Morris Publishing Extends Loan Payment, Reports Profit Loss
Publisher missed deadline for $9.7 million payment; cuts wages up to 10 percent.
Newspaper and magazine publisher Morris Publishing today said it has reached an agreement with its lenders to extend the deadline for its $9.7 million interest payment on its senior subordinated notes until April 24. The payment was originally due February 1.
Morris’ senior bank group also agreed to extend to April 24 the waiver of cross default arising from the overdue interest payment on the senior notes, the Augusta, Georgia-based publisher said. Morris owes more than $226 million in senior notes.
For 2008, Morris reported a net loss of $140.6 million, down from a $68.6 million net income in 2007. Net revenue was $251.6 million, down roughly 18 percent from the previous year.
Morris also said it would cut employee salaries by 5 percent to 10 percent, effective April 1. Staffers who earn $50,000 or more per year will receive 10 percent wage reductions, the company said.
In January, Morris hired investment banking firm Lazard Freres & Co. as financial advisor and Neal, Gerber & Eisenberg as legal counsel as the publisher explores strategic options. According to a 10-Q document filed November 14 with the Securities and Exchange Commission, Morris Publishing said it will be “unlikely to meet the financial covenants” by the second quarter of 2009.
In addition to 13 daily newspapers, Morris—an affiliate of the Morris Communications Company—publishes several city magazines including Augusta, Athens, H magazine and Savannah.