SACRAMENTO, Calif.,
Aug. 8, 2019 /PRNewswire/ --
McClatchy (NYSE American-MNI) today reported a net
loss in the second quarter of 2019 of $17.5
million, or $2.21 per share, a
13.9% improvement from the net loss of $20.4
million, or $2.62 per share in
the second quarter of 2018.
"We are continuing the trend toward stabilizing adjusted EBITDA
in 2019," said Craig Forman,
McClatchy's President and CEO. "The second quarter adjusted EBITDA
marks the third consecutive quarter of improving trends in
operating results, and we posted our best year-over-year quarterly
performance in adjusted EBITDA since the fourth quarter of 2015.
This trend reflects our discipline in controlling costs while
making strategic changes to accelerate our digital transformation.
Moreover, adjusted EBITDA in the first half of this year, excluding
the impact of real estate gains and equity distributions, was down
4.2% and signifies our best performance since 2010."
The trend in adjusted earnings before interest, taxes,
depreciation and amortization (EBITDA) improved sequentially in the
second quarter of 2019. Adjusted EBITDA excluding the impact of
real estate gains and equity distributions was down 3.2% for the
quarter compared to the second quarter of 2018. This reflects the
third consecutive quarter of improvement: from a decline of 8.2% in
the fourth quarter of 2018 and a decline of 5.7% in the first
quarter of 2019 when compared to previous
periods.
Evidence of the company's continued digital transformation is
reflected in its growth in the number of digital subscribers and
engagement with its digital products. Digital-only subscriptions
grew 51.6% from the second quarter of 2018 to nearly 185,500
subscribers. When coupled with the company's combination
print/digital subscriptions, where customers have activated their
digital products, total paid digital customer relationships were
approximately 483,600 at the end of the second quarter of 2019, up
24.4% from 388,600 a year earlier.
Forman added: "We continue to be strategic and resolved in
taking costs out of the business while making key investments to
boost revenue generation. During the quarter we invested in our
digital advertising team, adding new leaders to our functional
organizational structure with a dedicated focus on our customers to
drive digital revenue and create new efficiencies. While periods of
reorganization and change can be temporarily disruptive, we believe
the new structure, powered by a highly-motivated and focused sales
team, will drive greater digital advertising revenues in the
future.
"We are excited by the improvements we are seeing in our
business and we remain firm in our commitment to independent local
journalism in the public interest. In this regard we had a very
strong quarter capped by international recognition of the Miami
Herald's investigative series 'Perversion of Justice,' which
gave voice to victims of sexual abuse who for more than a decade
were not heard. The series contributed to the arrest of
Jeffrey Epstein and subsequent
resignation of Alexander Acosta as
U.S. Secretary of Labor. These events drove an increase in
audience, subscriptions and digital advertising for the Miami
Herald in July."
Second Quarter Results
Total revenues in the second quarter of 2019 were $178.7 million, down 12.6% compared to the second
quarter of 2018. Total advertising revenues were $85.5 million, down 20.1% in the second quarter
of 2019 compared to the second quarter of 2018.
In the second quarter of 2019 total digital advertising revenues
were $37.8 million, representing
44.2% of total advertising revenues, and exceeded print advertising
in our home-delivered and single-copy newspapers. Digital-only
advertising revenues in the second quarter of 2019 were down 20.6%
and total digital advertising revenues were down 18.7% over the
same period in 2018. The restructuring of the advertising function
during the second quarter of 2019 temporarily impacted sales. In
addition, as the company discussed last quarter the decline in
digital-only advertising continued due to lower audience traffic
compared to the second quarter of 2018, the result of a
strategic tightening of website paywalls that accelerated paid
digital subscriptions and, to a lesser extent, a change in
algorithms by a large platform company in the last half of 2018
that impacted McClatchy and the rest of the industry.
Audience revenues were $80.3
million, down 5.3% in the second quarter of 2019 compared to
a decline of 5.7% in the same period in 2018 versus 2017. Audience
revenues accounted for approximately 45% of total revenues in the
second quarter of 2019.
Digital audience revenues were up 8.1% for the second quarter of
2019 compared to the same period last year. The company reported
total digital subscribers, defined as digital-only subscribers and
digital subscriptions activated by combined print/digital
customers, of 483,600, up 24.4% compared to the second quarter of
2018. Digital-only audience revenues associated with digital-only
subscriptions were up 57.6% and the number of digital-only
subscribers ended the quarter at 185,500, representing an increase
of 51.6% from the second quarter of 2018. Digital-only
subscriptions have grown for thirteen consecutive
quarters.
Average monthly total unique visitors to the company's online
products were 51.1 million in the second quarter of 2019.
Results in the second quarter of 2019 included the following
items:
- Loss on extinguishment of debt related to bond
redemptions;
- Severance charges; and
- Costs related to re-organizing operations and other
miscellaneous costs.
Adjusted net loss, which excludes the items above, was
$11.4 million compared to adjusted
net loss of $5.6 million in the
second quarter of 2018.
Operating expenses were down 14.6%, while adjusted operating
expenses were down 15.3%. Excluding the impact of real estate
gains offsetting expenses in the second quarter of 2019, operating
expenses were down 13.5% and adjusted operating expenses were down
14.0%.
Adjusted EBITDA was $28.6 million
in the second quarter of 2019, down 4.9% from the second quarter of
2018. Excluding real estate gains from the second quarter of 2019
and equity distributions from CareerBuilder in the second quarter
of 2018 adjusted EBITDA was $26.3
million, down 3.2% from the second quarter of 2018. (A
discussion of our non-GAAP measures and the reconciliation to the
comparable GAAP measures are provided below.)
Other Second Quarter Business and Recent Highlights
Real Estate Transaction:
As announced on May 16, 2019, the
company completed the sale and leaseback of its real property in
Kansas City, MO, the headquarters
and printing pavilion of The Kansas City Star. On
April 26, 2019 the company completed
the sale of a small distribution center in Miami, FL. The two property sales combined
resulted in net after-tax proceeds of $32.0
million which were used to redeem 9.0% senior secured notes
due 2026 (2026 Notes).
Debt and Liquidity:
On June 7, 2019, the company
completed a partial redemption of $32.0
million of its 2026 Notes at par in accordance with its
asset sales mandatory redemption requirements. As of June 30, 2019, the company's principal debt
outstanding was $708.5 million. The
company finished the quarter with $19.6
million in cash, resulting in net debt of $688.9 million.
As of the end of the second quarter, the company had
$39.4 million of total borrowing
capacity under its Asset Backed Loan (ABL) Credit Facility, and no
amounts were outstanding under the ABL.
Pension Matters:
As previously disclosed, the Company submitted an application
for a waiver of the minimum required contributions to its defined
benefit pension plan with the Internal Revenue Service (IRS).
McClatchy is requesting the waiver of the minimum required
contributions under the pension plan for the Company's fiscal year
2020, which are estimated to be approximately $120 million, and would be paid in installments
beginning in April 2020 with the bulk
of those payments due September 15,
2020 or afterwards.
There can be no assurance that the IRS will grant the requested
waivers, and the Company does not expect to provide periodic
updates prior to a definitive ruling by the IRS, which is expected
to take some time. If the waivers are not granted, it would have a
material adverse effect on the Company's liquidity.
The Company expects to make a required pension contribution
under ERISA of approximately $3.0
million in the fourth quarter of 2019. The company remains
in compliance with all IRS funding rules and regulations related to
the pension plan.
Journalism Highlights:
McClatchy newsrooms across our 30 markets continued to produce
extraordinary local journalism with national impact. The arrest and
imprisonment of hedge-fund manager and serial sex abuser
Jeffrey Epstein and subsequent
resignation of former U.S. Labor Secretary Alexander Acosta demonstrated the power of the
Miami Herald's accountability journalism and years-long
investigation in its series, Perversion of Justice.
In California, The
Sacramento Bee joined other news outlets in the state to
release "Destined to Burn" -- a multimedia examination of the risk
posed by wildfire to the lives of millions of Californians. The
Charlotte Observer helped to uncover how the city found itself
in an affordable housing crisis, and the data team in our
Washington bureau helped five
local newsrooms unearth new information that showed for the first
time the White House had reversed transportation spending trends to
benefit rural communities.
In the first quarter, McClatchy partnered with the Google News
Initiative to launch three local news outlets in communities that
have limited sources of local news to test sustainable models for
local journalism. The Compass Experiment will share with the
industry what works to scale successful new approaches. The Compass
team selected the first community to launch the initiative in
Youngstown, Ohio, which will soon
lose its local daily newspaper, The Vindicator.
First Six Months Results of 2019
Total revenues for the first six months of 2019 were
$359.0 million, down 11.0% compared
to the first six months of 2018.
Advertising revenues were $170.7
million, down 17.5% compared to the first six months of last
year. Total digital and digital-only advertising revenues surpassed
print newspaper advertising revenues for the first half of 2019.
Digital-only advertising revenues in the first half of 2019 were
down 13.2% compared to the first half of 2018 and total digital
advertising revenues were down 12.5% over the same period in 2019.
The trends for the first half of 2019 compared to 2018 are largely
due to the slower news cycle, changes in algorithms at a large
platform company and strategic tightening of paywalls that were
previously discussed in the quarterly results for the first and
second quarters.
Audience revenues were $163.4
million, down 4.5% compared to the first six months of 2018
and digital-only audience revenues were up 54.0% over the same
period due to the growth in digital subscribers. Total digital
audience revenues were up 8.7% compared to the first half of 2018,
while print audience revenues declined 10.0%.
Results for the first six months of 2019 included the following
items:
- Non-cash charge to the company's tax provision;
- Non-cash incremental pension costs related to the voluntary
early retirement incentive program;
- Severance charges;
- Loss on extinguishment of debt related to bond
redemptions;
- Costs related to re-organizing operations;
- Non-cash impairment charge on real estate held for sale;
and
- Accelerated depreciation and other miscellaneous costs.
The company reported a net loss for the first half of 2019 of
$59.5 million, or $7.54 per share. Net loss for the first half of
2018 was $59.3 million or
$7.66 a share. Adjusted net loss,
which excludes the items above, was $32.9
million compared to adjusted net loss of $23.6 million in the first half of
2018.
Operating expenses were down 10.8%, while adjusted operating
expenses were down 11.7% in the first half of 2019 compared to the
same period last year.
Adjusted EBITDA was $45.0 million
in the first half of 2019, down 4.2% when excluding real estate
gains from 2019 and CareerBuilder distributions from 2018 first
halves, respectively, and were down 11.0% with gains on real estate
sales and CareerBuilder equity distributions included in the
results.
Outlook
Craig Forman said: "As we look to
the second half, it's important to note that our mission to produce
public-service journalism has a direct correlation to our results.
The Miami Herald's award-winning investigation into the
secret plea agreement secured by serial sex abuser Jeffrey Epstein proved accountability journalism
can move our society in powerful ways — and remind customers of the
unique and essential value of our business. We believe the boosts
to our digital audience and subscriptions that have been aided by
the interest in this story and other local stories that have
national impact will fuel both advertising and audience revenues as
we look to the second half of 2019 and beyond."
In the full-year of 2019, digital subscriptions are
expected to continue to grow and largely offset continuing declines
in print circulation, resulting in low single-digit total audience
revenue declines for the full-year 2019.
Management expects digital-only advertising to improve in the
second half of the year and total digital and digital-only
advertising revenues to surpass newspaper print advertising for the
full-year 2019 as print advertising becomes a smaller percent of
total revenues. While product offerings and collaboration efforts
in digital advertising have steadily grown, management will
continue to adjust news and advertising content, paywall strategies
and the mix of advertising and audience revenue initiatives as
McClatchy pursues the best experience for all digital
customers.
Management plans to be steadfast in reducing operating
expenses in the second half of 2019 to align expense and revenue
performance, while making additional investments in our news and
sales organization.
Management is completing the consolidation and restructuring of
the advertising division which created some disruption to
advertising sales in the second quarter of 2019. The second half of
2019 should bring focus back to the advertising division, as well
as continued cost savings that are expected to be in the high
single digit millions of dollars for full year 2019.
Proceeds from asset sales and free cash flow are expected to be
used to reduce debt and debt service costs throughout 2019.
The company's consolidated statistical reports, which summarize
actual revenue performance for the second quarter and six months
ended are attached.
Non-GAAP Operating Performance 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 operating
performance measures such as adjusted EBITDA, adjusted EBITDA
margin, adjusted net income (loss), and adjusted operating
expenses. Adjusted EBITDA is defined as net income (loss) plus
interest, taxes, depreciation and amortization, non-operating
income and expenses, severance charges associated with changes in
our operations, equity income (loss) in unconsolidated companies,
net, non-cash stock compensation expense, non-cash and
non-operating pension costs, and certain other charges as outlined
in the non-GAAP reconciliation schedule accompanying this release.
Adjusted EBITDA margin is defined as adjusted EBITDA divided by
total net revenues. Adjusted net income (loss) is defined as net
income (loss) excluding amounts for other asset impairments,
impairment charges related to equity investments, gain (loss) on
extinguishment of debt, severance charges, accelerated depreciation
on equipment, reversal of interest on tax items and certain
discrete tax items, and certain other charges as outlined in the
non-GAAP reconciliation schedule accompanying this release. The tax
impact of these non-GAAP adjustments is calculated using the
federal statutory rate plus the net state rates for the
jurisdictions in which the subsidiaries file tax returns. Adjusted
operating expenses are defined as operating expenses less non-cash
charges, charges not directly related to operations, and unique or
non-recurring transactions. These non-GAAP operating performance
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, including the
corresponding GAAP measures, provide useful information to
investors by offering supplemental information that enables
investors to:
- make more meaningful period-to-period comparisons of the
company's ongoing operating results. Management believes variances
in the excluded line items are not reflective of the underlying
business operations of the company or trends in the company's
markets or industry;
- better identify trends in the company's underlying
business;
- better understand how management plans and measures the
company's underlying business;
- more easily compare operating results to those of our
peers;
- more directly compare the company's operating results against
investor and analyst financial models; and
- better understand the performance measures used in the
company's indenture, term loan agreement, and ABL credit
agreement.
These non-GAAP operating performance measures should not be
considered a substitute or an alternative to these computations
calculated in accordance with and required by GAAP. Also,
McClatchy's non-GAAP operating performance measures may not be
comparable to similarly titled measures presented by other
companies.
Conference Call Information
At noon Eastern time today,
McClatchy will review its results in a conference call
(833-255-2826, please request to be connected to the McClatchy
second quarter earnings call) and webcast (www.mcclatchy.com). The
webcast will be archived at McClatchy's website.
About McClatchy
McClatchy operates 30 media companies in 14 states, providing
each of its communities with strong independent local journalism in
the public interest and advertising services in a wide array of
digital and print formats. McClatchy publishes iconic local brands
including the Miami Herald, The Kansas City Star, The Sacramento
Bee, The Charlotte Observer, The (Raleigh) News & Observer, and the
Fort Worth Star-Telegram. McClatchy is headquartered in
Sacramento, Calif., and listed on
the New York Stock Exchange American under the symbol MNI.
#ReadLocal
Additional Information
Statements in this press release regarding future financial and
operating results, including our strategies for success and their
effects, our real estate monetization efforts and the repurchase of
outstanding notes, revenues, and management's efforts with respect
to cost reduction efforts and efficiencies, cash expenses,
revenues, adjusted EBITDA, debt levels, interest costs and creation
of shareholder and investor value as well as future opportunities
for the company and any other statements about management's future
expectations, beliefs, goals, investments, plans or prospects
constitute forward-looking statements as defined in 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; we may not be successful in reducing debt whether through
open market repurchase programs or other negotiated transactions;
we may not be successful in obtaining waiver(s) for minimum pension
plan contributions from the Internal Revenue Service; sales of real
estate properties may not close as anticipated or result in cash
distributions in the amount or timing anticipated; McClatchy may
not successfully implement audience strategies designed to increase
audience revenues and may experience decreased audience volumes or
subscriptions; McClatchy may experience diminished revenues from
advertising; McClatchy may not achieve its expense reduction
targets including efforts related to legacy expense initiatives 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;
potential increases in contributions to McClatchy's qualified
defined benefit pension plan in the next several years; 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
listed in the company's publicly filed documents, including the
company's Annual Report on Form 10-K for the year ended
December 30, 2018. Except as required
by law, McClatchy disclaims any intention and assumes no obligation
to update the forward-looking information contained in this
release.
THE MCCLATCHY
COMPANY
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited; In
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
July
1,
|
|
June
30,
|
|
July
1,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
REVENUES -
NET:
|
|
|
|
|
|
|
|
Advertising
|
$
85,455
|
|
$ 106,953
|
|
$ 170,650
|
|
$ 206,840
|
Audience
|
80,292
|
|
84,825
|
|
163,404
|
|
171,103
|
Other
|
12,915
|
|
12,570
|
|
24,932
|
|
25,263
|
|
178,662
|
|
204,348
|
|
358,986
|
|
403,206
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
Compensation
|
61,456
|
|
77,937
|
|
130,891
|
|
157,149
|
Newsprint,
supplements and printing expenses
|
11,229
|
|
13,761
|
|
22,925
|
|
27,420
|
Depreciation and
amortization
|
17,411
|
|
19,222
|
|
34,929
|
|
38,455
|
Other operating
expenses
|
83,087
|
|
91,817
|
|
171,291
|
|
181,466
|
Other asset
write-downs
|
-
|
|
-
|
|
739
|
|
59
|
|
173,183
|
|
202,737
|
|
360,775
|
|
404,549
|
|
|
|
|
|
|
|
|
OPERATING INCOME
(LOSS)
|
5,479
|
|
1,611
|
|
(1,789)
|
|
(1,343)
|
|
|
|
|
|
|
|
|
NON-OPERATING
(EXPENSES) INCOME:
|
|
|
|
|
|
|
|
Interest
expense
|
(19,920)
|
|
(17,939)
|
|
(39,964)
|
|
(36,835)
|
Equity income (loss)
in unconsolidated companies, net
|
(900)
|
|
2,314
|
|
(1,529)
|
|
1,046
|
Loss on
extinguishment of debt, net
|
(1,986)
|
|
(19)
|
|
(1,986)
|
|
(5,368)
|
Retirement benefit
expense
|
(4,329)
|
|
(2,779)
|
|
(15,056)
|
|
(5,557)
|
Other -
net
|
218
|
|
65
|
|
368
|
|
241
|
|
(26,917)
|
|
(18,358)
|
|
(58,167)
|
|
(46,473)
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
(21,438)
|
|
(16,747)
|
|
(59,956)
|
|
(47,816)
|
Income tax (benefit)
provision
|
(3,907)
|
|
3,618
|
|
(469)
|
|
11,490
|
NET
LOSS
|
$ (17,531)
|
|
$
(20,365)
|
|
$
(59,487)
|
|
$
(59,306)
|
|
|
|
|
|
|
|
|
Net loss per
common share:
|
|
|
|
|
|
|
|
Basic
|
$
(2.21)
|
|
$
(2.62)
|
|
$
(7.54)
|
|
$
(7.66)
|
Diluted
|
$
(2.21)
|
|
$
(2.62)
|
|
$
(7.54)
|
|
$
(7.66)
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares used
|
|
|
|
|
|
|
|
to calculate basic
and diluted earnings per share:
|
|
|
|
|
|
|
|
Basic
|
7,925
|
|
7,761
|
|
7,892
|
|
7,741
|
Diluted
|
7,925
|
|
7,761
|
|
7,892
|
|
7,741
|
THE McCLATCHY
COMPANY
|
Reconciliation of
GAAP Measures to Non-GAAP Amounts
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Loss to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Quarters
Ended
|
|
Six Months
Ended
|
|
|
June 30,
|
|
July 1,
|
|
June 30,
|
|
July 1,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
NET LOSS
|
|
$
(17,531)
|
|
$
(20,365)
|
|
$
(59,487)
|
|
$
(59,306)
|
|
|
|
|
|
|
|
|
|
Income tax provision
(benefit)
|
|
(3,907)
|
|
3,618
|
|
(469)
|
|
11,490
|
Interest
expense
|
|
19,920
|
|
17,939
|
|
39,964
|
|
36,835
|
Depreciation and
amortization
|
|
17,411
|
|
19,222
|
|
34,929
|
|
38,455
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
15,893
|
|
20,414
|
|
14,937
|
|
27,474
|
|
|
|
|
|
|
|
|
|
Severance
charges
|
|
1,566
|
|
4,903
|
|
3,488
|
|
7,596
|
Non-cash stock
compensation
|
|
302
|
|
319
|
|
965
|
|
1,059
|
Non-cash and
non-operating retirement benefit expense
|
|
4,329
|
|
2,779
|
|
15,056
|
|
5,557
|
Equity (income) loss
in unconsolidated companies, net
|
|
569
|
|
506
|
|
1,198
|
|
1,774
|
Loss related to sale
of equity investment
|
|
331
|
|
-
|
|
331
|
|
-
|
Other asset
impairment charges
|
|
-
|
|
-
|
|
739
|
|
59
|
Other operating
costs, net (1)
|
|
3,794
|
|
1,154
|
|
6,645
|
|
1,897
|
Other non-operating,
net
|
|
1,768
|
|
(46)
|
|
1,633
|
|
5,127
|
Adjusted
EBITDA
|
|
$
28,552
|
|
$
30,029
|
|
$
44,992
|
|
$
50,543
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
|
16.0%
|
|
14.7%
|
|
12.5%
|
|
12.5%
|
|
|
|
|
|
|
|
|
|
EBITDA ADJUSTED FOR
REAL ESTATE / MINORITY DISTRIBUTION ACTIVITY
|
$
26,289
|
|
$
27,170
|
|
$
42,729
|
|
$
44,609
|
|
|
|
|
|
|
|
|
|
(1) Other operating
costs, net, includes: Relocation charges; limited technology
conversion costs; costs associated with reorganizing operations;
trust related litigations, and operating costs associated with the
voluntary early retirement program.
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Loss to Adjusted Net Loss
|
|
|
|
|
|
|
|
|
|
NET LOSS
|
|
$
(17,531)
|
|
$
(20,365)
|
|
$
(59,487)
|
|
$
(59,306)
|
|
|
|
|
|
|
|
|
|
Add back certain
items:
|
|
|
|
|
|
|
|
|
Loss on
extinguishment of debt, net
|
|
1,986
|
|
19
|
|
1,986
|
|
5,368
|
Other asset
impairment charges
|
|
-
|
|
-
|
|
739
|
|
59
|
Loss related to
sale of equity investment
|
|
331
|
|
-
|
|
331
|
|
-
|
Severance
charges
|
|
1,566
|
|
4,903
|
|
3,488
|
|
7,596
|
Voluntary early
retirement incentive program, pension costs
|
|
-
|
|
-
|
|
6,850
|
|
-
|
Accelerated
Depreciation
|
|
-
|
|
229
|
|
106
|
|
229
|
Other operating
costs, net
|
|
3,794
|
|
1,154
|
|
6,645
|
|
1,897
|
Certain discrete tax
items
|
|
33
|
|
10,101
|
|
9,214
|
|
24,352
|
Less: Tax effect of
adjustments
|
|
(1,569)
|
|
(1,627)
|
|
(2,770)
|
|
(3,765)
|
Adjusted net loss
(2)
|
|
$
(11,390)
|
|
$
(5,586)
|
|
$
(32,898)
|
|
$
(23,570)
|
|
|
|
|
|
|
|
|
|
(2) The tax impact of
these non-GAAP adjustments for 2019 and 2018 are calculated using
the federal statutory rate of 21% plus the net state rate for the
jurisdictions in which the subsidiaries file tax returns and ranges
from 2.1% to 10.0%.
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating Expenses to Adjusted Operating Expenses
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
$ 173,183
|
|
$ 202,737
|
|
$ 360,775
|
|
$ 404,549
|
Add back:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
17,411
|
|
19,222
|
|
34,929
|
|
38,455
|
Other asset
impairment charges
|
|
-
|
|
-
|
|
739
|
|
59
|
Severance charges and
non-cash stock compensation
|
|
1,868
|
|
5,222
|
|
4,453
|
|
8,655
|
Other operating
costs, net
|
|
3,794
|
|
1,154
|
|
6,645
|
|
1,897
|
Adjusted operating
expenses
|
|
$ 150,110
|
|
$ 177,139
|
|
$ 314,009
|
|
$ 355,483
|
|
|
|
|
|
|
|
|
|
OPEX ADJUSTED FOR
REAL ESTATE ACTIVITY
|
|
$ 175,446
|
|
$ 202,737
|
|
$ 363,038
|
|
$ 407,624
|
|
|
|
|
|
|
|
|
|
ADJUSTED OPEX
ADJUSTED FOR REAL ESTATE ACTIVITY
|
|
$ 152,373
|
|
$ 177,139
|
|
$ 316,272
|
|
$ 358,558
|
The McClatchy
Company
|
Consolidated
Statistical Report
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Quarters
Ended
|
|
Six Months
Ended
|
|
June
30,
|
July
01,
|
|
|
|
June
30,
|
July
01,
|
|
|
Revenues -
Net
|
2019
|
2018
|
$
Change
|
%
Change
|
|
2019
|
2018
|
$
Change
|
%
Change
|
Advertising
|
|
|
|
|
|
|
|
|
|
Digital-only
|
$
31,250
|
$
39,362
|
$
(8,112)
|
-20.6%
|
|
$
65,683
|
$
75,667
|
$
(9,984)
|
-13.2%
|
Digital bundled with
print
|
6,506
|
7,054
|
(548)
|
-7.8%
|
|
12,620
|
13,775
|
(1,155)
|
-8.4%
|
Total
Digital
|
37,756
|
46,416
|
(8,660)
|
-18.7%
|
|
78,303
|
89,442
|
(11,139)
|
-12.5%
|
Print
|
32,459
|
39,930
|
(7,471)
|
-18.7%
|
|
63,652
|
78,555
|
(14,903)
|
-19.0%
|
Direct marketing and
other
|
15,240
|
20,607
|
(5,367)
|
-26.0%
|
|
28,695
|
38,843
|
(10,148)
|
-26.1%
|
Total
Advertising
|
85,455
|
106,953
|
(21,498)
|
-20.1%
|
|
170,650
|
206,840
|
(36,190)
|
-17.5%
|
|
|
|
|
|
|
|
|
|
|
Audience
|
|
|
|
|
|
|
|
|
|
Digital
|
26,969
|
24,957
|
2,012
|
8.1%
|
|
54,798
|
50,397
|
4,401
|
8.7%
|
Print
|
53,323
|
59,868
|
(6,545)
|
-10.9%
|
|
108,606
|
120,706
|
(12,100)
|
-10.0%
|
Total
Audience
|
80,292
|
84,825
|
(4,533)
|
-5.3%
|
|
163,404
|
171,103
|
(7,699)
|
-4.5%
|
|
|
|
|
|
|
|
|
|
|
Other
revenue
|
12,915
|
12,570
|
345
|
2.7%
|
|
24,932
|
25,263
|
(331)
|
-1.3%
|
Total
Revenues
|
$ 178,662
|
$ 204,348
|
$ (25,686)
|
-12.6%
|
|
$ 358,986
|
$ 403,206
|
$ (44,220)
|
-11.0%
|
|
|
|
|
|
|
|
|
|
|
Statistics:
|
|
|
|
|
|
|
|
|
|
Daily average total
circulation*
|
1,061.0
|
1,151.4
|
N/A
|
-7.9%
|
|
1,099.3
|
1,196.9
|
N/A
|
-8.2%
|
Sunday average total
circulation*
|
1,477.4
|
1,753.6
|
N/A
|
-15.8%
|
|
1,548.9
|
1,810.2
|
N/A
|
-14.4%
|
Average monthly
unique visitors
|
51,082.7
|
65,649.0
|
N/A
|
-22.2%
|
|
54,523.2
|
71,909.5
|
N/A
|
-24.2%
|
Digital-only
subscriptions
|
185.5
|
122.4
|
N/A
|
51.6%
|
|
185.5
|
122.4
|
N/A
|
51.6%
|
Paid digital customer
relationships
|
483.6
|
388.6
|
N/A
|
24.4%
|
|
483.6
|
388.6
|
N/A
|
24.4%
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Advertising Detail:
|
|
|
|
|
|
|
|
|
|
Retail
|
$
39,238
|
$
47,484
|
$
(8,246)
|
-17.4%
|
|
$
79,493
|
$
91,814
|
$ (12,321)
|
-13.4%
|
National
|
7,688
|
11,697
|
(4,009)
|
-34.3%
|
|
15,846
|
21,454
|
(5,608)
|
-26.1%
|
Classified
|
23,289
|
27,165
|
(3,876)
|
-14.3%
|
|
46,616
|
54,729
|
(8,113)
|
-14.8%
|
Direct marketing and
other
|
15,240
|
20,607
|
(5,367)
|
-26.0%
|
|
28,695
|
38,843
|
(10,148)
|
-26.1%
|
Total
Advertising
|
$
85,455
|
$ 106,953
|
$ (21,498)
|
-20.1%
|
|
$ 170,650
|
$ 206,840
|
$ (36,190)
|
-17.5%
|
|
* Reflects total average
circulation based upon number of days in the period. Does not
reflect AAM reported figures.
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/mcclatchy-reports-second-quarter-2019-results-300898489.html
SOURCE McClatchy