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
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Commission file number 1-5837
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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
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(Address of principal executive offices)
10036
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(Zip Code)
Registrant's telephone number, including area code 212-556-1234
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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
<PAGE>
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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
<PAGE>
-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.
<PAGE>
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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
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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
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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.
<PAGE>
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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.
<PAGE>
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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.
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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.
<PAGE>
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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
======= =======
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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
======= =======
<PAGE>
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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.
<PAGE>
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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.
<PAGE>
-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.
<PAGE>
-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.
<PAGE>
-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.
<PAGE>
-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.
<PAGE>
-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
