Welcome to the Lee Enterprises 2026 Second Quarter Webcast and Conference Call. The call is being recorded and will be available for replay at investors.lee.net. At the close of the planned remarks, there will be an opportunity for questions. Participants assessing this call webcast may submit written questions through the platform and they will be answered during the call, as time permits. Any remaining questions will be followed up on after the call. A link to the live webcast can be found at investors.lee.net. I will now turn the call over to your host, Jared Marks, Vice President, Finance.

Thank you, and good morning, everyone. We appreciate you joining us today. With me on this morning's call are Nathan Becki, President and Chief Executive Officer, Josh Reinholz, Vice President, Chief Financial Officer and Treasurer, Joe Battistoni, Chief Revenue Officer, and David Hoffman, Chairman of our Board of Directors. Earlier today, we issued a news release announcing preliminary results for our second fiscal quarter of 2026. The release and accompanying presentation are available at investors.ly.net. As a reminder, this morning's discussion will include forward-looking statements based on current expectations. These statements are subject to certain risks, trends, and uncertainties that could cause actual results to differ. Such factors are described in this morning's news release and in our SEC filings. We will also reference certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures are included in the tables accompanying the release. that i'll turn the call over to our chairman david hoffman thank you jared and good morning

and thank you for joining us excuse me as i open this call i'd like to say that it's a privilege to step into this role at a company with more than a century of service to its communities its shareholders and the enduring importance of local journalism lee's legacy is strong but as important is the decisive transformation that is now underway at our company i'd like to spend a few moments to frame the vision for lee's next chapter we are a different company than we were even a year ago more focused more accountable and more closely connected to the communities we serve we are thinking more expansively about our role in local media and our path to long-term growth that has required meaningful change deliberate and at times difficult but meaningful to position lee for a stronger and more sustainable future delivering on that vision requires strong leadership and clear alignment at the top i'm very happy to share following a comprehensive nationwide search the board and myself concluded that the right leadership for for Lee's future was already in place. Nathan and Josh have demonstrated strong execution, deep industry knowledge, and a clear vision of where the company is headed. Just as importantly, they've built alignment across the organization and already translating that into action across the business. Coming back to the vision for Lee's next chapter, let me start with one of our most important priorities, reconnecting with our communities. Over the past several months, I've been on the road with our leadership team conducting town hall meetings across our markets. These weren't symbolic visits, they were working sessions. We listened carefully to readers, advertisers, and community stakeholders and leaders. What we heard were gaps in local news coverage, areas where communities felt underserved. We've already begun to address those gaps by reinvesting in local journalism, including adding recorders in key markets to fill those holes that work we believe is foundational to who we are and it's where our turnaround begins at the same time we've taken a disciplined approach to our cost structure we're committed to being strong stewards of capital and that starts at the top of the organization just recently the board has shifted its compensation structure to be 100% equity-based, aligning more directly with long-term shareholder value. A similar structure was put in place for our top 120 executives. We've also reduced corporate overhead and simplified our operating model, ensuring that many resources are directed to the front lines of the business, more resources, prioritizing our content and our customers. We're also producing more local content that is important to our readers. We recently launched Community Center, which is a free collection of publicly available content covering everything from municipal news releases to local real estate listings. Another area where we see real opportunity for differentiation is local sports. Through our partnership with Huddle, we're expanding and enhancing our coverage of high school and local sports. This is deeply relevant, highly engaging content for our communities. It's just yet another example how we're investing where it matters most to our audience. And finally, I'll occasionally contribute a column sharing my perspective on opportunities to build stronger communities. Looking further ahead, we are actively developing a disciplined acquisition strategy. We believe there are opportunities to expand Lee's footprint in ways that make both strategic and financial sense. Our focus will be on markets and assets that strengthen our commitment to local journalism while enhancing our overall scale and efficiency. We will be thoughtful and selective, but insistent in our efforts to grow the business. Underlying all this is a clear financial priority, conserving cash and strengthening our balance We are managing liquidity carefully, improving operational efficiency daily, and ensuring we have the financial flexibility to execute our strategy. That provides stability today and optionality for the future. I'm very confident in the direction we're headed, grounded in local journalism, disciplined in operations, and ambitious about our future. With that, I'll pass it over to Nathan, our Chief

Executive Officer. Good morning, everyone, and thank you for joining the call today. I'd like to start today by thanking David for his investment in Lee and, more importantly, for his commitment to local journalism and the communities we serve. As David mentioned, we're entering this next phase of the business from a position of strength and optimism. Our strategy is clear, execution is gaining momentum, and our results are beginning to reflect the progress we've made. We are a leading provider of high-quality local news, information, and advertising with 114 daily and weekly publications. Our strength is rooted in trusted local journalism, delivered through a digital first model that continues to deepen audience engagement and provide value to advertisers. Over the past 12 months, digital-only subscription revenue grew 7%, further strengthening our mix of sustainable and recurring revenue. At the same time, we've maintained disciplined cost management across the organization, particularly in legacy costs and corporate overhead. The combination of those efforts has driven adjusted EBITDA to $57 million over the last 12 months, reflecting both improved efficiency and structural improvement in the business. Second quarter adjusted EBITDA grew 95% year over year. That level of growth reflects extremely strong execution and the accelerating progress of our digital transformation. We also recognize $4 million in business interruption insurance proceeds related to last year's cyber event. The magnitude of these reimbursements underscores the significant impact the cyber event had on prior year results and its continued effect on our operations, while also reflecting the diligent efforts of our team to secure these recoveries. While those proceeds contributed to the quarter, it's important to note that even excluding them, second quarter adjusted EBITDA grew 45 percent year over year, reflecting underlying operational strength. The strong second quarter growth builds off our solid first quarter, and now year-to-date through March, we've delivered a 78% increase in adjusted EBITDA, an improvement of $12 million year-over-year driven by diligent cost management while continuing to advance our digital strategy. Absent business interruption insurance proceeds, our adjusted EBITDA growth was 40%, or $6 million year-over-year in the first half. These results highlight our ability to expand profitability while navigating industry change, particularly demonstrated over the last four quarters of adjusted EBITDA growth on a comparable basis. Our standout performance in the second quarter was highlighted by adjusted EBITDA nearly doubling year over year to $15 million, with margin expanding 670 basis points. This improvement was driven primarily by decisive cost actions. Cash costs declined 15% or $19 million, with meaningful reductions across SG&A and print-related expenses. From a revenue perspective, digital revenue now represents 56% of total company revenue, up 270 basis points year-over-year. It now accounts for 74% of total advertising revenue, underscoring the growing importance of our digital offerings. On the digital subscription side, we ended the quarter with 591,000 digital-only subscribers and $22 million in revenue. Year-over-year comparisons were impacted by a couple of factors tied to last year's cyber event. Units continued to be challenged compared to the prior year, particularly due to lost starts during the impact period from last year's cyber event, in addition to other processing limitations. All things considered, lapping the cyber event had a negative impact on our second quarter's revenue. As we move beyond those impacts, we view this quarter as a clean baseline moving forward. We remain focused on building and growing high-quality recurring subscription revenue. In digital advertising revenue, we saw sequential improvement for the second consecutive quarter. The second quarter saw a two-percentage point improvement in same-store revenue trends compared to the prior quarter. While revenue declined modestly year over year, trends are stabilizing. Importantly, we continue to prioritize profitability over volume, which included the intentional exit of certain lower-margin advertisers and products that impacted top-line revenue but had minimal impact to adjusted EBITDA. Our team is focused on profitable growth, which Joe will expand on momentarily. Before turning it over to Joe, I'll briefly touch on the balance sheet and our improved capital structure. Following the close of the strategic investment mid-second quarter, our cash balance surged to $53 million as of March. This strong baseline of cash provides us the opportunity to make targeted investments in high ROI areas that will drive improved content and subscriber engagement, acquisition, and monetization. Additionally, interest expense decreased $2.4 million year over year as a direct result of the interest rate reduction from 9% to 5%, with further benefits expected in the coming quarters. With that, I'll hand it over to Joe to add some additional context to our subscription and advertising revenue performance.

Thanks, Nathan, and glad to join the call this morning. From a revenue strategy standpoint, I'll start on the subscription side. Our digital growth strategy is centered on building the audience funnel with a focus on higher intent, more engaged users. This reflects a move away from relying on algorithm-driven traffic toward focusing on our own platforms with repeatable channels that generate stronger, more consistent engagement. We are driving higher conversion and retention by applying data-driven insights and targeted product enhancements that grow customer lifetime value. At the same time, we're scaling efficiently, using AI and streamlined workflows to reduce acquisition costs while accelerating growth in our digital subscription base. Today, we reach millions of users across our markets. Our opportunity is to deepen those relationships, converting and retaining more of that audience as long-term subscribers. As Nathan mentioned earlier, this quarter was hindered a bit by some of the fallout of the cyber incident last year. We know there is growth potential over the long term, and our primary focus is the consumer. Serving our local communities with high-quality local news with the best experience in the ways that matter most to them. Our advantage is being intensely local. There's a lot in store for Lee Enterprises on the subscription side of the house. We're executing several exciting initiatives in the second half of fiscal year 2026, all focused on expanding content offerings, driving new users, and improving the consumer experience. On the advertising side, the landscape continues to evolve, and our approach is grounded in profitability and long-term value. We are seeing early signs of stabilization with sequential improvement in revenue trends. At the same time, we're not chasing commoditized ad dollars. We are being disciplined, prioritizing higher margin, more sustainable revenue, and reviewing and exiting lower quality opportunities. Through Amplify Digital Agency, we deliver full-funnel, AI-enabled marketing services that help advertisers increase customer lifetime value and grow their business. This year, we're sharply focused on delivering a more complete, integrated solution for advertisers, especially across multiple products. Our full product suite remains a key differentiator, enabling us to meet a broader range of advertiser needs in one place. In last quarter's call, Nathan introduced our strategic partnership with Huddle, a leader in sports technology, video analysis, and data. David also mentioned it earlier in today's call. I'd like to echo their excitement regarding this partnership, which represents one of the largest collaborations in local sports media and aligns with our mission to serve our communities with high school sports coverage at the core. Our partnership with Huddle will enable us to serve our communities better by adding video and free access to remarkable local sports content. Huddle also strengthens our ability to connect advertisers with highly engaged local audience at scale. By aligning with a platform that sits at the center of community sports, we give our clients direct access to passionate fans, families, and athletes, creating a more relevant, impactful advertising opportunities. opportunities. Also touching briefly on initiatives like America's 250th birthday coming up this July, Community Center, and VidMax, these are fantastic examples that further support how we're expanding higher value, differentiated advertising opportunities. We're leveraging our own audience and our local market strength to deliver premium, brand safe environments that drive stronger engagement for our advertisers. They also enable a more integrated multi-platform campaigns, increasing client retention and deepening relationships through multi-channel solutions. Collectively, these offerings support our shift toward higher margin, recurring digital revenue built on unique content and first-party data. Ultimately, these efforts support our broader goal to build a more predictable, higher margin, digital advertising business. With that, I'll pass it back to Nathan.

Thanks, Joe. Stepping back, it's worth highlighting the strength and stability of our digital growth, especially considering the challenging landscape within the industry. Over the past several years, we've delivered consistent expansion in digital revenue, supported by both subscription and agency growth. Over the last three years, our digital subscription revenue has grown 25% annually while our digital agency business has shown tremendous resiliency in a tough operating climate, growing 5% annually. Together, this has yielded a strong foundation of $290 million in total digital revenue over the last 12 months, representing 4% annualized growth over the past three years. While the broader industry remains under pressure, our focus on local markets, owned audiences, and recurring revenue streams has positioned us to perform competitively. Our focus is not just on top-line growth, but about improving the quality and margin profile of our revenue. As we continue to execute, we believe this differentiated approach will drive sustainable performance over the long term. This slide further illustrates the longstanding progress we've made in building a more sustainable and higher-quality digital revenue base. Over the past six years, we've gone from a print-dependent to digital-dominant. Digital revenue has grown from a minority of the business, 21% back in 2020, to 56% as of our second quarter, a clear and measurable shift. Digital is no longer a growth initiative, but the core engine of our business, and it will continue to drive both revenue expansion and margin improvement. Over time, this transition positions us to operate as a predominantly digital business with significantly reduced reliance on print. Our focus remains on strengthening our digital products, enhancing audience engagement, and building scalable capabilities that position the company for sustained performance in the digital media landscape. We are focused on scaling these core drivers while continuing to optimize pricing, product mix, and customer lifetime value. As we execute, digital will continue to expand as the primary engine of our growth and profitability. And with that, I'll hand it over to Josh to provide some additional financial performance details.

Thanks, Nathan. As Nathan said, we have made significant progress in our digital transformation. We are not only transforming our business, we are also strengthening our financial foundation. From a long-term execution standpoint, our digital business continues to scale toward a key milestone, where digital gross margins fully cover our SG&A costs. We've made meaningful progress since the start of our digital transformation, and our current trajectory gives us a clear, achievable path forward. Year-to-date through March, core digital revenue has grown at a 9% annual rate from fiscal 21 to fiscal 26, with digital gross margins expanding at a similar pace. This continued shift from print to higher margin digital revenue is strengthening the underlying economics of our business. At our current pace, we expect digital revenue and margins to fully support our entire business within three years. Our confidence in reaching that milestone continues to build as we realize the benefits of our transformational initiatives and maintain disciplined execution across both revenue growth and cost management. Turning to costs, we continue to pair strong cost discipline with targeted investments that support long-term growth. Our focus on reducing legacy costs and simplifying operations is strengthening our financial profile while preserving the quality of our journalism. By enhancing operational rigor this year, without compromising quality, we have improved our long-term positioning and are poised to drive sustainable shareholder value over the long term. In the first half of fiscal 2026, cash costs declined $37 million, or 14%, compared to the prior year. The majority of that reduction came from SG&A costs, which decreased approximately $23 million, largely driven by lower corporate overhead. Legacy print costs declined by $13 million year-over-year, primarily reflecting efficiencies aligned with our evolving revenue mix and ongoing print optimization efforts. Through the first half of fiscal 26, we have remained disciplined from a cost perspective. We continue to manage our print business for efficiency, scale our digital operations, and reduce SG&A costs. Lastly, before I pass it back to Nathan, I'd like to highlight the significant progress we've made on the balance sheet. Since refinancing in March 2020, we have reduced debt by $121 million. Following our recent strategic investment and resulting lower interest rate, we expect to generate approximately $18 million in annual interest savings, or up to $90 million over five years. We are also actively monetizing non-core assets to further accelerate to leveraging. with assets estimated at $20 million in value currently identified. With a stronger balance sheet and reduced interest costs, we are in a significantly improved financial position compared to just a quarter ago. This enables us to invest in the business, reduce debt, and drive long-term shareholder value. I'll now turn the call back to Nathan for final remarks.

Thanks, Josh. We are reaffirming our full-year outlook of adjusted EBITDA growth in the mid-single digits, and based on our first half performance, we are confident that we will deliver. Our disciplined approach to cost and focus on profitability were key drivers of our strong first half results, and we will maintain our operational rigor going forward. Our strategy is clear. Accelerate digital growth, strengthen the balance sheet, and continue delivering sustainable value for shareholders. We've moved beyond stabilization and are now executing with real momentum. As a result, Lee is better positioned than ever to accelerate into its next phase of sustained growth. Thank you again for joining us this morning. We'll now open the

call for questions. Thank you. At this time, we'll be conducting the question and answer session. As a reminder, if you're accessing this call by webcast, you may submit typed questions on your screen. Those questions will be answered during the call as time permits. We'll moment please

while we poll for questions. We will now take our first question from the web. Were there any debt principal payments made in the second quarter?

Great. Thank you for the question. Yeah, in the second quarter, we did not make any debt payments. However, we did have two real estate sales of non-core assets, and we made a $1 million debt payment just into the third quarter, but that would not be reflected in our second quarter debt.

All right. We have no more questions from our web participants. I will now turn the call back

to Nathan for closing remarks. Great. Thank you. Midway through fiscal 2026, I'm pleased with our results. As an organization, we are fundamentally stronger than ever before, and our first half results meaningfully demonstrated our ability to execute across the board with improved operating efficiency. With a clear strategy, strong foundation, and significant momentum, we are well-positioned for our next stage of evolution as a digital media company. I want to thank our employees for their dedication and our shareholders for their continued support. Thank you again for

joining today's call. Thank you, ladies and gentlemen. That does conclude our call for today. Thank you all for joining, and you may now disconnect. Have a great day.