LEE ENTERPRISES, Inc

1 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 28, 2026, 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 2025 Annual Report on Form 10-K.

Our fiscal year ends on the last Sunday in September. Fiscal year 2026 ends September 27, 2026, and fiscal year 2025 ended September 28, 2025. Fiscal years 2026 and 2025 include 52 weeks of operations. Because of seasonal and other factors, the results of operations for the three and nine months ended June 28, 2026, 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.

New accounting pronouncements not yet adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances annual income tax disclosures by requiring additional disaggregated information about the effective tax rate reconciliation and income taxes paid. The guidance is effective for annual periods beginning after December 15, 2024. We will adopt this guidance for our annual consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, and in January 2025 issued ASU 2025-01 to clarify the effective date. The guidance requires additional disaggregation of certain expense captions presented on the statement of operations. The guidance is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. We expect to enhance our expense disclosures upon adoption.

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, which clarifies the accounting acquirer guidance for certain VIE transactions. The guidance is effective for annual periods beginning after December 15, 2026, including interim periods within those annual periods. We are evaluating the guidance and do not expect it to have a material impact on our consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient for estimating expected credit losses on current accounts receivable and current contract assets arising from revenue transactions. The guidance is effective for annual reporting periods beginning after December 15, 2025, including interim periods within those annual periods, with early adoption permitted. We are evaluating the guidance and do not expect it to have a material impact on our consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The amendments clarify the accounting for internal-use software and provide targeted improvements to the capitalization guidance. The ASU is effective for annual reporting periods beginning after December 15, 2027, including interim periods within those annual reporting periods. Early adoption is permitted. We are currently evaluating the guidance and assessing the impact on our consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which improves the organization and navigability of interim reporting guidance and clarifies when such guidance applies. The amendments are not intended to significantly change interim reporting or expand or reduce current interim disclosure requirements. The guidance is effective for interim periods within fiscal years beginning after December 15, 2027. We are evaluating the guidance and do not expect it to fundamentally change our interim reporting.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements, which makes technical corrections, clarifications and other incremental improvements to U.S. GAAP. The guidance is effective for annual reporting periods beginning after December 15, 2026, including interim periods within those annual periods, with early adoption permitted. We are evaluating the guidance and assessing the impact on our consolidated financial statements.

2 AGREEMENT WITH HOFFMANN MEDIA GROUP ("HMG")

On May 14, 2026, we entered into afive-year management agreement with HMG, effective June 1, 2026, under which we manage certain HMG-owned newspaper publications and related digital properties. HMG is owned by David H. Hoffmann, our Chairman and majority shareholder ("Mr. Hoffmann").

Under the agreement, we receive a fixed management fee of $135,000 per fiscal quarter, a variable fee based on the EBITDA of certain acquired publications, and reimbursement of shared service costs at cost. HMG retains ownership of the publications and all related revenues and remains responsible for working capital and operating obligations.

The agreement was approved by our Board of Directors in accordance with our related-party transaction policies. Mr. Hoffmann recused himself from the Board's review and approval of the agreement.

3 PRIVATE PLACEMENT FINANCING AND RELATED AGREEMENTS

On February 5, 2026, we issued an aggregate of 16,000,000 shares of Common Stock, consisting of 15,384,615 shares of Common Stock to certain investors and 615,385 shares of Common Stock to service providers as reimbursement for certain expenses incurred by certain investors, at a price of $3.25 per share in a private placement pursuant to the private placement agreement by and among the Company and the investors ("Private Placement"). The aggregate gross proceeds from the Private Placement were $50.0 million before deducting offering expenses.

The investors also agreed to a lock-up with respect to the shares for a period of 180 days and standstill period oftwelve months, subject to certain exceptions. With respect to the standstill, certain investors are each able to purchase up to 600,000 shares of Common Stock during the standstill period. Since the closing of the Private Placement, Mr. Hoffmann purchased the full 600,000 shares through June 28, 2026 bringing his percentage ownership to 54.5%.

Further, in connection with the closing of the Private Placement, we amended our Certificate of Incorporation, increasing the number of authorized shares from 12,000,000 to 40,000,000.

Registration Rights Agreement

We entered into a registration rights agreement pursuant to which we agreed to provide certain customary registration rights, including the registration of the Shares for resale. We were required to use commercially reasonable efforts to file a registration statement with the Securities and Exchange

Commission covering the resale by the investors of their shares within 60 days following the closing and an S-3 was filed on March 6, 2026.

Financing costs

Costs related to the transaction are $4.7 million and partially offset the Private Placement proceeds of $50.0 million in "Additional Paid-in Capital" on the Consolidated Balance Sheets.

4 REVENUE

The following table presents our revenue disaggregated by source:

Recognition principles

Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for goods or services. Revenues are recognized as performance obligations are satisfied either at a point in time, such as when an advertisement is published, or over time, such as audience subscription revenue.

Advertising and marketing services revenue

Print advertising revenue includes amounts charged to customers for retail, national, or classified advertising space purchased in our newspapers, advertising marketing services and other print advertising products such as preprint inserts and direct mail.

Digital advertising revenue includes amounts for advertisements placed on our digital platforms, amounts charged to customers for digital marketing services which include: audience extension, search engine optimization, search engine marketing, web and mobile production, social media services and reputation monitoring and management.

Payments for print and digital advertising revenue are due upon completion of our performance obligations at previously agreed upon rates. In instances where the timing of revenue recognition differs from the timing of invoicing, such timing differences are not large. As a result, we have determined that our contracts do not include a significant financing component. Depending on the product, revenue is recognized over time or at the point in time in which performance obligations are met.

Subscription revenue

Print subscription revenue results from the sale of print editions of newspapers to individual subscribers and to sales outlets that resell the newspapers. Print subscriptions include full access to all forms of content provided. Single copy revenue is also included in subscription revenue. Subscription revenue from single copy and home delivery subscriptions are recognized at the point in time the publications are delivered.

Digital subscription revenue results from the sale of digital-only access to our content delivered via digital products purchased. Digital subscription revenue is recognized over time as performance obligations are met throughout the subscription period.

Payments for print and digital subscription revenue are typically collected in advance, or for contract periods of one year or less, and result in an unearned revenue liability that is reduced when revenue is recognized.

Other revenue

Other revenue primarily consists of digital services, commercial printing and delivery of third party products. Digital services revenues, which are primarily delivered through BLOX Digital, are primarily comprised of contractual agreements to provide web hosting and content management services. As such, digital services revenue is recognized over the contract period. Prices for digital services are agreed upon in advance of the contract beginning and are typically billed in arrears on a monthly basis. Commercial printing and delivery revenue is recognized when the product is delivered to the customer or to the third party's subscriber.

Contract Liabilities

Our primary source of unearned revenue is from subscriptions paid in advance of the service provided. We expect 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 our only contract liability. Revenue recognized in the nine months ended June 28, 2026, that was included in the contract liability as of September 28, 2025, was $23.6 million.

Accounts receivable, excluding allowance for credit losses, was $48.6 million and $59.4 million as of June 28, 2026, and September 28, 2025, respectively. Allowance for credit losses was $3.7 million and $4.8 million as of June 28, 2026, and September 28, 2025, respectively.

Valuation and qualifying account information related to the allowance for credit losses related to continuing operations is as follows:

Practical expedients

Sales commissions are expensed as incurred as the associated contractual periods are one year or less. These costs are recorded within "Compensation" on our Consolidated Statements of Income (Loss) and Comprehensive Income (Loss). The vast majority of our contracts have original expected lengths of one year or less and revenue is earned at a rate and amount that corresponds directly with the value to the customer.

5 INVESTMENTS IN ASSOCIATED COMPANIES

TNI Partners

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

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

Summarized results of TNI are as follows:

TNI makes periodic distributions of its earnings and for the three months ended June 28, 2026 and June 29, 2025, we received $0.7 million and $0.7 million in distributions, respectively. In the nine months ended June 28, 2026 and June 29, 2025, we received $1.7 million and $2.4 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 their related digital platforms. Net income or loss of MNI (after income taxes) is allocated equally to us and The Capital Times Company (“TCT”). MNI conducts its business under the trade name Capital Newspapers.

Summarized results of MNI are as follows:

MNI makes periodic distributions of its earnings and in the three months ended June 28, 2026, and June 29, 2025, we received $0.3 million and $0.0 million in distributions, respectively. In the nine months ended June 28, 2026 and June 29, 2025, we received $1.1 million and $0.9 million in distributions, respectively.

6 GOODWILL AND OTHER INTANGIBLE ASSETS

All of our goodwill is attributed to a single reporting unit. Goodwill and identified intangible assets consist of the following:

The weighted average amortization period for amortizable assets is approximately nine years.

7 SEGMENTS

We operate as a single operating and reportable segment. The President and Chief Executive Officer (“CEO”) serves as our Chief Operating Decision Maker (“CODM”) and is responsible for evaluating financial performance and allocating resources. The CODM reviews financial information and makes operating decisions on a consolidated basis.

Our operations are organized into Strategic Business Units (“SBUs”) based on market. The SBU’s generally include one or more daily newspapers, several nondaily publications as well as the related digital operations. SBUs are internal, location-based operating components used for management purposes and do not represent separate operating or reportable segments. Separate operating results for each SBU are not reviewed by the CODM when assessing performance or making operating decisions. The CODM reviews our consolidated statements of income (loss) and balance sheets on a monthly basis and makes key decisions regarding resource allocation, including operating expenses and capital expenditures, primarily focusing on consolidated net income (loss) and consolidated total assets. These consolidated statements are used by the CODM to monitor budget versus actual results and evaluate the return on assets.

Significant segment expenses are separately disclosed and presented in the Consolidated Statements of Income (Loss) and Comprehensive Loss. The measure of segment assets is reported on the Consolidated Balance Sheets as Total Assets. The accounting policies of our operating segment are the same as those described in Note 1.

8 DEBT

We have debt consisting of a single 25-year term loan with BH Finance LLC, with an aggregate principal balance of $454.7 million at an annual fixed rate and maturing on March 16, 2045 (referred to herein as “Credit Agreement” and “Term Loan”). On June 28, 2026, the fair value was $332.5 million, representing a Level 2 fair value measurement, which are fair values estimated using significant other observable inputs.

Concurrently with the execution of the Private Placement agreement discussed in Note 3, we entered into the Second Amendment to Credit Agreement on February 5, 2026. The amendments include, among other items, a reduction of the applicable margin on our 25-year term loan from 9.00% to 5.00% for a period of 5 years following the closing and amending the definition of “Excess Cash Flow” such that the cash-on hand balance greater than $64.0 million held by us will be deemed Excess Cash Flow for a 5 year period following the closing. The interest rate amendment to 5.00% is treated as modification to the existing Credit Agreement.

During the nine months ended June 28, 2026, we had $0.8 million in proceeds that qualified as Net Cash Proceeds, as defined in our Credit Agreement, from asset sales which were applied towards our debt principal. As of June 28, 2026, there was no Excess Cash payment due as we did not generate the defined level of Excess Cash Flow.

In February 2025, in an effort to provide short-term liquidity to fund the Cyber Incident's remediation efforts and other operations, BH Finance LLC waived the interest expense payment and BH Media Group, Inc. waived the lease payment due March 1, 2025, April 1, 2025, and May 1, 2025. As of September 28, 2025, the waivers increased the outstanding debt balance by $11.3 million and was treated as non-cash activity within the statement of cash flows. These waivers were treated as modifications to the existing Credit Agreement. In addition, the May 2025 waiver was accompanied by an amendment to the Credit Agreement which includes provisions requiring us to prepay the loan in an aggregate amount equal to 100% of net cash proceeds received by us or our subsidiaries within three days following the receipt of net cash proceeds from asset sales and allowing BH Finance to assign its rights and obligations under the Credit Agreement to any person other than a natural person. Future payments are contingent on our ability to generate future Excess Cash Flow, as defined in the Credit Agreement.

9 PENSION, POSTRETIREMENT AND POSTEMPLOYMENT DEFINED BENEFIT PLANS

We are the sponsor ofone single-employer defined benefit pension plan, the Lee Enterprises, Incorporated Pension Plan ("the Plan"). As previously announced to participants on October 22, 2025, we are executing a strategic termination of our fully funded defined benefit pension Plan, eliminating the long-term volatility tied to interest rate movement, mortality assumptions and asset performance, while preserving participant benefits and improving balance sheet flexibility. We established December 31, 2025 as the termination date of the Plan and have submitted a request for a determination of the Plan's qualified status to the United States Internal Revenue Service. The termination process is ongoing, and we expect to complete it, including the settlement and distribution of Plan assets, in fiscal year 2027.

Additionally, we provide retiree medical and life insurance benefits under postretirement plans at several of our operating locations. In the three months ended June 28, 2026, we irrevocably transferred certain postretirement life insurance obligations under our Postretirement Plans to a third-party insurer. The transaction qualified as a settlement under ASC 715, Compensation—Retirement Benefits and we recognized a settlement gain of approximately $2.3 million, which includes the recognition of the applicable portion of previously deferred actuarial gains associated with the settled obligations. The settlement gain is recorded on a separate line in the Consolidated Statement of Income (Loss).

Through June 28, 2026, 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:

In the nine months ended June 28, 2026 and June 29, 2025, we madeno contributions to our pension plans. We haveno required contributions to our pension plans for 2026.

Multi-employer Pension Plans

In prior periods, we completed withdrawals from several multi-employer plans. As of June 28, 2026 and September 28, 2025, we had $21.4 million and $22.4 million of accrued withdrawal liabilities. The liabilities reflect the estimated value of payments to the funds, payable over 20 years.

10 INCOME TAXES

We recorded income tax expense of $1.4 million related to income before taxes of $6.6 million for the three months ended June 28, 2026, and income tax expense of $5.8 million related to income before taxes of $4.1 million for the nine months ended June 28, 2026. We recorded an income tax benefit of $2.7 million related to loss before taxes of $4.4 million for the three months ended June 29, 2025, and an income tax benefit of $1.3 million related to loss before income taxes of $31.2 million for the nine months ended June 29, 2025. The effective income tax rate for the three and nine months ended June 28, 2026, was 21.3% and 140.4%, respectively. The effective income tax rate for the three and nine months ended June 29, 2025, was 61.4% and 4.2% respectively.

The primary differences between these rates and the U.S. federal statutory rate of 21% are because of state taxes, non-deductible expenses, increase in valuation allowance, 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 34 state and local jurisdictions. We do not currently have any federal or material income tax examinations in progress. Our income tax returns have generally been audited or closed to audit through 2017.

11 EARNINGS (LOSS) PER COMMON SHARE

The following table sets forth the computation of basic and diluted earnings (loss) per common share:

For the three months ended June 28, 2026,51,000 shares were excluded from the computation of diluted earnings per common share because their effect would have been antidilutive. No shares were considered in the computation of diluted earnings per common share for the three month period ended June 29, 2025 and nine month periods ended June 28, 2026 and June 29, 2025 because we recorded net losses in those periods. The increase in weighted common shares is due to shares issued for the Private Placement on February 5, 2026 described in Note 3.

Rights Agreement

On March 28, 2024, our Board of Directors adopted a stockholder rights plan (the “Rights Agreement”). Pursuant to the Rights Agreement, on March 28, 2024, our Board of Directors declared a dividend ofone preferred share purchase right (a “Right”), payable on April 8, 2024, for each share of our Common Stock outstanding to the stockholders of record on that date. Each Right entitled the registered holder to purchase from the Company one one-thousandth of a share of Series C Participating Convertible Preferred Stock, without par value (the “Preferred Shares”), of the Company at a price of $90.00 per one one-thousandth of a Preferred Share represented by a Right, subject to adjustment. On February 4, 2026, in connection with the closing of the Private Placement, the Board of Directors amended the termination date of the Rights Agreement to February 4, 2026 causing each Right to expire and to be extinguished and for the Rights Agreement to be terminated. See Note 3 for additional information related to the Private Placement.

12 CYBERSECURITY INCIDENT

On February 3, 2025, we experienced a cybersecurity incident that disrupted certain IT systems and resulted in unauthorized access to certain files (the “Cyber Incident”). We activated our incident-response plan, engaged third-party cybersecurity experts, notified law enforcement, and offered identity-protection services to affected customers and subscribers. The Cyber Incident adversely affected fiscal 2025 operating results; however, the incremental impact on revenues and certain operating expenses is not reasonably separable from other business factors. The incident remains under legal and forensic review, and we continue to implement security enhancements. We maintain cyber insurance with a $0.5 million deductible.

Since the incident, we have incurred $10.5 million in cash flow losses attributable to the cyber incident, which have been submitted for recovery to our insurance providers. Approximately $3.7 million of incurred expenses and $2.0 million of business interruption reimbursements were recognized in "Restructuring and Other" in the Consolidated Statements of Loss and Comprehensive Loss during the year ended September 28, 2025. For the nine months ended June 28, 2026, we have received $0.9 million of reimbursements, which are presented as a reduction of related costs within “Restructuring and other” and $6.4 million in business interruption reimbursements that were recorded on a separate line within "Operating Expenses".

13 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 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.

Stoudemire et al. v. Lee Enterprises, Incorporated (Video Privacy Claim). On December 19, 2022, named Plaintiffs filed a Complaint in the U.S. District Court for the Southern District of Iowa alleging our news websites violate the Video Privacy Protection Act by disclosing to third parties certain data about users’ video-watching habits. In particular, the Complaint alleged the websites use Facebook Pixel, a technology that allegedly links a user’s Facebook profile to videos the user watches on our website. The claimants are asserting class action claims and allege statutory damages of $2,500 per class member, punitive damages, and attorneys’ fees. In July 2023, the Court denied our Motion to Dismiss. This claim was submitted for coverage under our media insurance policy. The parties successfully mediated the case on November 5, 2024, and the court granted final approval of the class action settlement on August 14, 2025. The entire $9.5 million settlement amount was paid by our insurance carriers in October 2025. Payments to class members went out in October 2025. This case is now closed.

Fetes et al. v. Lee Enterprises, Incorporated (Cyber Incident). On June 12, 2025, Sarah Fetes filed a Complaint in the U.S. District Court for the Southern District of Iowa alleging claims arising out of a February 2025 cybersecurity incident, during which a third-party threat actor potentially accessed personal information of past and present Company employees existing on Company systems. Fetes andfive additional named Plaintiffs filed a Consolidated Complaint on August 11, 2025. Plaintiffs allege that we failed to properly secure and safeguard personally identifiable information collected as part of our regular business practices. Plaintiffs sought damages for invasion of privacy and misuse of the compromised data, on behalf of themselves and a class consisting of approximately 39,700 individuals who received data breach notifications. This claim was submitted for coverage under our media insurance policy. The parties have reached a tentative settlement, all of which will be paid by our insurance carriers, in an amount that will be publicly disclosed through the court process. The settlement is subject to required court approval and open to objection by class members. We anticipate final approval of the settlement by August 2026. The probable settlement liability and insurance receivable are recorded within “Compensation and other accrued liabilities” and “Prepaids and other” on the Consolidated Balance Sheets as of June 28, 2026.

Lineup Systems Corporation v. Lee Enterprises, Incorporated. In July 2025, Lineup filed suit against us for breach of contract, breach of the covenant of good faith and fair dealing, and quantum meruit arising from the contract between Lee and Lineup for the purchase and installation of software. The suit claims $7.0 million in damages for failure to pay owed amounts, attorneys' fees and interest. We filed a counter claim alleging breach of contract and fraudulent inducement. Trial has been set for October 18, 2027. Lineup filed a Motion for Judgment on the Pleadings for various counts and oral arguments were heard by the Court on the Motion for Judgment on the Pleadings on January 16, 2026. The Court rendered an opinion in favor of defendants denying the motion. Discovery is ongoing in this case and the outcome is uncertain at this time.

The Associated Press v. Lee Enterprises, Incorporated. In June 2026, The Associated Press ("AP") filed a lawsuit against us in New York State Court alleging that we breached the parties' agreement. AP seeks to recover alleged damages, including amounts purportedly due under the agreement, together with interest, attorneys' fees, and other relief requested in the complaint. At this stage of the proceedings, loss is not reasonably estimable.

14 SUBSEQUENT EVENTS

On July 23, 2026, the Company completed the sale of its property located in Davenport, Iowa. The transaction generated Net Cash Proceeds, as defined in the Company's Credit Agreement, of approximately $2.2 million, which were applied toward principal repayments of the Term Loan in accordance with the Credit Agreement. In addition, subsequent to quarter-end, the Company entered into purchase agreements for several additional properties through auctions in July 2026 with aggregate contract values of approximately $6.8 million. The remaining transactions are expected to close during the fourth quarter of 2026, subject to customary closing conditions, and have not been reflected in the accompanying consolidated financial statements.

On July 24, 2026, we amended our Stock Purchase Agreement with the Investors to modify the standstill provisions, permitting Investors owning more than 10% of the Company's common stock to purchase up to 600,000 shares during the standstill period, and to exceed that limit through Company-approved Rule 10b5-1 trading plans. All other terms of the Stock Purchase Agreement remain unchanged.