A. H. Belo Corporation (NYSE: AHC) today reported results for
the second quarter of 2015, which reflects total revenue of $66.7
million, a decrease from revenue of $69.3 million reported in the
prior year quarter. This decline is primarily due to a decrease in
core print advertising revenues.
Jim Moroney, chairman, president and Chief Executive Officer,
said, "While we experienced more accelerated declines in core print
advertising than in recent quarters, particularly in national and
major retail categories, we were encouraged that DallasNews.com
digital advertising grew by 18.3% compared to the prior year
quarter and our marketing services category more than doubled its
revenue compared to the prior year quarter.
"Our combined digital advertising and marketing services
revenues now comprise 25 percent of the Company's total advertising
and marketing services revenue. By year end, we expect revenues
from core print advertising to be less than one-third of the
Company's total revenue.
"Although the Company anticipates continued challenges for core
print revenues, we believe new and organic revenue opportunities
and continued expense management will help mitigate expected
declines in these areas."
Net loss from continuing operations was $0.03 per share in the
second quarter of 2015, a decrease of $0.88 per share compared to
the second quarter of 2014. This decrease is primarily due to the
prior year gain of $18.5 million for the Company's share of sales
proceeds for apartments.com through
its previously held investment in Classified Ventures.
As of June 30, 2015, cash and cash equivalents were $84.1
million, and the Company had no debt.
Second Quarter Results from Continuing
Operations
Total revenue was $66.7 million in the second quarter of 2015, a
decrease of 3.7 percent compared to the prior year period.
Revenue from advertising and marketing services, including print
and digital revenues, decreased 4.9 percent. Marketing services
revenue more than doubled from the prior year period as a result of
growth of Speakeasy and the acquisition of DMV. Revenue from
Crowdsource, our event marketing business, also doubled from the
same period last year. Increases in marketing services revenue were
offset by declines in display, classified, and preprint advertising
revenues which decreased 18.5 percent, 10.8 percent, and 7.9
percent, respectively.
Circulation revenue decreased 1.9 percent to $20.8 million due
to declining volumes, substantially offset by higher rates.
Commercial printing, distribution and other revenue decreased
2.4 percent to $7.6 million in the second quarter of 2015 due
primarily to lower volumes.
Total consolidated operating expense in the second quarter was
$67.2 million, a 0.5 percent increase compared to the prior year
period. Excluding costs associated with the acquisition of DMV,
operating expenses were $65.2 million, a 2.5 percent decrease
compared to the prior year period. Operating expenses included cost
savings within core print operations for employee compensation and
benefits and other production costs as these expenses are aligned
with declining revenues. Excluding the compensation expenses
associated with the acquisition of DMV, employee compensation and
benefits declined 7.5 percent compared to the prior year period.
Newsprint expense in the second quarter decreased $0.9 million, or
17.1 percent, compared to the prior year period as consumption
dropped 8.5 percent to approximately 7,900 metric tons and average
purchase price per metric ton decreased 13.3 percent. These savings
were offset by higher costs related to the Company's platforms
supporting digital advertising and its flagship website and event
marketing operations.
As of June 30, 2015, A. H. Belo had approximately 1,200
full-time equivalent employees, a decrease of 20.0 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 Tuesday, July 28,
2015, 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). 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 1-800-230-1059
(USA) or 612-338-9017 (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 July 28 until 11:59 p.m. CDT on August 4,
2015. The access code for the replay is 363886.
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 June 30, Six Months Ended June 30,
In thousands, except share and per share amounts (unaudited)
2015 2014 2015
2014 Net Operating Revenue Advertising and marketing
services $ 38,266 $ 40,251 $ 75,097 $ 77,977 Circulation 20,816
21,227 41,854 42,239 Printing, distribution and other 7,594
7,783 15,161 13,437
Total net operating revenue 66,676 69,261 132,112 133,653
Operating Costs and Expense Employee compensation and
benefits 25,105 25,722 52,608 53,886 Other production, distribution
and operating costs 31,015 29,640 62,475 58,084 Newsprint, ink and
other supplies 7,843 8,114 16,009 16,102 Depreciation 2,875 3,348
5,915 6,758 Amortization 373 30
746 60 Total operating costs and expense
67,211 66,854 137,753
134,890 Operating income (loss) (535 ) 2,407 (5,641 )
(1,237 )
Other Income (Expense), Net Gains on equity method
investments, net 690 18,567 276 18,159 Other income (loss), net
(532 ) 141 (423 ) 258
Total other income (expense), net 158 18,708
(147 ) 18,417
Income (Loss) from
Continuing Operations Before Income Taxes (377 ) 21,115 (5,788
) 17,180 Income tax provision (benefit) 317
1,428 (5,413 ) 2,319
Income (Loss)
from Continuing Operations (694 ) 19,687
(375 ) 14,861 Income from discontinued
operations — 2,146 — 3,123 Income (Loss) related to the divestiture
of discontinued operations, net 2 153 (10 ) (25 ) Tax expense from
discontinued operations — 30 —
46
Gain (Loss) from Discontinued
Operations, Net 2 2,269 (10
) 3,052
Net Income (Loss) (692 ) 21,956 (385 )
17,913 Net loss attributable to noncontrolling interests
(100 ) (24 ) (156 ) (30 )
Net Income (Loss)
Attributable to A. H. Belo Corporation $ (592 ) $ 21,980
$ (229 ) $ 17,943
Per Share Basis Basic
Continuing operations $ (0.03 ) $ 0.86 $ (0.01 ) $ 0.64
Discontinued operations — 0.10 —
0.14 Net income (loss) attributable to A. H.
Belo Corporation $ (0.03 ) $ 0.96 $ (0.01 ) $ 0.78
Diluted Continuing operations $ (0.03 ) $ 0.85 $
(0.01 ) $ 0.64 Discontinued operations — 0.10
— 0.14 Net income (loss)
attributable to A. H. Belo Corporation $ (0.03 ) $ 0.95 $
(0.01 ) $ 0.78
Weighted average shares
outstanding Basic 21,747,635 22,014,125 21,758,382 21,946,256
Diluted 21,747,635 22,121,695 21,758,382 22,064,339
A. H. Belo Corporation Condensed Consolidated
Balance Sheets June 30, December
31, In thousands (unaudited) 2015
2014 Assets Current assets: Cash and cash equivalents
$ 84,061 $ 158,171 Accounts receivable, net 32,249 34,396 Other
current assets 14,980 13,323 Assets of discontinued operations
253 565 Total current assets 131,543 206,455
Property, plant and equipment, net 52,034 61,589 Intangible assets,
net 45,985 25,238 Other assets 5,538 5,465 Total
assets $ 235,100 $ 298,747
Liabilities and Shareholders’
Equity Current liabilities: Accounts payable $ 13,769 $ 12,904
Accrued expenses and other current liabilities 12,369 72,065
Advance subscription payments 15,429 15,894 Liabilities of
discontinued operations 85 543 Total current
liabilities 41,652 101,406 Long-term pension liabilities 62,923
65,859 Other liabilities 5,322 5,463 Noncontrolling interests -
redeemable 1,263 — Total shareholders’ equity 123,940
126,019 Total liabilities and shareholders’ equity $ 235,100 $
298,747
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version on businesswire.com: http://www.businesswire.com/news/home/20150727006348/en/
A. H. Belo CorporationKaty Murray, 214-977-8869Senior Vice
President / Chief Financial Officer
A H Belo (NYSE:AHC)
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