Business News

Newspaper Publisher A. H. Belo Corporation Reports Preliminary Fourth Quarter 2009 and Preliminary Full-Year 2009 Financial Results

Thursday 25. February 2010 - Newspaper publisher A. H. Belo Corporation (NYSE:AHC) reported preliminary fourth quarter 2009 and preliminary full-year 2009 financial results today and will discuss these preliminary results during the conference call scheduled for 1:00 p.m. CST. On February 12, 2010, the Company issued a press release stating that its 2009 audit is substantially complete but additional time is required to finalize the accounting treatment of its future pension obligations with the Company's new public accounting firm.

When this work is finalized, the Company anticipates recording a non-cash adjustment related to its future pension obligations. At that time, the Company will finalize its preliminary fourth quarter and preliminary full year financial results. GAAP and non-GAAP financial measures presented in this press release and during the conference call scheduled for later today (including but not limited to expenses, EBITDA and net income) are preliminary, do not reflect any pension adjustment(s) for the fourth quarter or full year, and will change.

Today, the Company reported fourth quarter and full-year 2009 revenues of $135.5 million and $518.3 million, respectively, and preliminary net income of $5.6 million, or $0.27 per share, and a preliminary net loss of $110.3 million, or ($5.37) per share, for the fourth quarter and full year, respectively. The fourth quarter results include non-cash charges of $3.7 million related to the write-off of a Web content management system and $1.2 million related to investment write-offs. Fourth quarter results also include a charge of $0.4 million related to severance. Full year results include non-cash impairment charges of $106.4 million related to goodwill and other asset write-offs, including the Web content management system, and $2.3 million related to investment write-offs. Full year results also include a charge of $4.2 million related to severance and related costs. These charges were partially offset by $1.1 million related to insurance proceeds that the Company received in the second quarter of 2009.

Robert W. Decherd, chairman, president and Chief Executive Officer, said, “In the fourth quarter of 2009, The Dallas Morning News, The Providence Journal and The Press-Enterprise saw their lowest year-to-year percent declines in advertising revenue of the year. For the full year, total consolidated operating expenses, including all non-cash and cash charges mentioned above, decreased by $76.6 million and consolidated EBITDA increased by $36.2 million. As of December 31, 2009, A. H. Belo had no borrowings outstanding under its bank credit facility and remained in compliance with the facility’s covenants. The Company had approximately $24.5 million of cash and cash equivalents. Although macroeconomic and secular challenges remain, A. H. Belo will continue to focus on managing expenses, producing high-quality local content, and delivering value-added circulation to its advertisers.”

In the fourth quarter of 2009, A. H. Belo generated consolidated EBITDA of $20.2 million, excluding the $0.4 million charge for severance. For the full year, A. H. Belo generated consolidated EBITDA of $37.0, excluding the $4.2 million charge for severance and related costs. The newspaper EBITDA margin was 20.9 percent in the fourth quarter and 11.9 percent for the full year, excluding charges for severance and severance and related costs, respectively. EBITDA margins in the fourth quarter and for the full year were highest at The Providence Journal, followed by The Dallas Morning News and The Press-Enterprise. For the full year, The Providence Journal, The Dallas Morning News and The Press-Enterprise each generated positive EBITDA.

Fourth Quarter Highlights

Total revenue decreased 15.3 percent in the fourth quarter versus the prior year quarter.

Advertising revenue, including print and Internet revenue, was down 23.5 percent. Retail and general advertising were down 30.9 percent and 17.0 percent, respectively. The percent decline in retail advertising revenue was smallest at The Dallas Morning News, followed by The Press-Enterprise and The Providence Journal. At The Dallas Morning News, classified revenue, excluding Internet classified revenue, decreased 31.1 percent. A. H. Belo’s Internet revenues accounted for 7.5 percent of total revenues in the quarter. Internet revenues were $10.1 million, 8.5 percent below the same period last year.

The Company continues to focus on editorial quality and value-added circulation for its advertisers. In the fourth quarter, circulation revenue rose 12.0 percent due to price increases implemented during 2009 at The Dallas Morning News and The Providence Journal.

Despite the non-cash charge of $3.7 million related to the Web content management system, A. H. Belo’s total consolidated operating expenses in the fourth quarter decreased $65.3 million, or 33.5 percent, versus the same period last year. This decrease was primarily driven by declines in salaries, wages, benefits and newsprint.

Full Year Highlights

Total revenue decreased 18.7 percent in the full-year 2009 versus the prior year.

Advertising revenue, including print and Internet revenue, decreased 27.3 percent. Retail and general advertising were down 27.4 percent and 19.7 percent, respectively. The percent decline in retail advertising revenue was smallest at The Dallas Morning News, followed by The Press-Enterprise and The Providence Journal. At The Morning News, classified revenue, excluding Internet classified revenue, decreased 45.4 percent and was the most significant driver of the decline in advertising revenue. A. H. Belo’s Internet revenues accounted for 7.5 percent of total revenues for the year. Internet revenues were $38.9 million, 17.3 percent below the prior year. A. H. Belo’s circulation revenue increased 10.7 percent versus the prior year.

For the full year, expense reduction initiatives resulted in a $76.6 million or 10.7 percent decrease in total consolidated operating expenses. This decrease was primarily driven by declines in salaries, wages, benefits and newsprint. Full year results include non-cash impairment charges of $106.4 million related to goodwill and other asset write-offs, including $3.7 million for the Web content management system, and $2.3 million related to investment write-offs. Full year results also include a charge of $4.2 million related to severance and related costs. These charges were partially offset by $1.1 million in insurance proceeds received in the second quarter of 2009.

In 2009, newsprint consumption decreased 36.6 percent versus the prior year to 71,010 metric tons, and the average purchase price per metric ton of newsprint declined 18.0 percent versus the prior year to $575 per metric ton. Newsprint expense decreased $27.7 million or 37.3 percent.

As of December 31, 2009, A. H. Belo had approximately 2,300 full-time and 280 part-time employees.