McClatchy Announces Expiration Date of 2017 Senior Secured Notes Offering; Provides Update on Second Quarter 2011 Performance
The McClatchy Company (NYSE: MNI) today announced that its previously disclosed offer to repurchase $65 million of the company's 2017 senior secured notes will expire at 11:59 p.m. Eastern time on June 24, 2011. The company also provided an update of business trends for the second quarter of 2011.
The company reported that combined total revenues in April and May 2011 were down 8.1% compared to the same period in 2010. Combined advertising revenues for the two-month period declined 9.1% compared to the same period in 2010. Management noted that total revenues declined 9.5% in the first quarter of 2011 and advertising revenue declined 11.0% compared to the first quarter of 2010. Through the first five months of 2011, total revenues declined 8.9% and advertising revenues were down 10.2% compared to the same period in 2010.
Gary Pruitt, McClatchy's chairman and chief executive, said, "We have seen an improvement in revenue trends in the second quarter of 2011, helped in part by retail advertising associated with the later Easter holiday in April. As previously reported, we expect cash expenses to be down in the mid-single digit range in the second quarter despite higher newsprint prices."
McClatchy is required under the terms of its 2017 senior secured notes to offer to repurchase $65 million of those notes at par as a result of selling the building and land housing its newspaper operations in Miami, FL on May 27, 2011.
Pat Talamantes, McClatchy vice president and chief financial officer, said, "Since we launched the offer on May 27, we have also used our free cash flow to retire $75.4 million of debt. As a result, we have reduced outstanding debt by $96.1 million in the first five months of 2011. The company's principal debt outstanding went from $1.775 billion at the end of 2010 to $1.678 billion as of close of business yesterday."
McClatchy anticipates releasing its final second-quarter results on July 28, 2011.
THIS PRESS RELEASE IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER TO PURCHASE NOR A SOLICITATION FOR ACCEPTANCE OF AN OFFER. THE OFFER IS BEING MADE ONLY PURSUANT TO THE OFFER TO PURCHASE AND RELATED LETTER OF TRANSMITTAL THAT MCCLATCHY HAS DISTRIBUTED TO ITS NOTEHOLDERS. NOTEHOLDERS SHOULD READ CAREFULLY THE OFFER TO PURCHASE AND RELATED LETTER OF TRANSMITTAL BECAUSE THEY CONTAIN IMPORTANT INFORMATION, INCLUDING THE VARIOUS TERMS OF AND CONDITIONS TO THE OFFER, PRIOR TO MAKING ANY DECISION WITH RESPECT TO THE OFFER.
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 Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer and The News & Observer in Raleigh, N.C. McClatchy is listed on the New York Stock Exchange under the symbol MNI.
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: the duration and depth of the economic recession; McClatchy may not generate cash from operations, or otherwise, necessary to reduce debt or meet debt covenants as expected; McClatchy may not consummate contemplated transactions to enable debt reduction on anticipated terms or at all; 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; 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; decreased circulation and diminished revenues from retail, classified and national advertising; 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. 26, 2010, 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.
SOURCE The McClatchy Company