A. H. Belo Corporation (NYSE: AHC) today reported a net loss of
$0.37 per share for the first quarter of 2013 compared to a net
loss of $0.18 per share in the first quarter of 2012.
First quarter 2013 results include advertising and marketing
services revenues which decreased 4 percent, the lowest
year-over-year quarterly decline since the Company's spin-off from
Belo Corp. in 2008. This improvement was driven by a 1 percent
increase in advertising and marketing services revenue at
The Dallas Morning News.
Adjusted EBITDA, or earnings before interest, taxes,
depreciation and amortization (“EBITDA”) with pension expense added
back, was $0.5 million in the first quarter of 2013, compared to
$6.1 million in the prior year period. As of March 31, 2013, cash
and cash equivalents were $31.9 million, and the Company had no
debt.
The Company also announced that it has entered into a
non-binding letter of intent to sell its five-story office building
in Riverside, California to the County of Riverside for
approximately $30 million. The non-binding letter of intent
contemplates the transaction closing in the third quarter of 2013.
The Company is exploring relocation opportunities for
The Press-Enterprise employees who currently office in this
building.
Robert W. Decherd, chairman, president and Chief Executive
Officer, said, “We are very pleased with the advertising and total
revenue performance in Dallas, which was on plan despite a
challenging start to the year. While Adjusted EBITDA declined in
the first quarter, this decline is in line with our expectations
and we anticipate achieving the $37 to $41 million in full-year
Adjusted EBITDA outlined at our 2012 Investor Day last October.
“Additionally, the significant proceeds from the Riverside
office building sale will provide additional opportunities in 2013
for increasing shareholder returns and diversifying our revenue
streams. The Board of Directors’ current priority is determining
the best deployment of these anticipated real estate proceeds.”
First Quarter Results
Total revenue was $99.3 million in the first quarter of 2013, a
decrease of 5 percent compared to the prior year period. The
percentage decline in total revenue was lowest at
The Dallas Morning News, followed by The Providence
Journal and The Press-Enterprise.
Revenue from advertising and marketing services, including print
and digital revenues, decreased 4 percent as improvements at
The Dallas Morning News were more than offset by
declines at The Providence Journal and
The Press-Enterprise. Digital revenue increased 12 percent
over the prior year quarter. When the impact of non-recurring
revenue associated with a discontinued digital advertising platform
is excluded, digital revenue increased 15 percent, primarily due to
increased automotive digital revenue at
The Dallas Morning News and marketing services
revenue associated with 508 Digital. Increases in digital
revenue were offset by declines in display, preprint and classified
advertising revenues which decreased 5, 1 and 15 percent,
respectively.
Advertising revenue from niche publications, which is a
component of the display, preprint, classified and digital revenues
reported above, remained flat compared to the prior year
period.
Circulation revenue decreased 7 percent to $32.1 million in the
first quarter of 2013 compared to the prior year period, due
primarily to continued home delivery and single copy sales decline
at The Dallas Morning News. The Company expects this
trend to improve through the remainder of 2013 as various
circulation pricing and marketing initiatives are implemented.
Printing and distribution revenue decreased 7 percent to $9.4
million in the first quarter of 2013 as expansion in printing and
distribution contracts at The Providence Journal and
The Dallas Morning News were offset by the cessation
of unprofitable commercial printing products at
The Press-Enterprise.
Total consolidated operating expense in the first quarter was
$107.1 million. Excluding the effect of pension expense in both
periods, operating expense in the first quarter was $106.5 million,
a 1 percent decrease compared to the prior year period as salaries,
wages and benefits, newsprint and depreciation expenses
decreased.
The Company's newsprint expense in the first quarter was $8.8
million, a decrease of 7 percent compared to the prior year period.
Newsprint consumption dropped 6 percent to 14,000 metric
tons. Compared to the prior year period, newsprint cost per metric
ton and the average purchase price per metric ton for newsprint
decreased 2 percent and 4 percent, respectively.
Excluding the effect of pension expense in both periods, first
quarter corporate and non-operating unit expenses were $7.0
million, a decrease of 10 percent compared to the prior year
period.
Capital expenditures totaled $1.4 million in the first quarter.
The Company anticipates full-year 2013 capital expenditures in the
$8 to $10 million range.
As of March 31, 2013, A. H. Belo had approximately 1,900
full-time equivalent employees, a decrease of approximately 5
percent compared to the prior year period.
Real Estate
In January 2013, the Company sold a real estate property in
Southern California, generating pre-tax net proceeds and a gain of
approximately $0.2 million.
Non-GAAP Financial
Measures
Reconciliations of net loss to EBITDA and Adjusted EBITDA are
included as exhibits to this release.
Financial Results Conference
Call
A. H. Belo will conduct a conference call on Tuesday, April 30
at 1:00 p.m. CDT to discuss financial results. The conference call
will be available via webcast by accessing the Company's website
(www.ahbelo.com/invest) or by dialing
1-800-553-5275 (USA) or 612-332-0725 (International). A replay line
will be available at 1-800-475-6701 (USA) or 320-365-3844
(International) from 3:30 p.m. CDT on April 30 until 11:59 p.m. CDT
on May 7, 2013. The access code for the replay is 288081.
About A. H. Belo
Corporation
A. H. Belo Corporation (NYSE: AHC), headquartered in Dallas,
Texas, is a distinguished newspaper publishing and local news and
information company that owns and operates four daily
newspapers and related websites. A. H. Belo
publishes The Dallas Morning News, Texas'
leading newspaper and winner of nine Pulitzer Prizes; The
Providence Journal, the oldest continuously-published daily
newspaper in the United States and winner of four Pulitzer Prizes;
The Press-Enterprise (Riverside, CA), serving the Inland
Southern California region and winner of one Pulitzer Prize; and
the Denton Record-Chronicle. The Company publishes various niche
publications targeting specific audiences, and its investments
include Classified Ventures, owner of Cars.com, and Wanderful
Media, owner of Find&Save. A. H. Belo offers digital
marketing solutions through 508 Digital and Speakeasy and
also owns and operates commercial printing, distribution and
direct mail service businesses. Additional information is available
at www.ahbelo.com or by contacting Alison K. Engel,
Senior Vice President/Chief Financial Officer,
at 214-977-2248.
Statements in this communication concerning A. H. Belo
Corporation's (the “Company's”) business outlook or future economic
performance, anticipated profitability, revenues, expenses,
dividends, capital expenditures, investments, impairments, business
initiatives, pension plan contributions and obligations, real
estate sales, future financings, and other financial and
non-financial items that are not historical facts, are
“forward-looking statements” as the term is defined under
applicable federal securities laws. Forward-looking statements are
subject to risks, uncertainties and other factors that could cause
actual results to differ materially from those statements.
Such risks, uncertainties and factors include, but are not
limited to, changes in capital market conditions and prospects, and
other factors such as changes in advertising demand and newsprint
prices; newspaper circulation trends and other circulation matters,
including changes in readership methods, patterns and demography;
and audits and related actions by the Alliance for Audited Media;
challenges implementing increased subscription pricing and new
pricing structures; challenges in achieving expense reduction goals
in a timely manner, and the resulting potential effects on
operations; technological changes; development of Internet
commerce; industry cycles; changes in pricing or other actions by
existing and new competitors and suppliers; consumer acceptance of
new products and business initiatives; labor relations; regulatory,
tax and legal changes; adoption of new accounting standards or
changes in existing accounting standards by the Financial
Accounting Standards Board or other accounting standard-setting
bodies or authorities; the effects of Company acquisitions,
dispositions, co-owned ventures, and investments; pension plan
matters; general economic conditions and changes in interest rates;
significant armed conflict; acts of terrorism; and other factors
beyond our control, as well as other risks described in
the Company's Annual Report on Form 10-K, and in the Company's
other public disclosures and filings with the Securities and
Exchange Commission.
A. H. Belo Corporation Condensed
Consolidated Statements of Operations Three Months
Ended March 31, In thousands, except share and per share
amounts (unaudited) 2013 2012
Net Operating Revenue Advertising and marketing services
57,734 60,077 Circulation 32,144 34,655 Printing and distribution
9,394 10,102 Total net operating
revenue 99,272 104,834
Operating Costs and Expense Salaries,
wages and employee benefits 45,037 46,005 Other production,
distribution and operating costs 41,081 40,696 Newsprint, ink and
other supplies 13,914 13,972 Depreciation 5,722 7,113 Amortization
1,340 1,310 Total operating costs and
expense 107,094 109,096 Net loss from
operations (7,822 ) (4,262 )
Other Income (Expense), Net
Other income, net 576 907 Interest expense (411 )
(136 ) Total other income (expense), net 165
771
Loss Before Income Taxes (7,657 ) (3,491 ) Income
tax expense 419 402
Net Loss
(8,076 ) (3,893 ) Net loss attributable to noncontrolling interests
(54 ) —
Net Loss Attributable to A. H. Belo
Corporation (8,022 ) (3,893 )
Per Share
Basis Net loss attributable to A. H. Belo Corporation Basic and
Diluted $ (0.37 ) $ (0.18 ) Weighted average shares outstanding
Basic and Diluted 22,033 21,688
A. H. Belo Corporation Condensed Consolidated Balance
Sheets March 31, December
31, In thousands (unaudited) 2013 2012
Assets Current assets: Cash and cash equivalents $ 31,862 $
34,094 Accounts receivable, net 40,079 46,964 Other current assets
19,423 18,079 Total current assets 91,364 99,137
Property, plant and equipment, net 140,322 144,609 Intangible
assets, net 35,315 36,293 Other assets 11,750 11,900
Total assets $ 278,751 $ 291,939
Liabilities and Shareholders’
Equity Current liabilities: Accounts payable $ 14,055 $ 15,178
Accrued expenses 23,040 26,012 Advance subscription payments
21,617 20,708 Total current liabilities 58,712 61,898
Long-term pension liabilities 121,534 122,821 Other liabilities
5,414 5,160 Total shareholders’ equity 93,091 102,060
Total liabilities and shareholders’ equity $ 278,751 $ 291,939
A. H. Belo Corporation
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA
Three Months Ended March 31, In thousands
(unaudited) 2013 2012 Net loss
attributable to A. H. Belo Corporation $ (8,022 ) $ (3,893 )
Depreciation and amortization 7,062 8,423 Interest expense 411 136
Income tax expense 419 402
EBITDA (130 ) 5,068 Addback: Pension
expense 624 1,036
Adjusted
EBITDA $ 494 $ 6,104
EBITDA is calculated by adding depreciation and amortization,
interest expense and income tax expense recorded to net income
(loss). Adjusted EBITDA is calculated by adding pension expense,
non-cash impairment expense and net investment-related losses
recorded to EBITDA.
Neither EBITDA nor Adjusted EBITDA is a measure of financial
performance under generally accepted accounting principles
(“GAAP”). Management uses EBITDA, Adjusted EBITDA and similar
measures in internal analyses as a supplemental measure of the
Company’s financial performance and to assist with determining
bonus achievement, performance comparisons against its peer group
of companies, as well as capital spending and other investing
decisions. EBITDA or similar measures are also common alternative
measures of performance used by investors, financial analysts and
rating agencies to evaluate financial performance. Neither EBITDA
nor Adjusted EBITDA should be considered in isolation or as a
substitute for cash flows provided by operating activities or other
income or cash flow data prepared in accordance with GAAP, and
these non-GAAP measures may not be comparable to similarly-titled
measures of other companies.
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