Company cites improved balance sheet
The New York Times Company has handed out its first quarterly dividend since the financial crisis.
The company's board of directors voted to pay a dividend of 4 cents a share on the company’s Class A and Class B common stock at the end of October, citing its improved balance sheet. The Times had nearly $1 billion in cash and securities as of its last quarterly earnings report.
The move comes as the media company has divested itself of many of its struggling assets. In August, the paper sold the Boston Globe and its affiliated properties to John Henry, owner of the Boston Red Sox, for $70 million.
Although, other storied family owned papers like the Washington Post have recently been sold, the Times owners the Sulzberger family have insisted that the paper is not for sale. Offering a dividend to the various members of the Sulzberger family helps insure that they will not dilute the family's ownership position by selling off shares.
A dividend has not been issued in nearly 5 years and the family’s ownership of Class A stock has dipped as a result. The Sulzberger clan's ownership position has fallen from 19 percent of Class A stock has dropped from 19 percent to 13 percent since 2010.
During the most recent fiscal quarter, the Times saw circulation revenue increase more than 5 percent on the strength of digital subscriptions, but advertising revenue from print dipped 6.8 percent, and digital advertising revenue dropped 2.7 percent. Overall revenues fell .9 percent to $485.4 million.
“Given the expectation of continued volatility in advertising revenue and the fact that our growth strategy is at an early stage of development, we will maintain a prudent view of both the balance sheet and free cash flow,” Mark Thompson, president and CEO of The New York Times Company, said.
The Times shares were up 1.16 percent to $11.67 on news of the dividend as of 10:24 a.m. EST.