MORRIS PUBLISHING ANNOUNCES
2006 FOURTH-QUARTER AND YEAR-END RESULTS
AUGUSTA, Ga. (March 22, 2007)— Morris Publishing Group, LLC today reported fourth-quarter operating income of $23.6 million, down $3.3 million, or 12.4%, from $26.9 million for the same period in 2005. Net income for the quarter was $8.3 million, down $2.4 million from $10.7 million in the prior year.
Total operating revenue for the fourth quarter was $123.5 million, up $2.5 million, or 2.1%, from the same period in 2005. Total advertising revenue was $101.6 million, up $2.0 million, or 2.1%, with retail advertising revenue of $58.2 million, up 4.5%; classified advertising revenue of $36.8 million, down 1.5%; and national advertising revenue of $6.6 million, up 1.8%. Circulation revenue was $17.6 million, up slightly from 2005.
For the fourth quarter, total operating cost was $99.9 million, up $5.9 million, or 6.2%, from the same quarter in 2005, with labor and employee benefits cost of $44.8 million, up $2.1 million, or 5.0%; newsprint, ink and supplement cost of $15.4 million, up $1.9 million, or 13.7%; and other operating cost of $34.2 million, up $1.9 million, or 5.7%. Depreciation and amortization expense was $5.5 million, up slightly from the previous year.
Commenting on the results, William S. Morris IV, Morris Publishing Group’s chief executive officer and president, said, “While our fourth-quarter results were impacted by the weakness in Jacksonville’s classified category, total advertising revenue from all of the other publications we owned during the fourth quarter last year was up 3.5%, with strong gains in all categories. Our total online advertising revenue growth remained strong, up 46.5%.
"I am very pleased with our full-year 2006 results. Excluding the gain from the sale of the Savannah facility in 2005, our operating income was up $4.0 million, or 4.9%, with total operating revenue up 2.2% and total operating costs up 1.6%."
For the year, operating income for 2006 was $86.5 million, down $1.0 million, or 1.1%, from $87.5 million in the prior year. Net income was $30.3 million, down $1.0 million from $31.3 million in 2005.
Total operating revenue for 2006 was $475.2 million, up $10.1 million, or 2.2%, from $465.1 million last year. Total advertising revenue was $389.4 million, up $11.0 million, or 2.9%, while circulation revenue was $69.7 million, down $1.0 million, or 1.3%. Retail and classified advertising revenues were up 1.6% and 5.2%, respectively, while national advertising revenue was down 0.9%.
Total operating cost for 2006 was $388.6 million, up $11.0 million, or 2.9%, from $377.6 million in 2005, with labor and employee benefits cost of $176.2 million, down 0.4%; newsprint, ink and supplement cost of $59.9 million, up 7.1%; depreciation and amortization expense of $21.4 million, down 2.4%, and other operating cost of $131.1 million, up 6.7%.
Morris Publishing Group, LLC is a wholly owned subsidiary of Morris Communications Company, LLC, a privately held media company based in Augusta, Ga. Morris Publishing owns and operates 27 daily newspapers as well as nondaily newspapers, city magazines, and other free community publications in the Southeast, Midwest, Southwest and Alaska. For more information, visit our Web site, morris.com.
A conference call will be held Thursday, March 22, 2007, at 10:00 a.m. Eastern Time. In order to participate, please call 1-888-928-9177 ten (10) minutes prior to the scheduled start. The pass code and leader’s name listed below will be required to join the conference call:
LEADER: | | MR. STEVE STONE |
PASS CODE: | | MORRIS PUBLI |
To access the Audio Replay of this call, all parties can:
1. Go to the URL: https://e-meetings.mci.com
2. Choose Audio Streaming under Join Events
3. Enter the conference number and pass code.
PASS CODE: | | MORRIS PUBLI |
CONFERENCE NUMBER: | | 3739667 |
Replays of the conference call are available for 30 days after the live event at the URL link.
For further information, please contact:
Craig S. Mitchell
Senior Vice President of Finance
Morris Communications Company, LLC
706-823-3236
Fourth-quarter and twelve-month results follow:
Morris Publishing Group, LLC | |
Condensed Consolidated Statements of Income | |
| | | | | | | | | | |
| | | Three Months | | Twelve Months | |
| | | Ended | | Ended | |
(Dollars in thousands) | | December 31, | | December 31, | |
| | | 2006 | | 2005 | | 2006 | | 2005 | |
| | | | | | | | | | |
| NET OPERATING REVENUES: | | | | | | | | | |
| Advertising | | $ | 101,569 | | $ | 99,524 | | $ | 389,345 | | $ | 378,338 | |
| Circulation | | | 17,578 | | | 17,541 | | | 69,691 | | | 70,615 | |
| Other | | | 4,369 | | | 3,942 | | | 16,119 | | | 16,154 | |
| Total net operating revenues | | | 123,516 | | | 121,007 | | | 475,155 | | | 465,107 | |
| OPERATING EXPENSES: | | | | | | | | | | | | | |
| Labor and employee benefits | | | 44,837 | | | 42,722 | | | 176,163 | | | 176,832 | |
| Newsprint, ink and supplements | | | 15,399 | | | 13,546 | | | 59,901 | | | 55,932 | |
| Other operating costs (excluding depreciation and amortization) | | | 34,163 | | | 31,816 | | | 131,125 | | | 127,688 | |
| Depreciation and amortization expense | | | 5,499 | | | 5,461 | | | 21,432 | | | 21,965 | |
| Total operating expenses-prior to pre-tax loss/(gain) on sale of fixed assets | | | 99,898 | | | 93,545 | | | 388,621 | | | 382,417 | |
| Net pre-tax loss/(gain) on sale of fixed assets | | | 28 | | | 525 | | | (13 | ) | | (4,810 | ) |
| Total operating expenses, net of pre-tax gains | | | 99,926 | | | 94,070 | | | 388,608 | | | 377,607 | |
| Operating income | | | 23,590 | | | 26,937 | | | 86,547 | | | 87,500 | |
| OTHER EXPENSES (INCOME): | | | | | | | | | | | | | |
| Interest expense, including amortization of debt issuance costs | | | 9,499 | | | 9,205 | | | 37,059 | | | 35,662 | |
| Loss on extinguishment of debt | | | - | | | 986 | | | - | | | 986 | |
| Interest income | | | (1 | ) | | (72 | ) | | (70 | ) | | (120 | ) |
| Other, net | | | (262 | ) | | (113 | ) | | (381 | ) | | (94 | ) |
| Total other expenses, net | | | 9,236 | | | 10,006 | | | 36,608 | | | 36,434 | |
| INCOME BEFORE INCOME TAXES | | | 14,354 | | | 16,931 | | | 49,939 | | | 51,066 | |
| PROVISION FOR INCOME TAXES | | | 6,045 | | | 6,262 | | | 19,664 | | | 19,776 | |
| NET INCOME | | $ | 8,309 | | $ | 10,669 | | $ | 30,275 | | $ | 31,290 | |
