LEE

Welcome to the Lee Enterprises 2026 2nd 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'll be an opportunity for questions. Participants accessing this 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 Bekke, President and Chief Executive Officer, Josh Rinehults, Vice President, Chief Financial Officer, and Treasurer, Joe Battistoni, Chief Revenue Officer, and David Hoffmann, Chairman of our Board of Directors. Earlier today, we issued a news release announcing preliminary results for our 2nd 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 Hoffmann.

Thank you, Jared, 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, 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, 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 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'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 Hudl, 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. 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. Thank you for joining the call today. I'd like to start today by thanking David Hoffmann for his investment in Lee and more importantly, for his commitment to local journalism and the communities we serve. As David Hoffmann 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 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. 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 FY 2026, all focused on expanding content offerings, driving new users, and improving the consumer experience. On the advertising side, the landscape continues to evolve. 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, 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 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 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 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. 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 a 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. 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 2021 to fiscal 2026, 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 2026, 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 non-core 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. 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 a 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. One 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 2 real estate sales of non-core assets, and we made a $1 million debt payment just into the third quarter. 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 Bekke 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 wanna 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. At the close of the planned remarks, there will be an opportunity for questions. Participants accessing this call by webcast may submit written questions through the website and they will be answered during the call as time permits. Otherwise, you will receive a response letter. 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 Becky, President and Interim Chief Executive Officer, and Josh Reinholz, Vice President, Interim Chief Financial Officer, and Treasurer. Earlier today, we issued a news release announcing preliminary results for our 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 Becky.

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 five 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 a 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 twelve 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 Hoffman, 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. Hoffman as Chairman of the Board of Directors. Concurrently, with this private placement, the credit agreement has been amended to reduce the interest rate on our outstanding debt to 5% from 9% for the next five years. On $455 million in debt, the interest rate is expected to generate approximately $18 million in annual interest savings or up to $90 million over the five-year period. That significant cash flow improvement over the five-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 consumer's 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 US. 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 twelve 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 twelve 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. Q1 adjusted EBITDA increased by a significant 61% or $5 million over the prior year reflecting improved operating efficiency and higher 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 rep. 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 a 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 headcount, 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 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 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 rep. Over the past three 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 user's experience by delivering journalism that is credible, and timely as well as intuitive, accessible, and engaging across devices. Our roadmap will ensure our platforms evolve alongside audience expectations also 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 three 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 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 six years ago, our revenue was primarily print. Making up nearly 80% of our operating. As of 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 a 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 is translated to comparable annual growth in digital gross margin. 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 Vistas project we have underway and that are forthcoming. From a cost perspective, we have a consistent track record of disciplined cost management. While making strategic investments that support long-term growth. We remain steadfast in our commitment to long-term financial sustainability and the continued delivery of high-quality local journals. 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 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 just like to reiterate how impactful the amended credit agreement is to our long-term financial. 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 of 5% is expected to generate approximately million dollars in annual interest savings or up to approximately $90 million over the five 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 non-core that we are actively working to monetize. These asset sales will contribute toward 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 five years.

In other news,

recently announced a new strategic partnership with Huddl. A leader in sports technology video analysis, and data. Huddl 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 collaborations 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 Huddl 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.

What leaves 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 Huddl team and we'll share more as the relationship develops.

With that,

open the call for questions.

Lee?

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

Questions.

We have no questions from our live 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 five 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 five 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.

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