Ziff-Davis Inc. Announces First Quarter Results PR Newswire, Tuesday, June 02, 1998 at 09:42 NEW YORK, June 2 /PRNewswire/ -- Ziff-Davis Inc. (NYSE:ZD) today announced financial results for its first quarter ended March 31, 1998. Revenue for the first quarter of 1998 was $228.1 million compared to $224.9 million for the first quarter of 1997. Excluding the impact of transferring certain publications to a joint venture, publishing segment revenue improved $4.1 million or 2.1%. The improvement was due to growth in advertising in the Internet business, principally ZDNet, and consumer publications, which was partly offset by lower advertising in business publications. In October 1997, Ziff-Davis transferred its Macuser and MacWeek magazines to form a 50/50 joint venture with another publishing company. These publications contributed $12.8 million of revenue in the first quarter of 1997 but are no longer consolidated in the Company's results for 1998. Advertising revenue was lower in the business publications principally due to factors affecting the computer technology industry during the period. Revenue from the events segment rose 77%, primarily the result of the earlier production of two events as compared to the prior year. Excluding timing effects, segment revenue increased $2 million or 7.8% principally from growth in the JavaOne event. Losses from operations for the first quarter 1998 totaled $24.0 million compared to $15.6 million in the comparable period last year. Earnings before interest, taxes, depreciation and amortization ("EBITDA") were $15.1 million for 1998 compared to $25.5 million in 1997. Excluding the impact from the timing of events, results were less favorable than last year primarily due to the lower level of advertising in the higher margin business publications. In addition, during the first quarter of 1998 the Company recorded $3.2 million of one-time costs for office relocations and incurred $1.4 million of losses from launching new publications. The net loss for the period was $5.1 million or $0.05 per pro forma share, compared to $59.8 million or $0.60 per pro forma share in 1997. The net loss and per share results are not directly comparable to last year due to significant tax benefits recorded in the first quarter of 1998. On May 4, 1998, Ziff-Davis issued 74.2 million shares to its parent company, SOFTBANK Holdings Inc., and closed an initial public offering of 25.8 million shares of its common stock. On May 28, 1998, the Company's U.S. underwriters exercised their option to purchase an additional 2 million shares to cover over-allotments. The Company will procure the additional shares from SOFTBANK Holdings Inc. and there will be no change to the total number of shares outstanding. As a result of the reorganization and offering, the public now holds 27.8 million or 27.8% of the Company's shares. As a result of the reorganization and offering, the Company significantly increased the number of shares outstanding from 1997 to 1998. For comparative purposes, the Company has reported losses per share for both periods on a proforma basis as if the shares were outstanding since January 1, 1997. Ziff-Davis is a leading integrated media and marketing company focused on computing and Internet-related technology, with principal platforms in print publishing, trade shows and conferences, online content, market research and education. The company provides global technology companies with marketing strategies for reaching key decision-makers. Information on the Company can be found at www.ziffdavis.com and www.zdnet.com. Ziff-Davis Inc. (a) Combined Statement of Operations (Unaudited - in thousands, except share and per share data) Three Months Ended March 31, 1998 1997 Revenue, net: Publishing $200,933 $209,564 Events 27,121 15,321 228,054 224,885 Cost of production: Publishing 53,581 54,990 Events 16,729 6,537 70,310 61,527 Selling, general and administrative expenses 144,239 139,980 Depreciation and amortization of property and equipment 7,029 7,894 Amortization of intangible assets 30,446 31,072 Loss from operations (23,970) (15,588) Related party interest expense, net (45,939) (46,712) Other non-operating income, net 1,622 2,155 Loss before income taxes (68,287) (60,145) Income tax benefit (63,166) (328) Net loss $(5,121) $(59,817) Basic loss per share (b) $(0.05) $(0.60) EBITDA 15,127 25,533 (a) Ziff-Davis Inc. was capitalized on May 4, 1998 through SOFTBANK Holdings Inc.'s contribution of its equity in ZD Inc. and ZD Comdex and Forums Inc. and an initial public offering of the Company's common stock. The above results of operations are the combined results of ZD Inc. and ZD Comdex and Forums Inc. for the indicated period. (b) Basic loss per share has been calculated as if the 100 million shares issued on May 4, 1998 were outstanding since January 1, 1997. Diluted loss per share is not shown as the effect of common stock equivalents is anti-dilutive. SOURCE Ziff-Davis Inc. -0- 06/02/98 /CONTACT: Public Relations: Greg Jarboe, Director of Corporate Communications, 617-225-3500, or email@example.com, or Investor Information: Timothy C. O'Brien, Chief Financial Officer, 212-503-3500, or firstname.lastname@example.org, or Tom Wright, Vice President and Treasurer, 212-503-3500, or email@example.com, all of Ziff-Davis Inc./ /Web site: http://www.ziffdavis.com/ /Web site: http://www.zdnet.com/
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