McClatchy Expects Advertising Revenue to Improve

The McClatchy Company MNI management today provided an update of business trends for 2010 and an outlook for 2011. Management noted that it saw a continuation of improving advertising revenue trends in October and November 2010. Advertising revenues were down 5.8% in October and November 2010 combined, compared to declines of 6.4% in the third quarter, 8.2% in the second quarter and 11.2% in the first quarter of 2010. Year-to-date advertising revenues through November 2010 were down 8.0%. Total revenues for October and November 2010 combined were down 5.1% and were down 6.2% year-to-date through November 2010. Gary Pruitt, McClatchy's chairman and chief executive officer, said, "We have seen improvement in revenues in every quarter of 2010 and that has continued into the fourth quarter. For all of 2010 we expect cash expenses to be down in the 9 to 10 percent range, excluding severance costs associated with our restructuring plans, and operating cash flow to be up a few percentage points from last year. Looking forward to 2011, we expect advertising revenues to continue to improve, and we will remain vigilant in controlling expenses. "We also expect to receive a dividend this month in the range of $20 million to $25 million from Classified Ventures, a growing internet company in which we own a 25.6% interest. Classified Ventures owns two of the nation's premier classified websites, the auto website Cars.com and the rental site Apartments.com, and has been a significant contributor to our earnings in 2010. We expect to use the dividend to repay debt.