McClatchy Reports First Quarter 2018 Results

McClatchy (NYSE American-MNI) reported a milestone in its digital transformation as total digital advertising revenues exceeded print newspaper advertising revenues for the first time in the first quarter of 2018.

The company reported a net loss in the first quarter of 2018 of $38.9 million, or $5.04 per share, narrowed from a net loss of $95.6 million, or $12.60 per share in the first quarter of 2017. Additionally, the company reported an adjusted net loss, which excludes severance, unique tax items, and certain other items, in the first quarter of 2018 of $20.3 million, compared to adjusted net loss of $14.5 million in the first quarter of 2017.

“The quarter just ended reflects a significant crossover point in the trajectory of our digital transformation,” said Craig Forman, president and CEO of McClatchy. “Despite strong industry headwinds, we are making progress in our strategy to drive digital growth.” The company reported a 33 percent increase in digital subscriptions and growth of 13 percent in average monthly unique visitors to its news sites in the first quarter compared to the same quarter last year.

Another digital milestone was a collaboration with Google for a new subscription platform, Subscribe with Google. “As an early development partner and the sole local news publisher who collaborated with Google in the early design stages, we’re excited to see the impact of this experiment on the growth of our digital subscriptions starting in the current quarter,” said Forman. “This initiative by Google reflects a growing sentiment that is gaining wider recognition — local journalism plays a vital role in the lives of individuals, in our communities and strengthens our democracy.”

Continuing on the topic of digital subscriptions, Forman added, “We’ve been successful in our efforts to transition casual readers to a digital subscription; our digital subscribers reached 112,200 by the end of the first quarter.”

First Quarter Results
Total revenues in the first quarter of 2018 were $198.9 million, down 10.1% compared to the first quarter of 2017. Headwinds that impacted advertising included continued declines in print advertising and difficulties faced in retail advertising.

Total advertising revenues were $99.9 million, down 16.7% in the first quarter of 2018 compared to the first quarter of 2017. Digital-only advertising revenues grew 21.6% and total digital advertising revenues were up 7.6% over the same period in 2017.

Direct marketing advertising revenues declined 21.9% in the first quarter compared to the same period last year. Direct marketing was primarily impacted by the headwinds faced by our retail customers.

Audience revenues were $86.3 million, down 5.6% in the first quarter compared to the same period in 2017. Digital-only subscribers ended the quarter at 112,200, representing an increase of 32.8% from the first quarter of 2017. Digital-only audience revenues associated with digital subscriptions were up 16.6% for the same period. Total digital audience revenues, which are impacted by print home delivery trends, were up 2.6% compared to the same period last year.

Average total unique visitors to the company’s online products were 78.2 million, an increase of 13.1% in the first quarter of 2018 compared to the same quarter last year.

Revenues exclusive of print newspaper advertising accounted for an estimated 80.6% of total revenues in the first quarter of 2018, an increase from 74.4% in the first quarter of 2017.

Adjusted net loss, which excludes the items above, was $20.3 million. Adjusted EBITDA was $17.4 million, down 24.5% compared to the first quarter last year. Operating expenses were down 10.6% while adjusted operating expenses, which exclude non-cash and certain other charges, were down 8.4% compared to the same quarter last year. (A discussion of our non-GAAP measures and the reconciliation to the comparable GAAP measures are provided below.)
more detail at: http://investors.mcclatchy.com/phoenix.zhtml?c=87841&p=irol-newsArticle&ID=2345297

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