This summary is based on the fourth quarter fiscal 2008 earnings call conducted by The New York Times Co. (NYT) on 28 January, 2009.
Management:
-
President and Chief Executive Officer: Janet L. Robinson
-
Senior Vice President and Chief Financial Officer: James M. Follo
-
Senior Vice President, Digital Operations: Martin A. Nisenholtz
-
Senior Vice President and Chief Advertising Officer for the New York Times Media Group and General Manager of NYTimes.com: Denise Warren
-
Senior Vice President, Corporate Communications: Catherine J. Mathis
Key Investors Issues
- Earnings of $63.3 million or 19 cents a share were down 38% from $101.5 million or 37 cents a share in 2007.
- Total revenues declined 10.8% to $772 million from $866 million in the prior year.
Full Year Highlights:
- Revenues were down 7.7% to $2.9 billion.
- Net loss was $57.8 million or 40 cents a share from a profit of $209 million or $1.45 a share in 2007.
Fourth Quarter Highlights
The firm reported earnings of $63.3 million or 19 cents a share, down 38% from $101.5 million or 37 cents a share in the prior year as the firm saw a weakening of revenues as the economy declined and advertisers pulled back on placements.
- Digital revenues decreased, as online marketers reduced display ads in response to deteriorating business conditions.
- The continued strength of the brand was evident in the willingness of the readers to pay higher prices for newspapers, which in turn is reflected in the growth of circulation revenues.
- Operating cost decreased 8.5%, and this occurred despite a 33% increase in newsstand prices and the firm plans to continue to drive down cost without detracting from the quality of journalism or the ability to achieve strategic objective.
- The firm recently announced a private financing transaction for $250 million in senior unsecured notes and warrants with the proceeds used to refinance existing debt including amounts currently borrowed under the revolving credit facility that matures in May of 2009.
The firm is exploring the possible sale of its 17.75% stake in New England Sports Ventures, whose holdings include the Boston Red Sox, Fenway Park and 80% of New England Sports Network, a regional cable sports network.
- Total revenues for the company declined 10.8% to $772 million from $866 million in the prior year, with ad revenues down 17.6%, circulation revenues up 3.7% and other revenues down 2.5%.
- At the News Media Group, which includes the New York Times, New England and Regional Media Group, ad revenues decreased 18.4%, with National advertising down 14.9%, Retail down 15% and Classified down 32.9%.
- At the Times Media Group, ad revenues decreased 16.9% and national print categories that performed well included corporate advertising, which got significant gains from energy-related companies and financial services.
The National print categories with the largest declines were entertainment, where studios released fewer films than the prior year and limited support the new releases.
- Telecommunications also declined as advertisers are making placements less often as the industry matures; and books, as retail book sellers saw lower sales and publishers delayed new releases.
- Classified advertising declined in all three major categories; real estates, recruitment and automotive and retail advertising revenues were down, due to decreased advertising from department stores, mass markets and home furnishing stores.
- At the New England Media Group, advertising revenues declined 21.3% and national ad revenues decreased, but the largest declines in the entertainment, non-bank financial services and telecommunications categories.
- Retail advertising revenues declined, due to weakness in department store, home furnishing and jewelry advertising.
At the Regional Media Group, advertising revenues decreased 20.9% and almost 60% of the decline was due to less classified advertising.
- Total circulation revenues were up 3.7% because of higher prices at the Times New England and the Regional Media Group.
- At the Times, the election resulted in higher newsstand sales on November 5th and had a carryover effect that has been reflected in new home delivery subscription.
- Other revenues for the News Media Group decreased 2.9%, mainly as a result of less direct mail and commercial printing.
- Throughout 2009, the other revenue comparisons will be negatively affected by the closure of City & Suburban, retail and newsstand distribution organization in the New York metropolitan area, which occurred earlier this month.
- Due to the ad revenues at the News Media Group declined 3.2% in November and December as the economy slowed, the firm saw a significant industry wide pullback in online display advertising.
At the About Group, total revenues decreased 2.9% to $29.8 million, as display advertising softened.
- Cost-per-click advertising rose in the mid single-digits and the Group relaunched ConsumerSearch.com with the complete redesign that will further help value conscious shoppers by making it easier to access the reviews and analysis the site has announced.
- In total, internet businesses accounted for 12% of the company''s revenues versus 11% in 2007 and the firm sold $2.3 million of the Times'' November 5th issue and related election items.
- Earlier this month, the firm introduced front page ad at The New York Times and the Globe, which generate incremental revenue for papers.
On the cost side, it will continue on the path it has been on for some time, of streamlining businesses and lowering cost so that it is operating as efficiently and effectively as it can.
- Operating cost declined 8.5%, mainly as a result of lower compensation costs and benefit expense.
- Depreciation and amortization decreased 23% to $36 million from $46.7 million in 2007, primarily because of various assets at The New York Times Media Group reached the end of their depreciation periods in the first nine months of 2008.
- Newsprint expense rose 11%, stemming from a 33% increase in prices, offset in part by a 22% decrease in consumption and the newsprint price increase added $18 million to cost and a decrease in consumption lowered costs by $12.1 million.
