Newspaper Publisher A. H. Belo Corporation Reports First Quarter 2010 Financial Results

May 4, 2010 at 8:05 AM EDT

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DALLAS, May 4, 2010 -- Newspaper publisher A. H. Belo Corporation (NYSE: AHC) today reported a net loss of $0.44 per share in the first quarter of 2010 compared to a net loss of $4.91 per share in the first quarter of 2009. Consolidated EBITDA in the first quarter of 2010 was $2.3 million, an increase of $11.3 million compared to the first quarter of 2009. Consolidated EBITDA in the first quarter of 2010 excluding pension expenses was $7.6 million, an increase of $16.7 million compared to the first quarter of 2009.

Robert W. Decherd, chairman, president and Chief Executive Officer, said, "Total first quarter revenue decreased 9.9 percent compared to the first quarter of 2009, the lowest year-to-year percent decline in two years. Advertising revenue, including print and digital revenue, was within 100 basis points of the Company's 2010 Financial Plan for the first quarter. Circulation revenue increased 12.2 percent compared to the first quarter of 2009. These improvements reflect the Company's strategy of focusing on selected audiences, creating high-quality local content and delivering valuable audiences to advertisers."

"As of March 31, the Company had no borrowings outstanding under its bank credit facility, remained in compliance with the facility's covenants and had approximately $43 million of cash and cash equivalents. We will continue to manage expenses aggressively to maximize EBITDA and operating cash flow over the long-term," Decherd said.

Operating Results

In the first quarter of 2010, total revenue was $115.8 million, a decrease of 9.9 percent compared to the first quarter of 2009. The percent decrease in total revenue was lowest at The Providence Journal, followed by The Dallas Morning News and The Press-Enterprise. Advertising revenue, including print and digital revenue, decreased 19.2 percent. Although digital revenue decreased 8.0 percent to $8.5 million, non-classified digital revenue increased 7.1 percent to $3.6 million. Due to circulation pricing actions implemented in Dallas and Providence in 2009, total circulation revenue increased 12.2 percent. Other revenue increased 7.2 percent.

Total consolidated operating expenses in the first quarter of 2010 were $124 million, a decrease of 46.4 percent compared to the first quarter of 2009. Excluding the $80.9 million non-cash goodwill impairment charge at The Providence Journal in the first quarter of 2009, total consolidated operating expenses in the first quarter of 2010 decreased 17.6 percent. The Company's newsprint expense in the first quarter of 2010 was $8.5 million, a decrease of 46.2 percent compared to the first quarter of 2009. In the first quarter of 2010, newsprint consumption decreased 33.0 percent and newsprint cost per metric ton decreased 19.7 percent. The Company's average purchase price per metric ton for newsprint declined 23.3 percent in the first quarter of 2010 compared to the first quarter of 2009.

In the first quarter of 2010, Newspaper EBITDA was $9.4 million, an improvement of $11.8 million compared to the first quarter of 2009. Newspaper EBITDA margin was highest at The Providence Journal, followed by The Dallas Morning News and The Press-Enterprise. At The Press-Enterprise, the Newspaper EBITDA margin improved significantly compared to the first quarter of 2009 due to aggressive expense management.

The Company has maintained its long-standing commitment to delivering high-quality local content through editorial investments and targeted new products. In April 2010, the 2010 Pulitzer Prize for Editorial Writing was awarded to The Dallas Morning News' Tod Robberson, Colleen McCain Nelson and William McKenzie for their "relentless editorials deploring the stark social and economic disparity between the city's better-off northern half and distressed southern half."

Corporate

In the first quarter of 2010, corporate and non-operating expenses, net of costs allocated to operating units, were $8.3 million, a decrease of 4.0 percent compared to the first quarter of 2009.

Non-GAAP Financial Measures

Reconciliations of Consolidated and Newspaper EBITDA to net loss are included as exhibits to this release.

Financial Results Conference Call

AHC will conduct a conference call today at 1:00 p.m. CDT to discuss financial results. The conference call will be available via Webcast by accessing the Company's Web site (www.ahbelo.com/invest) or by dialing 1-800-398-9402 (USA) or 612-338-9017 (International). A replay line will be available at 800-475-6701 (USA) or 320-365-3844 (International) from 3:00 p.m. CDT on May 4 until 11:59 p.m. CDT on May 11, 2010. The access code for the replay is 154864.

About A. H. Belo Corporation

A. H. Belo Corporation (NYSE: AHC), headquartered in Dallas, Texas, is a distinguished newspaper publishing and local news and information company that owns and operates four daily newspapers and a diverse group of Web sites. A. H. Belo publishes The Dallas Morning News, Texas' leading newspaper and winner of nine Pulitzer Prizes since 1986; The Providence Journal, the oldest continuously-published daily newspaper in the U.S. and winner of four Pulitzer Prizes; The Press-Enterprise (Riverside, CA), serving southern California's Inland Empire region and winner of one Pulitzer Prize; and the Denton Record-Chronicle. The Company publishes various specialty publications targeting niche audiences, and its partnerships and/or investments include the Yahoo! Newspaper Consortium and Classified Ventures, owner of cars.com. A. H. Belo also owns direct mail and commercial printing businesses. Additional Information is available at http://www.ahbelo.com/ or by contacting David A. Gross, vice president/Investor Relations and Strategic Analysis, at 214-977-4810.

Statements in this communication concerning A. H. Belo Corporation's (the "Company's") business outlook or future economic performance, anticipated profitability, revenues, expenses, dividends, capital expenditures, investments, impairments, pension plan contributions, 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, uncertainties and factors include, but are not limited to, changes in capital market conditions and prospects, and other factors such as changes in advertising demand and newsprint prices; newspaper circulation trends and other circulation matters, including changes in readership patterns and demography, and audits and related actions by the Audit Bureau of Circulations; challenges in achieving expense reduction goals, and on schedule, and the resulting potential effects on operations; technological changes; development of Internet commerce; industry cycles; changes in pricing or other actions by competitors and suppliers; regulatory, tax and legal changes; adoption of new accounting standards or changes in existing accounting standards by the Financial Accounting Standards Board or other accounting standard-setting bodies or authorities; the effects of Company acquisitions, dispositions, co-owned ventures, and investments; pension plan matters; general economic conditions and changes in interest rates; significant armed conflict; and other factors beyond our control, as well as other risks described in the Company's Annual Report on Form 10-K for the year ended December 31, 2009, and other public disclosures and filings with the Securities and Exchange Commission.

    A. H. Belo Corporation
    Consolidated Statements of Operations

                                                   Three months ended
                                                        March 31,
                                                        ---------
    In thousands, except per share
     amounts (unaudited)                             2010            2009
    ------------------------------                                   ----
    Net operating revenues
      Advertising                                 $72,186         $89,331
      Circulation                                  35,586          31,714
      Other                                         7,986           7,449
                                                    -----           -----
        Total net operating revenues              115,758         128,494
    Operating Costs and Expenses
      Salaries, wages and employee
       benefits                                    56,254          62,894
      Other production, distribution and
       operating costs                             46,030          55,866
      Newsprint, ink and other supplies            11,222          19,619
      Asset impairment                                  -          80,940
      Depreciation                                  9,164          10,536
      Amortization                                  1,310           1,624
                                                    -----           -----
        Total operating costs and expenses        123,980         231,479
        Loss from operations                       (8,222)       (102,985)
    Other (expense) and income
      Interest expense                               (203)           (300)
      Other income, net                                25             822
                                                      ---             ---
        Total other (expense) income                 (178)            522
    Earnings
      Loss before income taxes                     (8,400)       (102,463)
      Income tax expense (benefit)                    728          (1,756)
                                                      ---          ------
        Net loss                                  $(9,128)      $(100,707)
                                                  =======       =========
    Net loss per share
      Basic and Diluted                            $(0.44)         $(4.91)
    Average shares outstanding
      Basic and Diluted                            20,767          20,506

    A. H. Belo Corporation
    Condensed Consolidated Balance Sheets


                                                  March              December
                                                    31,                 31,
    In thousands                                   2010                2009
    ------------                                   ----                ----
                                            (unaudited)
    Assets
      Current assets
        Cash and cash equivalents               $42,863             $24,503
        Accounts receivable, net                 48,722              62,977
        Other current assets                     32,295              34,464
                                                 ------              ------
      Total current assets                      123,880             121,944
      Property, plant and equipment,
       net                                      194,578             203,329
      Intangible assets, net                     50,699              52,009
      Other assets                               26,811              27,145
                                                 ------              ------
    Total assets                               $395,968            $404,427
                                               ========            ========

    Liabilities and Shareholders'
     Equity
      Current liabilities
        Accounts payable                        $15,360             $19,191
        Accrued expenses                         32,510              29,788
        Advance subscription payments            26,479              26,713
                                                 ------              ------
      Total current liabilities                  74,349              75,692
      Deferred income taxes                         566                 223
      Other liabilities                           7,278               6,915
      Total shareholders' equity                313,775             321,597
                                                -------             -------
    Total liabilities and
     shareholders' equity                      $395,968            $404,427
                                               ========            ========

    A. H. Belo Corporation
    Consolidated EBITDA

                                                    Three months ended
                                                        March 31,
                                                       
    In thousands (unaudited)                      2010                 2009
    ------------------------                      ----                 ----

      Consolidated EBITDA (1)                   $2,277              $(9,063)
      Asset impairment                               -              (80,940)
      Depreciation and Amortization            (10,474)             (12,160)
      Interest Expense                            (203)                (300)
      Income Tax Benefit (Expense)                (728)               1,756
      Net Loss                                 $(9,128)           $(100,707)
                                               =======            =========

    A. H. Belo Corporation
    Newspaper EBITDA

                                                  Three months ended
                                                      March 31,
                                                     
    In thousands (unaudited)                      2010                 2009
    ------------------------                      ----                 ----

      Newspaper EBITDA (1)                      $9,433              $(2,321)
      Corporate & Non-Operating
       Company Expenses                         (7,181)              (7,564)
      Other income, net                             25                  822
      Asset impairment                               -              (80,940)
      Depreciation and Amortization            (10,474)             (12,160)
      Interest Expense                            (203)                (300)
      Income Tax Benefit (Expense)                (728)               1,756
      Net Loss                                 $(9,128)           $(100,707)
                                               =======            =========



    (1)  The Company defines Consolidated EBITDA as net earnings before
    interest expense, income taxes, goodwill impairment, depreciation
    and amortization and Newspaper EBITDA as net earnings before
    corporate and non-operating company expenses, other income net,
    interest expense, income taxes, goodwill impairment, depreciation
    and amortization.  Neither Consolidated EBITDA nor Newspaper EBITDA
    is a measure of financial performance under accounting principles
    generally accepted in the United States.  Management uses both
    measures in internal analyses as a supplemental measure of the
    financial performance of the Company to assist it with determining
    bonus achievement, performance comparisons against its peer group of
    companies, as well as capital spending and other investing
    decisions.  They are also common alternative measures of performance
    used by investors, financial analysts, and rating agencies to
    evaluate financial performance.   Neither Consolidated EBITDA nor
    Newspaper EBITDA should be considered in isolation or as a
    substitute for cash flows provided by operating activities or other
    income or cash flow data prepared in accordance with U.S. GAAP and
    this non-GAAP measure may not be comparable to similarly titled
    measures of other companies.

Investor Relations
Katy Murray
President 
DallasNews Corporation
214-977-8869

invest@dallasnews.com

DallasNews Corporation Headquarters
Mailing Address:
P.O. Box 224866
Dallas, Texas 75222-4866
Street Address:
1954 Commerce Street
Dallas, Texas 75201
214-977-8222
214-977-8285 (fax)