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Company Tech News as it Breaks
/C O R R E C T I O N -- The McClatchy Company/
Submitted by admin on 2/7/2013 @ 8:34 AM
Companies mentioned in this article:
The McClatchy Company
In the news release, McClatchy Reports Fourth Quarter 2012 Earnings, issued
McClatchy Reports Fourth Quarter 2012 Earnings
-- Refinanced 11.5% senior secured notes extending maturity and reducing interest
-- Digital-only advertising revenues up 14.9% from comparable 13-week 2011 quarter
-- Plus Program launched and expected to add more than $20 million to 2013 revenues
-- Advertising revenue from nontraditional sources now at 36.0% of total advertising
SACRAMENTO, Calif., Feb. 7, 2013 /PRNewswire/ -- The McClatchy Company (NYSE: MNI) today reported a net loss in the fourth quarter of 2012 of $30.0 million or 35 cents per share, including a $60.0 million after-tax loss on debt refinancing. In the fourth quarter of 2011 the company reported net income of $42.0 million or 49 cents per diluted share.
The company's fiscal 2012 reporting period is a 53-week year compared to a 52-week year in 2011, and as a result, the fiscal fourth quarter of 2012 includes 14 weeks compared to 13 weeks in the 2011 fiscal fourth quarter. The company estimates that the reported net loss in 2012 was reduced by approximately $4.0 million because of the additional week being reported.
Fourth Quarter Results:
Revenues in the fourth quarter of 2012 were $355.7 million, up 1.2% from the fourth quarter of 2011. On a 13-week basis, fourth quarter total revenues were an estimated $333.0 million, down 5.3% compared to fourth quarter 2011, with advertising revenues of approximately $253.9 million, down 6.3%, and circulation revenues of about $65.7 million, down 1.9%. On a 13-week basis, total digital advertising revenues grew 3.5% in the fourth quarter of 2012, with digital-only advertising revenues up 14.9% from the 2011 quarter. Total digital advertising represented 20.2% of total advertising revenues in the fourth quarter of 2012 compared to 18.5% of total advertising revenues in the fourth quarter of 2011.
Results in the fourth quarter of 2012 included the following items:
-- A loss from the extinguishment of debt totaling $94.5 million ($60.0
million after-tax) related to the refinancing of the company's 11.5%
secured bonds due in 2017.
-- A reduction to equity income totaling $7.0 million ($4.3 million
after-tax) related to an impairment charge taken by a company in which
McClatchy is a minority owner.
-- Accelerated depreciation totaling $2.3 million ($1.3 million after-tax)
related to relocating Miami newspaper operations.
-- Severance and other restructuring charges totaling $2.3 million ($1.4
million after-tax).
-- The reversal of non-cash interest expense totaling $0.4 million ($0.2
million after-tax) related to the release of tax reserves.
-- A favorable adjustment to net income totaling $3.0 million for a
reduction to tax reserves related to state tax positions previously
taken.
Income in the fourth quarter of 2012, excluding the net impact of these items, was $33.8 million compared to income in the fourth quarter of 2011 adjusted for certain items of $43.2 million. (Non-GAAP measurements are discussed below.)
Operating cash expenses on a comparable 13-week period, excluding charges associated with restructuring plans, declined approximately $2.8 million, or 1.2%, from the 2011 quarter. Operating cash flow, a non-GAAP measure, was $118.0 million, and was an estimated $109.5 million on a 13-week basis, in the fourth quarter of 2012.
Full Year Results:
Net loss for fiscal 2012 was $0.1 million, or 0 cents per share and included the $60.0 million after-tax loss on debt refinancing taken in the fourth quarter of 2012. Net income for fiscal 2011 was $54.4 million, or 63 cents per diluted share.
Revenues in 2012 were down 3.1% to $1.231 billion compared to $1.270 billion in 2011. On a 52-week basis, 2012 total revenues were an estimated $1.208 billion, down 4.9% compared to 2011 total revenues, with advertising revenues of approximately $898.2 million, down 6.1% and circulation revenues of approximately $258.4 million, down 1.5%.
Results in 2012 included the following items:
-- A loss from the extinguishment of debt totaling $88.4 million ($56.1
million after-tax) primarily related to the refinancing of the company's
11.5% secured bonds due in 2017.
-- A reduction to equity income totaling $7.0 million ($4.3 million
after-tax) related to an impairment charge taken by a company in which
McClatchy is a minority owner.
-- Accelerated depreciation totaling $8.8 million ($5.3 million after-tax)
primarily related to relocating Miami newspaper operations.
-- Severance and other restructuring charges totaling $9.5 million ($5.9
million after-tax).
-- The reversal of non-cash interest expense totaling $8.1 million ($5.1
million after-tax) related to the release of tax reserves.
-- A favorable adjustment to net income totaling $10.0 million for tax
settlements and adjustments to reserves related to state tax positions
previously taken.
Income in 2012, excluding the net impact of these items, was $56.4 million compared to income in 2011 adjusted for certain items of $60.1 million. (Non-GAAP measurements are discussed below.)
Debt Refinancing:
On Dec. 18, 2012, the company issued $910 million aggregate principal amount of 9.0% Senior Secured Notes due 2022 and retired $762.4 million aggregate principal amount of its 11.50% Senior Secured Notes due 2017; and on Dec. 31, 2012, it retired $68,000 aggregate principal amount of the 11.5% Senior Secured Notes due 2017. On Jan. 17, 2013, the company redeemed in full the remaining $83.5 million aggregate principal amount of its 11.5% Senior Secured Notes due 2017.
Management's Comments:
Commenting on McClatchy's results, Pat Talamantes, McClatchy's President and CEO, said, "As we look back on 2012, we see a year in which the company made great progress on many fronts. Our successful transition to a hybrid print and digital media company continued as we were able to grow our nontraditional revenue sources with new product introductions while cultivating and enhancing our existing products. In addition, we were able to strengthen the company's capital structure by refinancing a good portion of our debt at a lower interest rate while extending the maturity date by five years.
"In spite of a softer-than-expected Christmas season for our advertisers, our ad revenue picture improved through most of 2012. On a 52-week basis, advertising revenues were down 6.1% in 2012 compared to down 7.7% in 2011. In the fourth quarter of 2012, advertising revenues were down 6.3% despite going up against the toughest comparison of the year.
"We have been focused on diversifying and growing our revenue stream and believe that our year-over-year revenue improvement speaks to the success of this strategy. We were again pleased that advertising revenues from both digital and direct marketing grew in the quarter. These two sources now contribute more than 36% of our advertising revenues on a combined basis.
"Our unrelenting focus on growing our digital business continues to be rewarded. Total digital advertising revenues in the fourth quarter of 2012 were up 3.5% on a 13-week basis. Our digital traffic also grew in the quarter with daily average local unique visitors to our websites and mobile content up 3.4% compared to the same quarter of 2011. Digital-only revenues were up double digits for every quarter in 2012 with the fourth quarter up 14.9%. Digital advertising now represents 20.2% of McClatchy's total advertising revenues compared to 18.5% in 2011. McClatchy's digital advertising revenues reached a record high in 2012 of $197.0 million on a 52-week basis.
"Direct marketing advertising revenues were up 1.8% in the fourth quarter on a 13-week basis. Over the last 11 quarters, this category has shown positive growth in all but one quarter. Direct marketing accounted for 15.9% of total advertising revenues in the quarter and more than 14% for 2012.
"The company-wide rollout of our new subscription packages, known as our Plus Program, is exceeding our initial expectations. Under the Plus Program, a metered paywall at each of our newspaper websites requires users to pay for content after accessing a limited number of pages or news articles for free each month. Existing home delivery subscribers are given full access to the digital content and rolled into a higher-priced, bundled print and digital subscription when their newspaper subscription renews.
"The early results are promising: a vast majority of renewing subscribers have accepted the program, telling us our print readers value our content and high-quality journalism and are willing to pay for it in a digital format. Similarly, we have added thousands of new digital-only subscribers to our paying customer base. In total, the Plus Program contributed $1.2 million in incremental revenues in 2012 which is impressive considering that most of our newspapers launched the program in the fourth quarter. We believe that the new Plus Program could result in more than $20 million in new revenues by the end of the year.
"Cash expenses, excluding restructuring costs and on a 13-week basis, were down 1.2% in the quarter as compared to the fourth quarter of 2011. We continued to carefully balance expense management with strategically investing in our products. For instance, our cash expenses declined even though we invested approximately $2.0 million in new revenue initiatives and enterprise-wide operating systems in the fourth quarter.
"Our share of income from all equity investments was $4.9 million in the fourth quarter of 2012 and $31.9 million for fiscal 2012. McClatchy's equity investments, particularly our digital investments, are consistently producing strong results which speak to the staying power of the underlying products. We received $38.6 million in distributions in fiscal 2012, including $18.9 million coming from Classified Ventures, LLC and $15.0 million from CareerBuilder, LLC. These are healthy, growing internet companies that are strategically important to our newspapers.
"Looking forward, we will continue to focus on our new products and revenue initiatives, especially in digital and direct marketing while enhancing our existing products. And we expect revenues from our new Plus Program in 2013 will grow as readers renew their subscriptions. We believe this will translate into an improving revenue picture for McClatchy in 2013. Based on preliminary data, we estimate that January 2013 advertising revenues were down in the same range as the fourth quarter on a 13-week basis. Given the incremental revenues from our Plus Program, we expect the decline in total revenues in the first quarter of 2013 to improve somewhat compared to the decline we reported in the fourth quarter of 2012.
"Our disciplined approach to expense management remains firmly in place as we continue to balance opportunities to invest in our business. We expect to continue to benefit from stability in newsprint pricing in 2013. Despite additional investments in new revenue initiatives and enterprise-wide operating systems and higher pension expenses, which together are expected to total about $5 million, we expect cash expenses in the first quarter of 2013 to be flat compared to last year. For full year 2013, we expect investments in new products and systems will total approximately $10 million and that pension expenses could be higher by $10 million to $12 million. Even so, we expect total cash expenses to be flat with 2012 expenses on a 52-week basis."
Elaine Lintecum, McClatchy's CFO said, "We view the successful issuance of our new $910.0 million 9.0% senior notes due 2022 as a strong vote of confidence in the company's future prospects. Even though we had five years until our 2017 secured bonds matured, this was the right time to do the refinancing given the historically attractive market conditions. Our proforma effective interest rate on debt, after including the retirement of the remaining 11.5% notes in January of this year, is 7.8%, down from 9.1%, and cash interest savings in 2013 is expected to be about $15 million. That savings improves our free cash flow and the extended maturity gives us flexibility to execute our strategic plans and create shareholder value.
"We used the proceeds from the offering to retire $846.0 million of the company's 11.5% notes. In December 2012, $762.4 million of the 11.5% notes were retired leaving us with a debt balance of $1.712 billion at the end of 2012. The remaining $83.6 million of 11.5% notes were fully redeemed by January 17, 2013, leaving a debt balance of $1.628 billion.
"In addition to the successful bond offering, we were also able to further improve our financial flexibility by increasing our revolving line of credit to $75.0 million while extending the maturity date of the facility to December 2017. Our leverage ratio at the end of the fourth quarter as defined in our credit agreement was 4.72 times cash flow and our interest coverage was 2.44 times. Adjusting for completing the retirement of the remainder of the 11.5% notes in mid January, our proforma leverage ratio was 4.49 times cash flow.
"We ended 2012 with a cash balance of $113.1 million providing the funds for the completion of our debt refinancing. We contributed $7.5 million to our pension plan in early 2013 and expect that there will be no substantial additional cash contributions made for the remainder of the year. We estimate that total capital expenditures for 2013 will be approximately $33 million with $12 million of the amount going towards final costs of the new Miami production facility."
The company's statistical report, which summarizes revenue performance for the fourth fiscal quarter of 2012 and for the full fiscal year 2012, follows.
Non-GAAP Financial Measures:
In addition to the results reported in accordance with accounting principles generally accepted in the United States ("GAAP") included in this press release, the company has presented non-GAAP financial measures such as adjusted net income, operating cash flows and operating cash flow margins. Adjusted net income is defined as net income excluding amounts (net of tax) for loss (gain) on extinguishment of debt, restructuring related charges, gain on sale of internet asset, accelerated depreciation on equipment, non-cash impairments, reversal of interest on tax items and other certain discrete tax items. Operating cash flow is defined as operating income plus depreciation and amortization, restructuring related charges and other non-cash impairments. Operating cash flow margin is defined as operating cash flow divided by net revenues. These non-GAAP financial measures are reconciled to GAAP measures in the attached schedule. Management believes these non-GAAP measures, when read in conjunction with the company's GAAP financials, provide useful information to investors by offering:
-- The ability to make more meaningful period-to-period comparisons of the
company's on-going operating results.
-- The ability to better identify trends in the company's underlying
business.
-- A better understanding of how management plans and measures the
company's underlying business.
-- An easier way to compare the company's most recent operating results
against investor and analyst financial models.
These non-GAAP financial measures should not be considered a substitute or an alternative to these computations calculated in accordance with and required by GAAP. McClatchy's non-GAAP financial measures may not be comparable to similarly titled measures presented by other companies.
At noon Eastern time today, McClatchy will review its results in a conference call (877-278-1205, pass code 92613413) and webcast (www.mcclatchy.com). The webcast will be archived at McClatchy's website.
About McClatchy
The McClatchy Company is a leading news and information provider, offering a wide array of print and digital products in each of the markets it serves. As the third largest newspaper company in the country, McClatchy's operations include 30 daily newspapers, community newspapers, websites, mobile news and advertising, niche publications, direct marketing and direct mail services. The company's largest newspapers include the Fort Worth Star-Telegram, The Sacramento Bee, The Kansas City Star, The Miami Herald, The Charlotte Observer and The (Raleigh) News & Observer. McClatchy is listed on the New York Stock Exchange under the symbol MNI.
Additional Information:
Statements in this press release regarding future financial and operating results, including revenues, anticipated savings from cost reduction efforts, cash flows, debt levels, as well as future opportunities for the company and any other statements about management's future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words "believes," "plans," "anticipates," "expects," "estimates" and similar expressions) should also be considered to be forward-looking statements. There are a number of important risks and uncertainties that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including: McClatchy may not generate cash from operations, or otherwise, necessary to reduce debt or meet debt covenants as expected; McClatchy may not successfully implement circulation strategies designed to increase circulation revenue, including the Plus Program, and may experience decreased circulation volumes or subscriptions through the Plus Program; McClatchy may experience diminished revenues from retail, classified, national and direct marketing advertising; McClatchy may not achieve its expense reduction targets or may do harm to its operations in attempting to achieve such targets; McClatchy's operations have been, and will likely continue to be, adversely affected by competition, including competition from internet publishing and advertising platforms; increases in the cost of newsprint; bankruptcies or financial strain of its major advertising customers; litigation or any potential litigation; geo-political uncertainties including the risk of war; changes in printing and distribution costs from anticipated levels, including changes in postal rates or agreements; changes in interest rates; changes in pension assets and liabilities; changes in factors that impact pension contribution requirements, including, without limitation, the value of the company-owned real property that McClatchy has contributed to its pension plan; increased consolidation among major retailers in our markets or other events depressing the level of advertising; our inability to negotiate and obtain favorable terms under collective bargaining agreements with unions; competitive action by other companies; and other factors, many of which are beyond our control; as well as the other risks detailed from time to time in the company's publicly filed documents, including the company's Annual Report on Form 10-K for the year ended Dec. 25, 2011, filed with the U.S. Securities and Exchange Commission. McClatchy disclaims any intention and assumes no obligation to update the forward-looking information contained in this release.
***THE McCLATCHY COMPANY***
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)
Three Months Ended Year Ended
------------------ ----------
December 30, December 25, December 30, December 25,
2012 2011 2012 2011
---- ---- ---- ----
REVENUES - NET:
Advertising $270,386 $270,948 $914,738 $956,305
Circulation 70,543 66,953 263,286 262,335
Other 14,735 13,536 52,700 51,000
------ ------ ------ ------
355,664 351,437 1,230,724 1,269,640
OPERATING EXPENSES:
Compensation 114,245 104,864 443,401 457,707
Newsprint, supplements and
printing expense 38,567 38,313 140,932 145,874
Depreciation and amortization 32,971 30,326 125,275 121,528
Other operating expenses 87,134 87,650 334,980 343,216
272,917 261,153 1,044,588 1,068,325
OPERATING INCOME 82,747 90,284 186,136 201,315
NON-OPERATING (EXPENSES)
INCOME:
Interest expense (38,509) (37,739) (151,334) (165,434)
Interest income 18 38 88 97
Equity gain in unconsolidated
companies, net 4,855 6,482 31,935 27,762
(Loss) gain on extinguishment
of debt (94,504) 1,289 (88,430) (1,203)
Other - net (4) (17) 79 248
--- --- --- ---
(128,144) (29,947) (207,662) (138,530)
(LOSS) INCOME BEFORE INCOME
TAX (BENEFIT) PROVISION (45,397) 60,337 (21,526) 62,785
INCOME TAX (BENEFIT) PROVISION (15,382) 18,332 (21,382) 8,396
------- ------ ------- -----
NET (LOSS) INCOME (30,015) 42,005 (144) 54,389
NET (LOSS) INCOME PER COMMON
SHARE:
Basic $(0.35) $0.49 $(0.00) $0.64
Diluted $(0.35) $0.49 $(0.00) $0.63
WEIGHTED AVERAGE NUMBER OF COMMON SHARES:
Basic 85,891 85,403 85,744 85,211
Diluted 85,891 86,169 85,744 86,044
The McClatchy Company
Consolidated Statistical Report
(In thousands, except for preprints)
Quarter 4
----------
Combined Print Only Digital
-------- ---------- -------
13-week 13-week 13-week 13-week 13-week 13-week
Revenues - Net: 2012 Proforma 2011 % Change Proforma 2011 % Change Proforma 2011 % Change
---- -------- ---- -------- -------- ---- -------- -------- ---- --------
Advertising
Retail $145,538 $136,123 $149,297 -8.8% $113,874 $127,112 -10.4% $22,249 $22,185 0.3%
National 22,902 21,490 22,429 -4.2% 15,521 17,797 -12.8% 5,968 4,631 28.9%
Classified Total 58,968 55,345 58,683 -5.7% 31,742 35,420 -10.4% 23,603 23,263 1.5%
Automotive 21,942 20,530 19,629 4.6% 9,092 9,779 -7.0% 11,438 9,851 16.1%
Real Estate 8,561 8,094 10,139 -20.2% 4,999 6,609 -24.4% 3,095 3,530 -12.3%
Employment 10,267 9,658 11,378 -15.1% 4,444 5,394 -17.6% 5,214 5,984 -12.9%
Other 18,198 17,063 17,537 -2.7% 13,207 13,638 -3.2% 3,856 3,898 -1.1%
Direct Marketing 42,888 40,852 40,144 1.8% 40,852 40,144 1.8%
Other Advertising 90 87 395 -78.0% 87 396 -78.0%
--- --- --- --- ---
Total Advertising $270,386 $253,897 $270,948 -6.3% $202,076 $220,869 -8.5% $51,820 $50,079 3.5%
Circulation 70,543 65,660 66,953 -1.9%
Other 14,735 13,412 13,536 -0.9%
------ ------ ------
Total Revenues $355,664 $332,969 $351,437 -5.3%
======== ======== ========
Advertising Revenues by Market:
California $47,232 $44,110 $46,036 -4.2% $35,918 $37,696 -4.7% $8,191 $8,341 -1.8%
Florida 43,091 40,869 44,470 -8.1% 34,106 37,948 -10.1% 6,764 6,521 3.7%
Texas 28,200 26,374 29,059 -9.2% 20,917 23,733 -11.9% 5,457 5,326 2.5%
Southeast 77,110 72,424 77,755 -6.9% 55,993 62,347 -10.2% 16,432 15,408 6.6%
Midwest 45,871 43,062 45,719 -5.8% 34,088 36,834 -7.5% 8,974 8,885 1.0%
Northwest 28,757 26,938 27,788 -3.1% 21,054 22,311 -5.6% 5,885 5,477 7.4%
Other 125 119 121 -1.7% 0 0 0.0% 119 121 -1.7%
--- --- --- --- --- --- ---
Total Advertising $270,386 $253,896 $270,948 -6.3% $202,076 $220,869 -8.5% $51,822 $50,079 3.5%
Advertising Statistics for Dailies:
Full Run ROP Linage 4,506.7 4,815.1 -6.4%
Millions of Preprints Distributed 1,433.5 1,463.4 -2.0%
Average Paid Circulation:*
Daily 1,990.1 2,079.3 -4.3%
Sunday 2,708.6 2,818.7 -3.9%
Columns may not add due to rounding
* Reflects average paid circulation based upon number of days in period. Does not reflect ABC reported figures.
The McClatchy Company
Consolidated Statistical Report
(In thousands, except for preprints)
December Year-to-Date
---------------------
Combined Print Only Digital
-------- ---------- -------
52-week 52-week 52-week 52-week 52-week 52-week
Revenues - Net: 2012 Proforma 2011 % Change Proforma 2011 % Change Proforma 2011 % Change
---- -------- ---- -------- -------- ---- -------- -------- ---- --------
Advertising
Retail $474,031 $464,616 $499,250 -6.9% $384,052 $422,299 -9.1% $80,565 $76,951 4.7%
National 70,477 69,065 76,296 -9.5% 50,024 57,515 -13.0% 19,041 18,781 1.4%
Classified Total 238,280 234,658 251,409 -6.7% 137,308 156,745 -12.4% 97,349 94,664 2.8%
Automotive 83,396 81,984 80,823 1.4% 38,460 42,668 -9.9% 43,524 38,156 14.1%
Real Estate 36,386 35,919 44,703 -19.6% 22,795 30,229 -24.6% 13,124 14,473 -9.3%
Employment 46,954 46,346 51,933 -10.8% 21,305 24,717 -13.8% 25,041 27,216 -8.0%
Other 71,544 70,409 73,950 -4.8% 54,749 59,131 -7.4% 15,660 14,819 5.7%
Direct Marketing 131,309 129,273 128,339 0.7% 129,273 128,339 0.7%
Other Advertising 641 638 1,011 -36.9% 638 1,011 -36.9%
--- --- ----- --- -----
Total Advertising $914,738 $898,250 $956,305 -6.1% $701,295 $765,909 -8.4% $196,955 $190,396 3.4%
Circulation 263,286 258,403 262,335 -1.5%
Other 52,700 51,377 51,000 0.7%
------ ------ ------
Total Revenues $1,230,724 $1,208,030 $1,269,640 -4.9%
========== ========== ==========
Advertising Revenues by Market:
California $158,036 $154,914 $165,355 -6.3% $123,667 $133,350 -7.3% $31,247 $32,005 -2.4%
Florida 136,741 134,520 140,736 -4.4% 109,401 115,662 -5.4% 25,119 25,073 0.2%
Texas 96,928 95,102 106,179 -10.4% 73,670 85,090 -13.4% 21,432 21,089 1.6%
Southeast 264,201 259,515 276,419 -6.1% 198,426 219,204 -9.5% 61,089 57,215 6.8%
Midwest 158,584 155,775 163,410 -4.7% 120,963 129,466 -6.6% 34,812 33,944 2.6%
Northwest 99,701 97,882 103,986 -5.9% 75,168 83,136 -9.6% 22,714 20,850 8.9%
Other 548 542 220 146.4% 0 1 -100.0% 542 220 146.4%
--- --- --- --- --- --- ---
Total Advertising $914,739 $898,250 $956,305 -6.1% $701,295 $765,909 -8.4% $196,955 $190,396 3.4%
Advertising Statistics for Dailies:
Full Run ROP Linage 17,355.8 18,496.9 -6.2%
Millions of Preprints Distributed 4,657.9 4,969.1 -6.3%
Average Paid Circulation:*
Daily 1,985.9 2,103.6 -5.6%
Sunday 2,715.1 2,800.5 -3.0%
Columns may not add due to rounding
* Reflects average paid circulation based upon number of days in period. Does not reflect ABC reported figures.
THE McCLATCHY COMPANY
Reconciliation of GAAP Measures to Non-GAAP Amounts
(In thousands)
Reconciliation of Operating Income (Loss) to Operating Cash Flows
Three Months Ended Year Ended
------------------ ----------
Dec. 30, Dec 25, Dec. 30, Dec 25,
2012 2011 2012 2011
---- ---- ---- ----
REVENUES - NET:
Advertising $270,386 $270,948 $914,738 $956,305
Circulation 70,543 66,953 263,286 262,335
Other 14,735 13,536 52,700 51,000
------ ------ ------ ------
355,664 351,437 1,230,724 1,269,640
OPERATING EXPENSES:
Compensation excluding
restructuring charges 113,290 104,263 438,750 443,854
Newsprint, supplements and
printing expense 38,567 38,313 140,932 145,874
Other cash operating expenses 85,836 83,618 330,140 327,859
------ ------ ------- -------
Cash operating expenses
excluding restructuring
charges 237,693 226,194 909,822 917,587
Restructuring related
compensation charges 955 601 4,651 13,853
Other restructuring charges 1,298 890 4,840 890
Impairment charges related to
asset sales - 3,142 - 14,467
Depreciation and amortization 32,971 30,326 125,275 121,528
------ ------
Total operating expenses 272,917 261,153 1,044,588 1,068,325
------- ------- --------- ---------
OPERATING INCOME 82,747 90,284 186,136 201,315
Add back:
Depreciation and amortization 32,971 30,326 125,275 121,528
Restructuring related
compensation charges 955 601 4,651 13,853
Other restructuring charges 1,298 890 4,840 890
Impairment charges related to
asset sales - 3,142 - 14,467
OPERATING CASH FLOW $117,971 $125,243 $320,902 $352,053
======== ======== ======== ========
OPERATING CASH FLOW MARGIN 33.2% 35.6% 26.1% 27.7%
Reconciliation of Net Income to Adjusted Net Income
Net Income (Loss): $(30,015) $42,005 $(144) $54,389
Add back certain items, net of
tax:
Loss (gain) on extinguishment
of debt 59,956 (796) 56,108 748
Restructuring related
compensation charges 583 367 2,896 8,547
Gain on sale of internet asset - - - (1,182)
Accelerated depreciation on
equipment 1,350 740 5,299 740
Other restructuring charges 821 553 3,070 553
Non-cash impairments - 1,928 - 9,081
Impairment recorded by minority
owned company 4,297 - 4,297 -
Reversal of interest on tax
items (221) (219) (5,069) (2,969)
Certain discrete tax items (2,968) (1,371) (10,014) (9,769)
Adjusted net income $33,803 $43,207 $56,443 $60,138
======= ======= ======= =======
SOURCE The McClatchy Company