Morris Publishing Announces 2008 First-Quarter Results

AUGUSTA, Ga., May 13 /PRNewswire/ -- Morris Publishing Group, LLC today reported first-quarter operating income of $7.6 million, down $3.0 million, or 28.3%, from $10.6 million for the same period in 2007.

Total operating revenue for the first quarter was $82.7 million, down $9.1 million, or 9.9%, from 2007. Total advertising revenue was $65.3 million, down $9.8 million, or 13.0%, with retail advertising revenue of $33.9 million, down 8.3%; classified advertising revenue of $26.4 million, down 19.0%; and national advertising revenue of $5.0 million, down 8.7%. Circulation revenue was $14.7 million, up $0.5 million, or 3.6%, from 2007.

For the first quarter, total operating cost was $75.1 million, down $6.1 million, or 7.5%, from 2007, with labor and employee benefits cost of $34.4 million, down $2.3 million, or 6.3%; newsprint, ink and supplement cost of $9.1 million, down $2.0 million, or 17.8%; depreciation and amortization expense of $3.5 million, down $1.3 million, or 25.6%; and other operating cost of $28.0 million, down $0.5 million, or 1.9%.

Commenting on the results, William S. Morris IV, Morris Publishing Group's chief executive officer and president, said, "The real estate downturn in Florida and in many of our other markets, continues to have the greatest impact on our revenue results. We continue to closely monitor the market for signs of a cyclical recovery, but currently see a lot of downward pressure on a large segment of our advertising base.

"Our cost control efforts continue to help offset the revenue declines, with newsprint and employee costs being the major contributors."

Interest and loan amortization expense totaled $8.0 million, down $1.3 million from $9.3 million last year primarily due the reduction in outstanding debt. At the end of the first quarter, the Company had $425 million in outstanding debt compared to $530 million at the end the same period last year.

During March, the Company repurchased $19.1 million of its $300 million 7% senior subordinated notes for a total purchase price of $10.7 million. Including the $8.4 million gain on these repurchases of debt, income from continuing operations before income taxes for the quarter was $8.2 million, up $6.9 million from $1.3 million in the prior year.

Net income was $5.6 million, up $4.8 million from last year.

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 currently owns and operates 13 daily newspapers as well as nondaily newspapers, city magazines and free community publications in the Southeast, Midwest, Southwest and Alaska. For more information, visit our Web site, morris.com.

A conference call will be held Tuesday, May 13, 2008, 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:  https://e-meetings.verizonbusiness.com/
  2. Choose Audio Streaming under Join Events
  3. Enter the conference number and pass code.

      PASS CODE:           MORRIS PUBLI
      CONFERENCE NUMBER:   4234934

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
               Condensed Consolidated Statements of Income
                               (unaudited)

                                                     Three Months Ended
  (Dollars in thousands)                                  March 31,
                                                    2008            2007
  NET OPERATING REVENUES:
    Advertising                                    $65,317        $75,043
    Circulation                                     14,713         14,208
    Other                                            2,678          2,523
      Total net operating revenues                  82,708         91,774

  OPERATING EXPENSES:
    Labor and employee benefits                     34,411         36,725
    Newsprint, ink and supplements                   9,143         11,123
    Other operating costs (excluding
     depreciation and amortization)                 28,020         28,569
    Depreciation and amortization expense            3,524          4,739
      Total operating expenses                      75,098         81,156
        Operating income                             7,610         10,618

  OTHER (INCOME) EXPENSES:
    Interest expense, including
     amortization of debt issuance costs             8,022          9,319
    Gain on repurchases of debt                     (8,411)             -
    Interest income                                   (186)            (3)
    Other, net                                         (31)           (41)
      Total other (income) expense, net               (606)         9,275
  INCOME FROM CONTINUING OPERATIONS
   BEFORE INCOME TAXES                               8,216          1,343
  PROVISION FOR INCOME TAXES                         2,571            611
  INCOME FROM CONTINUING OPERATIONS                  5,645            732

  INCOME FROM DISCONTINUED OPERATIONS,
   NET OF PROVISIONS FOR INCOME TAXES                    -             56

  NET INCOME                                        $5,645           $788