Lee repays $60 million debt for year, $15.3 million more in October

By Susanna Moon

Chicago, Oct. 10 - Lee Enterprises, Inc. said it has repaid another $15.3 million of debt in the most recent quarter after paying down more than $60 million in the fiscal year ended Sept. 30.

The repayments trimmed the company's debt balance to $930.6 million, below the initial target level, according to a statement prepared for a presentation Wednesday at the Deutsche Bank 2012 Leveraged Finance Conference in Scottsdale, Ariz.

In January of this year, Lee refinanced its former term loan and revolving debt into a structure of first- and second-lien secured debt, along with a small undrawn revolver and former Pulitzer notes debt.

Lee used a voluntary pre-packaged Chapter 11 process to bind a small minority of non-consenting lenders to the terms. The agreements extend the maturity of Lee's borrowings to December 2015 and April 2017.

Mary Junck, Lee's chairman and chief executive officer, and Carl Schmidt, vice president, chief financial officer and treasurer, said the company expects to keep slashing its leverage over the next few years.

In the 12 months ended June, Lee posted unlevered free cash flow of $170 million, and substantially all of that free cash flow will be used to service debt. Lower cash levels and selective asset sales have contributed to the acceleration in debt repayment, the release noted.

Lee said it expects that higher interest costs from refinancing and the tax treatment of recently refinanced debt will result in minimal cash taxes going forward.

Lee is a Davenport, Iowa-based print and digital provider of local news, information and advertising. Lee's reorganization plan became effective as of Jan. 30 as expected. The court confirmed the company's pre-packaged reorganization plan on Jan. 23.

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