Ziff Davis Q1: Revenue Declines, Especially Print, While EBITDA and E-Media Increase

By
05/17/2007

Ziff Davis Media this week reported revenue of $32.7 million for the first quarter of 2007, a decline of $4.3 million, or 12 percent, from the same period in 2006, excluding 2006 revenue from closed publications.

The company also reported EBITDA increased slightly, from $2.76 million in the prior-year period to $3.1 million this year. The increase in EBITDA was primarily due to the growth in Ziff's digital businesses, which generated a four-fold increase, the company reported.

The company reported that revenue for e-media increased by 9 percent, and that roughly half of the company's overall revenue now comes from e-media. The increase in e-media revenue did not, however, offset a significant decline in print revenue of 24 percent, again excluding closed magazines.

"I'm pleased to report our fourth consecutive quarter of increased earnings over the prior year," Ziff CEO Robert F. Callahan said in a statement. "The growth of our digital platforms continues to drive the improved profitability of this business, despite the decline in print advertising. Roughly half of our revenues now come from digital platforms and next quarter we will be well over 50 percent."

Ziff is currently in the process of seeking buyers for all of its three divisions, or any one of them individually. Its owner, private-equity firm Willis Stein & Partners, put the company on the block last summer.

In terms of the performance of the individual units, the Consumer/Small Business Group's revenue for the quarter was $11.3 million, down $2.3 million, or 17 percent, compared to the first quarter of 2006. A 20 increase in the group's digital revenues was offset by lower display advertising revenue at PC Magazine. Revenue for the Enterprise Group was $16.0 million for first quarter, down $800,000, or 5 percent, compared to the first quarter of 2006. The drop was attributable to a 15 percent decline in print revenues. For the Game Group, revenue was $5.4 million, down $1.1 million, or 17 percent, compared to the first quarter of 2006 excluding revenue from a closed publication, Official U.S. PlayStation Magazine. This decrease was attributable to a decline in print advertising and circulation associated with the console platform transition.

The company reported cash on hand of $22.2 million at the close of the quarter. It reported that it paid $15.7 million in scheduled interest payments in the quarter, and spent $0.6 million for capital expenditures and $1.7 million in restructuring costs.