Saturday, July 30, 2011

Will DMN layoffs happen before the iPhone 5 is released?

A recap of what we think we know: Plans are well along for layoffs. Likely to happen in the next month or so. Likely to focus more on editors than reporters.  Likely to force remaining editors and reporters to do more production using the capabilities of Newsgate. (In possible confirmation of that, Metro has just scheduled "refresher" Newsgate classes for reporters.)
The death of Quick was not part of the larger layoff plan but was its own specific demise.

Rumors have not carried to me about layoff numbers or how high into management the layoffs might go. Level of tension is high, but is that a clue about the size of cuts?

Current open positions are staying open or are being filled from inside. As with every summer, the interns are doing good work generating stories and papering over some of the gaps.

How is the company doing financially? The top managers took the conference call about second quarter financials on Thursday. None of the questions included anything about possible layoffs. Here are some highlights.

Barry Lucas - Gabelli & Company - Analyst
Can you tell us how many people are actually paying for one digital device, or is that possible to break out?
Jim Moroney - A. H. Belo Corporation - Executive Vice President
It is certainly possible to break out, but we said that we are just going to hold off on that number because the minute we put that number out it is just going to be all that we are going to talk about. I will tell you we continue to add digital-only in every single one of the channels through which we distribute, and we are encouraged by where we are today.
Robert Decherd - A. H. Belo Corporation - Chief Executive Officer
Barry, what we said about that previously still holds. We want to get into the first quarter of next year and see what a full year looks like. These are modest numbers. I don't want to give you the impression that there is some fantastic breakthrough that we are going to announce next spring, but as Jim said, they are meaningful in the sense that we know there's a market. It's a niche market but we want to see how it progresses, what the usage patterns are, how much time do people spend on these sites and be able to come out with something that's meaningful.

That does not sound like someone keeping a huge success hidden. Page views are down only 20 percent since the paywall went up, they said. Is most of the traffic therefore to parts of the site outside the paywall? That was not asked.

On the other hand:
We continue to anticipate full year 2011 adjusted EBIDTA in the range of $45 million to $50 million, which assumes no gains from real estate dispositions. As of June 30, the Company had approximately $50 million of cash and cash equivalents, had no borrowings outstanding at its bank credit facility, and remained in compliance with bank covenants. This strong cash position and debt free balance sheet enabled our Board of Directors to declare a quarterly cash dividend of $0.06 per share payable on September second, 2011 to shareholders of record at the close of business on August 12, 2011.
Based on that, if you are an employee and a stockholder,  you've hedged your bets. You may lose your job, but you'll get a dividend because the company has such a "strong cash position and debt free balance sheet."

If you have information to share, please send it to me at  Information is power. Maybe not much power, but better to know than to not.

(Those latest rumors about iPhone release? Early or mid-September. You're welcome.)

1 comment:

  1. The NewsGate refresher makes you wonder if Metro reporters will soon publish their own stories to the website much like they already do on the blogs. But reporters still will not be able to publish stories to the top of the home page. Web editors will be needed to post stories there.

    Also, the refresher was in the works for about a month and a half, so I doubt it was directly linked to pending layoffs.