New York | 1-5837 | 13-1102020 | |||||||||||||||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
|||||||||||||||
620 Eighth Avenue, | New York, | New York | 10018 | ||||||||||||||
(Address and zip code of principal executive offices) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Class A Common Stock | NYT | New York Stock Exchange |
Exhibit Number | Description | |||||||
Exhibit 99.1 | ||||||||
Exhibit 104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
THE NEW YORK TIMES COMPANY | ||||||||
Date: May 8, 2024 |
By: | /s/ Diane Brayton | ||||||
Diane Brayton | ||||||||
Executive Vice President and
Chief Legal Officer
|
Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | ||||||||||||||||||||||||||||
Total subscribers(1) |
10,550 | 10,360 | 10,080 | 9,880 | 9,730 | |||||||||||||||||||||||||||
Digital-only subscribers(1) |
9,910 | 9,700 | 9,410 | 9,190 | 9,020 | |||||||||||||||||||||||||||
Digital-only subscribers quarterly net additions(1) |
210 | 300 | 210 | 180 | 190 | |||||||||||||||||||||||||||
Total digital-only ARPU | $ | 9.21 | $ | 9.24 | $ | 9.28 | $ | 9.15 | $ | 9.04 | ||||||||||||||||||||||
% change year-over-year | 1.9 | % | 3.5 | % | 4.6 | % | 3.6 | % | (1.0) | % | ||||||||||||||||||||||
Digital-only subscription revenues | $ | 293.0 | $ | 288.7 | $ | 282.2 | $ | 269.8 | $ | 258.8 | ||||||||||||||||||||||
% change year-over-year | 13.2 | % | 7.2 | % | 15.7 | % | 13.0 | % | 14.1 | % | ||||||||||||||||||||||
Digital advertising revenues | $ | 63.0 | $ | 107.7 | $ | 75.0 | $ | 73.8 | $ | 61.3 | ||||||||||||||||||||||
% change year-over-year | 2.9 | % | (3.7) | % | 6.7 | % | 6.5 | % | (8.5) | % | ||||||||||||||||||||||
Total revenues | $ | 594.0 | $ | 676.2 | $ | 598.3 | $ | 590.9 | $ | 560.7 | ||||||||||||||||||||||
% change year-over-year | 5.9 | % | 1.3 | % | 9.3 | % | 6.3 | % | 4.3 | % | ||||||||||||||||||||||
Total operating costs(2) |
$ | 545.7 | $ | 547.2 | $ | 534.8 | $ | 535.1 | $ | 532.8 | ||||||||||||||||||||||
% change year-over-year(2) |
2.4 | % | (4.8) | % | 7.7 | % | 6.2 | % | 0.3 | % | ||||||||||||||||||||||
Adjusted operating costs(3) |
$ | 518.0 | $ | 522.3 | $ | 508.6 | $ | 498.7 | $ | 506.8 | ||||||||||||||||||||||
% change year-over-year | 2.2 | % | (0.7) | % | 6.2 | % | 4.0 | % | 6.4 | % | ||||||||||||||||||||||
Operating profit | $ | 48.3 | $ | 129.0 | $ | 63.6 | $ | 55.8 | $ | 27.9 | ||||||||||||||||||||||
Operating profit margin % | 8.1 | % | 19.1 | % | 10.6 | % | 9.4 | % | 5.0 | % | ||||||||||||||||||||||
Adjusted operating profit (“AOP”) - NYTG(4) |
$ | 84.7 | $ | 158.4 | $ | 97.7 | $ | 100.0 | $ | 65.3 | ||||||||||||||||||||||
AOP margin % - NYTG(4) |
15.2 | % | 24.8 | % | 17.3 | % | 17.8 | % | 12.3 | % | ||||||||||||||||||||||
AOP - The Athletic(4) |
$ | (8.7) | $ | (4.4) | $ | (7.9) | $ | (7.8) | $ | (11.3) | ||||||||||||||||||||||
AOP(3) |
$ | 76.1 | $ | 154.0 | $ | 89.8 | $ | 92.2 | $ | 54.0 | ||||||||||||||||||||||
AOP margin %(3) |
12.8 | % | 22.8 | % | 15.0 | % | 15.6 | % | 9.6 | % | ||||||||||||||||||||||
Diluted earnings per share (“EPS”) | $ | 0.24 | $ | 0.66 | $ | 0.32 | $ | 0.28 | $ | 0.13 | ||||||||||||||||||||||
Adjusted diluted EPS(3) |
$ | 0.31 | $ | 0.70 | $ | 0.37 | $ | 0.38 | $ | 0.19 | ||||||||||||||||||||||
Diluted shares | 165.6 | 165.9 | 165.4 | 165.0 | 165.4 | |||||||||||||||||||||||||||
(1) Subscribers (including net subscriber additions) are rounded to the nearest ten thousand. | ||||||||||||||||||||||||||||||||
(2) Q1 2023 and Q2 2023 were recast to conform to the current presentation of total operating costs. See “Comparisons” for more details. | ||||||||||||||||||||||||||||||||
(3) Non-GAAP financial measure. See “Comparisons”, “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” for more details. | ||||||||||||||||||||||||||||||||
(4) Q1 2023 was recast to reflect the Company’s updated bundle allocation methodology. See “Segment information” for more details. |
The New York Times Company | |||||
Digital-only subscription revenues | increase 11 - 14% | ||||
Total subscription revenues | increase 6 - 8% | ||||
Digital advertising revenues | increase high-single-digits | ||||
Total advertising revenues | increase low-single-digits | ||||
Other revenue | flat to increase low-single-digits | ||||
Adjusted operating costs | increase 4 - 5% |
THE NEW YORK TIMES COMPANY | |||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||
(Dollars and shares in thousands, except per share data) | |||||||||||||||||
First Quarter | |||||||||||||||||
2024 | 2023 | % Change | |||||||||||||||
Revenues | |||||||||||||||||
Subscription(a) |
$ | 429,005 | $ | 397,542 | 7.9 | % | |||||||||||
Advertising(b) |
103,711 | 106,241 | (2.4) | % | |||||||||||||
Other(c) |
61,299 | 56,956 | 7.6 | % | |||||||||||||
Total revenues | 594,015 | 560,739 | 5.9 | % | |||||||||||||
Operating costs | |||||||||||||||||
Cost of revenue (excluding depreciation and amortization) | 316,867 | 306,852 | 3.3 | % | |||||||||||||
Sales and marketing | 65,134 | 67,034 | (2.8) | % | |||||||||||||
Product development | 63,185 | 57,062 | 10.7 | % | |||||||||||||
General and administrative | 78,815 | 81,051 | (2.8) | % | |||||||||||||
Depreciation and amortization | 20,706 | 20,840 | (0.6) | % | |||||||||||||
Generative AI Litigation Costs | 989 | — | * | ||||||||||||||
Total operating costs(1) |
545,696 | 532,839 | 2.4 | % | |||||||||||||
Operating profit | 48,319 | 27,900 | 73.2 | % | |||||||||||||
Other components of net periodic benefit (costs)/income | (1,051) | 685 | * | ||||||||||||||
Interest income and other, net | 8,387 | 3,173 | * | ||||||||||||||
Income before income taxes | 55,655 | 31,758 | 75.2 | % | |||||||||||||
Income tax expense | 15,238 | 9,437 | 61.5 | % | |||||||||||||
Net income | $ | 40,417 | $ | 22,321 | 81.1 | % | |||||||||||
Average number of common shares outstanding: | |||||||||||||||||
Basic | 164,632 | 164,975 | (0.2) | % | |||||||||||||
Diluted | 165,630 | 165,398 | 0.1 | % | |||||||||||||
Basic earnings per share attributable to common stockholders | $ | 0.25 | $ | 0.14 | 78.6 | % | |||||||||||
Diluted earnings per share attributable to common stockholders | $ | 0.24 | $ | 0.13 | 84.6 | % | |||||||||||
Dividends declared per share | $ | 0.13 | $ | 0.11 | 18.2 | % | |||||||||||
(1) First quarter 2023 was recast to conform to the current presentation of total operating costs. See “Comparisons” for more details. |
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* Represents a change equal to or in excess of 100% or not meaningful. | |||||||||||||||||
See footnotes pages for additional information. |
THE NEW YORK TIMES COMPANY | ||||||||||||||||||||
FOOTNOTES | ||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
(a) The following table summarizes digital and print subscription revenues for the first quarters of 2024 and 2023: | ||||||||||||||||||||
First Quarter | ||||||||||||||||||||
2024 | 2023 | % Change | ||||||||||||||||||
Digital-only subscription revenues(1) |
$ | 292,978 | $ | 258,768 | 13.2 | % | ||||||||||||||
Print subscription revenues(2) |
136,027 | 138,774 | (2.0) | % | ||||||||||||||||
Total subscription revenues | $ | 429,005 | $ | 397,542 | 7.9 | % | ||||||||||||||
(1) Includes revenue from bundled and standalone subscriptions to our news product, as well as to The Athletic and to our Cooking, Games and Wirecutter products. | ||||||||||||||||||||
(2) Includes domestic home-delivery subscriptions, which include access to our digital products. Also includes single-copy, NYT International and Other subscription revenues. |
(b) The following table summarizes digital and print advertising revenues for the first quarters of 2024 and 2023: | ||||||||||||||||||||
First Quarter | ||||||||||||||||||||
2024 | 2023 | % Change | ||||||||||||||||||
Advertising revenues: | ||||||||||||||||||||
Digital | $ | 63,026 | $ | 61,271 | 2.9 | % | ||||||||||||||
40,685 | 44,970 | (9.5) | % | |||||||||||||||||
Total advertising | $ | 103,711 | $ | 106,241 | (2.4) | % | ||||||||||||||
(c) Other revenues primarily consist of revenues from licensing, Wirecutter affiliate referrals, commercial printing, the leasing of floors in the Company headquarters, retail commerce, our live events business, our student subscription sponsorship program and books, television and film. Digital other revenues, which consist primarily of Wirecutter affiliate referral revenue and digital licensing revenues, totaled $35.8 million and $26.1 million for the first quarter of 2024 and 2023, respectively. |
THE NEW YORK TIMES COMPANY | ||||||||||||||||||||||||||||||||
SUPPLEMENTAL SUBSCRIBER, ARPU AND SUBSCRIPTION REVENUES INFORMATION | ||||||||||||||||||||||||||||||||
(Amounts in thousands, except for ARPU) |
The following table sets forth subscribers as of the end of the five most recent fiscal quarters: | ||||||||||||||||||||||||||||||||
Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | ||||||||||||||||||||||||||||
Digital-only subscribers: | ||||||||||||||||||||||||||||||||
Bundle and multiproduct(1)(2) |
4,550 | 4,220 | 3,790 | 3,300 | 3,020 | |||||||||||||||||||||||||||
News-only(2)(3) |
2,500 | 2,740 | 3,020 | 3,320 | 3,580 | |||||||||||||||||||||||||||
Other single-product(2)(4) |
2,860 | 2,740 | 2,600 | 2,580 | 2,420 | |||||||||||||||||||||||||||
Total digital-only subscribers(2)(5) |
9,910 | 9,700 | 9,410 | 9,190 | 9,020 | |||||||||||||||||||||||||||
Print subscribers(6) |
640 | 660 | 670 | 690 | 710 | |||||||||||||||||||||||||||
Total subscribers | 10,550 | 10,360 | 10,080 | 9,880 | 9,730 | |||||||||||||||||||||||||||
(1) Subscribers with a bundle subscription or standalone digital-only subscriptions to two or more of the Company’s products. | ||||||||||||||||||||||||||||||||
(2) Includes group corporate and group education subscriptions, which collectively represented approximately 6% of total digital-only subscribers as of the end of the first quarter of 2024. The number of group subscribers is derived using the value of the relevant contract and a discounted subscription rate. | ||||||||||||||||||||||||||||||||
(3) Subscribers with only a digital-only news product subscription. | ||||||||||||||||||||||||||||||||
(4) Subscribers with only one digital-only subscription to The Athletic or to our Cooking, Games or Wirecutter products. | ||||||||||||||||||||||||||||||||
(5) Subscribers with digital-only subscriptions to one or more of our news product, The Athletic, or our Cooking, Games and Wirecutter products. | ||||||||||||||||||||||||||||||||
(6) Subscribers with a domestic home-delivery or mail print subscription to The New York Times, which includes access to our digital products, or a print subscription to our Book Review or Large Type Weekly products. | ||||||||||||||||||||||||||||||||
The sum of individual metrics may not always equal total amounts indicated due to rounding. Subscribers (including net subscriber additions) are rounded to the nearest ten thousand. |
The following table sets forth ARPU metrics relating to the above digital-only subscriber categories for the five most recent fiscal quarters: | ||||||||||||||||||||||||||||||||
Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | ||||||||||||||||||||||||||||
Digital-only ARPU: | ||||||||||||||||||||||||||||||||
Bundle and multiproduct | $ | 11.79 | $ | 12.13 | $ | 12.81 | $ | 13.40 | $ | 14.33 | ||||||||||||||||||||||
News-only | $ | 10.88 | $ | 10.38 | $ | 10.05 | $ | 9.29 | $ | 8.69 | ||||||||||||||||||||||
Other single-product |
$ | 3.59 | $ | 3.56 | $ | 3.48 | $ | 3.57 | $ | 3.67 | ||||||||||||||||||||||
Total digital-only ARPU | $ | 9.21 | $ | 9.24 | $ | 9.28 | $ | 9.15 | $ | 9.04 | ||||||||||||||||||||||
ARPU metrics are calculated by dividing the digital subscription revenues in the quarter by the average number of digital-only subscribers divided by the number of days in the quarter multiplied by 28 to reflect a 28-day billing cycle. In calculating ARPU metrics, for our subscriber categories (Bundle and multiproduct, News-only and Other single-product), we use the monthly average number of digital-only subscribers (calculated as the sum of the number of subscribers in each category at the beginning and end of the month, divided by two) and for Total digital-only ARPU, we use the daily average number of digital-only subscribers. |
THE NEW YORK TIMES COMPANY | ||||||||||||||||||||||||||||||||
SUPPLEMENTAL SUBSCRIBER, ARPU AND SUBSCRIPTION REVENUES INFORMATION | ||||||||||||||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||||||||||||
The following table sets forth the subset of subscribers above who have a digital-only standalone subscription to The Athletic or a bundle subscription that includes the ability to access The Athletic as of the end of the five most recent fiscal quarters: | ||||||||||||||||||||||||||||||||
Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | ||||||||||||||||||||||||||||
Digital-only subscribers with The Athletic(1)(2) |
4,990 | 4,650 | 4,180 | 3,640 | 3,270 | |||||||||||||||||||||||||||
(1) We provide all bundle subscribers with the ability to access The Athletic and all bundle subscribers are included in this metric. | ||||||||||||||||||||||||||||||||
(2) Subscribers (including net subscriber additions) are rounded to the nearest ten thousand. |
THE NEW YORK TIMES COMPANY | ||||||||||||||||||||
SEGMENT INFORMATION | ||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
We have two reportable segments: NYTG and The Athletic. Management uses adjusted operating profit (loss) by segment in assessing performance and allocating resources. The Company includes in its presentation revenues and adjusted operating costs to arrive at adjusted operating profit (loss) by segment. Adjusted operating costs are defined as operating costs before depreciation and amortization, severance, multiemployer pension plan withdrawal costs and special items. Adjusted operating profit is defined as operating profit before depreciation and amortization, severance, multiemployer pension plan withdrawal costs and special items. Adjusted operating profit expressed as a percentage of revenues is referred to as adjusted operating profit margin.
Subscription revenues from and expenses associated with our bundle are allocated to NYTG and The Athletic.
Prior to April 1, 2023, we allocated bundle revenues first to our digital news product based on its standalone list price and then the remaining bundle revenues were allocated to the other products in the bundle, including The Athletic, based on their relative standalone list prices. Starting April 1, 2023, we allocate 10% of bundle revenues to The Athletic based on management’s view of The Athletic’s relative value to the bundle, which is derived based on analysis of various metrics.
Prior to April 1, 2023, we allocated to NYTG and The Athletic direct variable expenses associated with the bundle, which include credit card fees, third party fees and sales taxes, based on a historical actual percentage of these costs to bundle revenues. Starting April 1, 2023, we allocate 10% of product development, marketing and subscriber servicing expenses (including the direct variable expenses referenced above) associated with the bundle to The Athletic, and the remaining costs are allocated to NYTG, in each case, in line with the revenues allocations.
For comparison purposes, the Company previously recast segment results for the first quarter of 2023 to reflect the updated allocation methodology.
| ||||||||||||||||||||
First Quarter | ||||||||||||||||||||
2024 | 2023(1)(2) |
% Change | ||||||||||||||||||
Revenues | ||||||||||||||||||||
NYTG | $ | 557,394 | $ | 532,782 | 4.6 | % | ||||||||||||||
The Athletic | 37,184 | 27,957 | 33.0 | % | ||||||||||||||||
Intersegment eliminations(3) |
(563) | — | * | |||||||||||||||||
Total revenues | $ | 594,015 | $ | 560,739 | 5.9 | % | ||||||||||||||
Adjusted operating costs | ||||||||||||||||||||
NYTG | $ | 472,650 | $ | 467,495 | 1.1 | % | ||||||||||||||
The Athletic | 45,874 | 39,269 | 16.8 | % | ||||||||||||||||
Intersegment eliminations(3) |
(563) | — | * | |||||||||||||||||
Total adjusted operating costs | $ | 517,961 | $ | 506,764 | 2.2 | % | ||||||||||||||
Adjusted operating profit (loss) | ||||||||||||||||||||
NYTG | $ | 84,744 | $ | 65,287 | 29.8 | % | ||||||||||||||
The Athletic | (8,690) | (11,312) | (23.2) | % | ||||||||||||||||
Total adjusted operating profit | $ | 76,054 | $ | 53,975 | 40.9 | % | ||||||||||||||
AOP margin % - NYTG | 15.2 | % | 12.3 | % | 290 bps | |||||||||||||||
(1) Recast to reflect the Company’s updated bundle allocation methodology. | ||||||||||||||||||||
(2) Recast to conform to the current presentation of total operating costs. See “Comparisons” for more detail. |
||||||||||||||||||||
(3) Intersegment eliminations (“I/E”) related to content licensing. | ||||||||||||||||||||
* Represents a change equal to or in excess of 100% or not meaningful. |
THE NEW YORK TIMES COMPANY | ||||||||||||||||||||
SEGMENT INFORMATION | ||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Revenues detail by segment | ||||||||||||||||||||
First Quarter | ||||||||||||||||||||
2024 | 2023(1) |
% Change | ||||||||||||||||||
NYTG | ||||||||||||||||||||
Subscription | $ | 401,370 | $ | 374,156 | 7.3 | % | ||||||||||||||
Advertising | 98,004 | 102,090 | (4.0) | % | ||||||||||||||||
Other | 58,020 | 56,536 | 2.6 | % | ||||||||||||||||
Total | $ | 557,394 | $ | 532,782 | 4.6 | % | ||||||||||||||
The Athletic | ||||||||||||||||||||
Subscription | $ | 27,635 | $ | 23,386 | 18.2 | % | ||||||||||||||
Advertising | 5,707 | 4,151 | 37.5 | % | ||||||||||||||||
Other | 3,842 | 420 | * | |||||||||||||||||
Total | $ | 37,184 | $ | 27,957 | 33.0 | % | ||||||||||||||
I/E(2) |
$ | (563) | $ | — | * | |||||||||||||||
The New York Times Company | ||||||||||||||||||||
Subscription | $ | 429,005 | $ | 397,542 | 7.9 | % | ||||||||||||||
Advertising | 103,711 | 106,241 | (2.4) | % | ||||||||||||||||
Other | 61,299 | 56,956 | 7.6 | % | ||||||||||||||||
Total | $ | 594,015 | $ | 560,739 | 5.9 | % | ||||||||||||||
(1) Recast to reflect the Company’s updated bundle allocation methodology. | ||||||||||||||||||||
(2) I/E related to content licensing recorded in Other revenues. | ||||||||||||||||||||
* Represents a change equal to or in excess of 100% or not meaningful. |
THE NEW YORK TIMES COMPANY | ||||||||||||||||||||
SEGMENT INFORMATION | ||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Adjusted operating costs (operating costs before depreciation and amortization, severance, multiemployer pension plan withdrawal costs and special items) detail by segment | ||||||||||||||||||||
First Quarter | ||||||||||||||||||||
2024 | 2023(1) |
% Change | ||||||||||||||||||
NYTG | ||||||||||||||||||||
Cost of revenue (excluding depreciation and amortization) | $ | 292,457 | $ | 284,323 | 2.9 | % | ||||||||||||||
Sales and marketing | 55,481 | 58,932 | (5.9) | % | ||||||||||||||||
Product development | 54,865 | 50,832 | 7.9 | % | ||||||||||||||||
Adjusted general and administrative(2) |
69,847 | 73,408 | (4.9) | % | ||||||||||||||||
Total | $ | 472,650 | $ | 467,495 | 1.1 | % | ||||||||||||||
The Athletic | ||||||||||||||||||||
Cost of revenue (excluding depreciation and amortization) | $ | 24,973 | $ | 22,529 | 10.8 | % | ||||||||||||||
Sales and marketing | 9,653 | 8,102 | 19.1 | % | ||||||||||||||||
Product development | 8,320 | 6,230 | 33.5 | % | ||||||||||||||||
Adjusted general and administrative(3) |
2,928 | 2,408 | 21.6 | % | ||||||||||||||||
Total | $ | 45,874 | $ | 39,269 | 16.8 | % | ||||||||||||||
I/E(4) |
$ | (563) | $ | — | * | |||||||||||||||
The New York Times Company | ||||||||||||||||||||
Cost of revenue (excluding depreciation and amortization) | $ | 316,867 | $ | 306,852 | 3.3 | % | ||||||||||||||
Sales and marketing | 65,134 | 67,034 | (2.8) | % | ||||||||||||||||
Product development | 63,185 | 57,062 | 10.7 | % | ||||||||||||||||
Adjusted general and administrative | 72,775 | 75,816 | (4.0) | % | ||||||||||||||||
Total | $ | 517,961 | $ | 506,764 | 2.2 | % | ||||||||||||||
(1) Recast to reflect the Company’s updated bundle allocation methodology. | ||||||||||||||||||||
(2) Excludes severance of $4.0 million and multiemployer pension withdrawal costs of $1.6 million for the first quarter of 2024. Excludes severance of $3.3 million and multiemployer pension withdrawal costs of $1.5 million for the first quarter of 2023. | ||||||||||||||||||||
(3) Excludes severance of $0.4 million and $0.5 million for the first quarter of 2024 and 2023, respectively. | ||||||||||||||||||||
(4) I/E related to content licensing recorded in Cost of revenue (excluding depreciation and amortization). | ||||||||||||||||||||
* Represents a change equal to or in excess of 100% or not meaningful. |
THE NEW YORK TIMES COMPANY | ||||||||||||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||||||||||||||||||||
In this release, the Company has referred to non-GAAP financial information with respect to adjusted diluted EPS, defined as diluted EPS excluding amortization of acquired intangible assets, severance, non-operating retirement costs and special items; adjusted operating profit, defined as operating profit before depreciation, amortization, severance, multiemployer pension plan withdrawal costs and special items; adjusted operating profit margin, defined as adjusted operating profit divided by revenues; adjusted operating costs, defined as operating costs before depreciation, amortization, severance, multiemployer pension withdrawal costs and special items; and free cash flow, defined as net cash provided by operating activities less capital expenditures. The Company has included these non-GAAP financial measures because management reviews them on a regular basis and uses them to evaluate and manage the performance of the Company’s operations. Management believes that, for the reasons outlined below, these non-GAAP financial measures provide useful information to investors as a supplement to reported diluted earnings/(loss) per share, operating profit/(loss) and operating costs. However, these measures should be evaluated only in conjunction with the comparable GAAP financial measures and should not be viewed as alternative or superior measures of GAAP results. | ||||||||||||||||||||||||||||||||||||||
Adjusted diluted EPS provides useful information in evaluating the Company’s period-to-period performance because it eliminates items that the Company does not consider to be indicative of earnings from ongoing operating activities. Adjusted operating profit and adjusted operating profit margin are useful in evaluating the ongoing performance of the Company’s business as they exclude the significant non-cash impact of depreciation and amortization as well as items not indicative of ongoing operating activities. Total operating costs include depreciation, amortization, severance, multiemployer pension plan withdrawal costs and special items. Adjusted operating costs provide investors with helpful supplemental information on the Company’s underlying operating costs that is used by management in its financial and operational decision-making. | ||||||||||||||||||||||||||||||||||||||
Management considers special items, which may include impairment charges, pension settlement charges, acquisition-related costs, and beginning in the first quarter of 2024, Generative AI Litigation Costs, as well as other items that arise from time to time, to be outside the ordinary course of our operations. Management believes that excluding these items provides a better understanding of the underlying trends in the Company’s operating performance and allows more accurate comparisons of the Company’s operating results to historical performance. Management determined to report Generative AI Litigation Costs as a special item and thus exclude them beginning in the first quarter of 2024 because, unlike other litigation expenses which are not excluded, the Generative AI Litigation Costs arise from a discrete, complex and unusual proceeding and do not, in management’s view, reflect the Company’s ongoing business operational performance. In addition, management excludes severance costs, which may fluctuate significantly from quarter to quarter, because it believes these costs do not necessarily reflect expected future operating costs and do not contribute to a meaningful comparison of the Company’s operating results to historical performance. | ||||||||||||||||||||||||||||||||||||||
The Company considers free cash flow as providing useful information to management and investors about the amount of cash that is available to be used to strengthen the Company’s balance sheet, for strategic opportunities, including investing in the Company’s business and strategic acquisitions, and/or for the return of capital to stockholders in the form of dividends and stock repurchases. | ||||||||||||||||||||||||||||||||||||||
Non-operating retirement costs include (i) interest cost, expected return on plan assets, amortization of actuarial gains and loss components and amortization of prior service credits of single-employer pension expense, (ii) interest cost, amortization of actuarial gains and loss components and (iii) all multiemployer pension plan withdrawal costs. These non-operating retirement costs are primarily tied to financial market performance including changes in market interest rates and investment performance. Management considers non-operating retirement costs to be outside the performance of the business and believes that presenting adjusted diluted EPS excluding non-operating retirement costs and presenting adjusted operating results excluding multiemployer pension plan withdrawal costs, in addition to the Company’s GAAP diluted EPS and GAAP operating results, provide increased transparency and a better understanding of the underlying trends in the Company’s operating business performance. | ||||||||||||||||||||||||||||||||||||||
Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are set out in the tables below. | ||||||||||||||||||||||||||||||||||||||
THE NEW YORK TIMES COMPANY | ||||||||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||
Reconciliation of diluted EPS excluding amortization of acquired intangible assets, severance, non-operating retirement costs and special items (or adjusted diluted EPS) | ||||||||||||||||||||
First Quarter | ||||||||||||||||||||
2024 | 2023 | % Change | ||||||||||||||||||
Diluted EPS | $ | 0.24 | $ | 0.13 | 84.6 | % | ||||||||||||||
Add: | ||||||||||||||||||||
Amortization of acquired intangible assets | 0.04 | 0.04 | * | |||||||||||||||||
Severance | 0.03 | 0.02 | 50.0 | % | ||||||||||||||||
Non-operating retirement costs: | ||||||||||||||||||||
Multiemployer pension plan withdrawal costs | 0.01 | 0.01 | * | |||||||||||||||||
Other components of net periodic benefit costs | 0.01 | — | * | |||||||||||||||||
Special items: | ||||||||||||||||||||
Generative AI Litigation Costs | 0.01 | — | * | |||||||||||||||||
Income tax expense of adjustments | (0.02) | (0.02) | * | |||||||||||||||||
Adjusted diluted EPS(1) |
$ | 0.31 | $ | 0.19 | 63.2 | % | ||||||||||||||
(1) Amounts may not add due to rounding. | ||||||||||||||||||||
* Represents a change equal to or in excess of 100% or not meaningful. |
Reconciliation of operating profit before depreciation and amortization, severance, multiemployer pension plan withdrawal costs and special items (or adjusted operating profit) | ||||||||||||||||||||
First Quarter | ||||||||||||||||||||
2024 | 2023 | % Change | ||||||||||||||||||
Operating profit | $ | 48,319 | $ | 27,900 | 73.2 | % | ||||||||||||||
Add: | ||||||||||||||||||||
Depreciation and amortization | 20,706 | 20,840 | (0.6) | % | ||||||||||||||||
Severance | 4,428 | 3,780 | 17.1 | % | ||||||||||||||||
Multiemployer pension plan withdrawal costs | 1,612 | 1,455 | 10.8 | % | ||||||||||||||||
Generative AI Litigation Costs | 989 | — | * | |||||||||||||||||
Adjusted operating profit | $ | 76,054 | $ | 53,975 | 40.9 | % | ||||||||||||||
Divided by: | ||||||||||||||||||||
Revenues | $ | 594,015 | $ | 560,739 | 5.9 | % | ||||||||||||||
Operating profit margin | 8.1 | % | 5.0 | % | 310 bps | |||||||||||||||
Adjusted operating profit margin | 12.8 | % | 9.6 | % | 320 bps | |||||||||||||||
* Represents a change equal to or in excess of 100% or not meaningful. |
THE NEW YORK TIMES COMPANY | ||||||||||||||||||||||||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of total operating costs before depreciation and amortization, severance, multiemployer pension plan withdrawal costs and special items (or adjusted operating costs) | ||||||||||||||||||||||||||||||||||||||||||||||||||
First Quarter | ||||||||||||||||||||||||||||||||||||||||||||||||||
2024 | 2023(1)(2) |
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NYTG | The Athletic | I/E(3) |
Total | NYTG | The Athletic | Total | % Change | |||||||||||||||||||||||||||||||||||||||||||
Total operating costs | $ | 493,275 | $ | 52,984 | $ | (563) | $ | 545,696 | $ | 486,285 | $ | 46,554 | $ | 532,839 | 2.4 | % | ||||||||||||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 14,025 | 6,681 | — | 20,706 | 14,006 | 6,834 | 20,840 | (0.6) | % | |||||||||||||||||||||||||||||||||||||||||
Severance | 3,999 | 429 | — | 4,428 | 3,329 | 451 | 3,780 | 17.1 | % | |||||||||||||||||||||||||||||||||||||||||
Multiemployer pension plan withdrawal costs | 1,612 | — | — | 1,612 | 1,455 | — | 1,455 | 10.8 | % | |||||||||||||||||||||||||||||||||||||||||
Generative AI Litigation Costs | 989 | — | — | 989 | — | — | — | * | ||||||||||||||||||||||||||||||||||||||||||
Adjusted operating costs | $ | 472,650 | $ | 45,874 | $ | (563) | $ | 517,961 | $ | 467,495 | $ | 39,269 | $ | 506,764 | 2.2 | % | ||||||||||||||||||||||||||||||||||
(1) Recast to reflect the Company’s updated bundle allocation methodology. | ||||||||||||||||||||||||||||||||||||||||||||||||||
(2) Recast to conform to the current presentation of total operating costs. See “Comparisons” for more detail. | ||||||||||||||||||||||||||||||||||||||||||||||||||
(3) I/E related to content licensing. | ||||||||||||||||||||||||||||||||||||||||||||||||||
* Represents a change equal to or in excess of 100% or not meaningful. |
Reconciliation of net cash provided by/(used in) operating activities before capital expenditures (or free cash flow) | ||||||||||||||
Three Months | ||||||||||||||
2024 | 2023 | |||||||||||||
Net cash provided by operating activities | $ | 53,079 | $ | 50,730 | ||||||||||
Less: Capital expenditures | (6,424) | (5,985) | ||||||||||||
Free cash flow | $ | 46,655 | $ | 44,745 |