Morris Publishing Group LLC, which emerged from a swift prepackaged bankruptcy in March, reported a big profit for the first quarter because of a gain from the cancellation of much of its debt.
In a filing with the Securities and Exchange Commission, Morris reported net income of $171.5 million, compared with a year-ago loss of $12.6 million. Much of the swing was the result of a drop of more than $158 million in expenses related to the debt cancellation.
Morris said it had a Q1 operating income of $2.6 million, up from $1.4 million in the 2009 quarter.
Morris continued to experience ad revenue declines in the quarter, but moderating ones. Ad revenue of $41.5 million was down 10.2% from the year-ago period.
Florida newspapers, which account for 32.5% of total ad revenue for the Augusta, Ga.-based chain, were responsible for 59.2% of the ad decline, Morris said.
Morris said ROP ad revenue dropped 13.5%, and insert revenue was down 3.9%.
Online advertising revenue was $6.0 million, down $0.4 million, or 5.8% from last year.
Retail advertising revenue fell 9.4% for the quarter.
Classified fell 10.5% overall with print classified down 10.6%. The Times-Union in Jacksonville weighed the chain down in this area, as well, with classified off 22.3%.
Under the reorganization plan approved in Chapter 11 proceedings, notes totalling about $300 million were canceled in exchange for $100,000 $100 million in new notes. Morris family affiliated entities contributed $87 million to Morris Publishing and repaid $25 million in intercompany indebtedness.
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