DALLAS, Feb. 17 /PRNewswire-FirstCall/ -- 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. 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. 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 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 (http://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. 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 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 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. 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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