News Release


August 8, 2018

A. H. Belo Corporation Announces Second Quarter 2018 Financial Results

  · Digital subscriptions grew by 6,407 subscribers, or 31.6 percent, in 2018 compared to 2017
  · Operating expense decreased $11.8 million, or 18.4 percent, in 2018 compared to 2017


DALLAS - A. H. Belo Corporation (NYSE: AHC) today reported a second quarter 2018 net loss of $0.5 million, or $(0.03) per share. In the second quarter of 2017, A. H. Belo Corporation (the “Company”) reported a net loss of $0.8 million, or $(0.04) per share.


In the second quarter of 2018, on a non-GAAP basis, the Company reported operating income adjusted for certain items (“adjusted operating income”) of $2.7 million, a decrease of $0.1 million, or 3.4 percent, when compared to adjusted operating income of $2.8 million reported for the second quarter of 2017.


Robert W. Decherd, chairman, president and Chief Executive Officer, said, “I am very excited to return the Company as CEO and am confident A. H. Belo is well-positioned financially to address the challenges and opportunities in our markets. As a Board member for many years, I am keenly aware of the exceptional talent of the Company’s leadership team, which is the most important aspect to successfully defining A. H. Belo’s future.”


In May, the Company announced the hiring of Susan “Sue” Kerr as vice president of Print Audience, a newly created position reporting to Grant Moise, Publisher and President of The Dallas Morning News. Moise said, “I wanted to make sure we have the best talent in the industry leading our print audience division. Sue brings over three decades of customer service and subscription expertise to our company, and I have a tremendous amount of confidence that she will substantially improve this important part of our business. Sue’s customer-centric philosophy fits very well with what we are building.”


Second Quarter Results


Total revenue was $51.2 million in the second quarter of 2018, a decrease of $11.9 million, or 18.9 percent, when compared to the second quarter of 2017.


Revenue from advertising and marketing services, including print and digital revenues, was $26.4 million in the second quarter of 2018, a decrease of $9.6 million, or 26.7 percent, when compared to the second quarter of 2017. The Company adopted the new revenue guidance (Topic 606) as of January 1, 2018, which requires revenue to be recorded net for certain transactions where the Company acted as an agent. Prior to adoption, such revenue was generally recorded gross. As a result of adopting this new guidance, advertising and marketing services revenue was reduced by $2.9 million for the three months ended June 30, 2018, with the offsetting change recorded as a reduction to operating expense.


Excluding the impact of the new revenue guidance, advertising and marketing services revenue decreased $6.7 million, or 18.7 percent, when compared to the prior year period. For the second quarter of 2018, total digital and marketing services revenue was 40.9 percent of total advertising and marketing services revenue, up from the 38.5 percent reported in the second quarter of 2017. Total digital and marketing services revenue was 22.0 percent of total revenue, flat when compared to the second quarter of 2017.


Circulation revenue was $17.9 million, a decrease of $1.2 million, or 6.1 percent, when compared to the second quarter of 2017. The decline was primarily due to a decrease in home delivery and single copy volumes, partially offset by single copy rate increases. Circulation revenue was also affected by the adoption of the new revenue guidance, including a decline of $0.3 million related to the grace period for home delivery subscriptions where the Company records revenue for newspapers delivered after a subscription expires. Prior to adoption, non-payment of grace was recorded as bad debt to operating expense; however, under the new guidance revenue is reduced.


Printing, distribution and other revenue decreased $1.1 million, or 14.1 percent, to $6.9 million, due to a $0.6 million decrease related to event sponsorships and a decrease of $0.4 million in commercial printing revenue.


Total consolidated operating expense in the second quarter of 2018, on a GAAP basis, was $52.5 million, a decrease of $11.8 million, or 18.4 percent, compared to the second quarter of 2017. Excluding the expense decrease related to the adoption of the new revenue guidance, consolidated operating expense decreased $8.7 million, or 13.4 percent, when compared to the prior year period. The improvement was primarily due to decreases of $4.2 million in employee compensation and benefits expense, $1.6 million in distribution expense, $1.0 million in advertising and promotion expense, $0.5 million in newsprint expense and $0.3 million in temporary services expense.


In the second quarter of 2018, on a non-GAAP basis, total consolidated operating expense adjusted for certain items (“adjusted operating expense”) was $51.7 million, an improvement of $8.6 million, or 14.3 percent, compared to $60.3 million of adjusted operating expense reported in the second quarter of 2017. The improvement is primarily due to decreases in employee compensation and benefits, distribution, advertising and promotion, newsprint and temporary services expense.


The Company’s newsprint expense in the second quarter of 2018 was $3.0 million, an improvement of 6.8 percent compared to the second quarter of 2017, due to lower circulation volumes. Newsprint consumption declined 15.3 percent to 5,014 metric tons. Compared to the second quarter of 2017, newsprint cost per metric ton increased 14.9 percent and the average purchase price per metric ton for newsprint increased 20.3 percent.


Non-GAAP Financial Measures


Reconciliations of operating loss to adjusted operating income, total net operating revenue to adjusted operating revenue and total operating costs and expense to adjusted operating expense are included in the exhibits to this release.


Financial Results Conference Call


A. H. Belo Corporation will conduct a conference call on Thursday, August 9, 2018, 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 1-800-230-1085 (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 August 9, 2018 until 11:59 p.m. CDT on August 16, 2018. The access code for the replay is 452076.


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 delivers 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. 


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