NEWS - State-Regional News

By Lou Phelps
SBJ Staff

Morris Publishing Group, publishers of the Savannah Morning News, Savannah Magazine, Effingham Now, Bryan County Now and Skirt released its first quarter 2011 financial results indicating a continued decline in revenues.

Advertising revenues at the company’s 13 daily newspapers included a 17 percent decline at its Savannah operation, an 8.6 percent decline at Augusta, an 11.9 percent decline at Jacksonville and an 18.2 percent decline at St. Augustine. 

Since the company emerged from bankruptcy March 1, 2010, the daily newspaper and niche publisher has announced a number of staff reductions and other strategies in Savannah to both cut expenses and reposition the company to address the changing daily newspaper business. 

For the three months ended March 31, 2011, the company saw total company revenue decline 7.6 percent, a reduction of $4.5 million year over year. Specifically, advertising revenue – including both print and online - declined by 10 percent, from $41.5 million to $37.4 million; circulation revenue declined 2.9 percent; but the company had a 2.8 percent increase in “other” revenues.  The printing and distribution of periodical publications and commercial printing operations are included in the company’s “other” revenues.

After interest expenses on its borrowing and other non-operating expenses, Morris posted a loss of $1.7 million for the first quarter 2011 before income tax provisions.

The company cut operating expenses by 6 percent, a reduction of $3.4 million. It owes its parent company Morris Communications $2.167 million and has a balance of $ $73,552 million in debt as of March 31, 2011 with a 10 percent annual interest rate. 

“Our existing Florida newspapers and publications, which account for 31.6 percent of our total advertising revenues, contributed 40 percent of our entire net decline in advertising revenue,” the company states. “Advertising revenue from Jacksonville was down $1.3 million or 11.9 percent, and St. Augustine was down $0.3 million or 18.2 percent.  Augusta was down $0.4 million or 8.6 percent, Savannah was down $0.7 million or 17.1 percent, Lubbock was down $0.3 million or 7.7 percent, Topeka was down $0.2 million or 7.3 percent, Athens was down $0.2 million, or 13.5 percent, and Amarillo was down $0.3 million or 8.5 percent. Our five other daily newspapers were, together, down $0.2 million or 6 percent.”

“Our non-daily publications were down $0.2 million or 3.9 percent, primarily due to significant declines from Skirt! magazines and the Jacksonville Sun publications,” the report also explains.

On positive notes, Morris Publishing did not borrow against its $10 million working capital facility during the first quarter of 2011 and was in compliance with all financial covenants under its current borrowings.  Also, its working capital bank has extended the facility until May 15, 2012.

The technology and shared services fees paid to Morris Communications totaled $3,034 and $1,813 for the three-month periods ended March 31, 2011 and 2010, respectively, with the increase due the change in the cost allocation method used.

For the first quarter of 2010, the company is now reporting a loss of $4.6 million on operations, after the correction to its financial reports for the quarter when it exited bankruptcy, after interest expense including accretion of original issue discount and amortization of debt issuance costs. Previously, the company had reported a loss of $3.6 million.

The financial results for the first quarter of 2010 had to be restated after the company’s audit committee determined that the previously released financial information was not accurate.

< Prev		Next >