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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 accessing this call broadcast 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 Bekke, President and Chief Executive Officer; Josh Rinehults, 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.lee.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. With that, I'll turn the call over to our Chairman, David Hoffman.

Thank you, Jared, and good morning, and thank you for joining us. 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 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 reporters 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 are 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 Hudl, we are 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 of 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 sheet. 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 recognized $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% 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 and 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 continue 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 2 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 Amplified 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 Hudl, 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 Hudl will enable us to serve our communities better by adding video and free access to remarkable local sports content. Hudl 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.

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 owned 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 multichannel 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 3 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 3 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 long-standing progress we've made in building a more sustainable and higher quality digital revenue base. Over the past 6 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 3 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 5 years. We are also actively monetizing noncore assets to further accelerate deleveraging, 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.

[Operator Instructions]

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. Yes, 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.

Welcome to the Lee Enterprises 2026 First Quarter Webcast and Conference Call. The call is being recorded and will be available for replay at investors.lee.net. [Operator Instructions] A link to the live webcast can be found at investors.lee.net.

I would now like to turn the call over to your host, Jared Marks, Vice President, Finance. Please go ahead.

Thank you, and good morning, everyone. We appreciate you joining us today. With me on this morning's call are Nathan Bekke, President and Interim Chief Executive Officer; and Josh Rinehults, Vice President, Interim Chief Financial Officer and Treasurer.

Earlier today, we issued a news release announcing preliminary results for our first fiscal quarter of 2026. The release and the accompanying presentation are available at investors.lee.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.

During the call, we refer to certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures are included in the tables accompanying the release.

With that, I'll turn the call over to Nathan Bekke.

Thank you, Jared. Good morning, everyone, and thank you for joining us. Lee Enterprises delivered a strong start to fiscal 2026, highlighted by significant first quarter adjusted EBITDA growth and a transformational improvement to our capital structure. Adjusted EBITDA grew 61% year-over-year to $12 million, driven by consistent execution across the core business and disciplined cost management.

Last week, we completed a $50 million equity investment that materially strengthens our balance sheet and significantly improves our liquidity. In this morning's call, we'll provide a closer look at the financial stability that the transaction provides and the transition following the closing of the deal.

Before we dive into that, let me begin by reinforcing the fundamentals of our Three Pillar Digital Growth Strategy, which has enabled Lee to rapidly transform over the last 5 years into a digital-first company. Our transformation into a strong and stable digital media company is not theoretical. It's measurable, repeatable and scalable.

Digital is no longer an emerging segment inside the legacy business, but the primary economic engine of the company. The trajectory of Lee is increasingly governed by digital growth rates, digital markets and digital unit economics. This shift represents disciplined execution, expanding our audience through rich local content, accelerating digital subscription growth and building a digital advertising business that delivers results. With nearly $300 million in digital revenue over the last 12 months, we are well positioned to reach our $450 million digital revenue target by 2030.

Our investment thesis is centered on a strengthened balance sheet and continued debt reduction. The $50 million common stock private placement shores up our balance sheet in both the near and long term and will lead to future deleveraging. Furthermore, with the close of this deal, our already favorable credit agreement will see a significant boost. We'll touch on the details of this transaction and the amended credit agreement in just a moment.

But for now, I'd just point out the transformational impact these will have on our future. By strengthening the balance sheet and improving the company's capital structure, we are putting the company in a much better position to execute our strategy and deliver long-term value to our shareholders.

I'm excited to share the details of the strategic deal that closed this past week. We raised $50 million in gross proceeds through a private placement of common stock at $3.25 per share. The private placement was anchored and backstopped by David Hoffmann, with additional existing investors also participating. This transaction followed a comprehensive review of the company's performance and capital structure, consideration of alternatives and approval by both the Board and shareholders, who recognize that by strengthening the balance sheet and reducing the interest rate under our credit agreement, the company would be in a better position to execute and create long-term shareholder value. As part of the closing of the transaction, we welcome Mr. Hoffmann as Chairman of the Board of Directors.

Concurrently, with this private placement, our credit agreement has been amended to reduce the interest rate on our outstanding debt to 5% from 9% for the next 5 years. On $455 million in debt, the interest rate reduction is expected to generate approximately $18 million in annual interest savings or up to $90 million over the 5-year period. That significant cash flow improvement over the 5-year horizon will allow us the flexibility to invest in our core business and drive digital growth. The proceeds from the deal will be used primarily for working capital and to fund current and future digital transformation projects. This transaction accelerates our ability to strengthen our digital platforms, enhance the consumers' experience and deliver measurable performance for our local advertising clients. In the near term, it improves operating efficiency while positioning us with a more flexible, scalable digital infrastructure designed to support sustainable long-term growth.

Fiscal 2026 presents a tremendous opportunity for growth, driven by the strength of our digital businesses and operational discipline, particularly as we've already delivered strong first quarter results. At a macro level, we are a leading provider of high-quality local news, information and advertising in 72 markets across the U.S. Our local journalism is what sets us apart. As a digital-first subscription platform, we provide breaking news and local content that commands a strong audience and attracts advertisers within the local communities we serve.

Over the last 12 months, sustained growth of 14% in our digital-only subscription revenue has further diversified our revenue mix and boosted our reliance on growing revenue streams. At the same time, we've maintained disciplined cost management across the organization, particularly in legacy costs and corporate overhead. These efforts are driving steady momentum in adjusted EBITDA, which was $50 million over the last 12 months.

Now I'll hand the call over to Josh to run through our first quarter results.

Thanks, Nathan. Our strong first quarter was marked by meaningful year-over-year improvement in adjusted EBITDA, driven by continued progress in our digital transformation and disciplined cost management. Q1 adjusted EBITDA increased by a significant 61% or $5 million over the prior year, reflecting improved operating efficiency and tighter expense control. These results demonstrate the company's ability to expand profitability even as we navigate dynamic changes in the digital media landscape.

On the digital subscription front, we finished the quarter with $23 million in revenue from our 609,000 digital-only subscribers. 5% growth in digital-only subscription revenue was fueled by increased efforts to maximize engagement within our subscriber base as well as to optimize price within our highly engaged subscriber cohorts. Targeted investments in personalization, content delivery and life cycle marketing are increasing subscriber lifetime value and improving overall monetization.

Q1 finished with over $70 million in total digital revenue, which represented over 54% of our total revenue. This progress builds on the continued evolution of our revenue, with digital revenue mix improving 330 basis points year-over-year, digital-only subscription revenue growing 5%, and digital sources representing 71% of total advertising revenue, underscoring the transformational effect of our digital growth strategy. The strength of our first quarter performance clearly demonstrates the strong foundation for Lee's future as a digital-first company.

Lastly and most significantly, Q1 saw substantial growth in adjusted EBITDA, up $5 million or 61% over the prior year. Our first quarter growth in adjusted EBITDA was driven by strong cost control particularly tied to our legacy revenue streams, with total cash costs declining $17 million over the prior year. The operational efficiency demonstrated this quarter was primarily driven by reduced head count and legacy print costs. This quarter represents our third consecutive quarter of adjusted EBITDA growth on a comparable basis. The year-over-year improvement in adjusted EBITDA margin was also quite substantial, with the first quarter of 2026 representing 9.4% compared to 5.3% in the prior year.

Another brief note on the quarter. Our results included $2 million in business interruption insurance proceeds tied to the cyber incident last year. Excluding these proceeds, Q1 adjusted EBITDA showed a very strong 35% growth. We expect to receive further insurance proceeds as the fiscal year progresses.

Overall, our first quarter results highlight the strength of our digital strategy and our continued path towards transforming local media. Compared to our broader peer group, we have consistently outperformed across several key indicators of digital growth, including digital subscription revenue and digital agency revenue.

Over the past 3 years, digital subscription revenue has grown significantly, more than double that of our nearest competitor, reflecting the consistent strength of our local journalism, effective subscription strategies for managing both volume and rate and continual improvement in digital platforms. Over the past year, we have continued to modernize our technology and expand our product ecosystem using data-driven marketing and audience insights to deepen engagement and enhance monetization.

Post transaction, we expect to further bolster our digital products and technology. Ultimately, our goal is improving the users' experience by delivering journalism that is credible and timely as well as intuitive, accessible and engaging across devices. Our road map will ensure our platforms evolve alongside audience expectations while supporting sustainable business outcomes.

On the advertising side, revenue from our Amplified Digital Agency has also outpaced peers, growing at a 5% annual rate over the last 3 years. This performance underscores our ability to generate sustainable digital advertising growth through scalable solutions, innovative services and highly skilled digitally focused teams.

Looking ahead, our trajectory toward approximately 90% digital revenue by fiscal 2030 positions us to operate a sustainable business model that is no longer dependent on print products. As Nathan mentioned earlier, our focus remains on strengthening our digital products, enhancing audience engagement and building scalable capabilities that position the company for sustained performance in a digital media landscape.

Just 6 years ago, our revenue was primarily print, making up nearly 80% of our operating revenue. As of the first quarter of fiscal 2026, 54% of our revenue is now digital. This transformational shift demonstrates that we're less reliant on legacy print than ever before. As we move forward, we will continue to build on this digital revenue growth momentum while also managing our declining legacy revenue streams, all driving us towards the day when we are sustainable solely from our digital platforms.

Our core digital business has grown 12% annually from fiscal 2021 to fiscal 2025, and that has translated to comparable annual growth in digital gross margins. Replacing our print revenue with growing and profitable digital revenue sets us up to achieve long-term sustainability. By fiscal 2030, we will be sustainable from just our digital revenue and margin, which is something we're more confident in now than ever as post transaction, we begin to realize the impact of the transformational business projects we have underway and that are forthcoming.

From a cost perspective, Lee has a consistent track record of disciplined cost management while making strategic investments to support long-term growth. We remain steadfast in our commitment to long-term financial sustainability and the continued delivery of high-quality local journalism.

In fiscal 2026, reducing legacy costs and complexity throughout our business remains a top priority for us. By enhancing operational rigor this year without compromising quality, we've strengthened our long-term position and are poised to drive sustainable shareholder value over the long term.

Lastly, before I pass it back to Nathan, I'd just like to reiterate how impactful the amended credit agreement is to our long-term financial outlook. Since refinancing in March 2020, we have paid down $121 million of principal. With a strengthened balance sheet and a reduced interest rate, our path to debt reduction is stronger than ever.

On $455 million in debt, the interest rate reduction to 5% is expected to generate approximately $18 million in annual interest savings or up to approximately $90 million over the 5 years. This savings is a boost that will generate long-term debt reduction and shareholder value creation.

Another recent improvement to our balance sheet is the strategic termination of the company's fully funded defined benefit pension plan. Since the plan's assets were sufficient to cover all obligations, the company is free from any future cost uncertainty.

Lastly, we have identified $26 million in noncore assets that we are actively working to monetize. These asset sales will contribute to our future debt reduction.

I'll now pass the call over to Nathan for final remarks.

Thanks, Josh. Looking ahead to the full year, we're reaffirming our outlook for fiscal 2026 of adjusted EBITDA growth in the mid-single digits. The strength of our first quarter positions us well to achieve our 2026 outlook. The transaction and interest reduction give us increased confidence in not only fiscal 2026, but also the next 5 years.

In other news, we recently announced a new strategic partnership with Hudl, a leader in sports technology, video analysis and data. Hudl works with thousands of high schools and local sports teams across the nation, providing video, data and tools to support athletes, coaches and communities. This partnership represents one of the largest collaboration in local sports media and aligns with our mission to serve our communities with high school sports coverage at the core. It also reinforces our commitment to journalism and storytelling that bring communities together.

This partnership with Hudl will allow us to serve our communities even better by adding video content with free access and continue to tell the amazing local sports stories that reflect the pride, passion and connection people feel for their schools and teams. With Lee's deep roots in local communities, we create meaningful value for both our readers and advertisers, positioning our digital platforms as the place to go for local sports consumption and advertising. While in the early stages, we're extremely excited to partner with the Hudl team, and we'll share more as the relationship develops.

With that, we'll open the call for questions.

[Operator Instructions]

We have no questions from our web participants. I'll now turn the call back to Nathan for closing remarks.

Great. Thank you. I'll reiterate that we are a leader in local content and are well underway on a significant digital transformation. We have become a digital-first organization, growing our digital revenue mix to 54% as of this past quarter, more than doubling over the past 5 years. With the $50 million private placement transaction supporting both deleveraging and continued digital investment and up to $90 million in interest savings over the next 5 years, we've meaningfully strengthened our balance sheet and increased our financial flexibility.

With a clear strategy, strong foundation and a compelling future, we are set up now more than ever 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.

We have reached the end of our question-and-answer session. This concludes our call. You may now disconnect.

Welcome to the Lee Enterprises 2025 Fourth Quarter Webcast and Conference Call. This call is being recorded and will be available for replay at investor.lee.net. [Operator Instructions] The 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.

Good morning. Thank you for joining us. In addition to myself, speaking on this morning's call are Kevin Mowbray, President and Chief Executive Officer; Nathan Bekke, Chief Operating Officer; and Tim Millage, Vice President, Chief Financial Officer and Treasurer. Earlier today, we issued a news release with preliminary results for our fourth fiscal quarter of 2025. It is available at lee.net as well as major financial websites. Please also refer to our earnings presentation found at investors.lee.net, which includes supplemental information.

As a reminder, this morning's discussion will include forward-looking statements based on our current expectations. These statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially. Such factors are described in this morning's news release and in our SEC filings. During the call, we refer to certain non-GAAP financial measures. Reconciliations to the relevant GAAP measures are included in the tables accompanying the release. And now to open the discussion is our President and Chief Executive Officer, Kevin Mowbray.

Thanks, Jared, and good morning, everyone. This morning, I'll provide an update on our fiscal 2025 performance. We'll also hear from Nathan and Tim later in the call to discuss operations and an outlook on fiscal 2026. Our 2025 performance clearly demonstrates the strong foundation of Lee's future as a digital-first company. Fiscal 2025 finished with $562 million in total revenue, 53%, which was Digital, showing more reliance on our Digital business and our legacy Print business.

On the Digital subscription front, we finished the fiscal year with $94 million in revenue from our 633,000 digitally only subscribers. I'm incredibly proud of this industry-leading revenue growth of 16% year-over-year on a same-store basis. Considering the February severance hampered our ability to generate Digital Only subscriptions, we are really encouraged to see where we finish the year on the revenue side. We see an opportunity in 2026 to grow units in combination with continued rate optimization. Our digital marketing services business, known as Amplified Digital Agency surpassed the $100 million mark in FY '25 with industry-leading 5% growth on a same-store basis.

I'm very encouraged by Amplified's ability to consistently deliver steady top line growth even as the broader digital advertising market remains competitive. Progress in these revenue category gives us confidence in our ability to drive sustainable growth and deliver long-term value to our shareholders. As a reminder, our 3-pillar digital growth strategy is expected to result in $450 million in digital revenue by 2030. Our team continues to execute exceptionally well on our digital transformation strategy. In 2025, we delivered an excellent 16% growth in digital-only subscription revenue, further diversifying our revenue mix, expanding our digital margins in leading the industry. At the same time, we maintained disciplined cost management across the organization, particularly in print production and corporate overhead, which allowed us to reinvest in high-growth digital initiatives.

These efforts are driving steady momentum in adjusted EBITDA, which grew for the second consecutive quarter when adjusted for the extra week in the prior year. This level of performance is truly a testament to Nathan and his operations team and positions Lee to achieve sustained success in the years ahead. In 2025, we continue to lay the foundation for Lee's future as a digital-first company. We're driving our digital transformation, and we're confident on our ability to drive sustainable growth and deliver long-term value to our shareholders. The strength of our core digital business has built a solid foundation of over $298 million of digital revenue annually, putting us firmly on track to achieve $450 million of digital revenue by fiscal 2030.

Lee has consistently outpaced our industry peers in several key measures of digital growth both digital subscriptions and digital agency revenue growth. Digital subscription revenue growth grew 32% annually over the last 3 years, more than doubling the nearest industry peer. The substantial growth is a testament to the value of our hyper local content as well as our top-notch digital platforms and tools. Over the course of 2025, we continue to modernize our digital platforms and expand our product ecosystem, leveraging data and marketing to maximize engagement. On the advertising side, Amplified Digital Agency revenue growth has significantly outpaced our nearest peer, growing 5% annually over the past 3 years.

Again, we've demonstrated the ability to grow digital advertising revenue through innovative and scalable operations and services with our tremendously talented digitally-driven teams. Overall, Lee continues to advance our strategy by driving digital transformation across every part of the business, expanding reach through ongoing digital innovation and investing in initiatives that support industry-leading growth. Our focus remains on strengthening our digital products, enhancing audience engagement and building scalable capabilities that position the company for sustained performance and increasingly digital media landscape. Total digital revenue was $298 million in fiscal '25, well on our way to achieving our long-term target of $450 million, and we're confident in our ability to get there. Next, I'll pass it over to Nathan.

Thank you, Kevin. As Kevin mentioned earlier, we closed the year with solid digital momentum, delivering 2% digital revenue growth on a same-store basis, a clear indication that our digital transformation strategy is taking hold across the enterprise. Within advertising, we strengthened SMB retention throughout the year and nearly doubled the number of clients now valued at more than $1 million annually demonstrating the rising impact of our innovative solutions and the deepening value we provide to local and regional businesses. This improved customer performance, combined with accelerating adoption of our AI-powered tools including AI enablement, AI Boost, Smart Answer and SmartSites directly fuel 5% same-store revenue growth in the Amplified Digital Agency contributing $103 million to our $184 million in digital advertising revenue and reinforcing the durability of our commercial base and our first-to-market leading position.

On the consumer side, digital-only subscription revenue increased 16% on a same-store basis, driven by the strength of our local journalism and targeted retention strategies. These gains reflect the quality and relevance of our local content, the stickiness of our consumer products and our continued ability to grow high-margin recurring digital revenue. Altogether, we delivered $298 million in total digital revenue, representing 53% of total company revenue, a key performance measure that underscores the shift towards sustainable, higher-margin digital enterprise. Importantly, digital growth and product innovation are enabled by rigorous operational execution. Throughout the fiscal year, we continued optimizing our cost structure, including consolidating print operations and reducing legacy complexity. These actions created the financial capacity to invest in cloud modernization, AI-driven product development and the digital capabilities that fuel this year's digital growth.

This slide highlights the fundamental shift underway in our business and the clear progress of our digital transformation. In 2020, before we launched the 3-pillar digital growth strategy, only 21% of our revenue came from digital. Today, digital represents 53% of total revenue, meaning we have already surpassed the critical revenue inflection point where digital leads the enterprise. This transition is the result of industry-leading digital revenue growth across advertising, subscription and new digital products, supported by disciplined execution and consistent investment in our digital capabilities. We are also effectively optimizing print operations to maximize profitability and free up resources for digital growth.

Looking ahead, our strategy positions us to achieve our long-term target of 90% digital revenue by fiscal year 2030 enabling a sustainable business model that is no longer reliant on print products as they mature. This trajectory demonstrates we are moving with purpose towards a stronger, more resilient, predominantly digital companies. With that, I'll turn it over to Tim.

Thanks, Nathan. Our core digital business has driven digital revenue growth of more than 12% annually from fiscal 2021 to fiscal 2025, and that has translated to a comparable annual growth in digital gross margins. As Nathan touched on replacing our print revenue with growing and profitable digital revenue sets us up to achieve long-term sustainability and we're nearing the sustainability point. While the February cyber incident interrupted efforts on several key projects in 2025, we believe that 2026 will see a nice lift in digital revenue and margin due to realizing the impact of these transformational business projects.

Moving over to the cost side, Lee has a successful track record of effective cost management and thoughtfully investing in strategies that fuel long-term growth. As a reminder, we executed approximately $40 million in annualized cost reductions in the second quarter aimed at lowering costs across the board with an emphasis on noncore print operations while also preserving the integrity of our core operations. We also made an additional $10 million in additional reductions entering fiscal 2026. For the year, cash costs decreased 5% compared to last year and finished at $524 million. We remain steadfast in our commitment to long-term financial sustainability. By enhancing operational rigor this year without compromising quality, we strengthened our long-term position and are poised to drive sustainable shareholder value over the long term.

Next, I'll move to the balance sheet. Our credit agreement with Berkshire Hathaway includes favorable terms, including the 25-year runway, fixed interest rate and no financial performance covenants. These better-than-market terms allow us to stay laser-focused on executing our strategy. Also, we've recently executed a strategic termination of the company's fully funded defined benefit pension plan. This enhances balance sheet flexibility and eliminate long-term volatility while preserving the participant benefits. Since the plan assets have grown sufficiently to cover all obligations, the company is free from any future cost uncertainty. We continue to identify opportunities to monetize our noncore assets, which improves liquidity and facilitate accelerated debt repayment.

In fiscal 2025, we closed $9 million of asset sales, and we've identified an additional $25 million of noncore assets to monetize in the future. The monetization of these noncore assets provide a significant source of liquidity in 2026. And looking ahead to 2026, we expect adjusted EBITDA growth in mid-single digits. And with that, I'll turn it back to Kevin.

Thanks, Tim. I'd like to revisit our long-term outlook for digital subscription. The key driver of our digital revenue growth is our digital-only subscription revenue, not only for 2026, but for the next 5 years. This slide provides insight into the positive long-term trajectory of our digital subscriptions and associated revenue. The acceleration in digital subscription revenue growth over the past few years is driven by investments we've made in top talent and in the areas of content, branding and consumer marketing. These investments are producing strong results through engaging local content, effective brand campaigns and KPI-driven marketing campaigns, we expect the results to continue to push our revenue forward.

With these investments and actions, we expect to achieve $175 million of recurring digital subscription revenue by fiscal 2030 fueled by 1.2 million digital subscribers. Our focus on diversifying and expanding offerings for advertisers will lead to the acceleration of digital advertising revenue over the next 5 years. We have strong relationships with more than 20,000 local and regional advertisers across the U.S., and we partner with them to achieve their marketing goals. We sell advertising and marketing services to our customer base through both our owned and operated products and our full suite of omnichannel marketing solutions through Amplified Digital Agency.

With advanced data-driven ad tech specialized category expertise, scalable custom video content and powerful first-party data access, Amplified is a strong partner for local and regional businesses looking to drive growth. We continue to see a significant growth runway as we execute our strategy. Our 2030 goal for digital advertising revenue is over $250 million. While Amplified is the growth engine for top line advertising revenue, our massive own and operated digital audience fuels high-margin digital advertising revenue. These owned and operated digital products infused with valuable hyper-local content remain a key advertising channel for our local communities.

Our owned and operated properties attract massive audiences and we're offering more video inventory and branded content opportunities to boost digital advertising revenue. This category is important as there remains growth potential by expanding our audience and this category represents our highest margin digital advertising revenue. Lee has a strong legacy and a bright future. We're a leader in local content with core local news and strong advertising assets in place. We provide breaking news and stories that matter most to the local communities we serve. Over the past 5 years, we have grown our digital revenue mix to 53% as of 2025 more than doubling since the launch of our 3-pillar digital growth strategy.

Looking ahead, we're working on an important development, namely a $50 million common stock rights offering to further support our digital transformation and deleveraging over the next 5 years. Our full lender of Berkshire Hathaway is extremely supportive of our long-term future. Successful completion of the rights offering will trigger an amendment to our credit agreement, reducing the interest rate on our outstanding debt from 9% to 5% for 5 years. This will result in $18 million in annual interest savings. The combination of the $50 million infusion into the business with another $90 million in interest savings over 5 years gives our balance sheet and capital structure a tremendous boost. We're excited to provide an update on our next quarter's call on the recapitalization investment efforts that are underway.

The upcoming rights offer sets us up even more favorably over the next stage of our evolution as a digital-first company. Our local content and presence in our local communities are as strong as they've ever been, and we look forward to the next 5 years being our strongest yet. And lastly, we recently announced the upcoming departure of Tim in the early part of 2026. I'd like to extend my sincere and deep gratitude to Tim for his leadership, integrity and dedication serving as Lee's CFO for the better part of the last decade. His financial acumen and stewardship has been instrumental in advancing the company. While we'll miss him as a valued team member, we fully support his decision and wish him every success in the next chapter. Tim will see the transaction and transition through and be with Lee until March. We'll share more on the next call regarding his successor. But in the meantime, I'd like to thank Tim and his team and wish him the very best in the future. This concludes our remarks, and we're open for questions.

[Operator Instructions]

We will now take our first question from the web. What was the total debt reduction in the fourth fiscal quarter and the full fiscal year.

Yes. So just as some context, since our credit agreement was launched in 2020, we have reduced debt, $121 million since that time. In 2025, we have seen -- as you recall, we did have, in response to the cyber incident, waivers related to interest in rent that did increase our debt balance. If we exclude the increase related to those items, our debt was reduced roughly $3.5 million in the fiscal year as a result of the operations and asset sales.

So with that, we have no more questions, and I'll turn it back to Kevin for closing remarks.

I'd like to thank everyone for joining today's call. Our focus remains on transforming our business for the long-term benefit of our shareholders, our employees, our readers and our advertisers. We appreciate your time and your interest in Lee. Thank you again.

Thank you. At this time, we have reached the end of our question-and-answer session, and this concludes today's conference call. Thank you for participating, and you may now all disconnect. Everyone, have a great day.

Welcome to the Lee Enterprises 2025 Third Quarter Webcast and Conference Call. The call is being recorded and will be available for replay at investors.lee.net.

[Operator Instructions]

A link to the webcast can be found at investors.lee.net. Now I will turn the call over to your host, Jared Marks, Vice President of Finance.

Good morning. Thank you for joining us. In addition to myself, speaking on this morning's call are Kevin Mowbray, President and Chief Executive Officer; and Tim Millage, Vice President, Chief Financial Officer and Treasurer. Earlier today, we issued a news release with preliminary results for our third fiscal quarter of 2025. It is available at lee.net as well as major financial websites. Please also refer to our earnings presentation found at investors.lee.net, which includes supplemental information.

As a reminder, this morning's discussion will include forward-looking statements based on our current expectations. These statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially. Such factors are described in this morning's news release and in our SEC filings. During the call, we refer to certain non-GAAP financial measures. Reconciliations to the relevant GAAP measures are included in the tables accompanying the release. And now to open the discussion is our President and Chief Executive Officer, Kevin Mowbray.

Thanks, Jared, and good morning, everyone. During this call, I'm pleased to share an update on our digital transformation as well as our third quarter operating results, which represented significant growth in adjusted EBITDA over Q2. We also have an important update on our management team. Nathan Bekke was named Chief Operating Officer, with a strong background in strategic leadership and operational excellence, Nathan will continue to play a pivotal role in driving our digital growth and innovation.

The third quarter demonstrated solid growth amid continued recovery from last quarter's cyber event. Notably, local advertising revenue trends showed meaningful improvement with the year-over-year trend favorable 7 points fueled by sustained strength across our core base of 20,000 local advertisers. We launched our first-to-market AI-powered suite in Q2.

Our AI enablement program offers a full suite of AI products. Since our last update in partnership with WeLevel, Amplified Agency has launched an expanded suite of AI-powered packages designed to drive lead capture, customer engagement and business automation. These packages are called Smart Answer, Smart Team and Smart Suite HQ, designed to provide scalable solutions for businesses at every stage from handling inbound calls to fully automating content, communications and sales workflows. This rollout marks a pivotal step in evolving our product catalog into a portfolio of industry-leading AI tools and solutions. We expect the growth of our AI product suite to be a key catalyst for accelerating digital advertising growth as we advance towards our long-term targets.

On the digital subscription front, we delivered same-store revenue growth of 16% year-over-year, driven by an impressive 28% growth in ARPU. We ended June with 670,000 digitally-only subscribers, which is down sequentially, reflecting the continued residual impact from the cyber event. However, as we've said before, unit growth may not be linear quarter-to-quarter. We remain confident and firmly committed to reaching our long-term unit target, and expect to continue driving top line revenue growth through both unit growth and rate optimization. The progress in these revenue category gives us confidence in our ability to drive sustainable growth and deliver long-term value to our shareholders.

As a result of our 3-pillar digital growth strategy is expected to result in $450 million of digital revenue by 2028. After navigating the cyber event back in February, our entire team is back to full steam ahead. With an excellent foundation of $305 million annual digital revenue as of this quarter, we're confident our strategy will achieve digital revenue of $450 million by 2028. As a testament to our 3-pillar digital growth strategy, we have consistently outpaced our industry peers in several key measures of digital growth, both digital subscription and digital agency revenue growth. Digital subscription revenue grew 33% over the last 3 years, nearly doubling the nearest industry peer.

On the advertising side, Ampli Digital agency revenue growth has significantly outpaced our nearest competitor, growing 10% annually over the last 3 years. Total digital revenue was $305 million on a trailing 12-month basis, well on our way to achieving our long-term target. Our digital revenue continues to grow with an increase of 4% on a same-store basis over the prior quarter. Digital subscription revenue continued to lead the way, growing 16% year-over-year on a same-store basis. Ampli Digital Agency had another solid quarter of double-digit growth as well with an increase of 10% on a same-store basis over the prior year.

Our third quarter revenue clearly demonstrates that our digital transformation is in full effect with our digital revenue reaching 55% of our overall revenue this quarter. The strength of our core digital business is foundational to the long-term success of Lee, but I'll add that the innovative ad products that we recently launched puts us in a position to accelerate our digital revenue growth even further. And now I'll pass it over to Tim.

Thank you, Kevin. Our core digital business has driven digital revenue growth of more than 17% annually from fiscal 2021 to fiscal 2024, and that has translated to comparable annual growth in digital gross margins. Replacing our print revenue with growing and profitable digital revenue sets us up to achieve long-term sustainability, and we are nearing this sustainability point. As Kevin alluded to and as we shared in our last call, we launched our suite of AI products last quarter designed to provide local businesses with the tools they need to thrive in a competitive environment. This innovative offering comes from Amplified Digital Agency and leverages cutting-edge artificial intelligence technology. We are excited about this AI product suite in terms of our long-term digital revenue outlook.

While the February cyber incident interrupted efforts on this project, we believe that AI products will provide a nice lift to our FY '25 digital revenue and more importantly, help us over the long term to reach sustainability from digital revenue. Speaking to this quarter's results, total operating revenue in the third quarter was $141 million, which represented a year-over-year trend in line with our second quarter operating results. Third quarter trends were impacted by the aftereffects of the cyber incident, particularly on the subscription side. We mentioned on our last call that our normal process for activating new digital subscribers was hampered, which significantly impacted units in the quarter.

Despite the unit challenges, digital subscription revenue grew 16% on a same-store basis due to a multitude of successes on the pricing side. For Amplified Digital Agency, we saw a nice pickup in revenue trends, a percentage point better than prior quarter and a promising return to double-digit growth year-over-year. This all led to $78 million of total digital revenue in the third quarter, representing growth over the prior year of 4% on a same-store basis. Moving over to the cost side. Lee has a successful track record of effective cost management and thoughtfully investing in strategies that fuel long-term growth. Following up on our last call, we executed approximately $40 million in annualized cost reductions in the second quarter aimed at lowering costs across the board, with an emphasis on noncore print operations while preserving the integrity of our core operations.

In the third quarter, cash costs decreased 7% compared to the same quarter last year, an acceleration from the first half trend due to our cost containment efforts. We anticipate fiscal year will finish with cash costs between $522 million and $532 million, representing a 3% to 5% decline over the prior year. Keep in mind that as we enter FY '26, about half of the $40 million in annualized cost reductions we took this year will flow through and benefit next year's operating results. We remain steadfast in our commitment to long-term financial sustainability and the continued delivery of high-quality local journalism. By enhancing operational rigor this quarter without compromising quality, we've strengthened our long-term position and are poised to drive sustainable shareholder value over the long term.

Next, I'll move over to the balance sheet. Our credit agreement with Berkshire Hathaway includes favorable terms, which include a 20-year runway, a fixed interest rate and no financial performance covenants. These better-than-market terms allow us to stay laser-focused on executing our strategy. In response to the cyber incident and to provide short-term liquidity, Berkshire waived payment of the company's interest in basic rent payments in March, April and May. The waived payments were added to principal amount due under our credit agreement. This is a fitting example of how our credit agreement benefited us in the wake of the cyber incident.

Since May of 2025, however, all mandatory principal and interest payments required under our credit agreement have been made from our internal operating cash flows. This is an important milestone in our cyber recovery. Despite the temporary addition of our principal debt balance, we've made considerable progress paying down debt in recent years and remain committed to reducing our debt going forward. We continue to identify opportunities to monetize our noncore assets, which improve liquidity and facilitate accelerated debt repayment. Year-to-date through the third quarter, we closed $9 million of asset sales. We've identified an additional $20 million of noncore assets to monetize. The monetization of these noncore assets will provide a significant source of liquidity in 2025.

Our operating results in the third quarter put us on pace to achieve our outlook of digital revenue and adjusted EBITDA growth in the second half. In the fourth quarter, we expect our core digital business led by digital subscriptions to continue to grow as the value of our high-quality local news is unmatched. We have new AI revenue streams, which we expect to help drive momentum as we finish the fiscal year strong. And with that, I will turn it back to Kevin for closing comments.

Thanks, Tim. I'd like to reiterate my thanks to the entire Lee team for their tremendous efforts during the quarter, driving our progress on our digital transformation. We're paving the way for Lee to lead the industry in this era of AI digital transformation. This concludes our remarks. The team will remain on the line for questions you may have.

[Operator Instructions]

I will now read our first question from the web. Recent trends suggest readers are spending less time per visit on news websites. How is Lee addressing this shift in how readers consume news?

I can start. Certainly, thanks for the question. One of the competitive advantages that Lee has over kind of the national media is our asset portfolio, which typically does not act in the same manner as certainly as major metros. In fact, we have seen some strong metrics specifically from our loyal reader base in terms of engagement.

Additionally, we are hyper-focused on enhancing our digital user experience by providing state-of-the-art digital products. We're also focused on expanding the depth and breadth of local content and growing subscribers and driving subscription revenue. So that's how we're aiming to address changes in consumer behavior.

We have no more questions from our participants. I'll turn it back to Kevin for closing remarks.

Well, thank you all for joining us this morning. Our focus remains on transforming our business for the long-term benefit of our shareholders, our employees, our readers and our advertisers. We appreciate your time and your interest in Lee. Thank you again.

Thank you. At this time, we have reached the end of our question-and-answer session. This concludes our call, and you may now disconnect.