-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Be6N+7T+haDs1UaVdT6sout1K2YD1gfXLyFDxKCU/XiGHvdpKzgvayWMMZF/uvbs 8/khXOIrWBGFKfV0hYnbyw== 0000950112-94-001225.txt : 19940517 0000950112-94-001225.hdr.sgml : 19940517 ACCESSION NUMBER: 0000950112-94-001225 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940510 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: 1934 Act SEC FILE NUMBER: 001-05837 FILM NUMBER: 94526809 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 1 NEW YORK TIMES 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 31, 1994 ----------------- 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 March 31, 1994 (exclusive of treasury shares): Class A Common Stock 106,286,192 shares Class B Common Stock 430,181 shares -2- THE NEW YORK TIMES COMPANY Form 10-Q March 31, 1994 INDEX PART I. FINANCIAL INFORMATION (Unaudited) Page ---- Item 1. Financial Statements: Condensed Consolidated Financial Statements Condensed Consolidated Statements of Income for the Three Months Ended March 31, 1994 and 1993 . . . . . . 3 Condensed Consolidated Balance Sheets as of March 31, 1994 and December 31, 1993 . . . . . . . . . . . . . . 4 Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1994 and 1993 . . . . . 6 Notes to Condensed Consolidated Financial Statements . . . 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations: Segment Information . . . . . . . . . . . . . . . . . . 10 Results of Operations - First Quarter of 1994 Compared with First Quarter of 1993 . . . . . . . . . . 12 Liquidity and Capital Resources . . . . . . . . . . . . . 14 PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security-Holders . . . . . . . . . . . . . . . . . . 16 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 -3- THE NEW YORK TIMES COMPANY Form 10-Q March 31, 1994 PART I. FINANCIAL INFORMATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended March 31, 1994 1993 ---- ---- (Dollars and shares in thousands except per share data) Revenues Advertising $411,623 $313,528 Circulation 144,296 109,172 Other 33,593 31,782 ------- ------- Total 589,512 454,482 ------- ------- Production Costs Raw Materials 78,419 63,734 Wages and Benefits 132,032 101,144 Other 112,930 94,534 ------- ------- Total 323,381 259,412 Selling, General and Administrative Expenses 222,979 163,997 ------- ------- Total 546,360 423,409 ------- ------- Operating Profit 43,152 31,073 Interest Expense, Net of Interest Income 8,666 5,220 ------- ------- Income Before Income Taxes and Equity in Operations of Forest Products Group 34,486 25,853 Income Taxes 16,721 12,823 ------- ------- Income Before Equity in Operations of Forest Products Group 17,765 13,030 Equity in Operations of Forest Products Group (30) (2,142) ------- ------- Net Income $ 17,735 $ 10,888 Average Number of Common Shares Outstanding 106,856 79,734 Per Share of Common Stock Net Income $ .17 $.14 Cash Dividends .14 .14 See notes to condensed consolidated financial statements. -4- THE NEW YORK TIMES COMPANY Form 10-Q March 31, 1994 PART I. FINANCIAL INFORMATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, December 31, 1994 1993 ---- ---- (Dollars in thousands) ASSETS Current Assets Cash and short-term investments . . . $ 65,045 $ 42,058 ---------- ---------- Accounts receivable-net . . . . . . . . 274,305 264,218 ---------- ---------- Inventories Newsprint and magazine paper . . . . 40,133 38,691 Work-in-process, etc . . . . . . . . 10,154 8,580 ---------- ---------- Total inventories . . . . . . . . 50,287 47,271 ---------- ---------- Deferred subscription costs . . . . . 39,449 32,597 ---------- ---------- Other current assets . . . . . . . . 49,731 107,009 ---------- ---------- Total current assets . . . . . . 478,817 493,153 Other Assets Investment in forest products group . 75,218 76,020 Property, plant and equipment (less accumulated depreciation of $591,998,000 in 1994 and $571,487,000 in 1993 . . . . . . 1,119,198 1,112,024 Intangible assets acquired Cost in excess of net assets acquired (less accumulated amortization of $145,034,000 in 1994 and $136,442,000 in 1993) . . . . . . . . . . . . . 1,239,267 1,247,140 Other intangible assets acquired (less accumulated amortization of $56,596,000 in 1994 and $53,564,000 in 1993) . . . . . . . 169,075 173,813 Miscellaneous assets . . . . . . . . 112,334 113,054 ---------- ---------- TOTAL ASSETS . . . . . . . . . . $3,193,909 $3,215,204 ========== ========== See notes to condensed consolidated financial statements. (Continued) - 1 -5- THE NEW YORK TIMES COMPANY Form 10-Q March 31, 1994 PART I. FINANCIAL INFORMATION CONDENSED CONSOLIDATED BALANCE SHEETS - (Continued) (Unaudited) March 31, December 31, 1994 1993 ---- ---- (Dollars in thousands) LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable . . . . . . . . . . $123,443 $115,402 Notes payable . . . . . . . . . . . . - 62,340 Payrolls . . . . . . . . . . . . . . 70,615 71,256 Accrued expenses . . . . . . . . . . 187,516 171,515 Unexpired subscriptions . . . . . . . 152,054 130,627 Short-term debt . . . . . . . . . . . 2,678 2,590 ------- ------- Total current liabilities . . . . . 536,306 553,730 ------- ------- Other Liabilities Long-term debt . . . . . . . . . . . 413,446 413,581 Capital lease obligations . . . . . . 45,945 46,482 Deferred income taxes . . . . . . . . 198,200 196,875 Other . . . . . . . . . . . . . . . . 402,795 403,869 ------- ------- Total other liabilities . . . . . . 1,060,386 1,060,807 ---------- --------- Equity Put Options . . . . . . . . . . 2,198 - ------- ------- Stockholders' Equity Capital shares . . . . . . . . . . . 12,623 12,609 Additional capital . . . . . . . . . 600,312 599,758 Earnings reinvested in the business . 1,024,714 1,022,958 Common stock held in treasury, at cost (42,630) (34,658) ------- ------- Total stockholders' equity . . . . 1,595,019 1,600,667 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY . . . . . . $3,193,909 $3,215,204 ========== ========== See notes to condensed consolidated financial statements. (Concluded) - 2 -6- THE NEW YORK TIMES COMPANY Form 10-Q March 31, 1994 PART I. FINANCIAL INFORMATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, CASH PROVIDED (USED): 1994 1993 ---- ---- (Dollars in thousands) OPERATING ACTIVITIES Net income . . . . . . . . . . . . . . $ 17,735 $ 10,888 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization . . . . 38,896 28,261 Deferred income taxes . . . . . . . . 1,325 (4,928) Equity in operations of forest products group-net . . . . . . . . . 195 2,577 Other-net . . . . . . . . . . . . . . 28,669 (4,917) ------- ------- Net cash provided by operating activities . . . . . . . . . . . . . 86,820 31,881 ------- ------- INVESTING ACTIVITIES Net proceeds on sale of BPI Communications, L.P. . . . . . . . . . 52,992 - Purchase of marketable securities . . . - (39,944) Additions to property, plant and equipment . . . . . . . . . . . . . . . (29,302) (13,847) Loans to former affiliate . . . . . . . (3,000) (5,000) Other-net . . . . . . . . . . . . . . . (584) (1,926) ------- ------- Net cash provided by(used in)investing activities . . . . . . . . . . . . . 20,106 (60,717) ------- ------- FINANCING ACTIVITIES Short-term borrowings - net . . . . . . (62,340) - Long-term obligations and notes payable Reduction . . . . . . . . . . . . . . (1,436) (1,694) Capital Shares Issuance . . . . . . . . . . . . . . 239 477 Repurchase . . . . . . . . . . . . . (5,510) - Dividends paid to stockholders . . . . (14,990) (11,163) Other-net . . . . . . . . . . . . . . . 98 - ------- ------- Net cash used in financing activities . (83,939) (12,380) ------- ------- Increase (Decrease) in Cash and short- term investments . . . . . . . . . . 22,987 (41,216) Cash and short-term investments at the beginning of the year . . . . . . . . . 42,058 118,503 Cash and short-term investments at the ------- ------- end of the quarter . . . . . . . . . $65,045 $77,287 ======= ======= See notes to condensed consolidated financial statements. -7- THE NEW YORK TIMES COMPANY Form 10-Q March 31, 1994 PART I. FINANCIAL INFORMATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. General a. Results for the interim periods should not be considered as indicative of results for a full year. b. The information furnished, in the opinion of management, reflects all adjustments (which consist of normal recurring accruals) necessary for a fair presentation of results for the interim periods presented. c. The 1994 amounts are subject to year-end audit. 2. Income Taxes For the three months ended March 31, 1994 and 1993, income tax expense includes the reversal of deferred income taxes of $5,221,000 and $5,383,000 respectively. The principal reasons for the variance between the effective tax rate on income before income taxes and equity in operations of Forest Products Group and the Federal statutory rate (exclusive of the effects of the Company's interest in Madison Paper Industries ("Madison"), a partnership) are state and local taxes and the amortization of certain intangible assets acquired. Equity in operations of Forest Products Group includes the income tax effects of the Company's interest in Madison and its equity in the operations of Canadian forest products companies. For the three months ended March 31, 1994 and 1993, income tax benefit included in equity in operations was $36,000 and $519,000 respectively . The Company's consolidated Federal income tax return includes the Company's interest in Madison. 3. Earnings Per Share The computation of earnings per share data is not separately disclosed as such computation can be clearly determined from the Condensed Consolidated Statements of Income. 4. Cash and Short-Term Investments For purposes of the Condensed Consolidated Statements of Cash Flows, the Company considers all highly liquid debt instruments purchased with maturities of three months or less to be cash equivalents. The Company has overdraft positions at certain banks caused by outstanding checks. These overdrafts have been reclassified to accounts payable. For the three-month periods ended March 31, 1994 and 1993, the Company made cash payments for interest (net of amounts capitalized) totaling $13,847,000 and $1,884,000 respectively. Cash payments for income taxes for the three-month periods ended March 31, 1994 and 1993 totaled $5,295,000 and $5,729,000 respectively. -8- THE NEW YORK TIMES COMPANY Form 10-Q March 31, 1994 PART I. FINANCIAL INFORMATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) 5. Capital Investment Projects In December 1993 the Company and the City of New York executed a lease agreement and related agreements, under which the Company will lease 31 acres of City-owned land in Queens, New York, on which The Times plans to build a state-of-the-art printing and distribution facility. The Company's preliminary estimate is that the cost of the new facility will be approximately $280,000,000 with construction to begin in the summer of 1994 and completion expected in 1997. The lease will continue for 25 years after the start of construction with an option to ultimately purchase the property. Construction of the facility is subject to approval of the Company's Board of Directors. 6. Staff Reductions and Union Negotiations In April, The Newspaper Guild of New York ratified a collective bargaining agreement, which extends to the year 2000 and is the final in a series of long-term agreements reached with all of the major unions at The Times over the past two years. These agreements encompass wages, benefits, job security and other incentives. The agreements extend to all of The Times's current production and distribution facilities and to any new facilities which the Company might utilize. In connection with these agreements and additional white-collar staff reductions for non-union employees, the Company recorded pre-tax charges ($35,400,000, or $.23 per share, in 1993, $28,000,000, or $.20 per share, in 1992 and $30,000,000, or $.22 per share, in 1989) for severance and related costs for staff reductions at The Times. At March 31, 1994 and December 31, 1993, approximately $38,300,000 and $40,000,000, respectively, are included in accrued expenses on the accompanying Condensed Consolidated Balance Sheets, which represent the unpaid balance of these pre-tax charges. 7. Acquisition On October 1, 1993, pursuant to an Agreement and Plan of Merger dated June 11, 1993, as amended as of August 12, 1993 (the "Merger Agreement"), a wholly-owned subsidiary of the Company was merged with Affiliated Publications, Inc. the parent company of The Boston Globe ("The Globe"), which became a wholly-owned subsidiary of the Company. Pro forma operating results for the three months ended March 31, 1993 had the merger occurred at the beginning of that period are as follows: revenues of $556,819,000; net income of $8,844,000; and net income per share of $.08. This is not necessarily indicative of the combined results that would have occurred had the merger taken place at the beginning of that period, nor necessarily indicative of results that may be obtained in the future. -9- THE NEW YORK TIMES COMPANY Form 10-Q March 31, 1994 PART I. FINANCIAL INFORMATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Concluded) 8. Stock Repurchase Program On October 21, 1993, the Company announced authorized expenditures of up to $150,000,000 for repurchases of its Class A Common Stock. Under the program, purchases may be made from time to time either in the open market or through private transactions. The number of shares that may be purchased in market transactions may be limited as a result of The Globe transaction. Purchases may be suspended from time to time or discontinued. To date, the Company has repurchased approximately 601,000 shares of its Class A Common Stock at an average price of $27.13 per share. 9. Equity Put Options In addition to the Company's stock repurchase program (see Note 8), the Company has sold put options in a series of private placements that entitle the holder, upon exercise, to sell one share of Class A Common Stock to the Company at a specified price. The equity put option balance on the accompanying condensed consolidated balance sheet at March 31, 1994, is the purchase price for 80,000 Class A Common Shares that the Company would be obligated to pay if all the options were exercised. The proceeds from the issuance of the put options ($98,000 as of March 31, 1994 and $500,000 to date) are accounted for as additional paid-in capital. -10- THE NEW YORK TIMES COMPANY Form 10-Q March 31, 1994 PART I. FINANCIAL INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS (Unaudited) - - ------------------------------------------------ Segment Information - - ------------------- Three Months Ended March 31, 1994 1993 ---- ---- (Dollars in thousands) REVENUES Newspapers . . . . . . . . . . . . . . $468,924 $339,421 Magazines . . . . . . . . . . . . . . . 96,466 94,955 Broadcasting/Information Services . . . 24,122 20,106 ------- ------- Total . . . . . . . . . . . . . . . . . $589,512 $454,482 ======== ======== OPERATING PROFIT (LOSS) Newspapers . . . . . . . . . . . . . . $45,072 $28,617 Magazines . . . . . . . . . . . . . . . 166 3,226 Broadcasting/Information Services . . . 4,071 3,632 Unallocated Corporate Expenses . . . . (6,157) (4,402) ------ ------ Total . . . . . . . . . . . . . . . . . 43,152 31,073 INTEREST EXPENSE, NET OF INTEREST INCOME 8,666 5,220 ------ ------- INCOME BEFORE INCOME TAXES AND EQUITY IN OPERATIONS OF FOREST PRODUCTS GROUP . 34,486 25,853 INCOME TAXES . . . . . . . . . . . . . 16,721 12,823 ------ ------- INCOME BEFORE EQUITY IN OPERATIONS OF FOREST PRODUCTS GROUP . . . . . . 17,765 13,030 EQUITY IN OPERATIONS OF FOREST PRODUCTS (30) (2,142) GROUP . . . . . . . . . . . . . . . . ------ ------- NET INCOME . . . . . . . . . . . . . . $17,735 $10,888 ======= ======= -11- THE NEW YORK TIMES COMPANY Form 10-Q March 31, 1994 PART I. FINANCIAL INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS - (Continued) - - -------------------------------------------------- Segment Information - - ------------------- Three Months Ended March 31, 1994 1993 ---- ---- (Dollars in thousands) DEPRECIATION AND AMORTIZATION Newspapers $33,006 $20,826 Magazines 3,265 4,657 Broadcasting/Information Services 2,470 2,635 Corporate 155 143 ------- ------- Total $38,896 $28,261 ======= ======= -12- THE NEW YORK TIMES COMPANY Form 10-Q March 31, 1994 PART I. FINANCIAL INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS - (Continued) - - -------------------------------------------------- The Company's largest source of revenues is advertising, which influences the pattern of the Company's quarterly consolidated revenues and is seasonal in nature. Traditionally, second-quarter and fourth-quarter advertising volume is higher than that which occurs in the first quarter. Advertising volume tends to be the lowest in the third quarter primarily because of the summer slow-down in many areas of economic activity. In addition, quarterly trends are affected by the overall economy and economic conditions that may exist in specific markets served by each of the Company's business segments. Results of Operations - First Quarter of 1994 - - ---------------------------------------------- Compared with First Quarter of 1993 - - ----------------------------------- The Company reported first-quarter net income of $17.7 million, or $.17 per share, compared with net income of $10.9 million, or $.14 per share, in 1993. The higher 1994 net income was principally due to increases in advertising and circulation revenues at The New York Times ("The Times") and the Regional Newspaper Group, which were partially offset by softness in advertising at the Company's magazines. The 1994 per share amount was also affected by dilution from the October 1, 1993 acquisition of The Boston Globe ("The Globe"). Results for 1993 were adversely affected by $3.7 million pre-tax ($.02 per share) due to a March snowstorm, which disrupted delivery of The Times. Consolidated revenues for the 1994 first quarter increased to $589.5 million compared with $454.5 million for the first quarter of 1993, due principally to the inclusion of The Globe, although revenues at The Times, Regional Newspapers and other operating groups also increased. The Company's costs and expenses rose to $546.4 million from $423.4 due to the inclusion of Globe operations and acquisition amortization and higher wages and benefits costs throughout the Company. For the first quarter of 1994 the Company's operating profit rose to $43.2 million from $31.1 million in the 1993 first quarter, and operating profit before depreciation and amortization rose significantly to $82.0 million from $59.3 million in the 1993 quarter. Improved operating performances at The Times and Regional Newspapers and the contribution from The Globe principally accounted for the higher results. The Company anticipates that depreciation and amortization will approximate $160 million for the year 1994 as compared with $129 million in 1993. Interest expense, net of interest income, rose to $8.7 million in the 1994 first quarter from $5.2 million last year due principally to borrowings incurred in connection with the Company's stock repurchase programs and the acquisition of The Globe. Since the inception of the stock repurchase programs in June of 1993, the Company has expended approximately $270.8 million and repurchased 10.8 million shares. -13- THE NEW YORK TIMES COMPANY Form 10-Q March 31, 1994 PART I. FINANCIAL INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued) - - ------------------------------------------------ The Company's 1994 effective income tax rate was 48.5 percent compared with 49.6 percent in the 1993 first quarter. Increased nondeductible amortization of intangible assets (resulting from The Globe acquisition in October 1993) and a higher federal statutory tax rate increased the tax rate. However, more than offsetting these factors was a reduction of the proportion of such nondeductible amortization to pre-tax accounting income in 1994 as compared with 1993. A discussion of the operating results of the Company's segments and equity interests follows: Operating profit of the Newspaper Group was $45.1 million compared with $32.3 million in 1993, excluding the impact of the March 1993 snowstorm, on revenues of $468.9 million and $339.4 million respectively. The improved operating performance is due to a combination of higher advertising and circulation revenues, cost controls and the inclusion of The Globe in the 1994 quarter. The increase in revenues was principally due to inclusion of The Globe, although revenues at The Times and Regional Newspapers also increased. Advertising volume at The Times for the first quarter of 1994 was 856,500 inches, up 2.8 percent over the 1993 quarter. The retail, national, classified and zoned categories each showed gains, and preprint distribution was up 3.4 percent. Average circulation of The Times for the six months ended March 31, 1994, as reported to the Audit Bureau of Circulation ("ABC"), was 1,188,000 copies on weekdays, down 42,200 copies from the same 1993 period and 1,767,800 copies on Sundays, down 44,700 copies. At The Globe, advertising volume was 656,600 inches for the 1994 first quarter, up 7.4 percent over the 1993 first quarter. As with The Times, ad volume increased in all categories and preprint distribution also increased by 13.4 percent. Average circulation for the six months ended March 31, 1994, as reported to ABC, was 500,300 copies weekdays, down 4,500 copies and 815,300 copies Sundays, up 3,900 copies. At the 28 regional newspapers that were in the Group for the entire 1994 and 1993 periods, advertising inches for the first quarter increased to 3.9 million inches, up 3.1 percent. The retail category was flat when compared with the 1993 first quarter, but the national, legal and classified categories all increased and preprint distribution was up 7.5 percent. For the six months ended March 31, 1994, average circulation for the same 28 newspapers as reported to ABC was 874,400 copies on weekdays, down 5,300 copies, and 878,200 copies on Sunday, up 600 copies. Circulation was 55,000 copies for the nondailies, down 2,100 copies. The circulation numbers throughout the Newspaper Group were adversely affected by several factors which included newsstand and home delivery price increases, the harsh 1994 winter and the strength of circulation during the comparable 1993 ABC period, which included the 1992 Presidential election. -14- THE NEW YORK TIMES COMPANY Form 10-Q March 31, 1994 PART I. FINANCIAL INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS - (Continued) - - -------------------------------------------------- The Magazine Group had first-quarter operating profit of $0.2 million in 1994 compared with $3.2 million in 1993 on revenues of $96.5 million and $95.0 million respectively. Exclusive of the amortization associated with the McCall's and Golf World (U.S.) acquisitions, the Group's first-quarter operating profit was $2.0 million in 1994 compared with $6.5 million in 1993's first quarter. Lower ad pages and the timing of certain promotion costs in the Company's Sports/Leisure Magazines as well as continuing softness in advertising in the consumer packaged goods category in the Women's Magazines affected the Group's quarterly comparisons. The Broadcasting/Information Services Group operating profit was $4.1 million compared with $3.6 million in the 1993 first quarter, on revenues of $24.1 million and $20.1 million respectively. Higher advertising revenues at the Company's broadcasting properties accounted for the improved results. Equity in operations (an after-tax amount) of the Forest Products Group for the first quarter of 1994 was break-even compared with a loss of $2.1 million in the 1993 quarter. The improvement resulted principally from the fact that the Company no longer records the operating losses for one of its mills as a result of a fourth quarter 1993 write-down of its investment in this Group. The amount of excess capacity in the industry has begun to diminish but there is still oversupply in the market. While some of the previously announced March 1, 1994, newsprint price increase has taken effect, it is too early to predict whether it will be fully realized. Liquidity and Capital Resources - - ------------------------------- Net cash provided by operating activities of $86.8 million increased significantly over the 1993 first-quarter amount of $31.9 million. Stronger operations throughout the Company and the inclusion of The Globe contributed to the increase. Such cash was used primarily to modernize facilities and equipment, to pay dividends to stockholders, to repurchase shares of the Company's Class A Common Stock and to reduce short-term borrowings. The ratio of current assets to current liabilities was .89 at both March 31, 1994 and December 31, 1993, and long-term debt and capital lease obligations as a percentage of total capitalization was 22 percent at both March 31, 1994 and December 31, 1993. In October 1993, the Company announced authorized expenditures of up to $150.0 million for repurchases of its Class A Common Stock. Under the program, purchases may be made from time to time either in the open market or through private transactions. The number of shares that may be purchased in market transactions may be limited as a result of The Globe transaction. Purchases may be suspended from time to time or discontinued. To date, the Company has repurchased approximately 601,000 shares of its Class A Common Stock at an average price of $27.13 per share under this program. -15- THE NEW YORK TIMES COMPANY Form 10-Q March 31, 1994 PART I. FINANCIAL INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS (Concluded) - - ------------------------------------------------ In December 1993 the Company and the City of New York executed a lease agreement and related agreements, under which the Company will lease 31 acres of City-owned land in Queens, New York, on which The Times plans to build a state-of-the-art printing and distribution facility. The Company's preliminary estimate is that the cost of the new facility will be approximately $280.0 million with construction to begin in the summer of 1994 and completion expected in 1997. Construction of the facility is subject to approval of the Company's Board of Directors. The Company currently estimates that, exclusive of the Queens facility, capital expenditures for 1994 will range from $90.0 million to $110.0 million. In connection with the 1991 divestiture of a jointly-owned affiliate, Spruce Falls Power and Paper Company, Limited, the Company committed to lend up to $26.5 million (C$30.0 million) to the new owners of the mill. Such loans will take place over a five-year period ending December 1996. To date, the Company has loaned approximately U.S. $23.5 million under the commitment. In October 1993 the Company issued notes totaling $200.0 million to an insurance company with interest payable semi-annually. $100.0 million of five-year notes were issued at a rate of 5.50 percent, and the remaining $100.0 million were issued as six and one-half year notes at a rate of 5.77 percent. In connection with the previously announced fourth-quarter 1993 charges totaling $35.4 million for staff reductions (see Note 6), the Company currently anticipates that the staff reductions and related expenditures will occur during 1994 and that the amounts of these charges will be recovered through reduced costs over a two-year period. The charges cover approximately 300 employees with an average annual wage and benefit cost of $110,000 per employee. The Company does not anticipate that its ongoing business operations will be affected by this reduction of staff and expects to fund the amounts through internally generated funds. Through March 31, 1994, approximately $3.4 million has been expended in connection with these charges. In January 1994 a definitive agreement was reached regarding the sale of a partnership (BPI Communications, L.P.) in which the Company had a one- third interest. In February 1994, the Company received approximately $53.0 million, which was primarily utilized to repay notes payable, which totaled $62.3 million at December 31, 1993. In addition to cash provided from operating activities, the Company has several established sources for future liquidity purposes, including several revolving credit and term loan agreements. At March 31, 1994, $150.0 million was available for borrowing by the Company under these agreements. The Company anticipates that during 1994 cash for operating, investing and financing activities will continue to come from a combination of internally generated funds and external financing. -16- THE NEW YORK TIMES COMPANY Form 10-Q March 31, 1994 PART I. FINANCIAL INFORMATION Item 4. Submission of Matters to a Vote of Security-Holders --------------------------------------------------- (a) The Company's annual meeting of stockholders was held on April 19, 1994. (c) The following matters were voted on at the annual meeting: 1. The stockholders (with Class A and Class B stockholders voting separately) elected all of management's nominees for election as Class A Directors and Class B Directors. The result of the vote taken was as follows: For Withheld ---------- -------- Class A Directors: Louis V. Gerstner, Jr. 92,388,967 345,498 A. Leon Higginbotham, Jr. 92,406,945 327,520 Robert A. Lawrence 92,400,967 333,498 Charles H. Price II 92,411,644 322,821 Donald M. Stewart 92,416,315 318,150 Class B Directors: John F. Akers 403,572 0 Richard L. Gelb 403,572 0 Marian S. Heiskell 403,572 0 Ruth S. Holmberg 403,572 0 Walter E. Mattson 403,572 0 George B. Munroe 403,572 0 George L. Shinn 403,572 0 Arthur Ochs Sulzberger 403,572 0 Judith P. Sulzberger 403,572 0 William O. Taylor 403,572 0 Cyrus R. Vance 403,572 0 2. The stockholders (with Class A and Class B stockholders voting together) approved the amendment of the Company's Employee Stock Purchase Plan, approved by the stockholders of the Company on April 22, 1969, and amended on April 20, 1971, April 26, 1977, April 21, 1981, April 24, 1984 and April 18, 1989, to increase the number of shares sold thereunder by an additional 6,000,000. The result of the vote taken was as follows: For 76,971,836 Against 8,169,440 Abstain 322,508 Total Against and Abstain* 8,491,948 Broker Non-Votes 7,674,253 - - -------------------- * An abstention vote had the same effect as a vote against this matter. -17- THE NEW YORK TIMES COMPANY Form 10-Q March 31, 1994 PART II. OTHER INFORMATION 3. The stockholders (with Class A and Class B stockholders voting together) ratified the selection, by the Audit Committee of the Board of Directors, of Deloitte & Touche, independent certified public accountants, as auditors of the Company for the year ending December 31, 1994. The result of the vote taken was as follows: For 92,713,027 Against 231,236 Abstain 193,773 Total Against and Abstain* 425,009 - - -------------------- * An abstention vote had the same effect as a vote against this matter. -18- THE NEW YORK TIMES COMPANY Form 10-Q March 31, 1994 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 10, 1994 /s/ D. L. Gorham ------------ -------------------------- (Signature) David L. Gorham Senior Vice President and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----