The New York Times Company Reports 2008 First-Quarter Results

Business Wire, April 17, 2008

NEW YORK -- The New York Times Company announced today first-quarter 2008 earnings per share (EPS) from continuing operations of $.00, including a $.07 per share non-cash charge for the write-down of assets and a $.03 per share favorable tax adjustment, compared with EPS of $.14 in the first quarter of 2007, which included an unfavorable tax adjustment of $.03 per share. Excluding the charge and the adjustments, EPS from continuing operations was $.04 in the first quarter of 2008 compared with $.17 in the first quarter of 2007.

First-quarter 2008 operating profit was $6.2 million compared with $54.5 million in the first quarter of 2007. Excluding depreciation and amortization and the non-cash charge for the write-down of assets, operating profit was $66.4 million compared with $98.9 million in the first quarter of 2007.

"Advertising revenues decreased in the quarter as weaker economic conditions compounded the effects of secular change in our business," said Janet L. Robinson, president and CEO. "While this is a challenging time for the media industry, we are diligently managing our business for the long term. Continuing our transition into the digital era, online advertising revenues grew 16 percent, due in part to new offerings and ad formats. At the same time, circulation revenues also showed gains in the quarter, up approximately 2 percent.

"Our disciplined approach to expense management resulted in a 1 percent decrease in operating costs. For the fifth consecutive quarter, operating costs, excluding depreciation and amortization, declined. As we have said before, we expect to achieve cost savings of approximately $130 million in 2008.

"In April, the rate of decline in advertising revenues is expected to be in the mid-single digits. This is an improvement from our performance in March and is due mainly to shifts in the timing of Easter and in the publication of KEY Magazine. During the balance of the year, we plan to stay focused on what we do best - producing high-quality journalism, introducing new products in print and online, and stringently managing our costs."

Comparisons

The first-quarter 2008 results included the following special items:

* A non-cash charge for the write-down of assets for a systems project, which amounted to $18.3 million ($10.4 million after tax or $.07 per share). To decrease capital spending, the Company reduced the scope of a major advertising and circulation project, which resulted in the write-down of previously capitalized costs.

* A favorable tax reserve adjustment of $4.6 million ($.03 per share).

The first-quarter 2007 results included the following special item:

* An unfavorable tax adjustment of $4.5 million ($.03 per share) primarily from a change in New York state tax law that was effective January 1, 2007.

All quarterly comparisons exclude the results of the Broadcast Media Group, which was sold in May 2007. This release includes non-GAAP financial measures, and the exhibits include a discussion of management's use of these non-GAAP financial measures and reconciliations to the most comparable GAAP financial measures.

First-Quarter Results from Continuing Operations

Revenues

Total revenues decreased 4.9 percent to $747.9 million from $786.0 million. Advertising revenues decreased 9.2 percent. Circulation revenues increased 1.9 percent and other revenues rose 7.2 percent.

Operating Costs

Operating costs decreased 1.1 percent to $723.3 million from $731.5 million. Depreciation and amortization declined 5.6 percent to $41.9 million from $44.4 million, mainly because of lower accelerated depreciation expense for the assets at the Edison, N.J., printing facility, which was closed last month.

Excluding depreciation and amortization, operating costs declined 0.8 percent to $681.4 million from $687.1 million mainly due to lower newsprint expense, outside printing and distribution costs, and benefits expense. The cost decline was partially offset by increased stock-based compensation, buyouts and the effect of foreign currency translation because of the Euro-dollar relationship.

Newsprint expense for the first quarter decreased 23.4 percent, with 17.0 percent of the decline resulting from lower consumption and 6.4 percent from lower prices.

Stock-based compensation expense increased $6.2 million in the first quarter primarily because of a shift in the timing of the Company's annual equity awards. Historically equity awards were made in December of each year. In early 2007, the Board elected to make annual equity awards in February of each year, beginning in February 2008, to better enable it to evaluate performance during the most recently completed fiscal year.

Buyout costs totaled $11.2 million in the first quarter of 2008 and $7.8 million in the same period a year earlier.

While foreign currency translation had a favorable effect on revenues, it increased expenses by $2.4 million in the quarter.

First-Quarter Business Segment Results

News Media Group

Total News Media Group revenues decreased 5.7 percent mainly as a result of lower print advertising.