Ziff Davis revenue falls, 'Smart Business' magazine shuttered

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New York--Tech publisher Ziff Davis Media Inc. Tuesday reported dismal operating results for the first quarter and announced it would close Ziff Davis Smart Business magazine. The company will continue to offer a Smart Business Web site and newsletter.

First-quarter revenue totaled $54.1 million, down from $84.2 million a year earlier, a decline of 36%. Ziff Davis Publishing, a division of the company that includes such stalwart titles as PC Magazine and eWeek, posted earnings of $5.1 million before interest, taxes, depreciation, amortization and restructuring charges, compared with $10.9 million of EBITDA a year earlier.

The results from the most recent quarter, as chairman-CEO Robert F. Callahan pointed out in a statement, did beat Ziff Davis’ previously announced guidance of $3 million to $5 million. The closing of Smart Business is part of an effort to cut costs. In its publishing division, the company trimmed selling, general and administrative costs to $23.8 million for the quarter, compared with $40.5 million a year earlier, a reduction of 41.2%.

But that may not be enough to save the company, industry observers said. Ziff Davis is undergoing what these observers describe as essentially a bankruptcy proceeding to restructure the company and its debt obligations. If it can get approval from 95% of its bondholders by June 25, the company can be restructured without a visit to bankruptcy court. In an April Securities and Exchange Commission filing, the company said it had 60% of bondholders already in agreement with the restructuring.

--Sean Callahan

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