• by Ray Schultz , February 27, 2023

Lee Enterprises Inc. made it just under the wire on Monday, filing its Form 10-K with the Securities and Exchange Commission for its 2022 fiscal year on the very day set as deadline for a compliance plan by The Nasdaq Stock Market LLC. Instead, it made the full filing. 

The company reported total operating revenue of $781 million for the fiscal year ended September 25, 2022 , down $13.7 million, or 1.7% YoY.  

Net income was $970,000, compared to $24.8 million in 2021, the decrease mostly due to “cycling one-time non-cash benefits,” the filing states.  

In addition:

• Advertising and marketing services revenue totaled $366.4 million, down 0.8% compared to 2021.  
• Print advertising revenues were $185.0 million in down $42.9 million, or 18.8%, from 2021. The decline was mostly due to the downward industrywide trend in print advertising.
• The digital advertising and marketing services category hit $181.5 million, a 28.3% hike over 2021. This category made up 49.5% of 2022 revenue, versus 38.3% in 2021.  Lee attributed the increase to growth at Amplified, its digital marketing service. Amplified revenue increased 82.9% to $75.8 million.
• Digital digital-only subscription revenues, and digital services revenues, were $240 million, or 31% of Lee’s total revenues. The firm has 532,000 digital-only subscribers, compared to 402,000 in 2021. 
• Subscription revenue was $353.6 million, down 1.1%, YoY. The change in is due to decline in full access volume, consistent with historical and industry trends, but was partly offset by growth in selective price increases on full access subscriptions and in digital-only subscribers and digital-only revenue. 

Moving forward, Lee has set these strategic initiatives: 

• Expand digital audiences by transforming the presentation of local news and information. 
• Expand digital subscription base and revenue. 
• Diversify and expand offerings for local advertisers.

Possible risks to the firm include issues relating to Alden Global Capital’s attempted takeover (reportedly abandoned by Alden) and Lee's acquisition of BH Media and Buffalo News.

In the filing, Lee attributes its reporting problems to the following (we quote in part):  

• “Management did not maintain appropriately designed information technology general controls in the areas of user access for certain of its information systems.
• “Management did not maintain appropriately designed controls over data provided by third-party service 
• organizations. 
• “Management did not maintain appropriately designed controls over validation of the accuracy of the tax basis associated with certain deferred tax assets and liabilities.”

The late filing did not affect Lee’s Nasdaq listing.