A. H. Belo Corporation Announces Fourth Quarter And Full-Year 2011 Financial Results And Discusses 2012 Outlook

A. H. Belo Corporation (NYSE: AHC) today reported fourth quarter net income of $0.12 per share compared to a net loss of $5.65 per share in the fourth quarter of 2010. Fourth quarter 2011 net income includes non-cash expenses of $6.5 million for the impairment of Southern California real estate; $2.6 million for net investment-related losses; and $1.4 million for the write-down of spare parts inventory. For the full-year 2011, the Company’s net loss was $0.51 per share compared to a net loss of $5.92 per share in 2010.

Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization (“EBITDA”) with pension expense, impairment expense and net investment-related losses added back, was $22.3 million in the fourth quarter of 2011 – an increase of 42.9 percent compared to the prior year period. Adjusted EBITDA for full-year 2011 was $47.7 million, a decrease of 15.6 percent compared to the prior year period due primarily to $0.1 million of real estate gains in 2011 compared to $7.1 million of real estate gains in 2010.

As of December 31, 2011, cash and cash equivalents were $57.4 million, and the Company had no borrowings under its bank credit facility.

Robert W. Decherd, chairman, president and Chief Executive Officer, said, “We finished the year with improved year-to-year comparables, particularly in Dallas and Riverside. Due to better advertising trends and ongoing expense containment, Adjusted EBITDA in the fourth quarter and full-year 2011 exceeded our expectations.”

Decherd continued, “For the third consecutive year, we begin the year with a strong balance sheet and the flexibility to deploy cash in the long-term interests of the Company, its shareholders and employees. In 2012, we will invest approximately $3 million into a new operating initiative at The Dallas Morning News that will provide effective solutions for underserved small and medium-sized businesses. We will also invest $4 million into targeted marketing campaigns to support this launch and other programs focused on consumer revenue. We are one of the few newspaper companies able to re-invest in our business to this degree, and the long-term payoff should be substantial.”

Fourth Quarter Results

Total revenue was $124.9 million in the fourth quarter of 2011, a decrease of 4.6 percent compared to the prior year period. Advertising revenue, including print and digital revenues, decreased 8.2 percent compared to the prior year period.

• The smallest percentage decrease came at The Press-Enterprise, followed by The Dallas Morning News and The Providence Journal
• Display advertising revenue decreased 14.3 percent to $28.8 million
• Preprint revenue decreased 3.0 percent to $26.6 million
• Classified revenue decreased 1.5 percent to $15.1 million
• Digital revenue decreased 12.4 percent to $9.1 million
• Advertising revenue from niche publications, which is a component of the display, preprint, classified and digital revenues reported above, was flat at $7.1 million

Circulation revenue was $35.2 million in the fourth quarter, flat to the prior year period. Excluding $0.9 million of increased circulation revenue resulting from The Providence Journal’s transition from a carrier to a distributor circulation model at the end of 2011, total circulation revenue decreased 2.4 percent to $34.3 million.

Printing and distribution revenue was $10.1 million in the fourth quarter, an increase of 12.0 percent compared to the prior year period that resulted from a new commercial printing contract that came on line in Providence during the third quarter.

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