Business News

Morris Publishing Announces 2007 Fourth-Quarter and Year-End Results

Friday 28. March 2008 - Morris Publishing Group, LLC today reported fourth-quarter operating income from continuing operations of $18.6 million, down $3.1 million, or 14.4%, from $21.7 million for the same period in 2006. Net income from continuing operations for the quarter was $5.9 million, down $1.3 million, or 17.5%, from $7.2 million in the prior year.

On November 30, 2007, Morris Publishing sold fourteen daily newspapers, three nondaily newspapers, a commercial printing operation and other related publications to GateHouse Media. The total purchase price was $115 million, with the sale resulting in a fourth-quarter after-tax gain of $49.6 million.

From continuing operations, total operating revenue for the fourth quarter was $95.0 million, down $10.2 million, or 9.7%, from 2006. Total advertising revenue was $77.7 million, down $10.2 million, or 11.6%, with retail advertising revenue of $44.8 million, down 8.8%; classified advertising revenue of $27.7 million, down 15.1%; and national advertising revenue of $5.2 million, down 15.4%. Circulation revenue was $14.6 million, down 2.2% from 2006.

For the fourth quarter, total operating cost from continuing operations was $76.5 million, down $7.1 million, or 8.5%, from 2006, with labor and employee benefits cost of $34.1 million, down $2.8 million, or 7.5%; newsprint, ink and supplement cost of $10.2 million, down $3.1 million, or 23.3%; depreciation and amortization expense of $3.6 million, down $1.4 million, or 27.6%; and other operating cost of $28.7 million, up $0.1 million, or 0.4%.

Commenting on the results, William S. Morris IV, Morris Publishing Group’s chief executive officer and president, said, “The advertising environment in which we are now operating continues to be very challenging, but the fundamentals of our business remain solid, as we have the largest advertising reach and we remain the preeminent provider of news and information in the communities we serve.

“The fourth-quarter results of The Florida Times-Union strongly reflect the well publicized downturn in the state’s real estate markets. Not only has its classified advertising revenue been adversely affected, but a large portion of its revenue declines were from retailers dependent on the housing industry. In response, we have implemented various initiatives to increase Jacksonville’s revenues and to improve the newspaper’s operational efficiencies through a number of cost control measures. A number of these initiatives, many of which were implemented last year, have already begun to bear fruit.”

For the year, operating income from continuing operations for 2007 was $61.1 million, down $18.3 million, or 23.0%, from $79.4 million in 2006. Net income from continuing operations was $14.6 million, down $11.3 million, or 43.6%, from $25.9 million in 2006.

From continuing operations, total operating revenue for 2007 was $374.6 million, down $29.2 million, or 7.2%, from $403.8 million in 2006. Total advertising revenue was $306.7 million, down $29.6 million, or 8.8%, while circulation revenue was $57.6 million, down $1.2 million, or 2.1%. Retail, national and classified advertising revenues were down 4.1%, 15.0% and 13.1%, respectively.

Total operating cost from continuing operations for 2007 was $313.5 million, down $10.9 million, or 3.4%, from $324.4 million in 2006, with labor and employee benefits cost of $143.3 million, down $0.8 million, or 0.6%; newsprint, ink and supplement cost of $40.3 million, down $11.3 million, or 21.8%; depreciation and amortization expense of $16.2 million, down $2.9 million, or 15.1%; and other operating cost of $113.7 million, up $4.1 million, or 3.7%.

Excluding the gain on the GateHouse sale, income from discontinued operations, net of income taxes, was $4.5 million for the year compared to $4.4 million during 2006.

Net income for 2007 was $68.7 million compared to $30.3 million during 2006.