SACRAMENTO, Calif.,
July 21, 2017 /PRNewswire/ --
- Grew digital-only subscribers to 91,000, or 13.8% from the
first quarter of 2016
- Reduced operating expenses 11.7% and adjusted operating
expenses 4.6%
- Reduced principal debt by $15
million
- Grew digital-only advertising revenues 10.0%
- Grew average total unique visitors 14.6%, local unique
visitors up 10.7%
- Entered into an agreement to sell a majority of our interest
in CareerBuilder, expected after-tax proceeds of $68 million
- Grew revenue categories other than print newspaper
advertising to 74.7% of total revenues
McClatchy (NYSE-MNI) today reported a net loss in the
second quarter of 2017 of $37.4
million, or $4.91 per share
that includes after-tax non-cash impairments totaling $28.8 million on the carrying value of the
company's interest in CareerBuilder LLC (CareerBuilder) and other
equity investments. In the second quarter of 2016 McClatchy
reported a net loss of $14.7 million,
or $1.89 per share.
The company reported an adjusted net loss of $6.1 million, which excludes severance and
certain other items in the second quarter of 2017, compared to an
adjusted net loss of $1.5 million in
the second quarter of 2016.
Craig Forman, McClatchy's
president and CEO, said, "As we focus forward at McClatchy, the
mantra of accelerating our pace and cadence is being embraced
across the organization. And our changes are being well-received by
customers -- both long-tenured and new. In the second quarter, we
moved forward by regionalizing our publisher structure,
centralizing our audience department, expanding our
exceleratetm digital marketing business, hastening our
product release cycles and diligently working to close on our
strategic real estate transactions.
"As I have mentioned before, achieving a normalized operating
environment takes some time in digital transitions. While we
continue to see strong headwinds in print advertising, we also are
seeing our digital efforts in all aspects of the business moderate
those headwinds. In the second quarter, our advertising revenue
trend improved by almost one percentage point and our decline in
adjusted EBITDA improved from last quarter by almost seven
percentage points, important indicators of our strategic plans at
work.
"Our commitment to journalism that matters is an area of focus
that is unremitting. And reaching greater audiences with that
journalism is at the core of what we do," Forman continued. "Our
newsroom reinvention and the rollout of our new audience management
platform are key to these efforts. Two measurements of our success
are growth in our digital subscriptions and in unique visitors.
Digital subscriptions grew by 13.8% over the same quarter last year
and our unique visitors grew by 14.6% over the same period.
"We plan to continue our digital audience growth in the second
half of the year by providing relevant journalism to our readers
and viewers while explaining the benefits of subscribing to our
digital products," Forman said. "We also will learn more about our
customers as they begin using the new audience platform, and as a
result we can engage more meaningfully with our subscribers."
Second Quarter Results
Total revenues in the second quarter of 2017 were $225.1 million, down 7.1% compared to the second
quarter of 2016. The sequential rate of decline is consistent with
that reported for the first quarter of 2017 in the 7% range.
Total advertising revenues were $125.2
million, down 11.1% in the second quarter of 2017 compared
to the second quarter of 2016. The rate of decline in total
advertising revenue slowed in the second quarter reflecting a
sequential improvement of 90 basis points compared to the decline
reported in the first quarter of 2017. The decline in advertising
revenues continues to be due to the softness in traditional print
advertising offset by improvements in direct marketing advertising
and digital-only advertising.
Digital-only advertising revenues grew 10.0% in the second
quarter of 2017 while total digital advertising revenues, which
includes digital-only advertising and digital advertising bundled
as an upsell with print advertising, declined 0.9% compared to the
same quarter last year. Direct marketing declined 1.8% in the
second quarter of 2017 compared to a decline of 13.2% in the same
period last year. The improvement in trend in the first half of
2017 was mainly attributable to new customers joining in the second
half of last year at a few of our markets and the impact of rolling
over the elimination of certain products during late 2015 and early
2016.
Audience revenues were $89.9
million, down 0.6% in the second quarter compared to the
same period in 2016. Digital-only audience revenues were up 6.7%
due to subscriber growth and pricing strategies implemented
throughout 2016. The number of digital-only subscribers ended the
quarter at 91,000, representing an increase of 13.8% from the
second quarter of 2016. The strength in digital-only audience
results were achieved despite the interruption that was inherent
during the implementation of a new audience management platform
during the quarter. New features will be rolled out in coming
quarters that will enable additional revenue-generating
strategies.
Average total unique and local unique visitors to the company's
online products were 66 million and 16.3 million, respectively, in
the second quarter of 2017. These results represented growth of
14.6% in total unique visitors and 10.7% in local unique visitors
in the second quarter of 2017 compared to the same quarter last
year. Mobile users represented 60.2% of average total unique
visitors in the second quarter of 2017 compared to 52.9% in the
second quarter of 2016.
Revenues exclusive of print newspaper advertising accounted for
74.7% of total revenues in the second quarter of 2017, an increase
from 70.4% in the second quarter of 2016.
Results in the second quarter of 2017 included the following
items:
- Non-cash impairment charge related to the write-down on the
carrying value of our equity investment in CareerBuilder and other
equity investments totaling $46.1
million ($28.8 million
after-tax);
- Severance charges totaling $5.6
million ($3.4 million
after-tax);
- Costs associated with reorganizing sales and other operations
totaling $0.8 million ($0.5 million after-tax);
- Gain on real estate transactions and charges associated with
relocations of certain operations netting to $3.1 million ($1.9
million after-tax); and
- Loss on extinguishment of debt $0.9
million ($0.6 million
after-tax).
Adjusted net loss, which excludes the items above, was
$6.1 million. Adjusted
EBITDA was $35.5 million in the
second quarter of 2017, down 18.2% compared to the second quarter
last year. Operating expenses were down 11.7%, while adjusted
operating expenses, which exclude non-cash and certain other
charges, were down 4.6% in the second quarter of 2017 compared to
the same quarter last year. (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 Transactions:
On March 31, 2017, the company
completed the sale of the San Luis
Obispo, California, building and land for gross proceeds of
$9.0 million.
The Sacramento, California,
land and buildings sale and leaseback transaction is expected to
close in the third quarter of 2017.
The company entered into separate sales agreements during the
second and third quarter respectively for its Kansas City, Missouri real property. On
April 4, 2017, the company entered
into an agreement with 1729 Grand Boulevard, LLC, a 3D Development
company, to buy the Kansas City Star's downtown office
facility. On July 12, 2017, the
company entered into an agreement with R2 Capital, LLC to buy the
Kansas City Star's
production facility, which will be structured as a sales leaseback
transaction. The two Kansas City
sale transactions will yield combined gross proceeds of
$42 million and are expected to close
in the third and fourth quarters of 2017, subject to customary
closing conditions.
In the second quarter, the Company entered into a non-binding
letter of intent to sell and leaseback its Columbia, South Carolina, land and building.
The sale is expected to close in the fourth quarter of 2017,
subject to customary closing
conditions.
CareerBuilder:
On June 19, 2017, the Company
announced that along with the current ownership group, it entered
into an agreement to sell a majority of the collective ownership
interest in CareerBuilder to an investor group led by investment
funds managed by affiliates of Apollo Management Group along with
the Ontario Teachers' Pension Plan Board. The transaction is
expected to close in the third quarter of 2017. Upon closing, the
company expects to receive $76
million made up of approximately $8
million in normal distributions and $68 million of after-tax proceeds.
Upon the closing of the transaction, McClatchy's ownership
interest in CareerBuilder will be reduced to 3.5% from 15%.
Management has estimated a fair value of the interest retained in
CareerBuilder and its accounting impact of the transaction, and as
a result, an additional pre-tax non-cash impairment charge of
$45.6 million was recorded in the
second quarter of 2017.
First Six Months Results of 2017
Total revenues for the first six months of 2017 were
$446.3 million, down 7.1% compared to
the first six months of 2016. Advertising revenues were
$245.1 million, down 11.6% compared
to the first six months of last year. Softness in print advertising
negatively impacted advertising revenues but was partially offset
by growth in digital-only advertising revenue of 10.8% when
compared to the first half of 2016.
Audience revenues were $181.3
million, relatively unchanged when compared to the first
half of 2016 and digital-only audience revenues were up 8.8% over
the same period. The growth in digital-only audience revenue is
attributable to the increase in digital-only subscribers through
promotional efforts and rate increases initiated in the second half
of last year.
The company reported a net loss for the first half of 2017 of
$133.0 million, or $17.49 per share which included non-cash
after-tax impairment charges of $105.6
million that are mainly attributable to the write-down of
its CareerBuilder investment. Net loss for the first half of 2016
was $27.5 million or $3.48 a share.
Results for the first six months of 2017 included the following
items:
- Non-cash impairment charge related to the write-down of the
carrying value of our equity investment in CareerBuilder and other
investments totaling $169.1 million
($105.6 million after-tax);
- Severance charges totaling $9.5
million ($5.8 million
after-tax);
- Non-cash write-down of inventory totaling $2.0 million ($1.2
million after-tax);
- Costs associated with reorganizing sales and other operations
totaling $1.2 million ($0.7 million after-tax);
- Gain on real estate transaction offset by charges associated
with relocations of certain operations netting to $2.8 million ($1.7
million after-tax);
- Loss on extinguishment of debt of $0.9
million ($0.6 million
after-tax);
- Costs related to co-sourcing information technology operations
and other miscellaneous acquisition-related costs totaling
$0.3 million ($0.2 million after-tax); and
- Net increase in taxes totaling $0.1
million for adjustments of certain deferred tax credits
related to tax positions taken in prior years.
Adjusted net loss, which excludes the items above, was
$20.6 million. Adjusted
EBITDA was $58.6 million in the
first half of 2017, down 21.0% compared to the first half of last
year. Operating expenses were down 8.9%, while adjusted operating
expenses, which exclude non-cash and certain other charges, were
down 4.5% in the first half of 2017 compared to the same period
last year.
Debt and Liquidity:
Debt at the end of the second quarter 2017, after repurchasing
$15 million of bonds, was
$858.7 million. The notes due
September 2017 had a principal
balance of $16.9 million outstanding
with no other maturities coming due until December 2022. The company finished the quarter
with $8.4 million in cash, resulting
in net debt of $850.3 million. In
addition, the Company has a $65
million revolving line of credit available for
liquidity.
The leverage ratio at the end of the second quarter under the
company's credit agreement was 5.48 times cash flow (as defined)
compared to a maximum leverage covenant of 6.0 times cash flow. The
company expects its current de-leveraging strategies to reduce this
ratio over the course of the year.
Outlook
Craig Forman said, "In the first
quarter we indicated that our decline in adjusted EBITDA was not
reflective of the trend we expect for the rest of 2017. We are
happy to report that we improved upon our adjusted EBITDA trend by
almost seven percentage points in the second quarter and we also
expect to see trend improvements in EBITDA in the second half."
For the second half of 2017, the company expects to grow
digital-only advertising revenue at a double-digit rate for all of
2017, improving on the trend seen in the first half of 2017. The
company expects to obtain the digital growth through organic
investments in digital solutions like exceleratetm, as
well as other digital products and partnerships.
Expenses are expected to include investments in
exceleratetm throughout 2017, providing it with a larger
sales force and with tools to drive revenue results in McClatchy's
markets, as well as adjacent markets. Management also sees further
potential in its video portfolio as well as Nucleus, which is
expected to help drive results for large retailers and national
accounts.
While the company believes in the value of print advertising,
the declining trends in print advertising are not anticipated to
subside in the remainder of 2017. Management believes that print
advertising will continue to become a smaller portion of
advertising and total revenue. Audience revenues are expected to be
stable in 2017.
Management remains committed to reducing operating expenses and
will monitor costs throughout the year to achieve expense
performance in line with revenue performance, despite the
additional investments in news and sales infrastructures.
Strategies to continue its digital transformation and reduce legacy
costs include, among others, moving to regional publishers,
centralizing audience functions, consolidating production and other
functions and reinventing our newsrooms to have a digital-first
work flow. These actions will result in initial implementation
costs in the range of $18 million to $20
million, which may include accelerated depreciation and
certain other non-cash costs. This compares to similar upfront
costs of approximately $40 million in
2016 to further its digital transformation and continue the
reduction of legacy costs. As noted above, management expects
improving performance in adjusted EBITDA compared to the level of
decline in the first half of 2017.
Management will maintain its focus on monetizing real estate
assets throughout 2017 with the goal of realizing approximately
$100 million in proceeds in 2017. The
proceeds achieved from the real estate transactions coupled with
proceeds from other asset sales and cash from operations will be
utilized to de-lever the company through debt reductions and for
further investment in the business.
The company's consolidated statistical report, which summarizes
revenue performance for the second quarter and first half of 2017,
is 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, 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 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 is defined as net income
(loss) excluding amounts for other asset impairments, impairment
charges related to equity investments, gain on extinguishment of
debt, severance charges, accelerated depreciation on equipment,
real estate related charges, 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 of 35% plus the net state rate for the
jurisdictions in which the subsidiaries file tax returns and ranges
from 1.6% to 8.1%. Adjusted operating expenses is 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;
and
- more directly compare the company's operating results against
investor and analyst financial models.
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
(877-278-1205, pass code 46060930) and webcast (www.mcclatchy.com).
The webcast will be archived at McClatchy's website.
About McClatchy
McClatchy is a publisher of iconic brands such as
the Miami Herald, The Kansas City Star,
The Sacramento Bee, The Charlotte Observer, The
(Raleigh) News &
Observer, and the (Fort
Worth) Star-Telegram. McClatchy operates 30
media companies in 29 U.S. markets in 14 states, providing each of
its communities with high-quality news and advertising services in
a wide array of digital and print formats. McClatchy is
headquartered in Sacramento,
Calif., and 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 our strategies for success and their
effects, our real estate monetization efforts, the future of CB,
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 value 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 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 or meet debt covenants as
expected; we may not be successful in reducing debt whether through
tenders offers, open market repurchase programs or other negotiated
transactions; including sales of real estate properties or
transactions related to strategic alternatives for CareerBuilder,
transactions 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
retail, classified, national and direct marketing 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; 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; an inability to
fully implement and execute its share repurchase plan; 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, 2016, 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
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited; In
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
June
25,
|
|
June
26,
|
|
June
25,
|
|
June
26,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
REVENUES -
NET:
|
|
|
|
|
|
|
|
Advertising
|
$ 125,239
|
|
$ 140,900
|
|
$
245,128
|
|
$ 277,156
|
Audience
|
89,915
|
|
90,479
|
|
181,331
|
|
181,141
|
Other
|
9,966
|
|
10,855
|
|
19,873
|
|
21,916
|
|
225,120
|
|
242,234
|
|
446,332
|
|
480,213
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
Compensation
|
86,823
|
|
94,543
|
|
178,231
|
|
193,623
|
Newsprint,
supplements and printing expenses
|
16,459
|
|
19,565
|
|
34,304
|
|
38,597
|
Depreciation and
amortization
|
19,624
|
|
24,430
|
|
39,428
|
|
48,992
|
Other operating
expenses
|
90,104
|
|
102,695
|
|
186,778
|
|
200,353
|
|
213,010
|
|
241,233
|
|
438,741
|
|
481,565
|
|
|
|
|
|
|
|
|
OPERATING INCOME
(LOSS)
|
12,110
|
|
1,001
|
|
7,591
|
|
(1,352)
|
|
|
|
|
|
|
|
|
NON-OPERATING
(EXPENSES) INCOME:
|
|
|
|
|
|
|
|
Interest
expense
|
(20,292)
|
|
(21,223)
|
|
(40,746)
|
|
(41,470)
|
Interest
income
|
136
|
|
112
|
|
289
|
|
208
|
Equity income (loss)
in unconsolidated companies, net
|
(159)
|
|
4,264
|
|
(96)
|
|
7,005
|
Impairments related
to equity investments
|
(46,147)
|
|
-
|
|
(169,147)
|
|
(892)
|
Gain (loss) on
extinguishment of debt, net
|
(869)
|
|
-
|
|
(869)
|
|
1,535
|
Retirement benefit
expense
|
(3,328)
|
|
(3,694)
|
|
(6,655)
|
|
(7,388)
|
Other -
net
|
23
|
|
75
|
|
83
|
|
33
|
|
(70,636)
|
|
(20,466)
|
|
(217,141)
|
|
(40,969)
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
(58,526)
|
|
(19,465)
|
|
(209,550)
|
|
(42,321)
|
Income tax
benefit
|
(21,080)
|
|
(4,731)
|
|
(76,529)
|
|
(14,846)
|
NET
LOSS
|
$
(37,446)
|
|
$
(14,734)
|
|
$
(133,021)
|
|
$
(27,475)
|
|
|
|
|
|
|
|
|
Net loss per
common share:
|
|
|
|
|
|
|
|
Basic
|
$
(4.91)
|
|
$
(1.89)
|
|
$
(17.49)
|
|
$
(3.48)
|
Diluted
|
$
(4.91)
|
|
$
(1.89)
|
|
$
(17.49)
|
|
$
(3.48)
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares used
|
|
|
|
|
|
|
|
to calculate basic
and diluted earnings per share:
|
|
|
|
|
|
|
|
Basic
|
7,622
|
|
7,784
|
|
7,605
|
|
7,906
|
Diluted
|
7,622
|
|
7,784
|
|
7,605
|
|
7,906
|
|
|
|
|
|
|
|
|
|
|
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 25,
|
|
June 26,
|
|
June 25,
|
|
June 26,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS
|
|
$
(37,446)
|
|
$
(14,734)
|
|
$
(133,021)
|
|
$
(27,475)
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
(21,080)
|
|
(4,731)
|
|
(76,529)
|
|
(14,846)
|
|
Interest
expense
|
|
20,292
|
|
21,223
|
|
40,746
|
|
41,470
|
|
Depreciation and
amortization
|
|
19,624
|
|
24,430
|
|
39,428
|
|
48,992
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
(18,610)
|
|
26,188
|
|
(129,376)
|
|
48,141
|
|
|
|
|
|
|
|
|
|
|
|
Severance
charges
|
|
5,591
|
|
5,647
|
|
9,457
|
|
8,652
|
|
Non-cash stock
compensation
|
|
432
|
|
383
|
|
1,461
|
|
1,757
|
|
Non-cash and
non-operating retirement benefit expense
|
|
3,328
|
|
3,694
|
|
6,655
|
|
7,388
|
|
Equity (income) loss
in unconsolidated companies, net
|
|
159
|
|
(4,264)
|
|
96
|
|
(7,005)
|
|
Impairments related
to equity investments
|
|
46,147
|
|
-
|
|
169,147
|
|
892
|
|
Other asset
impairment charges
|
|
-
|
|
-
|
|
1,957
|
|
-
|
|
Other operating
costs, net (1)
|
|
(2,278)
|
|
12,003
|
|
(1,307)
|
|
16,142
|
|
Other non-operating,
net
|
|
710
|
|
(303)
|
|
497
|
|
(1,776)
|
|
Adjusted
EBITDA
|
|
$
35,479
|
|
$
43,348
|
|
$
58,587
|
|
$
74,191
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
|
15.8%
|
|
17.9%
|
|
13.1%
|
|
15.4%
|
|
|
|
|
|
|
|
|
|
|
|
(1) Other operating
costs, net, includes: Gain and loss on sale of land and relocation
charges, net; Technology conversion costs related to co-sourcing a
majority of information technology operations; costs associated
with reorganizing sales and other operations; and net acquisition
costs. See the text of the press release for the detailed gross and
net of tax contribution of each category.
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Loss to Adjusted Net Loss
|
|
|
|
|
|
|
|
|
|
|
NET LOSS
|
|
$
(37,446)
|
|
$
(14,734)
|
|
$
(133,021)
|
|
$
(27,475)
|
|
|
|
|
|
|
|
|
|
|
|
Add back certain
items:
|
|
|
|
|
|
|
|
|
|
(Gain)
loss on extinguishment of debt, net
|
|
869
|
|
-
|
|
869
|
|
(1,535)
|
|
Other
asset impairment charges
|
|
-
|
|
-
|
|
1,957
|
|
-
|
|
Impairments related to equity investments
|
|
46,147
|
|
-
|
|
169,147
|
|
901
|
|
Severance charges
|
|
5,591
|
|
5,647
|
|
9,457
|
|
8,652
|
|
Accelerated depreciation on equipment
|
|
-
|
|
3,802
|
|
-
|
|
6,642
|
|
Other
operating costs, net
|
|
(2,278)
|
|
11,888
|
|
(1,307)
|
|
16,142
|
|
Certain
discrete tax items
|
|
-
|
|
-
|
|
106
|
|
(897)
|
|
Less: Tax effect of
adjustments
|
|
(18,955)
|
|
(8,088)
|
|
(67,767)
|
|
(11,803)
|
|
Adjusted net loss
(2)
|
|
$
(6,072)
|
|
$
(1,485)
|
|
$
(20,559)
|
|
$
(9,373)
|
|
|
|
|
|
|
|
|
|
|
|
(2) The tax impact of
these non-GAAP adjustments is calculated using the federal
statutory rate of 35% plus the net state rate for the jurisdictions
in which the subsidiaries file tax returns and ranges from 1.6% to
8.1%.
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating Expenses to Adjusted Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
$ 213,010
|
|
$ 241,233
|
|
$
438,741
|
|
$ 481,565
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
19,624
|
|
24,430
|
|
39,428
|
|
48,992
|
|
Other
asset impairment charges
|
|
-
|
|
-
|
|
1,957
|
|
-
|
|
Severance charges and non-cash stock compensation
|
|
6,023
|
|
6,030
|
|
10,918
|
|
10,409
|
|
Other
operating costs, net
|
|
(2,278)
|
|
12,003
|
|
(1,307)
|
|
16,142
|
|
Adjusted operating
expenses
|
|
$ 189,641
|
|
$ 198,770
|
|
$
387,745
|
|
$ 406,022
|
|
|
|
|
|
|
|
|
|
|
|
The McClatchy
Company
|
Consolidated
Statistical Report
|
(In thousands, except
for preprints)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
2
|
|
|
Combined
|
|
Print
|
|
Digital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues -
Net:
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
Advertising
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
|
|
$58,701
|
|
$68,579
|
|
-14.4%
|
|
$36,141
|
|
$46,393
|
|
-22.1%
|
|
$22,560
|
|
$22,185
|
|
1.7%
|
National
|
|
9,889
|
|
10,511
|
|
-5.9%
|
|
3,425
|
|
4,984
|
|
-31.3%
|
|
6,464
|
|
5,527
|
|
17.0%
|
Classified
Total
|
|
31,204
|
|
35,873
|
|
-13.0%
|
|
17,240
|
|
20,183
|
|
-14.6%
|
|
13,966
|
|
15,689
|
|
-11.0%
|
Automotive
|
|
6,742
|
|
8,156
|
|
-17.3%
|
|
1,637
|
|
2,522
|
|
-35.1%
|
|
5,105
|
|
5,634
|
|
-9.4%
|
Real
Estate
|
|
5,779
|
|
6,408
|
|
-9.8%
|
|
3,022
|
|
3,499
|
|
-13.6%
|
|
2,758
|
|
2,908
|
|
-5.2%
|
Employment
|
|
4,754
|
|
6,423
|
|
-26.0%
|
|
1,983
|
|
2,916
|
|
-32.0%
|
|
2,772
|
|
3,507
|
|
-21.0%
|
Other
|
|
13,929
|
|
14,886
|
|
-6.4%
|
|
10,598
|
|
11,246
|
|
-5.8%
|
|
3,331
|
|
3,640
|
|
-8.5%
|
Direct
Marketing
|
|
25,319
|
|
25,781
|
|
-1.8%
|
|
25,319
|
|
25,781
|
|
-1.8%
|
|
|
|
|
|
|
Other
Advertising
|
|
126
|
|
156
|
|
-19.2%
|
|
126
|
|
156
|
|
-19.2%
|
|
|
|
|
|
|
Total
Advertising
|
|
$125,239
|
|
$140,900
|
|
-11.1%
|
|
$82,251
|
|
$97,497
|
|
-15.6%
|
|
$42,990
|
|
$43,401
|
|
-0.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Memo:
Digital-Only Advertising
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$32,751
|
|
$29,777
|
|
10.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audience
|
|
89,915
|
|
90,479
|
|
-0.6%
|
|
65,113
|
|
65,368
|
|
-0.4%
|
|
24,801
|
|
25,111
|
|
-1.2%
|
Other
|
|
9,966
|
|
10,855
|
|
-8.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Revenues
|
|
$225,120
|
|
$242,234
|
|
-7.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advertising
Statistics for Dailies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Run ROP
Linage
|
|
|
|
|
|
|
|
2,712.2
|
|
3,139.7
|
|
-13.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of Preprints
Distributed
|
|
|
|
|
|
|
|
487.7
|
|
624.6
|
|
-21.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audience:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Daily Average Total
Circulation*
|
|
|
|
|
|
|
|
1,318.9
|
|
1,496.1
|
|
-11.8%
|
|
|
|
|
|
|
Sunday Average Total
Circulation*
|
|
|
|
|
|
|
|
1,955.9
|
|
2,216.6
|
|
-11.8%
|
|
|
|
|
|
|
Monthly Unique
Visitors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65,973.1
|
|
57,549.9
|
|
14.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Columns may not
add due to rounding
|
|
|
*
|
Reflects total
average circulation based upon number of days in period. Does not
reflect AAM reported figures.
|
The McClatchy
Company
|
Consolidated
Statistical Report
|
(In thousands, except
for preprints)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
Year-to-Date
|
|
|
Combined
|
|
Print
|
|
Digital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues -
Net:
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
Advertising
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
|
|
$114,928
|
|
$135,298
|
|
-15.1%
|
|
$72,149
|
|
$93,416
|
|
-22.8%
|
|
$42,779
|
|
$41,882
|
|
2.1%
|
National
|
|
18,726
|
|
20,382
|
|
-8.1%
|
|
6,435
|
|
9,678
|
|
-33.5%
|
|
12,291
|
|
10,705
|
|
14.8%
|
Classified
Total
|
|
62,632
|
|
71,563
|
|
-12.5%
|
|
34,740
|
|
40,720
|
|
-14.7%
|
|
27,893
|
|
30,843
|
|
-9.6%
|
Automotive
|
|
13,804
|
|
16,626
|
|
-17.0%
|
|
3,456
|
|
5,329
|
|
-35.1%
|
|
10,349
|
|
11,297
|
|
-8.4%
|
Real
Estate
|
|
11,192
|
|
12,744
|
|
-12.2%
|
|
5,904
|
|
7,231
|
|
-18.4%
|
|
5,289
|
|
5,513
|
|
-4.1%
|
Employment
|
|
9,708
|
|
12,689
|
|
-23.5%
|
|
4,139
|
|
5,833
|
|
-29.0%
|
|
5,570
|
|
6,856
|
|
-18.8%
|
Other
|
|
27,928
|
|
29,504
|
|
-5.3%
|
|
21,242
|
|
22,327
|
|
-4.9%
|
|
6,686
|
|
7,176
|
|
-6.8%
|
Direct
Marketing
|
|
48,608
|
|
49,460
|
|
-1.7%
|
|
48,608
|
|
49,460
|
|
-1.7%
|
|
|
|
|
|
|
Other
Advertising
|
|
234
|
|
453
|
|
-48.3%
|
|
234
|
|
453
|
|
-48.3%
|
|
|
|
|
|
|
Total
Advertising
|
|
$245,128
|
|
$277,156
|
|
-11.6%
|
|
$162,166
|
|
$193,727
|
|
-16.3%
|
|
$82,963
|
|
$83,430
|
|
-0.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Memo:
Digital-Only Advertising
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$62,603
|
|
$56,499
|
|
10.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audience
|
|
181,331
|
|
181,141
|
|
0.1%
|
|
131,740
|
|
130,954
|
|
0.6%
|
|
49,590
|
|
50,187
|
|
-1.2%
|
Other
|
|
19,873
|
|
21,916
|
|
-9.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Revenues
|
|
$446,332
|
|
$480,213
|
|
-7.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advertising
Statistics for Dailies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Run ROP
Linage
|
|
|
|
|
|
|
|
5,309.0
|
|
6,198.7
|
|
-14.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of Preprints
Distributed
|
|
|
|
|
|
|
|
988.0
|
|
1,221.6
|
|
-19.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audience:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Daily Average Total
Circulation*
|
|
|
|
|
|
|
|
1,436.1
|
|
1,542.8
|
|
-6.9%
|
|
|
|
|
|
|
Sunday Average Total
Circulation*
|
|
|
|
|
|
|
|
2,081.9
|
|
2,275.3
|
|
-8.5%
|
|
|
|
|
|
|
Monthly Unique
Visitors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
67,558.9
|
|
55,888.9
|
|
20.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Columns may not
add due to rounding
|
|
|
*
|
Reflects total
average circulation based upon number of days in period. Does not
reflect AAM reported figures.
|
View original
content:http://www.prnewswire.com/news-releases/mcclatchy-reports-second-quarter-2017-results-300492108.html
SOURCE McClatchy