DALLAS, July 28 /PRNewswire-FirstCall/ -- A. H. Belo Corporation
(NYSE:AHC) reported second quarter revenues of $163.3 million, a
net loss of $3.2 million or $0.16 per share, and consolidated
EBITDA of $10 million. The Company had no long term debt in the
second quarter. Robert W. Decherd, chairman, president and Chief
Executive Officer, said, "A. H. Belo continues to make notable
progress in our strategy to diversify revenue and continue building
strong brand equity. While these successes are transforming the
Company, the weak macroeconomic environment and declines in overall
advertising spending have impacted AHC significantly. Given that
the declines in ad revenue are unlikely to stabilize in the near
term, we're taking steps to dramatically change AHC's cost
structure." A letter to shareholders and a letter to colleagues
outlining these initiatives and operating conditions were sent by
Decherd today. These letters can be accessed at
http://www.ahbelo.com/invest. During the second quarter, AHC
furthered its commitment to maximizing the use of its existing
infrastructure, building new partnerships, and investing in
Internet businesses related to AHC's core operations. These
initiatives have the potential to develop meaningful and
sustainable incremental revenue streams. -- The Company recently
announced plans to launch Briefing, a new product published by The
Dallas Morning News beginning August 22. Briefing, will leverage
existing news resources and content to publish a condensed print
news product, home-delivered for free Wednesdays through Saturdays.
Briefing is targeted at 200,000 households with incomes of $75,000
and above. -- The Company's three newspapers have all recently
secured contracts to print and/or distribute other publications.
During the second quarter, The Providence Journal secured a
contract to distribute The Wall Street Journal. This contract,
along with other print and/or distribution contracts previously
detailed in Dallas and Riverside, will contribute at least $4.0
million of incremental revenue in 2008 and another $1.5 million in
2009. -- AHC's investment strategy is to seek opportunities that
expand the breadth of products or services provided to its
advertisers. The Company's recent investment in ResponseLogix,
announced on July 22, enables AHC to sell ResponseLogix's advanced
technology solutions to local automotive dealers who need a tool
for managing Internet leads. Also during the second quarter, AHC's
brand equity and journalistic excellence showcased the Company's
Internet focus with Dallasnews.com winning the Edward R. Murrow
National Award for best Non-Broadcast Affiliated Web site. Second
Quarter Highlights Total revenue decreased 15 percent in the second
quarter versus the prior year. Advertising revenue, including print
and Internet revenue, was down 21 percent. Ad revenue performance
was driven by declines in classified revenue at The Dallas Morning
News and The Press-Enterprise. The Press-Enterprise in Riverside,
CA continues to encounter strong cyclical pressures. Advertising
revenue, including print and Internet revenue, at The
Press-Enterprise declined 25 percent in the second quarter versus
the prior year, a slight improvement over a 26 percent decline in
the first quarter. AHC's total part-run revenue increased 3.3
percent versus the prior year. Despite its challenging business
environment, The Press-Enterprise experienced a 21 percent increase
in part-run revenue. AHC had over $12 million in Internet revenue
in the second quarter, which accounted for 7.4 percent of total
revenues. Circulation revenue increased 8.5 percent and other
revenue, driven by commercial printing revenue, increased 14
percent. In the second quarter, AHC reduced total newspaper
expenses by $5.8 million or 3.9 percent over the same period last
year. This decrease included a $2.7 million decline in direct
compensation and a $1.9 million decline in newsprint expense
attributable to our diligent control of newsprint volume in the
increasing newsprint price environment. Total newspaper expense at
all three newspapers declined in the second quarter. The aggregate
newspaper EBITDA margin was 12 percent in the second quarter, down
10 percentage points from the second quarter of 2007. All three
newspapers had positive EBITDA performance. EBITDA margins were
highest at The Providence Journal, followed by The Dallas Morning
News. Corporate & Non-Operating Company Results Corporate and
non-operating company expenses declined more than $4 million versus
the same period last year. The decline was due primarily to a drop
in direct compensation and other operating expense. The 2007
corporate and non-operating company expenses are based on an
estimate of allocated amounts since AHC did not become a separate
public company until February 8, 2008 when AHC 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 1:00
p.m. CDT to discuss financial and strategic results. The conference
call will be available via Webcast by accessing the Company's Web
site (http://www.ahbelo.com/invest) or by dialing 800-230-1096
(USA) or 612-326-1020 (International). A replay line will be
available at 800-475-6701 (USA) or 320-365-3844 (International)
from 3:00 p.m. CDT on July 28 until 11:59 p.m. CDT on August 4,
2008. The access code for the replay is 952133. About A. H. Belo
Corporation A. H. Belo Corporation (NYSE:AHC) headquartered in
Dallas, Texas, is a distinguished news and information company that
owns and operates four daily newspapers and 12 associated 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, young adults and the
fast-growing Hispanic market. A. H. Belo also owns direct mail and
commercial printing businesses. Additional information is available
at http://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 matters, including changes
in readership patterns and demography, and audits and related
actions by the Audit Bureau of Circulations; circulation trends;
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 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 Six months ended June 30, June 30, In thousands,
except per share amounts (unaudited) 2008 2007 2008 2007 Net
operating revenues Advertising $125,341 $157,704 $249,764 $299,649
Circulation 30,275 27,894 59,380 55,511 Other 7,639 6,678 14,298
12,829 Total net operating revenues 163,255 192,276 323,442 367,989
Operating Costs and Expenses Salaries, wages and employee benefits
68,840 72,492 143,105 147,791 Other production, distribution and
operating costs 60,948 65,170 121,914 126,069 Newsprint, ink and
other supplies 23,738 26,007 46,707 52,675 Depreciation 12,211
11,352 24,452 22,712 Amortization 1,625 1,625 3,250 3,250 Total
operating costs and expenses 167,362 176,646 339,428 352,497
Earnings (loss) from operations (4,107) 15,630 (15,986) 15,492
Other income and expense Interest expense (165) (9,035) (3,231)
(17,779) Other income (expense), net 305 2,608 1,262 2,782 Total
other income and expense 140 (6,427) (1,969) (14,997) Earnings
Earnings (loss) before income taxes (3,967) 9,203 (17,955) 495
Income tax benefit (770) (3,097) (6,040) (2,409) Net earnings
(loss) $(3,197) $12,300 $(11,915) $2,904 Net earnings (loss) per
share Basic and Diluted $(.16) $.60 $(.58) $.14 Average shares
outstanding Basic and Diluted 20,478 20,452 20,476 20,452 Cash
dividends declared per share $- $- $0.25 $- A. H. Belo Corporation
Condensed Consolidated Balance Sheets June 30, December 31, In
thousands 2008 2007 (unaudited) Assets Current assets Cash and
temporary cash investments $24,882 $6,874 Accounts receivable, net
72,408 90,792 Other current assets 34,524 24,353 Total current
assets 131,814 122,019 Property, plant and equipment, net 275,223
307,788 Intangible assets, net 156,843 160,093 Other assets 43,237
29,810 Total assets $607,117 $619,710 Liabilities and Shareholders'
Equity Current liabilities Accounts payable $30,016 $25,384 Accrued
expenses 41,657 32,550 Other current liabilities 28,737 62,468
Total current liabilities 100,410 120,402 Long-term debt - 378,916
Deferred income taxes 26,809 19,189 Other liabilities 13,916 14,263
Total shareholders' equity 465,982 86,940 Total liabilities and
shareholders' equity $607,117 $619,710 A. H. Belo Corporation
Consolidated EBITDA Three months ended Six months ended June 30,
June 30, In thousands (unaudited) 2008 2007 2008 2007 Consolidated
EBITDA (1) $10,034 $31,215 $12,978 $44,236 Depreciation and
Amortization (13,836) (12,977) (27,702) (25,962) Interest Expense
(165) (9,035) (3,231) (17,779) Income Tax Benefit 770 3,097 6,040
2,409 Net Earnings (Loss) $(3,197) $12,300 $(11,915) $2,904 A. H.
Belo Corporation Newspaper EBITDA Three months ended Six months
ended June 30, June 30, In thousands (unaudited) 2008 2007 2008
2007 Newspaper EBITDA (1) $19,305 $42,542 $33,734 $67,208 Corporate
& Non-Operating Company Expenses (9,576) (13,935) (22,018)
(25,754) Other Income (Expense), net 305 2,608 1,262 2,782
Depreciation and Amortization (13,836) (12,977) (27,702) (25,962)
Interest Expense (165) (9,035) (3,231) (17,779) Income Tax Benefit
770 3,097 6,040 2,409 Net Earnings (Loss) $(3,197) $12,300
$(11,915) $2,904 Note 1: The Company defines Consolidated EBITDA as
net earnings before interest expense, income taxes, depreciation
and amortization and Newspaper EBITDA as net earnings before
corporate and non-operating company expenses, other income net,
interest expense, income taxes, 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. DATASOURCE: A. H. Belo Corporation
CONTACT: Maribel Correa, director|Investor Relations of A. H. Belo
Corporation, +1-214-977-2702 Web site: http://www.ahbelo.com/
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