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NEW YORK--(BUSINESS WIRE)--April 12, 2004--The New York Times
Company announced today that first-quarter diluted earnings per share
were $.38, compared with $.45 in the first quarter of 2003, and net
income was $58.4 million compared with $68.8 million in the first
quarter of 2003.
The 2003 first-quarter financial results included a net benefit of
$.07 per share ($17.8 million pre-tax, $10.7 million after tax) from
the following three items, which are reviewed in more detail below:
Included in Costs and Expenses (a net benefit of $9.5 million):
---------------------------------------------------------------
- Reimbursement of printing plant remediation expenses
- Charge for closing of a job fair business
Included in Other Income (a benefit of $8.3 million):
-----------------------------------------------------
- Forfeiture of an advertising credit
"Solid advertising gains in March, aided by an improving economic
climate, helped us to conclude the first quarter on a decidedly
positive note across all of our business segments," said Russell T.
Lewis, president and chief executive officer. "We were particularly
encouraged by the revenue picture throughout our newspaper group in
March, including substantial gains in help-wanted advertising
revenues. Our broadcast properties also achieved improved revenue
results, led by increased political advertising, and our digital
enterprise accomplished record first-quarter results in both revenues
and profitability.
"Throughout 2004 we will continue to implement The Times's proven
national audience strategy, which includes print, digital and
television components, as well as our aligned multiple-media platform
strategy at each of our local newspapers and television stations. At
the same time, we will continue to exercise strong financial
discipline."
Revenues
Total revenues for the Company rose 2.3 percent to $801.9 million
in the first quarter from $783.7 million in the 2003 first quarter.
Advertising revenues (66 percent of total revenues) grew 3.1 percent
and circulation revenues (27 percent of total revenues) in the first
quarter were on a par with the same period in 2003.
Costs and Expenses
Total costs and expenses in the first quarter increased 4.7
percent to $692.8 million from $661.4 million in the 2003 first
quarter. Excluding the reimbursement of printing plant remediation
expenses and the charge associated with the closing of a small job
fair business in 2003 total costs and expenses in the first quarter
increased 3.3 percent, mainly because of increased costs associated
with the Company's investments in The New York Times's national
expansion and the International Herald Tribune (IHT), higher
compensation costs and increased newsprint expense.
Newsprint expense rose 6.6 percent in the first quarter compared
with the 2003 first quarter, due to an 8.2 percent increase primarily
from higher prices, partially offset by a 1.6 percent decrease from
lower consumption.
Operating Profit
Operating profit in the first quarter decreased 10.7 percent to
$109.2 million from $122.3 million in the first quarter of 2003,
mainly due to higher costs and expenses partially offset by an
increase in revenues. The first quarter of 2003 includes the net
benefit from the items included in costs and expenses mentioned above,
which make this quarter's comparison less favorable.
EBITDA
EBITDA (earnings before interest, taxes, depreciation and
amortization) in the first quarter decreased 11.9 percent to $143.8
million from $163.1 million in the 2003 first quarter. The decrease
was primarily attributable to the net benefit in the 2003 first
quarter of $17.8 million from the three items mentioned above, which
make this quarter's comparison less favorable.
The Company believes that EBITDA, a non-GAAP financial measure, is
a useful metric for evaluating its financial performance because of
its focus on the Company's results from operations before depreciation
and amortization. EBITDA is a common alternative measure of
performance used by investors, financial analysts and rating agencies.
These groups use EBITDA, along with other measures, to estimate the
value of a company and evaluate a company's ability to meet its debt
service requirements. A reconciliation of EBITDA to net income, as
well as additional information concerning EBITDA, is included in the
exhibits to this release.
Newspaper Group
Total Newspaper Group revenues grew 1.3 percent in the first
quarter to $744.8 million from $735.1 million in the prior-year first
quarter. Advertising revenues increased 1.5 percent in the first
quarter primarily due to higher advertising rates. Circulation
revenues in the first quarter were on a par with the prior-year first
quarter. For the six-month period ending March 31, 2004, The New York
Times and the Boston Globe expect to report to the Audit Bureau of
Circulations copy gains for both daily and Sunday circulation.
In the first quarter, operating profit for the Newspaper Group
decreased 16.4 percent to $104.9 million from $125.6 million in the
2003 first quarter, mainly because of increased costs associated with
the Company's investments in The New York Times's national expansion
and the IHT, higher compensation costs and increased newsprint
expense, offset in part by higher revenues. The first quarter of 2003
includes the net benefit from the items included in costs and expenses
mentioned above.
Broadcast Group
Broadcast Group revenues rose 8.8 percent in the first quarter to
$35.1 million from $32.2 million in the same period in 2003. Operating
profit grew 29.9 percent to $6.4 million from $5.0 million in the 2003
first quarter, primarily due to increased political advertising
revenues ($2.4 million in the first quarter of 2004 compared with $0.1
million in the same quarter last year).
New York Times Digital
Revenues for New York Times Digital (NYTD) grew 31.1 percent in
the first quarter to $25.7 million from $19.6 million in the 2003
first quarter, and operating profit more than doubled to a
first-quarter record of $8.4 million from $3.2 million, primarily due
to higher advertising revenues resulting from increased volume. This
resulted in an operating profit margin of 32.6 percent, the highest
that NYTD has ever achieved.
Joint Ventures
Net loss from joint ventures was $3.3 million in the first quarter
compared with $6.2 million in the 2003 first quarter, primarily as a
result of better performance at properties in which the Company has
equity interests.
Income Taxes
The Company's effective income tax rate (net of minority interest)
for the first quarter was 39.5 percent, the same as in the first
quarter of 2003.
Interest Expense-net, Shares, Cash and Total Debt
Interest expense-net in the first quarter decreased to $10.3
million from $11.8 million in the first quarter of 2003, mainly due to
lower levels of debt outstanding and higher levels of capitalized
interest.
In the first quarter, the Company repurchased 1.4 million shares
at a cost of $62.7 million. Approximately $32.2 million remains from
the Company's current share repurchase authorization at the end of the
first quarter. Class A and Class B common shares outstanding at the
end of the first quarter totaled 149.0 million shares.
At the end of the first quarter, the Company's cash and cash
equivalents and total debt were approximately $32 million and $868
million.
2004 Guidance
The 2004 guidance provided below is based on generally accepted
accounting principles. There have been no changes in guidance for 2004
since the Company originally issued it on December 9, 2003.
To provide more comprehensive guidance and reflect the growth of
all of the Company's lines of business, the 2004 advertising revenues
guidance is for total Company advertising revenues. This includes the
Newspaper Group (of which the IHT is a part), NYTD and the Broadcast
Group. The 2004 growth rates for total Company advertising revenues
and for expenses are each expected to be in the mid-single digits but
the growth rate for total Company advertising revenues is expected to
be higher than that of expenses.
Item 2004 Guidance
----------------------------------------------------------------------
Total Company Growth rate expected to
Advertising Revenues be in the mid-single digits
----------------------------------------------------------------------
Newspaper Group Growth rate expected to
Circulation Revenues be in the low-single digits
----------------------------------------------------------------------
Newsprint Cost Per Ton Growth rate expected to
be in the low teens
----------------------------------------------------------------------
Total Company Expenses Growth rate expected to
be in the mid-single digits
----------------------------------------------------------------------
Depreciation & Amortization $145 to $150 million
----------------------------------------------------------------------
Capital Expenditures (a) $220 to $250 million
----------------------------------------------------------------------
Net loss from Breakeven to a loss of $5 million
Joint Ventures
----------------------------------------------------------------------
Interest Expense $47 to $52 million
----------------------------------------------------------------------
Tax Rate 39.5%
----------------------------------------------------------------------
Diluted Growth rate expected to be in the low- to
Earnings Per Share mid-single digits over 2003 EPS of $1.98
----------------------------------------------------------------------
(a) Includes costs of $110 to $120 million related to the Company's
interest in a new headquarters in New York City, which the Company
expects to occupy in 2007.
Conference Call Information
The Company's first-quarter earnings conference call will be held
on Monday, April 12, at 11:30 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 call, dial 800-500-0177 (in the U.S.) and
719-457-2679 (international callers) at least 10 minutes prior to the
scheduled start of the call. In addition, a replay of the call will be
available online at www.nytco.com. A 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 Wednesday, April 14. The access code is
454888.
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 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 period ended December
28, 2003. 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 2003 revenues of $3.2 billion, includes The New York Times, the
International Herald Tribune, The Boston Globe, 16 other newspapers,
eight network-affiliated television stations, two New York City radio
stations and more than 40 Web sites, including NYTimes.com and
Boston.com. For the fourth consecutive year, the Company was ranked
No. 1 in the publishing industry in Fortune's 2004 list of America's
Most Admired Companies. 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
Newspaper Group Revenues by Division
Footnotes
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
---------------------------------------
2004 2003 % Change
------------ ------------ ----------
Revenues
Advertising $ 529,027 $ 513,154 3.1%
Circulation 220,243 221,001 -0.3%
Other (a) 52,674 49,585 6.2%
------------ ------------
Total 801,944 783,740 2.3%
Costs and expenses 692,782 661,445 4.7%
------------ ------------
Operating profit 109,162 122,295 -10.7%
Net loss from joint
ventures 3,293 6,212 -47.0%
Interest expense - net 10,320 11,802 -12.6%
Other income (b) 1,250 9,527 -86.9%
------------ ------------
Income before income taxes
and minority interest 96,799 113,808 -14.9%
Income taxes 38,239 44,946 -14.9%
Minority interest in net
income of subsidiaries (c) 125 16 *
------------ ------------
Net Income $ 58,435 $ 68,846 -15.1%
============ ============
Average Number of Common
Shares:
Basic 149,925 151,845 -1.3%
Diluted 152,460 154,598 -1.4%
Basic Earnings Per Share $ 0.39 $ 0.45 -13.3%
============ ============
Diluted Earnings Per Share $ 0.38 $ 0.45 -15.6%
============ ============
Dividends Per Share $ 0.145 $ 0.135 7.4%
============ ============
* Represents percentages that are not meaningful.
THE NEW YORK TIMES COMPANY
SEGMENT INFORMATION
Revenues, Operating Profit (Loss) and Depreciation & Amortization
are prepared in accordance with GAAP.
(Dollars and copies in thousands)
First Quarter
---------------------------------------
2004 2003 % Change
------------ ------------ ----------
Revenues
--------
Newspapers $ 744,812 $ 735,051 1.3%
Broadcast 35,055 32,205 8.8%
New York Times Digital 25,737 19,625 31.1%
Intersegment eliminations(d) (3,660) (3,141) 16.5%
------------ ------------
Total $ 801,944 $ 783,740 2.3%
============ ============
Operating Profit (Loss)
-----------------------
Newspapers $ 104,946 $ 125,600 -16.4%
Broadcast 6,445 4,962 29.9%
New York Times Digital 8,391 3,196 162.5%
Corporate (10,620) (11,463) -7.4%
------------ ------------
Total $ 109,162 $ 122,295 -10.7%
============ ============
Depreciation & Amortization
---------------------------
Newspapers $ 30,414 $ 30,963 -1.8%
Broadcast 2,397 2,238 7.1%
New York Times Digital 1,031 1,533 -32.7%
Corporate 3,019 2,795 8.0%
------------ ------------
Total $ 36,861 $ 37,529 -1.8%
============ ============
THE NEW YORK TIMES COMPANY
NEWSPAPER GROUP REVENUES BY DIVISION
Revenues are prepared in accordance with GAAP.
(Dollars in thousands)
2004
-------------------------
% Change
First Quarter vs. 2003
------------ ----------
The New York Times Newspaper Group
Advertising $ 283,143 -0.6%
Circulation 152,343 -2.0%
Other 33,572 5.3%
------------
Total $ 469,058 -0.7%
------------
New England Newspaper Group
Advertising $ 108,986 4.5%
Circulation 44,736 6.2%
Other 8,973 9.3%
------------
Total $ 162,695 5.2%
------------
Regional Newspapers
Advertising $ 85,125 5.1%
Circulation 23,164 -1.0%
Other 4,770 27.3%
------------
Total $ 113,059 4.6%
------------
Total Newspaper Group
Advertising $ 477,254 1.5%
Circulation 220,243 -0.3%
Other (a) 47,315 8.0%
------------
Total $ 744,812 1.3%
============
See footnotes 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) "Other income" in the Company's Condensed Consolidated Statements
of Income include the following items:
First Quarter
-----------------------------------
(In thousands)
-----------------------------------
2004 2003
-----------------------------------
Non-compete agreement $ 1,250 $ 1,250
Advertising credit * - 8,277
---------- ----------
Other income $ 1,250 $ 9,527
========== ==========
* Related to a credit for advertising issued by the Company, which
was not used within the allotted time by the advertiser.
(c) "Minority interest in net income of subsidiaries" includes
minority holders (FC Lion LLC and Myllykoski Corporation) income
or loss, net of income taxes, of subsidiaries that are
consolidated with the Company but less than 100% owned. FC Lion
LLC is a minority holder in a subsidiary formed for the purpose of
constructing the Company's new headquarters, and Myllykoski
Corporation is a minority holder of a subsidiary that has an
investment (along with the Company) in a paper mill. The prior
period presented has been reclassified to conform with this
presentation.
(d) Intersegment eliminations primarily include license fees between
NYTD and other segments.
Reconciliation of EBITDA to Net Income
EBITDA, which is reconciled to net income below, is defined as
earnings before interest, taxes, depreciation and amortization. For
comparability, EBITDA in the prior year has been restated to conform
with the 2004 presentation. The EBITDA presented may not be comparable
to similarly titled measures reported by other companies. The Company
believes that EBITDA, while providing useful information, should not
be considered in isolation or as an alternative to other financial
measures determined under GAAP.
First Quarter
-----------------------------------
(In thousands)
-----------------------------------
2004 2003
-----------------------------------
EBITDA $ 143,768 $ 163,126
Depreciation and
amortization (36,861) (37,529)
Interest expense - net (10,320) (11,802)
Income taxes * (38,152) (44,949)
---------- ----------
Net income $ 58,435 $ 68,846
========== ==========
* Includes taxes of minority holders netted within "Minority interest
in net income of subsidiaries" in the Condensed Consolidated
Statements of Income.
This press release can be downloaded from www.nytco.com
CONTACT: The New York Times Company
Catherine J. Mathis, 212-556-1981
E-mail: mathis@nytimes.com
Paula Schwartz, 212-556-5224
E-mail: schwap@nytimes.com
SOURCE: The New York Times Company
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