the ~~2020~~2021 Period. ~~Other revenue in the 2021 Period included $18,061,000 of acquired other revenue, primarily from commercial printing.~~ Digital services revenue totaled ~~$14,363,000~~$13,600,000 in the ~~2021~~2022 Period, a ~~1.2%~~5.3% decrease compared to the ~~2020~~2021 Period. Commercial printing revenue totaled ~~$19,332,000~~$16,195,000 in the 2022 Period, a 9.3% decrease compared to the 2021 Period ~~a 104.9% increase compared to the 2020 Period, due to $11,060,000 of acquired commercial printing revenue. Prior to the termination of the Management Agreement~~primarily driven by reduction in ~~connection with the Transactions in March 2020, we earned $5,814,000 in management agreement revenue.~~ print volumes from our partners.

Total digital revenue including digital advertising revenue, digital subscription revenue and digital services revenue totaled ~~$187,011,000~~$174,909,000 in the ~~2021~~2022 Period, an increase of ~~60.8%~~25.5% over the ~~2020~~2021 Period, and represented ~~31.1%~~29.8% of our total operating revenue in the ~~2021~~2022 Period.

Equity in earnings of TNI and MNI ~~increased $1,129,000~~decreased $691,000 in the ~~2021~~2022 Period.

Total operating expenses were ~~$562,631,000,~~$563,219,000 in the 2022 Period, a ~~45.7%~~0.1% increase compared to the 2020 Period, which included $185,729,000 in acquired operating expenses. Operating expenses include compensation expense, newsprint and ink, other operating expenses, depreciation, amortization, restructuring and other expenses, assets loss (gain) on sales, and impairments.2021 Period. Cash Costs, a Non-GAAP financial measure (see reconciliation of Non-GAAP financial measures below), were ~~$516,019,000,~~$527,252,000, a ~~43.5%~~2.2% increase compared to the ~~2020 Period, which included $172,657,000 of acquired Cash Costs. Cash Costs on a pro forma basis were down 4.2% compared to the 2020~~2021 Period.

Compensation expense ~~increased $85,718,000~~decreased $3,715,000 in the ~~2021~~2022 Period, or ~~52.2%~~1.5%, compared to the ~~2020 Period. This increase was primarily attributable~~2021 Period due to ~~$87,934,000 of acquired compensation expense,~~reductions in FTE's due to continued business transformation efforts partially offset by ~~a reduction~~investments in ~~FTEs on a proforma basis~~digital talent and ~~one-time furlough and~~increasing average compensation ~~reduction for all employees driving cost reductions~~levels due to investments in ~~response to COVID-19 in the 2020 Period.~~digital talent.

Newsprint and ink costs increased ~~$5,593,000~~$32,000 in the ~~2021~~2022 Period, or ~~33.6%~~0.1%, compared to the ~~2020~~2021 Period. The increase is attributable to ~~acquired~~higher newsprint ~~and ink expenses of $10,103,000~~prices offset by declines in newsprint ~~volumes and prices.~~volumes. See Item 3, “Commodities”, included herein, for further discussion and analysis of the impact of newsprint on our business.

Other operating expenses increased ~~$65,005,000~~$14,916,000 in the ~~2021~~2022 Period, or ~~36.4%~~6.1%, compared to the ~~2020~~2021 Period. Other operating expenses include all operating costs not considered to be compensation, newsprint, depreciation and amortization, or restructuring costs and ~~other.~~asset loss on sales, impairments and other, net. The largest components are costs associated with printing and distribution of our printed products, digital cost of goods sold and facility expenses. The increase is attributable to ~~$84,812,000~~increases in digital costs of ~~acquired other operating expenses~~goods sold from Amplified Digital growth, higher input costs due to inflation and ~~increases in~~ investments to fund our digital growth strategy partially offset by lower delivery and other print-related costs due to lower volumes of our print editions.

Restructuring costs and other totaled ~~$5,880,000~~$19,862,000 and ~~$6,422,000~~$5,880,000 in the 2022 Period and 2021 Period, respectively. Restructuring costs and ~~2020~~other include severance costs, litigation costs, restructuring expenses, and advisor expenses in the 2022 Period ~~respectively.~~associated with an unsolicited takeover offer received in November 2021. Restructuring costs in the 2021 ~~and 2020 Periods is~~Period are predominately severance related to our ongoing business transformation.

Depreciation ~~expense increased $4,845,000 or 50.2%,~~ and amortization expense ~~increased $3,753,000,~~decreased $6,349,000, or ~~24.1%~~18.8%, in the ~~2021~~2022 Period. ~~Increases~~The decrease in both ~~are due~~is attributable to ~~the acquired~~ assets ~~from BHMG and Buffalo News.~~becoming fully depreciated or amortized.

Assets (gain) loss ~~(gain)~~ on sales, impairments and other, was a net gain of $11,340,000 in the 2022 Period compared to a net loss of $6,938,000 in the 2021 ~~Period compared to a net gain of $5,153,000~~Period. The gains and losses in the ~~2020 Period. The loss in the 2021~~2022 Period and ~~the gains in the 2020~~2021 Period were the result of the disposition of non-core assets, including real estate.

The factors noted above resulted in operating income of $28,325,000 in the 2022 Period compared to $43,007,000 in the 2021 ~~Period compared to $43,843,000 in the 2020~~ Period.

Interest expense decreased ~~$1,248,000,~~$2,651,000, or ~~3.5%~~7.8%, to ~~$34,129,000~~$31,478,000 in the ~~2021~~2022 Period, compared to the same period last ~~year~~year. The decrease was due to a lower ~~debt balances and a reduction in the weighted average interest rates~~outstanding balance on our ~~debt during the 2021 period.~~Term Loan. Our weighted average cost of debt ~~excluding amortization of debt financing costs,~~ was 9.0% at the end of the 2022 Period and 2021 Period.

We recognized no debt financing and administrative expense in the 2021 Period compared to $11,865,000 in the 2020 Period. Expenses in the prior year are due to writing off unamortized financing costs paid in conjunction with a prior refinancing.

Other non-operating income and expense consists of benefits associated with our pension and other postretirement plans and the fair value adjustment of our Warrants. We recorded ~~$6,799,000 in~~$11,643,000 periodic pension and other postretirement benefits in the ~~2021~~2022 Period ~~and $2,458,000~~compared to $6,799,000 in the ~~2020~~2021 Period. We recorded non-operating income of $71,000 in the 2022 Period and non-operating expense of $954,000 in the 2021 Period, ~~and non-operating income of $765,000 in the 2020 Period,~~ related to ~~the~~ changes in the value of the Warrants.

We recognized a non-cash curtailment gain of $1,027,000 in the 2022 Period as a result of freezing certain pension plans. We recognized a non-cash curtailment gain of $23,830,000 and a reduction in our benefit obligation in the 2021 Period by eliminating post-retirement medical coverage for certain employees.

We recognized pension withdrawal costs in the 2022 and 2021 Period of $2,335,000 and $12,310,000, respectively in connection with the withdrawal from a pension plan that covered certain employees. ~~This~~These withdrawal ~~liability~~liabilities will be paid in equal quarterly installments over the next 20 years.

We recorded an income tax expense of $2,363,000, or 26.1% of pretax income, in the 2022 Period. In the 2021 Period, we recognized an income tax expense of $7,106,000 or 26.7% of pretax ~~income in the 2021 Period. In the 2020 Period, we recognized an income tax benefit of $92,000, or 102.2% of pretax~~ income.

Net income was $6,701,000 and diluted earnings per share were $0.87 for the 2022 Period, compared to net income of $19,532,000 and diluted earnings per share ~~were~~of $3.10 for the 2021 ~~Period compared to net income of $2,000 and diluted losses per share of $0.23 for 2020 Period as adjusted for the reverse stock split, described in Note 1 to the financial statements.~~Period. The change reflects the various items discussed above.

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 also 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.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(UNAUDITED)

The table below reconciles the non-GAAP financial performance measure of Adjusted EBITDA to net income, the most directly comparable GAAP measure:

	Three months ended						Nine months ended
	June 26,			June 27,			June 26,			June 27,
(Thousands of Dollars)	2022			2021			2022			2021

Net income		196			3,737			6,701			19,532
Adjusted to exclude
Income tax expense		156			1,366			2,363			7,106
Non-operating expenses, net		6,087			8,680			19,261			16,369
Equity in earnings of TNI and MNI		(1,050	)		(1,689	)		(4,211	)		(4,902	)
Loss (gain) on sale of assets and other, net		1,086	��		242			(11,340	)		6,938
Depreciation and amortization		8,818			10,836			27,445			33,794
Restructuring costs and other		6,072			1,419			19,862			5,880
Stock compensation		327			205			1,026			639
Add:
Ownership share of TNI and MNI EBITDA (50%)		1,268			1,923			4,864			5,421
Adjusted EBITDA		22,960			26,719			65,971			90,777

The table below reconciles the non-GAAP financial performance measure of Cash Costs to Operating expenses, the most directly comparable GAAP measure:

	Three months ended		Nine Months ended
	June 26,	June 27,	June 26,		June 27,
(Thousands of Dollars)	2022	2021	2022		2021

Operating expenses	189,648	184,396	563,219		562,631
Adjustments
Depreciation and amortization	8,818	10,836	27,445		33,794
Assets loss (gain) on sales, impairments and other, net	1,086	242	(11,340	)	6,938
Restructuring costs and other	6,072	1,419	19,862		5,880
Cash Costs	173,672	171,899	527,252		516,019

Table of Contents

Our operations have historically generated strong positive cash flow and are expected to provide sufficient liquidity, together with cash on hand, to meet our requirements, primarily operating expenses, interest expense and capital expenditures. A summary of our cash flows is included in the narrative below.

Cash provided by operating activities ~~was $42,771,000~~totaled $716,000 in ~~the 2021 Period~~2022 compared to ~~$38,010,000 in the 2020 Period. Net income for the 2021 Period totaled $19,532,000 compared to $2,000 in the 2020 Period. The increase in~~ cash provided by operating activities of $42,771,000 in ~~the~~ 2021, ~~Period is mainly attributed~~a decrease of $42,055,000. The decrease was driven by a decrease in operating results of $23,400,000 (defined as net income (loss) adjusted for non-working capital items) and an increase in working capital of $18,654,000, primarily related to ~~the acquired operations of BHMG~~unfavorable changes in inventory, postretirement liabilities, income taxes payable and ~~Buffalo News~~warrants, and ~~growth in our digital business.~~accounts receivable.

Cash ~~required~~provided by investing activities totaled ~~$2,465,000~~$8,515,000 in the ~~2021~~2022 Period compared to cash required byfor investing activities of ~~$121,137,000 in the 2020 Period. Capital spending totaled $5,350,000~~$2,465,000 in the 2021 ~~Period compared to $7,297,000~~Period. 2022 included $14,824,000 in ~~the 2020 Period. Cash~~ proceeds from ~~asset sales, mainly~~the sale of assets as the Company divested non-core real ~~estate, totaled $3,095,000~~estate.

We anticipate that funds necessary for capital expenditures, which are expected to total up to $10,000,000 in ~~the 2021 Period compared to $17,649,000 in the 2020 Period. In the 2020 Period we spent $130,985,000 on the acquisitions, substantially all of which was related to the Transactions.~~2022, and other requirements, will be available from internally generated funds.

Cash required for financing activities totaled $19,682,000 in the 2022 Period compared to $52,969,000 in the 2021 ~~Period compared to cash provided by financing activities of $131,192,000 in the 2020~~ Period. Debt reduction accounted for nearly all of the usage of funds in the 2022 and 2021 ~~Period~~Periods.

Our liquidity, consisting of cash on the balance sheet, totaled $15,661,000 on June 26, 2022. This liquidity amount excludes any future cash flows from operations. We expect all interest and ~~the 2020 Refinancing provided the majority of funds~~principal payments due in the ~~2020 Period.~~

~~In March 2020, in connection with the Transactions~~, ~~the Company completed a comprehensive refinancing~~next twelve months will be satisfied by existing cash and our cash flows, which will allow us to maintain an adequate level of ~~its debt, which consists of a 25-year term loan with BH Finance in an aggregate principal amount of $576,000,000. The Term Loan, which matures March 16, 2045, bears interest at an annual rate of 9.0%.~~

Excluding payments required from the Company’s future excess cash flow (as defined in the Credit Agreement), the only required principal payments include payments from net cash proceeds from asset sales (as defined in the Credit Agreement) and payments upon certain instances of change in control. There are no other scheduled mandatory principal payments required under the Credit Agreement.

~~Excess cash flow for the 13 weeks ended June 27, 2021 totaled $1,070,000, which was used to repay debt in July 2021.~~

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 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. There are no financial performance covenants under our Credit Agreement.

~~In connection with closing of the transactions, we no longer have access to a Revolving Facility.~~liquidity.

In February 2020, ~~we filed~~our filing of a replacement Form S-3 registration statement ("Shelf")~~, that gave~~ with the SEC was declared effective and expires February 2023. The Shelf registration gives us the flexibility to issue and publicly distribute various types of securities, including preferred stock, common stock, warrants, secured or unsecured debt securities, purchase contracts and units consisting of any combination of such securities, from time to time, in one or more offerings, up to an aggregate amount of $750,000,000. SEC issuer eligibility rules require us to have a public float of at least $75,000,000 ~~in order~~ to use the Shelf. Subject to maintenance of the minimum equity market float and the conditions of our existing debt agreements, the Shelf may enable us to sell securities quickly and efficiently when market conditions are favorable or financing needs arise.

We continue to evaluate the effects of the COVID-19 pandemic on our results of operations and cash flows. To combat the negative impacts, we took significant and immediate action to manage cash flow by implementing various initiatives including reductions in force, compensation reductions, furloughs, and reductions in capital investments.

While we currently forecast sufficient near-term liquidity, the ultimate impact of the COVID-19 pandemic could have a material impact on the Company's liquidity and its ability to meet its ongoing obligations.

The United States and various state and local governments are considering increasing their respective minimum wage rates. Most of our employees ~~earn an amount in excess of~~are paid more than the current United States or state minimum wage rates. However, until changes to such rates are enacted, the impact of the changes cannot be determined. Among other provisions, the CARES Act allows the Company to defer payments of the employer’s share of social security taxes which shall be paid between December 31, 2021, and December 31, 2022. The CARES Act also provides for an Employee Retention Credit which can be applied to the employer’s share of payroll taxes. The Company has elected to defer the employer’s share of social security tax payments and is currently determining the applicability of the Employee Retention Credit.

Price increases (or decreases) for our products or services are implemented when deemed appropriate by us. We continuously evaluate price increases, productivity improvements, sourcing efficiencies and other cost reductions to mitigate the impact of inflation.

We are exposed to market risk stemming from changes in interest rates and commodity prices. Changes in these factors could cause fluctuations in earnings and cash flows. In the normal course of business, exposure to certain of these market risks is managed as described below.

Our debt structure, which is entirely fixed rate, eliminates the potential impact of an increase in interest rates. We have no interest rate hedging in place.

All North American newsprint producers ~~announced and~~ implemented a January 2022 price increases of $25 per tonne, $25 per tonne in ~~January 2021, February 2021, April 2021, May 2021,~~March 2022 and ~~July 2021. An additional August 2021~~another price increase ~~announcement~~in May of $50 per tonne. The newsprint supply chain is ~~expected~~challenged due to ~~also be implemented. Supply~~significant capacity ~~utilization has recently been reaching very high levels due to~~reductions taken in the last two years including paper machine permanent shutdowns, conversion to paper grades other than newsprint, and ~~improving~~recovering demand, domestically and exports, for newsprint. Like other industries, the supply chain is further challenged by shipping delays due to restrictions of personnel crossing the US/Canada border.

Our long-term supply strategy iscontinues to align the Company with those cost-effective suppliers most likely to continue producing and supplying newsprint to the North American market and geographically aligned with our print locations. Where possible the Company will align supply with the lowest cost material, but may be restricted due to shipping expenses and paper production availability.

A $10 per tonne price increase ~~for 27.7 pound~~on 27.7-pound newsprint would result in an annualized reduction in income before taxes of approximately ~~$514,000 annualized~~$340,000 based on current and anticipated consumption trends in ~~2021,~~2022, excluding consumption of TNI and MNI and the impact of LIFO accounting.

Our fixed rate debt consists of ~~$485,162,000~~$462,554,000 principal amount of the Term Loan recorded at ~~carrying value. At June 27, 2021, based on market price quotations, the fair value approximates~~ carrying value.

Under the supervision and with the participation of our senior management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q (the “Evaluation Date”). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of the Evaluation Date, our disclosure controls and procedures were effective.

On March 16, 2020, we concluded the Transactions. The internal controls related to the acquired businesses are now considered in our assessment over internal control over financial reporting following the completion of the 12-month period of evaluation as permitted by the SEC. Other than the internal controls related to the acquired businesses, thereThere have been no changes in our internal control over financial reporting that occurred during the ~~13 weeks~~three and nine months ended June ~~27, 2021~~26, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We are involved in a variety of legal actions that arise in the normal course of business. Insurance coverage mitigates potential loss for certain of these matters. While we are unable to predict the ultimate outcome of these legal actions, it is our opinion that the disposition of these matters will not have a material adverse effect on our Consolidated Financial Statements, taken as a whole.

Except as otherwise described herein, there have been no material changes in the risk factors previously disclosed in “Part I, Item 1A. Risk Factors” of our ~~2020~~2021 Form 10-K.

In addition, the Company may, from time to time, evaluate and pursue other opportunities for growth, including through strategic investments, joint ventures, and other acquisitions. These strategic initiatives involve various inherent risks, including, without limitation, general business risk, integration and synergy risk, market acceptance risk and risks associated with the potential distraction of management. Such transactions and initiatives may not ultimately create value for us or our stockholders and may harm our reputation and materially adversely affect our business, financial condition, and results of operations.

Exhibits marked with an asterisk (*) are incorporated by reference to documents previously filed by us with the SEC, as indicated. Exhibits marked with a plus (+) are management contracts or compensatory plan contracts or arrangements filed pursuant to Item 601(b)(10)(iii)(A) of Regulation S-K. All other documents listed are filed with this Quarterly Report on Form 10-Q.

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.

Table Of Contents			PAGE

FORWARD LOOKING STATEMENTS			1

PART I	FINANCIAL INFORMATION		2

	Item 1.	Financial Statements (Unaudited)	2

		Consolidated Balance Sheets - June ~~27, 2021,~~26, 2022, and September ~~27,~~26, 20 2021	2

		Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) ~~- 13~~-Three and ~~39 weeks~~nine months ended June ~~27, 2021~~26, 2022 and June ~~28, 2020~~27, 2021	4

		Consolidated Statements of Stockholder's Equity ~~(Deficit)~~ - 13Three and ~~39 weeks~~nine months ended June ~~27, 2021,~~26, 2022, and June ~~28, 2020~~27, 2021	5

		Consolidated Statements of Cash Flows - ~~39 weeks~~Nine months ended June ~~27, 2021,~~26, 2022, and June ~~28, 2020~~27, 2021	6

		Notes to Consolidated Financial Statements	7

	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	1612

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2418

	Item 4.	Controls and Procedures	2419

PART II	OTHER INFORMATION		2519

	Item 1.	Legal Proceedings	2519

	Item 1.A.	Risk Factors	2519

	Item 6.	Exhibits	2519

SIGNATURES			2620

	•	~~Revenues may continue to diminish or declines in revenue could accelerate as a result of~~The overall impact the COVID-19 ~~pandemic;~~
	•	~~Revenues may continue to be diminished longer than anticipated as a result of~~pandemic has on the ~~COVID-19 pandemic;~~ Company's revenues and costs;
	•	The long-term or permanent changes the COVID-19 pandemic may ~~result in material long-term changes to~~have on the publishing industry, which may result in permanent revenue reductions ~~for the Company~~ and other risks and uncertainties;
	•	~~We may experience increased costs, inefficiencies and other disruptions as a result of the COVID-19 pandemic;~~
	•	We may be required to indemnify the previous owners of the BH Media or Buffalo News for unknown legal and other matters that may arise;
	•	Our ability to manage declining print revenue and circulation subscribers;
	•	~~The warrants issued in our 2014 refinancing will not be exercised;~~
	•	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; and
	•	Other risks detailed from time to time in our publicly filed documents.

		(Unaudited)				(Unaudited)
		June 27,		September 27,		June 26,		September 26,
(Thousands of Dollars)	2021		2020		2022		2021

ASSETS

Current assets:
Cash and cash equivalents		21,070		33,733		15,661		26,112
Accounts receivable and contract assets, net		62,085		52,598		74,911		65,070
Inventories		6,478		7,534		8,661		6,297
Prepaids and other		15,952		14,888
Prepaid and other current assets						13,482		11,320
Total current assets		105,585		108,753		112,715		108,799
Investments:
Associated companies		27,172		27,624		27,052		26,682
Other		6,256		6,255		6,075		6,065
Total investments		33,428		33,879		33,127		32,747
Property and equipment:
Land and improvements		16,853		18,711		14,505		16,576
Buildings and improvements		108,719		128,475		93,888		106,890
Equipment		231,662		245,117		212,908		228,817
Construction in process		4,569		2,323		3,998		2,813
		361,803		394,626		325,299		355,096
Less accumulated depreciation		275,375		289,017		249,519		271,830
Property and equipment, net		86,428		105,609		75,780		83,266
Operating lease right-of-use assets		67,260		70,933		58,193		65,682
Goodwill		330,204		328,445		329,504		330,204
Other intangible assets, net		163,064		182,680		140,231		156,671
Pension plan assets, net		6,831		4,147		16,571		35,855
Medical plan assets, net		16,116		15,912		18,200		16,695
Other		11,877		13,699		10,515		13,632
Total assets		820,793		864,057		794,836		843,551

(Thousands of Dollars)	Accumulated Deficit		Common Stock	Additional paid-in capital		Accumulated Other Comprehensive Loss		Total		Accumulated Deficit		Common Stock	Additional paid-in capital		Accumulated Other Comprehensive Income		Total

September 28, 2020	(268,529	)	58	256,957		(20,050	)	(31,564	)
September 27, 2021										(245,744	)	59	258,063		42,187		54,565
Shares issued (redeemed)	0		1	(55	)	0		(54	)	0		1	(386	)	0		(385	)
Income attributable to Lee Enterprises, Incorporated	15,902		0	0		0		15,902		12,658		0	0		0		12,658
Stock compensation	0		0	220		0		220		0		0	186		—		186
Other comprehensive income	0		0	0		1,347		1,347
Other comprehensive loss										0		0	0		(8,174	)	(8,174	)
Deferred income taxes, net	0		0	0		(205	)	(205	)	0		0	0		2,062		2,062
December 27, 2020	(252,627	)	59	257,122		(18,908	)	(14,354	)
December 26, 2021										(233,086	)	60	257,863		36,075		60,912

Shares issued (redeemed)	0		0	(8	)	0		(8	)	0		0	(3	)	0		(3	)
Loss attributable to Lee Enterprises, Incorporated	(1,134	)	0	0		0		(1,134	)	(7,276	)	0	0		0		(7,276	)
Stock compensation	0		0	214		0		214		0		0	663		0		663
Other comprehensive loss	0		0	0		682		682		0		0	0		(1,667	)	(1,667	)
Deferred income taxes, net	0		0	0		(204	)	(204	)	0		0	0		500		500
March 28, 2021	(253,761	)	59	257,328		(18,430	)	(14,804	)
March 27, 2022										(240,362	)	60	258,523		34,908		53,129

Shares issued (redeemed)	0		0	318		0		318		0		0	371		0		371
Income attributable to Lee Enterprises, Incorporated	3,227		0	0		0		3,227
Loss attributable to Lee Enterprises, Incorporated										(269	)	0	0		0		(269	)
Stock compensation	0		0	205		0		205		0		0	327		0		327
Other comprehensive loss	0		0	0		682		682		0		0	0		(1,667	)	(1,667	)
Deferred income taxes, net	0		0	0		(205	)	(205	)	0		0	0		500		500
June 27, 2021	(250,534	)	59	257,851		(17,953	)	(10,577	)
June 26, 2022										(240,631	)	60	259,221		33,741		52,391

(Thousands of Dollars)	Accumulated Deficit		Common Stock	Additional paid-in capital		Accumulated Other Comprehensive Loss		Total		Accumulated Deficit		Common Stock	Additional paid-in capital		Accumulated Other Comprehensive Loss		Total

September 30, 2019	(265,423	)	57	255,996		(29,114	)	(38,484	)
September 28, 2020										(268,529	)	58	256,957		(20,050	)	(31,564	)
Shares issued (redeemed)	0		1	(376	)	0		(375	)	0		1	(55	)	0		(54	)
Income attributable to Lee Enterprises, Incorporated	5,320		0	0		0		5,320		15,902		0	0		0		15,902
Stock compensation	0		0	545		0		545		0		0	220		0		220
Other comprehensive income	0		0	0		452		452		0		0	0		1,347		1,347
Deferred income taxes, net	0		0	0		(135	)	(135	)	0		0	0		(205	)	(205	)
December 29, 2019	(260,103	)	58	256,165		(28,797	)	(32,677	)

Shares issued (redeemed)	0		0	(199	)	0		(199	)
Loss attributable to Lee Enterprises, Incorporated	(5,367	)	0	0		0		(5,367	)
Stock compensation	0		0	269		0		269
Other comprehensive loss	0		0	0		451		451
Deferred income taxes, net	0		0	0		(135	)	(135	)
March 29, 2020	(265,470	)	58	256,235		(28,481	)	(37,658	)
December 27, 2020										(252,627	)	59	257,122		(18,908	)	(14,354	)

Shares issued (redeemed)	0		0	242		0		242		0		0	(8	)	0		(8	)
Loss attributable to Lee Enterprises, Incorporated	(1,275	)	0	0		0		(1,275	)	(1,134	)	0	0		0		(1,134	)
Stock compensation	0		0	228		0		228		0		0	214		0		214
Other comprehensive income	0		0	0		451		451		0		0	0		682		682
Deferred income taxes, net	0		0	0		(134	)	(134	)	0		0	0		(204	)	(204	)
June 28, 2020	(266,745	)	58	256,705		(28,163	)	(38,145	)
March 28, 2021										(253,761	)	59	257,328		(18,430	)	(14,804	)

Shares issued (redeemed)										0		0	318		0		318
Income attributable to Lee Enterprises, Incorporated										3,227		0	0		0		3,227
Stock compensation										0		0	205		0		205
Other comprehensive income										0		0	0		682		682
Deferred income taxes, net										0		0	0		(205	)	(205	)
June 27, 2021										(250,534	)	59	257,851		(17,953	)	(10,577	)

		~~39 Weeks Ended~~
		~~June 27,~~
~~(Thousands of Dollars)~~	~~2021~~

~~Goodwill, gross amount~~		~~1,617,174~~
~~Accumulated impairment losses~~		~~(1,288,729~~	)
~~Goodwill, beginning of September 27, 2020~~		~~328,445~~
~~Measurement period adjustments~~		~~1,759~~
~~Goodwill, end of period~~		~~330,204~~

	•	The Company must prepay the Term Loan in an aggregate amount equal to 100% of any Net Cash Proceeds received by the Company or any subsidiary from a sale, transfer, license, lease or other disposition of any property of the Company or any subsidiary in excess of ~~$500,000~~ ~~in any~~ ~~ninety~~ (90~~) day period.~~

	•	~~Beginning on~~ ~~June 28, 2020,~~ ~~the Company is required to prepay the Term Loan with~~ excess cash flow ~~defined as cash on the balance sheet in excess of~~ ~~$20,000,000~~ ~~(“Excess Cash Flow”). Excess Cash Flow is used to prepay the Term Loan, at par, and is due within 50-days of quarter end.~~

	•	If there is a Change of Control (as defined in the Credit Agreement), BH Finance has the option to require the Company to prepay the Term Loan in cash equal to 105% of the unpaid principal balance, plus accrued and unpaid interest.

PENSION PLANS	13 Weeks Ended						39 Weeks Ended						Three months ended						Nine months ended
	June 27,			June 28,			June 27,			June 28,			June 26,			June 27,			June 26,			June 27,
(Thousands of Dollars)	2021			2020			2021			2020			2022			2021			2022			2021

Service cost for benefits earned during the period		633			626			1,899			737			287			633			1,030			1,899
Interest cost on projected benefit obligation		1,787			2,462			5,361			5,113			2,001			1,787			5,939			5,361
Expected return on plan assets		(4,672	)		(4,356	)		(14,016	)		(8,628	)		(4,535	)		(4,672	)		(13,606	)		(14,016	)
Amortization of net loss		1,004			792			3,013			2,376			(687	)		1,004			(2,633	)		3,013
Amortization of prior service benefit		0			(2	)		(1	)		(6	)		212			0			424			(1	)
Curtailment gain														0			0			(1,027	)		0
Pension benefit		(1,248	)		(478	)		(3,744	)		(408	)		(2,722	)		(1,248	)		(9,873	)		(3,744	)

POSTRETIREMENT MEDICAL PLANS	13 Weeks Ended						39 Weeks Ended						Three months ended						Nine months ended
	June 27,			June 28,			June 27,			June 28,			June 26,			June 27,			June 26,			June 27,
(Thousands of Dollars)	2021			2020			2021			2020			2022			2021			2022			2021

Service cost for benefits earned during the period		240			232			690			268			27			240			81			690
Interest cost on projected benefit obligation		239			346			601			523			85			239			255			601
Expected return on plan assets		(252	)		(265	)		(756	)		(795	)		(263	)		(252	)		(789	)		(756	)
Amortization of net gain		(172	)		(186	)		(516	)		(558	)		(249	)		(172	)		(747	)		(516	)
Amortization of prior service benefit		(162	)		(161	)		(485	)		(483	)		(162	)		(162	)		(486	)		(485	)
Curtailment gain		0			0			(23,830	)		0			0			0			0			(23,830	)
Postretirement medical benefit		(107	)		(34	)		(24,296	)		(1,045	)		(562	)		(107	)		(1,686	)		(24,296	)

	Unaudited				Unaudited
	13 Weeks Ended			39 Weeks Ended
	June 28,			June 28,
(Thousands of Dollars, Except Per Share Data)	2020			2020
Total revenues		182,528			630,027
Income (loss) attributable to Lee Enterprises, Incorporated		(1,275	)		19,334
Earnings per share - diluted		(0.20	)		3.40

(Thousands of Dollars and Shares, Except Per Share Data)	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value

Outstanding, September 27, 2020		41			11.40
Exercised		(2	)		11.30
Cancelled		(3	)		11.30
Outstanding, June 27, 2021		36			11.40		0.95		604
Exercisable, June 27, 2021		36			11.40		0.95		604

(Thousands of Shares, Except Per Share Data)	Shares			Weighted Average Grant Date Fair Value

Outstanding, September 27, 2020		155			21.50
Vested		(45	)		27.70
Granted		46			11.20
Cancelled		0			0
Outstanding, June 27, 2021		156			16.70

	13 Weeks Ended						39 Weeks Ended
	June 27,			June 28,			June 27,			June 28,
(Thousands of Dollars)	2021			2020			2021			2020

Net income (loss)		3,737			(727	)		19,532			2
Adjusted to exclude
Income tax expense (benefit)		1,366			368			7,106			(92	)
Non-operating expenses, net		8,680			12,108			16,369			43,933
Equity in earnings of TNI and MNI		(1,689	)		(842	)		(4,902	)		(3,773	)
Loss (gain) on sale of assets and other, net		242			147			6,938			(5,153	)
Depreciation and amortization		10,836			11,201			33,794			25,196
Restructuring costs and other		1,419			2,865			5,880			6,422
Stock compensation		205			228			639			799
Add:
Ownership share of TNI and MNI EBITDA (50%)		1,923			955			5,421			4,464
Adjusted EBITDA		26,719			26,303			90,777			71,798

	•	~~In March 2020, we completed the acquisition of BHMG and~~ ~~Buffalo News~~ for a purchase price of $140,000,000. The acquisition was funded by the Term Loan, as part of a broader comprehensive refinancing of all of our then outstanding debt, as well as cash on our balance sheet.
	•	In the 13 weeks ended March 2020, we disposed of substantially all of the assets of certain of our smaller properties, including four daily newspapers and related print and digital publications, for an aggregate sales price of $3,950,000.

	June 27,	September 27,	Interest
(Thousands of Dollars)	2021	2020	Rates (%)

Term Loan	485,162	538,290	9.0
Less current maturities of long-term debt	1,070	13,733
Total long-term debt	484,092	524,557

Number	Description

31.1	Rule 13a-14(a) Certification of Chief Executive Officer	Attached
31.2	Rule 13a-14(a) Certification of Chief Financial Officer	Attached
32.1	Section 1350 Certification of Chief Executive Officer	Attached
32.2	Section 1350 Certification of Chief Financial Officer	Attached
101.INS	Inline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)	Attached
101.SCH	Inline XBRL Taxonomy Extension Schema Document	Attached
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	Attached
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	Attached
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	Attached
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	Attached
104	Cover Page Interactive Data File (formatted as Inline XBRL and embedded within the Inline XBRL document)	Attached


LEE ENTERPRISES, INCORPORATED

/s/ Timothy R. Millage		August ~~6, 2021~~4, 2022
Timothy R. Millage
Vice President, Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)