Thursday, May 14, 2009, 3:21pm EDT | Modified: Thursday, May 14, 2009, 4:11pm
'Substantial doubt' about Morris Publishing
Jacksonville Business Journal
The parent company for the Florida Times-Union has expressed “substantial doubt” that it can continue operations, according to its first quarter reports released Thursday.
Augusta, Ga.-based Morris Publishing Group LLC reported a net loss of nearly $12.6 million in the first quarter compared with net income of $5.6 million the same time last year. The first quarter earnings loss included a $2.9 million expense for debt restructuring costs.
The company had a nearly $10 million in interest payments deferred by its lenders three times this year now due May 28. More than 80 percent of its noteholders also extended the grace period for the same time so the company would not cross-default on its debt to both the lenders and noteholders.
“Several factors relating to the Company’s outstanding debt raise significant uncertainty about its liquidity and ability to continue as a going concern,” the report stated. “Specifically, the Company’s debt far exceeds the current value of its assets, and the Company’s creditors may have the right to accelerate the maturity of the debt before the end of May 2009.”
The interest due is from a $278.5 million in senior subordinated notes due 2013. Overall, Morris had $419.5 million in long-term debt in the first quarter. The company had about $170.1 million in assets. The results are unaudited.
“There is substantial doubt about the Company’s ability to continue as a going concern,” it stated.
Morris did manage to increase its cash 196 percent from almost $4.8 million in fourth quarter 2008 to $14.1 million in the first quarter. Net operating revenues from core streams including advertising and circulation declined 22 percent to $64.2 million in the first quarter compared with the same time last year.
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