They have not announced the date. Last year they released earnings on March 14 with the semi-annual dividend announcement made on March 12. I would expect both to be announced in similar timing this year.
Agreed. I like the fact that they have a record level of backlog at $1 Billion in revenue. You also have to like the tightening supply/demand aspects within the sector. This dynamic will continue to push up day rates higher and profitability will continue to improve. In light of this presentation, I can see why members of the management team were recent buyers of the stock. HERO is likely going higher over the long term.
Nice. Last time it traded at this price was the summer of 2008 before the market fell apart. Since then LEE has paid down over $1/2 billion in debt. Should hear about the loan refinancing soon which will likely push the share price higher. With earnings likely greater than $0.50/share this year, still room to the upside on the share price.
No. In the just released earnings report this week, they wrote all of their goodwill off and also wrote down some mining assets. Book value currently stands at $7.63/share, well above the current $4.00/share price.
Barron's this weekend had a bullish article on gold and miners saying it is time for investors to start to look more closely at the metal and miners. They point out that the GDX has moved over its 200 day average for the first time since December 2012 which they take as a bullish sign. They cite buying in China is one possible sources of the recent upward momentum. Market Edge changed their opinion on IAG this weekend and give the stock a "LONG" rating. Gold is up again today in Asian trading at $1,322/oz. Look for upward momentum to continue this week.
This was definitely a good start to the year. With TTM earnings ex items currently at $0.50/share, I see LEE easily doing $0.50-0.60/share in earnings (ex items) in the upcoming fiscal year despite revenues still sliding. The reduced interest costs and continued cost reductions should help earnings tick up slightly as we move forward. Although my projection estimates revenues to decline 3% this year, the continued double digit digital growth is very encouraging. And if they can finally monetize the St. Louis property via pay walls, revenue may actually start to trend upwards as we get to the back half of the fiscal year. With the positive earnings and continued strong cash flows coupled with successful refinancing of their debt well into the future (past 2020), I think the Street might start to see LEE in a more positive focus as they have virtual monopolies in most of their local markets. LEE is very undervalued at $3.88/share.
Q2 will be the least profitable quarter of the year, but I still think LEE can be breakeven ex items in this quarter. We will find out in April.
The warrants are for 6 million shares, not a set dollar amount. Even with the 10% dilution this results in, the improved financing of the 2nd lien and the expected refinancing of the 1st lien will prove beneficial to the company. Even with factoring in the share dilution and a 3% reduction in revenue in fiscal 2014, I see LEE earning between $0.50-0.60/share this upcoming year. As they continue to pay down debt at a faster pace with the lower interest rates and focusing on paying the higher interest debt, earnings should improve in subsequent years. The shares are extremely undervalued at the current price.
LEE has the following debt information in their annual report as of the end of Sept. 2013:
1st Lien $609.5M (7.5%) Syndicate of Lenders Due: Dec, 2015
2nd Lien $175M (15%) Syndicate of Lenders Due: Apr, 2017
New Pult. $63M (9%) Berkshire Hathaway Due: Apr, 2017
We know that Berkshire Hathaway (BRK) owns the 2nd Lien as they bought it cheap from Goldman Sachs a couple years ago. The average interest rate off all LEE’s debt is 9.2% currently.
With the recent S-3, we know they are shopping to refinance the 1st and 2nd Lien loans into one $750M loan. By time the refinance commences, they should have paid down their principal below this amount. With where high yield debt is being issued, I think LEE can at least place all of it at 7.5%. Current high yield issues have been in the 6-7% range recently (RRD recently placed debt at 6.5%).
I personally think LEE will refinance all of this debt with BRK. They refinanced the Pulitzer debt last year dropping LEE’s rate from 10.5% to 9%. As the WSJ article acknowledged this week, they have deep pockets and are not afraid to lend into the newspaper industry. I think BRK will refinance their debt with $750M at 7.5% while extending the maturity to April, 2017. BRK will then hold all of LEE’s debt. LEE’s blended interest rate would be about 7.6%.
This would be a positive for LEE as they would see interest payments drop by $13M per year, a positive for equity shareholders. BRK can put their cash to work earning more than Treasuries which benefits their shareholders. They subsequently would own all of LEE debt, benefiting from a company I think Buffett would like to buy (or control).
Based upon LEE's recent S-3 filing, are they going to be able to put in place new financing such that they can take out the $175M 15% loan in early February, hence the reason to delay the earnings announcement? After watching ad sales in St. Louis in the recent quarter, I expect the profit numbers for the quarter to be decent.