AHC A H Belo Corporation

A. H. Belo Corporation (NYSE: AHC) today reported results for the first quarter of 2015, highlighted by an increase in total operating revenue of 1.6 percent over the prior year quarter, driven by marketing services and commercial printing and distribution. The Company's January acquisition of three marketing services businesses, Distribion, Inc., CDFX, LLC (d/b/a Marketing FX) and Vertical Nerve, Inc. (collectively, "DMV"), added incremental revenue of $1.9 million.

Jim Moroney, chairman, president and Chief Executive Officer, said, "Although core advertising revenues remain challenged, we are continuing to invest in new and diversified sources of revenue and those investments are producing returns. The improvement of 1.6 percent this quarter is primarily due to our expansion of marketing services operations, resulting from our January acquisition of DMV, the continued growth of our content marketing agency Speakeasy, the expansion of our event marketing company Crowdsource and growth in our commercial printing and distribution operations.

"Although the Company anticipates continued challenges for print advertising revenues, we continue our efforts to look for opportunities to increase the channels of marketing we can offer to our customers while assiduously working on expense management."

Net income from continuing operations was $0.02 per share in the first quarter of 2015, an increase of $0.24 per share over the first quarter of 2014. First quarter 2015 earnings include an income tax benefit of $5.7 million primarily due to a reduction in the valuation allowance for the offset of deferred tax assets by $4.0 million of DMV acquisition-date tax liabilities.

Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization ("EBITDA") from continuing operations with acquisition costs and net investment-related gains and losses added back, was $(1.4) million in the first quarter of 2015, a decrease of $1.8 million from the first quarter of 2014.

As of March 31, 2015, cash and cash equivalents were $81.4 million, and the Company had no debt.

First Quarter Results from Continuing Operations

Total revenue was $65.4 million in the first quarter of 2015, an increase of 1.6 percent compared to the prior year period.

Revenue from advertising and marketing services, including print and digital revenues, decreased 2.4 percent. Marketing services revenue more than doubled from the prior year period as a result of growth of Speakeasy and the acquisition of DMV. The acquired marketing services businesses contributed $1.9 million of incremental revenue. Increases in marketing services revenue were offset by declines in display, classified, preprint and digital advertising revenues which decreased 2.7 percent, 11.7 percent, 11.8 percent and 7.3 percent, respectively. The decrease in digital advertising revenues is primarily due to declines in online classified advertising related to the resale of cars.com products and services.

Circulation revenue remained flat to the prior year period at $21.0 million as increased rates offset lower volumes.

Printing and distribution revenue increased 33.8 percent to $7.6 million in the first quarter of 2015 due primarily to the impact of commercial printing agreements with various regional and community papers.

Total consolidated operating expense in the first quarter was $70.5 million, a 3.7 percent increase compared to the prior year period, due to higher materials, production and distribution expenses related to additional printing and distribution business and operating expenses related to the acquired businesses.

The Company's newsprint expense in the first quarter was $4.5 million, a decrease of 7.6 percent compared to the prior year period. Newsprint consumption dropped 4.5 percent to approximately 7,750 metric tons. Compared to the prior year period, newsprint cost per metric ton and the average purchase price per metric ton for newsprint decreased 3.2 percent and 8.0 percent, respectively.

Corporate and non-operating unit expenses in the first quarter were $4.9 million, an increase of 4.6 percent compared to the prior year period primarily due to legal and professional fees associated with recent transactions.

As of March 31, 2015, A. H. Belo had approximately 1,200 full-time equivalent employees, a decrease of 19.1 percent compared to the prior year period, primarily due to the sale of The Providence Journal during the third quarter of 2014.

Non-GAAP Financial Measures

Reconciliations of net loss to EBITDA and Adjusted EBITDA from continuing operations are included as exhibits to this release.

Financial Results Conference Call

A. H. Belo will conduct a conference call on Tuesday, April 28 at 1:00 p.m. CDT to discuss financial results. The conference call will be available via webcast by accessing the Company's website (www.ahbelo.com/invest) or by dialing 1-800-230-1074 (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 April 28 until 11:59 p.m. CDT on May 5, 2015. The access code for the replay is 357654.

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 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.

      A. H. Belo Corporation Condensed Consolidated Statements of Operations   Three Months Ended March 31, In thousands, except share and per share amounts (unaudited)       2015     2014 Net Operating Revenue Advertising and marketing services $ 36,831 $ 37,726 Circulation 21,038 21,012 Printing, distribution and other 7,567   5,654   Total net operating revenue 65,436 64,392 Operating Costs and Expense Employee compensation and benefits 27,503 28,164 Other production, distribution and operating costs 31,460 28,444 Newsprint, ink and other supplies 8,166 7,988 Depreciation 3,040 3,410 Amortization 373   30   Total operating costs and expense 70,542   68,036   Operating loss (5,106 ) (3,644 ) Other Income (Expense), Net Losses on equity method investments, net (414 ) (408 ) Other income, net 109   117   Total other income (expense), net (305 ) (291 ) Loss from Continuing Operations Before Income Taxes (5,411 ) (3,935 ) Income tax (benefit) provision (5,730 ) 891   Income (Loss) from Continuing Operations 319   (4,826 ) Income from discontinued operations — 977 Loss related to the divestiture of discontinued operations, net (12 ) (178 ) Tax expense from discontinued operations —   16   Gain (Loss) from Discontinued Operations, Net (12 ) 783   Net Income (Loss) 307 (4,043 ) Net loss attributable to noncontrolling interests (56 ) (6 ) Net Income (Loss) Attributable to A. H. Belo Corporation $ 363   $ (4,037 )   Per Share Basis Basic and Diluted Continuing operations $ 0.02 $ (0.22 ) Discontinued operations —   0.03   Net income (loss) attributable to A. H. Belo Corporation $ 0.02   $ (0.19 )   Weighted average shares outstanding Basic 21,770,698 21,918,000 Diluted 21,845,197 21,918,000             A. H. Belo Corporation Condensed Consolidated Balance Sheets        

March 31,

December 31, In thousands (unaudited)       2015 2014 Assets Current assets: Cash and cash equivalents $ 81,442 $ 158,171 Accounts receivable, net 30,911 34,396 Other current assets 15,393 13,323 Assets of discontinued operations   253   565 Total current assets 127,999 206,455 Property, plant and equipment, net 59,816 61,589 Intangible assets, net 46,358 25,238 Other assets   5,856   5,465 Total assets $ 240,029 $ 298,747 Liabilities and Shareholders’ Equity Current liabilities: Accounts payable $ 11,723 $ 12,904 Accrued expenses and other current liabilities 14,219 72,065 Advance subscription payments 16,451 15,894 Liabilities of discontinued operations   150   543 Total current liabilities 42,543 101,406 Long-term pension liabilities 64,391 65,859 Other liabilities 5,032 5,463 Noncontrolling interests - redeemable 1,263 — Total shareholders’ equity   126,800   126,019 Total liabilities and shareholders’ equity $ 240,029 $ 298,747         A. H. Belo Corporation Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA from Continuing Operations     Three Months Ended March 31, In thousands (unaudited)       2015     2014 Net Income (Loss) Attributable to A. H. Belo Corporation $ 363 $ (4,037 ) Less: Income (Loss) from discontinued operations, net (12 ) 783 Plus: Net loss attributable to noncontrolling interests   (56 )   (6 ) Income (Loss) from continuing operations 319 (4,826 ) Depreciation and amortization 3,413 3,440 Income tax provision (benefit)   (5,730 )   891   EBITDA from Continuing Operations   (1,998 )   (495 ) Addback: Acquisition costs 725 — Net investment-related (gains) losses   (81 )   934   Adjusted EBITDA from Continuing Operations $ (1,354 ) $ 439    

The Company evaluates earnings before interest, taxes, depreciation and amortization ( “EBITDA”) which is presented for continuing operations by adjusting for discontinued operations and losses attributable to noncontrolling interests. Adjusted EBITDA is calculated by adding back to EBITDA recorded expenses to acquire new businesses, net investment-related gains and losses and non-cash impairment expense, as applicable.

Neither EBITDA nor Adjusted EBITDA is a measure of financial performance under generally accepted accounting principles (“GAAP”). Management uses EBITDA, Adjusted EBITDA and similar measures in internal analyses as supplemental measures of the Company’s financial performance, and for performance comparisons against its peer group of companies. Neither EBITDA nor Adjusted EBITDA should be considered in isolation or as a substitute for net income from continuing operations, cash flows provided by operating activities or other comparable measures prepared in accordance with GAAP. Additionally, these non-GAAP measures may not be comparable to similarly-titled measures of other companies.

A. H. Belo CorporationKaty Murray, 214-977-8869Senior Vice President / Chief Financial Officer