Exhibit 99.1
The New York Times Company Reports 2006 First-Quarter Results
NEW YORK--(BUSINESS WIRE)--April 13, 2006--The New York Times Company
announced today that 2006 first-quarter diluted earnings per share (EPS) were
$.24, compared with $.76 in the first quarter of the prior year. First-quarter
net income was $35.0 million compared with $111.0 million in the same period of
2005.
The 2006 first-quarter results include a pre-tax charge of $9.4 million
($5.2 million after tax or $.04 per share) for costs associated with a staff
reduction program announced in September 2005.
The 2005 first-quarter results included a gain of $67.8 million after tax
or $.46 per share from the sale of the Company's current headquarters ($62.8
million after tax or $.43 per share) as well as property in Florida ($5.0
million after tax or $.03 per share).
The Company only presents EPS on a generally accepted accounting principles
(GAAP) basis. This differs from the pro forma EPS provided by databases such as
First Call and Reuters.
"Our results in the first quarter reflect higher advertising and
circulation revenues at The New York Times Media Group and the Regional Media
Group, in part due to the introduction of innovative new products," said Janet
L. Robinson, president and chief executive officer. "Performance at the New
England Media Group was adversely affected by consolidation among important
advertisers and by a continued challenging environment.
"The Web sites in our News Media Group posted solid gains in advertising
revenues - up 23 percent in the quarter, which is a particularly strong showing
given the large revenue base for this increase.
"We continue to be very pleased with the performance of About.com, which we
acquired a year ago in March. Its revenues climbed an estimated 98 percent in
the quarter. All three of its revenue streams - display advertising,
cost-per-click advertising and e-commerce - achieved strong growth, driven by
higher rates and increased spending from blue-chip advertisers.
"In total, our Internet businesses now account for 7.5 percent of our
overall revenues, up from 4.5 percent in the first quarter of last year. This
stems from both strong organic growth as well as the acquisition of About.com.
"Looking ahead, we are focused on improving the margins of our businesses
by continuing to enhance existing products and introduce new ones that serve our
audiences and advertisers in print, online and through broadcast media. On the
cost side, we are benefiting from the changes we made to our expense structure
in 2005 and remain very disciplined on managing our costs. Total costs,
excluding those related to staff reductions and About.com, grew 3.2 percent in
the first quarter. We expect the rate of growth for costs - excluding those for
staff reductions and the extra week in our fiscal calendar - to be lower for the
balance of the year. We remain committed to improving our margins by achieving
higher revenue growth than growth for these costs for the full year."
First-Quarter Financial Results
All comparisons are for the first quarter of 2006 to the first quarter of
2005, unless otherwise noted.
Revenues
Total revenues rose 3.3 percent to $831.8 million compared with $805.6
million. On March 18, 2005, the Company acquired About.com, a leading online
provider of consumer information. Excluding About.com, total revenues increased
1.1 percent.
Advertising revenues grew 3.9 percent and, excluding About.com, increased
0.7 percent. Circulation revenues, which were not affected by the About.com
acquisition, were up 0.3 percent compared with last year.
In the first quarter the Company benefited from the timing of Easter, which
will be in April this year but was in March in 2005. Traditionally Easter is a
time of reduced overall advertising since classified advertising typically
declines on the holiday. Retail advertising normally increases in the days
leading up to Easter.
Costs and Expenses
Total costs and expenses increased 6.0 percent to $763.5 million from
$720.5 million. Excluding those related to staff reductions and About.com, total
costs and expenses rose 3.2 percent. The increase includes:
-- 1.3 percent attributable to higher distribution and outside printing
expense,
-- 1.0 percent attributable to increased raw materials expense and
-- 0.8 percent attributable to higher promotion expense.
Newsprint expense rose 5.9 percent in the first quarter, with 8.2 percent
of the increase resulting from higher prices partially offset by a 2.3 percent
decrease from lower consumption.
Stock-based compensation expense decreased to $3.7 million ($2.2 million
after tax or $.01 per share) from $6.6 million ($4.8 million after tax or $.03
per share) in the first quarter of last year, partially offsetting the increase
in expenses discussed above. In 2006, no compensation expense is being recorded
for the Company's employee stock purchase plan because, as a result of changes
implemented in 2006, it is no longer considered a compensatory plan.
Total costs and expenses excluding staff reductions, About.com, raw
materials and depreciation and amortization increased 2.4 percent.
Reconciliations to total costs and expenses excluding these items (non-GAAP
financial measures) are included in the exhibits to this release.
Operating Profit
Operating profit decreased to $68.3 million from $208.1 million. The 2005
first quarter included a pre-tax gain of $122.9 million related to the sale of
assets. Excluding the gain on the sale of assets in 2005, operating profit
decreased due to higher expenses, as discussed above, partially offset by growth
in revenues and the inclusion of About.com.
Business Segment Results
News Media Group
Total News Media Group revenues increased 1.0 percent to $781.0 million
from $773.2 million. Advertising revenues rose 0.7 percent, mainly due to growth
in online revenues. Higher print advertising rates were more than offset by
lower print volume. Circulation revenues were up 0.3 percent compared with last
year due to growth at The New York Times Media Group and the Regional Media
Group partially offset by declines at the New England Media Group.
Operating profit for the News Media Group decreased to $68.3 million from
$91.3 million, reflecting higher expenses, as discussed above, partially offset
by growth in revenues.
Broadcast Media Group
Broadcast Media Group revenues increased 2.0 percent to $32.0 million from
$31.3 million, due to revenues resulting from the acquisition of KAUT-TV in
November 2005. Excluding KAUT-TV, Broadcast Media Group revenues decreased 1.9
percent, as declines in automotive advertising and network compensation were
only partially offset by higher Olympic advertising.
Operating profit decreased to $3.2 million from $4.1 million. Excluding
KAUT-TV, operating profit decreased mainly because of lower revenues.
About.com
About.com's first-quarter revenues totaled $18.8 million and its operating
profit was $7.6 million. The Company estimates that About.com's total revenues
increased approximately 98 percent in the first quarter compared with the first
quarter of 2005, based on the Company's records and the records of the prior
owner. In 2006 the Company expects no dilution from About.com, and in 2007
expects that it will add to earnings.
Other Financial Data
Internet Revenues
In the first quarter, the Company's Internet-related businesses generated
$62.2 million in revenue, up 72.3 percent from $36.1 million in the 2005 first
quarter. Our Internet-related businesses include our digital archives, the Web
sites of our newspapers and broadcast properties and About.com, which we
acquired last March. Excluding About.com, Internet revenues increased 23.9
percent. In total, Internet businesses accounted for about 7.5 percent of the
Company's revenues in the first quarter versus 4.5 percent in the same quarter a
year ago.
Joint Ventures
Net income from joint ventures totaled $2.0 million in the first quarter
compared with a net loss of $0.2 million in the first quarter of 2005, mainly
because of stronger performance at the Discovery Times Channel.
As part of its ongoing efforts to examine the value of its assets and their
continuing fit with the Company's strategy, on April 8 the Company exercised its
right to require Discovery Communications, Inc. to purchase the Company's 50
percent investment in the Discovery Times Channel, a digital cable channel. As
part of the initial investment in the channel, this right was exercisable
following the fourth anniversary of the investment. By contract, the sale price
is determined by a formula, with a floor of $80 million and a ceiling of $135
million, as calculated by an independent appraiser. The independent appraiser
has not yet been selected. The Company's investment balance in the channel was
approximately $104 million at the end of the quarter. Based on the sale price,
which results from the independent appraisal, the Company will record a gain or
loss, depending on whether the price is higher or lower than its investment
balance.
Income Taxes
The Company's effective income tax rate was 39.6 percent in the first
quarter compared with 42.9 percent in the first quarter of 2005. The tax rate
for the 2005 first quarter includes the tax effect related to the gain from the
sale of the Company's current headquarters last year.
Interest Expense-net
Interest expense-net decreased to $12.5 million from $14.2 million. The
first quarter of 2005 includes $4.8 million related to the redemption of the
Company's $71.9 million debentures. Interest expense-net in the first quarter of
2006 includes the impact of higher short-term interest rates.
Shares
In the first quarter, the Company repurchased 0.3 million Class A shares at
a cost of $7.8 million. Approximately $136.9 million remained at the end of the
first quarter from the Company's current share repurchase authorization. Class A
and Class B common shares outstanding at the end of the quarter totaled 145.0
million shares.
Cash and Total Debt
At the end of the first quarter, the Company's cash and cash equivalents
were approximately $40 million and total debt was approximately $1.4 billion.
Capital Expenditures
In the first quarter, the Company's capital expenditures totaled
approximately $70 million. This amount includes both the Company's and its
development partner's expenditures for its new headquarters building. The
Company's capital expenditures, excluding its development partner's
expenditures, were approximately $50 million, which included approximately $28
million for its new headquarters.
2006 Expectations
Below are the Company's expectations for 2006. With the exception of the
first item, they have not changed since they were updated in January.
-- Earlier this month, The New York Times decreased the number of pages
devoted to stock tables from six to two Tuesday through Saturday and
introduced new tools on NYTimes.com to help users better manage their
portfolios. As a result, the Company expects to save $3 million in
newsprint in 2006 and $4 million on an annualized basis.
-- The New York Times newspaper raised home-delivery rates in New York
and across the country about 4 percent effective February 6. This is
expected to result in additional circulation revenues of approximately
$7 to $8 million in 2006. Since the Company last raised home-delivery
rates in early 2002, it has significantly enhanced its coverage of the
arts, travel, business and real estate and introduced new sections
such as Thursday Styles, Friday Escapes and T: Style magazines.
-- Because the Company has a fiscal year that equalizes the number of
Sundays, 2006 has an extra week. In the fourth quarter of 2006, there
will be 14 weeks rather than 13.
-- Across all of the newspaper properties the Company expects that
revenues will benefit from higher advertising rates in 2006. At The
Times, rates increased about 5 percent, and at the Globe and our
Regional Media Group, rates increased about 3 percent.
-- The Broadcast Media Group results will include a full year of revenues
for KAUT-TV, which was acquired in November 2005. For the full year
2005, KAUT-TV had revenues of approximately $6 million based on the
Company's records and the records of the prior owner. In 2006, the
Group's stations are expected to benefit from mid-term elections, and,
in the first quarter, benefited from the Olympics.
-- The Company expects that all of its digital properties will continue
to experience very strong revenue growth.
-- The Company's revenues will include a full year of revenue from
About.com, which is expected to have double-digit revenue and
operating profit growth.
-- Newsprint cost per ton - Growth rate expected to be 11 to 13 percent.
-- Depreciation and amortization - $154 to $158 million.
-- Income from joint ventures - $18 to $22 million.
-- Interest expense - $58 to $62 million.
-- Tax rate - 39.6 percent.
-- Capital expenditures - Under GAAP, total capital expenditures for both
the Company and its development partner in its new headquarters
building appear on the Company's financial statements.
Company* $355 to $385 million
Development partner $130 to $150 "
--------------------
Total $485 to $535 million
*Includes $240 to $270 million for new headquarters
Conference Call Information
The Company's first-quarter earnings conference call will be held on
Thursday, April 13, at 11 a.m. E.T. The live webcast will be accessible through
the Investors section of the Company's Web site, www.nytco.com, and other Web
services, including CCBN's Individual Investor Center and CCBN's StreetEvents
for institutional investors.
To access the conference call, dial 800-819-9193 (in the U.S.) and
913-981-4911 (international callers) at least 10 minutes prior to the scheduled
start of the call.
A replay of the webcast will be available online at www.nytco.com beginning
about two hours after the call. The archive of the webcast will be available for
30 days. A digital replay of the call will also be available at 888-203-1112 (in
the U.S.) and 719-457-0820 (international callers) beginning approximately two
hours after the call until 5 p.m. E.T. on Monday, April 17. The access code is
2599743.
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 25, 2005. 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 2005
revenues of $3.4 billion, includes The New York Times, the International Herald
Tribune, The Boston Globe, 15 other daily newspapers, nine network-affiliated
television stations, two New York City radio stations and 35 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 to Costs and Expenses Excluding Certain
Items
THE NEW YORK TIMES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Statements of Income are prepared in accordance with accounting
principles generally accepted in the United States of America (GAAP).
(Dollars and shares in thousands, except per share data)
- ----------------------------------------------------------------------
First Quarter
-------------------------------------
2006 2005 % Change
--------- --------- -----------------
Revenues
Advertising $554,627 $533,779 3.9%
Circulation 220,281 219,617 0.3%
Other (a) 56,864 52,187 9.0%
--------- ---------
Total 831,772 805,583 3.3%
Costs and expenses (b) 763,496 720,457 6.0%
Gain on sale of assets (c) - 122,946 N/A
--------- ---------
Operating profit 68,276 208,072 -67.2%
Net income/(loss) from joint *
ventures 1,967 (248)
Interest expense - net 12,524 14,248 -12.1%
Other income - 1,250 N/A
--------- ---------
Income from continuing operations
before income taxes and minority
interest 57,719 194,826 -70.4%
Income taxes 22,857 83,658 -72.7%
Minority interest in net
loss/(income) of subsidiaries 93 (119) *
--------- ---------
Net Income $34,955 $111,049 -68.5%
========= =========
Average Number of Common Shares:
Basic 145,165 145,868 -0.5%
Diluted 145,361 146,771 -1.0%
Basic Earnings Per Share $0.24 $0.76 -68.4%
========= =========
Diluted Earnings Per Share $0.24 $0.76 -68.4%
========= =========
Dividends Per Share $0.165 $0.155 6.5%
========= =========
* Represents an increase or decrease in excess of 100%.
See footnotes page for additional information.
- ----------------------------------------------------------------------
THE NEW YORK TIMES COMPANY
SEGMENT INFORMATION
Revenues, Operating Profit (Loss) and Depreciation & Amortization
are prepared in accordance with GAAP.
(Dollars in thousands)
- ----------------------------------------------------------------------
First Quarter
-------------------------------------
2006 2005 % Change
--------- --------- -----------------
Revenues
- ---------------------------------
News Media Group $780,991 $773,166 1.0%
Broadcast Media Group 31,954 31,317 2.0%
About.com (d) 18,827 1,100 *
--------- ---------
Total $831,772 $805,583 3.3%
========= =========
Operating Profit (Loss)
- ---------------------------------
News Media Group $68,311 $91,309 -25.2%
Broadcast Media Group 3,197 4,051 -21.1%
About.com (d) 7,564 142 *
Corporate (10,796) (10,376) 4.0%
Gain on Sale of Assets (c) - 122,946 N/A
--------- ---------
Total $68,276 $208,072 -67.2%
========= =========
Depreciation & Amortization
- ---------------------------------
News Media Group $30,949 $29,665 4.3%
Broadcast Media Group 2,333 1,986 17.5%
About.com (d) 2,959 220 *
Corporate 1,568 1,730 -9.4%
--------- ---------
Total $37,809 $33,601 12.5%
========= =========
* Represents an increase or decrease in excess of 100%.
See footnotes page for additional information.
- ----------------------------------------------------------------------
THE NEW YORK TIMES COMPANY
NEWS MEDIA GROUP REVENUES BY OPERATING SEGMENT
Revenues are prepared in accordance with GAAP.
(Dollars in thousands)
- ----------------------------------------------------------------------
2006
--------------------------
%
Change vs.
First Quarter 2005
------------- ----------
The New York Times Media Group
Advertising $307,811 2.1%
Circulation 156,473 1.8%
Other 40,033 5.1%
-------------
Total $504,317 2.2%
-------------
New England Media Group
Advertising $101,537 -7.2%
Circulation 40,296 -5.7%
Other 9,405 17.1%
-------------
Total $151,238 -5.6%
-------------
Regional Media Group
Advertising $96,049 5.3%
Circulation 23,512 1.5%
Other 5,875 10.6%
-------------
Total $125,436 4.8%
-------------
Total News Media Group
Advertising $505,397 0.7%
Circulation 220,281 0.3%
Other (a) 55,313 7.6%
-------------
Total $780,991 1.0%
=============
See footnotes page for additional information.
- ----------------------------------------------------------------------
THE NEW YORK TIMES COMPANY
FOOTNOTES
(a) Other revenue consists primarily of revenue from wholesale
delivery operations, news services and direct marketing.
(b) In the first quarter of 2006, the Company recognized charges of
$9.4 million for costs associated with staff reductions.
(c) In the first quarter of 2005, the Company recognized a $122.9
million pre-tax gain from the sale of assets. The Company's
sale of its current headquarters building resulted in a total
pre-tax gain of $143.9 million, of which $114.5 million was
recognized in the first quarter of 2005. The remainder of the
gain is being deferred and amortized under GAAP and will offset
the leaseback expense in connection with the sale. Additionally,
in the first quarter, the Company sold property in Sarasota, Fla.,
which resulted in a pre-tax gain of $8.4 million.
(d) On March 18, 2005, the Company purchased About, Inc., a leading
online consumer information provider. The first quarter of 2006
included results for About.com for the entire quarter compared to
results for nine days in the first quarter of 2005.
Reconciliation to Costs and Expenses Excluding Certain Items
Total costs and expenses include expenses related to staff
reductions and About.com. Given that in the first quarter of 2005,
there were no staff reductions and minimal expenses related to
About.com, the Company believes that excluding these items (a
non-GAAP financial measure) provides a more meaningful 2006-to-2005
comparison.
Total costs and expenses also include depreciation and amortization
and raw material costs. The Company believes that excluding these
items (a non-GAAP financial measure) provides a useful measure of
manageable costs.
A reconciliation to costs and expenses excluding these items is
below:
(In thousands) First Quarter
---------------------------
2006 2005 % Change
---------------------------
Costs and Expenses $763,496 $720,457 6.0%
Less:
Staff reduction expenses 9,377 -
About.com expenses 11,263 958
---------------------------
Sub-total 742,856 719,499 3.2%
Less:
Depreciation & amortization * 34,850 33,381
---------------------------
Sub-total 708,006 686,118 3.2%
Less:
Raw materials 81,937 74,829
---------------------------
Total $626,069 $611,289 2.4%
===========================
* Excludes depreciation & amortization for About.com, which is
included in About.com expenses above.
CONTACT: The New York Times Company
Catherine J. Mathis, 212-556-1981
mathis@nytimes.com
or
Paula Schwartz, 212-556-5224
schwap@nytimes.com