A. H. Belo Corporation (NYSE: AHC) announced today that its
annual report on Form 10-K for the fiscal year ended
December 31, 2019 has been filed with the Securities and
Exchange Commission. For the full year 2019, the Company reported
net income of $9.3 million, or $0.43 per fully diluted
share. For the full year 2018, the Company reported a net loss of
$25.2 million, or $(1.17) per share. The 2019 income was
driven by the sale of real estate previously used as the Company’s
headquarters for a pretax gain of $25.9 million, while the
2018 loss was driven by a non-cash asset impairment charge of
$16.9 million.
For 2019, on a non-GAAP basis, A. H. Belo reported an operating
loss adjusted for certain items (“adjusted operating income or
loss”) of $2.1 million, a decline of $3.7 million when
compared to adjusted operating income of $1.6 million reported
in 2018.
Total revenue was $183.6 million for 2019, a decrease of
$18.7 million, or 9.3 percent, when compared to the prior
year period. Total consolidated operating expense in 2019 was
$174.0 million, a decrease of $55.1 million, or
24.0 percent, when compared to 2018. Excluding the 2019 gain
from the real estate sale and the 2018 non-cash asset impairment
charge, the improvement was primarily due to decreases of
$9.2 million in employee compensation and benefits expense and
$5.5 million in newsprint, ink and other supplies expense,
partially offset by an increase of $1.9 million of expense
related to a strategy review with an outside consulting firm.
As of December 31, 2019, cash and cash equivalents were
$48.6 million and the Company had no debt.
Katy Murray, executive vice president and Chief Financial
Officer, said, “We are pleased to have the 2019 Form 10-K filing
completed. We look forward to updating our shareholders on 2019
financial results and the progress the Company has made in the
first part of 2020.”
Robert W. Decherd, chairman, president and Chief Executive
Officer, said, “Given the complexities of the newspaper industry in
recent years, the Board’s strategy is focused on building a
sustainably profitable digital business founded on high quality
local and regional news and information. This will take time, but
we are encouraged by growth in digital subscriptions at
The Dallas Morning News and the strong support from
various audiences for new digital products being rolled out by
The News. We look forward to elaborating on this strategy on
May 12 and the resumption of regular communications with the
Company’s shareholders following a prolonged quiet period caused by
the 2018 restatement, which, apart from the timing of the
impairment, had no effect on A. H. Belo’s operating results
reported as of year end.”
Non-GAAP Financial Measures
Reconciliations of operating income (loss) to adjusted operating
income (loss), total net operating revenue to adjusted operating
revenue, and total operating costs and expense to adjusted
operating expense are included in the exhibits to this release.
Investor Conference Call
An investor conference call will be held on Tuesday,
May 12, 2020 at 10:00 a.m. CDT. The conference call will be
simultaneously webcast on A. H. Belo Corporation’s website at
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 1-844-291-5491
(USA) or 409-207-6989 (International). The access code for the
conference call is 1491112. A replay line will be available at
1-866-207-1041 (USA) or 402-970-0847 (International) from 1:00 p.m.
CDT on May 12, 2020 until 11:59 p.m. CDT on May 18, 2020. The
access code for the replay is 1218784.
About A. H. Belo Corporation
A. H. Belo Corporation is the leading local news and information
publishing company in Texas. The Company has commercial printing,
distribution and direct mail capabilities, as well as a presence in
emerging media and digital marketing. While focusing on extending
the Company’s media platforms, A. H. Belo delivers news and
information in innovative ways to a broad range of audiences with
diverse interests and lifestyles. For additional information, visit
www.ahbelo.com or email invest@ahbelo.com.
Statements in this communication concerning A. H. Belo
Corporation’s business outlook or future economic performance,
revenues, expenses, 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, trends and uncertainties are, in most instances, beyond the
Company’s control, and include changes in advertising demand and
other economic conditions; consumers’ tastes; newsprint prices;
program costs; labor relations; cybersecurity incidents;
technological obsolescence; and the current and future impacts of
the COVID-19 public health crisis. Among other risks, there can be
no guarantee that the board of directors will approve a quarterly
dividend in future quarters; 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. Forward-looking statements, which are as
of the date of this filing, are not updated to reflect events or
circumstances after the date of the statement.
A. H. Belo Corporation and
SubsidiariesConsolidated Statements of
Operations
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Three Months Ended December 31, |
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Years Ended December 31, |
In thousands, except share and per share
amounts |
|
2019 |
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2018 |
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2019 |
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2018 |
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(unaudited) |
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(unaudited) |
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Net Operating
Revenue: |
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Advertising and marketing services |
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$ |
24,899 |
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$ |
28,030 |
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$ |
95,856 |
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$ |
105,428 |
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Circulation |
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17,165 |
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18,355 |
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68,260 |
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71,919 |
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Printing, distribution and other |
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4,738 |
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6,228 |
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19,447 |
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24,940 |
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Total net operating revenue |
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46,802 |
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52,613 |
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183,563 |
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202,287 |
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Operating Costs and
Expense: |
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Employee compensation and benefits |
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19,678 |
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21,929 |
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80,134 |
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89,304 |
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Other production, distribution and operating costs |
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23,473 |
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23,381 |
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90,673 |
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90,167 |
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Newsprint, ink and other supplies |
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3,829 |
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5,726 |
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16,570 |
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22,026 |
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Depreciation |
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1,975 |
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|
2,380 |
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8,983 |
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|
9,902 |
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Amortization |
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139 |
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200 |
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495 |
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|
799 |
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(Gain) loss on sale/disposal of assets, net |
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6 |
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— |
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(24,540 |
) |
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— |
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Asset impairments |
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116 |
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16,943 |
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1,709 |
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16,921 |
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Total operating costs and expense |
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49,216 |
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70,559 |
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174,024 |
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229,119 |
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Operating income (loss) |
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(2,414 |
) |
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(17,946 |
) |
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9,539 |
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(26,832 |
) |
Other income, net |
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1,046 |
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1,250 |
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4,169 |
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3,891 |
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Income (Loss) Before
Income Taxes |
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(1,368 |
) |
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(16,696 |
) |
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13,708 |
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(22,941 |
) |
Income tax provision (benefit) |
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(272 |
) |
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2,941 |
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4,416 |
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2,280 |
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Net Income
(Loss) |
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$ |
(1,096 |
) |
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$ |
(19,637 |
) |
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$ |
9,292 |
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$ |
(25,221 |
) |
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Per Share
Basis |
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Net income (loss) |
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Basic and diluted |
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$ |
(0.05 |
) |
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$ |
(0.91 |
) |
|
$ |
0.43 |
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|
$ |
(1.17 |
) |
Number of common shares used in the per share calculation: |
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Basic and diluted |
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21,438,953 |
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21,661,199 |
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21,546,257 |
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21,747,633 |
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A. H. Belo Corporation and
SubsidiariesConsolidated Balance
Sheets
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December 31, |
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December 31, |
In thousands |
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2019 |
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2018 |
Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
48,626 |
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$ |
55,313 |
Accounts receivable, net |
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18,441 |
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22,057 |
Assets held for sale |
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— |
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1,089 |
Other current assets |
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7,737 |
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8,935 |
Total current assets |
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74,804 |
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87,394 |
Property, plant and equipment, net |
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18,453 |
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26,261 |
Operating lease right-of-use assets (a) |
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21,371 |
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— |
Intangible assets, net |
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|
319 |
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|
304 |
Deferred income taxes, net |
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|
50 |
|
|
3,572 |
Long-term note receivable (b) |
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|
22,400 |
|
|
— |
Other assets |
|
|
3,648 |
|
|
5,029 |
Total assets |
|
$ |
141,045 |
|
$ |
122,560 |
Liabilities and
Shareholders’ Equity |
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Current liabilities: |
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Accounts payable |
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$ |
6,103 |
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$ |
6,334 |
Accrued compensation and other current liabilities |
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13,337 |
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13,880 |
Contract liabilities |
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12,098 |
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11,449 |
Total current liabilities |
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31,538 |
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31,663 |
Long-term pension liabilities |
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23,039 |
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31,889 |
Long-term operating lease liabilities (a) |
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23,120 |
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— |
Other liabilities |
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5,611 |
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|
8,210 |
Total liabilities |
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83,308 |
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|
71,762 |
Total shareholders' equity |
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|
57,737 |
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|
50,798 |
Total liabilities and shareholders’ equity |
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$ |
141,045 |
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$ |
122,560 |
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(a) The Company adopted the new lease guidance (Topic 842) using
the modified retrospective approach as of January 1, 2019, which
requires a right-of-use asset and a lease liability be recorded for
substantially all leases. Prior periods were not restated.(b) As a
result of the real estate sale in the second quarter of 2019, the
Company acquired a promissory note of $22.4 million.
A. H. Belo Corporation - Non-GAAP
Financial MeasuresReconciliation of Operating
Income (Loss) to Adjusted Operating Income (Loss)
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Three Months Ended December 31, |
|
Years Ended December 31, |
In thousands (unaudited) |
|
2019 |
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2018 |
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2019 |
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2018 |
|
Total net operating revenue |
|
$ |
46,802 |
|
|
$ |
52,613 |
|
|
$ |
183,563 |
|
|
$ |
202,287 |
|
Total operating costs and expense |
|
|
49,216 |
|
|
|
70,559 |
|
|
|
174,024 |
|
|
|
229,119 |
|
Operating Income (Loss) |
|
$ |
(2,414 |
) |
|
$ |
(17,946 |
) |
|
$ |
9,539 |
|
|
$ |
(26,832 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net operating revenue |
|
$ |
46,802 |
|
|
$ |
52,613 |
|
|
$ |
183,563 |
|
|
$ |
202,287 |
|
Addback: |
|
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|
|
|
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|
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|
Advertising contra revenue |
|
|
1,897 |
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|
|
2,943 |
|
|
|
11,013 |
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|
|
11,720 |
|
Circulation contra revenue |
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|
84 |
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|
|
217 |
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|
452 |
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|
1,006 |
|
Adjusted Operating
Revenue |
|
$ |
48,783 |
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$ |
55,773 |
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$ |
195,028 |
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$ |
215,013 |
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|
Total operating costs and expense |
|
$ |
49,216 |
|
|
$ |
70,559 |
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|
$ |
174,024 |
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$ |
229,119 |
|
Addback: |
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Advertising contra expense |
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|
1,897 |
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|
|
2,943 |
|
|
|
11,013 |
|
|
|
11,720 |
|
Circulation contra expense |
|
|
84 |
|
|
|
217 |
|
|
|
452 |
|
|
|
1,006 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
1,975 |
|
|
|
2,380 |
|
|
|
8,983 |
|
|
|
9,902 |
|
Amortization |
|
|
139 |
|
|
|
200 |
|
|
|
495 |
|
|
|
799 |
|
Severance expense |
|
|
257 |
|
|
|
17 |
|
|
|
1,678 |
|
|
|
773 |
|
(Gain) loss on sale/disposal of assets, net |
|
|
6 |
|
|
|
— |
|
|
|
(24,540 |
) |
|
|
— |
|
Asset impairments |
|
|
116 |
|
|
|
16,943 |
|
|
|
1,709 |
|
|
|
16,921 |
|
Adjusted Operating
Expense |
|
$ |
48,704 |
|
|
$ |
54,179 |
|
|
$ |
197,164 |
|
|
$ |
213,450 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating revenue |
|
$ |
48,783 |
|
|
$ |
55,773 |
|
|
$ |
195,028 |
|
|
$ |
215,013 |
|
Adjusted operating expense |
|
|
48,704 |
|
|
|
54,179 |
|
|
|
197,164 |
|
|
|
213,450 |
|
Adjusted Operating Income
(Loss) |
|
$ |
79 |
|
|
$ |
1,594 |
|
|
$ |
(2,136 |
) |
|
$ |
1,563 |
|
|
The Company calculates adjusted operating income (loss) by
adjusting operating income (loss) to exclude depreciation,
amortization, severance expense, (gain) loss on sale/disposal of
assets and asset impairments (“adjusted operating income (loss)”).
The Company believes that inclusion of certain noncash expenses and
other items in the results makes for more difficult comparisons
between years and with peer group companies.
The Company adopted the new revenue guidance (Topic 606) using
the modified retrospective approach as of January 1, 2018. While
the Company adjusts operating revenue and expense for non-GAAP
presentation, these adjustments have no effect on adjusted
operating income (loss). Additionally, the Company adopted the new
retirement benefits guidance (Topic 715) retrospectively as of
January 1, 2018, which requires net periodic pension and other
post-employment expense (benefit) to be included in non-operating
income (expense). As of January 1, 2019, the Company determined
pension and post-employment expense (benefit) would no longer be an
addback in the calculation of adjusted operating expense. As a
result of this change, adjusted operating expense increased and
adjusted operating income decreased $1,027 for the three months
ended December 31, 2018 and $3,818 for the year ended
December 31, 2018.
Adjusted operating income (loss) is not a measure of financial
performance under generally accepted accounting principles
(“GAAP”). Management uses adjusted operating income (loss) and
similar measures in internal analyses as supplemental measures of
the Company’s financial performance, and for performance
comparisons versus 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 (loss) should not be considered
in isolation or as a substitute for net income (loss), cash flows
provided by (used for) 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.
Contact:Katy Murray214-977-8869
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