McClatchy Co., publisher of the largest newspapers and local news websites in the Carolinas, reported Friday a first-quarter loss of $11 million, or 13 cents per share, compared with a loss of $16 million, or 18 cents per share, in the first quarter of 2014, and said it was tightening expenses in response.
McClatchy CEO Pat Talamantes said the company hoped to reduce expenses by $25 million or more by reducing newsprint and distribution costs at its 28 newspapers, which include The Charlotte Observer, The Herald of Rock Hill, The News & Observer of Raleigh and The State of Columbia.
Debt reduction in November reduced interest costs by $11 million in the first quarter, Talamantes said. Overall company debt is about $1 billion after steadily decreasing from $3.2 billion through the recession.
With ad revenues down 26 percent in national and 13 percent in retail categories, Talamantes said that the Sacramento, Calif.-based company’s publishers were also undertaking internal cost reductions to meet their budgets. Workforce reductions have already begun in some of the company’s key markets including Charlotte, Raleigh, Miami and Kansas City.
Talamantes said the company expects a challenging second quarter as well before cash flow stabilizes in the second half of 2015.
Talamantes said the company is spending more to sell digital advertising and is expanding its use of video on its websites to attract more revenues in that growing sector.
Direct marketing revenues fell 10 percent in the quarter, in part by a pullback of key retailers from inserts delivered to nonsubscribers, Talamantes said. Subscription revenues rose to $93 million, up 5 percent from the first quarter of 2014, and readership on mobile devices continues to grow, he said, now representing half of all monthly unique Web visitors. Digital advertising revenues were up 4 percent.