UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 8-K





CURRENT REPORT



PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934



Date of Report (Date of earliest event reported): April 29, 2019







(Exact name of registrant as specified in its charter)





Commission file number: 1-33741









Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company      ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:



☐        Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐        Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐        Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐        Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



 

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Item 2.02. Results of Operations and Financial Condition.



On April 29, 2019, A. H. Belo Corporation (the “Company”) announced its consolidated financial results for the three months ended March 31, 2019.  A copy of the announcement press release is furnished with this report as Exhibit 99.1.



Item 9.01. Financial Statements and Exhibits.



(d) Exhibits.





 

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SIGNATURE



Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.







 

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EXHIBIT INDEX



Exhibit No. 99.1  Press Release issued by A. H. Belo Corporation on April 29, 2019

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



DALLAS –  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.”

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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.

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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.

 

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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.



 

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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.



 

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A. H. Belo Corporation and Subsidiaries

Consolidated Statements of Operations



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A. H. Belo Corporation and Subsidiaries

Consolidated Balance Sheets













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.

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A. H. Belo Corporation - Non-GAAP Financial Measures

Reconciliation of Operating Loss to Adjusted Operating Loss











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.

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