SACRAMENTO, Calif.,
Sept. 7, 2017 /PRNewswire/ -- The
McClatchy Company (NYSE-MNI) ("McClatchy" or the "company")
announced that in the last week it has completed the sale of
The Kansas City Star's office building and land to
1729 Grand Boulevard, LLC, a 3D Development company, and The
Sacramento Bee building and surrounding land in Sacramento, California to affiliates of
Shopoff Advisors L.P. Together, the two transactions resulted in
gross proceeds of $56.75 million.
The Sacramento transaction is a
sale-leaseback of the company's buildings and land with initial
annual rent payments of $4.365
million over a 15-year term beginning on September 6, 2017. In connection with its bond
indenture on its unsecured notes maturing in 2027 and 2029,
McClatchy will be required to repurchase approximately $32 million in publicly traded bonds within 90
days of entering into the lease on the Sacramento buildings and land. The company
will also be required, within 365 days, to offer its net after tax
proceeds of approximately $44.8
million from the two transactions to its senior secured
bondholders of notes due in 2022 at par, or to reinvest the net
proceeds into the business.
On September 1, 2017, the company
retired all of the approximately $16.9
million of outstanding 5.750% Notes that matured on the same
date. Coupled with the redemption of debt in our recent offering on
the 9.00% Secured Notes, outstanding debt was $840 million on September
1, 2017.
Separately, McClatchy announced that its Class A common stock
has been approved for listing on the NYSE American LLC ("NYSE
American"), and the listing will be transferred from the New York
Stock Exchange ("NYSE"). The Company's Class A shares will continue
to trade under the symbol "MNI." McClatchy shares are expected to
begin trading on the NYSE American on September 12, 2017 and will continue to trade on
the NYSE's "Big Board" until that time. The NYSE American is an
enhanced market for small to mid-cap companies that more closely
reflects McClatchy's capital structure.
Finally, McClatchy has entered into an agreement with
Recruitology to provide employment services to customers across its
30 markets. This is a continuation of a nearly 10-year relationship
with the company, a 2017 winner of the News Media Alliance's award
for innovation. Together McClatchy and Recruitology are providing
employers with a one-stop solution that delivers results, while
also growing McClatchy's market share of local recruitment
advertising.
Craig Forman, McClatchy's
president and CEO said, "We are delighted to have completed our
Sacramento sale-leaseback and the
sale of the Kansas City office
building. Coupled with the proceeds and distribution related to the
sale of a majority of our interest in CareerBuilder, which was
completed earlier this year, we have increased our cash position to
approximately $127 million and debt
has been reduced more than $18
million, bringing net debt, that is, debt net of cash to
$713 million.
"As you can see, with these proceeds and our retirement last
week of the entirety of our 2017 bonds, McClatchy continues to
improve its balance sheet. We now face no material debt
maturities until 2022, providing clarity to stakeholders as we
continue to accelerate the pace and cadence of our digital
transformation.
"We also announced our return to the NYSE American — a sort of
'coming back to our roots' as McClatchy initially went public on
the American Stock Exchange in 1988. And while we remain
within the limits for Big Board equity trading, we believe that the
NYSE American trading platform is a better fit for our new capital
structure while allowing us to maintain our long-term relationship
with the NYSE."
Forman also noted that, "We are excited, too, about continuing
our relationship with Recruitology. This smart recruiting solution
gives employers hyper-targeted reach to the right candidates
through top local sites, national brands, social media and a
network of niche digital properties. And by combining McClatchy's
66 million unique monthly visitors to its local sites with
Recruitology's intelligent job matching, we can offer employers
access to the right candidates on the right sites."
McClatchy noted that it expects to release its third-quarter
2017 results from operations on October 16,
2017, and will provide a further business update at that
time.
About McClatchy
McClatchy is 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 and the repurchase of
outstanding notes, 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 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; 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.
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SOURCE McClatchy