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): February 17, 2009

 

A. H. BELO CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		1-33741		38-3765318
(State or other jurisdiction		(Commission File Number)		(I.R.S. Employer
of incorporation)				Identification No.)

P. O. Box 224866
Dallas, Texas		75222-4866
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (214) 977-8200

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

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:

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

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

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

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

 

 

Item 2.02.		Results of Operations and Financial Condition.

On February 17, 2009, A. H. Belo Corporation announced its consolidated financial results for the quarter and year ended December 31, 2008. 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.

99.1

A. H. Belo Corporation Financial Results Press Release dated February 17, 2009

Signatures

     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.

EXHIBIT INDEX

99.1

A. H. Belo Corporation Financial Results Press Release dated February 17, 2009

Exhibit 99.1

A. H. Belo Corporation

FOR IMMEDIATE RELEASE
Tuesday, February 17, 2009
7:00 A.M. CST

NEWSPAPER PUBLISHER A. H. BELO CORPORATION REPORTS
FOURTH QUARTER AND FULL YEAR 2008 FINANCIAL RESULTS

     DALLAS – Newspaper publisher A. H. Belo Corporation (NYSE: AHC) reported fourth quarter and full year 2008 revenues of $160.0 million and $637.3 million, respectively, and net losses per share of ($1.62) and ($3.04) for the fourth quarter and full year 2008 respectively. The fourth quarter results include a charge of $1.5 million or $0.05 per share related to a reduction-in-force; $14.1 million or $0.48 per share in non-cash goodwill impairment at The Press-Enterprise; and $14.0 million or $0.47 per share in non-cash future pension obligations. Additionally, full year results include charges of $11.1 million or $0.37 per share for the Company’s voluntary severance program in the third quarter, and $4.5 million or $0.15 per share related to the impairment of a 26-year-old printing press. The voluntary severance program and reduction-in-force are part of the Company’s ongoing expense reduction initiatives.

     The Company generated $5.9 million and $6.1 million in consolidated EBITDA for the fourth quarter and full year 2008, respectively, excluding the $14.0 million non-cash pension obligation. The aggregate newspaper EBITDA margin excluding all special charges mentioned above was 13 percent in the fourth quarter and 10 percent for the full year. EBITDA margins in the fourth quarter and for the full year 2008 were highest at The Providence Journal, followed by The Dallas Morning News.

     The Company’s borrowings of $10 million as of December 31, 2008 were unchanged from the third quarter, when the bank line was first utilized to fund costs associated with the voluntary severance program. The Company announced on January 30, 2009 that it amended its credit facility to become a $50 million asset-based revolving credit facility secured by all personal property assets of the Company and its subsidiaries and certain specified real property.

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A. H. Belo Fourth Quarter and Full Year Financial Results
February 17, 2009
Page Two

     Robert W. Decherd, chairman, president and Chief Executive Officer, said, “A. H. Belo and all advertising-based businesses faced an unexpectedly difficult business environment in 2008. By realigning our expense structure to meet rapidly changing revenue conditions, A. H. Belo was able to stabilize EBITDA. The combined efforts of our corporate management team, operating company leadership, and every A. H. Belo employee enabled the Company to reduce on-going cash operating expenses by $45 million in 2008 versus 2007, despite significant increases in newsprint prices. While the challenges facing the newspaper industry are well chronicled, we believe that A. H. Belo’s distinguishing characteristics, which we have described in the months before and since the spin-off, are significant attributes as the Company moves forward.”

Fourth Quarter Highlights

     Total revenue decreased 15 percent in the fourth quarter versus the prior year.

     Advertising revenue, including print and Internet revenue, was down 22 percent, driven primarily by declines in classified revenue at The Dallas Morning News. AHC’s Internet revenues accounted for 6.9 percent of total revenues in the quarter. Internet revenues were $11.1 million, 16 percent below the same period last year.

     The Company continues its ongoing efforts to focus on quality and value-added circulation for its advertisers. In the fourth quarter, circulation revenue rose 12 percent primarily due to increased prices for The Dallas Morning News.

     Despite the $1.5 million cost of the reduction-in-force and the one-time $14.0 million non-cash pension obligation, AHC’s total consolidated operating expenses in the fourth quarter were $167.5 million or 0.7 percent less than the same period last year. This decrease was driven by declines in direct compensation and outside services. Newsprint expense increased slightly in the fourth quarter.

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A. H. Belo Fourth Quarter and Full Year Financial Results
February 17, 2009
Page Three

Full Year Highlights

     Total revenue declined 14 percent for the full year 2008 versus the prior year.

     Advertising revenue, including print and Internet revenue, decreased 19 percent, driven primarily by declines in classified revenue at The Dallas Morning News. AHC’s Internet revenues accounted for 7.4 percent of total revenues for the year. Internet revenues were $47 million, 12 percent below the prior year.

     In 2008, the Company focused on strengthening the brand equity of its print and online publications and driving quality circulation Company-wide. AHC’s circulation revenue increased 9.5 percent versus the prior year.

     For the full year, expense reduction initiatives resulted in a 2.7 percent or $18 million decrease in A. H. Belo’s operating expenses, despite $12.6 million in voluntary severance and reduction-in-force costs and $14.0 million for the pension charge. Expenses at the operating unit level declined $6.9 million or 1.1 percent in 2008 versus the prior year in spite of these charges. Even though newsprint prices increased during 2008, newsprint expense declined 7.1 percent primarily as a result of reductions in page volume.

     AHC’s voluntary severance program and reduction-in-force in 2008 will result in annualized savings of approximately $29 million. As of December 31, 2008, A. H. Belo had approximately 2,950 full-time and 400 part-time employees.

Corporate & Non-Operating Company Results

     Corporate and non-operating expenses declined by $4.3 million and $11 million, respectively, for the fourth quarter and full year 2008 versus the prior year, primarily due to a decline in outside services. 2007 corporate and non-operating expenses are based on

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A. H. Belo Fourth Quarter and Full Year Financial Results
February 17, 2009
Page Four

an estimate of allocated amounts since AHC did not become a separate public company until February 8, 2008 when it was spun off from Belo Corp. AHC’s 2007 historical financial information reflects allocations for services historically provided by Belo Corp., and these allocated costs may be different from the actual costs AHC will incur for these services in the future as a separate public company, including with respect to actual services provided to AHC by Belo Corp. under a services agreement and other agreements. In some instances, the costs incurred for these services as a separate public company may be higher than the share of total Belo Corp. expenses allocated to AHC historically.

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 12:30 p.m. CST to discuss financial and strategic results. The conference call will be available via Webcast by accessing the Company’s Web site (www.ahbelo.com/invest) or by dialing 1-877-777-1973 (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. CST on February 17 until 11:59 p.m. CST on February 24, 2009. The access code for the replay is 982075.

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A. H. Belo Fourth Quarter and Full Year Financial Results
February 17, 2009
Page Five

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 eight 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 www.ahbelo.com or by contacting Maribel Correa, director/Investor Relations, at 214-977-2702.

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, 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, interest rates, 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; general economic conditions; 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, 2007, and other public disclosures and filings with the Securities and Exchange Commission, including the Company’s information statement on Form 10 dated January 31, 2008.

A. H. Belo Corporation
Consolidated Statements of Operations

		Three months ended								Twelve months ended
		December 31,								December 31,
In thousands, except per share amounts		2008				2007				2008				2007
		(unaudited)				(unaudited)				(unaudited)
Net operating revenues
Advertising		$	119,862			$	153,175			$	484,437			$	600,335
Circulation			32,438				28,914				123,381				112,635
Other			7,739				6,650				29,496				25,698
Total net operating revenues			160,039				188,739				637,314				738,668
Operating Costs and Expenses
Salaries, wages and employee benefits			77,374				76,999				298,283				297,630
Other production, distribution and operating costs			65,741				66,919				248,423				259,231
Newsprint, ink and other supplies			24,379				24,789				94,609				102,501
Impairment on printing press			—				—				4,535				—
Goodwill impairment			14,145				344,424				14,145				344,424
Depreciation			11,363				11,961				46,777				45,815
Amortization			1,625				1,625				6,500				6,499
Total operating costs and expenses			194,627				526,717				713,272				1,056,100
Loss from operations			(34,588	)			(337,978	)			(75,958	)			(317,432	)
Other income and expense
Interest expense			(745	)			(8,287	)			(4,028	)			(34,834	)
Other (expense) income, net			(629	)			455				608				3,767
Total other expense			(1,374	)			(7,832	)			(3,420	)			(31,067	)
Earnings
Loss before income taxes			(35,962	)			(345,810	)			(79,378	)			(348,499	)
Income tax benefit			(2,832	)			(2,175	)			(17,075	)			(1,487	)
Net Loss		$	(33,130	)		$	(343,635	)		$	(62,303	)		$	(347,012	)
Net loss per share
Basic and Diluted		$	(1.62	)		$	(16.80	)		$	(3.04	)		$	(16.97	)
Average shares outstanding
Basic and Diluted			20,479				20,452				20,478				20,452
Cash dividends declared per share		$	—			$	—			$	0.625			$	—

A. H. Belo Corporation
Condensed Consolidated Balance Sheets

		December 31,				December 31,
In thousands		2008				2007
		(unaudited)
Assets
Current assets
Cash and temporary cash investments		$	9,934			$	6,874
Accounts receivable, net			77,383				90,792
Other current assets			37,403				24,353
Total current assets			124,720				122,019
Property, plant and equipment, net			263,743				307,788
Intangible assets, net			139,449				160,093
Other assets			29,768				29,810
Total assets		$	557,680			$	619,710
Liabilities and Shareholders’ Equity
Current liabilities
Current portion of long term debt		$	10,000			$	—
Accounts payable			32,950				25,384
Accrued expenses			42,834				32,550
Other current liabilities			29,358				62,468
Total current liabilities			115,142				120,402
Long-term debt			—				378,916
Deferred income taxes			6,620				19,189
Other liabilities			27,264				14,263
Total shareholders’ equity			408,654				86,940
Total liabilities and shareholders’ equity		$	557,680			$	619,710

A. H. Belo Corporation
Consolidated EBITDA

		Three months ended								Twelve months ended
		December 31,								December 31,
In thousands (unaudited)		2008				2007				2008				2007
Consolidated EBITDA (1)		$	(8,084	)		$	20,487			$	(7,928	)		$	83,073
Goodwill impairment			(14,145	)			(344,424	)			(14,145	)			(344,424	)
Depreciation and Amortization			(12,988	)			(13,586	)			(53,277	)			(52,314	)
Interest Expense			(745	)			(8,287	)			(4,028	)			(34,834	)
Income Tax Benefit			2,832				2,175				17,075				1,487
Net Loss		$	(33,130	)		$	(343,635	)		$	(62,303	)		$	(347,012	)

A. H. Belo Corporation
Newspaper EBITDA

		Three months ended								Twelve months ended
		December 31,								December 31,
In thousands (unaudited)		2008				2007				2008				2007
Newspaper EBITDA (1)		$	6,197			$	37,980			$	36,864			$	135,855
Corporate & Non-Operating Company Expenses			(13,652	)			(17,948	)			(45,400	)			(56,549	)
Other (expense) income, net			(629	)			455				608				3,767
Goodwill impairment			(14,145	)			(344,424	)			(14,145	)			(344,424	)
Depreciation and Amortization			(12,988	)			(13,586	)			(53,277	)			(52,314	)
Interest Expense			(745	)			(8,287	)			(4,028	)			(34,834	)
Income Tax Benefit			2,832				2,175				17,075				1,487
Net Loss		$	(33,130	)		$	(343,635	)		$	(62,303	)		$	(347,012	)

Note 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.