A. H. Belo Corporation Announces Third Quarter 2016 Financial Results
In the third quarter of 2016, on a non-GAAP basis, the Company reported operating income excluding certain items (adjusted operating income) of
Third 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 8.1 percent to
Total consolidated operating expense in the third quarter was
The Company’s newsprint expense in the third quarter was
Non-GAAP Financial Measures
A reconciliation of operating income (loss) to adjusted operating income is included in the exhibits to this release.
Financial Results Conference Call
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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 September 30, | Nine Months Ended September 30, | |||||||||||||||||||
| In thousands, except share and per share amounts (unaudited) | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
| Net Operating Revenue: | ||||||||||||||||||||
| Advertising and marketing services | $ | 38,304 | $ | 39,184 | $ | 111,581 | $ | 114,281 | ||||||||||||
| Circulation | 19,633 | 20,279 | 59,806 | 62,133 | ||||||||||||||||
| Printing, distribution and other | 6,843 | 7,445 | 22,502 | 22,606 | ||||||||||||||||
| Total net operating revenue | 64,780 | 66,908 | 193,889 | 199,020 | ||||||||||||||||
| Operating Costs and Expense: | ||||||||||||||||||||
| Employee compensation and benefits | 25,626 | 29,041 | 77,417 | 81,649 | ||||||||||||||||
| Other production, distribution and operating costs | 30,615 | 30,562 | 88,844 | 93,037 | ||||||||||||||||
| Newsprint, ink and other supplies | 6,315 | 7,266 | 18,834 | 23,275 | ||||||||||||||||
| Depreciation | 2,488 | 2,780 | 7,725 | 8,695 | ||||||||||||||||
| Amortization | 225 | 361 | 680 | 1,107 | ||||||||||||||||
| Total operating costs and expense | 65,269 | 70,010 | 193,500 | 207,763 | ||||||||||||||||
| Operating income (loss) | (489 | ) | (3,102 | ) | 389 | (8,743 | ) | |||||||||||||
| Other Income (Expense): | ||||||||||||||||||||
| Loss from equity method investments, net | — | (564 | ) | — | (288 | ) | ||||||||||||||
| Other income (expense), net | 114 | (489 | ) | 601 | (912 | ) | ||||||||||||||
| Total other income (expense), net | 114 | (1,053 | ) | 601 | (1,200 | ) | ||||||||||||||
| Income (Loss) from Continuing Operations Before Income Taxes | (375 | ) | (4,155 | ) | 990 | (9,943 | ) | |||||||||||||
| Income tax provision (benefit) | 77 | (188 | ) | 1,361 | (5,601 | ) | ||||||||||||||
| Loss from Continuing Operations | (452 | ) | (3,967 | ) | (371 | ) | (4,342 | ) | ||||||||||||
| Loss from divestiture of discontinued operations | — | (52 | ) | — | (62 | ) | ||||||||||||||
| Loss from Discontinued Operations | — | (52 | ) | — | (62 | ) | ||||||||||||||
| Net Loss | (452 | ) | (4,019 | ) | (371 | ) | (4,404 | ) | ||||||||||||
| Net income (loss) attributable to noncontrolling interests | 45 | (63 | ) | 65 | (219 | ) | ||||||||||||||
| Net Loss Attributable to A. H. Belo Corporation | $ | (497 | ) | $ | (3,956 | ) | $ | (436 | ) | $ | (4,185 | ) | ||||||||
| Per Share Basis | ||||||||||||||||||||
| Net loss attributable to A. H. Belo Corporation | ||||||||||||||||||||
| Basic and diluted | $ | (0.02 | ) | $ | (0.18 | ) | $ | (0.02 | ) | $ | (0.19 | ) | ||||||||
| Number of common shares used in the per share calculation: | ||||||||||||||||||||
| Basic and diluted | 21,676,260 | 21,651,670 | 21,601,828 | 21,721,875 | ||||||||||||||||
A. H. Belo Corporation and Subsidiaries
Consolidated Balance Sheets
| September 30, | December 31, | |||||
| In thousands (unaudited) | 2016 | 2015 | ||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 78,341 | $ | 78,380 | ||
| Accounts receivable, net | 26,750 | 31,502 | ||||
| Assets held for sale | 2,600 | — | ||||
| Other current assets | 13,391 | 13,467 | ||||
| Total current assets | 121,082 | 123,349 | ||||
| Property, plant and equipment, net | 45,804 | 51,358 | ||||
| Intangible assets, net | 5,098 | 5,778 | ||||
| Goodwill | 36,883 | 36,883 | ||||
| Other assets | 4,515 | 4,133 | ||||
| Total assets | $ | 213,382 | $ | 221,501 | ||
| Liabilities and Shareholders’ Equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 10,838 | $ | 12,736 | ||
| Accrued compensation and other current liabilities | 12,608 | 11,812 | ||||
| Advance subscription payments | 13,211 | 14,424 | ||||
| Total current liabilities | 36,657 | 38,972 | ||||
| Long-term pension liabilities | 54,831 | 57,446 | ||||
| Other liabilities | 8,716 | 4,812 | ||||
| Total liabilities | 100,204 | 101,230 | ||||
| Noncontrolling interest - redeemable | 1,335 | 1,421 | ||||
| Total shareholders’ equity attributable to A. H. Belo Corporation | 110,562 | 117,781 | ||||
| Noncontrolling interests | 1,281 | 1,069 | ||||
| Total shareholders' equity | 111,843 | 118,850 | ||||
| Total liabilities and shareholders’ equity | $ | 213,382 | $ | 221,501 | ||
Reconciliation of Operating Income (Loss) to Adjusted Operating Income
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
| In thousands (unaudited) | 2016 | 2015 | 2016 | 2015 | ||||||||||||||
| Total net operating revenue | $ | 64,780 | $ | 66,908 | $ | 193,889 | $ | 199,020 | ||||||||||
| Total operating costs and expense | 65,269 | 70,010 | 193,500 | 207,763 | ||||||||||||||
| Operating Income (Loss) | $ | (489 | ) | $ | (3,102 | ) | $ | 389 | $ | (8,743 | ) | |||||||
| Addback: | ||||||||||||||||||
| Depreciation | $ | 2,488 | $ | 2,780 | $ | 7,725 | $ | 8,695 | ||||||||||
| Amortization | 225 | 361 | 680 | 1,107 | ||||||||||||||
| Severance expense | 49 | 2,796 | 1,049 | 2,746 | ||||||||||||||
| Adjusted Operating Income | $ | 2,273 | $ | 2,835 | $ | 9,843 | $ | 3,805 | ||||||||||
The Company calculates adjusted operating income by adjusting operating income (loss) to exclude depreciation, amortization, severance expense and pension plan settlement expense (“adjusted operating income”). The Company believes that inclusion of certain non-cash and non-recurring expenses in the results makes for more difficult comparisons between years and with peer group companies.
Adjusted operating income is not a measure of financial performance under generally accepted accounting principles (“GAAP”). Management uses adjusted operating income 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 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