The McClatchy Company (NYSE:MNI) Q2 2019 Earnings Conference Call - Final Transcript
Aug 08, 2019 • 12:00 pm ET
Good afternoon and welcome to the McClatchy Second Quarter 2019 Earnings Conference Call. [Operator Instructions]
I would now like to turn the conference over to Elaine Lintecum. Please go ahead.
Good morning, everyone. This is Elaine. I'm McClatchy's CFO, and thank you Ben. Thank you all for joining us today for our second quarter 2019 earnings call. The call is being webcast at mcclatchy.com and it will be archived for future reference. Our earnings release was issued this morning before the market opened and I hope you've had a chance to review it. You will note that our Investor Relations Director, Stephanie Zarate, is not on the call this morning, that's because just less than a month ago she welcomed a new addition to her family and remains on maternity leave, so I'm her understudy for the second and third quarter conference calls this year.
Joining me today is Craig Forman, our President and CEO; and our Vice President of Consumer Products, Scott Manuel; and our Vice President of Operations, Mark Zieman.
The call will contain forward-looking statements that are subject to risks and uncertainties that are described in our SEC filings. Actual results may differ materially from those described during the call. Also non-GAAP amounts discussed this morning are reconciled to the most directly comparable GAAP measures and the schedules that are posted on our website are in the body of the press release.
And now I'll turn the call over to Craig.
Craig I. Forman
Thank you, Elaine. Good morning from Sacramento, and thank you for joining us today. We're happy to share with you in detail our second quarter results. We're gratified to report continued improving sequential trends in adjusted EBITDA from both the fourth quarter and full year 2018, and the first quarter of 2019, and we are posting our best year-over-year quarterly performance in adjusted EBITDA since the fourth quarter of 2015. In fact, adjusted EBITDA in the first half of this year, excluding the impact of real estate gains and equity distributions was down 4.2% and marks our best performance since 2010. These positive trends highlight that the accelerated digital transition we embarked upon a little over two years ago, not only pointed our Company in the needed correct direction, but also accelerated the positive pace of that digital transformation despite unrelenting, and in some cases, intensifying industry headwinds.
Here are the headlines. We achieved an improving trend in adjusted EBITDA over the past three quarters, and to be clear that excludes the impact of real estate sales and distributions from minority investments. We reduced our adjusted operating expenses by 15.3% from the second quarter of 2018 and have reduced adjusted operating expenses by more than $41 million in the first half of 2019 compared to the same period in 2018. We grew the number of digital-only subscribers by almost 52% over last year, that is the 13th consecutive quarter of growth in this key area of digital transformation. And we redeemed $32 million of our first lien