Lee Enterprises, Incorporated LEE reduced debt by $98.5 million in its fiscal year ended September 29,
2013, reducing the balance to $847.5 million, two years ahead of its
reorganization plan.
In remarks prepared for a presentation Wednesday at the Deutsche Bank 21st
Annual Leveraged Finance Conference in Scottsdale, AZ, Mary Junck, Lee
chairman and chief executive officer, and Carl Schmidt, vice president, chief
financial officer and treasurer, said Lee expects to continue reducing
leverage over the next several years.
They also said:
* Lee's consolidated leverage has been reduced to approximately 4.9x
Adjusted EBITDA^(1) for the 53 weeks ended June 30, 2013 (LTM June
2013).
* Business transformation initiatives are expected to reduce cash costs
approximately $10 million in 2014. Those decreases will help to mitigate
cost increases from new revenue initiatives and other sources.
* Lee continues on track to achieve published guidance of 4.5-5.5% operating
expense reduction in 2013, excluding depreciation, amortization and
unusual matters. Since 2007, cash costs of continuing operations have been
reduced $271 million, or 34%, through LTM June 2013.
* "We are particularly proud of our track record of maintaining our cash
flow, in spite of revenue losses caused by macroeconomic and business
conditions. We have achieved nearly five straight years of stable
EBITDA^(1) and Adjusted EBITDA," which totaled $163 million and $175
million, respectively, through LTM June 2013, with EBITDA margin improving
to 23.6%.
* Lee's EBITDA results have resulted in strong unlevered free cash flow^(1),
which totaled $156 million through LTM June 2013. Substantially all of
that cash flow is dedicated to debt service. Details are included in the
appendix to the presentation, which is available at lee.net.
* Lee was able to carry back 2012 tax losses, resulting in a tax refund of
$9.5 million in August 2013. Approximately $7 million of additional
carryback is available from taxes paid in 2011. "At current levels of
profitability, we don't expect to pay significant taxes for at least
several years, due to higher interest expense from refinancing and the tax
impact of the Chapter 11 process."
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