McClatchy reports jump in net income

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Published on 02/07/2012 - 1:32 pm

Written by Business Journal Staff

Fresno-BeeNewspaper publisher The McClatchy Company reported a big jump in net income for the fourth quarter of 2011 following discouraging net income reports in the final quarter of 2010.

McClatchy, which owns The Fresno Bee; Modesto Bee; Sacramento Bee; Merced Sun-Star and The Tribune, San Luis Obispo, in California; reported that net income from continuing operations in the fourth quarter of 2011 reached $42 million or 49 cents per share, compared to net income of $15.7 million or 18 cents per share in the final quarter of 2010.

Net income from continuing operations was $54,389 for the year 2011, compared to $33,100 for the year of 2010.

Net revenues in the fourth quarter of 2011 were $351.4 million, down 5% from the fourth quarter of 2010. Advertising revenues were $270.9 million, down 5.7% from 2010.

Circulation revenues were $67 million, down 3%.

“The fourth quarter reflected one of the strongest holiday seasons in recent years and we were not surprised to see the momentum slow somewhat in January,” said Gary Pruitt, chairman and chief executive officer of The McClatchy Company.

He noted that despite advertising revenues being down, the fall wasn’t as steep as it was in previous months.

“We are pleased to see our advertising revenue results improve in the fourth quarter,” Pruitt said. “For the first three quarters of 2011 ad revenues were consistently down in the 10% range compared to a decline of 5.7% in the fourth quarter.”

Fourth quarter growth in retail advertising, direct marketing and national advertising helped improve advertising revenue results. Strong growth in digital-only advertising also helped.

“Much of the improvement in the ad revenue trend occurred in November, but each of the months in the fourth quarter of 2011 was better than the trends through the first nine months of the year,” Pruitt said.

Also encouraging is a reduction in debt. Pat Talamantes, McClatchy’s chief financial officer, said the company cut debt by $25 million in the forth quarter and by $140 million in total during 2011.

“Our debt balance was $1.635 billion at year end,” Talamantes said. “Our nearest term bond maturity is 2014 and that is only about $81 million – obviously not an issue given our free cash flow. Our leverage ration at the end of 2011 as defined in our credit agreement was 4.59 times cash flow and our interest coverage was 2.26 times.”