Ziff Davis Looks for More Time
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By @NY Staff
Technology publisher Ziff Davis Media, Inc. is looking to extend its March 15th deadline on an existing credit line after announcing earnings that show widening losses for 2001.
And with its ad revenue outlook still deteriorating, the company may be headed for a bankruptcy if it can't buy more time on a loan it took out in the form of a credit line while it restructures.
"We continue to have significant decreases in advertising pages in many of our publications and visibility for increases in the near term is limited," Bart Catalane, chief operating officer, said Wednesday.
The results, dramatically widened compared to a net loss of $15.2 million from the same, year-ago quarter, were largely driven by a $275 million restructuring charge it took during the period.
In its release and discussion of fourth quarter and year-end earnings, Ziff officials said the company was making progress in cutting cash burn, and is trying to extend a $16 million forbearance agreement with majority investor Willis Stein & Partners III that expires next Friday, March 15.
Willis Stein arranged the $16 million credit line in January to help Ziff make a $15 million payment on its $250 million, 12-year notes. The next payment is due July 15th.
But the credit line that it arranged to keep the wolf from the door expires on the 15th, unless the company can extend the forebearance deal further.
The company has been trying to turn its fortunes around and diversify its reliance on advertising revenues amid one of the worst advertising markets in over 15 years. The outlook so far looks bleak.
Its expects cash earnings for the current quarter ending March 31 for its Ziff Publishing Holdings subsidiary to come in between $2 million and $5 million, a drop of between 82 percent and 54 percent over cash flow from the same time a year ago.
Ziff Davis Inc. revenues for the fourth quarter were $74 million, a 41 percent drop from the prior year's revenues of $126 million.
For the full year, its net loss was $415.7 million on revenues of $224.6 million, again, largely due to restructuring charges as it closed down some operations and scaled back on publications. During 2000, Ziff's net loss was $28.8 million on revenues of $353 million.
"We have re-focused the business plans of our unrestricted subsidiaries in recent months to align them much more strongly as strategic partners to the core business in Ziff Davis Publishing Holdings Inc.," said Catalane.
"This new focus will enable us to quickly reduce our cash burn going forward and enable us to capitalize on operating efficiencies."