A. H. Belo Corporation Announces First Quarter 2017 Financial Results
- Digital and marketing services revenue grew 12.4 percent in 2017 compared to 2016, primarily from DMV, which grew
$2.1 million , or 66.8 percent - Digital and marketing services revenue represented 36.8 percent of 2017 total advertising and marketing services revenue compared to 32.7 percent in 2016
- Total advertising and marketing services revenue of
$35 .2 million in 2017 was flat compared to 2016 - Acquired the remaining interests in
DMV Digital Holdings Company and Your Speakeasy, LLC
In the first quarter of 2017, on a non-GAAP basis, the Company reported operating loss excluding certain items (“adjusted operating income (loss)”) of $(0.8) million, a decrease of
"Digital and marketing services grew 12.4 percent in 2017 compared to 2016, driven primarily by revenue growth from DMV, which grew
"We are making the steady progress that we expect from the consistent execution of our revenue diversification strategy."
First Quarter Results from Continuing Operations
Total revenue was
Revenue from advertising and marketing services, including print and digital revenues, was
Circulation revenue was
Printing, distribution and other revenue decreased $0.4 million, or 5.3 percent, in the first quarter of 2017, primarily due to a decrease of $0.2 million related to distribution of outside publications and a $0.1 million decrease in commercial printing revenue.
Total consolidated operating expense in the first quarter was
In the first quarter of 2017, on a non-GAAP basis, total consolidated operating expense excluding certain items (“adjusted operating expense”) was
The Company’s newsprint expense in the first quarter of 2017 was
Non-GAAP Financial Measures
A reconciliation of operating loss to adjusted operating income (loss) and of total operating costs and expense to adjusted operating expense is included in the exhibits to this release.
Financial Results Conference Call
To access the listen-only conference call, dial 1-877-209-9920 (
About
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
A. H. Belo Corporation and Subsidiaries
Consolidated Statements of Operations
| Three Months Ended March 31, | ||||||||
| In thousands, except share and per share amounts (unaudited) | 2017 |
2016 |
||||||
| Net Operating Revenue: | ||||||||
| Advertising and marketing services | $ | 35,204 | $ | 35,237 | ||||
| Circulation | 19,166 | 20,352 | ||||||
| Printing, distribution and other | 6,531 | 6,894 | ||||||
| Total net operating revenue | 60,901 | 62,483 | ||||||
| Operating Costs and Expense: | ||||||||
| Employee compensation and benefits | 27,875 | 27,017 | ||||||
| Other production, distribution and operating costs | 28,326 | 28,331 | ||||||
| Newsprint, ink and other supplies | 5,901 | 6,058 | ||||||
| Depreciation | 2,506 | 2,632 | ||||||
| Amortization | 200 | 226 | ||||||
| Goodwill impairment | 228 | — | ||||||
| Total operating costs and expense | 65,036 | 64,264 | ||||||
| Operating loss | (4,135 | ) | (1,781 | ) | ||||
| Other income (expense), net | (337 | ) | 79 | |||||
| Loss from Continuing Operations Before Income Taxes | (4,472 | ) | (1,702 | ) | ||||
| Income tax benefit | (42 | ) | (1,109 | ) | ||||
| Net Loss | (4,430 | ) | (593 | ) | ||||
| Net income attributable to noncontrolling interests | — | 39 | ||||||
| Net Loss Attributable to A. H. Belo Corporation | $ | (4,430 | ) | $ | (632 | ) | ||
| Per Share Basis | ||||||||
| Net loss attributable to A. H. Belo Corporation | ||||||||
| Basic and diluted | $ | (0.21 | ) | $ | (0.03 | ) | ||
| Number of common shares used in the per share calculation: | ||||||||
| Basic and diluted | 21,690,371 | 21,514,133 | ||||||
A. H. Belo Corporation and Subsidiaries
Consolidated Balance Sheets
| March 31, | December 31, | |||||
| In thousands (unaudited) | 2017 | 2016 | ||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 69,205 | $ | 80,071 | ||
| Accounts receivable, net | 25,524 | 29,114 | ||||
| Other current assets | 14,768 | 12,939 | ||||
| Total current assets | 109,497 | 122,124 | ||||
| Property, plant and equipment, net | 41,582 | 43,759 | ||||
| Intangible assets, net | 4,672 | 4,872 | ||||
| Goodwill | 13,973 | 14,201 | ||||
| Other assets | 7,908 | 7,775 | ||||
| Total assets | $ | 177,632 | $ | 192,731 | ||
| Liabilities and Shareholders’ Equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 11,550 | $ | 9,036 | ||
| Accrued compensation and other current liabilities | 11,568 | 14,975 | ||||
| Advance subscription payments | 13,791 | 13,243 | ||||
| Total current liabilities | 36,909 | 37,254 | ||||
| Long-term pension liabilities | 53,916 | 54,843 | ||||
| Other liabilities | 10,104 | 8,812 | ||||
| Total liabilities | 100,929 | 100,909 | ||||
| Noncontrolling interest - redeemable | — | 2,670 | ||||
| Total shareholders’ equity attributable to A. H. Belo Corporation | 76,703 | 87,918 | ||||
| Noncontrolling interests | — | 1,234 | ||||
| Total shareholders' equity | 76,703 | 89,152 | ||||
| Total liabilities and shareholders’ equity | $ | 177,632 | $ | 192,731 | ||
Reconciliation of Operating Loss to Adjusted Operating Income (Loss)
| Three Months Ended March 31, | ||||||||
| In thousands (unaudited) | 2017 |
2016 |
||||||
| Total net operating revenue | $ | 60,901 | $ | 62,483 | ||||
| Total operating costs and expense | 65,036 | 64,264 | ||||||
| Operating Loss | $ | (4,135 | ) | $ | (1,781 | ) | ||
| Total operating costs and expense | $ | 65,036 | $ | 64,264 | ||||
| Less: | ||||||||
| Depreciation | 2,506 | 2,632 | ||||||
| Amortization | 200 | 226 | ||||||
| Severance expense | 367 | 742 | ||||||
| Goodwill impairment | 228 | — | ||||||
| Adjusted Operating Expense | $ | 61,735 | $ | 60,664 | ||||
| Total net operating revenue | $ | 60,901 | $ | 62,483 | ||||
| Adjusted operating expense | 61,735 | 60,664 | ||||||
| Adjusted Operating Income (Loss) | $ | (834 | ) | $ | 1,819 | |||
The Company calculates adjusted operating income (loss) by adjusting operating loss to exclude depreciation, amortization, severance expense, pension plan settlement loss and goodwill impairment (“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.
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 against 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 loss from continuing operations, 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