Immaterial Corrections to Prior Period Financial Statements

12 Months Ended

Sep. 25, 2022

Accounting Changes and Error Corrections [Abstract]

Immaterial Corrections to Prior Period Financial Statements

IMMATERIAL CORRECTIONS TO PRIOR PERIOD FINANCIAL STATEMENTSIn 2022, the Company identified an immaterial error in its accounting for certain deferred tax assets contained in its previously issued audited consolidated financial statements for the fiscal years ended September 26, 2021, and September 27, 2020 (including the unaudited interim periods within those fiscal years), and the unaudited interim consolidated financial statements for the interim periods ended June 26, 2022, March 27, 2022, and December 26, 2021. The error relates to tax basis associated with goodwill and a put option that had been recognized in 2008 in connection with the acquisition of Pulitzer, Inc. When the put option was settled in 2009, the Company should have remeasured the tax basis to reflect the cash settlement of the put option, but did not. This remeasurement would have resulted in the deferred tax assets being reduced to zero and the recognition of a deferred tax liability. The Company assessed the materiality of these errors in accordance with SEC Staff Accounting Bulletins (SAB) No. 99, Materiality, and SAB No. 108, Quantifying Misstatements, on its previously issued consolidated financial statements and determined that, after reviewing the nature of the corrections, as well as evaluating the quantitative and qualitative characteristics of the errors, these adjustments do not represent a material change to the prior period financial statements. The Company has revised its previously issued consolidated financial statements as set forth in the tables below. As a result of this error, the Company recorded an adjustment to the opening balance sheet in the fiscal period ended September 27, 2020, to increase net deferred tax liabilities and accumulated deficit by $14,559,000.

The table below sets forth the impact of correcting the error in the Consolidated Statements of Income (loss) and Comprehensive Income (loss).

(Thousands of Dollars, Except Per Common Share Data)	Year Ended September 26, 2021			Year Ended September 27, 2020
	As previously reported	Adjustment	As Revised	As previously reported	Adjustment	As Revised
Income before Income Taxes	32,047	—	32,047	2,843	—	2,843
Income tax expense	7,215	40	7,255	4,104	(1,131)	2,973
Net income (loss)	24,832	(40)	24,792	(1,261)	1,131	(130)
(Loss) income attributable to Lee Enterprises, Incorporated	22,785	(40)	22,745	(3,106)	1,131	(1,975)
Comprehensive (loss) income attributable to Lee Enterprises, Inc.	85,022	(40)	84,982	5,958	1,131	7,089
Earnings per common share
Basic	3.99	(0.01)	3.98	(0.55)	0.20	(0.35)
Diluted	3.91	(0.01)	3.90	(0.55)	0.20	(0.35)

The table below sets forth the impact of correcting the error in the Consolidated Balance Sheets.

(Thousands of Dollars)	As of September 26, 2021			As of September 27, 2020
	As previously reported	Adjustment	As Revised	As previously reported	Adjustment	As Revised
Liabilities
Deferred incomes taxes	40,295	13,468	53,763	15,208	13,428	28,636
Total liabilities	786,853	13,468	800,321	893,690	13,428	907,118
Accumulated deficit	(245,744)	(13,468)	(259,212)	(268,529)	(13,428)	(281,957)
Total stockholders' equity (deficit)	54,565	(13,468)	41,097	(31,564)	(13,428)	(44,992)
Total equity (deficit)	56,698	(13,468)	43,230	(29,633)	(13,428)	(43,061)
Total liabilities and stockholders' equity	843,551	—	843,551	864,057	—	864,057

The table below sets forth the impact of correcting the error in the Consolidated Statements of Stockholders' Equity (Deficit)

(Thousands of Dollars)	Year Ended September 26, 2021			Year Ended September 27, 2020
	As previously reported	Adjustment	As Revised	As previously reported	Adjustment	As Revised
Accumulated deficit:
Balance, beginning of year	(268,529)	(13,428)	(281,957)	(265,423)	(14,559)	(279,982)
Net income (loss)	24,832	(40)	24,792	(1,261)	1,131	(130)
Balance, end of year	(245,744)	(13,468)	(259,212)	(268,529)	(13,428)	(281,957)

The table below sets forth the impact of correcting the error in the Consolidated Statements of Cash Flows.

(Thousands of Dollars)	Year Ended September 26, 2021			Year Ended September 27, 2020
	As previously reported	Adjustment	As Revised	As previously reported	Adjustment	As Revised
Operating Activities
Net income (loss)	24,832	(40)	24,792	(1,261)	1,131	(130)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Deferred income taxes	5,120	40	5,160	(3,560)	(1,131)	(4,691)

Unaudited Interim Financial Information

The tables below sets forth the impact of the error correction on the unaudited interim Consolidated Balance Sheets for the interim periods in 2022. The error had no impact on the unaudited interim Consolidated Statements of Income (Loss) and Comprehensive Income (Loss), and Statements of Cash Flows, in the 2022 interim periods.

(Thousands of Dollars)	As of December 26, 2021			As of March 27, 2022
	As previously reported	Adjustment	As Revised	As previously reported	Adjustment	As Revised
Liabilities
Deferred incomes taxes	38,957	13,468	52,425	38,397	13,468	51,865
Total liabilities	768,744	13,468	782,212	740,032	13,468	753,500
Accumulated deficit	(233,086)	(13,468)	(246,554)	(240,362)	(13,468)	(253,830)
Total stockholders' equity	60,912	(13,468)	47,444	53,129	(13,648)	39,481
Total equity	63,105	(13,468)	49,637	55,369	(13,468)	41,901
Total liabilities and stockholders' equity	831,849	—	831,849	795,401	—	795,401

(Thousands of Dollars)	As of June 26, 2022
	As previously reported	Adjustment	As Revised
Liabilities
Deferred incomes taxes	37,295	13,468	50,763
Total liabilities	740,221	13,468	753,689
Accumulated deficit	(240,631)	(13,468)	(254,099)
Total stockholders' equity	52,391	(13,468)	41,147
Total equity	54,615	(13,468)	41,147
Total liabilities and stockholders' equity	794,836	—	794,836