A. H. Belo Corporation (NYSE: AHC) today reported net income of $0.06 per diluted share for the third quarter of 2012 compared to a net loss of $0.01 per diluted share in the third quarter of 2011. Third quarter 2012 net income includes a credit of $2.5 million for a consent judgment related to past tax assessments of real estate by the City of Providence.
Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization (“EBITDA”) with pension expense added back, was $10.5 million in the third quarter of 2012, a decrease of 3 percent compared to the prior year period. As of September 30, 2012, cash and cash equivalents were $41 million, and the Company had no borrowings under its bank credit facility.
Robert W. Decherd, chairman, president and Chief Executive Officer, said, “Third quarter total revenue decreased 1 percent compared to the prior year quarter. This rate of decline is the lowest since our spin-off from Belo Corp. in 2008 and was driven by advertising revenue performance at The Dallas Morning News and increased printing and distribution revenues in Providence and Riverside.
“We are very pleased with our results thus far in 2012. While advertising revenues are difficult to predict, we remain confident in the Company’s ability to deliver Adjusted EBITDA and generate cash. We continue to expect full-year 2012 Adjusted EBITDA of $37 to $41 million.”Third Quarter Results Total revenue was $108.9 million in the third quarter of 2012, a decrease of 1 percent compared to the prior year period. Advertising and marketing services revenue, including print and digital revenues, decreased 5 percent, with the smallest percentage decrease at The Dallas Morning News followed by The Press-Enterprise and The Providence Journal. Display advertising revenue decreased 5 percent to $20.3 million, and preprint revenue decreased 4 percent to $19.7 million. Classified revenue decreased 8 percent to $13.5 million. Digital revenue increased 1 percent to $8.7 million. When the impact of non-recurring revenue associated with a discontinued digital advertising platform is excluded, digital revenue increased 7 percent, primarily due to increased automotive digital revenue at The Dallas Morning News. In the third quarter of 2011, The Dallas Morning News discontinued the niche publication Quick. When Quick’s advertising revenue in the third quarter of 2011 is excluded, advertising revenue from ongoing niche publications increased 4 percent in the third quarter of 2012. This increase primarily resulted from higher advertising revenue at The Morning News' Spanish-language publication Al Día. Advertising revenue from niche publications is a component of the display, preprint, classified and digital revenue figures presented above. Circulation revenue decreased 1.5 percent to $34.2 million in the third quarter of 2012 compared to the prior year period . Excluding $0.9 million of circulation revenue resulting from The Providence Journal’s transition from a carrier model to a distributor circulation model in 2011, total circulation revenue decreased 4 percent to $33.3 million. This decrease is primarily driven by the single copy sales decline at The Dallas Morning News. Printing and distribution revenue increased 25 percent to $12.5 million in the third quarter of 2012 due mostly to the impact of new contracts at The Providence Journal and The Press-Enterprise. The Company was notified in October 2012 that the new owners of the North County Times would cease printing that publication in the Riverside (Press Enterprise) productions facility on October 15, well before the expiration of a multi-year contract. The Company is pursuing multiple remedies. Excluding the effect of pension expense in both periods, operating expense in the third quarter was $106.6 million, a 2 percent decrease compared to the prior year period as headcount related expenses, computer and depreciation expenses all decreased. Third quarter severance and related expenses totaled $0.3 million.