McClatchy (NYSE American-MNI) today reported net income in the fourth quarter of 2017 of $60.4 million, or $7.80 per share, compared to net income of $3.1 million, or $0.40 per share in the fourth quarter of 2016.
Additionally, the company reported adjusted net income, which excludes severance, unique tax items, and certain other items, in the fourth quarter of 2017 of $3.2 million, compared to adjusted net income of $12.9 million in the fourth quarter of 2016.
The company’s fiscal 2017 reporting period is a 53-week year compared to a 52-week year in 2016, and as a result, the fiscal fourth quarter of 2017 includes 14 weeks compared to 13 weeks in the fourth quarter of 2016. The company estimates the additional week being reported had no meaningful impact on the reported net income in the fourth quarter of 2017 and net loss in the full-year 2017. Comparable 52-week annual and 13-week quarterly information is included in schedules attached to this release.
“In a challenging quarter, we achieved strong progress on our transition to a digital company,” said Craig Forman, president and CEO. “While headwinds in print newspaper advertising obscured growth, our focus on cost control and business-process improvement offset a portion of the advertising revenue declines.
“McClatchy continued to deliver on its strategy of producing local journalism that is essential to the communities we serve by growing digital revenues, leveraging operational efficiencies and reducing debt. The local news brands that comprise McClatchy continue to be renowned in the markets we serve and increasingly, across the country, McClatchy journalism is synonymous with local relevance and national importance,” said Forman.
The company achieved record growth in digital-only subscribers in the fourth quarter and announced a new regional editorial structure in California and the Carolinas designed to accelerate innovation and the roll-out of best-practices in digital journalism in 14 newsrooms.
Forman continued, “Transforming to a digital business model is not easy but we are committed to this goal. In fact, we are nearing a crossover point where digital advertising revenues exceed those from print newspaper advertising, which we expect to hit in 2018.
“Finally, we have a relentless focus on returns to our shareholders and stakeholders as we continue to deleverage a balance sheet where first-lien debt is now at $365 million, half of our $730 million in total debt. This compares with a balance sheet that 11 and a half years ago reflected $3.2 billion in debt associated with the $4.6 billion acquisition that created one of America’s largest local news and information companies.”
Fourth Quarter Results
Total revenues in the fourth quarter of 2017 were $244.7 million, down 6.7% compared to the fourth quarter of 2016. Headwinds that impacted advertising included a soft holiday retail advertising season and continued declines in print advertising.
Total advertising revenues were $138.2 million, down 12.7% in the fourth quarter of 2017 compared to the fourth quarter of 2016. Digital-only advertising revenues grew 9.6% and total digital advertising revenues were 1.0% over the same period in 2016.
Direct marketing advertising revenues declined 9.9% in the fourth quarter compared to the same period last year. Direct marketing was negatively impacted by revenue losses due to Hurricane Irma.
Audience revenues were $95.0 million, up 2.5% in the fourth quarter compared to the same period in 2016. Digital audience revenues were up 8.2%, and the number of digital-only subscribers ended the quarter at 102,900, representing an increase of 23.8% from the fourth quarter of 2016. Digital-only audience revenues associated with digital subscriptions were up 11.9% for the same period.
Average total unique visitors to the company’s online products grew to 71.3 million, or growth of 9.0% in the fourth quarter of 2017 compared to the same quarter last year. Mobile users represented 61.4% of average total unique visitors in the fourth quarter of 2017.
Revenues exclusive of print newspaper advertising accounted for an estimated 75.3% of total revenues in the fourth quarter of 2017, an increase from 70.4% in the fourth quarter of 2016.
Adjusted net income, which excludes the items above, was $3.2 million. Adjusted EBITDA was $53.7 million, down 15.0% compared to the fourth quarter last year. Operating expenses were down 6.1% while adjusted operating expenses, which exclude non-cash and certain other charges, were down 4.0% compared to the same quarter last year.
more at: http://investors.mcclatchy.com/phoenix.zhtml?c=87841&p=irol-newsArticle&ID=2333023