Exhibit 99.1
The New York Times Company Reports 2006 Third-Quarter Results
NEW YORK--(BUSINESS WIRE)--Oct. 19, 2006--The New York Times
Company announced today that 2006 third-quarter diluted earnings per
share (EPS) were $.10, compared with $.16 in the third quarter last
year. Third-quarter net income was $14.0 million compared with $23.1
million in the same period of 2005.
Included in results are:
-- staff reduction costs of $7.4 million ($4.3 million after tax,
or $.03 per share) in the 2006 third quarter and $12.4 million
($7.5 million after tax, or $.05 per share) in the third
quarter last year and
-- a loss of $7.8 million ($4.3 million after tax, or $.03 per
share) from the sale of the Company's 50 percent investment in
the Discovery Times Channel (DTC), a digital cable channel.
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 third-quarter results reflect the continued weakness in the
print advertising marketplace," said Janet L. Robinson, president and
chief executive officer. "We are, however, strongly encouraged by the
discipline our teams have shown in holding the line on operating
costs, which were virtually flat with the third quarter of last year.
The leadership we are showing in transitioning from our print-centric
distribution model to become a multi-platform content provider
continues to pay dividends through the robust growth in our
Internet-related revenues, which contributed more than 8 percent of
the Company's revenues in the quarter and are on track to exceed $250
million by year end.
"The strength of our brands both in print and online continues to
provide the foundation for translating excellence in content and
execution into innovative products that attract readers and add value
for our advertisers.
"The contemplated sale of our Broadcast Media Group and the sale
of our interest in the Discovery Times Channel, coupled with strategic
acquisitions such as Baseline StudioSystems and Calorie-Count.com that
increase our footprint in the Internet space, all serve to sharpen our
focus going forward."
On September 12, 2006, the Company announced that it plans to sell
its Broadcast Media Group. Under GAAP, the results of operations of
the Broadcast Media Group are now classified under discontinued
operations for all periods presented.
Third-Quarter Financial Results from Continuing Operations
All comparisons are for the third quarter of 2006 to the third
quarter of 2005 and exclude the results of the Broadcast Media Group.
Revenues
Total revenues decreased 2.4 percent to $739.6 million from $757.8
million. Advertising revenues declined 4.2 percent; circulation
revenues were down 1.3 percent; and other revenues increased 8.9
percent.
Costs and Expenses
Total costs and expenses increased 0.1 percent to $719.1 million
from $718.4 million. Excluding those related to staff reductions,
total costs and expenses rose 0.8 percent. The increase includes:
-- 0.4 percent attributable to increased compensation expense and
-- 0.3 percent attributable to higher distribution expense.
Newsprint expense decreased 2.2 percent in the third quarter, with
11.1 percent of the decrease resulting from lower consumption
partially offset by an 8.9 percent increase from higher prices.
Total costs and expenses excluding staff reductions, raw materials
and depreciation and amortization increased 0.7 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 $20.5 million from $39.4 million due
to a decline in revenues, as discussed above.
Business Segment Results
News Media Group
Total News Media Group revenues decreased 3.0 percent to $721.3
million from $743.6 million. Advertising revenues decreased 5.1
percent due to weakness in print advertising at The New York Times
Media Group and the New England Media Group, partially offset by
higher online advertising revenues across the News Media Group.
Circulation revenues were down 1.3 percent mainly due to weakness
at the New England Media Group. On October 1 The New York Times raised
the newsstand price of the Northeast edition of the Sunday Times from
$4.50 to $5.00, which is the same price as the national edition.
Home-delivery prices are scheduled to increase 4 percent on November
6. These two price increases are expected to add approximately $12
million to circulation revenues in 2007.
Other revenues increased 8.3 percent largely because of the
introduction of TimesSelect, higher commercial printing revenues and
the revenues from Baseline StudioSystems, which was acquired on August
28, 2006. Baseline is a leading online database and research service
for information on the film and television industries.
Total News Media Group costs and expenses decreased slightly
primarily due to lower staff reduction costs, offset in part by the
increase in expenses discussed above.
Operating profit for the News Media Group decreased to $25.5
million from $45.3 million, due to lower revenues.
About.com
About.com's third-quarter revenues increased 29.3 percent to $18.3
million from $14.2 million due to higher display and cost-per-click
advertising and e-commerce revenue. Operating profit increased to $6.4
million from $3.8 million.
Other Financial Data
Internet Revenues
In the third quarter, the Company's Internet-related businesses
generated $62.8 million in revenue, up from $50.5 million in the third
quarter of 2005. For the first nine months of 2006, these
Internet-related businesses generated $189.7 million in revenue, up
from $134.2 million in the same period last year. Internet-related
businesses include our digital archives, NYTimes.com, Boston.com,
About.com and Web sites of our other newspaper properties. In total,
Internet businesses accounted for about 8.5 percent of the Company's
revenues in the third quarter versus 6.7 percent in the same quarter a
year ago.
Joint Ventures
In September 2006, the Company completed the sale of its 50
percent investment in DTC for $100 million. The sale resulted in a
loss of $7.8 million. Including the loss from the sale, net income
from joint ventures increased in the third quarter to $7.3 million
from $5.0 million primarily due to stronger performance at New England
Sports Ventures.
Interest Expense-net
Interest expense-net increased to $13.3 million from $11.7 million
mainly because of higher levels of debt outstanding and higher
short-term interest rates.
Income Taxes
The effective income tax rate decreased to 35.0 percent from 42.4
percent as the Company benefited from a favorable adjustment in the
third quarter resulting from the completion of the Company's 2005
federal taxes.
Discontinued Operations
Income from the Broadcast Media Group is presented on the attached
Condensed Consolidated Statements of Income as "Discontinued
operations, net of income taxes - Broadcast Media Group" and was $4.3
million, or $.03 per share, for the third quarter, and $3.4 million,
or $.02 per share, for the third quarter of 2005. Results for the
Broadcast Media Group for the third quarter and first nine months of
2006 and 2005 are included in the exhibits to this release.
Shares
In the third quarter, the Company repurchased 0.7 million Class A
shares at a cost of $15.6 million. Approximately $108.2 million
remained at the end of the third quarter from the Company's current
share repurchase authorization. Class A and Class B common shares
outstanding at the end of the quarter totaled 144.1 million shares.
Cash and Total Debt
At the end of the quarter, the Company's cash and cash equivalents
were approximately $39 million and total debt was approximately $1.5
billion.
Capital Expenditures
In August 2006, the Company's new headquarters building was
converted to a leasehold condominium, with the Company and its
development partner acquiring ownership of their respective leasehold
condominium units. Previously, the leasehold interest in the building
was held by a consolidated partnership in which the Company held a 58
percent interest and its development partner held a 42 percent
interest. As of August 2006, the consolidated partnership no longer
holds the development partner's condominium interests, and, as a
result, its condominium units and capital expenditures are not
consolidated in the Company's financial statements. The Company's
capital expenditures include those of its development partner through
August 2006.
In the third quarter, total capital expenditures were
approximately $90 million. Of this amount, the development partner's
responsibility was approximately $11 million. The balance of $79
million was the Company's responsibility, including approximately $56
million for its portion of the cost of its new headquarters.
Plant Consolidation
In the third quarter, the Company announced plans to consolidate
its New York metro area printing into its newest facility in College
Point, Queens, and sublease its older Edison, New Jersey, facility.
The consolidation is expected to be completed in the second quarter of
2008. On an ongoing basis, the Company expects to save $30 million in
lower operating costs and avoid the need for approximately $50 million
in capital investment at the Edison facility over the next ten years.
The Company expects a return on its $135 million investment related to
the plant consolidation of at least 15 percent with a payback period
of five and a half years.
The Company currently estimates that it will record total costs to
close the Edison facility in the range of $104 to $128 million. The
breakdown of estimated expenses is as follows:
-- $78 to $90 million ($13 to $15 million per quarter) for
accelerated depreciation expense, which will begin in the
fourth quarter of 2006 and end in the first quarter of 2008.
This expense is for the acceleration of depreciation expense
of certain assets, mainly presses, at its Edison facility.
-- $12 to $16 million for one-time staff reduction cash
expenditures. The exact cost and the timing of the recognition
and expenditures will depend on the final composition and
seniority of the affected employees as well as the timing of
the implementation of the staff reductions.
-- $14 to $22 million for cash expenditures to restore the Edison
facility to its pre-lease condition, approximately half of
which was previously expensed.
Updated 2006 Expectations
Below are the Company's expectations for 2006.
-- The Company's revenues will include a full year of revenue
from About.com, which is expected to have revenue growth above
the industry average of 30 percent as well as double-digit
operating profit growth.
-- Process engineering benefits - $55 to $60 million.
-- Newsprint cost per ton - Growth rate expected to be 9 to 10
percent.
-- Depreciation and amortization - $160 to $167 million (includes
$13 to $15 million of accelerated depreciation expense in the
fourth quarter associated with the consolidation of the New
York metro area printing plants and $8 million of depreciation
and amortization expense associated with the first nine months
of operations of the Broadcast Media Group, which is now
considered a discontinued operation, and no longer records
this expense).
-- Net income from joint ventures - $18 to $20 million, including
the $7.8 million loss from the sale of the Company's interest
in DTC.
-- Interest expense - $51 to $55 million.
-- Tax rate - 38.5 percent.
-- Capital expenditures -
Company* $348 to $368 million
Development partner (through
August 2006) $55 million
--------------------------
Total $403 to $423 million
*Includes $216 to $236 million for new headquarters
Conference Call Information
The Company's third-quarter earnings conference call will be held
on Thursday, October 19, at 11 a.m. E.T. To access the call, dial
877-704-5384 (in the U.S.) and 913-312-1297 (international callers).
Participants should dial into the conference approximately 10 minutes
before the start time. Online listeners can link to the live webcast
at www.nytco.com/investors.html.
A digital replay will 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 Friday, October 20. The
access code is 2254476. An archive of webcast will be available
beginning two hours after the call for 30 days at
www.nytco.com/investors.html. In addition, an MP3 file of the call can
be downloaded from the Company's site.
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)
Third Quarter
--------------------------------------
2006 2005 % Change
------------ ------------ ------------
Revenues
Advertising $ 465,476 $ 485,644 -4.2%
Circulation 215,007 217,872 -1.3%
Other (a) 59,103 54,287 8.9%
------------ ------------
Total 739,586 757,803 -2.4%
Costs and expenses (b) 719,110 718,416 0.1%
------------ ------------
Operating profit 20,476 39,387 -48.0%
Net income from joint ventures 7,348 5,000 47.0%
Interest expense - net 13,267 11,677 13.6%
Other income - 1,250 -100.0%
------------ ------------
Income from continuing
operations before income taxes
and minority interest 14,557 33,960 -57.1%
Income taxes 5,091 14,404 -64.7%
Minority interest in net
loss/(income) of subsidiaries 267 167 59.9%
------------ ------------
Income from continuing
operations 9,733 19,723 -50.7%
Discontinued operations, net of
income taxes -
Broadcast Media Group (d) 4,290 3,358 27.8%
------------ ------------
Net Income $ 14,023 $ 23,081 -39.2%
============ ============
Average Number of Common
Shares:
Basic 144,454 145,214 -0.5%
Diluted 144,568 145,602 -0.7%
Basic Earnings Per Share:
Income from continuing
operations $ 0.07 $ 0.14 -50.0%
Discontinued operations, net
of income taxes 0.03 0.02 50.0%
------------ ------------
Net Income $ 0.10 $ 0.16 -37.5%
============ ============
Diluted Earnings Per Share:
Income from continuing
operations $ 0.07 $ 0.14 -50.0%
Discontinued operations, net
of income taxes 0.03 0.02 50.0%
------------ ------------
Net Income $ 0.10 $ 0.16 -37.5%
============ ============
Dividends Per Share $ 0.175 $ 0.165 6.1%
============ ============
Nine Months
--------------------------------------
2006 2005 % Change
------------ ------------ ------------
Revenues
Advertising $ 1,528,225 $ 1,524,829 0.2%
Circulation 654,993 655,971 -0.1%
Other (a) 175,822 159,154 10.5%
------------ ------------
Total 2,359,040 2,339,954 0.8%
Costs and expenses (b) 2,184,097 2,122,115 2.9%
Gain on sale of assets (c) - 122,946 -100.0%
------------ ------------
Operating profit 174,943 340,785 -48.7%
Net income from joint ventures 18,085 7,890 *
Interest expense - net 39,025 37,769 3.3%
Other income - 3,750 -100.0%
------------ ------------
Income from continuing
operations before income taxes
and minority interest 154,003 314,656 -51.1%
Income taxes 56,206 130,753 -57.0%
Minority interest in net
loss/(income) of subsidiaries 604 (113) *
------------ ------------
Income from continuing
operations 98,401 183,790 -46.5%
Discontinued operations, net of
income taxes -
Broadcast Media Group (d) 11,890 11,155 6.6%
------------ ------------
Net Income $ 110,291 $ 194,945 -43.4%
============ ============
Average Number of Common Shares:
Basic 144,803 145,535 -0.5%
Diluted 144,982 146,077 -0.7%
Basic Earnings Per Share:
Income from continuing
operations $ 0.68 $ 1.26 -46.0%
Discontinued operations, net
of income taxes 0.08 0.08 0.0%
------------ ------------
Net Income $ 0.76 $ 1.34 -43.3%
============ ============
Diluted Earnings Per Share:
Income from continuing
operations $ 0.68 $ 1.26 -46.0%
Discontinued operations, net
of income taxes 0.08 0.07 14.3%
------------ ------------
Net Income $ 0.76 $ 1.33 -42.9%
============ ============
Dividends Per Share $ 0.515 $ 0.485 6.2%
============ ============
* 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)
Third Quarter
-----------------------------------
2006 2005 % Change
------------ ------------ ---------
Revenues (d)
- ---------------------------------
News Media Group $ 721,260 $ 743,631 -3.0%
About.com (e) 18,326 14,172 29.3%
------------ ------------
Total $ 739,586 $ 757,803 -2.4%
============ ============
Operating Profit (Loss) (d)
- ---------------------------------
News Media Group $ 25,541 $ 45,269 -43.6%
About.com (e) 6,418 3,847 66.8%
Corporate (11,483) (9,729) 18.0%
------------ ------------
Total $ 20,476 $ 39,387 -48.0%
============ ============
Depreciation & Amortization (d)
- ---------------------------------
News Media Group $ 32,213 $ 29,658 8.6%
About.com (e) 2,959 3,040 -2.7%
Corporate 1,504 1,823 -17.5%
------------ ------------
Total $ 36,676 $ 34,521 6.2%
============ ============
Nine Months
-----------------------------------
2006 2005 % Change
------------ ------------ ---------
Revenues (d)
- ---------------------------------
News Media Group $ 2,302,441 $ 2,312,731 -0.4%
About.com (e) 56,599 27,223 *
------------ ------------
Total $ 2,359,040 $ 2,339,954 0.8%
============ ============
Operating Profit (Loss) (d)
- ---------------------------------
News Media Group $ 186,996 $ 243,814 -23.3%
About.com (e) 21,291 6,503 *
Corporate (33,344) (32,478) 2.7%
Gain on Sale of Assets (c) - 122,946 -100.0%
------------ ------------
Total $ 174,943 $ 340,785 -48.7%
============ ============
Depreciation & Amortization (d)
- ---------------------------------
News Media Group $ 94,260 $ 88,682 6.3%
About.com (e) 8,864 6,167 43.7%
Corporate 4,588 5,279 -13.1%
------------ ------------
Total $ 107,712 $ 100,128 7.6%
============ ============
* Represents an increase 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
-------------------------
%
Third Change vs.
Quarter 2005
------------ ------------
The New York Times Media Group
Advertising $ 261,653 -4.1%
Circulation 153,739 -0.3%
Other 41,516 6.4%
------------
Total $ 456,908 -1.9%
------------
New England Media Group
Advertising $ 97,424 -12.4%
Circulation 40,483 -5.7%
Other 11,146 18.4%
------------
Total $ 149,053 -8.9%
------------
Regional Media Group
Advertising $ 88,938 1.0%
Circulation 20,785 0.1%
Other 5,576 4.3%
------------
Total $ 115,299 1.0%
------------
Total News Media Group
Advertising $ 448,015 -5.1%
Circulation 215,007 -1.3%
Other (a) 58,238 8.3%
------------
Total $ 721,260 -3.0%
============
2006
-------------------------
%
Change vs.
Nine Months 2005
------------ ------------
The New York Times Media Group
Advertising $ 885,509 0.0%
Circulation 467,858 1.4%
Other 123,337 7.5%
------------
Total $ 1,476,704 1.0%
------------
New England Media Group
Advertising $ 307,569 -10.0%
Circulation 121,055 -6.2%
Other 32,173 17.2%
------------
Total $ 460,797 -7.5%
------------
Regional Media Group
Advertising $ 281,330 3.9%
Circulation 66,080 0.7%
Other 17,530 9.1%
------------
Total $ 364,940 3.5%
------------
Total News Media Group
Advertising $ 1,474,408 -1.6%
Circulation 654,993 -0.1%
Other (a) 173,040 9.4%
------------
Total $ 2,302,441 -0.4%
============
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, direct marketing, digital
archives, commercial printing and TimesSelect.
(b) The Company recognized charges of $7.4 million for costs
associated with staff reductions in the third quarter of 2006 and
$25.9 million for the full nine months of 2006 compared with
charges of $12.4 million for the third quarter and $22.3 million
for the first nine months of 2005.
(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 is offsetting the leaseback
expense in connection with the sale. Additionally, in the first
quarter of 2005, the Company sold property in Sarasota, Fla.,
which resulted in a pre-tax gain of $8.4 million.
(d) In the third quarter of 2006, the Company announced its plan to
sell its Broadcast Media Group, which includes nine
network-affiliated television stations and their related
properties. 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.
Results for the Broadcast Media Group, included within
discontinued operations, for the third quarter and nine months of
2006 and 2005 are as follows:
(In thousands) Third Quarter Nine Months
--------------------- ---------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
Revenues $ 36,476 $ 33,280 $ 107,542 $ 101,781
Pre-tax income $ 7,271 $ 5,692 $ 20,153 $ 18,908
Income taxes $ 2,981 $ 2,334 $ 8,263 $ 7,753
Net income $ 4,290 $ 3,358 $ 11,890 $ 11,155
(e) On March 18, 2005, the Company purchased About, Inc., a leading
online consumer information provider. Fiscal year 2006 includes
results for About.com for the full nine months compared to results
from the acquisition date through the third quarter in 2005.
Reconciliation to Costs and Expenses Excluding Certain Items
Total costs and expenses include expenses related to staff
reductions. The Company believes that excluding this item (a non-
GAAP financial measure) provides investors with helpful
supplemental information on the Company's underlying operating
expenses that is used by management in its financial and
operational decision-making.
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.
These measures should be considered in addition to results
prepared in accordance with GAAP, but should not be considered a
substitute for or superior to GAAP results.
A reconciliation to costs and expenses excluding these items is
below:
(In thousands) Third Quarter
----------------------------------
2006 2005 % Change
----------- ---------- -----------
Costs and Expenses $ 719,110 $ 718,416 0.1%
Less:
Staff reduction expenses 7,440 12,371
----------- ---------- -----------
Sub-total 711,670 706,045 0.8%
Less:
Depreciation & amortization 36,676 34,521
----------- ---------- -----------
Sub-total 674,994 671,524 0.5%
Less:
Raw materials 75,178 75,718
----------- ---------- -----------
Total $ 599,816 $ 595,806 0.7%
=========== ========== ===========
CONTACT: The New York Times Company
Catherine J. Mathis, 212-556-1981
mathis@nytimes.com
or
Paula Schwartz, 212-556-5224
schwap@nytimes.com