A. H. Belo Corporation (NYSE: AHC) today reported results for
the third quarter of 2015, which reflects total revenue of $66.9
million, an increase of 1.5 percent over the $65.9 million of
revenue reported in the prior year quarter. This increase is
principally due to the 6.1 percent increase in advertising and
marketing services revenue from $36.9 million in the third quarter
of 2014 to $39.2 million this quarter.
Jim Moroney, chairman, president and Chief Executive Officer,
said, “We continue to be encouraged by the growth we are seeing in
digital advertising and marketing services, which is helping to
offset the continuing pressure on print advertising revenue. In the
third quarter of 2015, digital advertising revenue increased by
$0.7 million, or 12.6 percent, to $6.5 million compared to the
third quarter of 2014, and marketing services revenue more than
doubled from the $2.4 million of revenue reported in the prior year
quarter to $5.4 million. As I indicated last quarter, our digital
and marketing services revenues continue to grow and on a
year-to-date basis represent 15.7 percent of total revenue.
Operating loss in the third quarter of 2015 exceeded operating
income in the prior year by $3.6 million, primarily due to
investments associated with the expansion of our marketing services
businesses and severance-related expenses of $2.8 million.
Net loss from continuing operations was $0.18 per share, on a
diluted basis, in the third quarter of 2015, a decrease of $0.28
per share compared to the third quarter of 2014. This decrease is
primarily due to a $3.5 million gain recorded in 2014 for an
economic parity payment related to the sale of the Company’s
investment in Classified Ventures and $2.8 million of additional
costs in 2015 associated with a voluntary severance option and
other headcount reductions.
As of September 30, 2015, cash and cash equivalents were $79.7
million, and the Company had no debt.
Jim Moroney, chairman, president and Chief Executive Officer,
said, “We are pleased with the results of our revenue
diversification and expense reduction measures. The combination of
these measures has allowed us to maintain a stable cash position
during the third quarter and throughout the year. The Company will
continue to focus on the development and growth of our digital and
marketing services businesses in order to strengthen their
contribution to operating profits. We will continue to look for
other opportunities that leverage the Company’s resources and
provides our sales organization with more marketing solutions which
they can offer to our customers.”
Third Quarter Results from Continuing
Operations
Total revenue was $66.9 million in the third quarter of 2015, an
increase of $1.0 million or, 1.5 percent, compared to the prior
year period.
Revenue from advertising and marketing services, including print
and digital revenue, increased 6.1 percent. Marketing services
revenue more than doubled from the prior year period as a result of
growth of Speakeasy and the acquisition of DMV Digital Holdings.
The acquired marketing services businesses contributed $2.4 million
of incremental revenue. Increases in marketing services revenue
were offset by declines in display and classified advertising
revenues which decreased 6.1 percent and 13.4 percent,
respectively. Preprint advertising was essentially flat to the
prior year, declining only 0.2 percent on a year over year
basis.
Circulation revenue decreased 4.4 percent to $20.3 million due
to declining volumes, substantially offset by higher rates.
Printing, distribution and other revenue decreased 4.1 percent
to $7.4 million in the third quarter of 2015 due primarily to lower
volumes associated with mailed advertisements and lower commercial
printing volumes from regional and community papers, partially
offset by growth in CrowdSource revenue, our event marketing
services company.
Operating expense in the third quarter was $70.0 million, a 7.0
percent increase compared to the prior year period. Operating
expense increased by $1.4 million for the publishing segment,
primarily due to higher severance-related costs of $2.8 million,
partially offset by lower newsprint expense of $0.9 million. The
severance costs incurred are associated with a third quarter
voluntary severance option offered to the Company’s newsroom
employees and other employee reduction initiatives. The Company
anticipates annual savings of approximately $4.6 million and
reduced headcount of 45 after resources are reinvested to build
stronger digital capabilities within the newsroom. Newsprint
expense in the third quarter decreased $0.9 million, or 18.7
percent, compared to the prior year period as consumption dropped
12.7 percent to approximately 7,500 metric tons and the average
purchase price per metric ton decreased 11.0 percent.
As of September 30, 2015, A. H. Belo had approximately 1,100
full-time equivalent employees, a decrease of 16 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 Thursday, October
29, 2015, at 9:00 a.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 1-800-230-1096
(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 October 29 until 11:59 p.m. CST on November
5, 2015. The access code for the replay is 370660.
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 and event 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
Nine Months Ended
In thousands, except share and per
share amounts (unaudited)
September 30, September 30, 2015
2014 2015 2014 Net Operating Revenue
Advertising and marketing services $ 39,184 $ 36,941 $ 114,281 $
114,918 Circulation 20,279 21,219 62,133 63,458 Printing,
distribution and other 7,445 7,763
22,606 21,200 Total net operating
revenue 66,908 65,923 199,020 199,576
Operating Costs and
Expense Employee compensation and benefits 29,041 24,265 81,649
78,151 Other production, distribution and operating costs 30,562
29,846 93,037 87,930 Newsprint, ink and other supplies 7,266 7,910
23,275 24,012 Depreciation 2,780 3,341 8,695 10,099 Amortization
361 61 1,107 121
Total operating costs and expense 70,010
65,423 207,763 200,313
Operating income (loss)
(3,102 ) 500 (8,743 ) (737 )
Other Income (Expense), Net
Income (loss) on equity method investments, net (564 ) (953 ) (288
) 17,206 Other income (loss), net (489 ) 3,878
(912 ) 4,136
Total other income (expense), net
(1,053 ) 2,925 (1,200 ) 21,342
Income (Loss) from Continuing Operations Before Income
Taxes (4,155 ) 3,425 (9,943 ) 20,605 Income tax provision
(benefit) (188 ) 1,156 (5,601 )
3,475
Income (Loss) from Continuing Operations
(3,967 ) 2,269 (4,342 ) 17,130
Income from discontinued operations - 643 - 3,766
Income (loss) related to the divestiture
of discontinued operations, net
(52 ) 17,134 (62 ) 17,109 Tax expense from discontinued operations
- 1,652 - 1,698
Gain (Loss) from Discontinued Operations, Net
(52 ) 16,125 (62 ) 19,177
Net
Income (Loss) (4,019 ) 18,394 (4,404 ) 36,307 Net loss
attributable to noncontrolling interests (63 ) (50 )
(219 ) (80 )
Net Income (Loss) Attributable to A.
H. Belo Corporation $ (3,956 ) $ 18,444 $ (4,185 ) $
36,387
Per Share Basis Basic and
Diluted Continuing operations $ (0.18 ) $ 0.10 $ (0.19 ) $ 0.74
Discontinued operations - 0.74 -
0.87 Net income (loss) attributable to A. H.
Belo Corporation $ (0.18 ) $ 0.84 $ (0.19 ) $ 1.61
Weighted average shares outstanding Basic 21,651,670
21,890,754 21,721,875 21,927,920 Diluted 21,651,670 21,991,716
21,721,875 22,039,248
A. H. Belo
Corporation Condensed Consolidated Balance Sheets
September 30, December 31,
In thousands (unaudited)
2015 2014 Assets Current assets: Cash
and cash equivalents $ 79,681 $ 158,171 Accounts receivable, net
32,259 34,396 Other current assets 15,309 13,323 Assets of
discontinued operations - 565 Total current assets
127,249 206,455 Property, plant and equipment, net 50,980 61,589
Intangible assets, net 45,624 25,238 Other assets 4,294
5,465 Total assets $ 228,147 $ 298,747
Liabilities and
Shareholders’ Equity Current liabilities: Accounts payable $
12,522 $ 12,904 Accrued expenses and other current liabilities
14,725 72,065 Advance subscription payments 15,356 15,894
Liabilities of discontinued operations - 543 Total
current liabilities 42,603 101,406 Long-term pension liabilities
61,455 65,859 Other liabilities 4,905 5,463 Noncontrolling
interests - redeemable 1,263 - Total shareholders’ equity
117,921 126,019 Total liabilities and shareholders’ equity $
228,147 $ 298,747
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version on businesswire.com: http://www.businesswire.com/news/home/20151029005415/en/
A. H. Belo CorporationKaty Murray, 214-977-8869Senior Vice
President / Chief Financial Officer
A H Belo (NYSE:AHC)
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