DALLAS, May 3 /PRNewswire-FirstCall/ -- Belo Corp. (NYSE:
BLC), one of the nation's largest pure-play, publicly-traded
television companies, today reported GAAP net earnings per share of
$0.13 in the first quarter of 2010
compared to $0.09 per share in the
first quarter of 2009.
The first quarter of 2009 included a gain, net of taxes, of
$9.1 million, or $0.09 per share, associated with the repurchase
and retirement of Company bonds. The first quarter of 2010
included a credit of $2.5 million,
net of taxes, or $0.02 per share,
from pension contribution reimbursements received from A. H. Belo
Corporation related to its obligation to reimburse Belo Corp.
(Belo) for 60 percent of any pension contributions Belo makes to
The G. B. Dealey Retirement Pension Plan. Excluding the
credit from the pension contribution reimbursement in the first
quarter of 2010 and the gain on the repurchase and retirement of
Company bonds in the first quarter of 2009, pro forma earnings per
share were $0.11 in the first quarter
of 2010 and ($0.00) in the first
quarter of 2009.
Dunia A. Shive, Belo's president
and Chief Executive Officer, said, "Belo's first quarter total
revenue increase of 15.6 percent was highlighted by a strong
resurgence in the Company's spot advertising revenue, which grew
more than 17 percent compared to the first quarter of 2009.
While political, Olympics and Super Bowl revenue all
contributed to the year-over-year spot revenue increase, improved
advertising conditions in several of the Company's largest
categories were also factors, especially automotive which was up 45
percent. The Company's station EBITDA of $57.5 million in the first quarter of 2010 was up
77 percent compared to the first quarter of 2009. The Company
reduced its debt by $35 million
during the quarter."
First Quarter in Review
Operating Results
Total revenue increased 15.6 percent in the first quarter of
2010 versus the first quarter of 2009. Total spot revenue,
including political, was up 17 percent with 9.2 percent and 18
percent increases in local and national spot, respectively.
First quarter 2010 revenue was affected by the improved
advertising environment, particularly in the automotive category.
The Olympics on the Company's NBC stations and the Super Bowl
on its CBS stations also contributed to the increase.
Political revenue in the first quarter of 2010 was
$6.3 million, $5.6 million higher than the first quarter of
2009.
Revenue associated with Belo's Web sites increased 12 percent to
$7.3 million in the first quarter of
2010 versus 2009. Retransmission revenue totaled $11.6 million in the first quarter of 2010, a 19
percent increase compared to the first quarter of 2009.
Retransmission revenue is expected to increase at more
moderate levels in the remaining quarters of 2010.
Total station expenses decreased 4.1 percent in the first
quarter of 2010 versus the same period last year due primarily to
expense reductions implemented over the past year and a
$2 million favorable variance in
non-cash expense reductions related to third-party funding of
certain newsgathering equipment.
Station EBITDA for the first quarter of 2010 was up 77 percent
versus the first quarter of 2009. The station EBITDA margin
for the first quarter of 2010 was 37 percent compared to 24 percent
in the first quarter of 2009.
Corporate
Corporate operating costs of $9.6
million in the first quarter of 2010 were 7.4 percent higher
than the first quarter of 2009 due primarily to higher accrued
bonus expense and higher share-based compensation related to the
change in the Company's stock price and the timing of grants.
Other Items
The Company recorded a reduction in operating expenses of
$4.1 million in the first quarter of
2010 related to pension contribution reimbursements received from
A. H. Belo Corporation related to its obligation to reimburse Belo
for 60 percent of any pension contributions Belo makes to The G. B.
Dealey Retirement Pension Plan. This credit is shown as a
separate component of total operating costs and expenses on Belo's
Consolidated Statements of Operations. The Company expects to
recognize pension contribution reimbursements of a similar amount
in the second quarter of 2010.
Belo's depreciation expense totaled $9.2
million in the first quarter of 2010, down from $10.8 million in the first quarter of 2009.
The Company's interest expense increased $5.3 million compared to the first quarter of
2009 due primarily to increased interest costs associated with the
Company's $275 million senior note
offering completed in the fourth quarter of 2009 and the
amortization of the discount and refinancing costs associated with
the note offering. These borrowings were previously included
in the Company's lower-rate revolving credit facility.
Other income, net, decreased $16.6
million in the first quarter of 2010 due primarily to a
$14.9 million pre-tax gain in the
first quarter of 2009 associated with the repurchase and retirement
of Company bonds.
Income tax expense increased $3.4
million in the first quarter of 2010 compared to the first
quarter of 2009 due primarily to higher pre-tax earnings.
Total debt at March 31, 2010, was
$993 million, a reduction of
$35 million from December 31, 2009. The Company's total
leverage ratio, as defined in the Company's credit facility, was
5.0 times at March 31, 2010, down
from 5.9 times at December 31, 2009.
Belo invested $2.7 million in
capital expenditures in the first quarter of 2010 and currently
expects full year capital expenditures to be approximately
$15 million.
Non-GAAP Financial Measures
A reconciliation of station EBITDA to earnings from operations
and a reconciliation of net earnings to pro forma net earnings
(loss) are set forth in an exhibit to this release.
2010 Outlook
Looking to the second quarter, Shive said, "We are optimistic
that the advertising momentum we experienced in our core business
in the first quarter of 2010 will continue in the second quarter.
Total spot revenue in April is expected to finish up about 10
percent compared to April 2009 with
little political revenue, and the months of May and June are
currently pacing above that level. Based on these pacing
trends, total spot advertising revenue could approach a mid-teen
increase in the second quarter of 2010 compared to the second
quarter of 2009. Within these estimates, the automotive
category is currently pacing up more than 40 percent. We
continue to expect robust political spending in 2010, most of which
will come in the second half of the year.
"While combined station and corporate operating costs were down
3.2 percent in the first quarter of 2010, expenses will be up in
the second quarter due to several factors listed below, some of
which are credits recorded in the second quarter of 2009."
- The Company converted to a paid time-off (PTO) vacation policy
in the second quarter of 2009 resulting in a non-cash credit of
$3.3 million in the second quarter of
2009. The credit for full year 2009 related to the PTO
conversion was $8.1 million.
- The second quarter of 2009 included an insurance reimbursement
of $1.7 million.
- Pension expense is currently estimated to be $3.2 million higher in the second quarter of 2010
compared to 2009, including the effect of reinstating the pension
transition supplement benefit that was suspended last year.
- Accrued bonus expenses, including revenue-based bonuses, are
currently estimated to be $3 million
in the second quarter of 2010 compared to virtually no bonus
expense last year.
- Offsetting a portion of the above expense increases in the
second quarter of 2010 is a projected $2.4
million favorable non-cash expense variance related to
third-party funding of certain newsgathering equipment.
Excluding the above items, second quarter combined station and
corporate operating costs are currently expected to be up in the
low-to-mid single digits. This increase is due to the lifting
of the wage freeze and partial reinstatement of salary reductions
in April of 2010, higher sales-related costs associated with higher
revenue, and investments in the launch of new local programs in two
markets late in the first quarter of 2010 that are expected to be
more than offset by incremental revenue.
A conference call to discuss this release and other matters of
interest to shareholders and analysts will follow at 1:00 p.m. CDT this afternoon. The
conference call will be simultaneously Webcast on Belo Corp.'s Web
site (www.belo.com/invest). Following the conclusion of the
Webcast, a replay of the conference call will be archived on Belo's
Web site. To access the listen-only conference lines, dial
1-877-209-9920. A replay line will be open from 3:00 p.m. CDT on May
3 until 11:59 p.m. CDT
May 17. To access the replay,
dial 800-475-6701 or 320-365-3844. The access code for the
replay is 154067.
About Belo Corp.
Belo Corp. (BLC), one of the nation's largest pure-play,
publicly-traded television companies, owns and operates 20
television stations (nine in the top 25 markets) and their
associated Web sites. Belo stations, which include
affiliations with ABC, CBS, NBC, FOX, CW and MyNetwork TV, reach
more than 14 percent of U.S. television households in 15
highly-attractive markets. Belo stations rank first or second
in nearly all of their local markets. Additional information
is available at www.belo.com or by contacting Paul Fry, vice president/Investor Relations
& Treasury Operations, at 214-977-6835.
Statements in this communication concerning Belo's business
outlook or future economic performance, anticipated profitability,
revenues, expenses, capital expenditures, investments, future
financings, impairments, pension matters, 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, uncertainties and factors include, but are not
limited to, uncertainties regarding the costs, consequences
(including tax consequences) and other effects of the Company's
spin-off distribution of its newspaper businesses and related
assets to A. H. Belo Corporation and the associated agreements
between the Company and A. H. Belo
relating to various matters; changes in capital market conditions
and prospects, and other factors such as changes in advertising
demand, interest rates and programming and production costs;
changes in viewership patterns and demography, and actions by
Nielsen; changes in the network-affiliate business model for
broadcast television; technological changes, and the development of
new systems to distribute television and other audio-visual
content; changes in the ability to secure, and in the terms of,
carriage of Belo programming on cable, satellite,
telecommunications and other program distribution methods;
development of Internet commerce; industry cycles; changes
in pricing or other actions by competitors and suppliers; Federal
Communications Commission and other regulatory, tax and legal
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, dispositions, co-owned
ventures, and investments; pension plan matters; general economic
conditions; and significant armed conflict, as well as other risks
detailed in Belo's other public disclosures and filings with the
SEC including Belo's Annual Report on Form 10-K.
Belo Corp.
|
|
Consolidated Statements of
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
|
|
|
March
31,
|
|
In thousands, except per share
amounts
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating Revenues
|
|
$
|
154,332
|
|
$
|
133,536
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Costs and
Expenses
|
|
|
|
|
|
|
|
|
Station salaries, wages and employee
benefits
|
|
|
51,224
|
|
|
52,673
|
|
|
Station programming and other
operating costs
|
|
|
45,631
|
|
|
48,364
|
|
|
Corporate operating costs
|
|
|
9,609
|
|
|
8,950
|
|
|
Pension contribution
reimbursement
|
|
|
(4,072)
|
|
|
-
|
|
|
Depreciation
|
|
|
|
9,243
|
|
|
10,792
|
|
|
|
Total operating costs and
expenses
|
|
|
111,635
|
|
|
120,779
|
|
|
|
|
|
|
|
-
|
|
|
-
|
|
|
|
Earnings from operations
|
|
|
42,697
|
|
|
12,757
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income and
expense
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
(19,888)
|
|
|
(14,580)
|
|
|
Other income (expense), net
|
|
|
(267)
|
|
|
16,369
|
|
|
|
Total other income and
expense
|
|
|
(20,155)
|
|
|
1,789
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income
taxes
|
|
|
22,542
|
|
|
14,546
|
|
Income tax expense
|
|
|
|
9,000
|
|
|
5,635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
$
|
13,542
|
|
$
|
8,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share -
Basic
|
|
$
|
0.13
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share -
Diluted
|
|
$
|
0.13
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per
share
|
|
$
|
-
|
|
$
|
0.075
|
|
|
|
|
|
|
|
|
|
|
|
Belo Corp.
|
|
|
|
|
|
|
|
|
|
Consolidated Condensed Balance
Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
|
December 31,
|
|
In thousands
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
Cash and temporary cash
investments
|
|
$
|
4,916
|
|
$
|
4,800
|
|
|
|
Accounts receivable, net
|
|
|
128,009
|
|
|
139,911
|
|
|
|
Other current assets
|
|
|
28,589
|
|
|
31,413
|
|
|
Total current assets
|
|
|
161,514
|
|
|
176,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment,
net
|
|
|
174,762
|
|
|
177,475
|
|
|
Intangible assets, net
|
|
|
1,149,272
|
|
|
1,149,272
|
|
|
Other assets
|
|
|
|
76,005
|
|
|
81,590
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
$
|
1,561,553
|
|
$
|
1,584,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
17,362
|
|
$
|
20,736
|
|
|
|
Accrued expenses
|
|
|
58,493
|
|
|
56,199
|
|
|
|
Other current liabilities
|
|
|
27,659
|
|
|
26,962
|
|
|
Total current liabilities
|
|
|
103,514
|
|
|
103,897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
993,443
|
|
|
1,028,219
|
|
|
Deferred income taxes
|
|
|
175,354
|
|
|
169,888
|
|
|
Other liabilities
|
|
|
|
202,051
|
|
|
210,626
|
|
|
Total shareholders' equity
|
|
|
87,191
|
|
|
71,831
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders'
equity
|
|
$
|
1,561,553
|
|
$
|
1,584,461
|
|
|
|
|
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Belo Corp.
|
|
Non-GAAP to GAAP
Reconciliations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Station EBITDA
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
|
March
31,
|
|
In thousands
(unaudited)
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Station EBITDA (1)
|
|
$
|
57,477
|
|
$
|
32,499
|
|
|
Corporate operating costs
|
|
|
(9,609)
|
|
|
(8,950)
|
|
|
Depreciation
|
|
|
(9,243)
|
|
|
(10,792)
|
|
|
Pension contribution
reimbursement
|
|
|
4,072
|
|
|
-
|
|
|
Earnings from
operations
|
|
$
|
42,697
|
|
$
|
12,757
|
|
|
|
|
|
|
|
|
|
|
|
Note 1:
|
Belo's management uses Station EBITDA
as the primary measure of profitability to evaluate operating
performance and to allocate capital resources and bonuses to
eligible operating company employees. Station EBITDA
represents the Company's earnings from operations before interest
expense, income taxes, depreciation, amortization, impairment
charges, pension contribution reimbursements and corporate expense.
Other income (expense), net is not allocated to television
station earnings from operations because it consists primarily of
equity in earnings (losses) from investments in partnerships and
joint ventures and other non-operating income (expense).
|
|
|
|
|
|
|
|
|
|
|
Pro Forma Net Earnings
|
|
In thousands
(unaudited)
|
|
|
|
|
|
Three months ended
March 31, 2010
|
|
|
Three months ended
March 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
|
|
|
EPS
|
|
|
Earnings
|
|
|
EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
$
|
13,542
|
|
$
|
0.13
|
|
$
|
8,911
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension contribution reimbursement,
net of tax
|
|
(2,484)
|
|
|
(0.02)
|
|
|
-
|
|
|
|
|
|
Gain from extinguishment of debt, net
of tax
|
|
-
|
|
|
|
|
|
(9,131)
|
|
|
(0.09)
|
|
|
Pro forma net earnings
(loss)
|
$
|
11,058
|
|
$
|
0.11
|
|
$
|
(220)
|
|
$
|
(0.00)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Belo Corp.