By: Lee Enterprises Inc., publisher of the St. Louis Post Dispatch and other papers, said Monday it would delay filing its annual report until Dec. 29 at the latest as it seeks waivers from lenders on a number of issues that could lead to a default on its debt.
Lee said it needs extra time to calculate further write-downs on the value of its goodwill and intangible assets, which it expects will total at least $180 million after tax for the fourth quarter, which ended Sept. 28.
A portion of the charge is expected to reduce the stockholders' equity in subsidiary Pulitzer Inc., and trigger the need for a waiver from lenders on a lending condition related to $306 million in debt.
"Without such a waiver by the noteholders, the reduction in Pulitzer Inc.'s stockholders' equity would constitute an event of default," Lee said in a statement.
A default on that debt would cause a cross-default on a recently amended bank credit agreement, Lee added.
On Friday, Lee said its independent accounting firm, KPMG, told the company that unless it was provided further information that showed Lee could meet its debt obligations, it would need to include an explanatory paragraph in the annual report about the company's ability "to continue as a going concern."
The addition of the paragraph would also cause a default under Lee's bank credit agreement, unless that condition was waived, it said.
Chief Executive Mary Junck said in a statement that the company is working to obtain the necessary waivers to continue.
"Although the credit markets remain very difficult, lenders have shown a willingness to work toward acceptable solutions to help us avoid violating performance conditions in our debt agreements," she said.
Lee Enterprises owns 49 daily newspapers, more than 300 weekly newspapers and specialty publications and has a joint interest in four others in 23 states.
For the fourth quarter, Lee said its net income fell 73 percent to $5.4 million, or 12 cents per share, from $20 million, or 44 cents per share, a year earlier.
Revenue fell 13 percent to $244.9 million from $282.2 million a year earlier, as advertising revenue dropped 15 percent, led by large declines in classified, employment, real estate and auto ads. Top of page
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