DALLAS--(BUSINESS WIRE)--Oct. 29, 2015--
A. H. Belo Corporation (NYSE: AHC) today reported results for the third
quarter of 2015, which reflects total revenue of $66.9 million, an
increase of 1.5 percent over the $65.9 million of revenue reported in
the prior year quarter. This increase is principally due to the 6.1
percent increase in advertising and marketing services revenue from
$36.9 million in the third quarter of 2014 to $39.2 million this quarter.
Jim Moroney, chairman, president and Chief Executive Officer, said, “We
continue to be encouraged by the growth we are seeing in digital
advertising and marketing services, which is helping to offset the
continuing pressure on print advertising revenue. In the third quarter
of 2015, digital advertising revenue increased by $0.7 million, or 12.6
percent, to $6.5 million compared to the third quarter of 2014, and
marketing services revenue more than doubled from the $2.4 million of
revenue reported in the prior year quarter to $5.4 million. As I
indicated last quarter, our digital and marketing services revenues
continue to grow and on a year-to-date basis represent 15.7 percent of
total revenue.
Operating loss in the third quarter of 2015 exceeded operating income in
the prior year by $3.6 million, primarily due to investments associated
with the expansion of our marketing services businesses and
severance-related expenses of $2.8 million.
Net loss from continuing operations was $0.18 per share, on a diluted
basis, in the third quarter of 2015, a decrease of $0.28 per share
compared to the third quarter of 2014. This decrease is primarily due to
a $3.5 million gain recorded in 2014 for an economic parity payment
related to the sale of the Company’s investment in Classified Ventures
and $2.8 million of additional costs in 2015 associated with a voluntary
severance option and other headcount reductions.
As of September 30, 2015, cash and cash equivalents were $79.7 million,
and the Company had no debt.
Jim Moroney, chairman, president and Chief Executive Officer, said, “We
are pleased with the results of our revenue diversification and expense
reduction measures. The combination of these measures has allowed us to
maintain a stable cash position during the third quarter and throughout
the year. The Company will continue to focus on the development and
growth of our digital and marketing services businesses in order to
strengthen their contribution to operating profits. We will continue to
look for other opportunities that leverage the Company’s resources and
provides our sales organization with more marketing solutions which they
can offer to our customers.”
Third Quarter Results from Continuing Operations
Total revenue was $66.9 million in the third quarter of 2015, an
increase of $1.0 million or, 1.5 percent, compared to the prior year
period.
Revenue from advertising and marketing services, including print and
digital revenue, increased 6.1 percent. Marketing services revenue more
than doubled from the prior year period as a result of growth of
Speakeasy and the acquisition of DMV Digital Holdings. The acquired
marketing services businesses contributed $2.4 million of incremental
revenue. Increases in marketing services revenue were offset by declines
in display and classified advertising revenues which decreased 6.1
percent and 13.4 percent, respectively. Preprint advertising was
essentially flat to the prior year, declining only 0.2 percent on a year
over year basis.
Circulation revenue decreased 4.4 percent to $20.3 million due to
declining volumes, substantially offset by higher rates.
Printing, distribution and other revenue decreased 4.1 percent to $7.4
million in the third quarter of 2015 due primarily to lower volumes
associated with mailed advertisements and lower commercial printing
volumes from regional and community papers, partially offset by growth
in CrowdSource revenue, our event marketing services company.
Operating expense in the third quarter was $70.0 million, a 7.0 percent
increase compared to the prior year period. Operating expense increased
by $1.4 million for the publishing segment, primarily due to higher
severance-related costs of $2.8 million, partially offset by lower
newsprint expense of $0.9 million. The severance costs incurred are
associated with a third quarter voluntary severance option offered to
the Company’s newsroom employees and other employee reduction
initiatives. The Company anticipates annual savings of approximately
$4.6 million and reduced headcount of 45 after resources are reinvested
to build stronger digital capabilities within the newsroom. Newsprint
expense in the third quarter decreased $0.9 million, or 18.7 percent,
compared to the prior year period as consumption dropped 12.7 percent to
approximately 7,500 metric tons and the average purchase price per
metric ton decreased 11.0 percent.
As of September 30, 2015, A. H. Belo had approximately 1,100 full-time
equivalent employees, a decrease of 16 percent compared to the prior
year period, primarily due to the sale of The Providence Journal
during the third quarter of 2014.
Financial Results Conference Call
A. H. Belo will conduct a conference call on Thursday, October 29, 2015,
at 9:00 a.m. CDT to discuss financial results. The conference call will
be available via webcast by accessing the Company's website (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 1-800-230-1096 (USA) or
612-288-0337 (International). A replay line will be available at
1-800-475-6701 (USA) or 320-365-3844 (International) from 3:00 p.m. CDT
on October 29 until 11:59 p.m. CST on November 5, 2015. The access code
for the replay is 370660.
About A. H. Belo Corporation
A. H. Belo Corporation (NYSE: AHC) is a leading local news information
publishing company with commercial printing, distribution and direct
mail capabilities, as well as expertise in emerging media and marketing
and event marketing services. With a continued focus on extending the
Company's media platform, A. H. Belo is able to deliver news and
information in innovative ways to a broad spectrum of audiences with
diverse interests and lifestyles. For additional information, visit ahbelo.com
or email invest@ahbelo.com.
Statements in this communication concerning A. H. Belo Corporation’s
(the “Company’s”) business outlook or future economic performance,
anticipated profitability, revenue, expense, 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, 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 methods, patterns and demography; audits and
related actions by the Alliance for Audited Media; challenges
implementing increased subscription pricing and new pricing structures;
challenges in achieving expense reduction goals in a timely manner and
the resulting potential effects on operations; challenges attracting and
retaining key personnel; challenges in consummating asset acquisitions
or dispositions upon acceptable terms; technological changes;
development of Internet commerce; industry cycles; changes in pricing or
other actions by existing and new competitors and suppliers; consumer
acceptance of new products and business initiatives; labor relations;
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;
acts of terrorism; and other factors beyond our control, 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.
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A. H. Belo Corporation
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Condensed Consolidated Statements of Operations
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Three Months Ended
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Nine Months Ended
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In thousands, except share and per share amounts (unaudited)
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September 30,
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September 30,
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2015
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2014
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2015
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2014
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Net Operating Revenue
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Advertising and marketing services
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$
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39,184
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$
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36,941
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$
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114,281
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$
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114,918
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Circulation
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20,279
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21,219
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62,133
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63,458
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Printing, distribution and other
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7,445
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7,763
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22,606
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21,200
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Total net operating revenue
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66,908
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65,923
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199,020
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199,576
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Operating Costs and Expense
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Employee compensation and benefits
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29,041
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24,265
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81,649
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78,151
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Other production, distribution and operating costs
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30,562
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29,846
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93,037
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87,930
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Newsprint, ink and other supplies
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7,266
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7,910
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23,275
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24,012
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Depreciation
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2,780
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3,341
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8,695
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10,099
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Amortization
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361
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61
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1,107
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121
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Total operating costs and expense
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70,010
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65,423
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207,763
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200,313
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Operating income (loss)
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(3,102
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500
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(8,743
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(737
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Other Income (Expense), Net
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Income (loss) on equity method investments, net
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(564
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(953
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)
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(288
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)
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17,206
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Other income (loss), net
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(489
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)
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3,878
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(912
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)
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4,136
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Total other income (expense), net
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(1,053
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)
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2,925
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(1,200
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)
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21,342
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Income (Loss) from Continuing Operations Before Income Taxes
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(4,155
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)
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3,425
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(9,943
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)
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20,605
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Income tax provision (benefit)
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(188
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)
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1,156
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(5,601
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)
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3,475
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Income (Loss) from Continuing Operations
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(3,967
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)
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2,269
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(4,342
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)
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17,130
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Income from discontinued operations
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-
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643
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-
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3,766
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Income (loss) related to the divestiture of discontinued
operations, net
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(52
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17,134
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(62
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17,109
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Tax expense from discontinued operations
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-
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1,652
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-
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1,698
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Gain (Loss) from Discontinued Operations, Net
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(52
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16,125
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(62
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19,177
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Net Income (Loss)
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(4,019
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18,394
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(4,404
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36,307
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Net loss attributable to noncontrolling interests
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(63
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(50
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(219
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(80
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Net Income (Loss) Attributable to A. H. Belo Corporation
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$
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(3,956
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$
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18,444
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$
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(4,185
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$
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36,387
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Per Share Basis
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Basic and Diluted
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Continuing operations
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$
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(0.18
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$
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0.10
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$
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(0.19
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$
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0.74
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Discontinued operations
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-
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0.74
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-
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0.87
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Net income (loss) attributable to A. H. Belo Corporation
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$
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(0.18
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$
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0.84
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$
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(0.19
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$
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1.61
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Weighted average shares outstanding
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Basic
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21,651,670
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21,890,754
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21,721,875
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21,927,920
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Diluted
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21,651,670
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21,991,716
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21,721,875
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22,039,248
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A. H. Belo Corporation
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Condensed Consolidated Balance Sheets
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September 30,
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December 31,
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In thousands (unaudited)
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2015
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2014
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Assets
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Current assets:
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Cash and cash equivalents
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$
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79,681
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$
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158,171
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Accounts receivable, net
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32,259
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34,396
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Other current assets
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15,309
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13,323
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Assets of discontinued operations
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-
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565
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Total current assets
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127,249
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206,455
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Property, plant and equipment, net
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50,980
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61,589
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Intangible assets, net
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45,624
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25,238
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Other assets
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4,294
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5,465
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Total assets
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$
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228,147
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$
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298,747
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Liabilities and Shareholders’ Equity
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Current liabilities:
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Accounts payable
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$
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12,522
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$
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12,904
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Accrued expenses and other current liabilities
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14,725
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72,065
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Advance subscription payments
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15,356
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15,894
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Liabilities of discontinued operations
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-
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543
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Total current liabilities
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42,603
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101,406
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Long-term pension liabilities
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61,455
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65,859
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Other liabilities
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4,905
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5,463
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Noncontrolling interests - redeemable
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1,263
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-
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Total shareholders’ equity
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117,921
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126,019
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Total liabilities and shareholders’ equity
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$
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228,147
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$
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298,747
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View source version on businesswire.com: http://www.businesswire.com/news/home/20151029005415/en/
Source: A. H. Belo Corporation
A. H. Belo Corporation
Katy Murray, 214-977-8869
Senior Vice
President / Chief Financial Officer
