McClatchy Files Form 10-K and Reports Final Results for 2008

Reports additional loss from discontinued operations

SACRAMENTO, Calif., March 2 /PRNewswire-FirstCall/ -- The McClatchy Company (NYSE: MNI) today reported that it filed its Annual Report on Form 10-K for the year ended December 28, 2008 (the Report) with the Securities and Exchange Commission (SEC), which includes its final fourth quarter and full year 2008 results. The company's fourth quarter 2008 after-tax loss from continuing operations was unchanged from the previously reported $20.4 million, or $0.25 per share. The company's total net loss, including the results of discontinued operations, was $27.0 million, or $0.33 per share.

The income from continuing operations for full year 2008 was unchanged from the $2.8 million or $0.03 per share previously reported. The company's total net loss, including the results of discontinued operations, was $4.0 million, or $0.08 per share.

In early 2009 various newspapers formerly owned by the Company filed for bankruptcy under Chapter 11 of the Bankruptcy Code. Certain amounts owed to the Company by these former newspapers may no longer be collectible and as a result, the Company has recorded reserves related to such amounts, net of taxes, of $5.3 million in discontinued operations.

The unaudited consolidated statement of income for the 2008 fourth quarter and full year is attached to this release.

About McClatchy

The McClatchy Company is the third largest newspaper company in the United States, with 30 daily newspapers, approximately 50 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local websites in each of its markets which extend its audience reach. The websites offer users information, comprehensive news, advertising, e-commerce and other services. Together with its newspapers and direct marketing products, these interactive operations make McClatchy the leading local media company in each of its premium high growth markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, The Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer, and The News & Observer (Raleigh).

McClatchy also has a portfolio of premium digital assets. McClatchy owns 14.4% of CareerBuilder, the nation's largest online job site, and owns 25.6% of Classified Ventures, a newspaper industry partnership that offers two of the nation's premier classified websites: the auto website, cars.com, and the rental site, apartments.com. McClatchy is listed on the New York Stock Exchange under the symbol MNI.

Additional Information:

Statements in this press release regarding future financial and operating results, including revenues, anticipated savings from cost reduction efforts, future dividend payments, cash flows, debt levels, as well as future opportunities for the company and any other statements about management's future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words "believes," "plans," "anticipates," "expects," "estimates" and similar expressions) should also be considered to be forward-looking statements. There are a number of important risks and uncertainties that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including: the duration and depth of the economic recession may reduce its income and cash flow greater than expected; McClatchy may not generate cash from operations, or otherwise, necessary to reduce debt or meet its debt covenants as expected; McClatchy may not consummate contemplated transactions to enable debt reduction on anticipated terms or at all; McClatchy may not achieve its expense reduction targets or may do harm to its operations in attempting to achieve such targets; McClatchy's operations have been, and will likely continue to be, adversely affected by competition, including competition from internet publishing and advertising platforms; McClatchy's expense and income levels could be adversely affected by changes in the cost of newsprint and McClatchy's operations could be negatively affected by any deterioration in its labor relations, bankruptcies or financial strain of its major advertising customers; McClatchy's ability to achieve and maintain compliance with NYSE listing standards or commencement by the NYSE of suspension and delisting procedures if McClatchy fails to implement successfully a plan to correct non-compliance with the NYSE listing standards; payments may be required related to certain guarantees included in agreements with the Pension Benefit Guaranty Corporation; as well as the other risks detailed from time to time in the Company's publicly filed documents, including the Company's Annual Report on Form 10-K for the year ended December 28, 2008, filed with the U.S. Securities and Exchange Commission. McClatchy disclaims any intention and assumes no obligation to update the forward-looking information contained in this release.

                                ***THE McCLATCHY COMPANY***
                       CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
                         (In thousands, except per share amounts)

                        Three Months Ended          Year Ended
                        ------------------          ----------
                      December      December    December    December
                      28, 2008      30, 2007    28, 2008    30, 2007
                       -------      -------     -------      -------
    REVENUES - NET:
       Advertising     $388,298     $489,405  $1,568,766   $1,911,722
       Circulation       66,974       66,076     265,584      275,658
       Other             15,598       17,953      66,106       72,983
                         ------       ------      ------       ------
                        470,870      573,434   1,900,456    2,260,363
    OPERATING EXPENSES:
       Compensation     175,000      222,372     822,771      911,964
       Newsprint and
        supplements      66,137       66,431     252,599      277,634
       Depreciation and
        amortization     34,438       36,119     142,948      148,559
       Other
        operating
        expenses        115,216      124,932     460,973      496,112
       Goodwill and
        newspaper
        masthead
        impairment       59,563    1,557,456      59,563    2,992,046
                         ------    ---------      ------    ---------
                        450,354    2,007,310   1,738,854    4,826,315

    OPERATING
     INCOME
     (LOSS)              20,516   (1,433,876)    161,602   (2,565,952)

    NON-OPERATING
     (EXPENSES) INCOME:
       Interest
        expense         (41,245)     (46,392)   (157,385)    (197,997)
       Interest income       97          114       1,429          243
       Equity gain (losses)
        in unconsolidated
        companies, net      319       (8,300)    (14,021)     (36,899)
       Gain on sale of
        SP Newsprint       (129)           -      34,417            -
       Gain on
        extinguishment
        of debt           1,346            -      21,026            -
       Write-down of
        investments
        and land held
        for sale         (1,964)           -     (26,462)     (84,568)
       Other - net          359          539       1,479        1,982
                         ------       ------      ------       ------
                        (41,217)     (54,039)   (139,517)    (317,239)
    INCOME (LOSS) FROM
     CONTINUING OPERATIONS
     BEFORE INCOME TAX
     PROVISION
    (BENEFIT)           (20,701)  (1,487,915)     22,085   (2,883,191)

    INCOME TAX
     PROVISION
     (BENEFIT)             (283)     (57,449)     19,278     (156,582)
                          ------     -------      ------     --------

    INCOME (LOSS)
     FROM
     CONTINUING
     OPERATIONS         (20,418)  (1,430,466)      2,807   (2,726,609)

    LOSS FROM
     DISCONTINUED
     OPERATIONS -
       NET OF
        INCOME
        TAXES            (6,583)      (3,080)     (6,758)      (9,404)
                          ------       ------      ------       ------

    NET LOSS           $(27,001) $(1,433,546)    $(3,951) $(2,736,013)
                        ========  ===========     =======  ===========

    NET
     INCOME
     (LOSS)
     PER
     COMMON
     SHARE:
       Basic:
         Income (loss)
         from continuing
         operations      $(0.25)     $(17.42)      $0.03      $(33.26)
         Loss from
          discontinued
          operations     $(0.08)      $(0.04)     $(0.08)      $(0.11)
         Net loss
          per
          share          $(0.33)     $(17.46)     $(0.05)     $(33.37)

       Diluted:
         Income (loss)
         from continuing
         operations      $(0.25)     $(17.42)      $0.03      $(33.26)
         Loss from
          discontinued
          operations     $(0.08)      $(0.04)     $(0.08)      $(0.11)
         Net loss
          per
          share          $(0.33)     $(17.46)     $(0.05)     $(33.37)

    WEIGHTED
     AVERAGE
     NUMBER OF
     COMMON
     SHARES:
       Basic             82,511       82,097      82,333       82,000
       Diluted           82,511       82,097      82,409       82,000

SOURCE McClatchy Company