This is a summary of the earnings call for the second quarter fiscal 2008 conducted by The New York Times Company (NYT) on July 23, 2008
Management:
President, Chief Executive Officer, Director Janet L. Robinson
Senior Vice President - Digital Operations: Martin A. Nisenholtz
Senior VP, Chief Advertising Officer, The NYT Media Group: Denise Warren
Vice President, Corporate Communications: Catherine J. Mathis
Chief Financial Officer, Senior Vice President James M. Follo
Chief Financial Officer, The New York Times Media Group Roland Caputo
Key investor issues:
- The company reported a 6% decrease in total revenues to $741.9 million from $788.9 million mainly due to lower print advertising
- Earnings were $21.1 million or 15 cents a share, down 82% from $118 million or 82 cents a share in the prior year.
Half Year Highlights:
-Total operating profit was $46.47 million, a decrease from $97.8 million reported in the same period last year.
- Sales were down 5% to $1.49 billion from $$1.57 billion in the prior year.
- Capital expenditures amounted to $68 million.
Second Quarter Highlights:
Total revenues declined 6% to $741.9 million from $788.9 million as advertising revenues was down 10.6% and circulation revenues up 2.5%
- Other revenues were up 2.5% whereas advertising revenues at the news media group decreased 11.8%, with national advertising down 5.7%, retail down 9.5%, and classified down 24.4%.
- Revenues decreased mainly due to lower print advertising.
- Total circulation revenues were up 2.5%, mainly driven by higher home delivery and newsstand prices.
- Home delivery increased prices on average of 4.5% and digital businesses grew nearly 13% and generated $91.3 million of the company’s revenues.
Internet revenues grew 12.8% to $91.3 million from $80.9 million in the prior year.
- Advertising revenues grew 18.3% to $80.5 million from $68.0 million in 2007 and in total Internet businesses accounted for 12.3% of the Company''s revenues versus 10.3% in 2007.
- Excluding depreciation and amortization and buyouts, operating costs were down 3.6% to $641.4 million from $665.4 million mainly as a result of lower compensation costs and newsprint expense.
- Compensation costs declined primarily due to lower incentive compensation and a reduced workforce in compared with the same period last year.
Newsprint expense decreased 10.1%, with 16.8% from lower consumption, offset in part by 6.7% in higher prices.
- Buy-out costs increased to $27.6 million, versus $5 million, a swing of 9 cents per share.
- Interest expense-net increased to $12.1 million from $7.1 million, as a result of less capitalized interest.
- Capital expenditures totaled $36 million and cash and cash equivalents were $42 million and total debt was approximately $1.1 billion.
- Earnings were $21.1 million or 15 cents a share, down 82% from $118 million or 82 cents a share in the prior year due to the difficult economy.
Business Segment Results:
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News Media Group: total revenues decreased 6.7% to $713.3 million from $764.2 million.
- Advertising revenues decreased 11.8% due to weakness in print advertising across the News Media Group, partially offset by higher online advertising revenues.
- Circulation revenues rose 2.5%, mainly because of higher prices at The New York Times offset in part by volume declines across the News Media Group.
Other revenues increased 1.4% primarily because of revenues from rental income and commercial printing.
- Excluding depreciation and amortization and buyouts, operating costs decreased 4.4% to $614.1 million from $642.6 million, mainly as a result of the items noted in the operating costs section above.
- Operating profit for the News Media Group decreased 4.7% to $44.5 million from $46.7 million.
- Excluding depreciation and amortization and the special items identified above, operating profit for the News Media Group decreased 38.3% to $72.0 million from $116.7 million, because of lower print advertising revenues.
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About Group: revenues increased 15.8% to $28.6 million from $24.7 million due to increased cost-per-click advertising.
- Excluding depreciation and amortization, operating costs increased 26.2% to $16.1 million from $12.8 million, because of investments in new revenue initiatives that resulted in higher advertising, content and compensation costs.
- Operating profit before depreciation and amortization rose 4.7% to $12.5 million from $11.9 million, due to higher revenues.
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Joint Ventures: net income was $10.2 million compared with $4.7 million in 2007 resulting from stronger performance at New England Sports Ventures and LLC.
Business outlook:
