By: Mark Fitzgerald
Sun-Times Media Group (STMG) reported Tuesday a fourth quarter 2007 net loss of $59.1 million, or 73 cents a share, deepening red ink at the trouble Chicago Sun-Times parent from a year-ago loss of $34.6 million, or 43 cents a share.
But for the year ended Dec. 31, STMG reported a net income of $271.6 million, or $3.37 per share, compared with a 2006 loss of $56.7 million, or 66 cents per share.
The full-year results include settling Canadian tax issues resulting in the reversal of tax accruals that totaled $586.7 million. That benefit was partially offset by an increase in the valuation allowance against deferred tax assets of $193.5 million, STMG said.
For the 12 months of 2007, STMG reported an operating loss of $140.2 million, compared with an operating loss of $39.0 million in 2006.
Weighing down on the company, STMG said, were big legal costs during the federal trial of Conrad Black, the former chairman of the company then known as Hollinger International and other former executives.
“While we made headway in 2007, it was not enough to overcome the downturn in the market,” STMG
President and CEO Cyrus F.Freidheim Jr. said in a conference call with analysts Tuesday afternoon.
Going into 2007, the company was losing market share because of “legacy issues” such as the tax and legal troubles, plus unreliable newspaper delivery and other high costs, Freidheim said.
STMG, which publishes about 100 dailies and non-dailies in the Chicago market, is in the midst of a study of “strategic alternatives,” including a sale of all or part of the company.
During the fourth quarter, STMG launched a plan to reduce operating costs by $50 million by June 30, 2008. Among the measures the company undertook was outsourcing distribution to the rival Chicago Tribune, outsourcing ad production, newsroom and management layoffs, and folding some newspapers.
STMG reported Q4 total operating results slumped to $93.3 million compared with $110.3 million in the year-ago period.
Advertising revenue in the quarter was down 15.7% from the year-go period to $72.3 million from $85.7 million.