DALLAS, April 27, 2011 /PRNewswire/ -- Belo Corp. (NYSE:
BLC), one of the nation's largest pure-play, publicly-traded
television companies, today reported pro forma earnings per share
of $0.09 in the first quarter of 2011
versus pro forma earnings per share of $0.11 in the first quarter of 2010. Pro
forma earnings per share in the first quarter of 2011 exclude a net
non-cash charge, after taxes, of $13.3
million, or $0.13 per share,
related to the January 2011 split of
The G. B. Dealey Retirement Pension Plan ("Pension Plan") with A.
H. Belo Corporation ("A. H. Belo").
Pro forma earnings per share in the first quarter of 2010
exclude a credit of $2.5 million, net
of taxes, or $0.02 per share, from
pension contribution reimbursements received from A. H. Belo related to its obligation to
reimburse Belo for 60 percent of any pension contributions Belo
made to the Pension Plan prior to the completion of the split.
Including these items, net earnings (loss) per share in the
first quarter of 2011 were ($0.04)
compared to $0.13 per share in the
first quarter of 2010.
Dunia A. Shive, Belo's president
and Chief Executive Officer, said, "Belo's spot revenue excluding
political was up slightly in the first quarter of 2011 despite
difficult comparisons to the first quarter of 2010, which included
significant Olympics and Super Bowl revenue. The Company's
station adjusted EBITDA was $47.4
million in the first quarter of 2011. During the
quarter, the Company paid off the remaining balance of its
revolving credit facility. While we expect to draw on the
facility to accommodate interest payments in the second quarter, we
currently expect to begin accumulating a cash balance in the back
half of the year as the Company's next tranche of debt does not
mature until May 2013."
Shive also noted that Belo's Board of Directors lifted the
Company's dividend suspension, with the declaration of a
$0.05 per share quarterly dividend as
detailed in a separate press release, also issued today.
First Quarter in Review
Operating Results
Total revenue decreased 1.9 percent in the first quarter of 2011
versus the first quarter of 2010. Total spot revenue,
excluding political, was up 0.4 percent with a 2.1 percent increase
in local spot revenue and a 2.7 percent decrease in national spot
revenue. Core local and national spot revenue was affected by
the loss of Olympics and Super Bowl revenue from the first quarter
of 2010, which totaled $10.7 million.
Total spot revenue, including political, was down 4.2 percent
in the first quarter of 2011 compared to the first quarter of 2010.
Political revenue in the first quarter of 2011 was
$5.9 million lower than the first
quarter of 2010.
Other revenue, which includes barter and trade advertising,
network compensation, Internet advertising and retransmission
revenue, was up 10 percent in the first quarter of 2011 due
primarily to increases in Internet and retransmission revenue,
which were partially offset by a decrease in network
compensation.
Station salaries, wages and employee benefits increased
$2.6 million, or 5.1 percent, during
the first quarter of 2011 versus the first quarter of 2010 due
primarily to employee merit increases, partial reinstatement of the
Company's 401(k) plan matching contribution which was suspended in
2009, and higher station pension expense.
Station programming and other operating costs were up
$4.6 million in the first quarter of
2011 compared to the first quarter 2010 due primarily to a
$3.9 million non-cash expense
reduction related to third-party funding of certain newsgathering
equipment in the first quarter of 2010.
Station adjusted EBITDA was $47.4
million for the first quarter of 2011, and the station
adjusted EBITDA margin for the first quarter of 2011 was 31
percent.
Corporate
Corporate operating costs of $6.3
million in the first quarter of 2011 were $3.3 million lower than the first quarter of 2010
due primarily to lower accrued bonus expense, a decrease in outside
services expense primarily related to lower technology costs, and
lower pension expense.
The Company's reported combined station and corporate operating
costs were up 3.6 percent in the first quarter of 2011 compared to
the first quarter of 2010.
Other Items
On January 3, 2011, Belo announced
the completion of the split of the Pension Plan with A. H. Belo. In the first quarter of 2011, the
Company recorded a net non-cash charge of $20.5 million related to the Pension Plan split,
with an associated tax benefit of $7.1
million. The $20.5 million
charge is shown as a separate component of total operating costs
and expenses on Belo's Consolidated Statements of Operations.
The Company also recorded an increase in equity of
$72 million and a reduction in its
unfunded pension liability of $117
million in the first quarter 2011 in connection with the
split.
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 pursuant to its
obligation to reimburse Belo for 60 percent of any pension
contributions Belo made to the Pension Plan prior to the split.
Belo's depreciation expense totaled $7.9
million in the first quarter of 2011, down from $9.2 million in the first quarter of 2010.
The Company's interest expense decreased $1.9 million in the first quarter of 2011
compared to the first quarter of 2010 due primarily to lower
borrowings on its revolving credit facility and lower ongoing fees
associated with the Company's election to reduce the commitment
amount under its facility in 2010.
Income tax expense decreased $9.7
million in the first quarter of 2011 compared to the first
quarter of 2010 due primarily to the $7.1
million tax benefit related to the Pension Plan split and
lower pre-tax earnings. The Company's full year effective tax
rate for 2011 is currently expected to be around 40 percent.
Total debt at March 31, 2011, was
$886 million, which consisted
entirely of fixed-rate debt. The Company paid down the
remaining $11 million of its
revolving credit facility during the quarter and had approximately
$9 million invested in marketable
securities at March 31, 2011.
The Company's total leverage ratio, as defined in the
Company's credit facility, was 3.6 times at March 31, 2011, down from 3.7 times at
December 31, 2010. Belo
invested $3 million in capital
expenditures in the first quarter of 2011 and currently expects
full year capital expenditures to be approximately $16 million.
Non-GAAP Financial Measures
A reconciliation of station adjusted EBITDA to earnings from
operations and a reconciliation of net earnings (loss) to pro forma
net earnings are set forth in an exhibit to this release.
Outlook
Looking to the second quarter, Shive said, "While we have not
yet seen a significant change in the overall pace of our business
related to ongoing events in Japan, we do expect some level of disruption
in the second quarter, particularly in the automotive category.
While pacings currently reflect a higher percentage growth
rate, we are currently estimating spot revenue excluding political
to be flat to up low-single digits in the second quarter of 2011
compared to the second quarter of 2010 due to the uncertainty
surrounding auto supply in the second quarter.
"For the second quarter of 2011, combined station and corporate
operating costs are currently estimated to be up about 8 percent
compared to the second quarter of 2010. Excluding a
$3.1 million non-cash expense
reduction related to third-party funding of certain newsgathering
equipment in the second quarter of 2010, combined station and
corporate operating costs are estimated to be up about 5 percent."
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
1-877-764-2008. A replay line will be open from 3:00 p.m. CDT on April
27 until 11:59 p.m. CDT
May 11. To access the replay,
dial 800-475-6701 or 320-365-3844. The access code for the
replay is 200861.
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, and the CW, 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 214-977-4465.
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 and devices to distribute and consume 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
|
|
2011
|
|
|
2010
|
|
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Net Operating Revenues
|
$
|
151,470
|
|
$
|
154,332
|
|
|
|
|
|
|
|
|
|
|
Operating Costs and
Expenses
|
|
|
|
|
|
|
|
Station salaries, wages and
employee benefits
|
|
53,836
|
|
|
51,224
|
|
|
Station programming and other
operating costs
|
|
50,196
|
|
|
45,631
|
|
|
Corporate operating
costs
|
|
6,299
|
|
|
9,609
|
|
|
Pension settlement charge and
contribution reimbursements
|
|
20,466
|
|
|
(4,072)
|
|
|
Depreciation
|
|
7,924
|
|
|
9,243
|
|
|
|
Total operating costs and
expenses
|
|
138,721
|
|
|
111,635
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from
operations
|
|
12,749
|
|
|
42,697
|
|
|
|
|
|
|
|
|
|
|
Other Income and
(Expense)
|
|
|
|
|
|
|
|
Interest expense
|
|
(17,983)
|
|
|
(19,888)
|
|
|
Other income (expense),
net
|
|
180
|
|
|
(267)
|
|
|
|
Total other income and
(expense)
|
|
(17,803)
|
|
|
(20,155)
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before income
taxes
|
|
(5,054)
|
|
|
22,542
|
|
Income tax (benefit)
expense
|
|
(740)
|
|
|
9,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss)
|
$
|
(4,314)
|
|
$
|
13,542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) per share -
Basic
|
$
|
(0.04)
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) per share -
Diluted
|
$
|
(0.04)
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
|
|
|
|
|
|
|
Basic
|
|
103,403
|
|
|
102,809
|
|
|
Diluted
|
|
103,403
|
|
|
103,225
|
|
|
|
|
|
|
|
|
|
Belo Corp.
|
|
Consolidated Condensed Balance
Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
|
December 31,
|
|
In thousands
|
|
2011
|
|
|
2010
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
Cash and temporary cash
investments
|
$
|
12,383
|
|
$
|
8,309
|
|
|
|
Accounts receivable,
net
|
|
131,240
|
|
|
144,992
|
|
|
|
Other current assets
|
|
74,741
|
|
|
57,495
|
|
|
Total current assets
|
|
218,364
|
|
|
210,796
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment,
net
|
|
159,006
|
|
|
164,439
|
|
|
Intangible assets,
net
|
|
1,149,272
|
|
|
1,149,272
|
|
|
Other assets
|
|
63,576
|
|
|
65,883
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
1,590,218
|
|
$
|
1,590,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Accounts payable
|
$
|
17,349
|
|
$
|
20,744
|
|
|
|
Accrued expenses
|
|
76,425
|
|
|
88,845
|
|
|
|
Other current
liabilities
|
|
30,080
|
|
|
27,611
|
|
|
Total current
liabilities
|
|
123,854
|
|
|
137,200
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
886,331
|
|
|
897,111
|
|
|
Deferred income taxes
|
|
246,338
|
|
|
206,765
|
|
|
Other liabilities
|
|
80,818
|
|
|
178,672
|
|
|
Total shareholders'
equity
|
|
252,877
|
|
|
170,642
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
1,590,218
|
|
$
|
1,590,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Belo Corp.
|
|
Non-GAAP to GAAP
Reconciliations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Station Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
March
31,
|
|
In thousands
(unaudited)
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Station Adjusted EBITDA
(1)
|
|
$
|
47,438
|
|
$
|
57,477
|
|
|
Corporate operating
costs
|
|
|
(6,299)
|
|
|
(9,609)
|
|
|
Depreciation
|
|
|
(7,924)
|
|
|
(9,243)
|
|
|
Pension settlement charge and
contribution reimbursements
|
|
|
(20,466)
|
|
|
4,072
|
|
|
Earnings from
operations
|
|
$
|
12,749
|
|
$
|
42,697
|
|
|
|
|
|
|
|
|
|
|
Note 1: Belo's management
uses Station Adjusted EBITDA as the primary measure of
profitability to evaluate operating performance and to allocate
capital resources and bonuses to eligible operating company
employees. Station Adjusted EBITDA represents the
Company's earnings from operations before interest expense, income
taxes, depreciation, amortization, impairment charges, pension
settlement charge and contribution reimbursements, and corporate
operating costs. 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
|
Three months
ended
|
|
|
|
|
March 31,
2011
|
March 31,
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
|
|
|
EPS
|
|
|
Earnings
|
|
|
EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
|
|
$
|
(4,314)
|
|
$
|
(0.04)
|
|
$
|
13,542
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension settlement charge and
contribution reimbursements, net of tax
|
|
13,323
|
|
|
0.13
|
|
|
(2,484)
|
|
|
(0.02)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma net
earnings
|
|
$
|
9,009
|
|
$
|
0.09
|
|
$
|
11,058
|
|
$
|
0.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Belo Corp.