Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Jun. 25, 2023 | Jul. 31, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 25, 2023 | |
Document Transition Report | false | |
Entity File Number | 1-6227 | |
Entity Registrant Name | LEE ENTERPRISES, INCORPORATED | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 42-0823980 | |
Entity Address, Address Line One | 4600 E. 53rd Street | |
Entity Address, City or Town | Davenport | |
Entity Address, State or Province | IA | |
Entity Address, Postal Zip Code | 52807 | |
City Area Code | 563 | |
Local Phone Number | 383-2100 | |
Title of 12(b) Security | Common Stock, par value $.01 per share | |
Trading Symbol | LEE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 6,072,392 | |
Entity Central Index Key | 0000058361 | |
Current Fiscal Year End Date | --09-24 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 25, 2023 | Sep. 25, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 16,955 | $ 16,185 |
Accounts receivable, net | 69,182 | 69,522 |
Inventories | 7,933 | 8,265 |
Prepaid and other current assets | 15,098 | 15,151 |
Total current assets | 109,168 | 109,123 |
Investments: | ||
Associated companies | 29,654 | 27,378 |
Other | 5,791 | 5,971 |
Total investments | 35,445 | 33,349 |
Property and equipment: | ||
Land and improvements | 13,098 | 14,505 |
Buildings and improvements | 89,246 | 95,111 |
Equipment | 216,872 | 215,731 |
Construction in process | 2,570 | 1,449 |
Property and equipment, gross | 321,786 | 326,796 |
Less accumulated depreciation | 255,693 | 253,083 |
Property and equipment, net | 66,093 | 73,713 |
Operating lease right-of-use assets | 43,543 | 47,490 |
Goodwill | 329,504 | 329,504 |
Other intangible assets, net | 107,111 | 121,373 |
Other | 12,262 | 9,896 |
Total assets | 722,824 | 744,042 |
Current liabilities: | ||
Current portion of lease liabilities | 7,971 | 7,859 |
Current maturities of long-term debt | 2,013 | 0 |
Accounts payable | 38,466 | 28,608 |
Compensation and other accrued liabilities | 32,332 | 44,740 |
Unearned revenue | 43,875 | 49,929 |
Total current liabilities | 124,657 | 131,136 |
Long-term debt, net of current maturities | 457,981 | 462,554 |
Operating lease liabilities | 39,421 | 46,003 |
Pension obligations | 711 | 966 |
Postretirement and postemployment benefit obligations | 9,465 | 9,221 |
Deferred income taxes | 42,259 | 42,719 |
Income taxes payable | 8,650 | 8,292 |
Withdrawal liabilities and other | 25,081 | 25,914 |
Total liabilities | 708,225 | 726,805 |
Stockholders' equity: | ||
Serial convertible preferred stock, no par value; authorized 500 shares; none issued | 0 | 0 |
Additional paid-in capital | 260,425 | 259,521 |
Accumulated deficit | (264,512) | (261,229) |
Accumulated other comprehensive income | 16,233 | 16,653 |
Total stockholders' equity | 12,207 | 15,005 |
Non-controlling interests | 2,392 | 2,232 |
Total equity | 14,599 | 17,237 |
Total liabilities and equity | 722,824 | 744,042 |
Common Class A | ||
Stockholders' equity: | ||
Common stock | 61 | 60 |
Common Class B | ||
Stockholders' equity: | ||
Common stock | 0 | 0 |
Pension Plan | ||
Property and equipment: | ||
Pension and medical plan assets | 105 | 528 |
Medical Plan | ||
Property and equipment: | ||
Pension and medical plan assets | $ 19,593 | $ 19,066 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Jun. 25, 2023 | Sep. 25, 2022 |
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 500 | 500 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common Class A | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 12,000 | 12,000 |
Common stock, shares issued (in shares) | 6,072 | 5,979 |
Common stock, shares outstanding (in shares) | 6,072 | 5,979 |
Common Class B | ||
Common stock, par value (in dollars per share) | $ 2 | $ 2 |
Common stock, shares authorized (in shares) | 3,000 | 3,000 |
Common stock, shares issued (in shares) | 0 | 0 |
Consolidated Statements of Inco
Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 25, 2023 | Jun. 26, 2022 | Jun. 25, 2023 | Jun. 26, 2022 | |
Operating revenue: | ||||
Total operating revenue | $ 171,310 | $ 195,037 | $ 527,129 | $ 587,333 |
Operating expenses: | ||||
Compensation | 63,582 | 78,126 | 207,859 | 246,333 |
Newsprint and ink | 6,346 | 7,542 | 20,244 | 22,254 |
Other operating expenses | 80,010 | 88,004 | 249,353 | 258,665 |
Depreciation and amortization | 7,478 | 8,818 | 23,097 | 27,445 |
Assets (gain) loss on sales, impairments and other, net | (900) | 1,086 | (4,255) | (11,340) |
Restructuring costs and other | 3,780 | 6,072 | 8,120 | 19,862 |
Total operating expenses | 160,296 | 189,648 | 504,418 | 563,219 |
Equity in earnings of associated companies | 1,194 | 1,050 | 3,534 | 4,211 |
Operating income | 12,208 | 6,439 | 26,245 | 28,325 |
Non-operating (expense) income: | ||||
Interest expense | (10,235) | (10,292) | (31,144) | (31,478) |
Curtailment gain | 0 | 0 | 0 | 1,027 |
Pension withdrawal cost | 0 | 0 | 0 | (2,335) |
Pension and OPEB related benefit and other, net | 555 | 4,205 | 2,255 | 13,525 |
Total non-operating expense, net | (9,680) | (6,087) | (28,889) | (19,261) |
Income (loss) before income taxes | 2,528 | 352 | (2,644) | 9,064 |
Income tax expense (benefit) | 394 | 156 | (1,237) | 2,363 |
Net income (loss) | 2,134 | 196 | (1,407) | 6,701 |
Net income attributable to non-controlling interests | (631) | (465) | (1,876) | (1,588) |
(Loss) income attributable to Lee Enterprises, Incorporated | 1,503 | (269) | (3,283) | 5,113 |
Other comprehensive loss, net of income taxes | (140) | (1,167) | (420) | (8,446) |
Comprehensive income (loss) attributable to Lee Enterprises, Incorporated | $ 1,363 | $ (1,436) | $ (3,703) | $ (3,333) |
Earnings (loss) per common share: | ||||
Basic (in dollars per share) | $ 0.26 | $ (0.05) | $ (0.56) | $ 0.89 |
Diluted (in dollars per share) | $ 0.25 | $ (0.05) | $ (0.56) | $ 0.87 |
Advertising and marketing services | ||||
Operating revenue: | ||||
Total operating revenue | $ 79,120 | $ 91,001 | $ 246,406 | $ 277,388 |
Subscription | ||||
Operating revenue: | ||||
Total operating revenue | 77,557 | 89,048 | 235,838 | 263,915 |
Other | ||||
Operating revenue: | ||||
Total operating revenue | $ 14,633 | $ 14,988 | $ 44,885 | $ 46,030 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Accumulated Deficit | Common Stock | Additional paid-in capital | Accumulated Other Comprehensive Loss |
Beginning Balance at Sep. 26, 2021 | $ 41,097 | $ (259,212) | $ 59 | $ 258,063 | $ 42,187 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Shares issued (redeemed) | (385) | 1 | (386) | ||
Income (loss) attributable to Lee Enterprises, Incorporated | 12,658 | 12,658 | |||
Stock compensation | 186 | 186 | |||
Other comprehensive loss | (8,174) | (8,174) | |||
Deferred income taxes, net | 2,062 | 2,062 | |||
Ending Balance at Dec. 26, 2021 | 47,444 | (246,554) | 60 | 257,863 | 36,075 |
Beginning Balance at Sep. 26, 2021 | 41,097 | (259,212) | 59 | 258,063 | 42,187 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Income (loss) attributable to Lee Enterprises, Incorporated | 5,113 | ||||
Ending Balance at Jun. 26, 2022 | 38,923 | (254,099) | 60 | 259,221 | 33,741 |
Beginning Balance at Dec. 26, 2021 | 47,444 | (246,554) | 60 | 257,863 | 36,075 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Shares issued (redeemed) | (3) | (3) | |||
Income (loss) attributable to Lee Enterprises, Incorporated | (7,276) | (7,276) | |||
Stock compensation | 663 | 663 | |||
Other comprehensive loss | (1,667) | (1,667) | |||
Deferred income taxes, net | 500 | 500 | |||
Ending Balance at Mar. 27, 2022 | 39,661 | (253,830) | 60 | 258,523 | 34,908 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Shares issued (redeemed) | 371 | 371 | |||
Income (loss) attributable to Lee Enterprises, Incorporated | (269) | (269) | |||
Stock compensation | 327 | 327 | |||
Other comprehensive loss | (1,667) | (1,667) | |||
Deferred income taxes, net | 500 | 500 | |||
Ending Balance at Jun. 26, 2022 | 38,923 | (254,099) | 60 | 259,221 | 33,741 |
Beginning Balance at Sep. 25, 2022 | 15,005 | (261,229) | 60 | 259,521 | 16,653 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Shares issued (redeemed) | (383) | (383) | |||
Income (loss) attributable to Lee Enterprises, Incorporated | 1,099 | 1,099 | |||
Stock compensation | 349 | 349 | |||
Other comprehensive loss | (200) | (200) | |||
Deferred income taxes, net | 60 | 60 | |||
Ending Balance at Dec. 25, 2022 | 15,930 | (260,130) | 60 | 259,487 | 16,513 |
Beginning Balance at Sep. 25, 2022 | 15,005 | (261,229) | 60 | 259,521 | 16,653 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Income (loss) attributable to Lee Enterprises, Incorporated | (3,283) | ||||
Ending Balance at Jun. 25, 2023 | 12,207 | (264,512) | 61 | 260,425 | 16,233 |
Beginning Balance at Dec. 25, 2022 | 15,930 | (260,130) | 60 | 259,487 | 16,513 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Shares issued (redeemed) | (97) | (97) | |||
Income (loss) attributable to Lee Enterprises, Incorporated | (5,885) | (5,885) | |||
Stock compensation | 574 | 574 | |||
Other comprehensive loss | (200) | (200) | |||
Deferred income taxes, net | 60 | 60 | |||
Ending Balance at Mar. 26, 2023 | 10,382 | (266,015) | 60 | 259,964 | 16,373 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Shares issued (redeemed) | 1 | 0 | |||
Income (loss) attributable to Lee Enterprises, Incorporated | 1,503 | 1,503 | |||
Stock compensation | 461 | 461 | |||
Other comprehensive loss | (200) | (200) | |||
Deferred income taxes, net | 60 | 60 | |||
Ending Balance at Jun. 25, 2023 | $ 12,207 | $ (264,512) | $ 61 | $ 260,425 | $ 16,233 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 25, 2023 | Jun. 26, 2022 | |
Cash provided by (required for) operating activities: | ||
Net (loss) income | $ (1,407) | $ 6,701 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 23,097 | 27,445 |
Curtailment gain | 0 | (1,027) |
Pension withdrawal cost | 0 | 2,335 |
Stock compensation expense | 1,384 | 1,026 |
Assets (gain) loss on sales, impairments and other, net | (4,255) | (11,340) |
Gain on sale of investment | (1,736) | 0 |
Deferred income taxes | (460) | 62 |
Return of letters of credit collateral | 778 | 2,451 |
Other, net | (1,705) | (1,492) |
Changes in operating assets and liabilities: | ||
Decrease (increase) in receivables | 124 | (8,004) |
Decrease in inventories and other | (348) | (2,369) |
(Decrease) increase in accounts payable and other accrued liabilities | (14,435) | 1,775 |
Decrease in pension and other postretirement and postemployment benefit obligations | (186) | (13,910) |
Change in income taxes payable | 358 | (2,986) |
Other, net | (2,693) | 49 |
Net cash (required for) provided by operating activities | (1,484) | 716 |
Cash provided by investing activities: | ||
Purchases of property and equipment | (3,791) | (5,738) |
Proceeds from sales of assets | 7,231 | 14,824 |
Distributions less than earnings of TNI and MNI | (234) | (276) |
Other, net | 1,873 | (295) |
Net cash provided by investing activities | 5,079 | 8,515 |
Cash required for financing activities: | ||
Payments on long-term debt | (2,560) | (20,062) |
Common stock transactions, net | (265) | 380 |
Net cash required for financing activities | (2,825) | (19,682) |
Net increase (decrease) in cash and cash equivalents | 770 | (10,451) |
Cash and cash equivalents: | ||
Beginning of period | 16,185 | 26,112 |
End of period | $ 16,955 | $ 15,661 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Jun. 25, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 25, 2023, 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 2022 Annual Report on Form 10-K. The Company's fiscal year ends on the last Sunday in September. Fiscal year 2023 ends on September 24, 2023, and fiscal year 2022 ended September 25, 2022. Fiscal year 2023 and 2022 are 52-week years with 13 weeks in each quarter. Because of seasonal and other factors, the results of operations for the three and nine months ended June 25, 2023, are not necessarily indicative of the results to be expected for the full year. The Consolidated Financial Statements include our accounts and those of our wholly owned subsidiaries, as well as our 82.5% interest in INN Partners, L.C. (“BLOX Digital", formerly "TownNews”). Our 50% interest in TNI Partners ("TNI") and our 50% interest in Madison Newspapers, Inc. ("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. |
Revenue
Revenue | 9 Months Ended |
Jun. 25, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | REVENUE The following table presents our revenue disaggregated by source: Three months ended Nine months ended (Thousands of Dollars) June 25, June 26, June 25, June 26, Operating revenue: Print advertising revenue 29,216 44,814 102,503 145,032 Digital advertising revenue 49,904 46,187 143,903 132,356 Advertising and marketing services revenue 79,120 91,001 246,406 277,388 Print subscription revenue 61,842 78,079 193,799 234,962 Digital subscription revenue 15,715 10,969 42,039 28,953 Subscription revenue 77,557 89,048 235,838 263,915 Print other revenue 9,773 10,671 30,542 32,430 Digital other revenue 4,860 4,317 14,343 13,600 Other revenue 14,633 14,988 44,885 46,030 Total operating revenue 171,310 195,037 527,129 587,333 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. 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. Revenue recognized in the nine months ended June 25, 2023, that was included in the contract liability as of September 25, 2022, was $45.5 million. Accounts receivable, excluding allowance for credit losses were $74.2 million and $74.8 million as of June 25, 2023, and September 25, 2022 , respectively. Allowance for credit losses was $5.0 million and $5.2 million as of June 25, 2023, and September 25, 2022 , respectively. Sales commissions are expensed as incurred as the associated contractual periods are one year or less. These costs are recorded within compensation. 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. |
Investments In Associated Compa
Investments In Associated Companies | 9 Months Ended |
Jun. 25, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments In Associated Companies | INVESTMENTS IN ASSOCIATED COMPANIES TNI Partners In Tucson, Arizona, TNI, acting as agent for our subsidiary, Star Publishing Company (“Star Publishing”), and Gannets Co. Inc.'s subsidiary Citizen Publishing Company (“Citizen”), is responsible for printing, delivery, advertising, and subscription activities of the Arizona Daily Star as well as the related digital platforms and specialty publications. TNI collects all receipts and income and pays substantially all operating expenses incident to the partnership's operations and publication of the newspaper and other media. Income or loss of TNI (before income taxes) is allocated equally to Star Publishing and Citizen. Summarized results of TNI are as follows: Three months ended Nine months ended (Thousands of Dollars) June 25, June 26, June 25, June 26, Operating revenue 7,244 8,229 23,954 25,805 Operating expenses 5,677 6,492 19,041 19,365 Operating income 1,567 1,737 4,913 6,440 Net Income 1,581 1,737 5,247 6,440 Equity in earnings of TNI 791 869 2,624 3,220 TNI makes periodic distributions of its earnings and for the three months ended June 25, 2023, and June 26, 2022, we received $0.4 million and $0.7 million in distributions, respectively. In the nine months ended June 25, 2023 and June 26, 2022, we received $2.8 million and $2.9 million in distributions, respectively. Madison Newspapers, Inc. We have a 50% ownership interest in MNI, which publishes daily and Sunday newspapers, and other publications in Madison, Wisconsin, and other Wisconsin locations, and operates related digital platforms. Net income or loss of MNI (after income taxes) is allocated equally to us and The Capital Times Company (“TCT”). MNI conducts its business under the trade name Capital Newspapers. Summarized results of MNI are as follows: Three months ended Nine months ended (Thousands of Dollars) June 25, June 26, June 25, June 26, Operating revenue 10,963 11,921 33,470 35,677 Operating expenses, excluding restructuring costs, depreciation and amortization (1) 8,470 9,682 26,496 28,402 Restructuring costs 10 122 137 122 Depreciation and amortization 129 167 402 507 Operating income 2,354 1,950 6,435 6,646 Net income 807 362 1,821 1,982 Equity in earnings of MNI 404 181 911 991 (1) Amounts were reclassed to align with current year presentation MNI makes periodic distributions of its earnings and in the three months ended June 25, 2023 and June 26, 2022, we received $0.2 million in distributions for both periods. In the nine months ended June 25, 2023 and June 26, 2022 we received distributions of $0.5 million and $1.0 million, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Jun. 25, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill And Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill and identified intangible assets consist of the following: (Thousands of Dollars) June 25, September 25, Goodwill, beginning of period 329,504 330,204 Impairment — (700) Goodwill, end of period 329,504 329,504 Non-amortized intangible assets: Mastheads 26,346 26,346 Amortizable intangible assets: Customer and newspaper subscriber lists 321,804 323,568 Less accumulated amortization (241,039) (228,541) 80,765 95,027 Total intangibles, net 436,615 450,877 The weighted average amortization period for amortizable assets is 11.70 years. |
Debt
Debt | 9 Months Ended |
Jun. 25, 2023 | |
Debt Disclosure [Abstract] | |
Debt | DEBTThe Company has debt consisting of a single 25-year term loan with BH Finance LLC, with an aggregate principal balance of $460.0 million at a 9% annual fixed rate and maturing on March 16, 2045 (referred to herein as “Credit Agreement” and “Term Loan”). On June 25, 2023, the fair value is $462.4 million. This represents a level 2 fair value measurement. During the nine months ended June 25, 2023, we made principal debt payments of $2.6 million. Future payments are contingent on the Company's ability to generate future excess cash flow, as defined in the Credit Agreement. Subsequent to June 25, 2023, the Company will make a $2.0 million payment related to net proceeds received from the sale of non-core assets as required by our Credit Agreement. |
Pension, Postretirement and Pos
Pension, Postretirement and Postemployment Defined Benefit Plans | 9 Months Ended |
Jun. 25, 2023 | |
Retirement Benefits [Abstract] | |
Pension, Postretirement and Postemployment Defined Benefit Plans | PENSION, POSTRETIREMENT AND POSTEMPLOYMENT DEFINED BENEFIT PLANS We have a defined benefit pension plan that covers certain employees, including plans established under collective bargaining agreements. Additionally, we provide retiree medical and life insurance benefits under postretirement plans at several of our operating locations. Through June 25, 2023, our liability and related expense for benefits under the plans are recorded over the service period of employees based upon annual actuarial calculations. The net periodic pension and postretirement cost (benefit) components for our plans are as follows: PENSION PLANS Three months ended Nine months ended (Thousands of Dollars) June 25, June 26, June 25, June 26, Service cost for benefits earned during the period 5 287 15 1,030 Interest cost on projected benefit obligation 2,592 2,001 7,776 5,939 Expected return on plan assets (2,548) (4,535) (7,644) (13,606) Amortization of net (gain) loss 2 (687) 6 (2,633) Amortization of prior service benefit 213 212 639 424 Curtailment gain — — (1,027) Pension cost (benefit) 264 (2,722) 792 (9,873) POSTRETIREMENT MEDICAL PLANS Three months ended Nine months ended (Thousands of Dollars) June 25, June 26, June 25, June 26, Service cost for benefits earned during the period 17 27 51 81 Interest cost on projected benefit obligation 149 85 447 255 Expected return on plan assets (295) (263) (885) (789) Amortization of net gain (254) (249) (762) (747) Amortization of prior service benefit (162) (162) (486) (486) Postretirement medical benefit (545) (562) (1,635) (1,686) In the nine months ended June 25, 2023 and June 26, 2022, we made no contributions to our pension plans. W e have no required contributions to our pension plans for 2023. Multiemployer Pension Plans In prior periods, the Company effectuated withdrawals from several multiemployer plans. As of June 25, 2023, and September 25, 2022, we had $23.1 million and $25.0 million of accrued withdrawal liabilities. The liabilities reflect the estimated value of payments to the fund, payable over 20 years. |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 25, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES We recorded an income tax expense of $0.4 million related to income before taxes of $2.5 million for the three months ended June 25, 2023, and an income tax benefit of $1.2 million related to a loss before income taxes of $2.6 million for the nine months ended June 25, 2023. We recorded an income tax expense of $0.2 million related to income before taxes of $0.4 million for the three months ended June 26, 2022 and income tax expense of $2.4 million related to income before income taxes of $9.1 million for the nine months ended June 26, 2022. The effective income tax rate for the three and nine months ended June 25, 2023, were 15.6% and 46.8%, respectively. The effective income tax rate for the three and nine months ended June 26, 2022, were 44.3% and 26.1%, respectively. The primary differences between these rates and the U.S. federal statutory rate of 21% are because of state taxes, non-deductible expenses and adjustments to reserves for uncertain tax positions, including any related interest. 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 2015. |
Earnings Per Common Share
Earnings Per Common Share | 9 Months Ended |
Jun. 25, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | EARNINGS PER COMMON SHARE The following table sets forth the computation of basic and diluted earnings per common share: Three months ended Nine months ended (Thousands of Dollars and Shares, Except Per Share Data) June 25, June 26, June 25, June 26, Income (loss) attributable to Lee Enterprises, Incorporated: 1,503 (269) (3,283) 5,113 Weighted average common shares 6,051 5,965 6,045 5,935 Less weighted average restricted Common Stock (173) (170) (172) (168) Basic average common shares 5,878 5,795 5,873 5,767 Dilutive stock options and restricted Common Stock 30 — — 93 Diluted average common shares 5,908 5,795 5,873 5,860 Earnings per common share: Basic 0.26 (0.05) (0.56) 0.89 Diluted 0.25 (0.05) (0.56) 0.87 For the three months ended June 25, 2023, 136,853 shares were excluded 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 months ended June 26, 2022, no shares were considered in the computation of diluted earnings per common share because the Company recorded net losses. For the nine months ended June 25, 2023, no shares were considered in the computation of diluted earnings per common share because the Company recorded net losses. For the nine months ended June 25, 2022, 74,804 shares were excluded in the computation of diluted earnings per common share because their inclusion would result in an anti-dilutive effect on per share amounts. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 9 Months Ended |
Jun. 25, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | COMMITMENTS AND CONTINGENT LIABILITIES Legal Proceedings 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 |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Jun. 25, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited interim Consolidated Financial Statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for quarterly reports. In the opinion of management, these financial statements contain all adjustments (consisting of only normal recurring items) necessary to present fairly the financial position of Lee Enterprises, Incorporated and its subsidiaries (the “Company”) as of June 25, 2023, 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 2022 Annual Report on Form 10-K. The Company's fiscal year ends on the last Sunday in September. Fiscal year 2023 ends on September 24, 2023, and fiscal year 2022 ended September 25, 2022. Fiscal year 2023 and 2022 are 52-week years with 13 weeks in each quarter. Because of seasonal and other factors, the results of operations for the three and nine months ended June 25, 2023, are not necessarily indicative of the results to be expected for the full year. The Consolidated Financial Statements include our accounts and those of our wholly owned subsidiaries, as well as our 82.5% interest in INN Partners, L.C. (“BLOX Digital", formerly "TownNews”). Our 50% interest in TNI Partners ("TNI") and our 50% interest in Madison Newspapers, Inc. ("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. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Jun. 25, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Disaggregated by Source | The following table presents our revenue disaggregated by source: Three months ended Nine months ended (Thousands of Dollars) June 25, June 26, June 25, June 26, Operating revenue: Print advertising revenue 29,216 44,814 102,503 145,032 Digital advertising revenue 49,904 46,187 143,903 132,356 Advertising and marketing services revenue 79,120 91,001 246,406 277,388 Print subscription revenue 61,842 78,079 193,799 234,962 Digital subscription revenue 15,715 10,969 42,039 28,953 Subscription revenue 77,557 89,048 235,838 263,915 Print other revenue 9,773 10,671 30,542 32,430 Digital other revenue 4,860 4,317 14,343 13,600 Other revenue 14,633 14,988 44,885 46,030 Total operating revenue 171,310 195,037 527,129 587,333 |
Investments In Associated Com_2
Investments In Associated Companies (Tables) | 9 Months Ended |
Jun. 25, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summarized Results of TNI and MNI | Summarized results of TNI are as follows: Three months ended Nine months ended (Thousands of Dollars) June 25, June 26, June 25, June 26, Operating revenue 7,244 8,229 23,954 25,805 Operating expenses 5,677 6,492 19,041 19,365 Operating income 1,567 1,737 4,913 6,440 Net Income 1,581 1,737 5,247 6,440 Equity in earnings of TNI 791 869 2,624 3,220 Summarized results of MNI are as follows: Three months ended Nine months ended (Thousands of Dollars) June 25, June 26, June 25, June 26, Operating revenue 10,963 11,921 33,470 35,677 Operating expenses, excluding restructuring costs, depreciation and amortization (1) 8,470 9,682 26,496 28,402 Restructuring costs 10 122 137 122 Depreciation and amortization 129 167 402 507 Operating income 2,354 1,950 6,435 6,646 Net income 807 362 1,821 1,982 Equity in earnings of MNI 404 181 911 991 (1) Amounts were reclassed to align with current year presentation |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Jun. 25, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill and Intangible Assets | Goodwill and identified intangible assets consist of the following: (Thousands of Dollars) June 25, September 25, Goodwill, beginning of period 329,504 330,204 Impairment — (700) Goodwill, end of period 329,504 329,504 Non-amortized intangible assets: Mastheads 26,346 26,346 Amortizable intangible assets: Customer and newspaper subscriber lists 321,804 323,568 Less accumulated amortization (241,039) (228,541) 80,765 95,027 Total intangibles, net 436,615 450,877 |
Pension, Postretirement and P_2
Pension, Postretirement and Postemployment Defined Benefit Plans (Tables) | 9 Months Ended |
Jun. 25, 2023 | |
Retirement Benefits [Abstract] | |
Schedule of Net Periodic Pension and Postretirement Cost (Benefit) Components | The net periodic pension and postretirement cost (benefit) components for our plans are as follows: PENSION PLANS Three months ended Nine months ended (Thousands of Dollars) June 25, June 26, June 25, June 26, Service cost for benefits earned during the period 5 287 15 1,030 Interest cost on projected benefit obligation 2,592 2,001 7,776 5,939 Expected return on plan assets (2,548) (4,535) (7,644) (13,606) Amortization of net (gain) loss 2 (687) 6 (2,633) Amortization of prior service benefit 213 212 639 424 Curtailment gain — — (1,027) Pension cost (benefit) 264 (2,722) 792 (9,873) POSTRETIREMENT MEDICAL PLANS Three months ended Nine months ended (Thousands of Dollars) June 25, June 26, June 25, June 26, Service cost for benefits earned during the period 17 27 51 81 Interest cost on projected benefit obligation 149 85 447 255 Expected return on plan assets (295) (263) (885) (789) Amortization of net gain (254) (249) (762) (747) Amortization of prior service benefit (162) (162) (486) (486) Postretirement medical benefit (545) (562) (1,635) (1,686) |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 9 Months Ended |
Jun. 25, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted earnings per common share: Three months ended Nine months ended (Thousands of Dollars and Shares, Except Per Share Data) June 25, June 26, June 25, June 26, Income (loss) attributable to Lee Enterprises, Incorporated: 1,503 (269) (3,283) 5,113 Weighted average common shares 6,051 5,965 6,045 5,935 Less weighted average restricted Common Stock (173) (170) (172) (168) Basic average common shares 5,878 5,795 5,873 5,767 Dilutive stock options and restricted Common Stock 30 — — 93 Diluted average common shares 5,908 5,795 5,873 5,860 Earnings per common share: Basic 0.26 (0.05) (0.56) 0.89 Diluted 0.25 (0.05) (0.56) 0.87 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details) | Jun. 25, 2023 |
TNI Partners | |
Noncontrolling Interest [Line Items] | |
Equity method investment, ownership percentage | 50% |
MNI | |
Noncontrolling Interest [Line Items] | |
Equity method investment, ownership percentage | 50% |
INN Partners, L.C. | |
Noncontrolling Interest [Line Items] | |
Noncontrolling interest, ownership percentage by parent | 82.50% |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 25, 2023 | Jun. 26, 2022 | Jun. 25, 2023 | Jun. 26, 2022 | |
Operating revenue: | ||||
Total operating revenue | $ 171,310 | $ 195,037 | $ 527,129 | $ 587,333 |
Advertising and marketing services revenue | ||||
Operating revenue: | ||||
Total operating revenue | 79,120 | 91,001 | 246,406 | 277,388 |
Advertising and marketing services revenue | Print advertising revenue | ||||
Operating revenue: | ||||
Total operating revenue | 29,216 | 44,814 | 102,503 | 145,032 |
Advertising and marketing services revenue | Digital advertising revenue | ||||
Operating revenue: | ||||
Total operating revenue | 49,904 | 46,187 | 143,903 | 132,356 |
Subscription revenue | ||||
Operating revenue: | ||||
Total operating revenue | 77,557 | 89,048 | 235,838 | 263,915 |
Subscription revenue | Print advertising revenue | ||||
Operating revenue: | ||||
Total operating revenue | 61,842 | 78,079 | 193,799 | 234,962 |
Subscription revenue | Digital advertising revenue | ||||
Operating revenue: | ||||
Total operating revenue | 15,715 | 10,969 | 42,039 | 28,953 |
Other revenue | ||||
Operating revenue: | ||||
Total operating revenue | 14,633 | 14,988 | 44,885 | 46,030 |
Other revenue | Print advertising revenue | ||||
Operating revenue: | ||||
Total operating revenue | 9,773 | 10,671 | 30,542 | 32,430 |
Other revenue | Digital advertising revenue | ||||
Operating revenue: | ||||
Total operating revenue | $ 4,860 | $ 4,317 | $ 14,343 | $ 13,600 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 25, 2023 | Sep. 25, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Contract liability revenue recognized | $ 45.5 | |
Accounts receivable, excluding allowance for credit loss | 74.2 | $ 74.8 |
Allowance for credit loss | $ 5 | $ 5.2 |
Investments In Associated Com_3
Investments In Associated Companies - Summarized Financial Results (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 25, 2023 | Jun. 26, 2022 | Jun. 25, 2023 | Jun. 26, 2022 | |
Schedule of Equity Method Investments [Line Items] | ||||
Operating revenue | $ 171,310 | $ 195,037 | $ 527,129 | $ 587,333 |
Operating expenses | 160,296 | 189,648 | 504,418 | 563,219 |
Restructuring costs | 3,780 | 6,072 | 8,120 | 19,862 |
Depreciation and amortization | 7,478 | 8,818 | 23,097 | 27,445 |
Operating income | 12,208 | 6,439 | 26,245 | 28,325 |
Net income | 2,134 | 196 | (1,407) | 6,701 |
Equity in earnings | 1,194 | 1,050 | 3,534 | 4,211 |
TNI Partners | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity in earnings | 791 | 869 | 2,624 | 3,220 |
MNI | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity in earnings | 404 | 181 | 911 | 991 |
TNI Partners | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Operating revenue | 7,244 | 8,229 | 23,954 | 25,805 |
Operating expenses | 5,677 | 6,492 | 19,041 | 19,365 |
Operating income | 1,567 | 1,737 | 4,913 | 6,440 |
Net income | 1,581 | 1,737 | 5,247 | 6,440 |
MNI | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Operating revenue | 10,963 | 11,921 | 33,470 | 35,677 |
Operating expenses | 8,470 | 9,682 | 26,496 | 28,402 |
Restructuring costs | 10 | 122 | 137 | 122 |
Depreciation and amortization | 129 | 167 | 402 | 507 |
Operating income | 2,354 | 1,950 | 6,435 | 6,646 |
Net income | $ 807 | $ 362 | $ 1,821 | $ 1,982 |
Investments In Associated Com_4
Investments In Associated Companies - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 25, 2023 | Jun. 26, 2022 | Jun. 25, 2023 | Jun. 26, 2022 | |
TNI Partners | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Distribution from equity method investments | $ 0.4 | $ 0.7 | $ 2.8 | $ 2.9 |
MNI | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Distribution from equity method investments | $ 0.2 | $ 0.2 | $ 0.5 | $ 1 |
Equity method investments, ownership percentage | 50% | 50% |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets -Schedule of Goodwill and Identified Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 25, 2023 | Sep. 25, 2022 | Sep. 26, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 329,504 | $ 329,504 | $ 330,204 |
Impairment | 0 | (700) | |
Amortizable intangible assets: | |||
Total intangibles, net | 436,615 | 450,877 | |
Customer and newspaper subscriber lists | |||
Amortizable intangible assets: | |||
Customer and newspaper subscriber lists | 321,804 | 323,568 | |
Less accumulated amortization | (241,039) | (228,541) | |
Amortizable intangible assets, net | 80,765 | 95,027 | |
Mastheads | |||
Non-amortized intangible assets: | |||
Mastheads | $ 26,346 | $ 26,346 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Narrative (Details) | 9 Months Ended |
Jun. 25, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Weighted average amortization period (in years) | 11 years 8 months 12 days |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Mar. 16, 2020 | Jun. 25, 2023 | Jun. 26, 2022 | Sep. 22, 2023 | |
Debt Instrument [Line Items] | ||||
Payments on long-term debt | $ 2,560 | $ 20,062 | ||
Forecast | ||||
Debt Instrument [Line Items] | ||||
Principal repayments on long term borrowings due to excess cash flow | $ 2,000 | |||
Credit Agreement | Secured Term Loan | BH Finance | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, term (years) | 25 years | |||
Long-term debt | $ 460,000 | |||
Long-term debt, interest rate | 9% | |||
Payments on long-term debt | 2,600 | |||
Credit Agreement | Secured Term Loan | BH Finance | Fair Value, Inputs, Level 2 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, fair value | $ 462,400 |
Pension, Postretirement and P_3
Pension, Postretirement and Postemployment Defined Benefit Plans - Net Periodic Cost (Benefit) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 25, 2023 | Jun. 26, 2022 | Jun. 25, 2023 | Jun. 26, 2022 | |
Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost for benefits earned during the period | $ 5 | $ 287 | $ 15 | $ 1,030 |
Interest cost on projected benefit obligation | 2,592 | 2,001 | 7,776 | 5,939 |
Expected return on plan assets | (2,548) | (4,535) | (7,644) | (13,606) |
Amortization of net gain (loss) | 2 | (687) | 6 | (2,633) |
Amortization of prior service benefit | 213 | 212 | 639 | 424 |
Curtailment gain | 0 | 0 | (1,027) | |
Pension and postretirement medical cost (benefit) | 264 | (2,722) | 792 | (9,873) |
Postretirement Medical Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost for benefits earned during the period | 17 | 27 | 51 | 81 |
Interest cost on projected benefit obligation | 149 | 85 | 447 | 255 |
Expected return on plan assets | (295) | (263) | (885) | (789) |
Amortization of net gain (loss) | (254) | (249) | (762) | (747) |
Amortization of prior service benefit | (162) | (162) | (486) | (486) |
Pension and postretirement medical cost (benefit) | $ (545) | $ (562) | $ (1,635) | $ (1,686) |
Pension, Postretirement and P_4
Pension, Postretirement and Postemployment Defined Benefit Plans - Narrative (Details) - USD ($) | 9 Months Ended | ||
Jun. 25, 2023 | Jun. 26, 2022 | Sep. 25, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Multiemployer plans, withdrawal obligation | $ 23,100,000 | $ 25,000,000 | |
Multiemployer plans, withdrawal obligation, period (years) | 20 years | ||
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, contributions by employer | $ 0 | $ 0 | |
Defined benefit plan, expected future employer contributions, next fiscal year | $ 0 |
Income Taxes (Details)
Income Taxes (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 25, 2023 USD ($) jurisdiction | Jun. 26, 2022 USD ($) | Jun. 25, 2023 USD ($) jurisdiction | Jun. 26, 2022 USD ($) | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 394 | $ 156 | $ (1,237) | $ 2,363 |
Loss (Income) before taxes | $ 2,500 | $ 400 | $ (2,600) | $ 9,100 |
Effective income tax rate | 15.60% | 44.30% | 46.80% | 26.10% |
Number of state and local jurisdictions | jurisdiction | 27 | 27 |
Earnings Per Common Share - Com
Earnings Per Common Share - Computation of Basic and Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Jun. 25, 2023 | Mar. 26, 2023 | Dec. 25, 2022 | Jun. 26, 2022 | Mar. 27, 2022 | Dec. 26, 2021 | Jun. 25, 2023 | Jun. 26, 2022 | |
Earnings Per Share [Abstract] | ||||||||
Income (loss) attributable to Lee Enterprises, Incorporated: | $ 1,503 | $ (5,885) | $ 1,099 | $ (269) | $ (7,276) | $ 12,658 | $ (3,283) | $ 5,113 |
Weighted average common shares (in shares) | 6,051 | 5,965 | 6,045 | 5,935 | ||||
Less weighted average restricted Common Stock (in shares) | (173) | (170) | (172) | (168) | ||||
Basic average common shares (in shares) | 5,878 | 5,795 | 5,873 | 5,767 | ||||
Dilutive stock options and restricted Common Stock (in shares) | 30 | 0 | 0 | 93 | ||||
Diluted average common shares (in shares) | 5,908 | 5,795 | 5,873 | 5,860 | ||||
Earnings per common share: | ||||||||
Basic (in dollars per share) | $ 0.26 | $ (0.05) | $ (0.56) | $ 0.89 | ||||
Diluted (in dollars per share) | $ 0.25 | $ (0.05) | $ (0.56) | $ 0.87 |
Earnings Per Common Share - Nar
Earnings Per Common Share - Narrative (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Jun. 25, 2023 | Jun. 26, 2022 | Jun. 25, 2023 | Jun. 26, 2022 | |
Earnings Per Share [Abstract] | ||||
Anti-dilutive shares excluded (in shares) | 136,853 | 0 | 0 | 74,804 |