The McClatchy Co. reported Thursday a second-quarter net loss of $17.5 million and declining revenues, even as digital-only subscribers grew.
The losses shrank for the Sacramento-based media company compared with the previous quarter for the third time, although revenues for the first half of the year were down by 11 percent compared with the same period a year ago.
The company, which publishes The Sacramento Bee and 29 other daily newspapers, including the Miami Herald, The Charlotte Observer, The Kansas City Star and the Fort Worth Star-Telegram, said digital-only subscriptions have grown by nearly 52 percent over the last year and now account for close to half of all paid subscribers.
“We continue to be strategic and resolved in taking costs out of the business while making key investments to boost revenue generation,” Craig Forman, McClatchy’s president and chief executive, said in a prepared statement.
“While periods of reorganization and change can be temporarily disruptive, we believe the new structure, powered by a highly-motivated and focused sales team, will drive greater digital advertising revenues in the future.”
Operating expenses were down by nearly 11 percent for the first half of 2019. During a conference call with investors Thursday, Elaine Lintecum, McClatchy chief financial officer, said one of the company’s successes has been cutting Saturday print editions in a handful of smaller markets.
“We have seen it be successful so, as we go forward, we may roll out to other smaller and maybe even some medium-sized markets,” Lintecum said. “We don’t have any intentions at this point of rolling them out to our major metro markets.”
McClatchy recently sought a waiver from the Internal Revenue Service to lower its estimated $120 million contribution to an employee pension plan for 2020 that would otherwise have a “material adverse effect” on the company’s finances.
There is no guarantee, however, the IRS will grant the waiver. Regardless, the company expects to contribute $3 million to the defined benefit plan later this year.
Debt continued to loom large on the balance sheet with $708 million outstanding and the company had $19.6 million in cash at the end of the quarter.
McClatchy stock closed trading Thursday at $2.21 a share.