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SACRAMENTO, Calif. (Map) -
The loss from continuing operations for the first nine months of 2007 was
As the company noted in its press release on
"As I said last month when we released our preliminary earnings, we recognize that newspaper revenues have declined industry-wide and that values have dropped. We have been more affected than most by the real estate downturn because of our operations in California and Florida, the epicenters of the sub-prime lending practices. We do not know when this downturn will end, and do not have visibility beyond the fourth quarter. Nonetheless, we believe that cyclical factors represent a significant portion of the current advertising downturn as evidenced by our operations in the California and Florida regions. McClatchy is a solidly profitable company that is rapidly paying down debt and re-engineering its operations to navigate through a changing environment for all media companies. We are well positioned in markets with growth prospects better than the nation as whole, and while that clearly doesn't make us immune to national economic events, we believe it will serve us well when the economy begins to recover from the real-estate led slowdown. Looking longer term, we like the prospects for all of our growth markets. We are working hard to grow revenues and will continue to focus on cost controls to weather this downturn by remaining efficient and protecting cash flows as best we can."
About a third of the goodwill impairment charge resulted from the
accounting treatment of the value of common stock issued in the Knight Ridder
transaction, which resulted in additional goodwill being recorded. McClatchy
announced the acquisition of Knight-Ridder, Inc. on
The unaudited consolidated statement of income which has been filed with the SEC is attached to this release.
About McClatchy
The McClatchy Company is the third largest newspaper company in the
McClatchy also has a portfolio of premium digital assets. Its leading local websites offer users information, comprehensive news, advertising, e- commerce and other services. The company owns and operates McClatchy Interactive, an interactive operation that provides websites with content, publishing tools and software development. McClatchy operates Real Cities (www.RealCities.com), the largest national advertising network of local news websites and owns 14.4% of CareerBuilder, the nation's largest online job site. McClatchy also owns 25.6% of Classified Ventures, a newspaper industry partnership that offers classified websites such as the nation's number two online auto website, cars.com, and the number one rental site, apartments.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, operating expenses, cash flows and 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: McClatchy may not consummate
contemplated transactions which may 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, 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
THE McCLATCHY COMPANY CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) (In thousands, except per share amounts) Three Months Ended Nine Months Ended September September September September 30, 24, 30, 24, 2007 2006 2007 2006 REVENUES - NET: Advertising $457,017 $506,774 $1,422,317 $856,791 Circulation 67,995 70,637 209,582 117,905 Other 15,332 17,717 55,030 26,895 540,344 595,128 1,686,929 1,001,591 OPERATING EXPENSES: Compensation 224,309 232,611 689,592 402,453 Newsprint and supplements 63,600 83,171 211,203 136,702 Depreciation and amortization 36,250 36,662 112,440 56,522 Other operating expenses 118,440 129,001 371,180 204,691 Goodwill and newspaper masthead impairment 1,434,590 - 1,434,590 - 1,877,189 481,445 2,819,005 800,368 OPERATING INCOME (LOSS) (1,336,845) 113,683 (1,132,076) 201,223 NON-OPERATING (EXPENSES) INCOME: Interest expense (48,264) (46,689) (151,605) (46,679) Interest income 23 2,007 129 2,035 Equity income(losses) in unconsolidated companies, net (7,652) (811) (28,599) 81 Write-down of investments and land held for sale (84,568) - (84,568) - Other - net 700 8,445 1,443 8,390 (139,761) (37,048) (263,200) (36,173) INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAX PROVISION (BENEFIT) (1,476,606) 76,635 (1,395,276) 165,050 INCOME TAX PROVISION (BENEFIT) (131,419) 24,025 (99,133) 58,470 INCOME (LOSS) FROM CONTINUING OPERATIONS (1,345,187) 52,610 (1,296,143) 106,580 INCOME (LOSS) FROM DISCONTINUED OPERATIONS - NET OF INCOME TAXES (1,546) (779) (6,324) 17,114 NET INCOME (LOSS) $(1,346,733) $51,831 $(1,302,467) $123,694 NET INCOME (LOSS) PER COMMON SHARE: Basic: Income (loss) from continuing operations $(16.40) $0.65 $(15.81) $1.83 Income (loss) from discontinued operations (0.02) (0.01) (0.08) 0.30 Net income (loss) per share $(16.42) $0.64 $(15.89) $2.13 Diluted: Income (loss) from continuing operations $(16.40) $0.65 $(15.81) $1.82 Income (loss) from discontinued operations (0.02) (0.01) (0.08) 0.30 Net income (loss) per share $(16.42) $0.64 $(15.89) $2.12 WEIGHTED AVERAGE NUMBER OF COMMON SHARES: Basic 82,040 81,013 81,967 58,173 Diluted 82,040 81,191 81,967 58,416
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