A. H. Belo Corporation Announces First Quarter 2016 Financial Results from Continuing Operations
DALLAS – A. H. Belo Corporation (NYSE: AHC) today reported first quarter operating income from continuing operations excluding certain items (adjusted operating income) of $1.8 million, an increase of $3.6 million, or 204 percent, over the first quarter of 2015.
In the first quarter of 2016, on a GAAP basis, the net loss attributable to A. H. Belo Corporation (the “Company”) was $ (0.6) million, or $ (0.03) per share. For the same period in 2015, the Company reported net income attributable to A. H. Belo Corporation of $0.4 million, or $0.02 per fully diluted share.
Jim Moroney, chairman, president and Chief Executive Officer, said, “While core print revenues continue to decline, we were highly encouraged that the strong 2015 operating results we experienced continued through the first quarter of 2016. Our performance this quarter highlights our ongoing efforts to diversify our revenue sources, manage-out product lines that can’t sustain profitability and closely scrutinize spending.”
First Quarter Results from Continuing Operations
Total revenue was $62.5 million in the first quarter of 2016, a decrease of $3.0 million,
or 4.5 percent, when compared to the prior year period.
Revenue from advertising and marketing services, including print and digital revenues, was
$35.2 million in the first quarter of 2016, down 4.3 percent from the $36.8 million reported in the first quarter of 2015, resulting from the decrease in print advertising revenue mostly offset by the increase in digital and marketing services revenue.
Total digital and marketing services revenue increased 23.5 percent to $11.5 million primarily due to organic growth in marketing services revenue associated with Speakeasy and DMV Digital Holdings, Inc. (“DMV Holdings”), which was acquired on January 2, 2015. For the first quarter of 2016, total digital and marketing services revenue was 32.7 percent of total advertising and marketing services revenue, reflecting a 730 basis point increase when compared to the
25.4 percent reported in the first quarter of 2015. Total digital advertising and marketing services revenue is approximately 18.5 percent of total revenue, reflecting a 420 basis point increase when compared to the 14.3 percent reported in the first quarter of 2015.
Circulation revenue was $20.4 million, a decrease of $0.7 million or 3.3 percent, primarily due to lower home delivery and single copy volumes partially offset by an increase in home delivery subscription rates.
Printing, distribution and other revenue decreased 8.9 percent to $6.9 million in the first quarter of 2016, primarily due to a decrease of $0.2 million in commercial printing revenue and a decrease of $0.4 million resulting from the timing of Savor, Dallas’ four-day celebration of food, wine and spirits, which, in 2015, occurred in the first quarter. In 2016, the festival occurred in April.
Total consolidated operating expense in the first quarter was $64.3 million, a decrease of
$6.3 million or 8.9 percent compared to the prior year period, primarily due to a decrease in newsprint, ink and other supplies of $2.1 million, a decrease in operating expenses related to the 2015 DMV Holdings acquisition of $0.7 million and a decrease in employee compensation and benefits of $0.5 million.
The Company’s newsprint expense in the first quarter was $3.2 million, a decrease of 28.3 percent compared to the prior year period. Newsprint consumption declined 15.0 percent to approximately 6,589 metric tons. Compared to the same period in 2015, newsprint cost per metric ton decreased 13.6 percent and the average purchase price per metric ton for newsprint decreased 10.3 percent.
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 Corporation will conduct a conference call on Monday, May 2, 2016, 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 ) 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. CDT on May 2, 2016, until 11:59 p.m. CDT on May 9, 2016. The access code for the replay is 391207.
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 the Company’s media platform, A. H. Belo Corporation 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, revenues, expenses, 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, trends and uncertainties are, in most instances, beyond our control, and include changes in advertising demand and other economic conditions; consumers’ tastes; newsprint prices; program costs; labor relations; technology obsolescence; 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.