A. H. Belo Corporation (NYSE:AHC) today reported fourth quarter
operating income from continuing operations excluding certain items
(adjusted operating income) of $8.6 million, an increase of $3.2
million, or 59 percent, over the fourth quarter of 2014.
In the fourth quarter of 2015, and on a GAAP basis, the net loss
attributable to A. H. Belo Corporation was ($13.7) million, or
($0.64) per share. For the same period in 2014, the Company
reported net income attributable to A. H. Belo Corporation of $56.5
million, or $3.07 per fully diluted share, which included a gain of
$77.1 million on the sale of the Company’s interest in Classified
Ventures, LLC.
Jim Moroney, chairman, president and Chief Executive Officer,
said, “We are very pleased and encouraged that we ended 2015 with a
strong fourth quarter, and for the full year we were able to show
revenue stability. These results are attributable to our
ongoing efforts to diversify our sources of revenue."
Fourth Quarter Results from Continuing
Operations
Total revenue was $73.1 million in the fourth quarter of 2015,
flat when compared to the prior year period.
Revenue from advertising and marketing services, including print
and digital revenues, was $42.5 million in the fourth quarter of
2015, slightly down from the $43.3 million reported in the
fourth quarter of 2014 as a result of the decrease in print
advertising revenue offset by the increase in digital and marketing
services revenue.
Total digital and marketing services revenue increased 31.7
percent to $11.4 million primarily due to the continued growth in
marketing services revenue associated with the acquisition of DMV
Digital Holdings, Inc. (“DMV Holdings”) on January 2, 2015, and
organic growth at Speakeasy. For the fourth quarter of 2015 total
digital and marketing services revenue was 26.8 percent of total
advertising and marketing services revenue, reflecting a 680 basis
point increase when compared to the 20.0 percent reported in the
fourth quarter of 2014. Total digital advertising and marketing
services revenue is approximately 15.6 percent of total revenue,
reflecting a 380 basis point increase when compared to the 11.8
percent reported in the fourth quarter of 2014.
Circulation revenue was flat at $21.4 million primarily due to
the increase in pricing related to home delivery subscriptions and
premium magazines, offset by lower home delivery and single copy
volumes. However, in the fourth quarter of 2015 the Company saw
strong performance in home delivery starts and a decrease in churn
was achieved as a result of increased focus on retention and
loyalty programs.
Printing, distribution, and other revenue increased 7.6 percent
to $9.1 million in the fourth quarter of 2014 primarily due to the
131 percent growth in CrowdSource revenue offset by an 8.5 percent
decline in commercial printing revenue.
Total consolidated operating expense in the fourth quarter was
$82.6 million, a $2.5 million, or 3.1 percent increase, compared to
the prior year period primarily due to the $7.3 million increase in
pension settlement expense, operating expenses of $2.5 million
associated with DMV Holdings and higher third party costs
associated with the CrowdSource event marketing business. These
increases were offset by a decrease in severance expense of $0.8
million and other savings in direct compensation and newsprint
expense.
The Company’s newsprint expense in the fourth quarter was $3.8
million, a decrease of 25.7 percent compared to the prior year
period. Newsprint consumption declined 11.2 percent to
approximately 8,000 metric tons. Compared to the same period in
2014, newsprint cost per metric ton decreased 18.3 percent and the
average purchase price per metric ton for newsprint decreased 19.8
percent.
Full-Year Results from Continuing
Operations
For the full year 2015, the Company reported operating income
from continuing operations excluding certain items (adjusted
operating income), of $12.4 million, a decrease of $2.7 million, or
18.0 percent, over the full year 2014.
Total revenue was $272.1 million in 2015, flat to the prior
year. This represents the third consecutive year the Company has
been effective in significantly stabilizing revenue declines
attributable to declines in print-related revenue. The continued
improvement in year-over-year revenue performance in 2015 was
driven by growth in digital and marketing services revenues from
the Company's recent acquisition of DMV Holdings and from
organically grown initiatives in marketing services and event
promotion.
For the full year 2015, net loss attributable to A. H. Belo
Corporation was ($17.8) million or ($0.84) per share. These results
reflect a decrease from the $92.9 million of earnings, or $4.13 per
fully diluted share, reported in 2014 which included total gains of
$95.6 million related to the sale of the Company’s interest in
Classified Ventures, LLC.
Advertising and marketing services revenue decreased slightly by
0.9 percent to $156.8 million primarily as a result of the decline
in print advertising revenue, offset by the growth in digital and
marketing services revenue.
Total digital and marketing services revenue increased 31.5
percent to $42.5 million primarily due to the continued growth in
marketing services revenue associated with DMV Holdings and
Speakeasy. For full year 2015, total digital and marketing services
revenue was 27.1 percent of total advertising and marketing
services revenue, compared to 20.5 percent in 2014. In addition,
total digital advertising and marketing services revenue
represented approximately 15.6 percent of total revenue, compared
to 11.9 percent for the full year 2014.
Circulation revenue decreased 1.6 percent to $83.6 million due
to lower volumes substantially offset by increased rates for home
delivery and single copy.
Printing, distribution and other revenue increased 6.9 percent
to $31.7 million primarily due to the 219 percent growth in
CrowdSource revenue as a result of an increase in the number of
events and higher attendance at events compared to 2014.
Total consolidated operating expense was $290.4 million in 2015,
a 3.5 percent increase compared to the prior year. This increase
over 2014 was primarily driven by an $8.9 million increase of
operating expenses related to DMV Holdings, a $7.3 million increase
in pension settlement expense, a $1.7 million increase in severance
expense and higher third-party costs associated with the Company’s
event marketing business, offset by lower direct compensation,
newsprint and facilities costs.
In 2015, the Company’s newsprint expense was $16.4 million, a
decrease of 17.4 percent compared to the prior year. Newsprint
consumption decreased 9.3 percent to approximately 31,000 metric
tons. Compared to the prior year, newsprint cost per metric ton and
the average purchase price per metric ton for newsprint decreased
by 11.1 percent and 13.6 percent, respectively.
As of December 31, 2015, cash and cash equivalents were $78.4
million, and the Company had no debt. The Company had approximately
1,100 employees, a decrease of approximately 5 percent compared to
the prior year.
Pension Plans
In 2015, the Company did not have any required contributions to
its pension plans and does not anticipate any required cash
contributions to its pension plans in 2016. In 2015, the
Company-sponsored plans continued a de-risking strategy whereby
voluntary lump sum payments to participants were made to decrease
future benefit obligations. As part of this strategy, payments of
approximately $100 million were made by the pension trust in 2015
to approximately 1,000 participants. This reduced the plans’
projected benefit obligation from approximately $369 million
pre-offering to $268 million post-offering. As a result of these
settlements, the Company recorded a non-cash charge to pension
expense of $15.0 million.
Non-GAAP Financial Measures
A reconciliation of income from continuing operations to
adjusted income from continuing operations are included as exhibits
to this release.
Financial Results Conference Call
A. H. Belo will conduct a conference call on Friday, March
4, 2016, at 9:00 a.m. CST 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 612-234-9960 (International). A replay
line will be available at 1-800-475-6701 (USA) or 320-365-3844
(International) from 11:00 a.m. CST on March 4, 2016, until 11:59
p.m. CST on March 11, 2016. The access code for the replay is
386261.
About A. H. Belo Corporation
A. H. Belo Corporation (NYSE:AHC) is a leading local news and
information publishing company with commercial printing,
distribution and direct mail capabilities, as well as expertise in
emerging media and digital marketing. With a continued focus on
extending our media platform, we are 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.
|
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|
|
|
|
|
|
A.
H. Belo
Corporation |
Consolidated Statements of Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, |
|
Twelve Months Ended
December 31, |
In thousands, except share and per share amounts
(unaudited) |
|
|
|
2015 |
|
|
|
|
2014 |
|
|
|
|
2015 |
|
|
|
|
2014 |
|
Net Operating
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
Advertising and marketing
services |
|
$ |
|
42,509 |
|
|
$ |
|
43,265 |
|
|
$ |
|
156,790 |
|
|
$ |
|
158,183 |
|
Circulation |
|
|
|
21,448 |
|
|
|
|
21,464 |
|
|
|
|
83,581 |
|
|
|
|
84,922 |
|
Printing, distribution and
other |
|
|
|
9,131 |
|
|
|
|
8,483 |
|
|
|
|
31,737 |
|
|
|
|
29,683 |
|
Total net operating revenue |
|
|
|
73,088 |
|
|
|
|
73,212 |
|
|
|
|
272,108 |
|
|
|
|
272,788 |
|
Operating Costs
and Expense |
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and
benefits |
|
|
|
39,169 |
|
|
|
|
33,559 |
|
|
|
|
120,818 |
|
|
|
|
111,710 |
|
Other production, distribution and
operating costs |
|
|
|
32,792 |
|
|
|
|
34,309 |
|
|
|
|
125,829 |
|
|
|
|
122,239 |
|
Newsprint, ink and other
supplies |
|
|
|
7,617 |
|
|
|
|
8,495 |
|
|
|
|
30,892 |
|
|
|
|
32,507 |
|
Depreciation |
|
|
|
2,820 |
|
|
|
|
3,721 |
|
|
|
|
11,515 |
|
|
|
|
13,820 |
|
Amortization |
|
|
|
242 |
|
|
|
|
77 |
|
|
|
|
1,349 |
|
|
|
|
198 |
|
Total operating costs and
expense |
|
|
|
82,640 |
|
|
|
|
80,161 |
|
|
|
|
290,403 |
|
|
|
|
280,474 |
|
Operating loss |
|
|
|
(9,552 |
) |
|
|
|
(6,949 |
) |
|
|
|
(18,295 |
) |
|
|
|
(7,686 |
) |
Other (Loss)
Income, Net |
|
|
|
|
|
|
|
|
|
|
|
|
Gains (loss) on equity method
investments, net |
|
|
|
(777 |
) |
|
|
|
76,692 |
|
|
|
|
(1,065 |
) |
|
|
|
93,898 |
|
Other (loss) income, net |
|
|
|
508 |
|
|
|
|
1,637 |
|
|
|
|
(404 |
) |
|
|
|
5,773 |
|
Total other (loss) income, net |
|
|
|
(269 |
) |
|
|
|
78,329 |
|
|
|
|
(1,469 |
) |
|
|
|
99,671 |
|
Income (Loss)
from Continuing Operations Before Income Taxes |
|
|
|
(9,821 |
) |
|
|
|
71,380 |
|
|
|
|
(19,764 |
) |
|
|
|
91,985 |
|
Income tax (benefit) provision |
|
|
|
4,031 |
|
|
|
|
2,503 |
|
|
|
|
(1,570 |
) |
|
|
|
5,978 |
|
Income (Loss)
from Continuing Operations |
|
|
|
(13,852 |
) |
|
|
|
68,877 |
|
|
|
|
(18,194 |
) |
|
|
|
86,007 |
|
Income from discontinued
operations |
|
|
|
— |
|
|
|
|
298 |
|
|
|
|
— |
|
|
|
|
4,064 |
|
Gain (loss) related to the
divestiture of discontinued operations, net |
|
|
|
(1 |
) |
|
|
|
(52 |
) |
|
|
|
(63 |
) |
|
|
|
17,057 |
|
Tax expense from discontinued
operations |
|
|
|
— |
|
|
|
|
12,653 |
|
|
|
|
— |
|
|
|
|
14,351 |
|
Gain (Loss)
from Discontinued Operations, Net |
|
|
|
(1 |
) |
|
|
|
(12,407 |
) |
|
|
|
(63 |
) |
|
|
|
6,770 |
|
Net Income
(Loss) |
|
|
|
(13,853 |
) |
|
|
|
56,470 |
|
|
|
|
(18,257 |
) |
|
|
|
92,777 |
|
Net loss attributable to
noncontrolling interests |
|
|
|
(196 |
) |
|
|
|
(72 |
) |
|
|
|
(415 |
) |
|
|
|
(152 |
) |
Net Income
(Loss) Attributable to A. H. Belo
Corporation |
|
$ |
|
(13,657 |
) |
|
$ |
|
56,542 |
|
|
$ |
|
(17,842 |
) |
|
$ |
|
92,929 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
|
(0.64 |
) |
|
$ |
|
3.09 |
|
|
$ |
|
(0.84 |
) |
|
$ |
|
3.84 |
|
Discontinued operations |
|
|
|
— |
|
|
|
|
(0.57 |
) |
|
|
|
— |
|
|
|
|
0.31 |
|
Net income (loss) attributable to
A. H. Belo Corporation |
|
$ |
|
(0.64 |
) |
|
$ |
|
2.52 |
|
|
$ |
|
(0.84 |
) |
|
$ |
|
4.15 |
|
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
|
(0.64 |
) |
|
$ |
|
3.07 |
|
|
$ |
|
(0.84 |
) |
|
$ |
|
3.82 |
|
Discontinued operations |
|
|
|
— |
|
|
|
|
(0.57 |
) |
|
|
|
— |
|
|
|
|
0.31 |
|
Net income (loss) attributable to
A. H. Belo Corporation |
|
$ |
|
(0.64 |
) |
|
$ |
|
2.50 |
|
|
$ |
|
(0.84 |
) |
|
$ |
|
4.13 |
|
Weighted average shares
outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
21,460,241 |
|
|
|
|
21,943,031 |
|
|
|
|
21,408,940 |
|
|
|
|
21,899,602 |
|
Diluted |
|
|
|
21,460,241 |
|
|
|
|
22,034,687 |
|
|
|
|
21,408,940 |
|
|
|
|
22,006,022 |
|
A.
H. Belo
Corporation |
Condensed Consolidated Balance
Sheets |
|
|
|
|
|
|
|
|
|
December 31, |
In thousands, (unaudited) |
|
2015 |
|
2014 |
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
78,380 |
|
$ |
158,171 |
Accounts receivable, net |
|
|
31,502 |
|
|
34,396 |
Other current assets |
|
|
13,467 |
|
|
13,323 |
Assets of discontinued
operations |
|
|
— |
|
|
565 |
Total current assets |
|
|
123,349 |
|
|
206,455 |
Property, plant and equipment,
net |
|
|
51,358 |
|
|
61,589 |
Intangible assets, net |
|
|
5,778 |
|
|
656 |
Goodwill |
|
|
36,883 |
|
|
24,582 |
Other assets |
|
|
4,133 |
|
|
5,465 |
Total assets |
|
$ |
221,501 |
|
$ |
298,747 |
Liabilities and
Shareholders’ Equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
12,736 |
|
$ |
12,904 |
Accrued compensation and other
current liabilities |
|
|
11,812 |
|
|
72,065 |
Advance subscription payments |
|
|
14,424 |
|
|
15,894 |
Liabilities of discontinued
operations |
|
|
— |
|
|
543 |
Total current liabilities |
|
|
38,972 |
|
|
101,406 |
Long-term pension liabilities |
|
|
57,446 |
|
|
65,859 |
Other liabilities |
|
|
4,812 |
|
|
5,463 |
Total liabilities |
|
|
101,230 |
|
|
172,728 |
Noncontrolling interests -
redeemable |
|
|
1,421 |
|
|
— |
Total shareholders’ equity
attributable to A. H. Belo Corporation |
|
|
117,781 |
|
|
125,763 |
Noncontrolling interests |
|
|
1,069 |
|
|
256 |
Total shareholders’ equity |
|
|
118,850 |
|
|
126,019 |
Total liabilities and shareholders’
equity |
|
$ |
221,501 |
|
$ |
298,747 |
A.
H. Belo Corporation - Non-GAAP Financial Measures |
Reconciliation of Operating Income (Loss) to Adjusted
Operating Income (Loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
In thousands, (unaudited) |
|
|
2015 |
|
|
|
|
2014 |
|
|
|
|
2015 |
|
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net operating revenue |
$ |
|
73,088 |
|
|
$ |
|
73,212 |
|
|
$ |
|
272,108 |
|
|
$ |
|
272,788 |
|
Total operating costs and
expense |
|
|
82,640 |
|
|
|
|
80,161 |
|
|
|
|
290,403 |
|
|
|
|
280,474 |
|
Operating
Loss |
|
|
(9,552 |
) |
|
|
|
(6,949 |
) |
|
|
|
(18,295 |
) |
|
|
|
(7,686 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Addback: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
2,820 |
|
|
|
|
3,721 |
|
|
|
|
11,515 |
|
|
|
|
13,820 |
|
Amortization |
|
|
242 |
|
|
|
|
77 |
|
|
|
|
1,349 |
|
|
|
|
198 |
|
Severance expense |
|
|
145 |
|
|
|
|
932 |
|
|
|
|
2,891 |
|
|
|
|
1,163 |
|
Pension plan settlement loss |
|
|
14,964 |
|
|
|
|
7,648 |
|
|
|
|
14,964 |
|
|
|
|
7,648 |
|
Adjusted
Operating Income |
$ |
|
8,619 |
|
|
$ |
|
5,429 |
|
|
$ |
|
12,424 |
|
|
$ |
|
15,143 |
|
The Company evaluates adjusted operating income which is
presented for operating income adjusting for depreciation,
amortization, severance expenses and pension plan settlement
(“Adjusted Operating Income”). The Company believes that such
expenses and charges are not indicative of normal, ongoing
operations and their inclusion in the results makes for more
difficult comparisons between years and with peer group
companies.
Adjusted Operating Income is not a measure of financial
performance under generally accepted accounting principles
(“GAAP”). Management uses Adjusted Operating Income 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. Management uses this Non-GAAP
financial measure for the purposes of evaluating consolidated
company performance. The Company therefore believes that the
Non-GAAP measure presented provides useful information to investors
by allowing them to view the Company’s business through the eyes of
management and the Board of Directors, facilitating comparison of
results across historical periods and providing a focus on the
underlying ongoing operating performance of its business. Adjusted
Operating Income should not 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, this non-GAAP
measure may not be comparable to similarly-titled measures of other
companies.
Katy Murray
(214) 977-8869
A H Belo (NYSE:AHC)
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From Aug 2024 to Sep 2024
A H Belo (NYSE:AHC)
Historical Stock Chart
From Sep 2023 to Sep 2024