The McClatchy Company Reports Operating Results (10-K)

The McClatchy Company (MNI) filed Annual Report for the period ended 2010-12-26.

Mcclatchy Company has a market cap of $345 million; its shares were traded at around $4.06 with a P/E ratio of 6 and P/S ratio of 0.2. Hedge Fund Gurus that owns MNI: John Paulson of Paulson & Co., Steven Cohen of SAC Capital Advisors. Mutual Fund and Other Gurus that owns MNI: John Rogers of Ariel Capital Management, Chuck Royce of Royce& Associates, John Keeley of Keeley Fund Management, John Hussman of Hussman Economtrics Advisors, Inc..

Highlight of Business Operations:

McClatchy also owns a portfolio of premium digital assets, including 14.4% of CareerBuilder LLC, which operates the nations largest online job site CareerBuilder.com, 25.6% of Classified Ventures LLC, a company that offers two of the nations premier classified websites: the auto website Cars.com and the rental site Apartments.com and 33.3% of HomeFinder LLC, which operates the real estate website HomeFinder.com.

Advertising revenues make up the vast majority of the Companys revenues, making the quality of its sales function of utmost importance. Advertising revenues were approximately 76% of consolidated net revenues in fiscal 2010 and 78% in fiscal 2009. Circulation revenues approximated 20% of consolidated net revenues in fiscal 2010 and 19% in fiscal 2009.

The Companys advertising revenues from digital advertising have been growing even as the Company has faced structural and cyclical change. McClatchy continues to be an industry leader in digital advertising revenue from newspaper websites as a percent of total advertising with 18.1% of advertising coming from digital products in fiscal 2010, compared to 16.2% in fiscal 2009. For fiscal 2010, 45.2% of the Companys digital advertising revenues came from advertisements placed only online; that is, they were not tied to a joint print buy. Management believes this independent revenue stream bodes well for the future of the Companys digital business and is evidence of its importance as a resource for advertisers.

While daily newspaper paid circulation was down 6.9% and Sunday circulation was down 6.3% in fiscal 2010 compared with fiscal 2009, a portion of the decline in print circulation reflected initiatives the Company began in 2009, including aggressive price increases at most newspapers and reductions in distribution by the Company to eliminate unprofitable circulation not valued by advertisers. Circulation volumes improved steadily during the course of 2010 as the Companys newspapers cycled over these 2009 initiatives, from down 10.0% daily and 8.2% Sunday in the first fiscal quarter of 2010 to down 4.5% daily and 4.2% Sunday in the fourth quarter of fiscal 2010, in each case as compared to the corresponding periods in the prior year. In addition, the Companys digital audience continues to show growth, with average local daily unique visitors at McClatchy newspapers websites in 2010 up 17.3% from 2009. In addition, all McClatchy websites now offer mobile-friendly versions for smartphones, and many are available on e-readers, tablets and other mobile devices.

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