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CST: 22/08/2019 06:03:51   

A. H. Belo Corporation Announces First Quarter 2019 Financial Results

114 Days ago

DALLAS, April 29, 2019 (GLOBE NEWSWIRE) -- A. H. Belo Corporation (NYSE: AHC) today reported a first quarter 2019 net loss of $3.0 million, or $(0.14) per share. In the first quarter of 2018, the Company reported a net loss of $4.0 million, or $(0.19) per share.

For the first quarter of 2019, on a non-GAAP basis, A. H. Belo reported operating loss adjusted for certain items (“adjusted operating loss”) of $0.9 million, an improvement of $2.6 million, or 74.7 percent, compared to the first quarter of 2018.

Robert W. Decherd, chairman, president and Chief Executive Officer, said, “The Company made notable progress during the first quarter by narrowing our net loss and concentrating on a range of initiatives designed to build a strong digital business.

“There were encouraging signs at The Dallas Morning News during the first quarter, particularly the improvement in run-of-press print advertising. The News continues to see sequential growth in digital subscription volume and pricing, albeit at levels that must continue to grow in order to fully implement our digital-first strategy. News and editorial content of the newspaper has been highly-impactful during the first four months of the year.

“Changes implemented by The News in its commercial printing business during the quarter have matched our expectations for margin improvement and re-sizing the business to focus on a few, major customers. 

“At Belo + Company, timing of sales and fulfillment of contracts were the focus during the first quarter, along with the bolt-on acquisition of a small creative agency in Tulsa, Oklahoma, acquired on April 1st, that will complete Belo + Company's suite of services and support client activities now and into the future. We are also benefiting from the presence of new leaders in both the sales and agency channels.”

First Quarter Results

Total revenue was $46.6 million in the first quarter of 2019, a decrease of $2.9 million, or 5.8 percent, when compared to the first quarter of 2018.

Revenue from advertising and marketing services, including print and digital revenues, was $24.0 million in the first quarter of 2019, a decrease of $1.7 million, or 6.6 percent, when compared to the $25.7 million reported for the first quarter of 2018.

Circulation revenue was $17.3 million, a decrease of $0.5 million, or 2.7 percent, when compared to the first quarter of 2018. The decline was primarily due to a decrease in home delivery and single copy volumes, partially offset by rate increases and an increase of $0.3 million, or 33.6 percent, in digital-only subscription revenue.

Printing, distribution and other revenue decreased $0.7 million, or 11.6 percent, to $5.3 million, primarily due to a reduction in brokered and commercial printing.

Total consolidated operating expense in the first quarter of 2019, on a GAAP basis, was $50.6 million, a decrease of $5.0 million, or 9.0 percent, compared to the first quarter of 2018. The improvement was primarily due to decreases of $3.5 million in employee compensation and benefits expense, $0.6 million in newsprint, ink and other supplies expense, and $0.5 million in distribution expense.

In the first quarter of 2019, on a non-GAAP basis, adjusted operating expense was $50.3 million, an improvement of $5.7 million, or 10.2 percent, compared to $56.0 million of adjusted operating expense in the first quarter of 2018. The improvement is primarily due to expense decreases in employee compensation and benefits, newsprint, distribution, and reductions from continued management of discretionary spending.

As of March 31, 2019, the Company had 918 employees, a decrease of 128, or 12.2 percent, compared to the prior year period. Cash and cash equivalents were $50.3 million and the Company had no debt.

Non-GAAP Financial Measures

Reconciliations of operating loss to adjusted operating loss, total net operating revenue to adjusted operating revenue, and total operating costs and expense to adjusted operating expense are included in the exhibits to this release.

Financial Results Conference Call

A. H. Belo Corporation will conduct a conference call on Tuesday, April 30, 2019, at 9:00 a.m. CDT to discuss financial results. The conference call will be available via webcast by accessing the Company’s website at www.ahbelo.com/invest. An archive of the webcast will be available at www.ahbelo.com in the Investor Relations section.

To access the listen-only conference call, dial 1-800-230-1951 (USA) or 612-288-0340 (International). A replay line will be available at 1-800-475-6701 (USA) or 320-365-3844 (International) from 11:00 a.m. CDT on April 30, 2019 until 11:59 p.m. CDT on May 7, 2019. The access code for the replay is 466835.

About A. H. Belo Corporation

A. H. Belo Corporation is the leading local news and information publishing company in Texas with commercial printing, distribution and direct mail capabilities, as well as a presence in emerging media and digital marketing. While focusing on extending the Company’s media platforms, A. H. Belo delivers news and information in innovative ways to a broad range of audiences with diverse interests and lifestyles. For additional information, visit www.ahbelo.com or email invest@ahbelo.com.

Statements in this communication concerning A. H. Belo Corporation’s business outlook or future economic performance, anticipated profitability, revenues, expenses, dividends, capital expenditures, investments, dispositions, impairments, business initiatives, acquisitions, pension plan contributions and obligations, real estate sales, working capital, 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, trends and uncertainties are, in most instances, beyond the Company’s control, and include changes in advertising demand and other economic conditions; consumers’ tastes; newsprint prices; program costs; labor relations; technology obsolescence; 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. Forward-looking statements, which are as of the date of this filing, are not updated to reflect events or circumstances after the date of the statement.

A. H. Belo Corporation and Subsidiaries
Consolidated Statements of Operations

             
             
    Three Months Ended March 31,
In thousands, except share and per share amounts (unaudited)   2019     2018  
Net Operating Revenue:            
Advertising and marketing services   $  24,041     $  25,741  
Circulation      17,273        17,747  
Printing, distribution and other      5,275        5,965  
Total net operating revenue      46,589        49,453  
Operating Costs and Expense:            
Employee compensation and benefits      21,124        24,672  
Other production, distribution and operating costs      22,184        23,014  
Newsprint, ink and other supplies      4,747        5,311  
Depreciation      2,386        2,473  
Amortization      200        200  
Total operating costs and expense      50,641        55,670  
Operating loss      (4,052 )      (6,217 )
Other income, net      897        888  
Loss Before Income Taxes      (3,155 )      (5,329 )
Income tax benefit      (143 )      (1,315 )
Net Loss   $  (3,012 )   $  (4,014 )
             
Per Share Basis            
Net loss            
Basic and diluted   $  (0.14 )   $  (0.19 )
Number of common shares used in the per share calculation:            
Basic and diluted      21,594,262        21,716,419  


A. H. Belo Corporation and Subsidiaries
Consolidated Balance Sheets

             
             
    March 31,   December 31,
In thousands (unaudited)   2019   2018
Assets            
Current assets:            
Cash and cash equivalents   $  50,301   $  55,313
Accounts receivable, net      19,552      22,057
Assets held for sale      1,089      1,089
Other current assets      10,244      8,935
Total current assets      81,186      87,394
Property, plant and equipment, net      23,924      26,261
Operating lease right-of-use assets      22,527      —
Intangible assets, net      3,074      3,274
Goodwill      13,973      13,973
Deferred income taxes, net      6,720      6,417
Other assets      4,028      5,029
Total assets   $  155,432   $  142,348
Liabilities and Shareholders’ Equity            
Current liabilities:            
Accounts payable   $  4,725   $  6,334
Accrued compensation and other current liabilities      12,260      13,880
Advance subscription payments      12,153      11,449
Total current liabilities      29,138      31,663
Long-term pension liabilities      30,997      31,889
Long-term operating lease liabilities      23,862      —
Other liabilities      5,858      8,210
Total liabilities      89,855      71,762
Total shareholders' equity      65,577      70,586
Total liabilities and shareholders’ equity   $  155,432   $  142,348

The Company adopted the new lease guidance (Topic 842) using the modified retrospective approach as of January 1, 2019, which requires a right-of-use asset and a lease liability be recorded for substantially all leases. Prior periods were not restated.


A. H. Belo Corporation - Non-GAAP Financial Measures
Reconciliation of Operating Loss to Adjusted Operating Loss

             
             
    Three Months Ended March 31,
In thousands (unaudited)   2019     2018  
Total net operating revenue   $  46,589     $  49,453  
Total operating costs and expense      50,641        55,670  
Operating Loss   $  (4,052 )   $  (6,217 )
             
Total net operating revenue   $  46,589     $  49,453  
Addback:            
Advertising contra revenue      2,652        2,853  
Circulation contra revenue      175        258  
Adjusted Operating Revenue   $  49,416     $  52,564  
             
Total operating costs and expense   $  50,641     $  55,670  
Addback:            
Advertising contra expense      2,652        2,853  
Circulation contra expense      175        258  
Less:            
Depreciation      2,386        2,473  
Amortization      200        200  
Severance expense      601        123  
Adjusted Operating Expense   $  50,281     $  55,985  
             
Adjusted operating revenue   $  49,416     $  52,564  
Adjusted operating expense      50,281        55,985  
Adjusted Operating Loss   $  (865 )   $  (3,421 )

The Company calculates adjusted operating income (loss) by adjusting operating income (loss) to exclude depreciation, amortization, severance expense, and asset impairments (“adjusted operating income (loss)”). The Company believes that inclusion of certain noncash expenses and other items in the results makes for more difficult comparisons between years and with peer group companies.

The Company adopted the new revenue guidance (Topic 606) using the modified retrospective approach as of January 1, 2018. While the Company adjusts operating revenue and expense for non-GAAP presentation, these adjustments have no effect on adjusted operating income (loss). Additionally, the Company adopted the new retirement benefits guidance (Topic 715) retrospectively as of January 1, 2018, which requires net periodic pension and other post-employment expense (benefit) to be included in non-operating income (expense). As of January 1, 2019, the Company determined pension and post-employment expense (benefit) would no longer be an addback in the calculation of adjusted operating expense. As a result of this change, adjusted operating expense and adjusted operating loss increased $930 for the three months ended March 31, 2018.

Adjusted operating income (loss) is not a measure of financial performance under generally accepted accounting principles (“GAAP”). Management uses adjusted operating income (loss) and similar measures in internal analyses as supplemental measures of the Company’s financial performance, and for performance comparisons versus its peer group of companies. Management uses this non-GAAP financial measure for the purposes of evaluating consolidated Company performance. The Company therefore believes that the non-GAAP measure presented provides useful information to investors by allowing them to view the Company’s business through the eyes of management and the Board of Directors, facilitating comparison of results across historical periods and providing a focus on the underlying ongoing operating performance of its business. Adjusted operating income (loss) should not be considered in isolation or as a substitute for net income (loss), cash flows provided by (used for) operating activities or other comparable measures prepared in accordance with GAAP. Additionally, this non-GAAP measure may not be comparable to similarly-titled measures of other companies.

 

Contact:
Katy Murray
214-977-8869

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