Morris Publishing Announces 2007 First-Quarter Results

May 10, 2007, 01:00 ET from Morris Communications Company, LLC

    AUGUSTA, Ga., May 10 /PRNewswire/ -- Morris Publishing Group, LLC today
 reported first-quarter operating income of $10.7 million, down $7.1
 million, or 39.9%, from $17.8 million for the same period in 2006. Net
 income for the quarter was $0.8 million, down $4.5 million from $5.3
 million in the prior year.
     Total operating revenue for the first quarter was $107.7 million, down
 $6.2 million, or 5.5%, from $113.9 million in the same quarter 2006, with
 total advertising revenue of $86.8 million, down 6.1%, and circulation
 revenue of $16.8 million, down 4.1%. National advertising revenue was up
 1.4%; however, retail and classified advertising revenue were down 3.4% and
 10.1%, respectively.
     For the first quarter, total operating expense was $97.0 million, up
 $0.9 million, or 0.9%. Total labor and employee benefit costs were up $1.0
 million, or 2.2%, newsprint ink and supplements costs were down $1.8
 million, or 12.3%, and other operating costs, excluding depreciation and
 amortization, were up $1.7 million, or 5.3%. Depreciation and amortization
 expense was up slightly from last year.
     Commenting on the first-quarter results, William S. Morris IV, Morris
 Publishing Group's chief executive officer and president, said, "Our
 industry is enduring one of the toughest advertising environments it has
 experienced in many years. For Morris, in particular, our results were
 negatively impacted by the $4.4 million, or 15.0%, decline in print
 advertising revenue in Jacksonville, our largest newspaper market.
     "We have implemented an aggressive strategy to further align our
 operating expenses with the existing revenue environment and are actively
 pursuing innovative new products to meet the rapidly changing needs of our
 consumers and advertisers.
     "We have begun the rollout of Yahoo! HotJobs at several our daily
 newspapers and through our participation in the newspaper consortium we are
 also working on the next phase further expanding our partnership with
 Yahoo! to create many other new initiatives."
     Morris Publishing Group, LLC is a wholly owned subsidiary of Morris
 Communications Company, LLC, a privately held media company based in
 Augusta, Ga. Morris Publishing owns and operates 27 daily newspapers as
 well as nondaily newspapers, city magazines, and other free community
 publications in the Southeast, Midwest, Southwest and Alaska. For more
 information, visit our Web site,
     A conference call will be held Thursday, May 10, 2007, at 10:00 a.m.
 Eastern Time. In order to participate, please call 1-888-928-9177 ten (10)
 minutes prior to the scheduled start. The pass code and leader's name
 listed below will be required to join the conference call:
                    LEADER:              MR. STEVE STONE
                 PASS CODE:              MORRIS PUBLI
     To access the Audio Replay of this call, all parties can:
        1. Go to the URL:
        2. Choose Audio Streaming under Join Events
        3. Enter the conference number and pass code.
                         PASS CODE:      MORRIS PUBLI
                 CONFERENCE NUMBER:      3739683
     Replays of the conference call are available for 30 days after the live
 event at the URL link.
     First-quarter results follow:
                           Morris Publishing Group, LLC
     Unaudited condensed consolidated statements of income
                                              Three months ended March 31,
     (Dollars in thousands)                     2007               2006
       Advertising                          $      86,770      $      92,373
       Circulation                                 16,825             17,544
       Other                                        4,097              4,009
        Total net operating revenue               107,692            113,926
       Labor and employee benefits                 45,002             44,032
       Newsprint, ink and supplements              12,955             14,764
       Other operating costs (excluding
        depreciation and amortization)             33,696              32,008
       Depreciation and amortization expense        5,322               5,281
         Total operating expenses                  96,975              96,085
           Operating income                        10,717              17,841
       Interest expense, including
       amortization of debt issuance costs          9,319               9,000
       Interest income                                 (3)                (67)
       Other, net                                     (44)                (11)
         Total other expense, net                   9,272               8,922
     INCOME BEFORE INCOME TAXES                     1,445               8,919
     PROVISION FOR INCOME TAXES                       657               3,582
     NET INCOME                             $         788      $        5,337

SOURCE Morris Communications Company, LLC