Exhibit 99.1
The New York Times Company Reports 2007 First-Quarter Results
NEW YORK--(BUSINESS WIRE)--April 19, 2007--The New York Times
Company announced today first-quarter diluted earnings per share (EPS)
from continuing operations of $.14, compared with $.21 in the first
quarter last year. Excluding special items, EPS was $.25 per share
from continuing operations compared with $.25 in the first quarter
last year. Operating profit decreased to $54.5 million from $60.5
million in the first quarter of 2006, while operating profit before
depreciation and amortization increased to $98.9 million from $95.9
million in the first quarter of 2006.
Included in the first-quarter results are the following special
items:
-- Accelerated depreciation expense of $11.6 million ($6.7
million after tax, or $.05 per share) for assets at the
Company's Edison, N.J., printing plant, which is in the
process of being closed.
-- Staff reduction costs of $7.8 million ($4.4 million after tax,
or $.03 per share) compared with $9.4 million ($5.2 million
after tax, or $.04 per share) in the same quarter last year.
-- 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.
"Despite a difficult print advertising environment, we continued
to make progress on our strategy of introducing new products,
developing our content verticals, building our innovation capability,
aggressively managing costs and rebalancing our portfolio of
businesses," said Janet L. Robinson, president and CEO. "Operating
profit before depreciation and amortization grew 3 percent. Contrary
to trends across the industry, circulation revenues increased. Our
Internet-related revenues rose 22 percent, in part due to new
products, and now account for 10 percent of the Company's revenues.
Operating costs again remained under very tight control as we
continued our drive to streamline our organization and improve the
efficiency of all of our operations.
"During the quarter, we continued to rebalance our portfolio of
businesses with the announcement that we agreed to sell our Broadcast
Media Group for $575 million. In addition, we are in the process of
selling our radio station WQEW-AM for $40 million. Both sales are
expected to close in the second quarter. As a result of our strong
cash flow and our current financial position strengthened by these
upcoming asset sales, we recently increased our dividend 31 percent.
Our dividend yield is now nearly 4 percent, significantly above our
peers and the S&P 500. We view this increase as an important way to
reward our shareholders."
First-Quarter Results from Continuing Operations
All comparisons are for the first quarter of 2007 to the first
quarter of 2006 and exclude the results of the Broadcast Media Group,
which are classified under discontinued operations.
Beginning this quarter, the Company is providing more detail on
operating costs in the income statement to make it easier to
understand how it manages expenses. The Company now shows depreciation
and amortization separately from production and selling, general and
administrative costs. In addition, the exhibits to this release
include non-GAAP financial measures, a discussion of management's use
of these non-GAAP financial measures and a reconciliation from the
most comparable GAAP financial measure.
Revenues
Total revenues decreased 1.6 percent to $786.0 million from $799.2
million. Advertising revenues decreased 3.4 percent; circulation
revenues increased 1.0 percent; and other revenues rose 4.3 percent.
Operating Costs
Operating costs decreased 1.0 percent to $731.5 million from
$738.7 million. The decline was a result of lower newsprint,
compensation and promotion costs, which were partially offset by
higher depreciation expense from the accelerated depreciation of
assets at the Edison, N.J., printing plant. Excluding depreciation and
amortization, operating costs decreased 2.3 percent to $687.1 million
from $703.3 million.
Newsprint expense decreased 8.5 percent, with 6.7 percent of the
decrease resulting from lower consumption and 1.8 percent from lower
prices.
Operating Profit
Operating profit decreased 9.9 percent to $54.5 million from $60.5
million. Operating profit before depreciation and amortization
increased 3.1 percent to $98.9 million from $95.9 million due to lower
costs, partially offset by a decrease in advertising revenues.
First-Quarter Business Segment Results
News Media Group
Total News Media Group revenues decreased 2.2 percent to $763.5
million from $781.0 million. Advertising revenues decreased 4.3
percent due to weakness in print advertising across the News Media
Group, partially offset by higher online advertising revenues across
the Group.
Circulation revenues for the quarter rose 1.0 percent, mainly
because of higher prices at The New York Times Media Group, partially
offset by fewer copies sold. In the fourth quarter of 2006, The New
York Times raised the newsstand price of the Northeast edition of the
Sunday Times and increased home-delivery prices.
Other revenues rose 3.8 percent largely because of revenues from
Baseline StudioSystems, wholesale delivery operations, and growth in
subscriptions to TimesSelect. Baseline, which was acquired in August
2006, is a leading online database and research service for
information on the film and television industries.
Total News Media Group operating costs decreased 1.8 percent due
to lower compensation, newsprint and promotion costs, which were
partially offset by higher depreciation expense from the accelerated
depreciation of assets at the Edison, N.J., printing plant.
Operating profit for the News Media Group decreased 7.2 percent to
$59.6 million from $64.3 million. Operating profit before depreciation
and amortization increased 4.4 percent to $99.4 million from $95.2
million.
About.com
About.com's first-quarter revenues increased 23.8 percent to $22.5
million from $18.2 million due to higher display and cost-per-click
advertising and e-commerce revenue. About.com's operating costs
increased 26.2 percent due to higher compensation costs. Operating
profit grew 20.0 percent to $8.3 million from $6.9 million. Operating
profit before depreciation and amortization rose 15.8 percent to $11.5
million from $9.9 million, due to higher revenues.
Corporate
Corporate costs increased 25.4 percent to $13.5 million from $10.7
million primarily due to higher professional fees associated with cost
savings efforts and higher compensation costs.
Other Financial Data
Internet Revenues
In the first quarter, the Company's Internet revenues grew 21.6
percent to $74.3 million from $61.1 million in the first quarter of
2006. Internet businesses include digital archives, NYTimes.com,
Boston.com, About.com and Web sites at the Company's other newspaper
properties. In total, Internet businesses accounted for 9.5 percent of
the Company's revenues in the first quarter versus 7.6 percent in the
2006 first quarter.
Joint Ventures
Net loss from joint ventures was $2.2 million in the first quarter
compared with net income of $2.0 million in the same quarter last
year. The Company no longer includes earnings from the Discovery Times
Channel due to the sale of the Company's interest in October 2006. In
addition, the decline was from weaker performance at the paper mills.
Interest Expense-net
Interest expense-net decreased to $11.3 million from $12.5 million
in the same quarter last year. Capitalized interest associated with
the Company's new headquarters increased due to continued spending for
construction. The increase in capitalized interest was partially
offset by higher interest expense due to increased short-term rates
and lower interest income from the Company's development partner.
Income Taxes
The effective income tax rate increased to 51.0 percent in the
first quarter from 39.0 percent in last year's first quarter.
Excluding the adjustment to income tax expense mentioned above, the
income tax rate is 39.9 percent.
Cash and Total Debt
At the end of the quarter, cash and cash equivalents were
approximately $54 million and total debt was approximately $1.4
billion.
Capital Expenditures
In the first quarter, total capital expenditures were
approximately $114 million, which included approximately $78 million
for the Company's new headquarters.
Plant Consolidation
In 2006, the Company announced plans to consolidate the printing
operations of a facility it leases in Edison, N.J., into its newest
facility in College Point, Queens. As part of the consolidation, the
Company originally planned to sublease the Edison facility through
2018, the end of the current lease term. After evaluating the options
with respect to the lease, the Company decided it was financially
prudent to purchase the Edison facility and sell it, with two adjacent
properties it already owned, to a third party. The anticipated
purchase and sale of the Edison facility, expected to close in the
second quarter of 2007, will relieve the Company of rental terms in
excess of market as well as restoration obligations under the lease.
As a result of the purchase and sale, the Company expects to recognize
a pre-tax loss of $65 to $72 million in the second quarter.
2007 Expectations
Below are the Company's expectations for 2007.
-- Previously the Company expected revenues from Internet-related
businesses, including About.com, NYTimes.com, Boston.com,
iht.com and the sites associated with its regional newspapers,
to grow 30 percent mainly from organic growth. With Internet
advertising growing more slowly across the industry, the
Company expects that revenues from its Internet-related
businesses will be less than originally forecast for 2007.
-- Newsprint cost per ton is expected to decline about 7 percent.
Previously the Company had expected newsprint cost per ton to
decline in the low-single digits but has revised its forecast
in light of market conditions.
-- Cost savings and productivity gains - $65 to $75 million,
excluding certain one-time costs, mainly staff reduction
costs.
-- Depreciation and amortization - $185 to $195 million, which
includes $45 to $48 million of accelerated depreciation
expense associated with the plant consolidation project,
mainly presses. Total depreciation and amortization includes
approximately $16 to $19 million for the new building,
primarily in the second half of 2007. Previously the Company
had expected depreciation and amortization of $195 to $205
million but reduced its estimate due to the plant
consolidation transactions mentioned above.
-- Income from joint ventures - $5 to $10 million. Previously the
Company had expected income from joint ventures of $10 to $15
million but has revised its forecast downward in part due to
lower paper prices.
-- Interest expense - $44 to $48 million. Previously the Company
had expected interest expense of $48 to $52 million but
reduced its estimate due to the plant consolidation
transactions mentioned above.
-- Capital expenditures - $340 to $370 million, including $170 to
$190 million for the Company's new headquarters and $75
million for the plant consolidation.
-- The Company expects to complete the sale of its Broadcast
Media Group for $575 million and the sale of its radio station
WQEW-AM for $40 million, both in the second quarter, and to
record a pre-tax gain of $235 to $245 million as a result of
the transactions.
-- Income tax rate - Excluding unusual items during the year,
such as the tax adjustment in the first quarter and asset
dispositions, the Company's normalized income tax rate for
2007 is estimated to be approximately 41 percent.
Conference Call Information
The Company's first-quarter earnings conference call will be held
on Thursday, April 19, at 11 a.m. E.T. To access the call, dial
800-289-0572 (in the U.S.) and 913-981-5543 (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, April 20. The access
code is 8126435. An archive of the 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 presentation 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 the Company's 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
31, 2006. 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 2006 revenues of $3.3 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.
Exhibits: Condensed Consolidated Statements of Income
Segment Information
News Media Group Revenues by Operating Segment
Footnotes
Reconciliation of Non-GAAP Information
This press release can be downloaded from www.nytco.com
THE NEW YORK TIMES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars and shares in thousands, except per share data)
- ----------------------------------------------------------------------
First Quarter
-----------------------------
2007 2006 % Change
--------- --------- ---------
Revenues
Advertising $504,915 $522,685 -3.4%
Circulation 222,454 220,281 1.0%
Other (a) 58,651 56,231 4.3%
--------- ---------
Total 786,020 799,197 -1.6%
Operating Costs (b)
Production costs 345,025 356,746 -3.3%
Selling, general, and administrative
costs 342,061 346,510 -1.3%
Depreciation and amortization 44,437 35,476 25.3%
--------- ---------
Total 731,523 738,732 -1.0%
Operating profit 54,497 60,465 -9.9%
Net (loss)/income from joint ventures (2,153) 1,967 *
Interest expense - net 11,328 12,524 -9.5%
--------- ---------
Income from continuing operations before
income taxes and minority interest 41,016 49,908 -17.8%
Income tax expense 20,899 19,475 7.3%
Minority interest in net loss of
subsidiaries 9 93 -90.3%
--------- ---------
Income from continuing operations 20,126 30,526 -34.1%
Income from discontinued operations, net
of income taxes-
Broadcast Media Group (c) 3,776 1,886 *
--------- ---------
Net Income $ 23,902 $ 32,412 -26.3%
========= =========
Average Number of Common Shares:
Basic 143,905 145,165 -0.9%
Diluted 144,077 145,361 -0.9%
Basic Earnings Per Share:
Income from continuing operations $ 0.14 $ 0.21 -33.3%
Discontinued operations, net of
income taxes 0.03 0.01 *
--------- ---------
Net Income $ 0.17 $ 0.22 -22.7%
========= =========
Diluted Earnings Per Share:
Income from continuing operations $ 0.14 $ 0.21 -33.3%
Discontinued operations, net of
income taxes 0.03 0.01 *
--------- ---------
Net Income $ 0.17 $ 0.22 -22.7%
========= =========
Dividends Per Share $ 0.175 $ 0.165 6.1%
========= =========
* 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
-------------------------------
2007 2006 % Change
---------- ---------- ---------
Revenues (c)
- --------------------------------------
News Media Group $763,477 $780,991 -2.2%
About.com 22,543 18,206 23.8%
---------- ----------
Total $786,020 $799,197 -1.6%
========== ==========
Operating Profit (Loss) (c)
- --------------------------------------
News Media Group $ 59,629 $ 64,255 -7.2%
About.com 8,330 6,943 20.0%
Corporate (13,462) (10,733) 25.4%
---------- ----------
Total $ 54,497 $ 60,465 -9.9%
========== ==========
Operating Profit (Loss) Before Depreciation & Amortization (d)
- ----------------------------------------------------------------------
News Media Group $ 99,352 $ 95,204 4.4%
About.com 11,463 9,902 15.8%
Corporate (11,881) (9,165) 29.6%
---------- ----------
Total $ 98,934 $ 95,941 3.1%
========== ==========
See footnotes page for additional information.
- ----------------------------------------------------------------------
THE NEW YORK TIMES COMPANY
NEWS MEDIA GROUP REVENUES BY OPERATING SEGMENT
(Dollars in thousands)
- ----------------------------------------------------------------------
2007
------------------------------------
First Quarter % Change vs. 2006
---------------- -----------------
The New York Times Media Group
Advertising $ 297,146 -3.5%
Circulation 160,662 2.7%
Other 42,076 5.1%
----------------
Total $ 499,884 -0.9%
----------------
New England Media Group
Advertising $ 97,242 -4.2%
Circulation 38,485 -4.5%
Other 9,393 -0.1%
----------------
Total $ 145,120 -4.0%
----------------
Regional Media Group
Advertising $ 89,206 -7.1%
Circulation 23,307 -0.9%
Other 5,960 1.4%
----------------
Total $ 118,473 -5.6%
----------------
Total News Media Group
Advertising $ 483,594 -4.3%
Circulation 222,454 1.0%
Other (a) 57,429 3.8%
----------------
Total $ 763,477 -2.2%
================
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, news services/syndication, digital archives,
TimesSelect, Baseline StudioSystems and commercial printing.
(b) The Company recognized staff reduction charges of $7.8 million in
the first quarter of 2007 and $9.4 million in the first quarter
of 2006.
(c) On January 3, 2007, the Company entered into an agreement to sell
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. The sale is expected to be completed in the second
quarter of 2007.
Results for the Broadcast Media Group, included within
discontinued operations, for the first quarter of 2007 and 2006
are as follows:
-----------------------------
First Quarter
-----------------------------
2007 2006
-------------- --------------
Revenues $ 32,904 $ 31,954
Pre-tax income $ 6,501 $ 3,197
Income taxes 2,725 1,311
-------------- --------------
Net income $ 3,776 $ 1,886
============== ==============
(d) See "Reconciliation of Non-GAAP Information" for a reconciliation
of operating profit(loss) to operating profit(loss) before
depreciation and amortization.
THE NEW YORK TIMES COMPANY
RECONCILIATION OF NON-GAAP INFORMATION
(Dollars in thousands, except per share data)
The Company has included non-GAAP financial information with respect
to diluted earnings per share (EPS) from continuing operations
excluding special items, operating profit(loss) before depreciation
and amortization and operating costs excluding certain items. 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 earnings per share 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 measures of results.
Diluted EPS from continuing operations excluding special items
provides 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 is useful in evaluating the Company's cash-generating
ability as it excludes the significant non-cash impact of
depreciation and amortization. Total operating costs include
depreciation and amortization, staff reduction and raw materials
costs. Total operating costs excluding depreciation and amortization
provide a useful measure of manageable costs. Total operating costs
excluding depreciation and amortization, staff reduction and raw
materials costs provide investors helpful supplemental information on
the Company's underlying operating costs.
Reconciliations of these non-GAAP financial measures from,
respectively, diluted EPS from continuing operations, operating
profit(loss) and total operating costs, the most directly comparable
GAAP items, are set out in the tables below.
Reconciliation of diluted earnings per share from continuing
operations excluding special items
-----------------------------
First Quarter
-----------------------------
2007 2006 % Change
--------- --------- ---------
Diluted EPS from continuing
operations $ 0.14 $ 0.21 -33.3%
Add:
Accelerated depreciation 0.05 -
Staff reduction costs 0.03 0.04
Income tax adjustment 0.03 -
--------- --------- ---------
Adjusted Diluted EPS $ 0.25 $ 0.25 0.0%
========= ========= =========
Reconciliation of operating profit(loss) before depreciation and
amortization
--------------------------------------
First Quarter 2007
--------------------------------------
News
Media
Group About.com Corporate Total
--------- --------- --------- --------
Operating profit(loss) $ 59,629 $ 8,330 $(13,462) $54,497
Add:
Depreciation and
amortization 39,723 3,133 1,581 44,437
--------- --------- --------- --------
Operating profit(loss) before
depreciation and amortization $ 99,352 $ 11,463 $(11,881) $98,934
========= ========= ========= ========
--------------------------------------
First Quarter 2006
--------------------------------------
News
Media
Group About.com Corporate Total
--------- --------- --------- --------
Operating profit(loss) $ 64,255 $ 6,943 $(10,733) $60,465
Add:
Depreciation and
amortization 30,949 2,959 1,568 35,476
--------- --------- --------- --------
Operating profit(loss) before
depreciation and amortization $ 95,204 $ 9,902 $ (9,165) $95,941
========= ========= ========= ========
Reconciliation of total operating costs excluding certain items
-----------------------------
First Quarter
-----------------------------
2007 2006 % Change
--------- --------- ---------
Total operating costs $731,523 $738,732 -1.0%
Less:
Depreciation and
amortization 44,437 35,476
--------- --------- ---------
Sub-total 687,086 703,256 -2.3%
Less:
Staff reduction costs 7,775 9,377
Raw materials 74,896 81,937
--------- --------- ---------
Total $604,415 $611,942 -1.2%
========= ========= =========
CONTACT: The New York Times Company
Catherine J. Mathis, 212-556-1981
mathis@nytimes.com
Or
Paula Schwartz, 212-556-5224
schwap@nytimes.com