McClatchy To Discuss Strategies And 2015 Outlook At UBS Conference

The McClatchy Company

said today that it will provide an update of business trends and strategies for 2014 and an outlook for 2015 at the 42nd Annual UBS Global Media and Communications Conference at the Westin New York Times Square in New York City on Dec. 9, 2014, at 11:30 a.m. Eastern, 8:30 a.m. Pacific time. The company's presentation will be webcast live on its website, www.mcclatchy.com, and at http://bit.ly/1yz8T3p. The webcast will be archived at McClatchy's website for future reference. Pat Talamantes, McClatchy's president and CEO, said, "The digital transformation of our business is moving at a rapid pace. We are broadening revenue sources, building new content distribution platforms and taking strategic expense actions while making investments in our business that will help fuel future growth. We enter 2015 with a great deal of momentum from our recent asset sales and continued investment in our digital infrastructure and look forward to discussing our strategies and outlook for the next year at the conference tomorrow." Management noted that McClatchy has been opportunistic in monetizing assets in 2014, including the sale of its interest in Cars.com. The company announced that it reduced debt by $523 million in the month of November, including $344 million of first lien bonds due in 2022, $150 million of unsecured bonds due in 2017, and the retirement of $29 million of unsecured bonds due Nov. 1, 2014. As a result, first lien debt has been reduced significantly and outstanding debt now stands at approximately $1.033 billion. McClatchy expects to have in excess of $200 million in cash on hand at the end of 2014 that will largely be used to pay taxes in early 2015 related to its sale of its interest in Cars.com. As management looks to 2015, the company expects to continue its digital transformation and revenue diversification by focusing on the 64% of revenue that includes digital and direct marketing advertising, audience and other non-traditional revenues. Management expects newspaper print advertising to be a smaller share of overall advertising, due in part to expected double-digit growth in digital-only advertising revenues and solid performance in both direct marketing and audience revenues. As part of its digital transformation, McClatchy will also focus on reducing legacy costs tied to its print newspaper products – primarily production and distribution expense. Management expects that even with investments in new digital products, enterprise-wide computer systems, and approximately $9 million in higher Cars.com expenses as a result of the company's new Cars.com affiliate agreement, the reductions in legacy costs will help to stabilize cash flow in 2015. Total cash expenses excluding unusual items are expected to decline in the low single-digit range from 2014, and to be reduced further if needed based upon the revenue environment. Talamantes said he expects 2015 to be another important year of investment in McClatchy's digital future along with continuing improvement in the company's financial condition and leverage ratio. Talamantes noted that the company's recent debt reduction should drive interest costs lower by approximately $40 million in 2015 compared with 2014. The company expects no required pension plan contributions in 2015 and anticipates about $20 million in capital expenditures next year.