GlobeNewswire Inc | Oct 26, 2020 04:30PM EDT

October 26, 2020

DALLAS, Oct. 26, 2020 (GLOBE NEWSWIRE) -- A. H. Belo Corporation (NYSE: AHC) today reported a third quarter2020 net loss of $0.1million, or $(0.00)per share, and an operating loss of $2.4million. In the third quarter of 2019, the Company reported a net loss of $4.0million, or $(0.19) per share, and an operating loss of $7.0million.

For the third quarter of 2020, on a non-GAAP basis, A. H. Belo reported an operating loss adjusted for certain items (adjusted operating loss) of $0.1million, an improvement of $1.4million or 92.2percent when compared to an adjusted operating loss of $1.6million reported in the third quarter of 2019.

Robert W. Decherd, chairman, president and Chief Executive Officer, said, The events of 2020 continue to create challenges for managing A. H. Belos businesses while we remain attentive to the longer term strategies that will enable the Company to become a sustainably profitable digital media enterprise. Colleagues throughout the Company have responded to the many effects of the coronavirus pandemic with ingenuity and resolve, and everyone has made sacrifices to ensure that our communities receive the highest quality news, information and insights possible. As the country enters the next phase of the pandemic this fall and winter, we expect operating conditions to remain mostly the same. The Companys balance sheet continues to be a significant advantage.

Third Quarter Results

Total revenue was $37.7million in the third quarter of 2020, a decrease of $5.3million or 12.3percent when compared to the third quarter of 2019.

Revenue from advertising and marketing services, including print and digital revenues, was $17.5million in the third quarter of 2020, a decrease of $4.1million or 19.2percent when compared to the $21.6million reported for the third quarter of 2019.

Circulation revenue was $16.1million, a decrease of $0.7million or 4.2percent when compared to the third quarter of 2019. The decline is primarily due to a decrease in home delivery and single copy volumes, partially offset by rate increases and an increase of $0.4million or 34.5percent in digital-only subscription revenue.

Printing, distribution and other revenue decreased $0.5million, or 10.3percent, to $4.2million, 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 third quarter of 2020, on a GAAP basis, was $40.2million, a decrease of $9.9million or 19.7percent compared to the third quarter of 2019. Excluding the 2019 loss of $2.9million from asset disposals and impairments, the improvement is primarily due to decreases of $3.0million in employee compensation and benefits expense, $1.5million in newsprint, ink and other supplies expense, and $1.1million in outside services expense.

In the third quarter of 2020, on a non-GAAP basis, adjusted operating expense was $41.0million, an improvement of $7.1million or 14.7percent when compared to $48.1million of adjusted operating expense in the third quarter of 2019. The improvement is primarily due to expense decreases in employee compensation and benefits, newsprint expense, and reductions from continued management of discretionary spending.

As of September 30, 2020, the Company had 750 employees, a decrease of 120 or 13.8percent when compared to the prior year period. Cash and cash equivalents were $43.2million and the Company had no debt.

Non-GAAPFinancialMeasures

Reconciliations of operating income (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, October27,2020, 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 1-877-226-8152 and enter the following access code when prompted: 4445036. A replay line will be available at 1-866-207-1041 from 12:00 p.m. CDT on October27, 2020 until 11:59 p.m. CST on November2,2020. The access code for the replay is 5679783.

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, 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.

Contact:Katy Murray214-977-8869

A.H.Belo Corporation and SubsidiariesConsolidated Statements of Operations

Three Months Ended Nine Months Ended September30, September30,Inthousands,except shareand per 2020 2019 2020 2019 shareamounts(unaudited)NetOperating Revenue:Advertisingand $ 17,474 $ 21,616 $ 52,392 $ 70,957 marketingservicesCirculation 16,111 16,809 48,248 51,095 Printing,distribution 4,157 4,632 12,860 14,709 and otherTotal netoperating 37,742 43,057 113,500 136,761 revenueOperatingCosts and Expense:Employeecompensation 16,499 19,504 52,512 60,456 and benefitsOtherproduction,distribution 19,307 21,171 58,958 67,200 andoperatingcostsNewsprint,ink and 2,476 3,972 8,018 12,741 othersuppliesDepreciation 1,753 2,289 5,320 7,008 Amortization 63 140 191 356 (Gain) losson sale/ 61 1,362 56 (24,546 )disposal ofassets, netAsset ? 1,593 ? 1,593 impairmentsTotaloperating 40,159 50,031 125,055 124,808 costs andexpenseOperatingincome (2,417 ) (6,974 ) (11,555 ) 11,953 (loss)Other 2,095 1,161 4,778 3,123 income, netIncome(Loss) (322 ) (5,813 ) (6,777 ) 15,076 BeforeIncome TaxesIncome taxprovision (224 ) (1,808 ) (1,644 ) 4,688 (benefit)Net Income $ (98 ) $ (4,005 ) $ (5,133 ) $ 10,388 (Loss) Per Share BasisNet income (loss)Basic and $ (0.00 ) $ (0.19 ) $ (0.24 ) $ 0.48 dilutedNumber ofcommonshares used in the persharecalculation:Basic and 21,410,423 21,476,029 21,410,423 21,553,625 diluted

A.H.Belo Corporation and SubsidiariesConsolidated Balance Sheets

September30, December31,In thousands (unaudited) 2020 2019Assets Current assets: Cash and cash equivalents $ 43,174 $ 48,626Accounts receivable, net 15,174 18,441Notes receivable 22,775 ?Other current assets 10,406 7,737Total current assets 91,529 74,804Property, plant and equipment, net 13,479 18,453Operating lease right-of-use assets 21,496 21,371Intangible assets, net 128 319Deferred income taxes, net 27 50Long-term note receivable ? 22,400Other assets 2,608 3,648Total assets $ 129,267 $ 141,045Liabilities and Shareholders? Equity Current liabilities: Accounts payable $ 5,792 $ 6,103Accrued compensation and other current 12,613 13,337liabilitiesContract liabilities 14,860 12,098Total current liabilities 33,265 31,538Long-term pension liabilities 18,893 23,039Long-term operating lease liabilities 22,555 23,120Other liabilities 4,718 5,611Total liabilities 79,431 83,308Total shareholders' equity 49,836 57,737Total liabilities and shareholders? equity $ 129,267 $ 141,045

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

Three Months Ended Nine Months Ended September30, September30,In thousands (unaudited) 2020 2019 2020 2019 Total net operating revenue $ 37,742 $ 43,057 $ 113,500 $ 136,761 Total operating costs and 40,159 50,031 125,055 124,808 expenseOperating Income (Loss) $ (2,417 ) $ (6,974 ) $ (11,555 ) $ 11,953 Total net operating revenue $ 37,742 $ 43,057 $ 113,500 $ 136,761 Addback: Advertising contra revenue 3,012 3,380 5,400 9,116 Circulation contra revenue 104 48 205 368 Adjusted Operating Revenue $ 40,858 $ 46,485 $ 119,105 $ 146,245 Total operating costs and $ 40,159 $ 50,031 $ 125,055 $ 124,808 expenseAddback: Advertising contra expense 3,012 3,380 5,400 9,116 Circulation contra expense 104 48 205 368 Less: Depreciation 1,753 2,289 5,320 7,008 Amortization 63 140 191 356 Severance expense 418 20 621 1,421 (Gain) loss on sale/disposal 61 1,362 56 (24,546 )of assets, netAsset impairments ? 1,593 ? 1,593 Adjusted Operating Expense $ 40,980 $ 48,055 $ 124,472 $ 148,460 Adjusted operating revenue $ 40,858 $ 46,485 $ 119,105 $ 146,245 Adjusted operating expense 40,980 48,055 124,472 148,460 Adjusted Operating Loss $ (122 ) $ (1,570 ) $ (5,367 ) $ (2,215 )

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.