Follow the money: How to decipher financial reports and better cover your industry

Two sessions at this year’s ASBPE national conference in Chicago dealt with foreign languages – that of corporate financial statements.

Ceci Rodgers, a business and economics lecturer at Medill School of Journalism, Northwestern University, walked editors through the nuts and bolts of financial reporting and sorting through the often confusing (sometimes on purpose) world of 10-Qs, 10-Ks and 8-Ks.

“If you can read a nutrition label or a stock quote, you can read this,” Rodgers said.

She recommends editors skip past the “PR garbage” and go straight to the tables on the forms, highlight the lines of information they need, and only then go to the PR/analyst section for explanations from the company.

BREAKDOWN. Rodgers broke down the three most common financial reports journalists and editors deal with:

10-K – annual report

  •  Offers some MD&A (management discussion and analysis)
  • Focus on the footnotes, especially anything listed as “other liabilities” or “special entities”
  • This is the only audited report; the 10-Q isn’t

10-Q – quarterly statement

  •  Income statement – measures profitability
  • Balance sheet – financial health
  • Statement of cash flows – focus on the cash from operations line

8-K – disclosure of information material to the company

14-A – deals with executive compensation

STORY IDEAS. Think there’s nothing in that mass of numbers, percentages and analyst double-speak? Here are some story ideas you can easily pull from a company’s 10-K or 10-Q:

  • How much income tax does the company pay?
  • How much cash does it have on hand?
  • Does it face any pending litigation?
  • What’s the status of its pension funds?
  • What are its “other” liabilities or assets?
  • Is the company “channel stuffing” – moving a lot of product to retailers or distributors and listing it as sold on their books?

WHERE TO LOOK. The 2002 Sarbanes-Oxley law mandates companies follow GAAP (generally accepted accounting principles) that allow journalists and analysts to make apples-to-apples comparisons of companies in the same industries/segments. That doesn’t always make it easy, but Rodgers recommended b2b editors focus on three areas when quarterly and annual reports are released to the media:

  • Income statement – how profitable is the company?
  • Balance sheet – What is the financial health of the company?
  • Statement of cash flow – How much liquidity does the company have?

I – income statement

  • A company’s top line is its total sales plus revenues.
  • Operating income focuses on profit without interest or taxes and tells you how the company is doing in its everyday business.
  • EBITDA (earnings before interest, taxes, debt and amortization) “takes the noise out,” Rodgers said, so analysts like it as a metric to judge the company’s performance.
  • The cost of goods sold (or COGS) shows the impact of commodity costs on business.
  • Sales and G&A expenses – compare this to the same three-month period from last year. If this rises too fast, cost cutting and layoffs might be imminent.
  • Gross margin = revenue minus COGS divided by revenue

II – balance sheet

  • Assets are cash and short-term (three-month) securities. Look for a trend here; are they building cash or not?
  • Goodwill should be less than 20% of total assets?
  • Liabilities are long-term debt (one year or more).
  • Market capitalization = stock price x shares

III – Cash flow

  •     Good ratios of operating cash to net income are 1:1 or 3:1

Author Chuck Bowen is a 2011 ASBPE Young Leader Scholarship award winner, and editor and associate publisher of Lawn & Landscape magazine. You can email him at

ASBPE Podcast: Serving Your Readers in a Down Economy

Last month, Christina Pellett is the editor of the Agent’s Sales Journal, gave us six tips for serving our readers in a down economy.

In this ASBPE Podcast, Christina expands on her advice and describes why her publication:

  • acknowledges the hard times by turning to its readers for practical advice on how best to survive uncertainty and the challenges ahead,
  • generates reader participation by including on editorial staffs’ emails tag lines soliciting input, and
  • opts to connect with its readers via LinkedIn more than it does on Facebook or Twitter.

More is More: 6 Ways to Serve Readers in a Down Economy

As the economy struggles to right itself after the 18-month Great Recession, readers need business-to-business publications more than ever. But the recession has affected practically every sector, publishing included.

So how, with smaller staffs and anemic page counts, can you continue to deliver relevant content to your audience? Conventional wisdom states that those who work smarter than ever to succeed during the bad times will find themselves far ahead of those who hunker down and wait for salad days to return. Here are a few tips for working smarter and delivering practical coverage for helping readers to do the same.

1. Acknowledge the bad times. Don’t hide behind Pollyanna optimism and spin, and don’t ignore what’s going on in the hopes that you’ll lift your readers’ spirits. This isn’t business as usual.

2. Offer hope and encouragement. As the editor of a publication geared toward insurance producers, the news isn’t always sunshine and rainbows. But with everything we do – illustration, photography, story tone – we attempt to imbue a sense of “you can do it.” It’s in nobody’s best interest to be so full of gloom that your readers decide to jump ship and switch to another career field.

3. Feature reader-generated stories and advice. My magazine features a two-person editorial staff and a less-than-amazing freelance budget. Yet our most popular story to date – one that has been in the top five most popular stories on our website every month since it first ran in December 2009 – was one called “52 Prospecting Tips for 52 Weeks.” We asked readers, regular contributors, and other experts for their best tips on finding new clients in a new economy. Often, five minutes spent putting a call out for such submissions – on Twitter, in LinkedIn groups, on your Facebook fan page, on the home page of your magazine and within its pages, via email – can net a feature package that serves your readers better than any 2,000-word staff-written story.

4. Run more content than ever. Your budgets and print magazines are shrinking, so this advice probably sounds crazy. But when you take advantage of the limitless space of your website, your social media presence, your blogs, you have plenty of space to bring readers the insight they need to survive. And when you turn to readers and industry contributors to supply you with this content, budgets shouldn’t be an issue.

5. Diversify your reach. Consider how different readers want to receive your content, and deliver it that way. Despite what you may think, this is actually a great time to experiment with new technologies and delivery media. Many companies and service providers are offering lower rates and free trials to try their technology. Can you experiment with ways to optimize your content for the iPad or mobile devices? Can you look into e-newsletters packaged around specific reader needs? What about digital publication of your online issues to expand your audience without cramping your postage and printing budget? Get creative now so your new strategy is firmly in place when the clouds begin to lift.

6. Talk to readers on their turf. The worst thing you can do is guess at your readers’ needs and blindly throw content at them. Instead, reach out to your readers on a regularly basis. Visit (and participate in) online discussion forums, amp up your social media presence and interact with readers where they already are, comment on blogs, attend professional events – even travel, if you can. Get personal. Find out what their pain points are. Then, you can figure out what they need before they need it – and deliver.

Christina Pellett is the editor of the Agent’s Sales Journal, a business-to-business publication for life and health insurance agents. Follow her on Twitter at @cpellett.

What B2B Can Learn from the Zell Saga

Sam Zell is the devil. Sam Zell is a savior.

Those are the two polarized reactions I always get when I broach the subject of the diminutive bedeviled one from Chicagoland to my journo friends. Well actually, truth be told, the consensus is about 99.9% weighted with the former opinion rather than the latter.

I had the fortune – or misfortune many would say – to cover Zell’s media foray in my recent book Money Talks, Bullsh*t Walks, which was published by Penguin USA’s Portfolio imprint in December 2009. Instead of a slam job on Zell, I purposely took a more balanced approach to the biography, recounting his days as a real estate mogul and addressing the successes and failures of his 40-year business career.

Darker Tone. The task was made all the more complex when he put his Tribune Co., one of America’s most respected media organizations (and owner of revered newspapers like the Chicago Tribune and Los Angeles Times), into Chapter 11 bankruptcy only weeks before my manuscript was due. Suddenly the book took on a different tone.

As with so many business people, Zell thought he knew media. After all, it was just another industry to conquer. And to a certain extent, he’s right, it is a business. But it is also known as the “Fourth Estate” for a reason, and as the proud holder of a Bachelor of Journalism degree from the University of Missouri and someone who has worked all sides of the media landscape over the past 25+ years, I understand the personalities and complexities of this often insular environment.

One of the undeniable facts about the B2B world is that, like Tribune, most of today’s B2B businesses are saddled with debt. Many have also gone through so-called “pre-packaged” bankruptcies and come out with tidier balance sheets, though still debt laden. New and savvier management teams are now in place.

More Work, Less Pay. Cost cutting had been the order of the day, and as ad sales continue to limp along, just as in the world of daily newspapers, reinvesting in media properties is challenged. Raise your hand if you know someone in B2B publishing, or media in general for that matter, who is doing more work for less pay than two years ago. I thought so.

However, one might legitimately argue that Zell could have fared much better in a B2B world. Thanks to B2B’s built-in connection to loyal niche audiences, he probably would have avoided the constant questioning of journalists’ “worth.”

Instead, he javelined himself smack into a brick wall. Newspaper journalists, in particular, were and still are loathe to introspection and perhaps most of all, change, especially when it is driven by billionaire investor types. Zell’s newly installed cast of merry characters – excuse me, managers – at Tribune were colorful to say the least, but they were also viewed as outsiders, people who didn’t “understand” or “get” the media world.

Hate him or hate him, Zell was just named as the 60th richest American by Forbes magazine. So from a wealth standpoint, he’s obviously right more often than he is wrong when it comes to his business acumen. But he also took down one of America’s great media brands, throwing it into bankruptcy after less than a year of ownership.

Hard Lessons. Obviously, judging the economics of the newspaper business is a dicey gambit. At least Zell is right when he believes that media in general have to change the way they do business. No longer can we all afford to think of ourselves as insulated from the realities of simple economics. That has been an especially hard lesson to learn in the recent financial crisis, as we’ve seen so many of our brethren thrust out of work and cherished titles shuttered.

The situation has spawned something else though – a spirit of much needed re-invention. For example, the web has become not only a much more important part of our own lives, but also the lives of our customers. That has built-in B2B advantages written all over it.

Zell believed that print would never die, but it would have to morph and change in lockstep with the viewing habits of its customers or it would indeed go the way of the Dodo.

At least that’s one point where he got it absolutely right.

By Ben Johnson

Ben Johnson is publisher of The CPA Technology Advisor, a B2B property serving the nation’s public accountants. He has more than 25 years of experience in communications and marketing, including several stints as editor and publisher for a variety of B2B media. Most recently he ran the custom publishing division at American Airlines.

Far-Reaching Impact of Reed Closings

By Nikki Golden

That sound you heard April 16 was the clicking sound of a Domino display being set into motion. The closure of the 23 magazines by Reed Business Information will impact a lot more than the lives of the now 324 talented people now out of work. There will be residual effects that we have not even imagined as of yet.

As cliché as it sounds, there is a symbiotic relationship between B2B publications and the industries they cover. These industries look to B2B pubs to be on top of trends, products, research and most of all, guidance when making decisions that impact their businesses. Isn’t that what most B2B pubs tout in their media kits?

So what’s the message that’s sent when a publisher just up and closes 23 titles and closes down the affiliated trade shows and supplements and takes down the Web sites? Many of these publications were Azbee award-winners, Neal award-winners and finalists. Several of these publications were ASBPE Magazine of the Year award-winners. There is a sense of awe with which the rest of us regard many of these great titles — industry-leading publications in their respective markets.

It is true that the B2B landscape is changing, and we need to change with it, but there’s a dangerous precedent that’s been sent and a very negative message — one that breaks up the relationship between B2B and industries. Partnership opportunities might dry up because companies, associations and the like are reluctant to be stuck holding the ball.

And none of this is taking into account the loss of institutional knowledge that the departure of many of these editors, many of whom have spent lifetimes covering the same industry, leaves behind.

Yesterday news came that a new publishing company was formed to purchase the Supply Chain titles: Logistics Management, Modern Materials Handling, Supply Chain Management Review and Material Handling Product News. There’s talk that more of these companies might be formed to purchase the intellectual property and restart the titles — and I hope that proves true.

But for the time being, join me in a moment of silence for the 19 titles still RIP:

Building Design+Construction
Chain Leader
Construction Bulletin
Construction Equipment
Consulting-Specifying Engineer *
Control Engineering *
Foodservice Equipment & Supplies
Graphic Arts Blue Book
Graphic Arts Monthly
Plant Engineering *
Professional Builder
Professional Remodeler
Restaurant & Institutions (an Azbee Magazine of the Year winner)
Semiconductor International
Spec Check,
Tradeshow Weekly

And to our colleagues who are now examining what the next step in their career path will be, we want you to make sure you update your information on the ASBPE Web site, connect with us on Facebook, Twitter, and LinkedIn, and know that your talents are needed elsewhere — and we’re going to help you find that next place.

* Update: On April 30, Folio: reported that two former RBI publishers, who formed CFE Media LLC, are buying three Reed titles: Consulting-Specifying Engineer, Control Engineering and Plant Engineering. We will keep you updated as more of these assets get purchased.

Nikki Golden is the president of ASBPE’s Chicago chapter and communications manager of the National Association of the Remodeling Industry, where she oversees the magazine The Remodelers’ Journal. She is a former Reed Business Information employee.

20 High-Value Blog Posts Offer 143 IdeasYou Can Use

By Tonie Auer

  • How can your publication succeed online?
  • What points should a social media policy address?
  • What challenges will face us as we convert our magazine from print to digital only?

Answers to these questions — and quite a few others — are in these 20 high-value posts from the ASBPE National Blog.

We combed through posts from the blog’s three-plus years of existence to compile some of the best. In choosing these posts, we had specific criteria in mind. We wanted to highlight posts that provide actionable, “how-to” material in an easy-to-use format (blogs with bullet lists and checklists were favored). We also wanted the posts, as a group, to cover a variety of topics.

With those considerations in mind, here are 20 of the best ASBPE National Blog posts, roughly in reverse chronological order.

The ASBPE National Blog’s value never stops. We have ongoing discussions scheduled on plenty of hot topics. And take advantage of the opportunity to express your own view via a follow-up post. Email me at

Editors Should Examine a New Way of Working with Advertisers

By Jim Romeo

We have all seen better days.

But could a new way of doing business in the trade press be a latent win-win? Could the bylined feature article, contributed Q-and-A article, or other contributed feature article be an unexploited pathway for advertisers, editors, publishers and freelance writers?

Freelancers are scraping. So are advertisers. And so are many editors. So is there anything that can be done besides sit and brood and hope that this dip in the road doesn’t last forever?

Perhaps a new paradigm could emerge: contributed content by the would-be advertiser who hires a freelance writer to write it. Here’s how it works. A firm that is tightening its belt just can’t afford the same advertising budget until its orders improve and the overall economy improves. But it still wants to market its goods and services. So the firm pitches editors in the trade press, offering to author a feature article about a particular topic which may fit an editorial calendar or trending theme for the publication. The editor bites and says okay, but no sales puffery.

The firm hires the freelance writer at a fraction of the advertising page rate. The freelancer is happy, as even a fraction of the page rate is a decent rate — somewhere in the $1.25-to-$1.50-per-word rate. The writer researches and interviews the firm to create a feature that informs while providing the company a byline in a trade magazine for its industry.

The firm is happy. After all, it got two to three pages of space; even got photos of its business leader or product or service in action. The freelancer is happy, as they got a fatter check than the publication would have paid.

Now is the editor happy? While it’s true the publication didn’t get the advertising dollars, they did get free content and they didn’t have to write it, or do much in the way of art direction for it. Readers get the benefit of the article right from the perspective of the firm that solved a problem, or managed some notable task that readers like to read about.

The above scenario is played out all the time. What I described, I have been a part of many times. It seems like it takes something away from true-blue editorial, but I’m sorry, it works.

Some editors might say “Hey, it’s fine, as long as they don’t puff it up and make it an advertorial.” That can be easily done. A case study, or exposé of the product or service in action, sells itself without much sales puffery. The byline or bio at the end of the article is all that’s needed. As for the foregone advertising dollars — well, that firm now has a relationship with the magazine. A new, very lucrative possibility has been created. The soil is well cultivated for the ad sales staff to court that firm for years down the road as a result of that article. The firm that touts the article that they placed and produced, for not that much money, is a good candidate to buy advertising in the future, or buy other media such as a webinar or podcast that can be used to build its brand, which was initially built in that contributed article. This is real value for the publication as well.

And let’s not forget the reader. That reader gets to hear a case study. They get to read about somebody else’s problems for a change. Everyone loves to read about how someone had this major undertaking and read in 1,500 words, how a firm built a team, and implemented the latest and greatest solution that looked so daunting. The reader gets first-hand information that can drive their own business model.

All of the above is not as clockwork as I may describe, but in tough times, there must be ways to make lemons out of lemonade, and this just may be worth a closer look. Contributed content via the bylined feature article, such as a case study or even a Q and A on a hot topic, adds value — to the firm, the freelancer, the publication, and, of course, the reader.

Jim Romeo is a freelance writer based in Chesapeake, Virginia. He is a mechanical engineer with and MBA and writes about business and technology. His new leaf in 2010 is to network more and start calling himself a technology evangelist because it sounds cool!,

Your Input Requested

Photo: Tonie Auer By Tonie Auer
DFW Chapter President

I’m calling on all ASBPE members as well as potential members for your feedback. At a very productive meeting of the ASBPE national board, we discussed how the economy has impacted everything – including our membership numbers.

And, it made us want to re-evaluate what we offer our members. So, I’m turning the microphone over to you. What services would you like to see ASBPE offer its members? What things are most valuable to you? Is it more webinars? More local chapter meetings? What do you want out of ASBPE membership? Please let us know. You can add your feedback to the comments here.

6 Ideas to Boost Revenue, Readership, or Recognition

Photo: Katy TomasuloBy Katy Tomasulo
President, ASBPE Washington, D.C. Chapter

During the ASBPE National Editorial Conference in July, I hosted a workshop that offered attendees 19 ideas for combating the down economy. These ideas — all of which have been implemented at B2B publications across the country — resulted in some sort of payback, whether through revenue, readership, or recognition, or a combination of the three. Here are six of my favorites:

1. Revenue: Remodeling Capitalizes on Current Events
When the stimulus package was introduced in February, Remodeling magazine editors immediately realized that the implications — and opportunities — for their readers were huge. The staff scrapped their plans, already in progress, for the June 2009 issue and produced a comprehensive guide to the stimulus package that explained to readers what it was and how they could take advantage of it. And not only were readers in need, manufacturers were eager to advertise so that it was their energy-efficient building products that were chosen for stimulus-dollar spending.
Result: The issue generated a 25%-30% bump in revenue for that month. It also spawned additional and future unbudgeted revenue generators in the form of a sister Web site, a Webinar, a virtual conference, and a pavilion at the magazine’s trade show.

2. Revenue and Readership: Hotel World Network Capitalizes on Down Economy
In response to the recession, Hotel World Network, which includes Hotel & Motel Management and Hotel Design magazines, launched an online campaign “100 Days to Fight the Recession,” a daily e-newsletter that gave readers actionable tips and advice on how to survive the tough market. In addition to the email, the content is housed on the Web in free downloadable PDFs that can be easily saved, printed, and shared. The content also is supported by forums that discuss each day’s topics.
Result: The company brought in a large chunk of unbudgeted revenue and received a fantastic response from readers.

3. Recognition: Engineering News Record Puts Itself in Its Readers’ Shoes
To investigate the state of crane safety at a time when accidents have been occurring too often, Engineering News-Record’s Tudor Van Hampton put himself in his readers’ place: He trained for and took a national certification course in crane safety. Only by experiencing the process could Van Hampton truly know what it was like, share the experience with readers, and bring attention to the importance of safety and training.
Result: ENR earned multiple accolades, including a Neal Award and an ASBPE award.

4. Revenue: Michigan Municipal League’s Business Alliance Program
The editor of Michigan Municipal Review created the “Municipal League Business Alliance Program.” Members (suppliers to local government) joined in exchange for benefits that boost their marketing visibility in the state, including discounted advertising rates and exhibit space. Once created, the program requires little effort or expense to administer.
Result: $150,000 in immediate annual revenue; encouraged further advertising and exhibit space purchasing

5. Readership, Revenue: Digital Editions
If you have a limited print circ, digital editions can expand your reach exponentially by being emailed to a larger subscription base not part of the print run. They also can provide a value-add to market to your print advertisers. Digital editions can require little effort on the part of the edit staff (the print product is simply converted by an outside vendor) or they can be updated with audio, video, and other rich media to enhance the experience even further. Utilizing digital editions also is an alternative, as well as less expensive and less risky, option for special supplements outside the regular print schedule.

6. Revenue: Journal of Light Construction Books
The Journal of Light Construction, a trade journal offering hands-on, in-depth coverage of building processes and techniques, capitalized on its trusted content by repackaging 20 years of how-to construction articles into a comprehensive book, “The JLC Field Guide,” and interactive CD-ROM. The book is filled with how-to illustrations, instructions, diagrams, and charts. It was so popular, a second volume was published.
Result: The book cost $300,000 to produce, but generated $750,000 in its first year alone.

Katy Tomasulo is deputy editor for EcoHome magazine, Building Products magazine, and at Hanley Wood Business Media in Washington, D.C.

With Gourmet Gone, You Know There’s a Recession

By Thomas Temin

If General Motors and Lehman Brothers can bite the dust, why not Gourmet magazine, for so many decades the Bible of chefs and foodies alike? A Wall Street Journal story on Oct. 6 noted that being reviewed in Gourmet could make a chef’s reputation.

Also out the door is Modern Bride, for a while some years ago part of the Cahners stable. The late Cele Lalli was the editor then, and at the editors’ meetings – back when they still had chief editors gatherings in nice resorts or conference centers – she was always a joy to hang out with. Maybe it was the fact she had earlier been editor of Amazing Stories that made Cele so cool and unpretentious.

In those days, Modern Bride might have been chasing Brides – which Conde Nast will continue publishing – but there was advertising enough that they could both have 600-page issues. Those of us in the electronics and engineering magazines would be gaga at the amount of advertising carried in such a seemingly frivolous topic as wedding planning. Cele used to say that readers would continue their subscriptions for six months or a year after getting married.

But even the bosses at Conde Nast must have been dreaming to think that they could publish both Brides and Modern Bride (and Elegant Bride to boot) and sell some differentiating story to advertisers. The acquisition of competitors under a single roof – has there ever been a successful stunt like that where both survive long term? Certainly not in a market where, as in so many markets, ad pages are dropping 25 percent, 30 percent, 40 percent.

Conde, like other publishers, is focusing ever more resources on digital products. In a market like bridal fashion, planning and accessories, the digital possibilities are rich, for sure. has all sorts of online toys, such as the fun, if somewhat useless, Create a Cake to full-scale financial and party planning tools for the Big Day. Where else but in a bridal blog might you find out about a new necktie for “hubby” from Thomas Pink that incorporates an i-Pod pocket?

But I suspect this is a market where there will always be at least one dominant print product. Print is still the best way to display the gorgeous wedding gowns and resort destinations, and where a reader can fantasize about her wedding day while lying across the bed instead of sitting at a desk.

Thomas R. Temin is a consultant with 30 years of publishing experience in media and information technology products and services. He is co-host of “The Federal Drive” with Tom Temin and Jane Norris, a weekday morning news and talk program on Federal News Radio AM 1050 in Washington D.C. You can see his weekly column on the op-ed page at and contact him at