UNITED STATES | ||||
Date of Report (Date of earliest event reported) | October 22, 2003 | |||
The McClatchy Company | ||||
(Exact name of registrant as specified in its charter) | ||||
Delaware | 1-9824 | 52-2080478 | ||
(State or other jurisdiction | (Commission | (IRS Employer | ||
2100 Q Street, Sacramento, CA 95816 | ||||
(Address of principal executive offices, including zip code) | ||||
Registrant's telephone number, including area code | (916) 321-1846 | |||
Item 7. | Financial Statements and Exhibits |
(c) | Exhibits | |
The following exhibit is filed herewith: | ||
Exhibit Number | Description |
| Text of press release issued by The McClatchy Company, dated October 22, 2003, titled " McCLATCHY REPORTS RECORD THIRD QUARTER 2003 EARNINGS AND PROVIDES FOURTH QUARTER OUTLOOK" |
Item 9. | Regulation FD Disclosure (Information Furnished in this Item 9 is Furnished under Item 12) |
In accordance with Securities and Exchange Commission Release No. 33-8216, the following information, which is intended to be furnished under Item 12, "Results of Operations and Financial Condition," is instead being furnished under Item 9, "Regulation FD Disclosure." This information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
The McClatchy Company's press release dated October 22, 2003 is incorporated herein by reference and is attached hereto as Exhibit 99.1.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto daily authorized.
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Patrick J. Talamantes Chief Financial Officer |
Exhibit Index
Exhibit Number | Description |
99.1 | Text of press release issued by The McClatchy Company, dated |
EXHIBIT 99.1
Contact: | Elaine Lintecum |
McCLATCHY REPORTS RECORD THIRD QUARTER 2003 EARNINGS AND
PROVIDES FOURTH QUARTER OUTLOOK
SACRAMENTO, CA, October 22, 2003 - The McClatchy Company (NYSE-MNI) - today reported record third quarter earnings of $35.8 million, or 77 cents per share, compared to earnings from continuing operations of $32.5 million, or 70 cents per share, in the third quarter of 2002. Net income in the 2002 quarter including The Newspaper Network, a discontinued operation, was $32.6 million or 71 cents per share.
Revenues in the third quarter of 2003 were $272.1 million, up 3.0% from 2002 revenues from continuing operations of $264.2 million, with advertising revenues of $225.4 million, up 4.2%, and circulation revenues of $41.3 million, up 0.1%.
Earnings from continuing operations in the first nine months were $98.5 million or $2.12 per share. Net income, which includes income from the operating results and the sale of The Newspaper Network (TNN), a discontinued operation, was $104.6 million or $2.25 per share. TNN was sold in June 2003 and the company recorded a gain of 13 cents per share on the sale. Earnings from continuing operations in the first nine months of 2002 totaled $91.8 million or $1.99 per share and net income including the results from TNN was $92.2 million or $2.00 per share.
Revenues from continuing operations through September were $806.4 million, up 2.7% from 2002 revenues of $785.3 million, with advertising revenues of $665.3 million, up 3.7%, and circulation revenues of $124.2 million, down 0.2% from 2002.
Commenting on the results, Gary Pruitt, McClatchy's chairman and chief executive officer, said, "The combination of a very good advertising month in September and cost controls resulted in our earnings coming in above the range we had previously anticipated for the quarter. Advertising revenues increased 6.8% in September. Indeed, we hit on all cylinders in the third quarter - newspaper, direct marketing and online advertising all reported strong growth. Additionally, we saw increases in newspaper circulation and online page views. Compared to third quarter 2002, daily circulation grew 0.8% and Sunday circulation increased 1.2%. Pageviews at our newspaper websites increased 19.7% through the first nine months of the year.
"As strong as the third quarter was, we know that comparisons are growing more difficult because we had advertising revenue growth of 4.9% in the fourth quarter of last year. However, we are pleased by the recent gains in retail and national advertising and believe our direct marketing and online revenue growth will continue its momentum. Early October activity suggests that revenue growth will be more modest than in September - an expected result considering that we face more difficult comparisons in October than we did in September.
"Given all these factors, we anticipate advertising revenue growth in the fourth quarter will be in the low to mid-single digit range and earnings will be in the range of 87 to 90 cents per share. We now believe earnings from continuing operations for full year 2003 will be between $2.99 and $3.02 per share, up from our previous guidance of $2.85 and $2.95 per share."
Pat Talamantes, McClatchy's chief financial officer, noted, "Our debt at the end of the third quarter was $397 million. We have been able to pay down $99 million since the end of 2002 even as we have increased our dividend 10% and made contributions of $50 million to our employees' pension plans. We will continue to focus on debt repayment and improving an already strong balance sheet at McClatchy. We expect debt at year-end 2003 to be $370 million or less."
The company's statistical report, which summarizes its revenue performance through September, follows.
At 11:30 am Eastern time today, McClatchy will review its results in a conference call
(1-877-278-1205, use pass code 3164176) and webcast (www.mcclatchy.com). A replay of the call can be accessed for up to 48 hours by dialing 1-800-642-1687 and using the same pass code, 3164176. The webcast will be archived at McClatchy's website.
The McClatchy Company, headquartered in Sacramento, California, is a leading newspaper and Internet publisher. It publishes 11 daily and 13 non-daily newspapers located in western coastal states, North and South Carolina and the Twin Cities of Minneapolis/St. Paul. McClatchy has daily circulation of 1.39 million and Sunday circulation of 1.85 million. McClatchy's newspapers include, among others, theStar Tribune in Minneapolis, The Sacramento Bee, The Fresno Bee andThe Modesto Beein California, The News & Observer (Raleigh, NC),The News Tribune(Tacoma, WA) and theAnchorage Daily News.
McClatchy also publishes leading local websites in each of its 11 daily newspaper markets, offering readers information, comprehensive news, advertising, e-commerce and other services and owns and operates Nando Media, a national on-line publishing operation. McClatchy is listed on the New York Stock Exchange under the symbol MNI.
Additional Information
This release contains forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ. These risks and uncertainties include national and local economic conditions that could affect advertising and circulation rates and volumes, changes in interest rates and/or newsprint prices, increased competition in our markets, as well as the other risks detailed from time to time in the Company's publicly filed documents, including the Company's December 29, 2002 report on form 10-K and June 29, 2003 report on form 10-Q, filed with the U.S. Securities and Exchange Commission. The Company assumes no obligation to update the forward-looking information contained in this release.
THE McCLATCHY COMPANY SUMMARY OF UNAUDITED RESULTS (In thousands, except per-share amounts) | |||||||
Three months ended | Nine months ended | ||||||
September 28, 2003 | September 29, 2002 (1) | September 28, 2003 | September 29, 2002 (1) | ||||
Revenues - net | $ 272,100 | $ 264,172 | $ 806,351 | $ 785,284 | |||
Operating expenses: | |||||||
Compensation | 110,488 | 107,398 | 333,110 | 322,049 | |||
Newsprint and supplements | 34,179 | 31,202 | 99,984 | 95,813 | |||
Depreciation and amortization | 17,166 | 18,253 | 52,519 | 55,131 | |||
Other operating expenses | 49,001 | 47,709 | 146,116 | 137,910 | |||
Total operating expenses | 210,834 | 204,562 | 631,729 | 610,903 | |||
Operating income | 61,266 | 59,610 | 174,622 | 174,381 | |||
Interest expense | (3,888) | (6,008) | (14,549) | (21,060) | |||
Partnership income (loss) | 449 | (225) | 259 | (1,125) | |||
Other non-operating income - net | 85 | 230 | (199) | (498) | |||
Income from continuing operations before taxes | 57,912 | 53,607 | 160,133 | 151,698 | |||
Income tax provision | (22,130) | (21,157) | (61,587) | (59,884) | |||
Income from continuing operations | 35,782 | 32,450 | 98,546 | 91,814 | |||
Income from discontinued operation | 56 | 199 | 6,050 | 356 | |||
Net income | $ 35,838 | $ 32,649 | $ 104,596 | $ 92,170 | |||
Net income per common share: | |||||||
Basic: | |||||||
Income from continuing operation | $ 0.78 | $ 0.71 | $ 2.14 | $ 2.01 | |||
Income from discontinued operation | - | - | $ 0.13 | 0.01 | |||
Net income per share | $ 0.78 | $ 0.71 | $ 2.27 | $ 2.02 | |||
Diluted: | |||||||
Income from continuing operation | $ 0.77 | $ 0.70 | $ 2.12 | $ 1.99 | |||
Income from discontinued operation | - | - | 0.13 | 0.01 | |||
Net income per share | $ 0.77 | $ 0.71 | $ 2.25 | $ 2.00 | |||
Weighted average common shares: | |||||||
Basic | 46,146 | 45,813 | 46,087 | 45,741 | |||
Diluted | 46,466 | 46,209 | 46,394 | 46,133 | |||
(1) Restated to reflect discontinued operation. | |||||||
The McClatchy Company Consolidated Statistical Report (In thousands, except for preprints and page views) | ||||||||||||
Period 9 | Period 9 Year-to-Date | |||||||||||
Revenues - Net: * | 2003 | 2002 | % Change | 2003 | 2002 | % Change | ||||||
Advertising | ||||||||||||
Daily Newspapers: | ||||||||||||
Minneapolis | $24,611 | $23,286 | 5.7% | $214,328 | $209,876 | 2.1% | ||||||
California | 27,043 | 23,868 | 13.3% | 247,261 | 230,048 | 7.5% | ||||||
Carolinas | 11,754 | 11,779 | -0.2% | 107,796 | 108,236 | -0.4% | ||||||
Northwest | 10,356 | 10,124 | 2.3% | 95,926 | 93,381 | 2.7% | ||||||
Total Advertising | $73,764 | $69,057 | 6.8% | $665,311 | $641,541 | 3.7% | ||||||
Circulation | 12,913 | 12,946 | -0.3% | 124,187 | 124,414 | -0.2% | ||||||
Other | 1,829 | 2,187 | -16.4% | 16,080 | 18,270 | -12.0% | ||||||
Total Newspapers | $88,506 | $84,190 | 5.1% | $805,578 | $784,225 | 2.7% | ||||||
Non-Newspapers | 71 | 118 | -39.8% | 773 | 1,059 | -27.0% | ||||||
Total Revenue | $88,577 | $84,308 | 5.1% | $806,351 | $785,284 | 2.7% | ||||||
* Revenues reported are from continuing operations only. | ||||||||||||
Average Paid Circulation: (Period) | ||||||||||||
Daily | 1,444.2 | 1,417.5 | 1.9% | 1,386.2 | 1,379.8 | 0.5% | ||||||
Sunday | 1,912.2 | 1,878.8 | 1.8% | 1,856.8 | 1,847.7 | 0.5% | ||||||
Community Newspapers | 61.1 | 63.8 | -4.2% | 61.0 | 62.8 | -2.9% | ||||||
Online: (Monthly) | ||||||||||||
Millions of Page Views** | 94.7 | 89.3 | 6.0% | 936.9 | 782.9 | 19.7% | ||||||
** Page Views have been restated to remove Nando Times and SportsServer discontinued products. | ||||||||||||
Advertising Linage for Dailies: | ||||||||||||
Full Run ROP | ||||||||||||
Retail | 442.7 | 437.1 | 1.3% | 4,047.0 | 4,103.3 | -1.4% | ||||||
National | 98.1 | 84.1 | 16.6% | 877.3 | 785.7 | 11.7% | ||||||
Classified | 593.8 | 622.5 | -4.6% | 5,540.2 | 5,638.4 | -1.7% | ||||||
Total | 1,134.6 | 1,143.7 | -0.8% | 10,464.5 | 10,527.4 | -0.6% | ||||||
Millions of Preprints Distributed | 246.4 | 229.2 | 7.5% | 2,229.1 | 2,107.4 | 5.8% | ||||||
Full Run ROP Linage by Market for Dailies: | ||||||||||||
California: | ||||||||||||
The Sacramento Bee | 209.1 | 197.3 | 6.0% | 1,901.0 | 1,846.4 | 3.0% | ||||||
The Fresno Bee | 103.4 | 96.6 | 7.0% | 957.1 | 918.0 | 4.3% | ||||||
The Modesto Bee | 102.0 | 100.4 | 1.6% | 977.3 | 955.9 | 2.2% | ||||||
Star Tribune, Minneapolis | 161.0 | 156.2 | 3.1% | 1,406.2 | 1,383.0 | 1.7% | ||||||
Northwest: | ||||||||||||
The News Tribune, Tacoma | 104.5 | 113.3 | -7.8% | 957.0 | 1,045.6 | -8.5% | ||||||
Anchorage Daily News | 77.0 | 79.3 | -2.9% | 685.8 | 723.8 | -5.3% | ||||||
Tri-City Herald | 61.5 | 61.8 | -0.5% | 570.9 | 558.8 | 2.2% | ||||||
Carolinas: | ||||||||||||
The News & Observer, Raleigh | 153.0 | 166.0 | -7.8% | 1,447.5 | 1,553.8 | -6.8% | ||||||
South Carolina Dailies | 163.1 | 172.8 | -5.6% | 1,561.7 | 1,542.1 | 1.3% | ||||||
Total | 1,134.6 | 1,143.7 | -0.8% | 10,464.5 | 10,527.4 | -0.6% | ||||||
