Time Inc. CEO Confident in "Return to Growth"
More than a year after the company's spinoff from Time Warner, Joe Ripp touts "our plan to fundamentally reengineer the business" and talks about rolling out paywalls.
More than a year after its spinoff from entertainment conglomerate Time Warner, Time Inc. on Tuesday reported its latest earnings and said it remains confident that it can return to financial growth.
"Over a full year has passed since our spinoff from Time Warner," said chairman and CEO Joe Ripp. "As an independent public company, Time Inc. is renewing the organization’s creativity, entrepreneurship and innovation. We are extending our brands and content assets wherever audiences wish to experience them. We remain confident in our plan to fundamentally reengineer the business and reposition our company for its return to growth."
He added: "2015 continues to be a pivotal year as we launch a portfolio of growth initiatives and invest to develop new revenue streams, including through key acquisitions, and continue our disciplined capital allocation strategy."
The company's brands include Time, Fortune, Entertainment Weekly, Sports Illustrated and People.
Time Inc. on Tuesday reported second-quarter earnings of $24 million, a swing from a year-ago loss of $32 million. Adjusted earnings dropped, though, from $33 million to $30 million due to higher interest expense.
Operating income of $61 million for the quarter marked a swing from a year-ago operating loss of $21 million, "primarily due to lower restructuring and severance costs and the absence of goodwill impairment." Second-quarter revenue dropped 6 percent to $773 million driven by a 9 percent decline in advertising revenue and a 2 percent decrease in circulation revenue.
In terms of expenses, "the benefits realized from previously announced cost-savings initiatives were offset by spending on investments and growth initiatives and $11 million of incremental real estate-related expenses associated with the upcoming relocation of our corporate headquarters and the leaseback of properties in Birmingham, Al. and Menlo Park, Calif.," the company said.
In May, Time Inc. launched a paywall for Entertainment Weekly's website, with management on Tuesday confirming plans to roll out such paywalls across its other sites later this year and in early 2016. Without providing full details, Ripp said: "Payment could simply be you sharing data with us, so we can know more about you."