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): July 26, 2010

 

A. H. BELO CORPORATION

(Exact name of registrant as specified in its charter)

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

P. O. Box 224866 Dallas, Texas (Address of principal executive offices)		75222-4866 (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 July 26, 2010, A. H. Belo Corporation announced its consolidated financial results for the quarter ended June 30, 2010. 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 July 26, 2010

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 July 26, 2010

Exhibit 99.1

A. H. Belo Corporation

		FOR IMMEDIATE RELEASE
		Monday, July 26, 2010
		7:00 A.M. CDT

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

     DALLAS — Newspaper publisher A. H. Belo Corporation (NYSE: AHC) today reported a net loss of $0.01 per share for the second quarter of 2010 compared to a net loss of $0.34 per share in the second quarter of 2009. Consolidated EBITDA was $11.2 million, an increase of $3.4 million compared to the second quarter of 2009, and includes the following items: a $5.4 million gain on the sale of a parking garage in Providence, Rhode Island; a $1.2 million gain related to the reversal of an accrual for the modification of a service agreement; and a $2.5 million charge related to a legal settlement. Similar to the first quarter of 2010, consolidated EBITDA in the second quarter of 2010 includes an incremental pension charge. The second quarter charge was $5.5 million, and the Company anticipates $2.9 million of pension expense during the remainder of the year. When these four items are excluded, consolidated EBITDA in the second quarter of 2010 was $12.6 million, an increase of $4.8 million compared to the comparable and unadjusted consolidated EBITDA figure in the second quarter of 2009. Second quarter results include $4.6 million of bonus accrual, and the Company anticipates a total bonus expense of $5.0 to $6.0 million in 2010. The Company cancelled most non-sales bonuses in 2009.

     Robert W. Decherd, chairman, president and Chief Executive Officer, said, “Second quarter total revenue decreased 4.7 percent compared to 2009. This rate of decline is less than in the first quarter of 2010 and is the lowest year-to-year percent decline in more than two years. Unadjusted consolidated EBITDA increased 43.7 percent compared to the second quarter of 2009. Improvement in the Company’s EBITDA was primarily driven by The Dallas Morning News.”

     “As of June 30, the Company had approximately $60 million of cash and cash

-more-

P. O. Box 224866 Dallas, Texas 75222-4866 Tel. 214.977.8200 Fax 214.977.8201
www.ahbelo.com Deliveries: 400 South Record Street Dallas, Texas 75202-4806

Newspaper Publisher A. H. Belo Corporation Reports
Second Quarter 2010 Financial Results
July 26, 2010
Page Two

equivalents, no borrowings outstanding under its bank credit facility, and remained in compliance with the bank covenants. We continue to manage the business to maximize operating cash flow over the long-term and monetize real estate in transactions that create value for shareholders at appropriate prices,” Decherd said.

Operating Results

     Total revenue was $121.6 million in the second quarter, a decrease of 4.7 percent compared to the second quarter of 2009. The percent decline in total revenue was lowest at The Dallas Morning News, followed by The Providence Journal and The Press-Enterprise. Advertising revenue, including print and digital revenue, decreased 12.0 percent. Although digital revenue decreased 4.3 percent to $9.3 million, non-classified digital revenue increased 2.5 percent to $4.2 million. Due primarily to circulation pricing actions implemented in Dallas last year, circulation revenue increased 6.6 percent. Other revenue increased 35.0 percent.

     Total consolidated operating expenses in the second quarter of 2010 were $126.1 million, a decrease of 4.5 percent compared to 2009. Excluding the impact of pension expense, legal settlement expense and the gain related to the reversal of an accrual, operating expenses in the second quarter of 2010 were $119.3 million, a decrease of 9.6 percent compared to 2009. The Company’s newsprint expense in the second quarter of 2010 was $9.2 million, a decrease of 27.1 percent compared to 2009. In the second quarter of 2010, newsprint consumption decreased 3.8 percent and newsprint cost per metric ton decreased 24.3 percent compared to 2009. The average purchase price per metric ton for newsprint increased 1.3 percent in the second quarter of 2010 compared to 2009.

-more-

P. O. Box 224866 Dallas, Texas 75222-4866 Tel. 214.977.8200 Fax 214.977.8201
www.ahbelo.com Deliveries: 400 South Record Street Dallas, Texas 75202-4806

Newspaper Publisher A. H. Belo Corporation Reports
Second Quarter 2010 Financial Results
July 26, 2010
Page Three

     Newspaper EBITDA was $10.1 million in the second quarter, a decrease of $3.0 million compared to the second quarter of 2009. This decrease was primarily attributable to incremental pension, bonus and legal settlement expenses. Excluding pension and legal settlement expenses, newspaper EBITDA was $18.1 million, an increase of 38.2 percent; the newspaper EBITDA margin was 14.9 percent; and the newspaper EBITDA margin was highest at The Providence Journal, followed by The Dallas Morning News and The Press-Enterprise.

Corporate

     In the second quarter of 2010, corporate and non-operating expenses, net of costs allocated to operating units, were $5.8 million, an increase of 2.6 percent compared to the second 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 1-800-230-1096 (USA) or 612-332-0418 (International). A replay line will be available at 800-475-6701 (USA) or 320-365-

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P. O. Box 224866 Dallas, Texas 75222-4866 Tel. 214.977.8200 Fax 214.977.8201
www.ahbelo.com Deliveries: 400 South Record Street Dallas, Texas 75202-4806

Newspaper Publisher A. H. Belo Corporation Reports
Second Quarter 2010 Financial Results
July 26, 2010
Page Four

3844 (International) from 3:00 p.m. CDT on July 26 until 11:59 p.m. CDT on August 2, 2010. The access code for the replay is 163974.

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 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, real estate sales, 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, 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;

-more-

P. O. Box 224866 Dallas, Texas 75222-4866 Tel. 214.977.8200 Fax 214.977.8201
www.ahbelo.com Deliveries: 400 South Record Street Dallas, Texas 75202-4806

Newspaper Publisher A. H. Belo Corporation Reports
Second Quarter 2010 Financial Results
July 26, 2010
Page Five

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.

P. O. Box 224866 Dallas, Texas 75222-4866 Tel. 214.977.8200 Fax 214.977.8201
www.ahbelo.com Deliveries: 400 South Record Street Dallas, Texas 75202-4806

A. H. Belo Corporation
Consolidated Statements of Operations

		Three months ended								Six months ended
		June 30,								June 30,
In thousands, except per share amounts (unaudited)		2010				2009				2010				2009
Net operating revenues
Advertising		$	77,004			$	87,492			$	149,190			$	176,823
Circulation			35,456				33,266				71,042				64,980
Other			9,110				6,746				17,097				14,195
Total net operating revenues			121,570				127,504				237,329				255,998
Operating Costs and Expenses
Salaries, wages and employee benefits			56,817				51,720				113,071				114,614
Other production, distribution and operating costs			47,034				50,867				93,066				106,734
Newsprint, ink and other supplies			12,492				16,425				23,713				36,043
Asset impairment			—				1,749				—				82,689
Depreciation			8,441				9,662				17,605				20,198
Amortization			1,310				1,625				2,620				3,249
Total operating costs and expenses			126,094				132,048				250,075				363,527
Loss from operations			(4,524	)			(4,544	)			(12,746	)			(107,529	)
Other income and expense
Interest expense			(203	)			(291	)			(406	)			(591	)
Other income, net			5,967				(702	)			5,992				120
Total other (expense) income			5,764				(993	)			5,586				(471	)
Earnings
Income (loss) before income taxes			1,240				(5,537	)			(7,160	)			(108,000	)
Income tax expense (benefit)			1,411				1,534				2,139				(222	)
Net loss		$	(171	)		$	(7,071	)		$	(9,299	)		$	(107,778	)
Net loss per share
Basic and diluted		$	(0.01	)		$	(0.34	)		$	(0.45	)		$	(5.25	)
Average shares outstanding
Basic and diluted			20,950				20,537				20,860				20,521

A. H. Belo Corporation
Condensed Consolidated Balance Sheets

		June 30,				December 31,
In thousands		2010				2009
		(unaudited)
Assets
Current assets
Cash and cash equivalents		$	60,009			$	24,503
Accounts receivable, net			47,025				62,977
Other current assets			32,304				34,464
Total current assets			139,338				121,944
Property, plant and equipment, net			185,551				203,329
Intangible assets, net			49,390				52,009
Other assets			26,465				27,145
Total assets		$	400,744			$	404,427
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable		$	16,395			$	19,191
Accrued expenses			37,768				29,788
Advance subscription payments			24,211				26,713
Total current liabilities			78,374				75,692
Deferred income taxes			1,366				223
Other liabilities			6,915				6,915
Total shareholders’ equity			314,089				321,597
Total liabilities and shareholders’ equity		$	400,744			$	404,427

A. H. Belo Corporation
Consolidated EBITDA

		Three months ended								Six months ended
		June 30,								June 30,
In thousands (unaudited)		2010				2009				2010				2009
Consolidated EBITDA (1)		$	11,194			$	7,790			$	13,471			$	(1,273	)
Asset impairment			—				(1,749	)			—				(82,689	)
Depreciation and Amortization			(9,751	)			(11,287	)			(20,225	)			(23,447	)
Interest Expense			(203	)			(291	)			(406	)			(591	)
Income Tax Benefit (Expense)			(1,411	)			(1,534	)			(2,139	)			222
Net Loss		$	(171	)		$	(7,071	)		$	(9,299	)		$	(107,778	)

A. H. Belo Corporation
Newspaper EBITDA

		Three months ended								Six months ended
		June 30,								June 30,
In thousands (unaudited)		2010				2009				2010				2009
Newspaper EBITDA (1)		$	10,094			$	13,126			$	19,527			$	10,807
Corporate & Non-Operating Company Expenses			(4,867	)			(4,633	)			(12,048	)			(12,200	)
Other income, net			5,967				(702	)			5,992				120
Asset impairment			—				(1,749	)			—				(82,689	)
Depreciation and Amortization			(9,751	)			(11,287	)			(20,225	)			(23,447	)
Interest Expense			(203	)			(291	)			(406	)			(591	)
Income Tax Benefit (Expense)			(1,411	)			(1,534	)			(2,139	)			222
Net Loss		$	(171	)		$	(7,071	)		$	(9,299	)		$	(107,778	)