GlobeNewswire Inc | Apr 26, 2021 04:15PM EDT

April 26, 2021

DALLAS, April 26, 2021 (GLOBE NEWSWIRE) -- A. H. Belo Corporation (NYSE: AHC) today reported a first quarter2021 net loss of $2.8million, or $(0.13)per share, and an operating loss of $3.7million. In the first quarter of 2020, the Company reported a net loss of $1.6million, or $(0.08) per share, and an operating loss of $4.8million. The 2020 net loss included a federal tax refund of $2.3million permitted under the CARES Act.

For the first quarter of 2021, on a non-GAAP basis, A. H. Belo reported an operating loss adjusted for certain items (adjusted operating loss) of $2.4million, an improvement of $0.4million or 14.4percent when compared to an adjusted operating loss of $2.8million reported in the first quarter of 2020.

Robert W. Decherd, chairman, president and Chief Executive Officer, said, We are encouraged that operating conditions have settled to some extent during the first part of 2021. However, it is obviously important to remain focused on revenue generation across all platforms while shaping the Companys expense structure to reflect the smaller enterprise A.H.Belo has become. On April 15 we announced a voluntary severance offer (VSO) for eligible employees in select departments, which is an important step in this process. The VSO should help accelerate the realignment of administrative, back office and production activities, and result in meaningful ongoing savings.

TheDallasMorningNews continues to provide superior, unduplicated local and regional news, information and commentary. The impact is seen in The News growth in digital memberships and the relative stability of its print member base. The Boards commitment to investing in this growth is the best pathway to becoming a sustainably profitable digital newspaper enterprise.

First Quarter Results

Total revenue was $36.8million in the first quarter of 2021, a decrease of $3.5million or 8.7percent when compared to the first quarter of 2020.

Revenue from advertising and marketing services, including print and digital revenues, was $16.8million in the first quarter of 2021, a decrease of $2.6million or 13.2percent when compared to the $19.3million reported for the first quarter of 2020. The decline is primarily due to a $1.6million reduction in print advertising revenue, which has been significantly impacted by the COVID-19 pandemic.

Circulation revenue was $16.0million, a decrease of $0.4million or 2.4percent when compared to the first quarter of 2020. Home delivery revenue decreased 4.3percent and single copy revenue decreased 27.1percent, primarily due to the significantly reduced number of locations selling newspapers as a result of the pandemic, partially offset by an increase of $0.6million or 46.5percent in digital-only subscription revenue.

Printing, distribution and other revenue decreased $0.6million, or 12.6percent, to $4.0million, primarily due to reductions in commercial printing and distribution revenue.

Total consolidated operating expense in the first quarter of 2021, on a GAAP basis, was $40.5million, an improvement of $4.6million or 10.2percent compared to the first quarter of 2020. The improvement is primarily due to expense decreases of $1.1million in employee compensation and benefits, $0.9million in newsprint, ink and other supplies, $0.9million in outside services, $0.7million in depreciation, $0.4million in distribution, and $0.3million in travel and entertainment.

In the first quarter of 2021, on a non-GAAP basis, adjusted operating expense was $45.3million, an increase of $0.8million or 1.7percent when compared to $44.6million of adjusted operating expense in the first quarter of 2020. The increase is primarily due to an increase of $4.7million in contra expense, partially offset by expense decreases in employee compensation and benefits, newsprint, distribution, and reductions from continued management of discretionary spending.

As of March 31, 2021, the Company had 713 employees, a decrease of 75 or 9.5percent when compared to the prior year period. Cash and cash equivalents were $38.1million and the Company had no debt.

Non-GAAPFinancialMeasures

Reconciliations of operating loss to adjusted operating 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, April27, 2021, at 9:00a.m. CDT 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 1-877-226-8189 and enter the following access code when prompted: 5840199. A replay line will be available at 1-866-207-1041 from 12:00 p.m. CDT on April27, 2021 until 11:59 p.m. CDT on May3,2021. The access code for the replay is 8305657.

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 March31,In thousands, except share and per 2021 2020 share amounts (unaudited)Net Operating Revenue: Advertising and marketing services $ 16,769 $ 19,327 Circulation 16,022 16,414 Printing, distribution and other 4,024 4,602 Total net operating revenue 36,815 40,343 Operating Costs and Expense: Employee compensation and benefits 17,947 19,016 Other production, distribution and 19,090 20,992 operating costsNewsprint, ink and other supplies 2,341 3,271 Depreciation 1,074 1,765 Amortization 64 64 Gain on sale/disposal of assets, net (1 ) (5 )Total operating costs and expense 40,515 45,103 Operating loss (3,700 ) (4,760 )Other income, net 1,254 1,352 Loss Before Income Taxes (2,446 ) (3,408 )Income tax provision (benefit) 319 (1,787 )Net Loss $ (2,765 ) $ (1,621 ) Per Share Basis Net loss Basic and diluted $ (0.13 ) $ (0.08 )Number of common shares used in the per share calculation:Basic and diluted 21,410,423 21,410,423

A.H.Belo Corporation and SubsidiariesConsolidated Balance Sheets

March31, December31,In thousands (unaudited) 2021 2020Assets Current assets: Cash and cash equivalents $ 38,132 $ 42,015Accounts receivable, net 15,503 16,562Notes receivable 22,775 22,775Other current assets 8,678 6,754Total current assets 85,088 88,106Property, plant and equipment, net 10,932 11,959Operating lease right-of-use assets 19,764 20,406Intangible assets, net ? 64Deferred income taxes, net 91 76Other assets 2,213 2,604Total assets $ 118,088 $ 123,215Liabilities and Shareholders? Equity Current liabilities: Accounts payable $ 7,381 $ 7,759Accrued compensation and other current liabilities 10,524 10,829Contract liabilities 13,760 12,896Total current liabilities 31,665 31,484Long-term pension liabilities 17,119 18,520Long-term operating lease liabilities 21,216 21,890Other liabilities 4,941 4,913Total liabilities 74,941 76,807Total shareholders' equity 43,147 46,408 Total liabilities and shareholders? equity $ 118,088 $ 123,215

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

Three Months Ended March31,In thousands (unaudited) 2021 2020 Total net operating revenue $ 36,815 $ 40,343 Total operating costs and expense 40,515 45,103 Operating Loss $ (3,700 ) $ (4,760 ) Total net operating revenue $ 36,815 $ 40,343 Addback: Advertising contra revenue 6,078 1,454 Circulation contra revenue 95 38 Adjusted Operating Revenue $ 42,988 $ 41,835 Total operating costs and expense $ 40,515 $ 45,103 Addback: Advertising contra expense 6,078 1,454 Circulation contra expense 95 38 Less: Depreciation 1,074 1,765 Amortization 64 64 Severance expense 208 186 Gain on sale/disposal of assets, net (1 ) (5 )Adjusted Operating Expense $ 45,343 $ 44,585 Adjusted operating revenue $ 42,988 $ 41,835 Adjusted operating expense 45,343 44,585 Adjusted Operating Loss $ (2,355 ) $ (2,750 )

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