June 5, 2020
A. H. Belo Corporation Announces First Quarter 2020 Financial Results
DALLAS – A. H. Belo Corporation (NYSE: AHC) today reported a first quarter 2020 net loss of $1.6 million, or $(0.08) per share. In the first quarter of 2019, the Company reported a net loss of $2.1 million, or $(0.10) per share.
For the first quarter of 2020, on a non-GAAP basis, A. H. Belo reported an operating loss adjusted for certain items (“adjusted operating loss”) of $2.8 million, a decline of $1.9 million when compared to an adjusted operating loss of $0.9 million reported in the first quarter of 2019.
Robert W. Decherd, chairman, president and Chief Executive Officer, said, “As noted in our investor call on May 12, A. H. Belo is making significant progress toward our goal of becoming a sustainably profitable digital newspaper company that plays a meaningful role in the communities served by The Dallas Morning News and the digital extensions of its content. While this will take time, the end result is potentially a valuable media franchise.
“Events surrounding the pandemic have stressed the systems that support A. H. Belo’s operations. And while digital subscription revenue grew in the first quarter, advertising revenue began to soften toward the end of the quarter. Our Board and management team have responded quickly to these pressures to ensure that The News is able to report essential and reliable information to its audiences in a timely manner. We recognize in such circumstances our journalists are asked to do their best work under duress and we are striving to keep our colleagues healthy and safe.
“As I outlined on our investor call, A. H. Belo has the financial flexibility to weather the pandemic’s effects in the months ahead.”
First Quarter Results
Total revenue was $40.3 million in the first quarter of 2020, a decrease of $6.2 million or 13.4 percent when compared to the first quarter of 2019.
Revenue from advertising and marketing services, including print and digital revenues, was $19.3 million in the first quarter of 2020, a decrease of $4.7 million or 19.6 percent when compared to the $24.0 million reported for the first quarter of 2019.
Circulation revenue was $16.4 million, a decrease of $0.9 million or 5.0 percent when compared to the first quarter of 2019. The decline is primarily due to a decrease in home delivery and single copy volumes, partially offset by rate increases and an increase of $0.3 million or 28.3 percent in digital-only subscription revenue.
Printing, distribution and other revenue decreased $0.7 million, or 12.8 percent, to $4.6 million, primarily due to a reduction in brokered and commercial printing, partially offset by an increase in shared mail packaging revenue generated from mailed advertisements for business customers.
Total consolidated operating expense in the first quarter of 2020, on a GAAP basis, was $45.1 million, a decrease of $5.4 million or 10.7 percent compared to the first quarter of 2019. The improvement is primarily due to decreases of $2.1 million in employee compensation and benefits expense, $1.5 million in newsprint, ink and other supplies expense, and $0.9 million in outside services expenses.
In the first quarter of 2020, on a non-GAAP basis, adjusted operating expense was $44.6 million, an improvement of $5.7 million or 11.3 percent when compared to $50.3 million of adjusted operating expense in the first quarter of 2019. The improvement is primarily due to expense decreases in employee compensation and benefits, newsprint expense, and reductions from continued management of discretionary spending.
As of March 31, 2020, the Company had 788 employees, a decrease of 130 or 14.2 percent when compared to the prior year period. Cash and cash equivalents were $44.0 million and the Company had no debt.
Non-GAAP Financial Measures
Reconciliations of operating loss to adjusted operating loss, 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.
About A. H. Belo Corporation
A. H. Belo Corporation is the leading local news and information publishing company in Texas. The Company has commercial printing, distribution and direct mail capabilities, as well as a presence in emerging media and digital marketing. While focusing on extending the Company’s media platforms, A. H. Belo delivers news and information in innovative ways to a broad range of audiences with diverse interests and lifestyles. For additional information, visit www.ahbelo.com or email email@example.com.
Statements in this communication concerning A. H. Belo Corporation’s business outlook or future economic performance, revenues, expenses, 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; cybersecurity incidents; technological obsolescence; and the current and future impacts of the COVID-19 public health crisis. Among other risks, there can be no guarantee that the board of directors will approve a quarterly dividend in future quarters; 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.