McClatchy Reports First Quarter 2013 Earnings

                McClatchy Reports First Quarter 2013 Earnings

- Digital subscription packages, or Plus Program, exceeding expectations

- Total revenue trends improve from 2012

- Digital-only advertising revenues up 8.9% from Q1 2012

- Advertising revenues from nontraditional sources now at 38.5% of total
advertising revenues

- Expenses excluding severance and other charges decline 1.8% from Q1 2012

PR Newswire

SACRAMENTO, Calif., April 25, 2013

SACRAMENTO, Calif., April 25, 2013 /PRNewswire/ --The McClatchy Company
(NYSE-MNI) today reported a net loss in the first quarter of 2013 of $12.7
million or 15 cents per share, including an $8.1 million after-tax loss
related to debt refinancing and open-market debt repurchases. In the first
quarter of 2012 the company reported a net loss of $2.1 million or 2 cents per

Total revenues in the first quarter of 2013 were $276.7 million, down 4.0%
from the first quarter of 2012. Advertising revenues were $197.1 million, down
6.0% from 2012, and circulation revenues were $67.5 million, up 1.6%. Total
digital advertising revenues grew 1.5% in the first quarter of 2013, with
digital-only advertising revenues up 8.9% from the 2012 quarter. Total digital
advertising represented 24.0% of total advertising revenues in the first
quarter of 2013 compared to 22.2% of total advertising revenues in the first
quarter of 2012.

Results in the first quarter of 2013 included the following items:

  oA loss from the extinguishment of debt totaling $12.8 million ($8.1
    million after-tax) related to the completion in early 2013 of the
    refinancing of the company's 11.5% secured bonds due in 2017 and
    open-market repurchases;
  oaccelerated depreciation totaling $2.1 million ($1.3 million after-tax)
    related to relocating Miami newspaper operations;
  oseverance and other restructuring-related charges totaling $2.3 million
    ($1.4 million after-tax);
  othe reversal of non-cash interest expense totaling $0.1 million ($.08
    million after-tax) related to the release of tax reserves; and
  oadditional tax expense totaling $1.1 million for an increase to
    liabilities related to tax positions taken in prior years.

The net loss in the first quarter of 2013, excluding the net impact of these
items, was $0.7 million compared to a net loss in the first quarter of 2012
adjusted for similar items of $2.5 million. (Non-GAAP measurements are
discussed below.)

Operating cash expenses, excluding severance and other restructuring-related
charges, declined approximately $4.1 million, or 1.8%, from the 2012 quarter.
Operating cash flow was $53.4 million in the first quarter of 2013, down

Management's Comments:

Commenting on McClatchy's first quarter results, Pat Talamantes, McClatchy's
president and CEO, said, "We were pleased to see growth in circulation
revenues in the first quarter and sequential improvement in total revenues
compared to the last quarter of 2012. Total company revenues were down 4.0%
this quarter compared to down 5.3% in the fourth quarter of 2012 on a
comparable 13-week basis and down 5.1% in the first quarter of 2012.

"For the quarter, total advertising revenues were down 6.0% compared to the
first quarter of 2012. Total digital advertising revenues grew again, up 1.5%,
compared to the same quarter last year while digital-only revenues were up
8.9%. Digital advertising represented 24.0% of McClatchy's total advertising
revenues in the first quarter compared to 22.2% in the first quarter of 2012.

"Direct marketing advertising revenues were up 2.6% in the first quarter. This
category continues its growth with its 11^th quarter of revenue growth out of
the past 12 quarters. Direct marketing accounted for 14.5% of total
advertising revenues in the quarter. Diversifying and growing our revenue
sources is one of the keys to our success. In the quarter, advertising
revenues from digital and direct marketing together contributed more than
38.5% of our advertising revenues.

"The company-wide rollout of our new digital subscription packages, known as
our Plus Program, continues to exceed our expectations. We finished the
quarter with over 22,000 digital-only subscribers. In total, the Plus Program
provided $5.8 million in incremental revenues contributing to the 1.6% growth
in total circulation revenues for the quarter compared to the same quarter
last year. We now expect the Plus Program to generate approximately $25
million in new revenues in 2013.

"Cash expenses, excluding severance and other restructuring-related charges,
were down 1.8% in the quarter compared to the first quarter of 2012. We were
able to reduce cash expenses even though we invested approximately $1.9
million in new revenue initiatives and enterprise-wide operating systems and
despite an increase in pension expense of $2.8 million.

"Our equity investments started off the year impressively as our equity income
was up 52.2% to $9.2 million in the first quarter of 2013 compared to the same
quarter last year. Importantly, Classified Ventures and CareerBuilder
continue to provide our customers with valued products while at the same time
providing us with strong financial results.

"As we look to the second quarter, we expect that the trend in total company
revenues, aided by results from the Plus Program, will improve compared to the
same quarter last year. We will remain vigilant in controlling costs and we
expect cash expenses (excluding restructuring-related charges) to be down in
the low-single digits in the second quarter versus the same quarter in 2012."

Elaine Lintecum, McClatchy's CFO said, "Total debt at the end of the first
quarter was $1.566 billion, a $145.9 million decrease compared to the balance
at the end of 2012. We completed the last stage of our refinancing in the
first quarter by retiring the remaining $83.6 million of 11.50% Senior Secured
Notes due 2017. The additional $62.3 million reduction was accomplished
through open market repurchases during the quarter. The refinancing
transaction, along with our continued focus on debt reduction, has given us
immediate benefits — we have extended our debt maturities significantly and
lowers our cash interest expense by about $15 million in the first year. For
the quarter, cash interest expense related to bonds was down approximately
$4.4 million compared to the same quarter last year.

"We contributed $7.5 million to our pension plan during the quarter and expect
that there will be no substantial additional cash contributions made for the
remainder of the year. Our leverage ratio at the end of the first quarter as
defined in our credit agreement was 4.41 times cash flow and our interest
coverage was 2.48 times.

"The relocation of The Miami Herald headquarters from downtown Miami to Doral,
Fla., is going well. We will begin moving office operations to the new leased
building in Doral at the end of the month. Construction of the adjacent
printing facility is complete and we expect to complete the relocation by the
end of May."

Management also noted that given the changes in its circulation delivery
contracts resulting from the rollout of the company's digital subscription
model and efforts to improve strategies and reduce costs associated with
delivery of its print newspapers, it has begun a review of its delivery
contracts to determine whether circulation revenues should continue to be
reported net of delivery costs or reported at gross with delivery costs
recorded as expenses. Neither method of accountinghas an impact on the
company's operating income, operating cash flows or earnings. The company
expects to complete this review before it files its Form 10-Q with the
Securities and Exchange Commission (SEC) on or before May 10, 2013. 

The company's statistical report, which summarizes revenue performance for the
first fiscal quarter of 2013, follows.

Non-GAAP Financial Measures:

In addition to the results reported in accordance with accounting principles
generally accepted in the United States ("GAAP") included in this press
release, the company has presented non-GAAP financial measures such as
adjusted net income, operating cash flows and operating cash flow margins.
Adjusted net income is defined as net income excluding amounts (net of tax)
for loss (gain) on extinguishment of debt, restructuring-related compensation
charges, accelerated depreciation on equipment, other restructuring charges,
reversal of interest on tax items and certain other discrete tax items.
Operating cash flow is defined as operating income plus depreciation and
amortization, restructuring-related charges and other non-cash impairments.
Operating cash flow margin is defined as operating cash flow divided by net
revenues. These non-GAAP financial measures are reconciled to GAAP measures
in the attached schedule. Management believes these non-GAAP measures, when
read in conjunction with the company's GAAP financials, provide useful
information to investors by offering:

  oThe ability to make more meaningful period-to-period comparisons of the
    company's ongoing operating results.
  oThe ability to better identify trends in the company's underlying
  oA better understanding of how management plans and measures the company's
    underlying business.
  oAn easier way to compare the company's most recent operating results
    against investor and analyst financial models.

These non-GAAP financial measures should not be considered a substitute or an
alternative to these computations calculated in accordance with and required
by GAAP. McClatchy's non-GAAP financial measures may not be comparable to
similarly titled measures presented by other companies.

At noon Eastern time today, McClatchy will review its results in a conference
call (877-278-1205, pass code 33652675) and webcast ( The
webcast will be archived at McClatchy's website.

About McClatchy

The McClatchy Company is a leading news and information provider, offering a
wide array of print and digital products in each of the markets it serves. As
the third largest newspaper company in the country, McClatchy's operations
include 30 daily newspapers, community newspapers, websites, mobile news and
advertising, niche publications, direct marketing and direct mail services.
The company's largest newspapers include the Fort Worth Star-Telegram, The
Sacramento Bee, The Kansas City Star, The Miami Herald, The Charlotte Observer
and The (Raleigh) News & Observer. McClatchy is 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; McClatchy may not successfully implement circulation strategies
designed to increase circulation revenue, including the Plus Program, and may
experience decreased circulation volumes or subscriptions through the Plus
Program; McClatchy may experience diminished revenues from retail, classified,
national and direct marketing advertising; McClatchy may not achieve its
expense reduction targets 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; 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. 30,
2012, 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.

(In thousands, except per share amounts)
                                               Three Months Ended
                                               March 30,       March 25,
                                               2013            2012
 Advertising                                 $  197,122     $  209,764
 Circulation                                 67,455          66,403
 Other                                       12,159          12,134
                                               276,736         288,301
 Compensation                                112,576         112,649
 Newsprint, supplements and printing         30,715          34,339
 Depreciation and amortization               30,446          30,741
 Other operating expenses                    82,401          82,597
                                               256,138         260,326
OPERATING INCOME                               20,598          27,975
 Interest expense                            (35,516)        (42,477)
 Interest income                             9               14
 Equity gain in unconsolidated companies,    9,161           6,018
 Gain (loss) on extinguishment of debt       (12,770)        4,433
 Other - net                                 52              38
                                               (39,064)        (31,974)
LOSS BEFORE INCOME TAX BENEFIT                (18,466)        (3,999)
INCOME TAX BENEFIT                            (5,725)         (1,912)
NET LOSS                                       $  (12,741)    $   (2,087)
 Basic                                       $    (0.15)  $    (0.02)
 Diluted                                     $    (0.15)  $    (0.02)
 Basic                                       86,022          85,494
 Diluted                                     86,022          85,494

The McClatchy Company
Consolidated Statistical Report
(In thousands, except for preprints)
              March Year-to-Date
              Combined                    Print Only                  Digital
Revenues -    2013      2012      %       2013      2012      %       2013     2012     %
Net:                              Change                      Change                    Change
Retail        $97,859   $107,129  -8.7%   $79,569   $88,324   -9.9%   $18,290  $18,805  -2.7%
National      14,999    15,130    -0.9%   10,678    11,322    -5.7%   4,321    3,808    13.5%
Classified    55,464    59,438    -6.7%   30,809    35,490    -13.2%  24,655   23,948   3.0%
Automotive    19,326    20,498    -5.7%   7,860     10,159    -22.6%  11,466   10,339   10.9%
Real Estate   8,483     9,413     -9.9%   5,266     6,150     -14.4%  3,217    3,263    -1.4%
Employment    10,854    12,344    -12.1%  4,838     5,764     -16.1%  6,016    6,580    -8.6%
Other         16,801    17,183    -2.2%   12,845    13,417    -4.3%   3,956    3,766    5.0%
Direct        28,649    27,916    2.6%    28,649    27,916    2.6%
Other         151       151       0.0%    151       151       0.0%
Total         $197,122  $209,764  -6.0%   $149,856  $163,203  -8.2%   $47,266  $46,561  1.5%
Circulation   67,455    66,403    1.6%
Other         12,159    12,134    0.2%
Total         $276,736  $288,301  -4.0%
Revenues by
California    $33,262   $36,026   -7.7%   $25,863   $28,666   -9.8%   $7,399   $7,360   0.5%
Florida       30,111    31,509    -4.4%   23,743    25,533    -7.0%   6,368    5,976    6.6%
Texas         20,871    22,900    -8.9%   15,782    17,711    -10.9%  5,089    5,189    -1.9%
Southeast     57,790    61,128    -5.5%   42,982    46,741    -8.0%   14,808   14,387   2.9%
Midwest       33,548    35,602    -5.8%   25,453    27,312    -6.8%   8,095    8,290    -2.4%
Northwest     21,444    22,471    -4.6%   16,033    17,240    -7.0%   5,411    5,231    3.4%
Other         96        128       -25.0%  0         0         0.0%    96       128      -25.0%
Total         $197,122  $209,764  -6.0%   $149,856  $163,203  -8.2%   $47,266  $46,561  1.5%
for Dailies:
Full Run ROP                              3,842.1   4,238.5   -9.4%
Millions of
Preprints                                 1,014.4   1,047.7   -3.2%
Average Paid
Daily                                     1,970.0   2,085.1   -5.5%
Sunday                                    2,785.6   2,810.0   -0.9%
Columns may not add due to rounding
* Reflects average paid circulation based upon number of days in period. Does not reflect
AAM reported figures.

Reconciliation of GAAP Measures to Non-GAAP Amounts
(In thousands)
Reconciliation of Operating Income (Loss) to Operating Cash Flows
                                                Three Months Ended
                                                March 30,       March 25,
                                                2013            2012
 Advertising                                  $   197,122   $   209,764
 Circulation                                  67,455          66,403
 Other                                        12,159          12,134
                                                276,736         288,301
 Compensation excluding restructuring charges 112,195         111,478
 Newsprint, supplements and printing expense  30,715          34,339
 Other cash operating expenses                80,475          81,709
 Cash operating expenses excluding
 restructuring charges                      223,385         227,526
 Restructuring related compensation charges   381             1,171
 Other restructuring charges                  1,926           888
 Depreciation and amortization                30,446          30,741
 Total operating expenses                     256,138         260,326
OPERATING INCOME                               20,598          27,975
Add back:
 Depreciation and amortization                30,446          30,741
 Restructuring related compensation charges   381             1,171
 Other restructuring charges                  1,926           888
OPERATING CASH FLOW                             $   53,351    $   60,775
OPERATING CASH FLOW MARGIN                      19.3%           21.1%
Reconciliation of Net Income to Adjusted Net Income
Net Income (Loss):                              $  (12,741)    $   (2,087)
Add back certain items, net of tax:
 Loss (gain) on extinguishment of debt        8,102           (2,801)
 Restructuring related compensation charges   224             674
 Accelerated depreciation on equipment        1,294           1,201
 Other restructuring charges                  1,223           561
 Reversal of interest on tax items            75
 Certain discrete tax items                   1,160           (65)
Adjusted net income (loss)                      $    (663)  $   (2,517)

SOURCE The McClatchy Company

Contact: Ryan Kimball, Assistant Treasurer, 916-321-1849,
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