Note 8 - Earnings Per Common Share

9 Months Ended

Jun. 26, 2022

Notes to Financial Statements

Earnings Per Share [Text Block]

8 EARNINGS PER COMMON SHARE

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

	Three months ended						Nine months ended
	June 26,			June 27,			June 26,			June 27,
(Thousands of Dollars and Shares, Except Per Share Data)	2022			2021			2022			2021
(Loss) income attributable to Lee Enterprises, Incorporated:		(269	)		3,227			5,113			17,995
Weighted average common shares		5,965			5,881			5,935			5,867
Less weighted average restricted Common Stock		(170	)		(156	)		(168	)		(155	)
Basic average common shares		5,795			5,725			5,767			5,712
Dilutive stock options and restricted Common Stock		—			123			93			102
Diluted average common shares		5,795			5,848			5,860			5,814
Earnings per common share:
Basic		(0.05	)		0.56			0.89			3.15
Diluted		(0.05	)		0.55			0.87			3.10

For the three months ended June 26, 2022 no shares were considered in the computation of diluted earnings per common share because the Company recorded net losses. For the nine months ended  June 26, 2022, 74,804 shares were not considered in the computation of diluted earnings per common share because their inclusion would result in an anti-dilutive effect on per share amounts. For the three and nine months ended June 27, 2021, 600,000 anti-dilutive shares were excluded.

Rights Agreement

On November 24, 2021, our Board of Directors adopted a stockholder rights plan (the “Rights Agreement”). Pursuant to the Rights Agreement, on November 24, 2021, our Board of Directors declared a dividend of one preferred share purchase right (a “Right”), payable on December 6, 2021, for each share of our Common Stock outstanding to the stockholders of record on that date. Each Right entitles the registered holder to purchase from the Company one-thousandth of a share of Series B Participating Convertible Preferred Stock, without par value (the “Preferred Shares”), of the Company at a price of $120.00 per one one-thousandth of a Preferred Share represented by a Right, subject to adjustment.

The Rights will initially trade with our Common Stock and will generally become exercisable only if any person or group, other than certain exempt persons, acquires beneficial ownership of 10% (or 20% in the case of certain passive investors) or more of our Common Stock outstanding. In the event the Rights become exercisable, each holder of a Right, other than the triggering person(s), will be entitled to purchase additional shares of our Common Stock at a 50% discount or the Company may exchange each Right held by such holders for one share of our Common Stock. The Rights Agreement will continue in effect until November 23, 2022, or unless earlier redeemed or terminated by the Company, as provided in the Rights Agreement. The Rights have no voting or dividend privileges, and, unless and until they become exercisable, have no dilutive effect on the earnings of the Company.

The Rights Agreement applies equally to all current and future stockholders and is not intended to deter offers or preclude our Board of Directors from considering acquisition proposals that are fair and otherwise in the best interest of our stockholders. However, the overall effect of the Rights Agreement may render it more difficult or discourage a merger, tender offer, or other business combination involving us that is not supported by our Board of Directors.