This memo, obtained by FOLIO:, was sent Friday by CEO John French to Penton staffers:
To All Penton Employees:
Recently, we’ve enjoyed success in certain areas of the company. Specifically, Penton’s Exhibitions Group is off to a strong start to the year highlighted by the success of the Expo West event (one of New Hope’s tradeshows covering the healthy products industry) in Anaheim, CA that drew record crowds and posted record financial results.
Registered Rep, in the Financial Services Group had a record first quarter. Many of our information data products are off to a strong start to the year as well. However, we are experiencing financial challenges in many other areas of the company. I’m writing today to discuss the challenges we will be facing together in the months ahead and the steps we will be taking as a company to address them.
Over the last several weeks, I have been meeting with our senior managers to review their revenue projections for the remainder of the year. Based on our forecasts, we project considerable revenue challenges for the balance of the year.
We are by no means alone in this situation. Many media companies, and many of our customers across a wide variety of sectors, have been affected by the recessionary economy. Virtually every one of our peers in the media industry has taken action to reduce their operating costs.
Penton is a strong company and we will be taking aggressive steps to address this revenue shortfall and protect our market positions. I have asked for a complete reforecast from all of our product managers, including a restated revenue forecast and a projected expense forecast for the remainder of 2008. We expect to complete this process by the end of April. Once we have completed our companywide review, I’ll report back to you on our findings.
While the decline in revenue is problematic, it is only part of the story. This year we are facing significant increases in some of our largest, fixed operating expenses including the cost of postage and the cost of paper. The increases in these expenses coupled with the revenue decline have forced us to closely examine all of our operating costs.
As a result, we will be instituting the following company-wide policies:
• Hiring Freeze: Effective immediately, we are putting a hold on all hiring activity at Penton. This applies to all hires (full time and part time), regardless of where they are in the hiring process. The only exceptions to this will be key hires including those in the New Media Group, as these activities are critical to our revenue growth plans for both the near and long-term future; hiring in the Buyer’s Guide Group in Overland Park, as we are relocating this function from Cleveland; hiring for the Helpdesk to replace the Unysis contract; which represents a significant cost savings to the organization; and hiring a new Chief Financial Officer, as this position is critical to the financial leadership of the organization.
• Salary Freeze: We will maintain salaries at their current levels at Penton. I know many of you were anticipating a salary increase in April. Our priority at this point, however, is to take every action we can now to minimize staff reductions in the future. Until we see indications of bottom-line improvement, we will freeze salaries for all employees.
• Cost Savings Initiative: In conjunction with the analysis conducted by the product managers on their respective businesses, I’m also asking each of you for your ideas on ways we can reduce our expenses.
Our greatest resource remains our people and I?m confident that many of you have insights into making our business more cost-effective.
Please direct your ideas to Eric Jacobson, SVP of Administration. Eric will consolidate this list and present it to me and other members of the Executive team for discussion. Eric may be reached at REDACTED@penton.com or XXX-XXX-XXXX.
Like many of you, I have personally experienced the difficulties of working through previous economic downturns. During times like these, we all need to focus on those issues we can control: finding new ways to work more effectively and efficiently; becoming even more creative in our thinking; and staying even closer to our industries and our customers.
I realize measures like the ones mentioned above are not popular and that many employees will be disappointed. However, you should know that I do not take these decisions lightly. My objective is to proactively take the steps necessary now to address our growing expenses in an effort to curtail the need to make more drastic moves in the future.
Thank you for your continued contributions to our company. Clearly, we will be going through some difficult times in the weeks and months ahead. However, Penton is a strong organization, and on balance, our future looks bright. As we move along in the process, I will send around periodic updates of our progress.
Please find posted to the Pulse http://thepulse.penton.com a short video and a set of frequently asked questions regarding these issues.