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McClatchy Discusses Strategies And 2016 Outlook At Noble Emerging Growth Investor Conference
Issues Preliminary Fourth Quarter Results

SACRAMENTO, Calif., Jan. 19, 2016 /PRNewswire/ -- The McClatchy Company (NYSE: MNI) said that it will provide an update on the company's strategies and outlook for 2016 in a presentation today at the Noble Financial Capital Markets' Twelfth Annual Investor Conference in Sandpiper Bay, Florida at 11 a.m. Eastern, 8 a.m. Pacific time.

The company's presentation will be webcast live on its website,, and at: The webcast will be archived at McClatchy's website for future reference. 

Pat Talamantes, McClatchy's president and CEO, said, "2015 was the year our digital transformation accelerated, clearly demonstrating our skill at evolving with the marketplace. We implemented, and continue to work on, initiatives and strategies to reinforce our position as the leading local media company in each of the markets we serve. As a result of our efforts, we saw accelerated growth in digital revenues in the second half of 2015 and we continued our focus on driving results in direct marketing and audience revenues. We reengineered our operations to reduce legacy costs and strengthen areas driving performance in news, audience, advertising and digital growth. We also continued our commitment to reducing debt, repurchasing $95 million of bonds during 2015, and returned value to shareholders through our share repurchase program, buying in 6.1 million Class A shares."

Talamantes continued, "Revenue initiatives included adding resources to our digital sales team, revamping our sales forces in our six largest markets and growing our digital marketing product providing agency services to small and medium-sized businesses in our markets. We realigned and improved delivery of our content on all platforms, from printed newspapers to websites to mobile apps in nearly every market. We also expanded our video efforts to improve storytelling and generate more advertising revenues. With these initiatives and our focus on growing our audience, unique visitors to our online products grew by 16.8% in the fourth quarter and by 3.4% for full-year 2015, ending the year with 50.6 million unique visitors. And more visitors also brings more digital advertising revenue opportunities to our sales teams.

"Our cost initiatives were focused on reducing legacy costs and we realized significant savings from these efforts, primarily in production and distribution, including substantial savings in newsprint costs. It's worth highlighting that we realized more than $30 million of cost savings in 2015 from these specific initiatives while still investing in our digital infrastructure and products."

Preliminary fourth quarter 2015 results

While the company's financial results are not yet final, the fourth quarter was the best quarter in the year for operating cash flow results, albeit not as strong as previous management guidance. During the fourth quarter the company saw a continued decline in preprinted insert advertising from its large retail and national advertising customers. The decline in print advertising was partially offset by two categories with stronger revenue performance: digital-only advertising and audience revenue.

On a preliminary basis, digital-only advertising revenues grew 20.3% and were up 14.3% on a gross basis for the fourth quarter of 2015. For full-year 2015 digital-only advertising revenues grew 8.5% on a gross basis excluding the impact of selling in April 2014. Digital-only advertising on a gross basis is the only basis in which these revenues are comparable to full-year 2014 due to changes in terms of certain key digital product agreements, primarily its affiliate agreement. Total advertising revenues are expected to be down 11.9% in the fourth quarter, and similar to trends we saw throughout 2015, largely reflect a pullback of large retailer and national print advertising buys. Preliminary audience revenues were down 1.0% in the fourth quarter, but are still expected to grow for full-year 2015, compared to the same periods in 2014. Total revenues are expected to be down 7.8% for the fourth quarter from the 2014 fourth quarter.

Management expects savings in cash expenses to help mitigate the decline in revenues. Operating cash flows are expected to be down between 3% and 5% in the fourth quarter and down between 6% and 8% for the second half of 2015 compared to the same periods in 2014. Also, the company expects to report growth in adjusted net income in the fourth quarter and full-year 2015 (adjustments exclude certain items including a non-cash impairment charge taken in the second quarter of 2015 for goodwill and other intangible assets).

While full-year 2015 cash flows are expected to be below 2014, free cash flow, fueled by lower cash interest costs of approximately $40 million and lower capital expenditures and taxes, is expected to grow in 2015 compared to the $53.7 million in 2014. On a trailing twelve month basis through September 2015, free cash flows were $68.8 million. Cash on hand was $9.3 million and debt net of cash was $927.9 million at the end of fiscal 2015.

Outlook for 2016

Looking to 2016, Mr. Talamantes said, "We plan to continue the rapid and innovative transition required of a digital company in an evolving media landscape. We are focused on driving non-traditional revenues and concentrating on local advertising customers as larger retailers and national accounts become a smaller portion of our advertising revenues. We expect to continue to reduce legacy costs as we reengineer the way we operate our business. And importantly, our commitment to reducing debt and interest costs remain top priorities, as are building runway for our business and creating shareholder value."

Management expects digital-only advertising revenues to continue the trend from the fourth quarter of 2015 and grow in the double-digit percentage range in 2016 while print advertising revenues, which remain volatile, are expected to be a smaller percent of total revenues. Direct marketing revenues are expected to benefit from the introduction of new products and events, but our direct mail programs will be hurt as large advertisers pull back on advertising inserts. Audience revenues are expected to continue to be stable. Cash expenses, benefiting from the rollover impact from 2015 initiatives as well as new efforts in 2016, are expected to continue to decline.

Management also noted cash from operations and proceeds resulting from strategically monetizing real estate assets are expected to be used to strengthen the company's financial position, including debt reduction. Cash will also be used to fund capital expenditures of $16 million to $20 million in 2016. Management also noted that it had $7.2 million remaining under its authorization for its share repurchase program as of its fiscal year-end, and would continue to make strategic investments to further its digital transformation in 2016. No cash contributions are expected to be made to the company's defined benefit pension plan during 2016.

About McClatchy

The McClatchy Company is a 21st century news and information leader, publisher of iconic brands such as the Miami HeraldThe Kansas City Star, The Sacramento Bee, The Charlotte Observer, The (Raleigh) News and Observer, and the (Fort WorthStar-Telegram. McClatchy operates media companies in 28 U.S. markets in 14 states, providing each of its communities with high-quality news and advertising services in a wide array of digital and print formats. McClatchy is headquartered in Sacramento, Calif., and 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, anticipated savings from cost reduction efforts, cash flows, 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 generate cash from operations, or otherwise, necessary to reduce debt or meet debt covenants as expected; we may not be successful in the reducing debt whether through tenders offers, open market repurchase programs or other negotiated transactions; transactions may not close as anticipated or result in cash distributions in the amount or timing anticipated; McClatchy may not successfully implement audience strategies designed to increase audience revenue and may experience decreased audience volumes or subscriptions; McClatchy may experience diminished revenues from retail, classified, national and direct marketing advertising; McClatchy may not achieve its expense reduction targets including efforts related to legacy expense initiatives 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; increases in the cost of newsprint; bankruptcies or financial strain of its major advertising customers; litigation or any potential litigation; geo-political uncertainties including the risk of war; changes in printing and distribution costs from anticipated levels, including changes in postal rates or agreements; changes in interest rates; changes in pension assets and liabilities; changes in factors that impact pension contribution requirements, including, without limitation, the value of the company-owned real property that McClatchy has contributed to its pension plan; increased consolidation among major retailers in our markets or other events depressing the level of advertising; our inability to negotiate and obtain favorable terms under collective bargaining agreements with unions; competitive action by other companies; an inability to fully implement and execute its share repurchase plan; and other factors, many of which are beyond our control; 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 Dec. 28, 2014, filed with the U.S. Securities and Exchange Commission. McClatchy disclaims any intention and assumes no obligation to update the forward-looking information contained in this release.


SOURCE The McClatchy Company

For further information: For Investors: Stephanie Zarate, Investor Relations Manager, (916) 321-1931,; OR Elaine Lintecum, Chief Financial Officer, (916) 321-1846,