-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L8KNGeV0IDRXI+vrPvAJ4kXFLUHS2zuCpR89PlasqggjFF7j2VD1705c3xnMO5E/ 6kpskpgFuDOPYMBmt+r+lw== 0000912057-97-016682.txt : 19970930 0000912057-97-016682.hdr.sgml : 19970930 ACCESSION NUMBER: 0000912057-97-016682 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970502 FILED AS OF DATE: 19970512 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW YORK TIMES CO CENTRAL INDEX KEY: 0000071691 STANDARD INDUSTRIAL CLASSIFICATION: 2711 IRS NUMBER: 131102020 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-05837 FILM NUMBER: 97600115 BUSINESS ADDRESS: STREET 1: 229 W 43RD ST CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 2125561234 MAIL ADDRESS: STREET 1: 229 W 43RD STREET CITY: NEW YORK STATE: NY ZIP: 10036 10-Q/A 1 FORM 10-Q/A FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For Quarter Ended MARCH 30, 1997 -------------- Commission file number 1-5837 -------------- THE NEW YORK TIMES COMPANY ------------------------------------------------------ (Exact name of registrant as specified in its charter) NEW YORK 13-1102020 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 229 WEST 43RD STREET, NEW YORK, NEW YORK ---------------------------------------- (Address of principal executive offices) 10036 --------- (Zip Code) Registrant's telephone number, including area code 212-556-1234 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No . ----- ------ Number of shares of each class of the registrant's common stock outstanding as of May 4, 1997 (exclusive of treasury shares): Class A Common Stock 95,268,649 shares Class B Common Stock 425,001 shares PART I. FINANCIAL INFORMATION Item 1. Financial Statements THE NEW YORK TIMES COMPANY -------------------------- CONDENSED CONSOLIDATED STATEMENTS OF INCOME ------------------------------------------- (Unaudited) (Dollars and shares in thousands, except per share data) For the Quarter Ended -------------------------- March 30, March 31, 1997 1996 -------------------------- (13 Weeks) Revenues Advertising . . . . . . . . . . . . . . . . . . . $476,548 $431,617 Circulation . . . . . . . . . . . . . . . . . . . 168,554 162,556 Other . . . . . . . . . . . . . . . . . . . . . . 47,359 33,402 ----------- ---------- Total . . . . . . . . . . . . . . . . . . . . . 692,461 627,575 ----------- ---------- Production Costs Raw Materials . . . . . . . . . . . . . . . . . . 73,477 105,567 Wages and Benefits. . . . . . . . . . . . . . . . 153,172 136,834 Other . . . . . . . . . . . . . . . . . . . . . . 114,645 105,116 ----------- ---------- Total . . . . . . . . . . . . . . . . . . . . . 341,294 347,517 Selling, General and Administrative Expenses. . . . 249,912 219,435 ----------- ---------- Total . . . . . . . . . . . . . . . . . . . . . 591,206 566,952 ----------- ---------- Operating Profit. . . . . . . . . . . . . . . . . . 101,255 60,623 Income from Joint Ventures. . . . . . . . . . . . . 1,315 4,682 Interest Expense, Net of Interest Income. . . . . . 8,318 6,438 ----------- ---------- Income Before Income Taxes. . . . . . . . . . . . . 94,252 58,867 Income Taxes. . . . . . . . . . . . . . . . . . . . 42,413 26,153 ----------- ---------- Net Income. . . . . . . . . . . . . . . . . . . . . $ 51,839 $ 32,714 ----------- ---------- ----------- ---------- Weighted Average Number of Common and Common Equivalent Shares. . . . . . . . . . . . . 101,066 97,653 Earnings Per Common and Common Equivalent Share . . $.51 $.33 Cash Dividends Per Common Share . . . . . . . . . . $.15 $.14 See notes to condensed consolidated financial statements. 2 THE NEW YORK TIMES COMPANY -------------------------- CONDENSED CONSOLIDATED BALANCE SHEETS ------------------------------------- (Unaudited) (Dollars in thousands) March 30, December 29, 1997 1996 ------------------------------- ASSETS - - - - ------ Current Assets - - - - -------------- Cash and short-term investments. . . . . . . . . $ 45,772 $ 39,103 Accounts receivable-net. . . . . . . . . . . . . 295,532 309,164 Inventories Newsprint and magazine paper . . . . . . . . . 31,814 28,778 Work-in-process, etc.. . . . . . . . . . . . . 5,928 5,030 ------------- ------------ Total inventories . . . . . . . . . . . . . 37,742 33,808 Other current assets . . . . . . . . . . . . . . 90,255 96,697 ------------- ------------ Total current assets. . . . . . . . . . . . 469,301 478,772 ------------- ------------ Other Assets - - - - ------------ Investment in joint ventures . . . . . . . . . . 137,031 137,255 Property, plant and equipment (less accumulated depreciation of $832,671 in 1997 and $807,120 in 1996). . . . . . . . . . . . . . . 1,393,456 1,358,029 Intangible assets acquired Cost in excess of net assets acquired (less accumulated amortization of $189,923 in 1997 and $184,196 in 1996). . . . . . . . . 1,028,180 1,041,672 Other intangible assets acquired (less accumulated amortization of $27,518 in 1997 and $23,384 in 1996) . . . . . . . . . 394,702 396,042 Miscellaneous assets . . . . . . . . . . . . . . 140,828 128,101 ------------- ------------ TOTAL ASSETS. . . . . . . . . . . . . . . . $3,563,498 $3,539,871 ------------- ------------ ------------- ------------ See notes to condensed consolidated financial statements. 3 THE NEW YORK TIMES COMPANY -------------------------- CONDENSED CONSOLIDATED BALANCE SHEETS ------------------------------------- (Unaudited) (Dollars in thousands) March 30, December 29, 1997 1996 -------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY - - - - ------------------------------------ Current Liabilities - - - - ------------------- Commercial paper outstanding . . . . . . . . . . $ 14,900 $ 45,500 Accounts payable . . . . . . . . . . . . . . . . 199,897 171,853 Accrued payroll and other related liabilities. . 73,895 84,458 Accrued expenses . . . . . . . . . . . . . . . . 259,766 258,468 Unexpired subscriptions. . . . . . . . . . . . . 89,152 90,059 Current portion of capital lease obligations . . 3,893 3,359 ------------- ------------ Total current liabilities. . . . . . . . . . . 641,503 653,697 ------------- ------------ Other Liabilities - - - - ----------------- Long-term debt . . . . . . . . . . . . . . . . . 589,823 589,693 Capital lease obligations. . . . . . . . . . . . 46,668 46,939 Deferred income taxes. . . . . . . . . . . . . . 188,674 188,560 Other. . . . . . . . . . . . . . . . . . . . . . 440,572 435,850 ------------- ------------ Total other liabilities. . . . . . . . . . . . 1,265,737 1,261,042 ------------- ------------ Total Liabilities. . . . . . . . . . . . . . . . . 1,907,240 1,914,739 ------------- ------------ Stockholders' Equity - - - - -------------------- Capital stock. . . . . . . . . . . . . . . . . . 12,986 12,872 Additional paid in capital . . . . . . . . . . . 690,898 663,007 Earnings reinvested in the business. . . . . . . 1,327,736 1,290,899 Common stock held in treasury, at cost . . . . . (375,362) (341,646) ------------- ------------ Total stockholders' equity . . . . . . . . . . 1,656,258 1,625,132 ------------- ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY........ $3,563,498 $3,539,871 ------------- ------------ ------------- ------------ See notes to condensed consolidated financial statements. 4 THE NEW YORK TIMES COMPANY -------------------------- CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS ---------------------------------------------- (Unaudited) (Dollars in thousands)
For the Quarter Ended ----------------------------- March 30, March 31, 1997 1996 ----------------------------- (13 Weeks) CASH FLOWS FROM OPERATING ACTIVITIES: - - - - ------------------------------------ Net cash provided by operating activities. . . . . $104,607 $ 26,885 ----------- ------------ CASH FLOWS FROM INVESTING ACTIVITIES: - - - - ------------------------------------ Additions to property, plant and equipment . . . . (44,746) (46,651) Other - net. . . . . . . . . . . . . . . . . . . . 66 (705) ----------- ------------ Net cash used in investing activities. . . . . . . (44,680) (47,356) ----------- ------------ CASH FLOWS FROM FINANCING ACTIVITIES: - - - - ------------------------------------ Commercial paper reduction - net . . . . . . . . . (30,600) - Long-term debt reduction . . . . . . . . . . . . . (973) (820) Capital Shares Issuance . . . . . . . . . . . . . . . . . . . 4,002 880 Repurchase . . . . . . . . . . . . . . . . . . (10,970) (739) Dividends paid to stockholders . . . . . . . . . . (14,717) (13,695) Other - net. . . . . . . . . . . . . . . . . . . . - (1,116) ----------- ------------ Net cash used in financing activities. . . . . . . (53,258) (15,490) ----------- ------------ Increase (Decrease) in cash and short-term investments. . . . . . . . . . . . . . . . . . . 6,669 (35,961) Cash and short-term investments at the beginning of the year. . . . . . . . . . . . . . . . . . . 39,103 91,442 ----------- ------------ Cash and short-term investments at the end of the quarter. . . . . . . . . . . . . . . . . . . $ 45,772 $ 55,481 ----------- ------------ ----------- ------------
SUPPLEMENTAL INFORMATION: - - - - ------------------------ Amounts in these statements of cash flows are presented on a cash basis and may differ from those shown in other sections of the financial statements. Repurchases of common stock in connection with certain exercises under the Company's stock option plans increased treasury stock by $23,312 and $3,742 in 1997 and 1996, respectively. Additional paid in capital increased by a corresponding amount. See notes to condensed consolidated financial statements. 5 THE NEW YORK TIMES COMPANY -------------------------- NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ---------------------------------------------------- (Unaudited) 1. GENERAL The accompanying Notes to Condensed Consolidated Financial Statements should be read in conjunction with the Notes to Consolidated Financial Statements included in the annual report on Form 10-K for the year ended December 29, 1996, for The New York Times Company (the "Company") filed with the Securities and Exchange Commission. In the opinion of management, all adjustments necessary for a fair presentation of the financial position and results of operations, as of and for the interim period ended, have been included. Due to the seasonal nature of the Company's business, results for the interim periods are not necessarily indicative of a full year's operations. Certain reclassifications have been made to the 1996 Condensed Consolidated Financial Statements to conform with classifications used at March 30, 1997. 2. INCOME TAXES Variances between the effective tax rate on income before income taxes and the federal statutory rate are presented in the following reconciliation:
- - - - ---------------------------------------------------------------------------------------------------------- March 30, March 31, - - - - ---------------------------------------------------------------------------------------------------------- For the Thirteen Weeks Ended 1997 1996 - - - - ---------------------------------------------------------------------------------------------------------- % of % of (Dollars in thousands) Amount Pretax Amount Pretax - - - - ---------------------------------------------------------------------------------- --------------------- Pretax income . . . . . . . . . . . . . . . . . . . . . . $94,252 100.0% $58,867 100.0% ----------------------- --------------------- ----------------------- --------------------- Tax at federal statutory rate . . . . . . . . . . . . . . 32,988 35.0% 20,603 35.0% State and local taxes, net of federal benefits. . . . . . 6,291 6.7% 3,682 6.2% Amortization of nondeductible intangible assets acquired. . . . . . . . . . . . . . . . . . . . . 2,180 2.3% 2,110 3.6% Foreign income. . . . . . . . . . . . . . . . . . . . . . (255) (.3%) (960) (1.6%) Other-net . . . . . . . . . . . . . . . . . . . . . . . . 1,209 1.3% 718 1.2% ----------------------- --------------------- Income Taxes. . . . . . . . . . . . . . . . . . . . . . . $42,413 45.0% $26,153 44.4% ----------------------- --------------------- ----------------------- ---------------------
6 3. DISPOSITIONS In March 1997, the Company announced its plans to sell the NYT Custom Publishing division and the following sports/leisure magazines: Tennis, Tennis Buyer's Guide, Cruising World, Sailing World, Snow Country and Snow Country Business. The operating profit (loss) of these magazines was not material to the results of the Company in the first quarter of 1997 and their sale will not have a material impact on the future results or the financial position of the Company. 4. EARNINGS PER SHARE Earnings per share is computed after preference dividends and is based on the weighted average number of Class A and Class B common shares outstanding during the period. The 1997 first-quarter calculation reflects primary earnings per share including incremental shares associated with stock options in accordance with Accounting Principles Board Opinion No.15, "Earnings Per Share" ("APB 15"). Fully diluted earnings per share in the first quarter of 1997 is not presented since dilution is not material. The potential dilutive effect of stock options on 1996 earnings per share was not material. In March 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS 128"), which supersedes APB 15. SFAS 128 is effective for periods after December 15, 1997, at which time earnings per share for periods prior to the effective date will be restated. SFAS 128 simplifies the computation of earnings per share by replacing the presentation of primary earnings per share with a presentation of basic earnings per share which excludes the dilutive effect of common stock equivalents such as stock options, warrants and other convertible securities. SFAS 128 requires dual presentation of basic and diluted earnings per share by entities with complex capital structures. Diluted earnings per share under SFAS 128 is computed similarly to fully diluted earnings per share under APB 15. Pro forma dual presentation of basic and diluted earnings per share for the three months ended March 1997, assuming the adoption of SFAS 128 in the first quarter of 1997, is as follows: Basic Earnings Per Share $0.53 ----- ----- Diluted Earnings Per Share $0.51 ----- ----- 5. DEBT OBLIGATIONS The Company currently maintains $300,000,000 in revolving credit agreements of which $100,000,000 expires in July 1997, which the Company plans to renew for one year at that time, and of which $200,000,000 expires in July 2001. These agreements contain provisions for, among other matters, specified levels of stockholders' equity. At March 30, 1997, approximately $930,000,000 of stockholders' equity was unrestricted under these agreements. At March 30, 1997 and December 29, 1996, the Company had commercial paper outstanding of $14,900,000 and $45,500,000, respectively, which is supported by the revolving credit agreements. 7 6. STOCK REPURCHASE PROGRAM At December 29, 1996, approximately $6,200,000 remained under a May 1996 stock repurchase authorization. In February 1997, the Board of Directors authorized additional expenditures of up to $150,000,000. During the first three months of 1997, the Company paid approximately $3,500,000 to repurchase approximately 91,000 shares of Class A Common Stock at an average price of $38.13 per share under these authorizations. Subsequent to March 30, 1997, the Company paid approximately $96,600,000 to repurchase approximately 2,366,000 shares of Class A Common Stock at an average price of approximately $41 per share. Approximately 1,900,000 of these shares were purchased under an agreement with an investment firm. The agreement provides for a settlement amount in cash or in shares of Class A Common Stock, at the Company's discretion, based on the Company's weighted average stock price as defined in the agreement. To date, approximately $56,100,000 remain from the February 1997 authorization. Stock repurchases under this program exclude shares reacquired in connection with certain exercises under the Company's stock option plans. 7. VOLUNTARY STAFF REDUCTIONS In the 1997 first quarter, the Company recorded approximately $2,500,000, or $.01 per share, at corporate headquarters and The New York Times, for pretax charges relating to staff reductions. At March 30, 1997 and December 29, 1996, approximately $28,953,000 and $49,052,000, respectively, were included in accrued expenses in the accompanying Condensed Consolidated Balance Sheets, which represent the unpaid balance of total pretax charges relating to staff reductions. The remaining cash outflows associated with these charges are expected to occur over the next three years due to the timing of certain union pension and welfare fund contributions. 8 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS Advertising and circulation revenues accounted for approximately 69% and 24%, respectively, of the Company's revenues in the first quarter of 1997. Advertising revenues influence the pattern of the Company's consolidated revenues because they are seasonal in nature. Traditionally, second-quarter and fourth-quarter advertising volume is higher than that which occurs in the first and third quarters since economic activity tends to be lower in the post-holiday season and the summer period. Quarterly trends are also affected by the overall economy and economic conditions that may exist in specific markets served by each of the Company's business segments. Newsprint is the major component of the Company's cost of raw materials. Newsprint prices, which were at historic highs in the first quarter of 1996, began to decline during the second quarter of 1996 and fell dramatically by year-end. A newsprint price increase announced by suppliers to be effective in March 1997, has started to be implemented, and prices are expected to drift upward in the remainder of 1997. However, 1997 newsprint prices are not expected to reach prior year highs. RESULTS OF OPERATIONS - FIRST QUARTER OF 1997 COMPARED WITH FIRST QUARTER OF 1996 The 1997 first-quarter net income was $51.8 million, or $.51 per share, compared with net income of $32.7 million, or $.33 per share, in the first quarter of 1996. The higher 1997 net income was principally due to improved operations in the Newspaper and Broadcast Groups, resulting primarily from higher advertising revenues and lower newsprint prices. The earnings per share amount in the first quarter of 1997 reflects a $.01 per share ($2.5 million pretax) charge for buyouts as well as a $.02 per share decrease resulting from the inclusion of outstanding stock options in the earnings per share calculation as required by Accounting Principles Board Opinion No. 15, "Earnings Per Share" ("APB 15"). This provision of APB 15 was triggered primarily as a result of the Company's higher stock price. The first quarter of 1996 did not include the dilutive effect of outstanding stock options. Certain provisions of APB 15 will be superseded by Statement of Financial Accounting Standards No. 128, "Earnings Per Share", effective December 15, 1997, and earnings per share amounts for periods prior to the effective date will then be restated. Revenues for the first quarter of 1997 were $692.5 million, a 10% increase over 1996 first-quarter revenues of $627.6 million. On a comparable basis, adjusted for the acquisitions of certain properties, first-quarter revenues increased in 1997 by approximately 9% over 1996. Costs and expenses for the Company increased to $591.2 million in the first quarter of 1997 from $567.0 million in 1996 due primarily to higher wages and payroll-related costs, and promotional expenses, offset by lower raw material costs resulting from lower paper prices. Operating profit rose to $101.3 million for the first quarter of 1997 from $60.6 million in 1996. The improvement in operating profit was principally due to improved operations in the Newspaper and Broadcast Groups. The 1997 first-quarter earnings before interest, income taxes, depreciation and amortization ("EBITDA") rose to $143.0 million from $100.1 million in the comparable 1996 period. 9 Income from Joint Ventures decreased to $1.3 million in the 1997 first quarter from $4.7 million in 1996. The decrease was primarily a result of lower selling prices for paper from the mills in which the Company has investments. Interest expense, net of interest income, increased to $8.3 million in the 1997 first quarter from $6.4 million in 1996. The increase was primarily a result of lower levels of investment income and capitalized interest associated with new construction. The effective tax rate for the first quarter of 1997 was 45.0% compared with an effective tax rate of 44.4% in the comparable 1996 period. SEGMENT INFORMATION - - - - ------------------- - - - - ------------------------------------------------------------------------------- For the Quarter Ended ----------------------------- March 30, March 31, (Dollars in thousands) 1997 1996 - - - - ------------------------------------------------------------------------------- (13 Weeks) REVENUES - - - - -------- Newspapers. . . . . . . . . . . . . . . . . . . $ 620,960 $ 565,410 Magazines . . . . . . . . . . . . . . . . . . . 40,147 40,710 Broadcasting. . . . . . . . . . . . . . . . . . 31,354 21,455 ------------------------------ Total . . . . . . . . . . . . . . . . . . . . $ 692,461 $ 627,575 ------------------------------ ------------------------------ OPERATING PROFIT (LOSS) - - - - ----------------------- Newspapers. . . . . . . . . . . . . . . . . . . $ 98,463 $ 61,146 Magazines . . . . . . . . . . . . . . . . . . . 5,711 7,070 Broadcasting. . . . . . . . . . . . . . . . . . 5,684 3,384 Unallocated Corporate Expenses. . . . . . . . . (8,603) (10,977) ------------------------------ Total . . . . . . . . . . . . . . . . . . . . $ 101,255 $ 60,623 ------------------------------ ------------------------------ DEPRECIATION AND AMORTIZATION - - - - ----------------------------- Newspapers. . . . . . . . . . . . . . . . . . . $ 36,899 $ 33,724 Magazines . . . . . . . . . . . . . . . . . . . (1,737) (1,871) Broadcasting. . . . . . . . . . . . . . . . . . 4,718 2,544 Corporate . . . . . . . . . . . . . . . . . . . 423 345 Joint Ventures. . . . . . . . . . . . . . . . . 89 97 ------------------------------ Total. . . . . . . . . . . . . . . . . . . . $ 40,392 $ 34,839 ------------------------------ ------------------------------ 10 A discussion of the operating results of the Company's segments follows: NEWSPAPER GROUP: The New York Times ("The Times"), The Boston Globe ("The Globe"), 21 Regional Newspapers, newspaper distributors, a news service, a features syndicate, TimesFax, licensing operations of The New York Times databases and microfilm and New Ventures. New Ventures include projects developed in electronic media by The Times and The Globe. ----------------------------------------------------------------- For the Quarter Ended ------------------------- March 30, March 31, (Dollars in thousands) 1997 1996 ----------------------------------------------------------------- (13 Weeks) REVENUES Newspapers $ 618,690 $ 563,523 New Ventures 2,270 1,887 ----------------------------------------------------------------- Total Revenues $ 620,960 $ 565,410 ----------------------------------------------------------------- EBITDA Newspapers $ 136,657 $ 96,991 New Ventures (1,295) (2,121) ----------------------------------------------------------------- Total EBITDA $ 135,362 $ 94,870 ----------------------------------------------------------------- OPERATING PROFIT (LOSS) Newspapers $ 99,970 $ 63,539 New Ventures (1,507) (2,393) ----------------------------------------------------------------- Total Operating Profit $ 98,463 $ 61,146 ----------------------------------------------------------------- The Newspaper Group's first-quarter operating profit, excluding buyouts associated with the Group of $1.5 million, rose to $100.0 million in 1997 from $61.1 million in the 1996 first quarter. Revenues were $621.0 million in the 1997 first quarter, compared with $565.4 million in 1996. The 10% increase in the Group's revenues was due primarily to higher advertising rates and volume. The improvement in operating profit in the first quarter of 1997 included the favorable effect of a 33% decrease in the Company's average cost of newsprint compared to 1996. Average circulation of daily newspapers for the six months ended March 31, 1997, as reported to the Audit Bureau of Circulations ("ABC") on a comparable basis, was as follows: - - - - ------------------------------------------------------------------------------ Weekday Sunday - - - - ------------------------------------------------------------------------------ (Copies in thousands) 1997 % Change 1997 % Change - - - - ------------------------------------------------------------------------------ AVERAGE ABC CIRCULATION FOR THE SIX MONTHS ENDED 3/31/97 The New York Times 1,107 (4.4%) 1,644 (5.9%) The Boston Globe 466 (4.1%) 751 (3.4%) Regional Newspapers 751 (1.0%) 813 (0.6%) - - - - ------------------------------------------------------------------------------ The average circulation decline is partly attributable to the increase in newsstand and home delivery prices and a decrease in distribution to selected outlying areas. To increase circulation, the Company is investing in a national image campaign at The Times, as well as other product enhancements and improvements in delivery service. 11 Advertising volume on a comparable basis for the quarter was as follows: - - - - -------------------------------------------------------------------- For the Quarter Ended March 30, --------------------- (Inches in thousands) 1997 % Change - - - - -------------------------------------------------------------------- (13 Weeks) ADVERTISING VOLUME (EXCLUDING PREPRINTS) The New York Times 928 3.0% The Boston Globe 708 4.2% Regional Newspapers 3,744 1.1% - - - - -------------------------------------------------------------------- Advertising volume at The Times for the first quarter of 1997 increased 3.0% from the 1996 first quarter. The national and classified advertising categories showed increases of 6.5% and 3.7%, respectively, while retail remained flat and zoned advertising was down .6%. Preprint distribution was down 11.7%. At The Globe, advertising volume for the 1997 first quarter increased 4.2% over the 1996 first quarter. Advertising was higher in retail, national and classified categories by 3.9%, 1.6% and 8.2%, respectively, while zoned was down 8.1%. Preprint distribution was up 9.2%. For the Regional Newspapers, advertising volume for the first quarter increased 1.1%. Classified advertising improved by 1.7% with retail remaining flat. Preprint distribution increased 12.8%. MAGAZINE GROUP: The Magazine Group is comprised of a number of sports-related publications, related activities in the sports/leisure fields, and New Ventures such as computerized systems for golf tee time reservations and on-line magazine services. The revenues for the Group includes the amortization of a $40.0 million non-compete agreement, associated with the divestiture of the Women's Magazine Division, which is being recognized on a straight-line basis over four years ending in July 1998. ------------------------------------------------------------------ For the Quarter Ended -------------------------- March 30, March 31, (Dollars in thousands) 1997 1996 ------------------------------------------------------------------ (13 Weeks) REVENUES Sports/Leisure Magazines $ 37,377 $ 38,040 Non-Compete 2,500 2,500 New Ventures 270 170 ------------------------------------------------------------------ Total Revenues $ 40,147 $ 40,710 ------------------------------------------------------------------ EBITDA Sports/Leisure Magazines $ 6,158 $ 6,368 New Ventures (2,184) (1,169) ------------------------------------------------------------------ Total EBITDA $ 3,974 $ 5,199 ------------------------------------------------------------------ OPERATING PROFIT (LOSS) Sports/Leisure Magazines $ 5,600 $ 5,888 Non-Compete 2,500 2,500 New Ventures (2,389) (1,318) ------------------------------------------------------------------ Total Operating Profit $ 5,711 $ 7,070 ------------------------------------------------------------------ 12 The Magazine Group's first-quarter operating profit was $5.7 million in 1997 compared with $7.1 million in 1996 on revenues of $40.1 million and $40.7 million, respectively. The operating profit decrease was primarily related to increased losses associated with two new ventures, one of which was discontinued in 1997. In March 1997, the Company announced its plans to sell its tennis, sailing and ski magazines. The operating profit (loss) of these magazines was not material to the Group in the first quarter of 1997 and their sale will not have a material impact on the future results or the financial position of the Company. BROADCASTING GROUP: The Broadcasting Group consists of eight network-affiliated television stations and two radio stations. ------------------------------------------------------- For the Quarter Ended ------------------------- March 30, March 31, (Dollars in thousands) 1997 1996 ------------------------------------------------------- (13 Weeks) Revenues $31,354 $21,455 ------------------------------------------------------- EBITDA $10,402 $ 5,928 ------------------------------------------------------- Operating Profit $ 5,684 $ 3,384 ------------------------------------------------------- The Broadcasting Group's first-quarter operating profit rose to $5.7 million in 1997 from $3.4 million in 1996 on revenues of $31.4 million and $21.5 million, respectively. The revenue and operating profit increases were principally attributable to the acquisition of KFOR-TV, Oklahoma City, Oklahoma, and WHO-TV, Des Moines, Iowa, two NBC affiliates which were acquired in July 1996, as well as strong advertising revenues throughout the Group. These two new stations contributed $1.5 million of operating profit in the first quarter of 1997. 13 LIQUIDITY AND CAPITAL RESOURCES Net cash provided by operating activities was $104.6 million in the 1997 first quarter compared with $26.9 million in 1996. The increase in operating cash flows was primarily used for the construction of production and distribution facilities, commercial paper reduction, stock repurchases and the payment of dividends to stockholders. The Company believes that cash generated from its operations and the availability of funds from external sources should be adequate to cover working capital needs, planned capital expenditures, dividend payments to stockholders, stock repurchases and other cash requirements. The ratio of current assets to current liabilities was .73 at March 30, 1997, and December 29, 1996. The ratio of long-term debt and capital lease obligations as a percentage of total capitalization was 28% at March 30, 1997 and at December 29, 1996. FINANCING: The Company currently maintains $300.0 million in revolving credit agreements of which $100.0 million expires in July 1997, which the Company plans to renew for one year at that time, and of which $200.0 million expires in July 2001. These agreements contain provisions for, among other matters, specified levels of stockholders' equity. At March 30, 1997, approximately $930.0 million of stockholders' equity was unrestricted under these agreements. At March 30, 1997 and December 29, 1996, the Company had commercial paper outstanding of $14.9 million and $45.5 million, respectively, which is supported by the revolving credit agreements. The Company's long-term debt was $589.8 million at March 30, 1997, of which $100.0 million is due in October 1998. CAPITAL EXPENDITURES: The Company's new production and distribution facilities under construction in College Point, New York City and Lakeland, Florida are estimated to cost approximately $383.0 million, exclusive of capitalized interest currently projected to be $38.3 million. At March 30, 1997, approximately $328.0 million had been incurred exclusive of capitalized interest for these projects. Completion of construction at College Point is expected in the middle of 1997. Completion of construction in Lakeland is expected by the end of 1997. The Company currently estimates that, inclusive of these new facilities, capital expenditures for 1997 will range from $170.0 million to $190.0 million. The Company currently anticipates that depreciation and amortization will approximate $170.0 million to $180.0 million for 1997 compared with $138.9 million in 1996. STOCK REPURCHASE PROGRAM: At December 29, 1996, approximately $6.2 million remained under a May 1996 stock repurchase authorization. In February 1997, the Board of Directors authorized additional expenditures of up to $150.0 million. During the first three months of 1997, the Company paid approximately $3.5 million to repurchase approximately 91,000 shares of Class A Common Stock at an average price of $38.13 per share under these authorizations. Subsequent to March 30, 1997, the Company paid approximately $96.6 million to repurchase approximately 2,366,000 shares of Class A Common Stock at an average price of approximately $41 per share. Approximately 1,900,000 of these shares were purchased under an agreement with an investment firm. The agreement provides for a settlement amount in cash or in shares of Class A Common Stock, at the Company's discretion, based on the Company's weighted average stock price as defined in the agreement. To date, approximately $56.1 million remain from the February 1997 authorization. Stock repurchases under this program exclude shares reacquired in connection with certain exercises under the Company's stock option plans. 14 OTHER: At March 30, 1997, approximately $29.0 million of payments remain from charges associated with staff reductions. The remaining cash outflows associated with these charges are expected to occur over the next three years as a result of the timing of certain union pension and welfare fund contributions. FACTORS THAT COULD AFFECT OPERATING RESULTS Except for the historical information contained herein, the matters discussed in this quarterly report 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. Such risks and uncertainties include national and local conditions that could influence the level of retail, national and classified advertising revenue as well as circulation revenue, the impact of competition that could affect levels (rate and volume) of advertising and circulation generated by the markets served by the Company's business segments, material increases in newsprint and magazine paper prices, and other risks detailed from time to time in the Company's publicly-filed documents, including its Annual Report on Form 10-K for the period ended December 29, 1996. 15 Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS 10.5. Amendment No. 1, dated May 1, 1997, to the Company's Supplemental Executive Retirement Plan 11. Statements re: Computation of earnings per share 27. Financial Data Schedule (b) REPORTS ON FORM 8-K No reports on Form 8-K have been filed during the period for which this report is filed. 16 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE NEW YORK TIMES COMPANY (Registrant) Date: May 12, 1997 /s/ Diane P. Baker ----------- -------------------------- Diane P. Baker Senior Vice President and Chief Financial Officer (Principal Financial Officer) 17 EXHIBIT INDEX TO QUARTERLY REPORT FORM 10-Q QUARTER ENDED MARCH 30, 1997 EXHIBIT NO. EXHIBIT 10.5 Amendment No. 1, dated May 1, 1997 to the Company's Supplemental Executive Retirement Plan 11 Statements of Computation of Primary and Fully-Diluted Net Income Per Share 27 Financial Data Schedule 18 EX-10.5 2 AMENDMENT NO. 1 (SUPP. EXEC. RETIREMENT PLAN) EXHIBIT 10.5 THE NEW YORK TIMES COMPANY SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (Restated January 1, 1993) AMENDMENT NO. 1 THIS INSTRUMENT made this 1st day of May, 1997, by The New York Times Company (the "Company"). W I T N E S S E T H: WHEREAS, the Company maintains The New York Times Company Supplemental Executive Retirement Plan, as amended from time to time (the "Plan"); WHEREAS, pursuant to Section I of the Plan, the Company has reserved the right, by action of a committee consisting of the Chairman and the President of the Company (the "Committee"), to amend the Plan; and WHEREAS, the Company wishes to amend the Plan to comply with agreements with certain executives; NOW, THEREFORE, the Plan is hereby amended by adding the attached Appendix I at the end thereof. IN WITNESS WHEREOF, The New York Times Company has caused this Amendment to be executed by the Committee as of the date first above written. By /s/ Arthur Ochs Sulzberger -------------------------------- Arthur Ochs Sulzberger, Chairman By /s/ Russell T. Lewis --------------------------- Russell T. Lewis, President APPENDIX I Everything in this Plan to the contrary notwithstanding, the following Participants shall have benefits under this Plan as provided in their respective agreements with the Company as follows: 1. LANCE R. PRIMIS: as per his agreement with the Company dated December 4, 1996. - 2 - EX-11 3 COMPUTATION OF EARNINGS EXHIBIT 11 THE NEW YORK TIMES COMPANY STATEMENTS OF COMPUTATION OF PRIMARY AND FULLY DILUTED NET INCOME PER SHARE (DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER SHARE DATA)
QUARTER ENDED QUARTER ENDED MARCH 30, 1997 MARCH 31, 1996 -------------- ------------------- PRIMARY Average shares outstanding..................................................... 97,821 97,653 Net effect of dilutive stock options and retirement units...................... 3,245 - -------------- ------------- Total primary average shares outstanding....................................... 101,066 97,653 -------------- ------------- -------------- ------------- Net Income..................................................................... $ 51,839 $ 32,714 Less cumulative preference stock dividends................................... (24) (24) -------------- ------------- Total...................................................................... $ 51,815 $ 32,690 -------------- ------------- -------------- ------------- Primary earnings per share..................................................... $ 0.51 $ 0.33 -------------- ------------- -------------- ------------- FULLY DILUTED Average shares outstanding..................................................... 97,821 97,653 Net effect of dilutive stock options and retirement units...................... 3,758 - -------------- ------------- Total fully diluted average shares outstanding................................. 101,579 97,653 -------------- ------------- -------------- ------------- Net Income..................................................................... $ 51,839 $ 32,714 Less cumulative preference stock dividends................................... (24) (24) -------------- ------------- Total...................................................................... $ 51,815 $ 32,690 -------------- ------------- -------------- ------------- Fully diluted earnings per share............................................... $ 0.51 $ 0.33 -------------- ------------- -------------- -------------
EX-27 4 FDS
5 3-MOS DEC-28-1997 MAR-30-1997 45,772 0 324,164 28,632 37,742 469,301 2,226,127 832,671 3,563,498 641,503 0 0 1,753 11,233 1,643,272 3,563,498 0 692,461 0 341,294 0 0 8,318 94,252 42,413 51,839 0 0 0 51,839 .51 .51
-----END PRIVACY-ENHANCED MESSAGE-----