MORRIS PUBLISHING ANNOUNCES
2008 FIRST-QUARTER RESULTS
AUGUSTA, Ga. (May 13, 2008) — Morris Publishing Group, LLC today reported first-quarter operating income of $7.6 million, down $3.0 million, or 28.3%, from $10.6 million for the same period in 2007.
Total operating revenue for the first quarter was $82.7 million, down $9.1 million, or 9.9%, from 2007. Total advertising revenue was $65.3 million, down $9.8 million, or 13.0%, with retail advertising revenue of $33.9 million, down 8.3%; classified advertising revenue of $26.4 million, down 19.0%; and national advertising revenue of $5.0 million, down 8.7%. Circulation revenue was $14.7 million, up $0.5 million, or 3.6%, from 2007.
For the first quarter, total operating cost was $75.1 million, down $6.1 million, or 7.5%, from 2007, with labor and employee benefits cost of $34.4 million, down $2.3 million, or 6.3%; newsprint, ink and supplement cost of $9.1 million, down $2.0 million, or 17.8%; depreciation and amortization expense of $3.5 million, down $1.3 million, or 25.6%; and other operating cost of $28.0 million, down $0.5 million, or 1.9%.
Commenting on the results, William S. Morris IV, Morris Publishing Group’s chief executive officer and president, said, "The real estate downturn in Florida and in many of our other markets, continues to have the greatest impact on our revenue results. We continue to closely monitor the market for signs of a cyclical recovery, but currently see a lot of downward pressure on a large segment of our advertising base.
"Our cost control efforts continue to help offset the revenue declines, with newsprint and employee costs being the major contributors."
Interest and loan amortization expense totaled $8.0 million, down $1.3 million from $9.3 million last year primarily due the reduction in outstanding debt. At the end of the first quarter, the Company had $425 million in outstanding debt compared to $530 million at the end the same period last year.
During March, the Company repurchased $19.1 million of its $300 million 7% senior subordinated notes for a total purchase price of $10.7 million. Including the $8.4 million gain on these repurchases of debt, income from continuing operations before income taxes for the quarter was $8.2 million, up $6.9 million from $1.3 million in the prior year.
Net income was $5.6 million, up $4.8 million from last year.
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 currently owns and operates 13 daily newspapers as well as nondaily newspapers, city magazines and 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 Tuesday, May 13, 2008, 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.verizonbusiness.com
2. Choose Audio Streaming under Join Events
60; 3. Enter the conference number and pass code.
PASS CODE: | | MORRIS PUBLI |
CONFERENCE NUMBER: | | 4234934 |
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
First-Quarter results follow:
| Morris Publishing Group, LLC | |
| Condensed Consolidated Statements of Income | |
| (unaudited) | |
| | | | | | | |
| | | Three Months | |
| | | Ended | |
| | | March 31, | |
| (Dollars in thousands) | | 2008 | | | 2007 | |
| | | | | | | |
| NET OPERATING REVENUES: | | | | | | |
| Advertising | | $ | 65,317 | | | $ | 75,043 | |
| Circulation | | | 14,713 | | | | 14,208 | |
| Other | | | 2,678 | | | | 2,523 | |
| Total net operating revenues | | | 82,708 | | | | 91,774 | |
| OPERATING EXPENSES: | | | | | | | | |
| Labor and employee benefits | | | 34,411 | | | | 36,725 | |
| Newsprint, ink and supplements | | | 9,143 | | | | 11,123 | |
| Other operating costs (excluding depreciation and amortization) | | | 28,020 | | | | 28,569 | |
| Depreciation and amortization expense | | | 3,524 | | | | 4,739 | |
| Total operating expenses | | | 75,098 | | | | 81,156 | |
| Operating income | | | 7,610 | | | | 10,618 | |
| OTHER (INCOME) EXPENSES: | | | | | | | | |
| Interest expense, including amortization of debt issuance costs | | | 8,022 | | | | 9,319 | |
| Gain on repuchases of debt | | | (8,411 | ) | | | - | |
| Interest income | | | (186 | ) | | | (3 | ) |
| Other, net | | | (31 | ) | | | (41 | ) |
| Total other (income) expense, net | | | (606 | ) | | | 9,275 | |
| INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | | | 8,216 | | | | 1,343 | |
| PROVISION FOR INCOME TAXES | | | 2,571 | | | | 611 | |
| INCOME FROM CONTINUING OPERATIONS | | | 5,645 | | | | 732 | |
| | | | | | | | | |
| INCOME FROM DISCONTINUED OPERATIONS, NET OF PROVISIONS FOR INCOME TAXES | | | - | | | | 56 | |
| | | | | | | | | |
| NET INCOME | | $ | 5,645 | | | $ | 788 | |
