Sheridan Group reports little cash at year-end, debt of $128 million

By Lisa Kerner

Charlotte, N.C., April 2 - Sheridan Group, Inc. reduced its net debt by $12 million in 2012, according to president and chief executive officer John Saxton.

"Our net debt-to-EBITDA ratio improved from 4.2 at the end of 2011 to 3.5 at the end of 2012," said Saxton during the company's fourth-quarter and full-year 2012 earnings call on Tuesday.

"Total balance sheet debt outstanding at December 31, 2012 was $128 million, including a $3.6 million bond discount," chief financial officer Robert Jakobe said on the call.

According to Jakobe, total balance sheet debt has been reduced by $7.9 million in 2012 versus 2011.

"However, when you exclude the bond discount and factor in the change in accrued interest and cash, net debt has been reduced $12.2 million in 2012 versus year-end 2011, and $1.1 million during the fourth quarter," Jakobe said.

Sheridan's revolver balance at Dec. 31 was $5.7 million.

The company had cash at year-end of about $1.6 million, compared to $500,000 at Dec. 31, 2011, said Jakobe.

In 2012, Sheridan repurchased 2011 notes with the face value of $12.1 million in the open market for $10.5 million. During the fourth quarter, the company bought 2011 notes with the face value of $2.5 million for $2.1 million, according to Jakobe.

To date in 2013, Sheridan has purchased 2011 notes with the face value of $6.6 million for $5.5 million.

Jakobe commented that, as reported in the company's form 10-K filing with the Securities and Exchange Commission, the Hunt Valley, Md.-based print and publishing company may seek to purchase or retire its 2011 notes in 2013.

The filing also stated that the company does not have sufficient funds and may not be able to refinance its senior secured notes that mature on April 15, 2014.

Sheridan's working capital facility terminates on Jan. 14, 2014, the filing said.

Net cash provided by operating activities was $20.6 million for 2012 compared to $10.1 million for 2011.

Sheridan used net cash of $10.5 million in investing activities for the year versus $7.8 million in 2011.

Net cash used in financing activities was $8.9 million for 2012 compared to $15.5 million during 2011, according to the filing.

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