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Tuesday February 9, 2010
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Tuesday February 9, 2010
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Released: 07/21/2009
SACRAMENTO, Calif. -- The McClatchy Company (NYSE-MNI) today reported net income from continuing operations in the second quarter of 2009 of $42.0 million, or 50 cents per share - more than double the earnings per share in the second quarter of 2008. Adjusted earnings from continuing operations,(1) excluding several unusual items in the second quarter of 2009, were $25.2 million, or 30 cents per share, up 42.9% from the 2008 quarter. Total net income including discontinued operations was $42.2 million, or 50 cents per share.The company's second-quarter 2008 earnings from continuing operations were $20.1 million, or 24 cents per share. Adjusted earnings from continuing operations,(1) excluding several unusual items in the second quarter of 2008, were $17.3 million, or 21 cents per share. Total net income including discontinued operations was $19.7 million, or 24 cents per share.
Unusual items affecting the second-quarter results in each year are discussed below.
Revenues in the second quarter of 2009 were $365.3 million, down 25.4% from revenues from continuing operations of $489.7 million in the second quarter of 2008. Advertising revenues were $283.7 million, down 30.2% from 2008, and circulation revenues were $69.4 million, up 5.0%.
First Six Months Results:
Income from continuing operations in the first half of 2009 was $4.3 million, or 5 cents per share. Adjusted earnings from continuing operations,(1) excluding several unusual items discussed below, were zero cents per share. Total net income, including discontinued operations, was $4.7 million, or 6 cents per share.
Income from continuing operations for the first six months of 2008 was $19.1 million, or 23 cents per share, and was affected by the issues discussed below. Adjusted earnings from continuing operations(1) were 24 cents per share in the first half of 2008. The company's total net income for the first six months of 2008, including the results of discontinued operations, was $18.8 million, or 23 cents per share.
Revenues from continuing operations in the first six months of 2009 were down 25.3% to $731.0 million compared to $978.0 million in 2008. Advertising revenues in 2009 totaled $568.4 million, down 29.9%, and circulation revenues were $137.8 million, up 2.9%.
Management's Comments:
Commenting on McClatchy's results, Gary Pruitt, chairman and chief executive officer, said, "We are extremely pleased to post earnings per share growth of 42.9% after adjusting for unusual items in the quarter, particularly given the impact of the recession in our markets. While our advertising revenues in the second quarter of 2009 were down in the same range as the first quarter, we saw an improving trend within the quarter. Advertising revenues were down 31.1% in April, 30.7% in May and 28.3% in June. So far, July's performance is similar to June's.
"Our second-quarter results also reflect our hard work on the expense side. We continue to restructure and permanently reduce expenses to better align our costs with our revenues. We reduced cash expenses in the second quarter of 2009 by 29.3%, excluding severance and other benefit charges related to our restructuring plan, resulting in operating cash flow of $92.4 million.
"Our operating cash flow margin for the quarter was a healthy 25.3% compared to 21.2% for the 2008 quarter. Our company remains profitable and each of our newspapers is contributing positive cash flow.
"McClatchy continues its transition to a successful hybrid print and online company. Our digital audience continues to grow impressively. Average monthly unique visitors to our websites were up 30.1% in the second quarter following 26.7% growth in the first quarter of 2009. Still, the recession is impacting our digital business. Our digital advertising was down 2.9% in the second quarter of 2009, hurt particularly by declining employment advertising. Excluding employment advertising, which has declined nationally both in print and online, our online advertising revenue grew 24.7% in the second quarter of this year.
"Our digital performance has been aided by ownership stakes in CareerBuilder, Cars.com, and Apartments.com, leading companies in the digital classified advertising arena. And our growth in digital retail advertising of 50.7% in the first half of 2009 is fueled in part by our partnerships with Yahoo! and other technology companies.
"As we continue our successful migration to a multimedia company, we are less vulnerable to print declines and the secular shifts of advertising to digital media. Digital advertising represented 16.5% of total advertising in the second quarter, up from 11.8% in the second quarter of 2008. In June, digital advertising represented 17.3% of total advertising.
"We are among the leaders in our industry in online advertising revenue performance and online advertising as a percentage of total advertising. Those who think of McClatchy as just a newspaper company need to take a fresh look. We are quickly becoming a 24-7 news and advertising company that can deliver in print, online, and to handheld devices.
"As we look to the second half, we will remain vigilant in our efforts to become more efficient and permanently reduce costs. Through the first six months of 2009, cash expenses, excluding restructuring charges, are down 23.6%, and we expect cash expenses to be down in the mid-20s percent range for the remainder of the year.
"Our challenge in this extremely tough environment is to stabilize cash flow, reduce debt and continue a transition to an integrated multimedia company. I'm happy to report that in the second quarter, we moved forward on all three fronts. Looking ahead, we know that economic slowdowns do not last forever, and our 152-year-old company has been successful by taking a long-term view and staying true to our strategic plan. So we are focused on continuing to be the leading local media company in some of the best markets in the nation. We are working to put ourselves in a good position to weather this downturn and to create value for all of our stakeholders."
Pat Talamantes, McClatchy's chief financial officer, said, "In addition to the outstanding efforts made by our papers to permanently reduce costs, we believe our recent bond exchange offer has further improved our financial standing. We were able to reduce our overall debt principal by about $75 million as a result of this offer. In addition, on April 15, 2009, we repaid principal of $31 million on unsecured notes that had matured.
"At the end of the second quarter, the principal due on our bank debt and public notes was down more than $100 million from the end of 2008. Based on our trailing 12 months of cash flow, our leverage ratio, as defined under our credit agreement, improved from 5.9 times cash flow in the first quarter to 5.8 times at the end of the second quarter and our interest coverage ratio was about the same at 2.8 times. Both of these ratios are well within the covenant requirements under our credit agreement of a leverage ratio of less than 7.0 times and an interest coverage ratio of at least 2.0 times. At the end of June, we had approximately $143.5 million available under our bank credit lines. McClatchy has no debt maturities until 2011."
Pruitt added, "There has been a steady drumbeat in recent media and analyst reports about the prospects of McClatchy violating bank covenants this year. We think it is important to note that even if our advertising performance does not improve from its current run rate for the rest of the year, we would not breach our bank covenants. In the meantime, we will continue to reduce debt."
(1)Adjusted Earnings From Continuing Operations and EPS:
The company entered into several transactions and reported several unusual events in the second quarters of fiscal 2009 and 2008 that affected results:
-- On March 31, 2008, McClatchy and its partners completed the sale of SP
Newsprint Company, of which McClatchy was a one-third owner. The company
received $60 million in proceeds ($5 million in 2009), which was used to
repay debt.
-- In May 2008, the company purchased $300 million aggregate principal
amount of its outstanding publicly traded debt securities for $282.4
million.
-- On June 16, 2008, the company announced a restructuring plan to
permanently reduce its workforce by about 10%.
-- On June 30, 2008, the company sold its 15.0% interest in ShopLocal, LLC
for $7.875 million and used the proceeds to reduce debt and recorded a
write-off in the second quarter of 2008 related to its carrying value.
In addition, one of the internet companies in which McClatchy has an
investment incurred an impairment charge on a product and as a result,
the company recognized a charge related to this investment in the second
quarter.
-- In March 2009, the company announced additional restructuring efforts
which included, among other things, reducing the workforce by
approximately 15%, the freezing of the company's pension plans and
a temporary suspension of the company matching contribution to the
401(k) plan as of March 31, 2009.
-- On May 21, 2009, the company launched a private debt exchange offer for
all of its outstanding debt securities for a combination of cash and new
debt securities. The offer closed on June 25, 2009, and the company
exchanged $3.4 million in cash and $24.2 million of newly issued senior
notes for $102.8 million of debt securities.
-- In connection with the debt tender offer described above, the company
entered into an agreement on May 20, 2009, to amend its credit agreement
which, among other things, allows it to use its revolving credit
facility for up to $60 million to repurchase its unsecured notes due in
2011 or unsecured notes due in 2014, subject to certain conditions.
-- During the second quarter of 2009, the company recorded $10.6 million of
accelerated depreciation on production equipment associated with the
outsourcing of printing at various newspapers. -- Both the 2009 and 2008 second quarters included charges for certain
discrete tax items.
The impacts of these items on the 2009 and 2008 results are summarized below (dollars in thousands, except per share amounts):
Three Months Ended Six Months Ended
------------------ --------------------
June 28, June 29, June 28, June 29,
2009 2008 2009 2008
-------- -------- -------- --------
(Dollars in thousands,
except per share amounts) Income from continuing
operations $42,003 $20 051 $4,279 $19,057
Unusual items, net of tax:
Sale of SP Newsprint
Company interest 407 (19,393) 496 (19,393)
Gain on extinguishment of
debt (28,332) (12,299) (28,332) (12,299)
Restructuring related
charges 2,874 13,188 16,769 14,373
Impairment related charges - 13,532 - 13,532
Write-off of financing
costs 258 - 258 1,914
Accelerated depreciation
on equipment 7,460 - 7,460 -
Certain discrete tax items 492 2,245 (930) 2,851
--- ----- ---- -----
Adjusted income from
continuing operations $25,162 $17,324 $Nil $20,035
======= ======= ======== =======
Earnings per share:
Income from continuing
operations $0.50 $0.24 $0.05 $0.23
Adjusted income from
continuing operations $0. 30 $0.21 $0.00 $0.24
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 provided information regarding operating income, non-operating expenses and income, income taxes, net income and diluted earnings per share (EPS) excluding certain special or unusual items described in the table above. In addition the company has presented operating cash flows (defined as operating income plus depreciation and amortization, any non-cash impairment charges and restructuring related charges) along with operating cash flow margins (operating cash flow divided by net revenues) which are reconciled to GAAP measures in an 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; and -- an easier way to compare the Company's most recent results of
operations against investor and analyst financial models.
Operating income, non-operating expenses and income, income taxes, net income and diluted earnings per share (EPS) excluding certain special or unusual items should not be considered a substitute or an alternative to these computations calculated in accordance with and required by GAAP. Nor are operating cash flow and operating cash flow margins to be considered replacements for cash provided by operating activities as shown in the company's statement of cash flows.
In addition, the company's statistical report, which summarizes revenue performance for the second fiscal quarter and first half of 2009, follows.
At 11 a.m., Eastern time, today, McClatchy will review its results in a conference call (877-278-1205 pass code 18707443) and webcast (www.mcclatchy.com). The webcast will be archived at McClatchy's website.
About McClatchy
The McClatchy Company is the third largest newspaper company in the United States, with 30 daily newspapers, approximately 50 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local websites in each of its markets which extend its audience reach. The websites offer users comprehensive news and information, advertising, e-commerce and other services. Together with its newspapers and direct marketing products, these interactive operations make McClatchy the leading local media company in each of its premium high growth markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer, and The News & Observer (Raleigh).
McClatchy also owns a portfolio of premium digital assets, including 14.4% of CareerBuilder, the nation's largest online job site, 25.6% of Classified Ventures, a newspaper industry partnership that offers two of the nation's premier classified websites: the auto website, cars.com, and the rental site, apartments.com and 33.3% of HomeFinder, LLC which operates the real estate website HomeFinder.com. 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, future dividend payments, 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 may reduce its income and cash flow greater than expected; McClatchy may not generate cash from operations, or otherwise, necessary to reduce debt as expected; McClatchy may not achieve financial performance levels necessary to maintain compliance with the leverage and interest coverage ratio covenants under its credit agreement; 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; McClatchy's expense and income levels could be adversely affected by changes in the cost of newsprint and McClatchy's operations could be negatively affected by any deterioration in its labor relations, bankruptcies or financial strain of its major advertising customers; McClatchy's ability to achieve and maintain compliance with NYSE listing standards, including the NYSE share price standard and compliance with its market capitalization and stockholders' equity standards; commencement by the NYSE of suspension and delisting procedures if McClatchy fails to implement successfully a plan to correct non-compliance with the NYSE listing standards; 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 December 28, 2008, 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 Six Months Ended
------------------ ----------------
June 28, June 29, June 28, June 29,
2009 2008 2009 2008
---- ---- ---- ----
REVENUES - NET:
Advertising $283,661 $406,328 $568,350 $810,351
Circulation 69,351 66,055 137,831 133,919
Other 12,323 17,300 24,779 33,696
------ ------ ------ ------
365,335 489,683 730,960 977,966
OPERATING EXPENSES:
Compensation 140,127 229,057 323,435 447,910
Newsprint and supplements 45,495 64,189 99,871 124,647
Depreciation and amortization 43,630 36,649 78,007 73,031
Other operating expenses 91,295 116,073 195,721 231,929
------ ------- ------- -------
320,547 445,968 697,034 877,517
OPERATING INCOME 44,788 43,715 33,926 100,449
NON-OPERATING (EXPENSES) INCOME:
Interest expense (34,305) (36,668) (68,226) (81,945)
Interest income 6 475 37 571
Equity income (losses) in
unconsolidated companies,
net 2,475 (366) (655) (13,490)
Gain on extinguishment of
debt 44,829 19,500 44,829 19,500
Gain on Sale of SP Newsprint (874) 31,976 (874) 31,976
Impairment related to internet
investments - (21,515) - (21,515)
Other - net (233) 105 (334) 1,019
---- --- ---- -----
11,898 (6,493) (25,223) (63,884)
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAX PROVISION 56,686 37,222 8,703 36,565
INCOME TAX PROVISION 14,683 17,171 4,424 17,508
------ ------ ----- ------
INCOME FROM CONTINUING
OPERATIONS 42,003 20,051 4,279 19,057
INCOME (LOSS) FROM DISCONTINUED
OPERATIONS - NET OF INCOME
TAXES 210 (386) 419 (242)
--- ---- --- ----
NET INCOME $42,213 $19,665 $4,698 $18,815
======= ======= ====== =======
NET INCOME PER COMMON SHARE:
Basic:
Income from continuing
operations $0.50 $0.24 $0.05 $0.23
Income from discontinued
operation 0.00 0.00 0.01 0.00
Net income per share $0.50 $0.24 $0.06 $0.23
Diluted:
Income from continuing
operations $0.50 $0.24 $0.05 $0.23
Income from discontinued
operation 0.00 0.00 0.01 0.00
Net income per share $0.50 $0.24 $0.06 $0.23
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES:
Basic 83,623 82,264 83,321 82,220
Diluted 83,632 82,317 83,331 82,274
***The McClatchy Company***
Consolidated Statistical Report
(In thousands, except for preprints) Quarter 2
------------------------
Combined
------------------------
Revenues - Net: 2009 2008 % Change
---- ---- --------
Advertising
Retail $149,442 $196,497 -23.9%
National 24,141 36,682 -34.2%
Classified Total 80,157 135,144 -40.7%
Automotive 23,627 35,997 -34.4%
Real Estate 18,692 34,412 -45.7%
Employment 15,148 40,423 -62.5%
Other 22,690 24,312 -6.7%
Direct Marketing 29,402 37,591 -21.8%
Other Advertising 519 412 26.0%
--- ---
Total Advertising $283,661 $406,328 -30.2%
Circulation 69,351 66,055 5.0%
Other 12,323 17,300 -28.8%
------ ------
Total Revenues $365,335 $489,683 -25.4%
======== ========
Advertising Revenues by Market:
California $51,417 $72,432 -29.0%
Florida 39,540 58,229 -32.1%
Texas 31,262 44,139 -29.2%
Southeast 82,246 119,617 -31.2%
Midwest 46,723 64,027 -27.0%
Northwest 32,434 47,524 -31.8%
Other 39 359 -89.1%
--- ---
Total Advertising $283,661 $406,328 -30.2%
Advertising Statistics for Dailies:
Full Run ROP Linage
Millions of Preprints Distributed
Average Paid Circulation:*
Daily
Sunday
Quarter 2
------------------------
Print Only
------------------------
Revenues - Net: 2009 2008 % Change
---- ---- --------
Advertising
Retail $131,942 $184,681 -28.6%
National 18,767 32,447 -42.2%
Classified Total 56,328 103,085 -45.4%
Automotive 15,452 27,563 -43.9%
Real Estate 14,280 29,891 -52.2%
Employment 7,600 23,722 -68.0%
Other 18,996 21,909 -13.3%
Direct Marketing 29,402 37,591 -21.8%
Other Advertising 519 412 26.0%
--- ---
Total Advertising $236,958 $358,216 -33.9%
Circulation
Other
Total Revenues
Advertising Revenues by Market:
California $43,407 $64,771 -33.0%
Florida 32,469 51,550 -37.0%
Texas 26,462 40,081 -34.0%
Southeast 68,522 104,148 -34.2%
Midwest 38,928 55,555 -29.9%
Northwest 27,170 42,111 -35.5%
Other 0 0 0.0%
- -
Total Advertising $236,958 $358,216 -33.9%
Advertising Statistics for Dailies:
Full Run ROP Linage 5,367.6 7,204.3 -25.5%
Millions of Preprints Distributed 1,350.0 1,574.6 -14.3%
Average Paid Circulation:*
Daily 2,299.0 2,623.9 -12.4%
Sunday 2,956.3 3,232.1 -8.5%
Quarter 2
-----------------------
Online Only
-----------------------
Revenues - Net: 2009 2008 % Change
---- ---- --------
Advertising
Retail $17,500 $11,816 48.1%
National 5,374 4,235 26.9%
Classified Total 23,829 32,059 -25.7%
Automotive 8,175 8,434 -3.1%
Real Estate 4,412 4,521 -2.4%
Employment 7,548 16,701 -54.8%
Other 3,694 2,403 53.7%
Direct Marketing
Other Advertising
------- -------
Total Advertising $46,703 $48,110 -2.9%
Circulation
Other
Total Revenues
Advertising Revenues by Market:
California $8,010 $7,661 4.6%
Florida 7,071 6,679 5.9%
Texas 4,800 4,058 18.3%
Southeast 13,723 15,468 -11.3%
Midwest 7,796 8,472 -8.0%
Northwest 5,264 5,413 -2.8%
Other 39 359 -89.1%
--- ---
Total Advertising $46,703 $48,110 -2.9%
Advertising Statistics for Dailies:
Full Run ROP Linage
Millions of Preprints Distributed
Average Paid Circulation:*
Daily
Sunday
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) June Year-to-Date
-------------------------
Combined
-------------------------
Revenues - Net: 2009 2008 % Change
---- ---- --------
Advertising
Retail $297,257 $387,255 -23.2%
National 51,695 74,907 -31.0%
Classified Total 161,708 275,354 -41.3%
Automotive 47,501 71,383 -33.5%
Real Estate 38,430 69,835 -45.0%
Employment 32,342 86,864 -62.8%
Other 43,435 47,272 -8.1%
Direct Marketing 56,810 72,020 -21.1%
Other Advertising 880 814 8.1%
--- ---
Total Advertising $568,350 $810,351 -29.9%
Circulation 137,831 133,919 2.9%
Other 24,779 33,696 -26.5%
------ ------
Total Revenues $730,960 $977,966 -25.3%
======== ========
Advertising Revenues by Market:
California $103,180 $143,513 -28.1%
Florida 83,657 120,971 -30.8%
Texas 63,263 89,091 -29.0%
Southeast 163,132 237,280 -31.2%
Midwest 91,771 125,234 -26.7%
Northwest 63,291 93,514 -32.3%
Other 56 747 -92.5%
-- ---
Total Advertising $568,350 $810,351 -29.9%
Advertising Statistics for Dailies:
Full Run ROP Linage
Millions of Preprints Distributed
Average Paid Circulation:*
Daily
Sunday
June Year-to-Date
------------------------
Print Only
------------------------
Revenues - Net: 2009 2008 % Change
---- ---- --------
Advertising
Retail $264,438 $365,476 -27.6%
National 41,284 66,972 -38.4%
Classified Total 114,806 211,395 -45.7%
Automotive 31,564 55,178 -42.8%
Real Estate 29,757 61,308 -51.5%
Employment 16,820 52,139 -67.7%
Other 36,665 42,770 -14.3%
Direct Marketing 56,810 72,020 -21.1%
Other Advertising 880 814 8.1%
--- ---
Total Advertising $478,218 $716,677 -33.3%
Circulation
Other
Total Revenues
Advertising Revenues by Market:
California $87,683 $128,790 -31.9%
Florida 70,095 108,048 -35.1%
Texas 53,841 80,942 -33.5%
Southeast 136,147 206,981 -34.2%
Midwest 77,300 109,423 -29.4%
Northwest 53,152 82,493 -35.6%
Other 0 0 0.0%
--- ---
Total Advertising $478,218 $716,677 -33.3%
Advertising Statistics for Dailies:
Full Run ROP Linage 10,683.0 14,163.5 -24.6%
Millions of Preprints Distributed 2,668.0 3,107.2 -14.1%
Average Paid Circulation:*
Daily 2,386.4 2,670.5 -10.6%
Sunday 3,031.8 3,280.3 -7.6%
June Year-to-Date
------------------------
Online Only
------------------------
Revenues - Net: 2009 2008 % Change
---- ---- --------
Advertising
Retail $32,819 $21,779 50.7%
National 10,411 7,935 31.2%
Classified Total 46,902 63,959 -26.7%
Automotive 15,937 16,205 -1.7%
Real Estate 8,673 8,527 1.7%
Employment 15,522 34,725 -55.3%
Other 6,770 4,502 50.4%
Direct Marketing
Other Advertising
------- -------
Total Advertising $90,132 $93,673 -3.8%
Circulation
Other
Total Revenues
Advertising Revenues by Market:
California $15,497 $14,723 5.3%
Florida 13,562 12,923 4.9%
Texas 9,422 8,149 15.6%
Southeast 26,985 30,299 -10.9%
Midwest 14,471 15,811 -8.5%
Northwest 10,139 11,021 -8.0%
Other 56 747 -92.5%
--- ---
Total Advertising $90,132 $93,673 -3.8%
Advertising Statistics for Dailies:
Full Run ROP Linage
Millions of Preprints Distributed
Average Paid Circulation:*
Daily
Sunday
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 to Non-GAAP Amounts
(In thousands)
Three Months Ended Six Months Ended
------------------ ----------------
June 28, June 29, June 28, June 29,
2009 2008 2009 2008
---- ---- ---- ----
REVENUES - NET:
Advertising $283,661 $406,328 $568,350 $810,351
Circulation 69,351 66,055 137,831 133,919
Other 12,323 17,300 24,779 33,696
------ ------ ------ ------
365,335 489,683 730,960 977,966
OPERATING EXPENSES:
Compensation 140,127 229,057 323,435 447,910
Newsprint and supplements 45,495 64,189 99,871 124,647
Other cash operating expenses 91,295 115,837 195,721 231,693
------ ------- ------- -------
Cash operating expenses 276,917 409,083 619,027 804,250
Non-cash impairment charge - 236 - 236
Depreciation and amortization 43,630 36,649 78,007 73,031
------ ------ ------ ------
Total operating expenses 320,547 445,968 697,034 877,517
OPERATING INCOME 44,788 43,715 33,926 100,449
Add back:
Depreciation and amortization 43,630 36,649 78,007 73,031
Non-cash impairment charge - 236 - 236
Restructuring related
compensation charges 4,017 23,312 23,745 25,408
----- ------ ------ ------
OPERATING CASH FLOW 92,435 103,912 135,678 199,124
====== ======= ======= =======
OPERATING CASH FLOW MARGIN 25.3% 21.2% 18.6% 20.4%
The Company believes operating cash flow is commonly used as a measure of
performance for newspaper companies, however, it does not purport to
represent cash provided by operating activities as shown in the company's
statement of cash flows, nor is it meant as a substitute for measures of
performance prepared in accordance with generally accepted accounting
principles.
SOURCE The McClatchy Company
The McClatchy Company