Thursday, April 23, 2009

Pruitt dodges question on whether McClatchy will have the cash to satisfy lenders in 2009

The Artful Dodger might be Gary Pruitt's new nickname. During today's conference call, Pruitt was asked a serious question about McClatchy's ability to meet its debt covenants in 2009, and Pruitt dodged. From the transcript at Seeking Alpha:

Scott Marcotikus, Goldman Sachs:

My first question relates to the bank covenant at seven times. It looks likely to be tripped at some point in the second half of the year. I’m just wondering what measure you can take to perhaps appease the banks to grant a waiver on that facility? You mentioned with regard to the bank debt the average rate on that is around 4%. I am wondering if you are in the midst of renegotiating your credit facility at some point as those interest rates are going to probably be dramatically higher. Can you comment on what you are forecasting for the second half of the year as far as interest expense?

Gary Pruitt:

We don’t expect to trip our covenant. We think we will be below seven times and our terms of our leverage covenant and therefore we don’t expect to have to amend our credit agreement to address the leverage covenant.

"We don't expect to trip our covenant" was nothing but a dodge.



Anonymous said...

He has 2 answers.

1. We don't expect to
2. We do expect to

Seems pretty logical to me.

Boy McW you are GRASPING at whatever you can here.

Anonymous said...

It is obvious to everyone that McClatchy is going to violate their debt convenants in 2009.

And the company needs to start fixing the problem before the covenants are violated. If they wait until it is too late, then they are in an even worse negotiating position with the lenders.

I think deep down the McClatchy family and Gary Pruitt know that it is over. They just are not yet ready to give up control and take the hit that bankruptcy will cause them.

Unfortunately, their pride is going to damage a lot of newspapers.

Anonymous said...

@Fitz & Jen
Jen: I think McClatchy just held one of the industry's shortest earnings call I have ever had to sit through. We were off the line in a merciful 20 minutes.

Anonymous said...

I'm going to love this turds swan song as we all watch MNI decent down the pipes to its well deserved oblivion.

It will be a, "I'm leaving the company...." just about a month before MNI goes belly up, and a, "I wish my MNI family all the best, sprinkled with a...."I wish I was staying, but"....

Anonymous said...

With great business insight such as this it is amazing your were kicked out of journalism. What specifically is your set of skills?

Anonymous said...

You would have accused him of dodging the question if he'd given a yes or no answer.

Your motives are pretty transparent here.

Anonymous said...

“Gary Glitter” is an early riser I see. Only fools are still defending Pru/MNI.

Ostrich says, “Your motives are pretty transparent here.”

Anonymous said...

Why hasn't Pruitt been fired?

Anonymous said...

I doubt Pruitt has even a good clue how to right MNI. He has surrounded himself with echo chamber thinkers. How do you get out of a doomed business model with the same shortsighted advisors? You don’t, the whole upper executive level has to go. Where do you find valuable senior managers? Marxists college professors that used to work for other failed newspapers? Yeah right!

Anonymous said...

He dodged it all right, just like Tony Conigliaro did.

Anonymous said...

GP needs to be laid off