Sizzling Stock – McClatchy (NYSE:MNI) moves down on net loss in first quarter

McClatchy (NYSE:MNI) notched a move of -0.38% to $9.25 in recent session. The total recent volume is 7326. The stock is trading at $9.29. The stock has recorded a 200-day Moving Average of 7.35% and the 50-Day Moving Average is 1.52%.

McClatchy (NYSE:MNI) reported a milestone in its digital transformation as total digital advertising revenues exceeded print newspaper advertising revenues for the first time in the first quarter of 2018.

The company reported a net loss in the first quarter of 2018 of $38.9 million, or $5.04 per share, narrowed from a net loss of $95.6 million, or $12.60 per share in the first quarter of 2017. Additionally, the company reported an adjusted net loss, which excludes severance, unique tax items, and certain other items, in the first quarter of 2018 of $20.3 million, compared to adjusted net loss of $14.5 million in the first quarter of 2017.

“The quarter just ended reflects a significant crossover point in the trajectory of our digital transformation,” said Craig Forman, president and CEO of McClatchy. “Despite strong industry headwinds, we are making progress in our strategy to drive digital growth.” The company reported a 33 percent increase in digital subscriptions and growth of 13 percent in average monthly unique visitors to its news sites in the first quarter compared to the same quarter last year.

Another digital milestone was a collaboration with Google for a new subscription platform, Subscribe with Google. “As an early development partner and the sole local news publisher who collaborated with Google in the early design stages, we’re excited to see the impact of this experiment on the growth of our digital subscriptions starting in the current quarter,” said Forman. “This initiative by Google reflects a growing sentiment that is gaining wider recognition — local journalism plays a vital role in the lives of individuals, in our communities and strengthens our democracy.”

Separately, McClatchy announced that it has entered into an agreement that provides for approximately $418.5 million of second lien and Tranche B loans with one of its existing bond investors. Expected proceeds of approximately $250.0 million from the second lien loan will be used to repay a portion of the company’s unsecured debentures due in 2027 and 2029 held by the investor and to reduce the company’s 9.0% Senior Secured Notes due in 2022 by approximately $50 million. The agreement also provides for $168.5 million of a Tranche B loan from the investor, expected proceeds from which will be used to repay a portion of unsecured debentures due in 2029 held by the investor. The transaction with the investor is contingent upon the satisfaction of certain conditions, including the refinancing of the remainder of the company’s 9.0% Senior Secured Notes due in 2022. The refinancing of the 9.0% Senior Secured Notes due 2022 will be subject to market and other conditions, and McClatchy cannot guarantee that it will be able to refinance the notes on terms acceptable to the company or at all.

The second lien loan would bear interest at a rate of 7.372% per annum, would mature in mid 2030 and would be subordinated to new first lien debt expected to be issued in connection with the refinancing of the company’s 9.0% Senior Secured Notes due in 2022. The new Tranche B loan would bear an interest rate of 6.875%, would be subordinated to both the second lien loan and first lien debt expected to be issued in the aforementioned refinancing and is expected to mature in mid 2031.

Elaine Lintecum, CFO of McClatchy said, “In the first quarter we reduced first lien debt by $95 million, to $345 million. Our first lien debt is now less than half of our total debt of $710 million, and our first-lien leverage ratio is now 2.13 times adjusted EBITDA and our total leverage ratio is 4.42 times adjusted EBITDA (as defined in our credit agreement). We believe the agreement to issue the new loans, which is subject to a refinancing of our 2022 notes, is a win-win for bond investors and equity investors by providing an infusion of new cash to reduce our first-lien debt.”

The McClatchy Company is with Insider ownership of 0.90% and institutional ownership counts to 80.70%. Shares float is 4.75M and outstanding shares are at 7.67M. The float short is currently 19.10% and short ratio is 65.95. The stock made income -391.50M on sales of 903.60M. ROA sticks to -20.60% and ROI is -51.10%. Shares have moved -22.16% from its 1 Year high price and changed 60.95% from its 1 Year low price. The shares registered RSI (14) at 51.14 and ATR factor was seen at 0.17.

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