<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
THE NEW YORK TIMES COMPANY
--------------------------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
----------------------------------------------
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
For the Quarter Ended
-----------------------------
March 30, March 31,
1997 1996
-----------------------------
(13 Weeks)
CASH FLOWS FROM OPERATING ACTIVITIES:
- - ------------------------------------
<S> <C> <C>
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
----------- ------------
----------- ------------
</TABLE>
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
<PAGE>
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:
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------
March 30, March 31,
- - ----------------------------------------------------------------------------------------------------------
For the Thirteen Weeks Ended 1997 1996
- - ----------------------------------------------------------------------------------------------------------
% of % of
(Dollars in thousands) Amount Pretax Amount Pretax
- - ---------------------------------------------------------------------------------- ---------------------
<S> <C> <C> <C> <C>
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%
----------------------- ---------------------
----------------------- ---------------------
</TABLE>
6
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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 -
<PAGE>
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)
<TABLE>
<CAPTION>
QUARTER ENDED QUARTER ENDED
MARCH 30, 1997 MARCH 31, 1996
-------------- -------------------
<S> <C> <C>
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
-------------- -------------
-------------- -------------
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-28-1997
<PERIOD-END> MAR-30-1997
<CASH> 45,772
<SECURITIES> 0
<RECEIVABLES> 324,164
<ALLOWANCES> 28,632
<INVENTORY> 37,742
<CURRENT-ASSETS> 469,301
<PP&E> 2,226,127
<DEPRECIATION> 832,671
<TOTAL-ASSETS> 3,563,498
<CURRENT-LIABILITIES> 641,503
<BONDS> 0
0
1,753
<COMMON> 11,233
<OTHER-SE> 1,643,272
<TOTAL-LIABILITY-AND-EQUITY> 3,563,498
<SALES> 0
<TOTAL-REVENUES> 692,461
<CGS> 0
<TOTAL-COSTS> 341,294
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,318
<INCOME-PRETAX> 94,252
<INCOME-TAX> 42,413
<INCOME-CONTINUING> 51,839
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 51,839
<EPS-PRIMARY> .51
<EPS-DILUTED> .51
</TABLE>
