Belo Presents at the Mid-Year Media Review Conference, Provides Second Quarter Outlook
June 20 2006 - 3:41PM
PR Newswire (US)
NEW YORK, June 20 /PRNewswire-FirstCall/ -- Belo Corp. (NYSE:BLC)
presented at the Mid-Year Media Review in New York on Tuesday, June
20, reviewing the Company's business strategies and providing
near-term guidance to the investment community on the Company's
financial performance and current operations. The full text of the
presentation and a replay of the Webcast are available on Belo's
Web site on the Investor Relations page at http://www.belo.com/ .
Presentation Overview Robert W. Decherd, Belo's chairman, president
and chief executive officer, noted, "We are in the midst of
transforming Belo's businesses to compete effectively in what is
becoming an increasingly Internet-centric marketplace. We are
launching new products, reengineering our cost structure and
reallocating human, financial and capital resources to match the
Company's forward strategy, while constantly looking to take costs
out of our business overall. We are determined to remain the
content provider of choice in our local markets and are confident
that we have the assets and management talent to succeed." Decherd
emphasized the quality of Belo's assets and strength of the
industries in which Belo operates. Decherd said, "Contrary to gloom
and doom predictions, newspapers are in fact doing a great job at
building and maintaining audiences and delivering strong value to
advertising partners. All of Belo's newspapers have increased their
audiences since 2001 with innovative niche products and strong
local Web sites. "Local television stations remain the foundation
of consumer media usage. Adults spend significantly more time with
television than with other media. At Belo's television stations,
the intense focus on quality journalistic content leads to high
ratings. Year after year, Belo's television stations are among the
highest rated in their markets. "Belo's Internet businesses extend
across the entire enterprise, and we are concentrating on our
competencies rather than trying to emulate pure Internet
competitors. Since 2000, Belo's Internet businesses have increased
six-fold in advertising revenues, growing at a compound annual rate
of 41 percent. In the first quarter of 2006, online advertising
revenue increased 57 percent versus the first quarter of 2005. Page
views on Belo's Web sites increased an average of 26 percent per
year for 2000 through 2005 and grew another 46 percent in the first
quarter of 2006 versus the first quarter of 2005. These robust
growth trends illustrate why we are shifting more resources to
capitalize on this increasingly profitable business." Financial
Outlook In discussing Belo's financial performance, Dennis A.
Williamson, Belo's executive vice president/Chief Financial
Officer, said, "Belo's financial performance to date reflects the
Company's enterprise-wide transformation process which began in
earnest in the first quarter of 2006. We are making significant
progress on important initiatives throughout the Company and expect
to finish the year in a strong financial position." Williamson
continued, "Television Group spot revenues increased less than one
percent in April and were up 4.2 percent in May. June spot revenues
are currently pacing up about eight percent which would result in
second quarter spot revenue growth of approximately four percent,
which is greater than our previous projection. Total Television
Group revenues are projected to be up four to five percent,
including a 50-plus percent increase in Internet advertising
revenues. "For full-year 2006, we continue to expect Television
Group revenue to increase in the mid-to-high single digits.
Expenses are expected to increase three to four percent resulting
in a low-double digit increase in Television Group segment EBITDA,
which is higher than our previous projection. "Newspaper Group
advertising revenues decreased about two percent on a like-days
basis in April and about one percent in May. The Company currently
expects June advertising revenues to finish up about one percent,
resulting in a decrease of about one percent for the second quarter
overall. Newspaper Group total revenue is expected to increase
about one percent in the second quarter, including an estimated $8
million in incremental circulation revenue at The Dallas Morning
News related primarily to a change from a buy-sell arrangement with
contractors to a fee-for-delivery system. "For full-year 2006,
Newspaper Group projections have tempered somewhat from original
expectations. Full-year Newspaper Group revenue is expected to
increase in the low-to-mid single digits, including $24 million in
estimated incremental circulation revenue at The Dallas Morning
News related to the change in circulation distribution methods,
with a low-single digit increase in advertising revenue. Full-year
Newspaper Group expenses are expected to be lower than previous
projections, up in the five to six percent range including
incremental circulation distribution expenses at The Morning News
of an estimated $20 million. Full-year EBITDA for the Newspaper
Group is currently expected to be down mid-to-high single digits."
Belo expects total operating costs and expenses to increase about
10 percent in the second quarter, which is better than previous
guidance. Most of this increase is attributable to new share-based
compensation costs, one- time transition expenses associated with
transformational initiatives, and unfavorable comparisons related
to new product initiatives launched in the second half of 2005.
Excluding these items and an estimated $6.5 million in incremental
expenses related to the change in circulation distribution methods
at The Dallas Morning News, all other expenses should be up about
three percent in the second quarter. Full-year 2006 expenses are
expected to increase in the mid-to-high single digits on a reported
basis and low-to-mid single digits excluding incremental costs
related to circulation distribution initiatives, share-based
compensation and severance costs. Interest expense for the second
quarter should increase about 10 percent due to higher debt levels
associated with share repurchases. The Company's effective tax rate
for the second quarter should be slightly less than 39 percent.
Based on the revenue and expense assumptions noted, Belo expects
earnings per share for the second quarter of 2006 to range from
$0.33 to $0.34, including a $0.04 after-tax gain related to a
change-in-control provision in one of the Company's vendor
contracts. About Belo Belo Corp. is one of the nation's largest
media companies with a diversified group of market-leading
television, newspaper, cable and interactive media assets. A
Fortune 1000 company with 7,700 employees and more than $1.5
billion in annual revenues, Belo operates in some of America's most
dynamic markets in Texas, the Northwest, the Southwest, the
Mid-Atlantic and Rhode Island. Belo owns 19 television stations,
six of which are in the 15 largest U.S. broadcast markets. The
Company also owns or operates seven cable news channels and manages
one television station through a local marketing agreement. Belo's
daily newspapers are The Dallas Morning News, The Providence
Journal, The Press-Enterprise (Riverside, CA) and the Denton
Record-Chronicle (Denton, TX). The Company also publishes specialty
publications targeting young adults, and the fast-growing Hispanic
market, including Quick and Al Dia in Dallas/Fort Worth, and El D
and La Prensa in Riverside. Belo operates more than 30 Web sites
associated with its operating companies. Additional information is
available at http://www.belo.com/ or by contacting Carey
Hendrickson, vice president/Investor Relations & Corporate
Communications, at 214-977-6626. Statements in this communication
concerning Belo's business outlook or future economic performance,
anticipated profitability, revenues, expenses, dividends, capital
expenditures, investments, future financings, or 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, uncertainties and factors include, but are not limited to,
changes in capital market conditions and prospects, and other
factors such as changes in advertising demand, interest rates and
newsprint prices; newspaper circulation matters, including changes
in readership, and audits and related actions (including the
censure of The Dallas Morning News) by the Audit Bureau of
Circulations; technological changes, including the transition to
digital television and the development of new systems to distribute
television and other audio-visual content; development of Internet
commerce; industry cycles; changes in pricing or other actions by
competitors and suppliers; regulatory changes; adoption of new
accounting standards or changes in existing accounting standards by
the Financial Accounting Standards Board or other accounting
standard-setting bodies or authorities; the effects of Company
acquisitions and dispositions; the recovery of the New Orleans
market (where the Company owns and operates market-leading
television station WWL-TV, the CBS affiliate) from the effects of
Hurricane Katrina; general economic conditions; and significant
armed conflict, as well as other risks detailed in Belo's other
public disclosures, and filings with the Securities and Exchange
Commission ("SEC") including the Annual Report on Form 10-K.
DATASOURCE: Belo Corp. CONTACT: Carey Hendrickson, vice
president-Investor Relations & Corporate Communications of Belo
Corp., +1-214-977-6626 Web site: http://www.belo.com/
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