Jim Dunning, president-chairman-CEO of Ziff Davis Media, said the company added about 200 jobs since last year, and now has roughly the same number of employees as this time last year-which hints at the depth of the layoffs. Ziff has a headcount of about 1,000.
"We've all been very surprised by the precipitous [decline] in tech ad dollars since November of last year," said Mr. Dunning.
Mr. Dunning touted an additional investment of $70 million from his backers, Willis Stein & Partners, since the end of Ziff's fiscal year March 31. But Ziff's most recent Securities and Exchange Commission filing details further troubles.
A reference to Willis Stein's most recent investment says $15 million "is restricted to pay interest due on the notes on July 16, 2001." That could suggest cash flow was not enough to make interest payments, said executives familiar with magazine deal structures; Mr. Dunning declined to comment on this issue.
The filing also refers to a plan to "consolidate operations and eliminate headcount" to be finalized by the end of September, but Mr. Dunning declined to comment on whether further cuts were coming.
Mr. Dunning said he was "absolutely not going to comment" on reports that Ziff's other consumer titles-Yahoo! Internet Life and Expedia Travels-are for sale, though industry executives quietly confirm they are.
Ziff, according to Mr. Dunning, has a 15-year license with Yahoo! for Yahoo! Internet Life. Asked if the license may affect who could buy it, Mr. Dunning said Yahoo! has "certain rights under our contract. I'm not going to tell you what rights." A spokeswoman said Yahoo! doesn't discuss its licensing agreements.
The SEC filing also reads the company "[does] not expect to meet certain financial ratios required under our credit facility," which the company amended this month.
At the end of March, Ziff was required to have a better than 4.5 to 1 debt to earnings before interest, taxes, depreciation and amortization ratio. It did, but barely, with the metric coming in at 4.45 to 1. It's doubtful in the current environment that could be equaled.
"Before we ever got in trouble, we went to the banks" and renegotiated, Mr. Dunning said. A 10-k filing did not specify any upcoming financial hurdles.
Ziff reported a net loss of $73.4 million on revenue of $440.5 million in the year ended March 31.
Ziff recently hired consultants McKinsey & Co. for a three-week review, Mr. Dunning said, to focus on its ad and marketing strategies.