Lee Enterprises (NYSE: LEE), a leading provider of news,
information and advertising in 50 markets, announced today that the
company has repaid, in full, the 9% Senior Notes issued by its
subsidiaries St. Louis Post-Dispatch LLC and Pulitzer Inc. (the
“New Pulitzer Notes.”)
The New Pulitzer Notes, which were issued in connection with the
refinancing of $94 million of debt in May 2013, were due April 3,
2017. The notes were held by BH Finance LLC, a subsidiary of
Berkshire Hathaway Inc., and had a balance of $9 million on March
29, 2015, the end of the last fiscal quarter.
Mary Junck, chairman and chief executive officer, attributed the
early pay-off to the company’s strong performance and substantial
cash flows.
“We have been, and will continue to be, committed to the
repayment of the company’s debt,” she said. “Paying off the New
Pulitzer Notes almost two years early is clear evidence of that
commitment. Our focus is on continued strong cash flows and using
them to best position us for the future.”
“We appreciate the involvement of Berkshire Hathaway in the
refinancing,” she added.
Vice President, Chief Financial Officer and Treasurer Ron Mayo
said the repayment has a significant impact on the remaining
debt.
“Repaying these notes triggers the relaxation, or removal, of
several cash flow restrictions that existed in our capital
structure,” he said. “The net effect of these changes should result
in more rapid amortization of debt under the company’s First Lien
Credit Agreement, which matures in March 2019.”
Debt outstanding under the term loan of the First Lien Credit
Agreement stood at $205.25 million at March 29, 2015. It was
reduced by $44.75 million from the original amount of $250 million
in the first year of the agreement, before the effect of the
changes in cash flow restrictions noted above took effect.
“The company’s ability to pay dividends, acquire its own stock,
or to make other restricted payments, such as optional redemption
of debt under its Second Lien Loan Agreement, remain restricted by
the terms of the Senior Secured Notes,” Mayo said.
“More rapid acceleration of payments under the First Lien Credit
Agreement could accelerate the company’s ability to make such
restricted payments in the future and may eliminate the need to
refinance any balance of such debt when it comes due in 2019.”
Mayo also said the repayment triggers the ability to reduce debt
under the company’s Second Lien Loan Agreement by requiring that
the excess cash flow of the Pulitzer subsidiary, as defined, be
offered, at 100% of the principal amount, to the debt holders until
March 2017. After that time, those debt holders are required to
accept payments based on excess cash flow.
This event also moves the holders under the Second Lien Loan
Agreement into a first priority collateral position on
substantially all of the assets of Pulitzer Inc. and its
subsidiaries, which includes St. Louis Post-Dispatch LLC, and it
moves the holders under the company’s Senior Secured Notes and
First Lien Credit Agreement into a junior collateral position on
the same assets.
ABOUT LEELee Enterprises is a
leading provider of local news and information, and a major
platform for advertising, in its markets, with 46 daily newspapers
and a joint interest in four others, rapidly growing digital
products and nearly 300 specialty publications in 22 states. Lee's
newspapers have circulation of 1.0 million daily and 1.5 million
Sunday, reaching more than three million readers in print alone.
Lee's markets include St. Louis, MO; Lincoln, NE; Madison, WI;
Davenport, IA; Billings, MT; Bloomington, IL; and Tucson, AZ. Lee
Common Stock is traded on the New York Stock Exchange under the
symbol LEE. For more information about Lee, please visit
www.lee.net.
FORWARD-LOOKING STATEMENTS — The Private Securities Litigation
Reform Act of 1995 provides a “safe harbor” for forward-looking
statements. This release contains information that may be deemed
forward-looking that is based largely on our current expectations,
and is subject to certain risks, trends and uncertainties that
could cause actual results to differ materially from those
anticipated. Among such risks, trends and other uncertainties,
which in some instances are beyond our control, are:
- Our ability to generate cash flows and
maintain liquidity sufficient to service our debt;
- Our ability to comply with the
financial covenants in our credit facilities;
- Our ability to refinance our debt as it
comes due;
- That the warrants issued in our
refinancing will not be exercised;
- The impact and duration of adverse
conditions in certain aspects of the economy affecting our
business;
- Changes in advertising demand;
- Potential changes in newsprint, other
commodities and energy costs;
- Interest rates;
- Labor costs;
- Legislative and regulatory
rulings;
- Our ability to achieve planned expense
reductions;
- Our ability to maintain employee and
customer relationships;
- Our ability to manage increased capital
costs;
- Our ability to maintain our listing
status on the NYSE;
- Competition; and
- Other risks detailed from time to time
in our publicly filed documents.
Any statements that are not statements of historical fact
(including statements containing the words “may”, “will”, “would”,
“could”, “believes”, “expects”, “anticipates”, “intends”, “plans”,
“projects”, “considers” and similar expressions) generally should
be considered forward-looking statements. Readers are cautioned not
to place undue reliance on such forward-looking statements, which
are made as of the date of this release. We do not undertake to
publicly update or revise our forward-looking statements, except as
required by law.
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Lee EnterprisesCharles Arms, 563-383-2100Director of
CommunicationsIR@lee.net
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