[X]
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|||
For
the quarterly period ended:
|
March
30, 2008
|
|||
or
|
||||
[ ]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|||
For
the transition period from ________________________________ to
_______________________________
|
||||
Commission
file number:
|
1-9824
|
|||
(Exact
name of registrant as specified in its
charter)
|
Delaware
|
52-2080478
|
||
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
||
2100
"Q" Street, Sacramento, CA
|
95816
|
||
(Address
of principal executive offices)
|
(Zip
Code)
|
916-321-1846
|
Registrant's
telephone number, including area
code
|
[ ]
|
Yes
|
[X]
|
No
|
Class
A Common Stock
|
57,266,620
|
|
Class
B Common Stock
|
25,050,962
|
Part
I - FINANCIAL INFORMATION
|
Page
|
|
Item
1 - Financial Statements (unaudited):
|
||
Consolidated
Balance Sheet – March 30, 2008 and December 30, 2007
|
1
|
|
Consolidated
Statement of Income for the three months ended March 30, 2008 and
April 1, 2007
|
3
|
|
Consolidated
Statement of Cash Flows for the three months ended March 30, 2008 and
April 1, 2007
|
4
|
|
Consolidated
Statement of Stockholders' Equity for the period December 30, 2007 to
March 30, 2008
|
5
|
|
Notes
to Consolidated Financial Statements
|
6
|
|
Item
2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
|
15
|
|
Item
3 - Quantitative and Qualitative Disclosures About Market
Risk
|
22
|
|
Item
4 - Controls and Procedures
|
23
|
|
Part
II - OTHER INFORMATION
|
||
Item
1A - Risk Factors
|
23
|
|
Item
6 - Exhibits
|
24
|
|
Signatures
|
25
|
|
Index
of Exhibits
|
26
|
THE
McCLATCHY COMPANY
|
||||||||
CONSOLIDATED
BALANCE SHEET (UNAUDITED)
|
||||||||
(In
thousands, except share amounts)
|
||||||||
ASSETS
|
March
30,
|
December
30,
|
||||||
CURRENT
ASSETS:
|
2008
|
2007
|
||||||
Cash
and cash equivalents
|
$ | 12,325 | $ | 25,816 | ||||
Trade
receivables – (less allowance of
$11,718
in 2008 and $11,416 in 2007)
|
236,725 | 289,550 | ||||||
Other
receivables
|
23,462 | 19,677 | ||||||
Newsprint,
ink and other inventories
|
44,849 | 36,230 | ||||||
Deferred
income taxes
|
27,077 | 27,077 | ||||||
Prepaid
income taxes
|
31,485 | 60,758 | ||||||
Income
tax refund
|
185,059 | 185,059 | ||||||
Land
and other assets held for sale
|
177,536 | 177,436 | ||||||
Other
current assets
|
21,986 | 20,636 | ||||||
760,504 | 842,239 | |||||||
PROPERTY,
PLANT AND EQUIPMENT:
|
||||||||
Land
|
205,091 | 205,080 | ||||||
Building
and improvements
|
396,315 | 395,553 | ||||||
Equipment
|
845,608 | 846,664 | ||||||
Construction
in progress
|
17,476 | 17,183 | ||||||
1,464,490 | 1,464,480 | |||||||
Less
accumulated depreciation
|
(538,262 | ) | (522,388 | ) | ||||
926,228 | 942,092 | |||||||
INTANGIBLE
ASSETS:
|
||||||||
Identifiable
intangibles - net
|
876,218 | 891,591 | ||||||
Goodwill
|
1,042,880 | 1,042,880 | ||||||
1,919,098 | 1,934,471 | |||||||
INVESTMENTS
AND OTHER ASSETS:
|
||||||||
Investments
in unconsolidated companies
|
383,396 | 401,274 | ||||||
Other
assets
|
16,844 | 17,843 | ||||||
400,240 | 419,117 | |||||||
TOTAL
ASSETS
|
$ | 4,006,070 | $ | 4,137,919 | ||||
See
notes to consolidated financial statements.
|
THE
McCLATCHY COMPANY
|
||||||||
CONSOLIDATED
BALANCE SHEET (UNAUDITED) - Continued
|
||||||||
(In
thousands, except share amounts)
|
||||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
March
30,
|
December
30,
|
||||||
CURRENT
LIABILITIES:
|
2008
|
2007
|
||||||
Accounts
payable
|
$ | 74,236 | $ | 93,626 | ||||
Accrued
compensation
|
92,614 | 104,892 | ||||||
Income
taxes payable
|
4,539 | 20,861 | ||||||
Unearned
revenue
|
85,584 | 82,461 | ||||||
Accrued
interest
|
30,805 | 28,246 | ||||||
Accrued
dividends
|
14,800 | 14,788 | ||||||
Other
accrued liabilities
|
42,775 | 44,642 | ||||||
345,353 | 389,516 | |||||||
NON-CURRENT
LIABILITIES:
|
||||||||
Long-term
debt
|
2,396,370 | 2,471,827 | ||||||
Deferred
income taxes
|
554,017 | 555,887 | ||||||
Pension
and postretirement obligations
|
205,091 | 200,318 | ||||||
Other
long-term obligations
|
95,935 | 94,831 | ||||||
3,251,413 | 3,322,863 | |||||||
COMMITMENTS
AND CONTINGENCIES
|
||||||||
STOCKHOLDERS'
EQUITY:
|
||||||||
Common
stock $.01 par value:
|
||||||||
Class
A - authorized 200,000,000 shares, issued
|
||||||||
57,180,022
in 2008 and 57,105,279 in 2007
|
572 | 571 | ||||||
Class
B - authorized 60,000,000 shares,
|
||||||||
issued
25,050,962 in 2008 and 2007
|
251 | 251 | ||||||
Additional
paid-in capital
|
2,199,204 | 2,197,041 | ||||||
Accumulated
deficit
|
(1,796,947 | ) | (1,781,298 | ) | ||||
Treasury
stock, 5,264 shares in 2008 and 3,029 shares in 2007 at
cost
|
(144 | ) | (122 | ) | ||||
Accumulated
other comprehensive income
|
6,368 | 9,097 | ||||||
409,304 | 425,540 | |||||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 4,006,070 | $ | 4,137,919 $ | ||||
See
notes to consolidated financial statements.
|
THE
McCLATCHY COMPANY
|
||||||||
CONSOLIDATED
STATEMENT OF INCOME (UNAUDITED)
(In
thousands, except per share amounts)
|
||||||||
Three
Months Ended
|
||||||||
March
30,
|
April
1,
|
|||||||
2008
|
2007
|
|||||||
REVENUES
- NET:
|
||||||||
Advertising
|
$ | 404,023 | $ | 477,023 | ||||
Circulation
|
67,864 | 71,880 | ||||||
Other
|
16,396 | 17,655 | ||||||
488,283 | 566,558 | |||||||
OPERATING
EXPENSES:
|
||||||||
Compensation
|
218,853 | 236,324 | ||||||
Newsprint
and supplements
|
60,458 | 75,417 | ||||||
Depreciation
and amortization
|
36,382 | 37,833 | ||||||
Other
operating expenses
|
115,856 | 129,596 | ||||||
431,549 | 479,170 | |||||||
OPERATING
INCOME
|
56,734 | 87,388 | ||||||
NON-OPERATING
(EXPENSES) INCOME:
|
||||||||
Interest
expense
|
(45,277 | ) | (53,785 | ) | ||||
Interest
income
|
96 | 64 | ||||||
Equity
losses in unconsolidated companies - net
|
(13,124 | ) | (9,749 | ) | ||||
Other
- net
|
914 | (48 | ) | |||||
(57,391 | ) | (63,518 | ) | |||||
INCOME
(LOSS) FROM CONTINUING OPERATIONS
|
||||||||
BEFORE
INCOME TAXES
|
(657 | ) | 23,870 | |||||
INCOME
TAX PROVISION
|
336 | 9,357 | ||||||
INCOME
(LOSS) FROM CONTINUING OPERATIONS
|
(993 | ) | 14,513 | |||||
INCOME
(LOSS) FROM DISCONTINUED OPERATIONS,
|
||||||||
NET
OF INCOME TAXES
|
144 | (5,483 | ) | |||||
NET
INCOME (LOSS)
|
$ | (849 | ) | $ | 9,030 | |||
NET
INCOME (LOSS) PER COMMON SHARE:
|
||||||||
Basic:
|
||||||||
Income
(loss) from continuing operations
|
$ | (0.01 | ) | $ | 0.18 | |||
Income
(loss) from discontinued operations
|
- | (0.07 | ) | |||||
Net
income (loss) per share
|
$ | (0.01 | ) | $ | 0.11 | |||
Diluted:
|
||||||||
Income
(loss) from continuing operations
|
$ | (0.01 | ) | $ | 0.18 | |||
Income
(loss) from discontinued operations
|
- | (0.07 | ) | |||||
Net
income (loss) per share
|
$ | (0.01 | ) | $ | 0.11 | |||
WEIGHTED
AVERAGE NUMBER OF COMMON SHARES:
|
||||||||
Basic
|
82,177 | 81,885 | ||||||
Diluted
|
82,177 | 81,982 | ||||||
See
notes to consolidated financial statements.
|
THE
McCLATCHY COMPANY
|
||||||||
CONSOLIDATED
STATEMENT OF CASH FLOWS (UNAUDITED)
|
||||||||
(In
thousands)
|
||||||||
Three
Months Ended
|
||||||||
March
30,
|
April
1,
|
|||||||
2008
|
2007
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Income
(loss) from continuing operations
|
$ | (993 | ) | $ | 14,513 | |||
Reconciliation
to net cash provided by continuing operations:
|
||||||||
Depreciation
and amortization
|
36,382 | 37,833 | ||||||
Employee
benefit expense
|
6,097 | 9,249 | ||||||
Stock
compensation expense
|
1,345 | 2,182 | ||||||
Equity
loss in unconsolidated companies
|
13,124 | 9,749 | ||||||
Write-off
of deferred financing costs
|
3,383 | - | ||||||
Other
|
1,734 | 1,210 | ||||||
Changes
in certain assets and liabilities:
|
||||||||
Trade
receivables
|
52,825 | 40,761 | ||||||
Inventories
|
(8,619 | ) | 8,677 | |||||
Other
assets
|
(4,409 | ) | 876 | |||||
Accounts
payable
|
(20,080 | ) | (42,911 | ) | ||||
Accrued
compensation
|
(12,278 | ) | (25,991 | ) | ||||
Income
taxes
|
12,951 | (38,032 | ) | |||||
Other
liabilities
|
4,078 | (2,779 | ) | |||||
Net
cash provided by operating activities of continuing
operations
|
85,540 | 15,337 | ||||||
Net
cash provided (used) by operating activities of discontinued
operations
|
(186 | ) | 2,501 | |||||
Net
cash provided by operating activities
|
85,354 | 17,838 | ||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchases
of property, plant and equipment
|
(4,754 | ) | (12,815 | ) | ||||
Equity
investments
|
(735 | ) | (1,200 | ) | ||||
Other
- net
|
34 | 162 | ||||||
Net
cash used by investing activities of continuing operations
|
(5,455 | ) | (13,853 | ) | ||||
Proceeds
from sale of newspaper, net of transaction costs
|
- | 522,922 | ||||||
Other
|
- | (4,837 | ) | |||||
Net
cash provided by investing activities of discontinued
operations
|
- | 518,085 | ||||||
Net
cash provided (used) by investing activities
|
(5,455 | ) | 504,232 | |||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Repayments
of term bank debt
|
- | (350,000 | ) | |||||
Net
repayments of revolving bank debt
|
(76,052 | ) | (170,599 | ) | ||||
Payment
of financing costs
|
(3,346 | ) | - | |||||
Payment
of cash dividends
|
(14,789 | ) | (14,739 | ) | ||||
Other
- principally stock issuances
|
797 | 3,832 | ||||||
Net
cash used by financing activities
|
(93,390 | ) | (531,506 | ) | ||||
NET
CHANGE IN CASH AND CASH EQUIVALENTS
|
(13,491 | ) | (9,436 | ) | ||||
CASH
AND CASH EQUIVALENTS, BEGINNING OF YEAR
|
25,816 | 19,581 | ||||||
CASH
AND CASH EQUIVALENTS, END OF PERIOD
|
$ | 12,325 | $ | 10,145 | ||||
OTHER
CASH FLOW INFORMATION:
|
||||||||
Cash
paid (received) during the period for:
|
||||||||
Income
taxes (net of refunds)
|
$ | (13,143 | ) | $ | 46,656 | |||
Interest
(net of capitalized interest)
|
$ | 35,809 | $ | 51,786 | ||||
|
||||||||
See notes to consolidated financial statements. |
THE
McCLATCHY COMPANY
|
||||||||||||||||||||||||||||
CONSOLIDATED
STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)
|
||||||||||||||||||||||||||||
(In
thousands, except share and per share amounts)
|
||||||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||||||
Additional
|
Other
|
|||||||||||||||||||||||||||
Par
Value
|
Paid-In
|
Accumulated
|
Comprehensive
|
Treasury
|
||||||||||||||||||||||||
Class
A
|
Class
B
|
Capital
|
Deficit
|
Income
|
Stock
|
Total
|
||||||||||||||||||||||
BALANCES,
DECEMBER 30, 2007
|
$ | 571 | $ | 251 | $ | 2,197,041 | $ | (1,781,298 | ) | $ | 9,097 | $ | (122 | ) | $ | 425,540 | ||||||||||||
Net
loss
|
(849 | ) | (849 | ) | ||||||||||||||||||||||||
Other
comprehensive income (loss), net of tax:
|
||||||||||||||||||||||||||||
Pension
and postretirement plans:
|
||||||||||||||||||||||||||||
Unamortized
gain/prior service credit
|
91 | 91 | ||||||||||||||||||||||||||
Other
comprehensive loss related to
|
||||||||||||||||||||||||||||
investments
in unconsolidated
companies |
(2,820 | ) | (2,820 | ) | ||||||||||||||||||||||||
Other
comprehensive loss
|
(2,729 | ) | ||||||||||||||||||||||||||
Total
comprehensive loss
|
(3,578 | ) | ||||||||||||||||||||||||||
Dividends
declared ($.18 per share)
|
(14,800 | ) | (14,800 | ) | ||||||||||||||||||||||||
Issuance
of 76,978 Class A shares under stock plans
|
1 | 818 | 819 | |||||||||||||||||||||||||
Stock
compensation expense
|
1,345 | 1,345 | ||||||||||||||||||||||||||
Purchase
of 2,235 shares of treasury stock
|
(22 | ) | (22 | ) | ||||||||||||||||||||||||
BALANCES,
MARCH 30, 2008
|
$ | 572 | $ | 251 | $ | 2,199,204 | $ | (1,796,947 | ) | $ | 6,368 | $ | (144 | ) | $ | 409,304 | ||||||||||||
See
notes to consolidated financial statements.
|
NOTE
1. SIGNIFICANT
ACCOUNTING POLICIES
|
|
For
the Three
Months
Ended
|
||||||||
March
30,
2008
|
April
1,
2007
|
|||||||
Net
income (loss)
|
$ | (849 | ) | $ | 9,030 | |||
Pension
amortization from other comprehensive income, net of tax
|
91 | - | ||||||
Other
comprehensive loss related to equity investments
|
(2,820 | ) | - | |||||
Total
comprehensive income (loss)
|
$ | (3,578 | ) | $ | 9,030 |
Three
Months Ended
|
||||||||
March
30, 2008
|
April
1,
2007
|
|||||||
Revenues
|
$ | - | $ | 52,903 | ||||
Income
(loss) from discontinued operations before income taxes
(1)
|
247 | (4,783 | ) | |||||
Income
tax expense
|
103 | 700 | ||||||
Income
(loss) from discontinued operations
|
$ | 144 | $ | (5,483 | ) | |||
|
||||||||
(1) Includes interest expense allocated to discontinued operations of $1.2 million for the three months ended April 1, 2007. |
Company
|
%
Ownership Interest
|
March
30,
2008
|
December
30,
2007
|
|||||||||
CareerBuilder,
LLC
|
14.4 | $ | 220,054 | $ | 224,699 | |||||||
Classified
Ventures, LLC
|
25.6 | 97,207 | 99,313 | |||||||||
Ponderay
Newsprint Company (general partnership)
|
27.0 | 15,918 | 16,221 | |||||||||
SP
Newsprint Company (general partnership)
|
33.3 | 15,888 | 19,455 | |||||||||
Seattle
Times Company (C-Corporation)
|
49.5 | 12,061 | 19,310 | |||||||||
ShopLocal,
LLC
|
15.0 | 11,136 | 10,907 | |||||||||
Topix,
LLC
|
11.3 | 8,827 | 9,074 | |||||||||
McClatchy
Tribune Information Services (joint venture)
|
50.0 | 1,650 | 1,627 | |||||||||
Other
|
Various
|
655 | 668 | |||||||||
$ | 383,396 | $ | 401,274 |
Intangible
assets and goodwill, along with their weighted-average amortization
periods consisted of the following (in thousands):
|
|||||||||||||
March
30, 2008
|
|||||||||||||
Weighted
|
|||||||||||||
Average
|
|||||||||||||
Gross
|
Accumulated
|
Net
|
Amortization
|
||||||||||
Amount
|
Amortization
|
Amount
|
Period
|
||||||||||
Intangible
assets subject to amortization:
|
|||||||||||||
Advertiser
and subscriber lists
|
$ | 817,701 | $ | (220,367 | ) | $ | 597,334 |
14
years
|
|||||
Other
|
26,266 | (13,332 | ) | 12,934 |
8
years
|
||||||||
Total
|
$ | 843,967 | $ | (233,699 | ) | $ | 610,268 | ||||||
Other
intangible assets not subject to amortization:
|
|||||||||||||
Newspaper
mastheads
|
265,950 | ||||||||||||
Total
|
876,218 | ||||||||||||
Goodwill
|
1,042,880 | ||||||||||||
Total
intangible assets and goodwill
|
$ | 1,919,098 | |||||||||||
December
30, 2007
|
|||||||||||||
Weighted
|
|||||||||||||
Average
|
|||||||||||||
Gross
|
Accumulated
|
Net
|
Amortization
|
||||||||||
Amount
|
Amortization
|
Amount
|
Period
|
||||||||||
Intangible
assets subject to amortization:
|
|||||||||||||
Advertiser
and subscriber lists
|
$ | 817,701 | $ | (205,979 | ) | $ | 611,722 |
14
years
|
|||||
Other
|
26,261 | (12,342 | ) | 13,919 |
8
years
|
||||||||
Total
|
$ | 843,962 | $ | (218,321 | ) | $ | 625,641 | ||||||
Other
intangible assets not subject to amortization:
|
|||||||||||||
Newspaper
mastheads
|
265,950 | ||||||||||||
Total
|
891,591 | ||||||||||||
Goodwill
|
1,042,880 | ||||||||||||
Total
intangible assets and goodwill
|
$ | 1,934,471 |
The
estimated amortization expense for the remainder of fiscal 2008 and the
five succeeding fiscal years is as follows (in
thousands):
|
|||||
Amortization
|
|||||
Year
|
Expense
|
||||
2008
(remaining)
|
$ | 45,558 | |||
2009
|
59,312 | ||||
2010
|
58,634 | ||||
2011
|
57,538 | ||||
2012
|
57,368 | ||||
2013
|
56,228 |
March
30,
2008
|
December
30,
2007
|
|||||||
Term
A bank debt, interest of 4.96% at March 30, 2008 and 6.07% at December
30, 2007
|
$ | 550,000 | $ | 550,000 | ||||
Revolving
bank debt, interest of 4.64% at March 30, 2008 and 6.02% at
December 30, 2007
|
432,547 | 508,600 | ||||||
Publicly
traded notes:
|
||||||||
$200
million 9.875% debentures due in 2009
|
205,921 | 207,327 | ||||||
$300
million 7.125% debentures due in 2011
|
303,243 | 303,497 | ||||||
$200
million 4.625% debentures due in 2014
|
177,050 | 176,180 | ||||||
$400
million 5.750% debentures due in 2017
|
364,538 | 363,600 | ||||||
$100
million 7.150% debentures due in 2027
|
91,274 | 91,162 | ||||||
$300
million 6.875% debentures due in 2029
|
271,797 | 271,461 | ||||||
Total
long-term debt
|
$ | 2,396,370 | $ | 2,471,827 |
Debt
Ratings
|
||||||||
As
of
|
As
of Last
|
|||||||
30-Mar-08
|
Rating
Action
|
|||||||
Credit Facility:
|
||||||||
S&P
|
BB
|
BB-
|
||||||
Moody's
|
Ba1
|
Ba1
|
||||||
Bonds:
|
||||||||
S&P
|
B+ |
|
B | |||||
Moody's
|
Ba3
|
B1 | ||||||
Corp.
Family Rating:
|
||||||||
S&P
|
BB
|
BB-
|
||||||
Moody's
|
Ba2
|
Ba3
|
Year
|
Payments
|
||||
2009
|
$ | 200,000 | |||
2010
|
- | ||||
2011
|
1,282,547 | ||||
2012
|
- | ||||
2013
|
- | ||||
Thereafter
|
1,000,000 | ||||
2,482,547 | |||||
Less
net discount
|
(86,177 | ) | |||
Total
debt
|
$ | 2,396,370 |
Three
Months Ended
|
||||||||
March
30,
2008
|
April
1,
2007
|
|||||||
Service
cost
|
$ | 9,110 | $ | 7,939 | ||||
Interest
cost
|
24,876 | 24,217 | ||||||
Expected
return on plan assets
|
(28,322 | ) | (28,226 | ) | ||||
Prior
service cost amortization
|
50 | 80 | ||||||
Actuarial
loss
|
90 | 4,009 | ||||||
Net
pension expense
|
$ | 5,804 | $ | 8,019 |
Three
Months Ended
|
||||||||
March
30,
2008
|
April
1,
2007
|
|||||||
Service
cost
|
$ | 28 | $ | 221 | ||||
Interest
cost
|
584 | 1,009 | ||||||
Prior
service cost
|
(313 | ) | - | |||||
Actuarial
gain
|
(6 | ) | - | |||||
Net
postretirement expense
|
$ | 293 | $ | 1,230 |
ITEM
2. MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
Quarter
Ended
|
||||||||||||
March
30,
2008
|
April
1,
2007
|
%
Change
|
||||||||||
Advertising:
|
||||||||||||
Retail
|
$ | 190,757 | $ | 206,188 | (7.5 | ) | ||||||
National
|
38,225 | 45,151 | (15.3 | ) | ||||||||
Classified:
|
||||||||||||
Auto
|
35,386 | 42,155 | (16.1 | ) | ||||||||
Employment
|
46,441 | 69,717 | (33.4 | ) | ||||||||
Real
estate
|
35,423 | 55,187 | (35.8 | ) | ||||||||
Other
|
22,961 | 21,612 | 6.2 | |||||||||
Total
classified
|
140,211 | 188,671 | (25.7 | ) | ||||||||
Direct
marketing
|
||||||||||||
and
other
|
34,830 | 37,013 | (5.9 | ) | ||||||||
Total
advertising
|
404,023 | 477,023 | (15.3 | ) | ||||||||
Circulation
|
67,864 | 71,880 | (5.6 | ) | ||||||||
Other
|
16,396 | 17,655 | (7.1 | ) | ||||||||
Total
revenues
|
$ | 488,283 | $ | 566,558 | (13.8 | ) | ||||||
·
|
Real
estate advertising decreased $19.8 million or 35.8% from the first fiscal
quarter of 2007. The Company has seen dramatic declines in
California and Florida, which continue to be adversely impacted more than
other regions by the real estate downturn. In the first quarter of 2008,
$12.8 million or 64.9% of the Company’s decline in real estate advertising
was in these two states. In total, print
real estate advertising declined 39.0%, while online advertising grew
8.7%.
|
·
|
Automotive
advertising decreased $6.8 million or 16.1% from the first fiscal quarter
of 2007, reflecting an industry-wide trend. Print automotive
advertising declined 24.4%, while online advertising grew 37.7% reflecting
the strength of the Company's cars.com online
products.
|
·
|
Employment
advertising decreased $23.3 million or 33.4% from the first fiscal quarter
of 2007 reflecting a national slowdown in hiring and therefore employment
advertising. The declines were reflected both in print
employment advertising, down 39.0%, and online employment advertising,
down 22.0%.
|
Debt
Ratings
|
||||||||
As
of
|
As
of Last
|
|||||||
30-Mar-08
|
Rating
Action
|
|||||||
Credit Facility:
|
||||||||
S&P
|
BB
|
BB-
|
||||||
Moody's
|
Ba1
|
Ba1
|
||||||
Bonds:
|
||||||||
S&P
|
B+ |
|
B | |||||
Moody's
|
Ba3
|
B1 | ||||||
Corp.
Family Rating:
|
||||||||
S&P
|
BB
|
BB-
|
||||||
Moody's
|
Ba2
|
Ba3
|
ITEM 6. EXHIBITS |
|
The
McClatchy Company
|
||
Registrant
|
||
May
9, 2008
|
/s/
Gary B. Pruitt
|
|
Date
|
Gary
B. Pruitt
Chief
Executive Officer
|
|
May
9, 2008
|
/s/
Patrick J. Talamantes
|
|
Date
|
Patrick
J. Talamantes
Chief
Financial Officer
|
TABLE
OF EXHIBITS
|
|||
Exhibit
|
Description
|
||
2.1* |
Agreement
and Plan of Merger, dated March 12, 2006, between the Company and
Knight-Ridder, Inc., included as Exhibit 2.1 in the Company’s Current
Report on Form 8-K filed March 12, 2006.
|
||
3.1* |
The
Company's Restated Certificate of Incorporation dated June 26, 2006,
included as Exhibit 3.1 in the Company's Quarterly Report on Form 10-Q for
the quarter ended
June
25, 2006.
|
||
3.2* |
The
Company's By-laws as amended as of June 22, 2006, included as Exhibit 3.2
in the Company's Current Report on Form 8-K filed June 28,
2006.
|
||
4.1* |
Form
of Physical Note for Commercial Paper Program included as Exhibit 4.1 to
the Company's Quarterly Report on Form 10-Q for the quarter ended June 27,
2004.
|
||
10.1* |
Credit
Agreement dated June 27, 2006 by and among the Company, lenders party
thereto, Bank of America, N.A. as Administrative Agent, Swing Line Lender
and Letter of Credit Issuer, JPMorgan Chase Bank as Syndication Agent and
Banc of America Securities LLC and JPMorgan Securities Inc. as Joint Lead
Arrangers and Joint Book Managers, included as Exhibit 10.2 in the
Company's Quarterly Report on Form
10-Q
filed for the quarter ending on June 25, 2006.
|
||
10.2* |
Amendment
No. 1 to Credit Agreement dated March 28, 2007 by and between The
McClatchy Company and Bank of America, N.A., as Administrative Agent,
included as Exhibit 99.1 in the Company's Current Report on Form 8-K filed
April 2, 2007.
|
||
10.3* |
Amendment
No. 2 to Credit Agreement dated July 30, 2007 by and between The McClatchy
Company and Bank of America, N.A., as Administrative Agent, included as
Exhibit 10.1 in the Company's Current Report on Form 8-K filed July 31,
2007.
|
||
10.4* |
Amendment
No. 3 to Credit Agreement dated March 28, 2008 by and between The
McClatchy Company and Bank of America, N.A., as Administrative Agent,
included as Exhibit 10.1 in the Company’s Current Report on Form 8-K filed
March 31, 2008.
|
||
10.5* |
General
Continuing Guaranty dated May 4, 2007 by each Material
Subsidiary in favor of the Lenders party to the Credit Agreement
dated June 27, 2006 by and between The McClatchy Company, the
Lenders and Bank of America, N.A., as Administrative Agent, included as
Exhibit 10.3 in the Company’s Quarterly Report on Form 10-Q for the
quarter ending on April 1, 2007.
|
||
10.6* |
Second
Supplemental Indenture dated June 27, 2006, between the Company and
Knight-Ridder, Inc. included as Exhibit 10.3 in the Company's Current
Report on Form 10-Q filed for the quarter ending on June 25,
2006.
|
||
10.7* |
Fourth
Supplemental Indenture dated June 27, 2006, between the Company and
Knight-Ridder, Inc. included as Exhibit 10.4 in the Company's Quarterly
Report on Form 10-Q filed for the quarter ending on June 25,
2006.
|
||
**10.8* |
The
McClatchy Company Management by Objective Plan Description included as
Exhibit 10.4 in the Company's Report filed on Form 10-K for the Year
ending December 30, 2000.
|
||
**10.9* |
The
Company's Amended and Restated Long-Term Incentive Plan included as
Exhibit 99.1 to the Company's Current Report on Form 8-K filed May 23,
2005.
|
Exhibit
|
Description
|
||
**10.10* |
Amended
and Restated Supplemental Executive Retirement Plan included as Exhibit
10.4 to the Company's 2002 Report on Form 10-K.
|
||
**10.11* |
The
Company's Amended and Restated 1990 Directors' Stock Option Plan dated
February 1, 1998 included as Exhibit 10.12 to the Company's 1997 Report on
Form
10-K.
|
||
**10.12* |
Amended
and Restated 1994 Stock Option Plan included as Exhibit 10.15 to the
Company's Quarterly Report on Form 10-Q filed for the Quarter Ending on
July 1, 2001.
|
||
**10.13* |
Form
of 2004 Stock Incentive Plan Nonqualified Stock Option Agreement included
as Exhibit 99.1 to the Company's Current Report on Form 8-K filed December
16, 2004.
|
||
**10.14* |
Amendment
1 to The McClatchy Company 2004 Stock Incentive Plan dated January 23,
2007 included as Exhibit 10.10 to the Company's 2006 Report on Form
10-K.
|
||
**10.15* |
Form
of Restricted Stock Agreement related to the Company's 2004 Stock
Incentive Plan, included as Exhibit 99.1 to the Company's Current Report
on Form 8-K dated January 28, 2005.
|
||
**10.16* |
The
Company's Amended and Restated Chief Executive Bonus Plan, included as
Exhibit 10.12 to the Company's Quarterly Report on Form 10-Q for the
Quarter Ending June 29, 2003.
|
||
**10.17* |
Amended
and Restated Employment Agreement between the Company and Gary B. Pruitt
dated October 22, 2003, included as Exhibit 10.10 to the Company's 2003
Form 10-K.
|
||
10.18* |
Form
of Indemnification Agreement between the Company and each of its officers
and directors, included as Exhibit 99.1 to the Company's Current Report on
Form 8-K filed on May 23, 2005.
|
||
**10.19* |
Amended
and Restated 1997 Stock Option Plan included as Exhibit 10.7 to the
Company's 2002 Report on Form 10-K.
|
||
**10.20* |
Amendment
1 to The McClatchy Company 1997 Stock Option Plan dated January 23, 2007
included as Exhibit 10.16 to the Company's 2006 Report on Form
10-K.
|
||
**10.21* |
The
Company's Amended and Restated 2001 Director Stock Option Plan, included
as Exhibit 10.13 to the Company's 2005 Report on Form
10-K.
|
||
**10.22* |
Amendment
1 to The McClatchy Company 2001 Director Option Plan dated January 23,
2007 included as Exhibit 10.18 to the Company's 2006 Report on Form
10-K.
|
||
10.23* |
Stock
Purchase Agreement by and between The McClatchy Company and Snowboard
Acquisition Corporation, dated December 26, 2006, included as Exhibit 2.1
to the Company's Current Report on Form 8-K filed December 26,
2006.
|
||
10.24* |
Contract
for Purchase and Sale of Real Property by and between The Miami Herald
Publishing Company and Richmond, Inc. and Knight Ridder, Inc. and
Citisquare Group, LLC, dated March 3, 2005, included as Exhibit 10.23 in
the Company's Quarterly Report on Form 10Q filed for the quarter ending
July 1, 2007.
|
Exhibit
|
Description
|
||
10.25* |
Amendment
to Contract for Purchase and Sale of Real Property by and between The
Miami Herald Publishing Company and Richmond, Inc. and Knight Ridder, Inc.
and Citisquare Group, LLC, dated March 3, 2005, included as Exhibit 10.24
in the Company's Quarterly Report on Form 10Q filed for the quarter ending
July 1, 2007.
|
||
**10.26* |
Form
of Chief Executive Stock Appreciation Rights Agreement related to the
Company's 2004 Stock Incentive Plan included as Exhibit 10.25 in the
Company’s 2007 Report on Form 10-K.
|
||
21* |
Subsidiaries
of the Company.
|
||
31.1 |
Certification
of the Chief Executive Officer of The McClatchy Company pursuant to Rule
13a-14(a) under the Exchange Act.
|
||
31.2 |
Certification
of the Chief Financial Officer of The McClatchy Company pursuant to Rule
13a-14(a) under the Exchange Act.
|
||
32.1 |
Certification
of the Chief Executive Officer of The McClatchy Company pursuant to 18
U.S.C. Section 1350.
|
||
32.2 |
Certification
of the Chief Financial Officer of The McClatchy Company pursuant to 18
U.S.C. Section 1350.
|
||
* |
Incorporated
by reference
|
||
** |
Compensation
plans or arrangements for the Company's executive officers and
directors
|