GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

The McClatchy Company Reports Operating Results (10-Q)

May 05, 2010 | About:
10qk

10qk

18 followers
The McClatchy Company (MNI) filed Quarterly Report for the period ended 2010-05-05.

The Mcclatchy Company has a market cap of $437.3 million; its shares were traded at around $5.17 with a P/E ratio of 4.8 and P/S ratio of 0.3. MNI is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Chuck Royce of Royce& Associates, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

The Company was a party to a credit agreement, dated as of June 27, 2006 (as amended through May 20, 2009, the “original credit agreement”), which provided for a five-year revolving credit facility and term loans. On January 26, 2010, the Company entered into an amendment and restatement of the original credit agreement that became effective on February 11, 2010, (the “Amended and Restated Credit Agreement”) immediately prior to the closing of an offering of $875.0 million of senior secured notes. The Amended and Restated Credit Agreement is a senior secured credit facility which provides for a $131.0 million term loan and a $238.2 million revolving credit facility, including a $100.0 million letter of credit sub-facility, and extended the term of certain of the credit commitments to July 1, 2013. In connection with the Amended and Restated Credit Agreement, certain of the lenders did not extend the maturity of their commitments from the original maturity date of June 27, 2011. Non-extended term loans equaling $37.6 million will mature on June 27, 2011 as will revolving loan commitments equal to $42.2 million. The remaining term loans of $93.4 million and revolving loan commitments of $196.0 under the Amended and Restated Credit Agreement will mature on July 1, 2013. No revolving loans were outstanding as of March 28, 2010.

In connection with the Amended and Restated Credit Agreement, the Company issued new 11.5% Senior Secured Notes due 2017 (the “2017 Notes”), totaling $875.0 million. In addition, the Company completed tender offers for its 7.125% notes due in 2011 (the “2011 Notes”) and 15.75% senior notes due in 2014 (the “2014 Notes”), paying $187.3 million in cash for $148.0 million of 2011 Notes and $23.9 million of 2014 Notes.

The Company reported a loss from continuing operations in the first quarter of 2010 of $2.0 million, or $0.02 per basic share. The Company reported income from discontinued operations of $4.2 million, or $0.05 per share, and net income including discontinued operations of $2.2 million, or $0.03 per share, in the first quarter of 2010. The Company s loss from continuing operations in the first quarter of 2009 was $37.7 million, or $0.45 per basic share and its net loss, including discontinued operations, in 2009 was $37.5 million, or $0.45 per basic share.

The Company s cash and cash equivalents were $7.2 million as of March 28, 2010 compared to $36.6 million of cash at March 29, 2009 and $6.2 million at the end of fiscal 2009. The higher cash balance in March 2009 reflected the Company s accumulation of cash which was used to retire $31.0 million of bonds in April, 2009. The Company generated $94.6 million of cash from operating activities from continuing operations in the first fiscal quarter of 2010 compared to $28.0 million in 2009. The increase in cash from operating activities in 2010 primarily relates to lower expenses and payments as a result of cost restructuring over the past two years.

The Company used $100.0 million for financing activities in 2010. The Company received net proceeds of $864.7 million from the issuance of $875.0 million in senior secured notes (See discussion of debt refinancing under “Debt and Related Matters” below). The Company used proceeds from the refinancing and cash from operations to repay $330.7 million in revolving bank debt and $415.8 million in term bank debt. In addition, the Company paid $187.3 million to retire $171.9 million of notes that would have matured in 2011 and 2014. The Company paid $31.1 million in costs associated with the refinancing transactions, most of which were recorded as deferred financing charges and the rest recorded as a loss on debt extinguishment.

On January 26, 2010, the Company entered into an amendment and restatement to the original credit agreement that became effective on February 11, 2010, (the “Amended and Restated Credit Agreement”) immediately prior to the closing of an offering of $875.0 million of senior secured notes. The Amended and Restated Credit Agreement is a senior secured credit facility which provides for a $131.0 million term loan and a $238.2 million revolving credit facility, including a $100.0 million letter of credit sub-facility, and extended the term of certain of the credit commitments to July 1, 2013. In connection with the Amended and Restated Credit Agreement, certain of the lenders did not extend the maturity of their commitments from the original maturity date of June 27, 2011. Non-extended term loans of $37.6 million will mature on June 27, 2011 as will revolving loan commitments of $42.2 million. The remaining term loans of $93.4 million and revolving loan commitments of $196.0 million under the Amended and Restated Credit Agreement will mature on July 1, 2013.

Read the The complete Report

About the author:

10qk
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 3.0/5 (2 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide