EX-99.1 2 d74675exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
A. H. Belo Corporation
     
 
  FOR IMMEDIATE RELEASE
 
  Monday, July 26, 2010
 
  7:00 A.M. CDT
Newspaper Publisher A. H. Belo Corporation Reports
Second Quarter 2010 Financial Results
     DALLAS — Newspaper publisher A. H. Belo Corporation (NYSE: AHC) today reported a net loss of $0.01 per share for the second quarter of 2010 compared to a net loss of $0.34 per share in the second quarter of 2009. Consolidated EBITDA was $11.2 million, an increase of $3.4 million compared to the second quarter of 2009, and includes the following items: a $5.4 million gain on the sale of a parking garage in Providence, Rhode Island; a $1.2 million gain related to the reversal of an accrual for the modification of a service agreement; and a $2.5 million charge related to a legal settlement. Similar to the first quarter of 2010, consolidated EBITDA in the second quarter of 2010 includes an incremental pension charge. The second quarter charge was $5.5 million, and the Company anticipates $2.9 million of pension expense during the remainder of the year. When these four items are excluded, consolidated EBITDA in the second quarter of 2010 was $12.6 million, an increase of $4.8 million compared to the comparable and unadjusted consolidated EBITDA figure in the second quarter of 2009. Second quarter results include $4.6 million of bonus accrual, and the Company anticipates a total bonus expense of $5.0 to $6.0 million in 2010. The Company cancelled most non-sales bonuses in 2009.
     Robert W. Decherd, chairman, president and Chief Executive Officer, said, “Second quarter total revenue decreased 4.7 percent compared to 2009. This rate of decline is less than in the first quarter of 2010 and is the lowest year-to-year percent decline in more than two years. Unadjusted consolidated EBITDA increased 43.7 percent compared to the second quarter of 2009. Improvement in the Company’s EBITDA was primarily driven by The Dallas Morning News.”
     “As of June 30, the Company had approximately $60 million of cash and cash
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P. O. Box 224866 Dallas, Texas 75222-4866 Tel. 214.977.8200 Fax 214.977.8201
www.ahbelo.com Deliveries: 400 South Record Street Dallas, Texas 75202-4806

 


 

Newspaper Publisher A. H. Belo Corporation Reports
Second Quarter 2010 Financial Results
July 26, 2010
Page Two
equivalents, no borrowings outstanding under its bank credit facility, and remained in compliance with the bank covenants. We continue to manage the business to maximize operating cash flow over the long-term and monetize real estate in transactions that create value for shareholders at appropriate prices,” Decherd said.
Operating Results
     Total revenue was $121.6 million in the second quarter, a decrease of 4.7 percent compared to the second quarter of 2009. The percent decline in total revenue was lowest at The Dallas Morning News, followed by The Providence Journal and The Press-Enterprise. Advertising revenue, including print and digital revenue, decreased 12.0 percent. Although digital revenue decreased 4.3 percent to $9.3 million, non-classified digital revenue increased 2.5 percent to $4.2 million. Due primarily to circulation pricing actions implemented in Dallas last year, circulation revenue increased 6.6 percent. Other revenue increased 35.0 percent.
     Total consolidated operating expenses in the second quarter of 2010 were $126.1 million, a decrease of 4.5 percent compared to 2009. Excluding the impact of pension expense, legal settlement expense and the gain related to the reversal of an accrual, operating expenses in the second quarter of 2010 were $119.3 million, a decrease of 9.6 percent compared to 2009. The Company’s newsprint expense in the second quarter of 2010 was $9.2 million, a decrease of 27.1 percent compared to 2009. In the second quarter of 2010, newsprint consumption decreased 3.8 percent and newsprint cost per metric ton decreased 24.3 percent compared to 2009. The average purchase price per metric ton for newsprint increased 1.3 percent in the second quarter of 2010 compared to 2009.
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P. O. Box 224866 Dallas, Texas 75222-4866 Tel. 214.977.8200 Fax 214.977.8201
www.ahbelo.com Deliveries: 400 South Record Street Dallas, Texas 75202-4806

 


 

Newspaper Publisher A. H. Belo Corporation Reports
Second Quarter 2010 Financial Results
July 26, 2010
Page Three
     Newspaper EBITDA was $10.1 million in the second quarter, a decrease of $3.0 million compared to the second quarter of 2009. This decrease was primarily attributable to incremental pension, bonus and legal settlement expenses. Excluding pension and legal settlement expenses, newspaper EBITDA was $18.1 million, an increase of 38.2 percent; the newspaper EBITDA margin was 14.9 percent; and the newspaper EBITDA margin was highest at The Providence Journal, followed by The Dallas Morning News and The Press-Enterprise.
Corporate
     In the second quarter of 2010, corporate and non-operating expenses, net of costs allocated to operating units, were $5.8 million, an increase of 2.6 percent compared to the second quarter of 2009.
Non-GAAP Financial Measures
     Reconciliations of consolidated and newspaper EBITDA to net loss are included as exhibits to this release.
Financial Results Conference Call
     AHC will conduct a conference call today at 1:00 p.m. CDT to discuss financial results. The conference call will be available via Webcast by accessing the Company’s Web site (www.ahbelo.com/invest) or by dialing 1-800-230-1096 (USA) or 612-332-0418 (International). A replay line will be available at 800-475-6701 (USA) or 320-365-
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P. O. Box 224866 Dallas, Texas 75222-4866 Tel. 214.977.8200 Fax 214.977.8201
www.ahbelo.com Deliveries: 400 South Record Street Dallas, Texas 75202-4806

 


 

Newspaper Publisher A. H. Belo Corporation Reports
Second Quarter 2010 Financial Results
July 26, 2010
Page Four
3844 (International) from 3:00 p.m. CDT on July 26 until 11:59 p.m. CDT on August 2, 2010. The access code for the replay is 163974.
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 a diverse group of Web sites. A. H. Belo publishes The Dallas Morning News, Texas’ leading newspaper and winner of nine Pulitzer Prizes since 1986; The Providence Journal, the oldest continuously-published daily newspaper in the U.S. and winner of four Pulitzer Prizes; The Press-Enterprise (Riverside, CA), serving southern California’s Inland Empire region and winner of one Pulitzer Prize; and the Denton Record-Chronicle. The Company publishes various specialty publications targeting niche audiences, and its partnerships and/or investments include the Yahoo! Newspaper Consortium and Classified Ventures, owner of cars.com. A. H. Belo also owns direct mail and commercial printing businesses. Additional information is available at www.ahbelo.com or by contacting David A. Gross, vice president/Investor Relations and Strategic Analysis, at 214-977-4810.
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, pension plan contributions, 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 Audit Bureau of Circulations; challenges in achieving expense reduction goals, and on schedule, and the resulting potential effects on operations; technological changes; development of Internet commerce; industry cycles; changes in pricing or other actions by competitors and suppliers; regulatory, tax and legal changes;
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P. O. Box 224866 Dallas, Texas 75222-4866 Tel. 214.977.8200 Fax 214.977.8201
www.ahbelo.com Deliveries: 400 South Record Street Dallas, Texas 75202-4806

 


 

Newspaper Publisher A. H. Belo Corporation Reports
Second Quarter 2010 Financial Results
July 26, 2010
Page Five
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; and other factors beyond our control, as well as other risks described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, and other public disclosures and filings with the Securities and Exchange Commission.
P. O. Box 224866 Dallas, Texas 75222-4866 Tel. 214.977.8200 Fax 214.977.8201
www.ahbelo.com Deliveries: 400 South Record Street Dallas, Texas 75202-4806

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A. H. Belo Corporation
Consolidated Statements of Operations
                                 
    Three months ended     Six months ended  
    June 30,     June 30,  
In thousands, except per share amounts (unaudited)   2010     2009     2010     2009  
Net operating revenues
                               
Advertising
  $ 77,004     $ 87,492     $ 149,190     $ 176,823  
Circulation
    35,456       33,266       71,042       64,980  
Other
    9,110       6,746       17,097       14,195  
 
                       
Total net operating revenues
    121,570       127,504       237,329       255,998  
 
                               
Operating Costs and Expenses
                               
Salaries, wages and employee benefits
    56,817       51,720       113,071       114,614  
Other production, distribution and operating costs
    47,034       50,867       93,066       106,734  
Newsprint, ink and other supplies
    12,492       16,425       23,713       36,043  
Asset impairment
          1,749             82,689  
Depreciation
    8,441       9,662       17,605       20,198  
Amortization
    1,310       1,625       2,620       3,249  
 
                       
Total operating costs and expenses
    126,094       132,048       250,075       363,527  
 
                               
Loss from operations
    (4,524 )     (4,544 )     (12,746 )     (107,529 )
 
                               
Other income and expense
                               
Interest expense
    (203 )     (291 )     (406 )     (591 )
Other income, net
    5,967       (702 )     5,992       120  
 
                       
Total other (expense) income
    5,764       (993 )     5,586       (471 )
 
                               
Earnings
                               
Income (loss) before income taxes
    1,240       (5,537 )     (7,160 )     (108,000 )
Income tax expense (benefit)
    1,411       1,534       2,139       (222 )
 
                       
 
                               
Net loss
  $ (171 )   $ (7,071 )   $ (9,299 )   $ (107,778 )
 
                       
 
                               
Net loss per share
                               
Basic and diluted
  $ (0.01 )   $ (0.34 )   $ (0.45 )   $ (5.25 )
 
                               
Average shares outstanding
                               
Basic and diluted
    20,950       20,537       20,860       20,521  

 


 

A. H. Belo Corporation
Condensed Consolidated Balance Sheets
                 
    June 30,     December 31,  
In thousands   2010     2009  
    (unaudited)          
Assets
               
Current assets
               
Cash and cash equivalents
  $ 60,009     $ 24,503  
Accounts receivable, net
    47,025       62,977  
Other current assets
    32,304       34,464  
 
           
Total current assets
    139,338       121,944  
 
               
Property, plant and equipment, net
    185,551       203,329  
Intangible assets, net
    49,390       52,009  
Other assets
    26,465       27,145  
 
           
 
               
Total assets
  $ 400,744     $ 404,427  
 
           
 
               
Liabilities and Shareholders’ Equity
               
Current liabilities
               
Accounts payable
  $ 16,395     $ 19,191  
Accrued expenses
    37,768       29,788  
Advance subscription payments
    24,211       26,713  
 
           
Total current liabilities
    78,374       75,692  
 
               
Deferred income taxes
    1,366       223  
Other liabilities
    6,915       6,915  
Total shareholders’ equity
    314,089       321,597  
 
           
 
               
Total liabilities and shareholders’ equity
  $ 400,744     $ 404,427  
 
           

 


 

A. H. Belo Corporation
Consolidated EBITDA
                                 
    Three months ended     Six months ended  
    June 30,     June 30,  
In thousands (unaudited)   2010     2009     2010     2009  
Consolidated EBITDA (1)
  $ 11,194     $ 7,790     $ 13,471     $ (1,273 )
Asset impairment
          (1,749 )           (82,689 )
Depreciation and Amortization
    (9,751 )     (11,287 )     (20,225 )     (23,447 )
Interest Expense
    (203 )     (291 )     (406 )     (591 )
Income Tax Benefit (Expense)
    (1,411 )     (1,534 )     (2,139 )     222  
 
                       
Net Loss
  $ (171 )   $ (7,071 )   $ (9,299 )   $ (107,778 )
 
                       
A. H. Belo Corporation
Newspaper EBITDA
                                 
    Three months ended     Six months ended  
    June 30,     June 30,  
In thousands (unaudited)   2010     2009     2010     2009  
Newspaper EBITDA (1)
  $ 10,094     $ 13,126     $ 19,527     $ 10,807  
Corporate & Non-Operating Company Expenses
    (4,867 )     (4,633 )     (12,048 )     (12,200 )
Other income, net
    5,967       (702 )     5,992       120  
Asset impairment
          (1,749 )           (82,689 )
Depreciation and Amortization
    (9,751 )     (11,287 )     (20,225 )     (23,447 )
Interest Expense
    (203 )     (291 )     (406 )     (591 )
Income Tax Benefit (Expense)
    (1,411 )     (1,534 )     (2,139 )     222  
 
                       
Net Loss
  $ (171 )   $ (7,071 )   $ (9,299 )   $ (107,778 )
 
                       
 
(1)   The Company defines Consolidated EBITDA as net earnings before interest expense, income taxes, goodwill impairment, depreciation and amortization and Newspaper EBITDA as net earnings before corporate and non-operating company expenses, other income net, interest expense, income taxes, goodwill impairment, depreciation and amortization. Neither Consolidated EBITDA nor Newspaper EBITDA is a measure of financial performance under accounting principles generally accepted in the United States. Management uses both measures in internal analyses as a supplemental measure of the financial performance of the Company to assist it with determining bonus achievement, performance comparisons against its peer group of companies, as well as capital spending and other investing decisions. They are also common alternative measures of performance used by investors, financial analysts, and rating agencies to evaluate financial performance. Neither Consolidated EBITDA nor Newspaper 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 U.S. GAAP and this non-GAAP measure may not be comparable to similarly titled measures of other companies.