Lee Enterprises, owner of the Quad City Times, Monday (5/3) reported a $1.5 million (3 cents per share) loss for its second quarter and announced it was shelving a plan to issue notes and stock to refinance the company's more than $1 billion debt.
The newspaper chain headquartered in Davenport said "market conditions" had prompted it to withdraw plans to issue more than $1 billion in senior secured notes and 8.9 million additional common shares.
"Refinancing our credit agreement and the Pulitzer Notes debt is among our highest priorities," Lee's Chairman and Chief Executive Officer Mary Junck said in the company news release."We will continue to pursue alternatives and intend to refinance our long-term debt before it matures in April 2012."
Lee reported it had reduced its debt by $26.2 million during the second quarter and nearly $56 million during the past six months. The company is facing a total of $96 million in debt repayments in the next four quarters, according to the company.
When Lee announced its intention to issue notes and stock to help refinance its debt a month ago, the Wall Street Journal reported some "vulture" investors -- who had been buying up Lee debt at a discount -- were disappointed. The distressed debt investors had been hoping the company would be forced into bankruptcy, giving them a sizeable ownership in the company and control of the corporate assets.
For the second quarter ended March 27, Lee's revenues fell nearly 4 percent to $179 million, compared with $186 million for the same period a year ago. A year ago, Lee reported net income of $3 million, or 7 cents per share.
Overall advertising revenues were down 5 percent despite a 26 percent increase in digital (online) revenues. The $14.3 million in online advertising revenues is a little more than 11 percent of the corporation's ad revenues.
Lee stock, which had traded as high as $3.28 a share in early April, has fallen to under $1.20 per share this week.
Lee owns 49 daily newspapers including six in Iowa.
