A. H. Belo Corporation Announces Second Quarter 2018 Financial Results
- Digital subscriptions grew by 6,407 subscribers, or 31.6 percent, in 2018 compared to 2017
- Operating expense decreased
$11 .8 million, or 18.4 percent, in 2018 compared to 2017
In the second quarter of 2018, on a non-GAAP basis, the Company reported operating income adjusted for certain items (“adjusted operating income”) of
In May, the Company announced the hiring of Susan “Sue” Kerr as vice president of Print Audience, a newly created position reporting to
Second Quarter Results
Total revenue was
Revenue from advertising and marketing services, including print and digital revenues, was
Excluding the impact of the new revenue guidance, advertising and marketing services revenue decreased
Circulation revenue was
Printing, distribution and other revenue decreased
Total consolidated operating expense in the second quarter of 2018, on a GAAP basis, was
In the second quarter of 2018, on a non-GAAP basis, total consolidated operating expense adjusted for certain items (“adjusted operating expense”) was
The Company’s newsprint expense in the second quarter of 2018 was
Non-GAAP Financial Measures
Reconciliations of operating loss to adjusted operating income, 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
To access the listen-only conference call, dial 1-800-230-1085 (
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 June 30, | Six Months Ended June 30, | |||||||||||||||
| In thousands, except share and per share amounts (unaudited) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Net Operating Revenue: | ||||||||||||||||
| Advertising and marketing services | $ | 26,397 | $ | 36,022 | $ | 52,138 | $ | 71,226 | ||||||||
| Circulation | 17,921 | 19,088 | 35,668 | 38,254 | ||||||||||||
| Printing, distribution and other | 6,851 | 7,979 | 12,816 | 14,510 | ||||||||||||
| Total net operating revenue | 51,169 | 63,089 | 100,622 | 123,990 | ||||||||||||
| Operating Costs and Expense: | ||||||||||||||||
| Employee compensation and benefits | 21,529 | 25,712 | 46,201 | 54,446 | ||||||||||||
| Other production, distribution and operating costs | 22,833 | 29,736 | 45,847 | 58,062 | ||||||||||||
| Newsprint, ink and other supplies | 5,461 | 5,993 | 10,772 | 11,894 | ||||||||||||
| Depreciation | 2,535 | 2,727 | 5,008 | 5,233 | ||||||||||||
| Amortization | 200 | 199 | 400 | 399 | ||||||||||||
| Asset impairments | (22 | ) | — | (22 | ) | 228 | ||||||||||
| Total operating costs and expense | 52,536 | 64,367 | 108,206 | 130,262 | ||||||||||||
| Operating loss | (1,367 | ) | (1,278 | ) | (7,584 | ) | (6,272 | ) | ||||||||
| Other income, net | 891 | 766 | 1,779 | 1,288 | ||||||||||||
| Loss Before Income Taxes | (476 | ) | (512 | ) | (5,805 | ) | (4,984 | ) | ||||||||
| Income tax provision (benefit) | 58 | 293 | (1,257 | ) | 251 | |||||||||||
| Net Loss | $ | (534 | ) | $ | (805 | ) | $ | (4,548 | ) | $ | (5,235 | ) | ||||
| Per Share Basis | ||||||||||||||||
| Net loss | ||||||||||||||||
| Basic and diluted | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.21 | ) | $ | (0.24 | ) | ||||
| Number of common shares used in the per share calculation: | ||||||||||||||||
| Basic and diluted | 21,738,545 | 21,743,390 | 21,756,678 | 21,717,032 | ||||||||||||
A. H. Belo Corporation and Subsidiaries
Consolidated Balance Sheets
| June 30, | December 31, | |||||
| In thousands (unaudited) | 2018 | 2017 | ||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 56,751 | $ | 57,660 | ||
| Accounts receivable, net | 19,931 | 26,740 | ||||
| Assets held for sale | 1,089 | 1,089 | ||||
| Other current assets | 14,616 | 16,905 | ||||
| Total current assets | 92,387 | 102,394 | ||||
| Property, plant and equipment, net | 29,239 | 31,706 | ||||
| Intangible assets, net | 3,673 | 4,073 | ||||
| Goodwill | 13,973 | 13,973 | ||||
| Deferred income taxes, net | 7,051 | 5,355 | ||||
| Other assets | 4,311 | 5,347 | ||||
| Total assets | $ | 150,634 | $ | 162,848 | ||
| Liabilities and Shareholders’ Equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 7,254 | $ | 10,303 | ||
| Accrued compensation and other current liabilities | 13,133 | 12,518 | ||||
| Advance subscription payments | 11,525 | 11,670 | ||||
| Total current liabilities | 31,912 | 34,491 | ||||
| Long-term pension liabilities | 20,844 | 23,038 | ||||
| Other liabilities | 8,081 | 7,620 | ||||
| Total liabilities | 60,837 | 65,149 | ||||
| Total shareholders' equity | 89,797 | 97,699 | ||||
| Total liabilities and shareholders’ equity | $ | 150,634 | $ | 162,848 | ||
Reconciliation of Operating Loss to Adjusted Operating Income
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| In thousands (unaudited) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Total net operating revenue | $ | 51,169 | $ | 63,089 | $ | 100,622 | $ | 123,990 | ||||||||
| Total operating costs and expense | 52,536 | 64,367 | 108,206 | 130,262 | ||||||||||||
| Operating Loss | $ | (1,367 | ) | $ | (1,278 | ) | (7,584 | ) | (6,272 | ) | ||||||
| Total net operating revenue | $ | 51,169 | $ | 63,089 | 100,622 | 123,990 | ||||||||||
| Addback: | ||||||||||||||||
| Advertising contra revenue | 2,906 | — | 5,759 | — | ||||||||||||
| Circulation contra revenue | 269 | — | 527 | — | ||||||||||||
| Adjusted Operating Revenue | $ | 54,344 | $ | 63,089 | $ | 106,908 | $ | 123,990 | ||||||||
| Total operating costs and expense | $ | 52,536 | $ | 64,367 | $ | 108,206 | $ | 130,262 | ||||||||
| Addback: | ||||||||||||||||
| Advertising contra expense | 2,906 | — | 5,759 | — | ||||||||||||
| Circulation contra expense | 269 | — | 527 | — | ||||||||||||
| Pension and post-employment benefit | (931 | ) | (859 | ) | (1,861 | ) | (1,718 | ) | ||||||||
| Less: | ||||||||||||||||
| Depreciation | 2,535 | 2,727 | 5,008 | 5,233 | ||||||||||||
| Amortization | 200 | 199 | 400 | 399 | ||||||||||||
| Severance expense | 411 | 277 | 534 | 644 | ||||||||||||
| Asset impairments | (22 | ) | — | (22 | ) | 228 | ||||||||||
| Adjusted Operating Expense | $ | 51,656 | $ | 60,305 | $ | 106,711 | $ | 122,040 | ||||||||
| Adjusted operating revenue | $ | 54,344 | $ | 63,089 | $ | 106,908 | $ | 123,990 | ||||||||
| Adjusted operating expense | 51,656 | 60,305 | 106,711 | 122,040 | ||||||||||||
| Adjusted Operating Income | $ | 2,688 | $ | 2,784 | $ | 197 | $ | 1,950 | ||||||||
The Company adopted the new revenue guidance (Topic 606) using the modified retrospective approach as of
The Company calculates adjusted operating income (loss) by adjusting operating income (loss) to include pension and post-employment benefit and 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. 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 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:
214-977-8869