GlobeNewswire Inc | Mar 8, 2021 04:45PM EST

March 08, 2021

DALLAS, March 08, 2021 (GLOBE NEWSWIRE) -- A. H. Belo Corporation (NYSE: AHC) today reported a fourth quarter2020 net loss of $1.7million, or $(0.08)per share, and an operating loss of $4.0million. In the fourth quarter of 2019, the Company reported a net loss of $1.1million, or $(0.05) per share, and an operating loss of $2.4million.

For the fourth quarter of 2020, on a non-GAAP basis, A. H. Belo reported operating income adjusted for certain items (adjusted operating income (loss)) of $0.5million, an improvement of $0.4million when compared to adjusted operating income of $0.1million reported in the fourth quarter of 2019.

For the full year 2020, the Company reported a net loss of $6.9million, or $(0.32)per share, and an operating loss of $15.6million. For the full year 2019, the Company reported net income of $9.3million, or $0.43 per fully diluted share, and operating income of $9.5million. 2019 income was driven by a pretax gain of $25.9million from the sale of real estate previously used as the Companys headquarters.

For the full year 2020, on a non-GAAP basis, the Company reported an adjusted operating loss of $4.9million, a decline of $2.8million when compared to an adjusted operating loss of $2.1million reported for the full year 2019.

Robert W. Decherd, chairman, president and Chief Executive Officer, said, The Company's business activitiesstabilized to some extent in the second half of 2020 as the effects of the pandemic became clearer, enabling our management teams to make further operating adjustments that will enable A.H. Belo and TheDallasMorningNews to carry on during another year of challenging conditions in 2021. The Board views these two calendar years as a single time frame during which the Company is responding ably to significant revenue and market pressures.

I am extraordinarily proud of theway every colleague has acclimated to the realities imposed by the pandemic. Working remotely since one year ago this month, our News Department, Belo+Company, and our business operations teams have excelled. The News Department has admirably fulfilled the vital, front-line role of providing meaningful news, information and insight when our region and our country have needed these most. Our 300-plus colleagues at the North Plant have worked tirelessly to print and distribute TheNews without missing a cycle, while tending to their personal situations away from work.

Throughout 2020, the Board supported management's recommendations to continue making investments in operations that will enable the Company to emerge from the pandemic as a sustainably profitable digital news organization. Grant Moise and Katy Murray are leading efforts internally during 2021 aimed at defining this path forward.

A key corporate objective for 2021 is to address the Company's compliance with New York Stock Exchange listing requirements. A.H. Belo became non-compliant at the end of the third quarter of 2020 when the Company did not meet the NYSE minimums for market capitalization and shareholders' equity. We have been in steady contact with the NYSE and are studying options to regain compliance. Management is discussing these with the Board and expects to have a plan for proceeding soon.

The outstanding balance of the Company's note to Charter Holdings in connection with the 2019 sale of our former headquarters in Downtown Dallas is due on June 30 of this year. Charter made its most recent interest payment on the note timely and continues to confirm its commitment to fulfilling its obligation to A.H. Belo. However, new commercial real estate development everywhere has been impacted by the economic effects of the pandemic, so we are monitoring this situation closely and are in contact with Charter's principal.

Fourth Quarter Results

Total revenue was $40.8million in the fourth quarter of 2020, a decrease of $6.0million or 12.8percent when compared to the fourth quarter of 2019.

Revenue from advertising and marketing services, including print and digital revenues, was $19.8million in the fourth quarter of 2020, a decrease of $5.1million or 20.4percent when compared to the $24.9million reported for the fourth quarter of 2019. The decline is primarily due to a $3.7million reduction in print advertising revenue, which has been significantly impacted by the COVID-19 pandemic.

Circulation revenue was $16.7million, a decrease of $0.5million or 2.8percent when compared to the fourth quarter of 2019. Home delivery revenue decreased 3.7percent and single copy revenue decreased 25.7percent, primarily due to the significantly reduced number of locations selling newspapers as a result of the pandemic, partially offset by an increase of $0.5million or 39.7percent in digital-only subscription revenue.

Printing, distribution and other revenue decreased $0.4million, or 9.5percent, to $4.3million, primarily due to a reduction in brokered and commercial printing, partially offset by an increase in shared mail packaging revenue.

Total consolidated operating expense in the fourth quarter of 2020, on a GAAP basis, was $44.8million, an improvement of $4.4million or 8.9percent compared to the fourth quarter of 2019. The improvement is primarily due to expense decreases of $1.7million in newsprint, ink and other supplies, $1.6million in outside services, $0.5million in distribution, $0.4million in employee compensation and benefits, and $0.3million in travel and entertainment.

In the fourth quarter of 2020, on a non-GAAP basis, adjusted operating expense was $46.1million, an improvement of $2.6million or 5.4percent when compared to $48.7million of adjusted operating expense in the fourth quarter of 2019. The improvement is primarily due to expense decreases in newsprint, distribution, employee compensation and benefits, and reductions from continued management of discretionary spending.

Full Year Results

Total revenue was $154.3million for the full year 2020, a decrease of $29.3million or 15.9percent when compared to the prior year period.

Revenue from advertising and marketing services, including print and digital revenues, was $72.2million in 2020, a decrease of $23.6million or 24.7percent when compared to the $95.9million reported for the full year 2019. Print advertising revenue declined $15.9million. Digital advertising and marketing services revenue decreased $7.7million, primarily due to the termination of TheDallasMorningNews affiliate relationship with Cars.com in September2019.

Circulation revenue was $64.9million, a decrease of $3.3million or 4.9percent when compared to the prior year period. Home delivery revenue decreased 5.5percent and single copy revenue decreased 24.7percent, primarily as a result of the pandemic, partially offset by an increase of $1.6million or 32.0percent in digital-only subscription revenue.

Printing, distribution and other revenue decreased $2.3million, or 11.8percent, to $17.2million for the full year 2020, primarily due to a reduction in brokered and commercial printing.

Total consolidated operating expense for the full year 2020, on a GAAP basis, was $169.9million, an improvement of $4.2million or 2.4percent compared to full year 2019. Excluding the 2019 gain of $25.9million from the real estate sale, operating expense improved $30.1million or 15.0percent. The improvement is primarily due to expense decreases of $8.4million in employee compensation and benefits, $6.4million in newsprint, ink and other supplies, $6.3million in outside services, $2.0million in depreciation, $1.4million in distribution, $1.2million in advertising and promotion, and $0.9million in travel and entertainment.

For the full year 2020, on a non-GAAP basis, adjusted operating expense was $170.6million, an improvement of $26.6million or 13.5percent when compared to $197.2million of adjusted operating expense reported for full year 2019. The improvement is primarily due to expense decreases in employee compensation and benefits, newsprint, distribution, and reductions from continued management of discretionary spending including additional measures the Company has taken this year in order to mitigate the financial impact of the pandemic.

As of December 31, 2020, the Company had 743 employees, a decrease of 87 or 10.5percent when compared to the prior year period. Cash and cash equivalents were $42.0million and the Company had no debt.

Non-GAAPFinancialMeasures

Reconciliations of operating income (loss) to adjusted operating income (loss), total net operating revenue to adjusted operating revenue, and total operating costs and expense to adjusted operating expense are included in the exhibits to this release.

Financial Results Conference Call

A. H. Belo Corporation will conduct a conference call on Tuesday, March9,2021, at 9:00a.m. CST to discuss financial results. The conference call will be available via webcast by accessing the Companys website at www.ahbelo.com/invest. An archive of the webcast will be available at www.ahbelo.com in the Investor Relations section.

To access the listen-only conference call, dial 1-844-291-5490 and enter the following access code when prompted: 5801403. A replay line will be available at 1-866-207-1041 from 12:00 p.m. CST on March9, 2021 until 11:59 p.m. CDT on March15,2021. The access code for the replay is 3114516.

AboutA.H.BeloCorporation

A. H. Belo Corporation is the leading local news and information publishing company in Texas. The Company has a growing presence in emerging media and digital marketing, and maintains capabilities related to commercial printing, distribution and direct mail. A. H. Belo delivers news and information in innovative ways to a broad range of audiences with diverse interests and lifestyles. For additional information, visit www.ahbelo.com or email invest@ahbelo.com.

Statements in this communication concerning A. H. Belo Corporations business outlook or future economic performance, revenues, expenses, and other financial andnon-financialitems that are not historical facts, including statements of the Companys expectations relating to its plans to regain NYSE compliance, 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, trends and uncertainties are, in most instances, beyond the Companys control, andinclude changes in advertising demand and other economic conditions; consumers tastes; newsprint prices; program costs; labor relations; cybersecurity incidents; technological obsolescence; and the current and future impacts of the COVID-19 public health crisis. Among other risks, there can be no guarantee that the board of directors will approve a quarterly dividend in future quarters; as well as other risks described in the Companys Annual Report on Form10-Kand in the Companys other public disclosures and filings with the Securities and Exchange Commission. Forward-looking statements, which are as of the date of this filing, are not updated to reflect events or circumstances after the date of the statement.

A. H.Belo Corporation and SubsidiariesConsolidated Statements of Operations

Three Months Ended December31, Years Ended December31,Inthousands,except shareand per 2020 2019 2020 2019shareamounts(unaudited)NetOperating Revenue:Advertisingand $ 19,822 $ 24,899 $ 72,214 $ 95,856 marketingservicesCirculation 16,687 17,165 64,935 68,260 Printing,distribution 4,290 4,738 17,150 19,447 and otherTotal netoperating 40,799 46,802 154,299 183,563 revenueOperatingCosts and Expense:Employeecompensation 19,260 19,678 71,772 80,134 and benefitsOtherproduction,distribution 21,050 23,473 80,008 90,673 andoperatingcostsNewsprint,ink and 2,150 3,829 10,168 16,570 othersuppliesDepreciation 1,696 1,975 7,016 8,983 Amortization 64 139 255 495 (Gain) losson sale/ 34 6 90 (24,540 )disposal ofassets, netAsset 563 116 563 1,709 impairmentsTotaloperating 44,817 49,216 169,872 174,024 costs andexpenseOperatingincome (4,018 ) (2,414 ) (15,573 ) 9,539 (loss)Other 2,236 1,046 7,014 4,169 income, netIncome(Loss) (1,782 ) (1,368 ) (8,559 ) 13,708 BeforeIncome TaxesIncome taxprovision (43 ) (272 ) (1,687 ) 4,416 (benefit)Net Income $ (1,739 ) $ (1,096 ) $ (6,872 ) $ 9,292 (Loss) Per Share BasisNet income (loss)Basic and $ (0.08 ) $ (0.05 ) $ (0.32 ) $ 0.43 dilutedNumber ofcommonshares used in the persharecalculation:Basic and 21,410,423 21,438,953 21,410,423 21,546,257 diluted

A.H.Belo Corporation and SubsidiariesConsolidated Balance Sheets

December31, December31,In thousands (unaudited) 2020 2019Assets Current assets: Cash and cash equivalents $ 42,015 $ 48,626 Accounts receivable, net 16,562 18,441 Notes receivable 22,775 ? Other current assets 6,754 7,737 Total current assets 88,106 74,804 Property, plant and equipment, net 11,959 18,453 Operating lease right-of-use assets 20,406 21,371 Intangible assets, net 64 319 Deferred income taxes, net 76 50 Long-term note receivable ? 22,400 Other assets 2,604 3,648 Total assets $ 123,215 $ 141,045 Liabilities and Shareholders? Equity Current liabilities: Accounts payable $ 7,759 $ 6,103 Accrued compensation and other current 10,829 13,337 liabilitiesContract liabilities 12,896 12,098 Total current liabilities 31,484 31,538 Long-term pension liabilities 18,520 23,039 Long-term operating lease liabilities 21,890 23,120 Other liabilities 4,913 5,611 Total liabilities 76,807 83,308 Total shareholders' equity 46,408 57,737 Total liabilities and shareholders? equity $ 123,215 $ 141,045

A. H. Belo Corporation - Non-GAAP Financial MeasuresReconciliation of Operating Income (Loss) to Adjusted Operating Income (Loss)

Three Months Ended Years Ended December31, December31,In thousands 2020 2019 2020 2019(unaudited)Total netoperating $ 40,799 $ 46,802 $ 154,299 $ 183,563 revenueTotaloperating 44,817 49,216 169,872 174,024 costs andexpenseOperating $ (4,018 ) $ (2,414 ) $ (15,573 ) $ 9,539 Income (Loss) Total netoperating $ 40,799 $ 46,802 $ 154,299 $ 183,563 revenueAddback: Advertisingcontra 5,643 1,897 11,043 11,013 revenueCirculationcontra 110 84 315 452 revenueAdjustedOperating $ 46,552 $ 48,783 $ 165,657 $ 195,028 Revenue Totaloperating $ 44,817 $ 49,216 $ 169,872 $ 174,024 costs andexpenseAddback: Advertisingcontra 5,643 1,897 11,043 11,013 expenseCirculationcontra 110 84 315 452 expenseLess: Depreciation 1,696 1,975 7,016 8,983 Amortization 64 139 255 495 Severance 2,127 257 2,748 1,678 expense(Gain) losson sale/ 34 6 90 (24,540 )disposal ofassets, netAsset 563 116 563 1,709 impairmentsAdjustedOperating $ 46,086 $ 48,704 $ 170,558 $ 197,164 Expense Adjustedoperating $ 46,552 $ 48,783 $ 165,657 $ 195,028 revenueAdjustedoperating 46,086 48,704 170,558 197,164 expenseAdjustedOperating $ 466 $ 79 $ (4,901 ) $ (2,136 )Income (Loss)

The Company calculates adjusted operating income (loss) by adjusting operating income (loss) to exclude depreciation, amortization, severance expense, (gain) loss on sale/disposal of assets, and asset impairments (adjusted operating income (loss)). The Company believes that inclusion of certain noncash expenses and other items in the results makes for more difficult comparisons between years and with peer group companies.

The Company adopted the new revenue guidance (Topic 606) using the modified retrospective approach as of January1, 2018. While the Company adjusts operating revenue and expense for non-GAAP presentation, these adjustments have no effect on adjusted operating income (loss).

Adjusted operating income (loss) is not a measure of financial performance under generally accepted accounting principles (GAAP). Management uses adjusted operating income (loss) and similar measures in internal analyses as supplemental measures of the Companys financial performance, and for performance comparisons versus its peer group of companies. Management uses this non-GAAP financial measure for the purposes of evaluating consolidated Company performance. The Company therefore believes that the non-GAAP measure presented provides useful information to investors by allowing them to view the Companys business through the eyes of management and the Board of Directors, facilitating comparison of results across historical periods and providing a focus on the underlying ongoing operating performance of its business. Adjusted operating income (loss) should not be considered in isolation or as a substitute for net income (loss), cash flows provided by (used for) operating activities or other comparable measures prepared in accordance with GAAP. Additionally, this non-GAAP measure may not be comparable to similarly-titled measures of other companies.

Contact:Katy Murray214-977-8869