DAVENPORT, Iowa (January 23, 2012) -- Lee
Enterprises, Incorporated (NYSE: LEE), a leading
provider of local news, information and
advertising in 52 markets, has successfully
completed the remaining steps to enable its
refinancing agreements to go into effect on
January 30, 2012.
The agreements extend the maturities of Lee's
borrowings to December 2015 and April 2017.
Implementation required a voluntary, prepackaged
Chapter 11 process to bind a small minority of
non-consenting lenders to the terms. The plan of
reorganization was confirmed today by Chief U.S.
Bankruptcy Judge Kevin Gross in the District of
Delaware, where Lee is incorporated. Lee is
scheduled to emerge from Chapter 11 on January
30, 2012, when the plan of reorganization becomes
effective.
"This is the favorable outcome we fully
expected, and it provides Lee with a nearly
four-year runway to continue improving our
balance sheet," said Mary Junck, chairman
and chief executive officer. "The completion
of our Chapter 11 process, which began December
12, 2011, did not affect employees, vendors,
contractors, customers or any aspect of company
operations. Stockholders retain their interest in
the company with only modest dilution. The
refinancing, along with our ongoing strong cash
flow, will keep Lee on solid financial footing as
we continue reshaping our company and building on
our unique strengths. Because of our intensive
sales culture and evolving array of products, Lee
has outpaced the industry in advertising revenue
performance for 33 quarters in a row. Even in a
challenging economy, more than 80% percent of
adults in our larger markets read or use our
print and digital products each week, including
two-thirds of 18- to 29-year-olds. All of this
reinforces our optimism for the future."
Lee announced in September that its credit
facility would be amended and extended beyond its
current maturity of April 2012 in a structure of
first and second lien debt. The first lien debt
consists of a term loan of $689.5 million, as
well as a new $40 million revolving credit
facility that is not expected to be drawn at
closing, both of which mature in December 2015.
The first lien debt carries interest at LIBOR
plus 6.25%, with a LIBOR floor of 1.25%. Interest
on the $40 million revolver is at LIBOR plus
5.5%, with a LIBOR floor of 1.25%. Mandatory
amortization payments for the first lien debt
total $5 million for the remainder of our 2012
fiscal year, $11 million in 2013, $12.75 million
in 2014, and $13.5 million prior to the final
maturity in 2015. The second lien debt consists
of a $175 million term loan with an interest rate
of 15% maturing in April 2017. There are no
mandatory amortization payments required. Second
lien creditors will share in issuance of
approximately 6,744,000 shares of Lee Common
Stock, amounting to approximately 13% of
outstanding shares on a pro forma basis as of the
closing date.
Agreement on extending Lee's remaining debt,
the Pulitzer Notes, was reached in December. The
debt will carry an interest rate of 10.55%,
increasing 0.75% in January 2013 and each year
thereafter. Adjusted for principal payments and
non-cash fees to be paid to noteholders, the
amended Pulitzer Notes will have a balance of
$126.4 million. Mandatory amortization payments
total $1.4 million in 2012 and $6.4 million
annually thereafter prior to the final maturity
in December 2015. Both the first lien debt and
Pulitzer Notes also require principal payments
based on calculated excess cash flow and allow
for optional repayments.
Carl Schmidt, vice president, chief financial
officer and treasurer, said that although the
refinancing agreements ultimately received
support from approximately 97% of lenders under
the credit facility and all Pulitzer Notes
lenders, Lee needed the court process to complete
the transactions due to the requirement for
unanimous approval of certain of the terms of the
amended facilities.
Lee Enterprises is a leading provider of local
news and information, and a major platform for
advertising, in its markets, with 48 daily
newspapers and a joint interest in four others,
rapidly growing digital products and nearly 300
specialty publications in 23 states. Lee's
newspapers have circulation of 1.3 million daily
and 1.7 million Sunday, reaching nearly four
million readers in print alone. Lee's
websites and mobile and tablet products attracted
21.8 million unique visitors in December 2011.
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 news 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, comply with or obtain
amendments or waivers of the financial covenants
contained in our credit facilities, if necessary,
and to refinance our debt as it comes due. Other
risks and uncertainties include the impact and
duration of continuing adverse economic
conditions, changes in advertising demand,
potential changes in newsprint and other
commodity prices, energy costs, interest rates,
availability of credit, labor costs, legislative
and regulatory rulings, difficulties in achieving
planned expense reductions, maintaining employee
and customer relationships, increased capital
costs, maintaining 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",
"believe", "expect",
"anticipate", "intend",
"plan", "project",
"consider" 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.
Contact: dan.hayes@lee.net, (563) 383-2100
HUG#1579600
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