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TheStreet Open House

The New York Times Company Reports 2012 Third-Quarter Results

Stocks in this article: NYT

The New York Times Company, a leading global, multimedia news and information company with 2011 revenues of $2.3 billion, includes The New York Times, the International Herald Tribune, The Boston Globe, NYTimes.com, BostonGlobe.com, Boston.com and related properties. The Company’s core purpose is to enhance society by creating, collecting and distributing high-quality news and information.

This press release can be downloaded from www.nytco.com .

Exhibits:

   

Condensed Consolidated Statements of Operations

Revenues by Operating Segment
Advertising Revenues by Category
Footnotes
Other Notes
Reconciliation of Non-GAAP Information

 
 

THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars and shares in thousands, except per share data)

      Third Quarter     Nine Months
2012   2011   % Change 2012   2011   % Change

Revenues

Advertising $ 182,641 $ 200,508 -8.9% $ 618,103 $ 665,492 -7.1%
Circulation 234,867 218,601 7.4% 695,152 640,917 8.5%
Other (a)   31,520     32,460   -2.9%   101,007     98,826   2.2%
Total revenues 449,028 451,569 -0.6% 1,414,262 1,405,235 0.6%

Operating costs

Production costs 201,577 197,504 2.1% 608,118 603,649 0.7%
Selling, general and administrative costs 216,457 209,269 3.4% 666,291 664,731 0.2%
Depreciation and amortization (b)   22,485     23,747   -5.3%   75,521     70,564   7.0%
Total operating costs 440,519 430,520 2.3% 1,349,930 1,338,944 0.8%
Write-down of assets (c) N/A 9,225 N/A
Pension withdrawal expense (d)         N/A       4,228   N/A
Operating profit 8,509 21,049 -59.6% 64,332 52,838 21.8%
Gain on sale of investments (e) 65,273 N/A 55,645 71,171 -21.8%
Write-down of investments (f) 600 N/A 5,500 N/A
Income/(loss) from joint ventures 1,027 (1,068 ) * 2,077 (4,026 ) *
Premium on debt redemption (g) 46,381 N/A 46,381 N/A
Interest expense, net   15,497     20,039   -22.7%   46,413     69,782   -33.5%
(Loss)/income from continuing operations before income taxes (6,561 ) 18,834 * 70,141 3,820 *
Income tax (benefit)/expense   (2,796 )   12,440   *   27,707     3,509   *
(Loss)/income from continuing operations (3,765 ) 6,394 * 42,434 311 *
Income/(loss) from discontinued operations, net of income taxes (h)   6,026     9,074   -33.6%   (86,272 )   (99,440 ) -13.2%
Net income/(loss) 2,261 15,468 -85.4% (43,838 ) (99,129 ) -55.8%
Net loss attributable to the noncontrolling interest   21     217   -90.3%   101     515   -80.4%
Net income/(loss) attributable to The New York Times Company common stockholders $ 2,282   $ 15,685   -85.5% $ (43,737 ) $ (98,614 ) -55.6%
 
Amounts attributable to The New York Times Company common stockholders:
(Loss)/income from continuing operations $ (3,744 ) $ 6,611 * $ 42,535 $ 826 *
Income/(loss) from discontinued operations, net of income taxes   6,026     9,074   -33.6%   (86,272 )   (99,440 ) -13.2%
Net income/(loss) $ 2,282   $ 15,685   -85.5% $ (43,737 ) $ (98,614 ) -55.6%
 
Average number of common shares outstanding:
Basic 148,254 147,355 0.6% 148,042 147,103 0.6%
Diluted 148,254 151,293 -2.0% 151,762 152,424 -0.4%
 
Basic (loss)/earnings per share attributable to The New York Times Company common stockholders:
(Loss)/income from continuing operations $ (0.02 ) $ 0.05 * $ 0.29 $ 0.01 *
Income/(loss) from discontinued operations, net of income taxes   0.04     0.06   -33.3%   (0.59 )   (0.68 ) -13.2%
Net income/(loss) $ 0.02   $ 0.11   -81.8% $ (0.30 ) $ (0.67 ) -55.2%
 
Diluted (loss)/earnings per share attributable to The New York Times Company common stockholders:
(Loss)/income from continuing operations $ (0.02 ) $ 0.04 * $ 0.28 $ 0.01 *
Income/(loss) from discontinued operations, net of income taxes   0.04     0.06   -33.3%   (0.57 )   (0.66 ) -13.6%
Net income/(loss) $ 0.02   $ 0.10   -80.0% $ (0.29 ) $ (0.65 ) -55.4%

* Represents an increase or decrease in excess of 100%.

See footnotes page for additional information.

 
 
THE NEW YORK TIMES COMPANY
REVENUES BY OPERATING SEGMENT AND ADVERTISING REVENUES BY CATEGORY
(Dollars in thousands)
 
      2012
Third Quarter     % Change

vs. 2011

    Nine Months     % Change

vs. 2011

The New York Times Media Group

Advertising $ 140,880 -9.7 % $ 485,368 -6.9 %
Circulation 194,739 9.3 % 578,914 10.9 %
Other   19,718 -12.5 %   62,944 -7.4 %
Total $ 355,337 -0.4 % $ 1,127,226 1.4 %
 

New England Media Group

Advertising $ 41,761 -6.0 % $ 132,735 -7.8 %
Circulation 40,128 -0.6 % 116,238 -2.1 %
Other   11,802 18.8 %   38,063 23.5 %
Total $ 93,691 -1.1 % $ 287,036 -2.2 %
 

Total Company

Advertising $ 182,641 -8.9 % $ 618,103 -7.1 %
Circulation 234,867 7.4 % 695,152 8.5 %
Other (a)   31,520 -2.9 %   101,007 2.2 %
Total $ 449,028 -0.6 % $ 1,414,262 0.6 %
 
See footnotes page for additional information.
 
 
2012
Third Quarter % Change

vs. 2011

Nine Months % Change

vs. 2011

National $ 118,084 -9.5 % $ 410,967 -7.1 %
Retail 30,343 -9.5 % 100,615 -4.3 %
Classified:

Help-Wanted

6,267 4.1 % 20,438 -2.1 %
Real Estate 8,707 -19.5 % 29,490 -17.8 %
Automotive 5,770 2.4 % 17,099 -6.1 %
Other   6,817 -8.7 %   21,311 -8.1 %
Total Classified 27,561 -7.9 % 88,338 -10.0 %
Other   6,653 2.4 %   18,183 -8.6 %
Total Company $ 182,641 -8.9 % $ 618,103 -7.1 %
 

 
 
THE NEW YORK TIMES COMPANY
FOOTNOTES
(Dollars in thousands)
 
(a) Other revenues consist primarily of revenues from news services/syndication, commercial printing, rental income, digital archives and direct mail advertising services.
 
(b) Includes $6.7 million of accelerated depreciation expense in the first quarter of 2012 for certain assets at the Worcester Telegram & Gazette’s facility in Millbury, Mass., associated with the consolidation of most of its printing into The Boston Globe’s facility in Boston, Mass., in the second quarter of 2012.
 
(c) In the second quarter of 2011, the Company recorded a $9.2 million non-cash charge for the write-down of certain assets held for sale.
 
(d) In the second quarter of 2011, the Company recorded a $4.2 million charge for a pension withdrawal obligation under a multiemployer pension plan at The Boston Globe.
 
(e) In the second quarter of 2012, the Company recorded a $37.8 million gain on the sale of its remaining 210 units in Fenway Sports Group. In the first quarter of 2012, the Company recorded a $17.8 million gain on the sale of 100 of its units in Fenway Sports Group.
 
In the third quarter of 2011, the Company recorded a $65.3 million gain on the sale of 390 of its units in Fenway Sports Group. In the first quarter of 2011, the Company recorded a $5.9 million gain on the sale of a portion of the Company’s interest in Indeed.com.
 
(f) In the first and third quarters of 2012, the Company recorded a $4.9 million and $0.6 million non-cash charge, respectively, for the write-down of certain investments.
 
(g) In the third quarter of 2011, the Company recorded a $46.4 million charge in connection with the prepayment of its $250 million 14.053% notes.
 
(h)

On September 24, 2012, the Company completed the sale of the About Group, consisting of About.com, ConsumerSearch.com, CalorieCount.com and related businesses. The results of the About Group have been classified as discontinued operations for all periods presented. See Other Notes on the next page for results of operations for the About Group.

 

On January 6, 2012, the Company completed the sale of its Regional Media Group, consisting of 16 regional newspapers, other print publications and related businesses. The results of the Regional Media Group, which had previously been included in the News Media Group reportable segment, have been classified as discontinued operations for all periods presented. In the second quarter of 2012, the Company recorded post-closing adjustments related to the sale totaling $4.5 million after-tax.

 

The following table summarizes the results of operations presented as discontinued operations for both the About Group and the Regional Media Group:

                       
Third Quarter Nine Months
2012 2011 2012 2011
Revenues $ 25,616 $ 85,666 $ 81,085 $ 275,206
Total operating costs 16,687 73,670 59,157 225,909
Write-down of assets       194,732     152,093
Pre-tax income/(loss) 8,929 11,996 (172,804 )

(102,796)

Income tax expense/(benefit)   2,903   2,922   (60,801 )  

(3,356)

Income/(loss) from discontinued operations, net of income taxes 6,026 9,074 (112,003 )

(99,440)

(Loss)/gain on sale, net of income taxes:
Loss on sale (4,717 )
Income tax benefit       (30,448 ) *  
Gain on sale, net of income taxes       25,731    
Income/(loss) from discontinued operations, net of income taxes $ 6,026 $ 9,074 $ (86,272 ) $

(99,440)

* Tax benefit is primarily due to a tax deduction for goodwill related to the Regional Media Group sale.

 
 
THE NEW YORK TIMES COMPANY
OTHER NOTES
(Dollars in thousands)
 
On September 24, 2012, the Company completed the sale of the About Group, consisting of About.com, ConsumerSearch.com, CalorieCount.com and related businesses. The results of the About Group for each quarter and the first nine months of 2012, and for each quarter and annual period of 2011, reported as discontinued operations, are summarized below.
           
2012

  First  

  Quarter  

       

Second

Quarter

       

 Third 

 Quarter 

       

Nine

Months

Revenues $ 23,944 $ 25,410 $ 25,616 $ 74,970
Total operating costs 16,948 17,505 16,687 51,140
Write-down of assets     194,732       194,732  
Pre-tax income/(loss) 6,996 (186,827 ) 8,929 (170,902 )
Income tax expense/(benefit)   2,675   (65,643 )   2,903   (60,065 )
Net income/(loss) $ 4,321 $ (121,184 ) $ 6,026 $ (110,837 )
                 
2011

  First  

  Quarter  

       

 Second 

 Quarter 

       

 Third 

 Quarter 

       

 Fourth 

 Quarter 

       

   Full   

   Year   

Revenues $ 31,142 $ 27,844 $ 25,724 $ 26,116 $ 110,826
Total operating costs 16,995 16,369 16,302 17,809 67,475
Write-down of assets         3,116   3,116
Pre-tax income 14,147 11,475 9,422 5,191 40,235
Income tax expense   5,433   4,407   3,619   1,994   15,453
Net income $ 8,714 $ 7,068 $ 5,803 $ 3,197 $ 24,782

 
 
THE NEW YORK TIMES COMPANY
RECONCILIATION OF NON-GAAP INFORMATION
(Dollars in thousands)
 
In this release, the Company has included non-GAAP financial information with respect to diluted loss per share from continuing operations excluding severance and special items, operating profit before depreciation, amortization, severance and special items (if any) and operating costs before depreciation, amortization, severance and raw materials. 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 diluted earnings/(loss) 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 or superior measures of GAAP results.
 
Diluted earnings/(loss) per share from continuing operations excluding severance and special items provide 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, amortization, severance and special items (if any) is useful in evaluating the Company’s ongoing performance of its businesses as it excludes the significant non-cash impact of depreciation and amortization as well as items not indicative of ongoing operating activities. Total operating costs include depreciation, amortization, severance and raw materials. Total operating costs excluding these items provide investors with helpful supplemental information on the Company’s underlying operating costs that is used by management in its financial and operational decision-making.
 
Reconciliations of these non-GAAP financial measures from, respectively, diluted (loss)/earnings per share from continuing operations, operating profit and operating costs, the most directly comparable GAAP items, are set out in the tables below.
 

Reconciliation of diluted loss per share from continuing operations excluding severance and special items

             
Third Quarter
2012 2011 % Change
Diluted (loss)/earnings per share from continuing operations $ (0.02 ) $ 0.04

Add:
Severance 0.01 0.01
Special items:
Gain on sale of investment (0.24 )
Premium on debt redemption       0.18    
Diluted loss per share from continuing operations excluding severance and special items $ (0.01 ) $ (0.01 )

—% 

 
* Represents a decrease in excess of 100%.

 
 
THE NEW YORK TIMES COMPANY
RECONCILIATION OF NON-GAAP INFORMATION (continued)
(Dollars in thousands)
               

Reconciliation of operating profit before depreciation & amortization, severance and special items

 
Third Quarter Nine Months
2012 2011 % Change 2012 2011 % Change
Operating profit $ 8,509 $ 21,049 -59.6% $ 64,332 $ 52,838 21.8%
Add:
Depreciation & amortization 22,485 23,747 -5.3% 75,521 70,564 7.0%
Severance 3,008 2,899 3.8% 10,128 4,999

*  

Special items:
Write-down of assets N/A 9,225 N/A
Pension withdrawal expense     N/A     4,228 N/A

Operating profit beforedepreciation & amortization,severance and special items

$ 34,002 $ 47,695 -28.7% $ 149,981 $ 141,854 5.7%
 
*Represents an increase in excess of 100%.
 

Reconciliation of operating costs before depreciation & amortization, severance and raw materials

 
Third Quarter Nine Months
2012 2011 % Change 2012 2011 % Change
Operating costs $ 440,519 $ 430,520 2.3% $ 1,349,930 $ 1,338,944 0.8%
Less:
Depreciation & amortization 22,485 23,747 75,521 70,564
Severance   3,008   2,899     10,128   4,999  

Operating costs beforedepreciation & amortizationand severance

415,026 403,874 2.8% 1,264,281 1,263,381 0.1%
Less:
Raw materials   31,592   32,722     98,551   101,097  

Operating costs beforedepreciation & amortization,severance and raw materials

$ 383,434 $ 371,152 3.3% $ 1,165,730 $ 1,162,284 0.3%




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