Operating expenses, excluding depreciation, amortization and curtailment gains, decreased 10.4 percent. Compensation declined 5.9 percent, with the average number of full-time equivalent employees down 7.7 percent. Newsprint and ink expense decreased 36.8 percent, a result of a reduction in newsprint volume of 12.7 percent and reduced cost of newsprint. Cash costs are expected to decline 9 percent in total for the fiscal year.
Operating cash flow increased 16.2 percent from a year ago to $33.3 million. Operating cash flow margin (1) increased to 17.9 percent from 14.4 percent a year ago in the historically smallest revenue quarter of the year. Including equity in earnings of associated companies, depreciation and amortization, as well as impairment charges and other unusual items in both years, operating income totaled $26.7 million, compared with an operating loss of $146.3 million a year ago. Operating income margin was 14.4 percent in the quarter. Non-operating expenses, primarily interest expense and debt financing costs, declined $10.1 million. Income tax expense was adversely impacted by new health care legislation, all of which, combined, resulted in income available to common stockholders of $3.0 million, compared with a loss of $51.8 million a year ago.
NEW UNION CONTRACT RESULTS IN CURTAILMENT GAINS
Non-cash, pretax curtailment gains totaling $13.9 million resulted from a new union contract in St. Louis.On March 27, 2010, members of the St. Louis Newspaper Guild, Local 36047 voted to approve a new, 5.5-year contract, effective April 1, 2010. Guild members had been operating under the provisions of a contract that expired in June 2009. Significant contract provisions that are changed from the previous contract include: