A. H. Belo Corporation Announces Second Quarter 2016 Financial Results from Continuing Operations
DALLAS – A. H. Belo Corporation (NYSE: AHC) today reported second quarter 2016 net income attributable to A. H. Belo Corporation (the “Company”) of $0.7 million, or $0.03 per fully diluted share. For the same period in 2015, the Company reported net loss attributable to A. H. Belo Corporation of $(0.6) million, or $(0.03) per share.
In the second quarter of 2016, on a non-GAAP basis, the Company reported operating income excluding certain items (adjusted operating income) of $5.8 million, an increase of $3.1 million, or 112 percent, over the second quarter of 2015.
Jim Moroney, chairman, president and Chief Executive Officer, said, “We were extremely pleased with our second quarter 2016 operating results. The revenue gains attributed to our marketing services segment nearly offset the declines associated with the print publishing segment and in tandem with our ongoing efforts to align expenses with revenues, made this a very successful quarter.”
Second Quarter Results from Continuing Operations
Total revenue was $66.6 million in the second quarter of 2016, a decrease of $0.1 million, essentially flat when compared to the prior year period.
Total digital and marketing services revenue increased 20.9 percent to $12.1 million primarily due to organic growth associated with Speakeasy and DMV. DMV revenue increased $1.7 million, or 90.9 percent, compared to the prior year period. For the second quarter of 2016, total digital and marketing services revenue was 31.8 percent of total advertising and marketing services revenue, reflecting a 570 basis point increase when compared to the 26.1 percent reported in the second quarter of 2015. Total digital advertising and marketing services revenue was approximately 18.1 percent of total revenue, reflecting a 310 basis point increase when compared to the 15.0 percent reported in the second quarter of 2015. The growth in digital advertising and marketing services revenue mostly offset declines in print advertising revenue.
Revenue from advertising and marketing services, including print and digital revenues, was $38.0 million in the second quarter of 2016, down $0.3 million, essentially flat when compared to the $38.3 million reported in the second quarter of 2015.
Circulation revenue was $19.8 million, a decrease of $1.0 million, or 4.8 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 increased 15.4 percent to $8.8 million in the second quarter of 2016, primarily due to an increase of $0.8 million resulting from the timing of Savor, hosted by CrowdSource, 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 second quarter was $64.0 million, a decrease of $3.2 million, or 4.8 percent, compared to the prior year period, primarily due to a decrease in newsprint, ink and other supplies of $1.4 million, a decrease in distribution expenses of $0.5 million and a decrease in employee compensation and benefits of $0.3 million.
The Company’s newsprint expense in the second quarter was $3.4 million, a decrease of 20.5 percent, compared to the prior year period. Newsprint consumption declined 13.8 percent to approximately 6,806 metric tons. Compared to the same period in 2015, newsprint cost per metric ton decreased 2.8 percent and the average purchase price per metric ton for newsprint decreased 1.9 percent.
Non-GAAP Financial Measures
A reconciliation of operating income (loss) to adjusted operating income is included in the exhibits to this release.
Financial Results Conference Call
A. H. Belo Corporation will conduct a conference call on Tuesday, August 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 1-800-475-6701 (USA) or 320-365-3844 (International) from 11:00 a.m. CDT on August 2, 2016 until 11:59 p.m. CDT on August 9, 2016. The access code for the replay is 397086.
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 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 the Company’s 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.