A. H. Belo Corporation Announces Third Quarter 2016 Financial Results From Continuing Operations
DALLAS – A. H. Belo Corporation (NYSE: AHC) today reported third quarter 2016 net loss attributable to A. H. Belo Corporation (the “Company”) of $(0.5) million, or $(0.02) per share. For the same period in 2015, the Company reported net loss attributable to A. H. Belo Corporation of $(4.0) million, or $(0.18) per share.
In the third quarter of 2016, on a non-GAAP basis, the Company reported operating income excluding certain items (adjusted operating income) of $2.3 million, a decrease of $0.6 million, or 19.8 percent, over the third quarter of 2015.
Jim Moroney, chairman, president and Chief Executive Officer, said, “Our marketing services segment had a strong third quarter performance helping to mitigate the declines experienced in our publishing segment. Due to the positive financial results this year, along with our healthy cash balance, we feel we are well positioned operationally and financially. We look forward to delivering against our strategy for excellence in journalism, revenue diversification and profitability.”
Third Quarter Results from Continuing Operations
Total revenue was $64.8 million in the third quarter of 2016, a decrease of $2.1 million, or 3.2 percent, when compared to the prior year period.
Revenue from advertising and marketing services, including print and digital revenues, was $38.3 million in the third quarter of 2016, a decrease of $0.9 million, or 2.2 percent, when compared to the $39.2 million reported in the third quarter of 2015. Within advertising and marketing services, total digital and marketing services revenue increased 18.7 percent to $14.0 million primarily due to organic growth associated with Speakeasy and DMV. DMV revenue increased $2.5 million, or 106.5 percent, compared to the prior year period. For the third quarter of 2016, total digital and marketing services revenue was 36.6 percent of total advertising and marketing services revenue, reflecting a 650 basis point increase when compared to the 30.1 percent reported in the third quarter of 2015. Total digital advertising and marketing services revenue was approximately 21.6 percent of total revenue, reflecting a 390 basis point increase when compared to the 17.7 percent reported in the third quarter of 2015. The growth in digital advertising and marketing services revenue partially offsets declines in print advertising revenue.
Circulation revenue was $19.6 million, a decrease of $0.6 million, or 3.2 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 8.1 percent to $6.8 million in the third quarter of 2016, primarily due to a decrease in commercial printing revenue of $0.2 million and a decrease of $0.2 million related to a CrowdSource event that occurred in the third quarter of 2015, which the Company will not host this year.
Total consolidated operating expense in the third quarter was $65.3 million, a decrease of $4.7 million, or 6.8 percent, compared to the prior year period, primarily due to a decrease in employee compensation and benefits of $3.4 million and a decrease in newsprint, ink and other supplies of $1.0 million.
The Company’s newsprint expense in the third quarter was $3.3 million, a decrease of 12.6 percent, compared to the prior year period. Newsprint consumption declined 11.8 percent to approximately 6,627 metric tons. Compared to the same period in 2015, newsprint cost per metric ton decreased 1.5 percent and the average purchase price per metric ton for newsprint increased 6.0 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, November 1, 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 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 1-800-230-1092 (USA) or 651-291-0561 (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 November 1, 2016 until 11:59 p.m. CST on November 8, 2016. The access code for the replay is 403803.
About A. H. Belo Corporation
A. H. Belo Corporation 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 www.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.