NEW YORK--(BUSINESS WIRE)--April 17, 2008--The New York Times
Company announced today first-quarter 2008 earnings per share (EPS)
from continuing operations of $.00, including a $.07 per share
non-cash charge for the write-down of assets and a $.03 per share
favorable tax adjustment, compared with EPS of $.14 in the first
quarter of 2007, which included an unfavorable tax adjustment of $.03
per share. Excluding the charge and the adjustments, EPS from
continuing operations was $.04 in the first quarter of 2008 compared
with $.17 in the first quarter of 2007.
First-quarter 2008 operating profit was $6.2 million compared with
$54.5 million in the first quarter of 2007. Excluding depreciation and
amortization and the non-cash charge for the write-down of assets,
operating profit was $66.4 million compared with $98.9 million in the
first quarter of 2007.
"Advertising revenues decreased in the quarter as weaker economic
conditions compounded the effects of secular change in our business,"
said Janet L. Robinson, president and CEO. "While this is a
challenging time for the media industry, we are diligently managing
our business for the long term. Continuing our transition into the
digital era, online advertising revenues grew 16 percent, due in part
to new offerings and ad formats. At the same time, circulation
revenues also showed gains in the quarter, up approximately 2 percent.
"Our disciplined approach to expense management resulted in a 1
percent decrease in operating costs. For the fifth consecutive
quarter, operating costs, excluding depreciation and amortization,
declined. As we have said before, we expect to achieve cost savings of
approximately $130 million in 2008.
"In April, the rate of decline in advertising revenues is expected
to be in the mid-single digits. This is an improvement from our
performance in March and is due mainly to shifts in the timing of
Easter and in the publication of KEY Magazine. During the balance of
the year, we plan to stay focused on what we do best - producing
high-quality journalism, introducing new products in print and online,
and stringently managing our costs."
Comparisons
The first-quarter 2008 results included the following special
items:
-- A non-cash charge for the write-down of assets for a systems
project, which amounted to $18.3 million ($10.4 million after
tax or $.07 per share). To decrease capital spending, the
Company reduced the scope of a major advertising and
circulation project, which resulted in the write-down of
previously capitalized costs.
-- A favorable tax reserve adjustment of $4.6 million ($.03 per
share).
The first-quarter 2007 results included the following special
item:
-- An unfavorable tax adjustment of $4.5 million ($.03 per share)
primarily from a change in New York state tax law that was
effective January 1, 2007.
All quarterly comparisons exclude the results of the Broadcast
Media Group, which was sold in May 2007. This release includes
non-GAAP financial measures, and the exhibits include a discussion of
management's use of these non-GAAP financial measures and
reconciliations to the most comparable GAAP financial measures.
First-Quarter Results from Continuing Operations
Revenues
Total revenues decreased 4.9 percent to $747.9 million from $786.0
million. Advertising revenues decreased 9.2 percent. Circulation
revenues increased 1.9 percent and other revenues rose 7.2 percent.
Operating Costs
Operating costs decreased 1.1 percent to $723.3 million from
$731.5 million. Depreciation and amortization declined 5.6 percent to
$41.9 million from $44.4 million, mainly because of lower accelerated
depreciation expense for the assets at the Edison, N.J., printing
facility, which was closed last month.
Excluding depreciation and amortization, operating costs declined
0.8 percent to $681.4 million from $687.1 million mainly due to lower
newsprint expense, outside printing and distribution costs, and
benefits expense. The cost decline was partially offset by increased
stock-based compensation, buyouts and the effect of foreign currency
translation because of the Euro-dollar relationship.
Newsprint expense for the first quarter decreased 23.4 percent,
with 17.0 percent of the decline resulting from lower consumption and
6.4 percent from lower prices.
Stock-based compensation expense increased $6.2 million in the
first quarter primarily because of a shift in the timing of the
Company's annual equity awards. Historically equity awards were made
in December of each year. In early 2007, the Board elected to make
annual equity awards in February of each year, beginning in February
2008, to better enable it to evaluate performance during the most
recently completed fiscal year.
Buyout costs totaled $11.2 million in the first quarter of 2008
and $7.8 million in the same period a year earlier.
While foreign currency translation had a favorable effect on
revenues, it increased expenses by $2.4 million in the quarter.
First-Quarter Business Segment Results
News Media Group
Total News Media Group revenues decreased 5.7 percent mainly as a
result of lower print advertising.
Advertising revenues in the quarter decreased 10.6 percent due to
lower print advertising.
Circulation revenues increased 1.9 percent primarily because of
higher home-delivery and newsstand prices. The New York Times
increased its prices in the third quarter of 2007. The Globe increased
its newsstand price in February of 2008.
Other revenues rose 6.0 percent largely because of rental income
from the lease of five floors in our new headquarters, and increased
commercial printing. The increase was partially offset by lower
subscription revenues for TimesSelect, an online product offering that
was discontinued in September 2007.
Total News Media Group operating costs decreased 2.2 percent to
$688.1 million from $703.8 million. Excluding depreciation and
amortization, operating costs declined 1.9 percent to $651.2 million
from $664.1 million mainly due to lower newsprint expense, outside
printing and distribution and promotions costs offset in part by
increased staff reduction costs and stock-based compensation expense.
Operating profit decreased to $13.3 million from $59.6 million.
Operating profit before depreciation and amortization and excluding
the non-cash charge for the write-down of assets was $68.5 million
compared with $99.4 million in 2007, mainly due to lower print
advertising.
About Group
Total About Group revenues increased 25.0 percent to $28.2 million
from $22.5 million due to higher cost-per-click advertising and
acquisitions.
Total About Group operating costs increased 31.2 percent to $18.6
million from $14.2 million. Excluding depreciation and amortization,
operating costs increased 40.9 percent to $15.6 million from $11.1
million because of the acquisition of ConsumerSearch, Inc. in May 2007
and investments in new revenue initiatives that resulted in higher
content and compensation costs.
Operating profit grew 14.3 percent to $9.5 million from $8.3
million. Operating profit before depreciation and amortization grew
9.5 percent to $12.6 million from $11.5 million.
Other Financial Data
Internet Revenues
Total Internet revenues grew 11.6 percent to $82.9 million from
$74.3 million. Internet advertising revenues increased 16.0 percent in
the quarter. Internet businesses include our digital archives,
NYTimes.com, Boston.com, About.com and the Web sites of our other
newspaper properties. In total, Internet businesses accounted for 11.1
percent of our revenues in the 2008 first quarter versus 9.5 percent
in the first quarter of 2007.
Joint Ventures
Net loss from joint ventures was $1.8 million compared with a net
loss of $2.2 million in the first quarter of 2007. The improvement was
mainly due to better performance at a paper mill in which the Company
has an investment.
Interest Expense-net
Interest expense-net increased in the first quarter to $11.7
million from $11.3 million. The Company had lower interest expense
primarily due to reduced debt, which was more than offset by a
decrease in interest income.
Income Taxes
Income taxes in the quarter benefited from a $4.6 million reserve
adjustment for uncertain tax positions. In the first quarter of 2007,
the Company recorded an unfavorable tax adjustment of $4.5 million
from a change in New York state tax law that was effective January 1,
2007.
Cash and Total Debt
At the end of the quarter, our cash and cash equivalents were
approximately $47 million and total debt was approximately $1.1
billion.
Capital Expenditures
In the first quarter, total capital expenditures were
approximately $33 million.
Expectations
The following expectations are for 2008 with the exception of cost
savings and productivity gains, which are for 2008 and 2009.
-- Cost savings and productivity gains - The Company believes
that it can achieve a reduction in costs from its year-end
2007 cash cost base of a total of approximately $230 million
in 2008 and 2009, excluding the effects of inflation, buyout
costs and one-time costs. About $130 million of these savings
are expected in 2008.
-- Depreciation and amortization - $160 to $170 million, which
includes approximately $5 million of accelerated depreciation
expense in the first quarter of 2008 associated with the New
York area plant consolidation project. Depreciation for the
new headquarters building is expected to be $8 million per
quarter.
-- Income from joint ventures - $16 to $20 million. Previous
guidance of $12 to $16 million was increased mainly due to the
expectation of better operating results at the paper mills in
which the Company has an interest.
-- Interest expense - $50 to $60 million.
-- Capital expenditures - $150 to $165 million, including
approximately $42 million for the consolidation of the
Company's New York area plants and about $22 million for its
new headquarters. The top end of the range for capital
expenditures was lowered to $165 million from $170 million as
a result of the reduction in scope of a major systems project.
-- Income tax rate - 40% to 43%. There are many factors that can
result in significant volatility quarter to quarter.
Conference Call Information
Our earnings conference call will be held on Thursday, April 17,
at 11:00 a.m. E.T. To access the call, dial (888) 271-8603 (in the
U.S.) and (913) 312-0394 (international callers). Participants should
dial into the conference call approximately 10 minutes before the
start time. Online listeners can link to the live webcast at
www.nytco.com/investors.
Except for the historical information contained herein, the
matters discussed in this press release are forward-looking statements
that involve risks and uncertainties that could cause actual results
to differ materially from those predicted by such forward-looking
statements. These risks and uncertainties include national and local
conditions, as well as competition, that could influence the levels
(rate and volume) of retail, national and classified advertising and
circulation generated by our various markets and material increases in
newsprint prices. They also include other risks detailed from time to
time in the Company's publicly filed documents, including the
Company's Annual Report on Form 10-K for the year ended December 30,
2007. The Company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events or otherwise.
The New York Times Company (NYSE: NYT), a leading media company
with 2007 revenues of $3.2 billion, includes The New York Times, the
International Herald Tribune, The Boston Globe, 15 other daily
newspapers, WQXR-FM and more than 50 Web sites, including NYTimes.com,
Boston.com and About.com. The Company's core purpose is to enhance
society by creating, collecting and distributing high-quality news,
information and entertainment.
This press release can be downloaded from www.nytco.com
Exhibits: Condensed Consolidated Statements of Income
Segment Information
News Media Group Revenues by Operating Segment
Footnotes
Reconciliation of Non-GAAP Information
THE NEW YORK TIMES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars and shares in thousands, except per share data)
First Quarter
-----------------------------
2008 2007 % Change
--------- --------- ---------
Revenues
Advertising $458,339 $504,915 -9.2%
Circulation 226,629 222,454 1.9%
Other (a) 62,887 58,651 7.2%
--------- ---------
Total 747,855 786,020 -4.9%
Operating costs
Production costs 340,564 345,025 -1.3%
Selling, general and administrative
costs 340,854 342,061 -0.4%
Depreciation and amortization 41,931 44,437 -5.6%
--------- ---------
Total 723,349 731,523 -1.1%
Write-down of assets(b) 18,291 - N/A
--------- ---------
Operating profit 6,215 54,497 -88.6%
Net loss from joint ventures (1,793) (2,153) -16.7%
Interest expense - net 11,745 11,328 3.7%
--------- ---------
(Loss)/income from continuing operations
before income taxes and minority
interest (7,323) 41,016 *
Income tax (benefit)/expense (7,692) 20,899 *
Minority interest in net (income)/loss
of subsidiaries (104) 9 *
--------- ---------
Income from continuing operations 265 20,126 -98.7%
(Loss)/income from discontinued
operations, net of income taxes-
Broadcast Media Group (c) (600) 3,776 *
--------- ---------
Net (loss)/income $ (335) $ 23,902 *
========= =========
Average Number of Common Shares
Outstanding:
Basic 143,760 143,905 -0.1%
Diluted 143,760 144,077 -0.2%
Basic Earnings Per Share:
Income from continuing operations $ 0.00 $ 0.14 N/A
Discontinued operations, net of
income taxes 0.00 0.03 N/A
--------- ---------
Net (loss)/income $ 0.00 $ 0.17 N/A
========= =========
Diluted Earnings Per Share:
Income from continuing operations $ 0.00 $ 0.14 N/A
Discontinued operations, net of
income taxes 0.00 0.03 N/A
--------- ---------
Net (loss)/income $ 0.00 $ 0.17 N/A
========= =========
Dividends Per Share 0.230 0.175 31.4%
* Represents an increase or decrease in excess of 100%.
See footnotes page for additional information.
THE NEW YORK TIMES COMPANY
SEGMENT INFORMATION
(Dollars in thousands)
First Quarter
-----------------------------
2008 2007 % Change
--------- --------- ---------
Revenues
----------------------------------------
News Media Group $719,685 $763,477 -5.7%
About Group 28,170 22,543 25.0%
--------- ---------
Total $747,855 $786,020 -4.9%
========= =========
Operating Profit(Loss)
----------------------------------------
News Media Group $ 13,285 $ 59,629 -77.7%
About Group 9,521 8,330 14.3%
Corporate (16,591) (13,462) 23.2%
--------- ---------
Total $ 6,215 $ 54,497 -88.6%
========= =========
Operating Profit(Loss) Before Depreciation & Amortization and a
Special Item(d)
----------------------------------------------------------------------
News Media Group $ 68,496 $ 99,352 -31.1%
About Group 12,554 11,463 9.5%
Corporate (14,613) (11,881) 23.0%
--------- ---------
Total $ 66,437 $ 98,934 -32.8%
========= =========
See footnotes page for additional information.
THE NEW YORK TIMES COMPANY
NEWS MEDIA GROUP REVENUES BY OPERATING SEGMENT
(Dollars in thousands)
2008
------------------------
%
Change vs.
First Quarter 2007
------------- ----------
The New York Times Media Group
Advertising $ 276,700 -6.9%
Circulation 165,785 3.2%
Other 43,281 2.9%
-------------
Total $ 485,766 -2.8%
-------------
New England Media Group
Advertising $ 81,378 -16.3%
Circulation 37,675 -2.1%
Other 12,594 34.1%
-------------
Total $ 131,647 -9.3%
-------------
Regional Media Group
Advertising $ 74,081 -17.0%
Circulation 23,169 -0.6%
Other 5,022 -15.7%
-------------
Total $ 102,272 -13.7%
-------------
Total News Media Group
Advertising $ 432,159 -10.6%
Circulation 226,629 1.9%
Other (a) 60,897 6.0%
-------------
Total $ 719,685 -5.7%
=============
See footnotes page for additional information.
THE NEW YORK TIMES COMPANY
FOOTNOTES
(Dollars in thousands)
(a) Other revenues consist primarily of revenue from wholesale
delivery operations, commercial printing, news
services/syndication, digital archives, advertising service
revenue, rental income and Baseline StudioSystems.
(b) Represents a non-cash charge for the write-down of assets for a
systems project. To decrease capital spending, the Company
reduced the scope of a major advertising and circulation project,
which resulted in the write-down of previously capitalized costs.
(c) On May 7, 2007, the Company sold the Broadcast Media Group,
consisting of nine network-affiliated television stations, their
related Web sites and the digital operating center, for $575
million. Under Statement of Financial Accounting Standards No.
144, Accounting for the Impairment or Disposal of Long-Lived
Assets, the Broadcast Media Group is treated as a discontinued
operation. The Company has made reclassifications in all periods
presented to reflect this change.
In the first quarter of 2008, there were post-closing adjustments
totaling $0.6 million to the gain on sale of the Broadcast Media
Group recorded in 2007. In the first quarter of 2007, the
Broadcast Media Group had pre-tax income of $6.5 million and net
income of $3.8 million.
(d) See "Reconciliation of Non-GAAP Information" for reconciliations
of operating profit(loss) to operating profit(loss) before
depreciation & amortization and excluding a special item.
THE NEW YORK TIMES COMPANY
RECONCILIATION OF NON-GAAP INFORMATION
(Dollars in thousands)
In this release, the Company has included non-GAAP financial
information with respect to earnings per share (EPS) from continuing
operations excluding special items, operating profit(loss) before
depreciation and amortization and excluding a special item, and
operating costs before depreciation and amortization and raw
materials. The Company has included these non-GAAP financial measures
because management reviews them on a regular basis and uses them to
evaluate and manage the performance of the operations. Management
believes that, for the reasons outlined below, these non-GAAP
financial measures provide useful information to investors as a
supplement to reported EPS from continuing operations, operating
profit(loss) and operating costs. However, these measures should be
evaluated only in conjunction with the comparable GAAP financial
measures and should not be viewed as alternative or superior measures
of GAAP results.
EPS from continuing operations excluding special items provide useful
information in evaluating the Company's period-to-period performance
because it eliminates items that the Company does not consider to be
indicative of earnings from ongoing operating activities. Operating
profit(loss) before depreciation and amortization and excluding a
special item is useful in evaluating the Company's ongoing cash-
generating ability as it excludes the significant non-cash impact of
depreciation and amortization as well as excludes items, if any, not
indicative of ongoing operating activities. Total operating costs
include depreciation and amortization and raw materials. Total
operating costs excluding depreciation and amortization provide a
useful measure of manageable costs. Total operating costs excluding
depreciation and amortization and raw materials provide investors
with helpful supplemental information on the Company's underlying
operating costs.
Reconciliations of these non-GAAP financial measures from,
respectively, EPS from continuing operations, operating profit(loss)
and operating costs, the most directly comparable GAAP items, are set
out in the tables below.
Reconciliation of earnings per share from continuing operations
excluding special items
------------------------------
First Quarter
------------------------------
2008 2007 % Change
---------- -------- ----------
Earnings per share from
continuing operations $ 0.00 $ 0.14 N/A
Adjustments:
Write-down of assets 0.07 -
Income tax adjustment (0.03) 0.03
---------- -------- ----------
Earnings per share from
continuing operations
excluding special items $ 0.04 $ 0.17 -76.5%
========== ======== ==========
Reconciliation of operating profit(loss) before depreciation &
amortization and a special item
---------------------------------------
First Quarter 2008
---------------------------------------
News Media About Total
Group Group Corporate Company
---------- -------- --------- --------
Operating profit(loss) $ 13,285 $ 9,521 $ (16,591) $ 6,215
Add:
Depreciation &
amortization 36,920 3,033 1,978 41,931
---------- -------- ---------- --------
Operating profit(loss) before
depreciation & amortization 50,205 12,554 (14,613) 48,146
Add:
Write-down of assets 18,291 - - 18,291
---------- -------- ---------- --------
Operating profit(loss) before
depreciation & amortization
and a special item $ 68,496 $12,554 $ (14,613) $66,437
========== ======== ========== ========
---------------------------------------
First Quarter 2007
---------------------------------------
News Media About Total
Group Group Corporate Company
---------- -------- --------- --------
Operating profit(loss) $ 59,629 $ 8,330 $ (13,462) $54,497
Add:
Depreciation &
amortization 39,723 3,133 1,581 44,437
---------- -------- ---------- --------
Operating profit(loss) before
depreciation & amortization $ 99,352 $11,463 $ (11,881) $98,934
========== ======== ========== ========
---------------------------------------
% Change
=======================================
News Media About Total
Group Group Corporate Company
---------- -------- --------- --------
Operating profit(loss) -77.7% 14.3% 23.2% -88.6%
Add:
Depreciation &
amortization -7.1% -3.2% 25.1% -5.6%
---------- -------- ---------- --------
Operating profit(loss) before
depreciation & amortization -49.5% 9.5% 23.0% -51.3%
Add:
Write-down of assets N/A N/A N/A N/A
---------- -------- ---------- --------
Operating profit(loss) before
depreciation & amortization
and a special item -31.1% 9.5% 23.0% -32.8%
========== ======== ========== ========
THE NEW YORK TIMES COMPANY
RECONCILIATION OF NON-GAAP INFORMATION (continued)
(Dollars in thousands)
Reconciliation of total operating costs excluding depreciation &
amortization and raw materials
---------------------------
First Quarter
---------------------------
2008 2007 % Change
-------- -------- ---------
Total operating costs $723,349 $731,523 -1.1%
Less:
Depreciation & amortization 41,931 44,437
-------- -------- ---------
Total operating costs before depreciation
& amortization 681,418 687,086 -0.8%
Less:
Raw materials 59,076 74,896
-------- -------- ---------
Total operating costs before depreciation
& amortization and raw materials $622,342 $612,190 1.7%
======== ======== =========
Reconciliation of News Media Group operating costs excluding
depreciation & amortization
---------------------------
First Quarter
---------------------------
2008 2007 % Change
-------- -------- ---------
News Media Group
------------------------------------------
Total operating costs $688,109 $703,848 -2.2%
Less:
Depreciation & amortization 36,920 39,723
-------- -------- ---------
Operating costs before depreciation &
amortization $651,189 $664,125 -1.9%
======== ======== =========
Reconciliation of About Group operating costs excluding depreciation &
amortization
---------------------------
First Quarter
---------------------------
2008 2007 % Change
-------- -------- ---------
About Group
------------------------------------------
Total operating costs $ 18,649 $ 14,213 31.2%
Less:
Depreciation & amortization 3,033 3,133
-------- -------- ---------
Operating costs before depreciation &
amortization $ 15,616 $ 11,080 40.9%
======== ======== =========
CONTACT: The New York Times Company
Catherine J. Mathis, 212-556-1981
mathis@nytimes.com
or
Paula Schwartz, 212-556-5224
paula.schwartz@nytimes.com
SOURCE: The New York Times Company
