UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: February 19, 2016
The McClatchy Company
(Exact name of registrant as specified in its charter)
| DELAWARE | 1-9824 | 52-2080478 |
| (state or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
2100 Q
Street
Sacramento CA 95816
(Address of principal executive offices, zip code)
Registrant's telephone number, including area code (916) 321-1846
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 3.01 | Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing. |
On February 16, 2016, The McClatchy Company (the “Company”) was notified by the New York Stock Exchange (“NYSE”) that the average closing price of the Company’s common stock had fallen below $1.00 per share over a period of 30 consecutive trading days, which is the minimum average share price for continued listing on the NYSE under Rule 802.01C of the NYSE Listed Company Manual.
As required by the NYSE, the Company will timely notify the NYSE that it intends to cure the deficiency and to return to compliance with the NYSE continued listing requirement. Under NYSE rules, the Company has six months following receipt of the notification to regain compliance with the minimum share price requirement. The Company can regain compliance at any time during the six-month cure period if the Company’s common stock has a closing share price of at least $1.00 on the last trading day of any calendar month during the period and also has an average closing share price of at least $1.00 over the 30-trading day period ending on the last trading day of that month or on the last day of the cure period. In addition, in the event that the Company determines that, if necessary, it will cure the price condition by taking action that will require approval of its shareholders, it will so notify the NYSE, in which case the Company must obtain the shareholder approval by no later than its next annual meeting, and must implement the action promptly thereafter.
The notice has no immediate impact on the listing of the Company’s common stock, which will continue to trade on the NYSE under the symbol “MNI”. The Company intends to actively monitor the closing share price for its common stock and will consider available options, including equity-based actions to resolve the deficiency and regain compliance with Rule 802.01C of the NYSE Listed Company Manual.
As required under the NYSE rules, the Company issued a press release on February 19, 2016, announcing that it had received the notice of noncompliance. A copy of this press release is attached as Exhibit 99.1 to this Form 8-K.
| Item 8.01 | Other Events. |
The Company reported that on February 19, 2016, it had repurchased $20.8 million in aggregate principal amount of its 5.75% Notes due in 2017 and $10.0 million in aggregate principal amount of its 9.0% Secured Notes due in 2022 for a total amount of $28.8 million in cash, plus accrued and unpaid interest in a privately negotiated transaction.
The press release issued on February 19, 2016 is furnished as Exhibit No. 99.1 to this report on Form 8-K.
| Item 9.01 | Financial Statements and Exhibits |
| (d) | Exhibits |
| Exhibit No. | Description | |
| 99.1 | Press Release, dated February 19, 2016 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| February 19, 2016 | The McClatchy Company |
| /s/ R. Elaine Lintecum | |
| By: R. Elaine Lintecum Title: Vice President and Chief Financial Officer |
| EXHIBIT INDEX | ||
| Exhibit No. | Description | |
| 99.1 | Press Release, dated February 19, 2016 | |
Exhibit 99.1
McClatchy Reduces Debt By $30.8 Million
SACRAMENTO, Calif., Feb. 19, 2016 /PRNewswire/ -- The McClatchy Company (NYSE: MNI) today announced that it had repurchased $20.8 million in aggregate principal amount of its 5.75% Notes due 2017 and $10.0 million of its 9.0% Secured Notes due 2022 for a total $28.8 million plus accrued and unpaid interest in a privately negotiated transaction. The company's total post-transaction debt balance is $906.5 million.
Elaine Lintecum, McClatchy's chief financial officer, said, "As this transaction demonstrates, we remain committed to reducing debt and interest and creating leveraged equity returns for our shareholders. Our next debt maturity date is in 2017 and is approximately $35 million, and we have no other maturities due until the end of 2022. This manageable maturity runway provides us with the necessary flexibility to accomplish our operational goals and objectives."
The Company also announced today that on February 16, 2016, it received a notice from the New York Stock Exchange ("NYSE") that the Company's common stock is not in compliance with the NYSE's continued listing standard which requires that the average closing price of a listed company's common stock remain above $1.00 per share, calculated over a period of consecutive 30 trading-days. The NYSE notification does not affect the Company's business operations or its Securities and Exchange Commission reporting requirements and does not conflict with or cause an event of default under any of the Company's material debt agreements.
Under the NYSE standards, the Company can regain compliance if, during the six-month period following receipt of the NYSE notice, on the last trading-day of any calendar month, the Company's common stock has a closing price per share and a 30 trading-day average closing share price of at least $1.00.
The Company intends to cure the price deficiency and return to compliance with the NYSE continued listing requirement within the applicable cure period. As required by the NYSE, the Company will notify the NYSE of its intent to cure. During this period, the Company's common stock will continue to be traded on the NYSE, subject to compliance with other continued NYSE listing requirements.
About McClatchy
The McClatchy Company is a 21st century news and information leader, publisher of iconic brands such as the Miami Herald, The Kansas City Star, The Sacramento Bee, The Charlotte Observer, The (Raleigh) News and Observer, and the (Fort Worth) Star-Telegram. McClatchy operates media companies in 28 U.S. markets in 14 states, providing each of its communities with high-quality news and advertising services in a wide array of digital and print formats. McClatchy is headquartered in Sacramento, Calif., and listed on the New York Stock Exchange under the symbol MNI.
Additional Information
Statements in this press release regarding the Company's future stock price, our expectations regarding future compliance with NYSE listing rules, our intent to seek a curative action requiring shareholder approval, if necessary, our intent to remain listed on the NYSE and the Company's intent to regain compliance with NYSE listing, goals and ability to strengthen its financial position and create leveraged equity returns, as well as the Company's debt maturity runway, strategies and any other statements about management's future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words "believes," "plans," "anticipates," "expects," "estimates" and similar expressions) should also be considered to be forward-looking statements. There are a number of important risks and uncertainties that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including: the value of any real property contributed to McClatchy's qualified defined benefit pension plan may not gain in value over time; McClatchy may not generate cash from operations, or otherwise, necessary to reduce debt or meet debt covenants as expected; we may not be successful in the reducing debt whether through tenders offers, open market repurchase programs or other negotiated transactions; transactions may not close as anticipated or result in cash distributions in the amount or timing anticipated; McClatchy may not successfully implement audience strategies designed to increase audience revenues and may experience decreased audience volumes or subscriptions; McClatchy may experience diminished revenues from retail, classified, national and direct marketing advertising; McClatchy may not achieve its expense reduction targets including efforts related to legacy expense initiatives or may do harm to its operations in attempting to achieve such targets; McClatchy's operations have been, and will likely continue to be, adversely affected by competition, including competition from internet publishing and advertising platforms; increases in the cost of newsprint; bankruptcies or financial strain of its major advertising customers; litigation or any potential litigation; geo-political uncertainties including the risk of war; changes in printing and distribution costs from anticipated levels, including changes in postal rates or agreements; changes in interest rates; changes in pension assets and liabilities; changes in factors that impact pension contribution requirements, including, without limitation, the value of the company-owned real property that McClatchy has contributed to its pension plan; increased consolidation among major retailers in our markets or other events depressing the level of advertising; our inability to negotiate and obtain favorable terms under collective bargaining agreements with unions; competitive action by other companies; an inability to fully implement and execute its share repurchase plan; and other factors, many of which are beyond our control; as well as the other risks detailed from time to time in the company's publicly filed documents, including the company's Annual Report on Form 10-K for the year ended Dec. 28, 2014, filed with the U.S. Securities and Exchange Commission. McClatchy disclaims any intention and assumes no obligation to update the forward-looking information contained in this release.
CONTACT: Stephanie Zarate, Investor Relations Manager, (916) 321-1931, szarate@mcclatchy.com; Elaine Lintecum, Chief Financial Officer, (916) 321-1846, elintecum@mcclatchy.com