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8-K - FORM 8-K - BELO CORP | c00056e8vk.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Monday, May 3, 2010
7:30 a.m. CDT
Monday, May 3, 2010
7:30 a.m. CDT
TELEVISION COMPANY BELO CORP. (BLC) REPORTS RESULTS FOR FIRST QUARTER 2010
DALLAS Belo Corp. (NYSE: BLC), one of the nations largest pure-play, publicly-traded
television companies, today reported GAAP net earnings per share of $0.13 in the first quarter of
2010 compared to $0.09 per share in the first quarter of 2009.
The first quarter of 2009 included a gain, net of taxes, of $9.1 million, or $0.09 per share,
associated with the repurchase and retirement of Company bonds. The first quarter of 2010 included
a credit of $2.5 million, net of taxes, or $0.02 per share, from pension contribution
reimbursements received from A. H. Belo Corporation related to its obligation to reimburse Belo
Corp. (Belo) for 60 percent of any pension contributions Belo makes to The G. B. Dealey Retirement
Pension Plan. Excluding the credit from the pension contribution reimbursement in the first
quarter of 2010 and the gain on the repurchase and retirement of Company bonds in the first quarter
of 2009, pro forma earnings per share were $0.11 in the first quarter of 2010 and ($0.00) in the
first quarter of 2009.
Dunia A. Shive, Belos president and Chief Executive Officer, said, Belos first quarter
total revenue increase of 15.6 percent was highlighted by a strong resurgence in the Companys spot
advertising revenue, which grew more than 17 percent compared to the first quarter of 2009. While
political, Olympics and Super Bowl revenue all contributed to the year-over-year spot revenue
increase, improved advertising conditions in several of the Companys largest categories were also
factors, especially automotive which was up 45 percent. The Companys station EBITDA of $57.5
million in the first quarter of 2010 was up 77 percent compared to the first quarter of 2009. The
Company reduced its debt by $35 million during the quarter.
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Belo Announces First Quarter 2010 Results
May 3, 2010
Page Two
May 3, 2010
Page Two
First Quarter in Review
Operating Results
Total revenue increased 15.6 percent in the first quarter of 2010 versus the first quarter of
2009. Total spot revenue, including political, was up 17 percent with 9.2 percent and 18
percent increases in local and national spot, respectively. First quarter 2010 revenue was
affected by the improved advertising environment, particularly in the automotive category. The
Olympics on the Companys NBC stations and the Super Bowl on its CBS stations also contributed to
the increase. Political revenue in the first quarter of 2010 was $6.3 million, $5.6 million higher
than the first quarter of 2009.
Revenue associated with Belos Web sites increased 12 percent to $7.3 million in the first
quarter of 2010 versus 2009. Retransmission revenue totaled $11.6 million in the first quarter of
2010, a 19 percent increase compared to the first quarter of 2009. Retransmission revenue is
expected to increase at more moderate levels in the remaining quarters of 2010.
Total station expenses decreased 4.1 percent in the first quarter of 2010 versus the same
period last year due primarily to expense reductions implemented over the past year and a $2
million favorable variance in non-cash expense reductions related to third-party funding of certain
newsgathering equipment.
Station EBITDA for the first quarter of 2010 was up 77 percent versus the first quarter of
2009. The station EBITDA margin for the first quarter of 2010 was 37 percent compared to 24
percent in the first quarter of 2009.
Corporate
Corporate operating costs of $9.6 million in the first quarter of 2010 were 7.4 percent higher
than the first quarter of 2009 due primarily to higher accrued bonus expense and higher share-based
compensation related to the change in the Companys stock price and the timing of grants.
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Belo Announces First Quarter 2010 Results
May 3, 2010
Page Three
May 3, 2010
Page Three
Other Items
The Company recorded a reduction in operating expenses of $4.1 million in the first quarter of
2010 related to pension contribution reimbursements received from A. H. Belo Corporation related to
its obligation to reimburse Belo for 60 percent of any pension contributions Belo makes to The G.
B. Dealey Retirement Pension Plan. This credit is shown as a separate component of total operating
costs and expenses on Belos Consolidated Statements of Operations. The Company expects to
recognize pension contribution reimbursements of a similar amount in the second quarter of 2010.
Belos depreciation expense totaled $9.2 million in the first quarter of 2010, down from $10.8
million in the first quarter of 2009.
The Companys interest expense increased $5.3 million compared to the first quarter of 2009
due primarily to increased interest costs associated with the Companys $275 million senior note
offering completed in the fourth quarter of 2009 and the amortization of the discount and
refinancing costs associated with the note offering. These borrowings were previously included in
the Companys lower-rate revolving credit facility.
Other income, net, decreased $16.6 million in the first quarter of 2010 due primarily to a
$14.9 million pre-tax gain in the first quarter of 2009 associated with the repurchase and
retirement of Company bonds.
Income tax expense increased $3.4 million in the first quarter of 2010 compared to the first
quarter of 2009 due primarily to higher pre-tax earnings.
Total debt at March 31, 2010, was $993 million, a reduction of $35 million from December 31,
2009. The Companys total leverage ratio, as defined in the Companys credit facility, was 5.0
times at March 31, 2010, down from 5.9 times at December 31, 2009. Belo invested $2.7 million in
capital expenditures in the first quarter of 2010 and currently expects full year capital
expenditures to be approximately $15 million.
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Belo Announces First Quarter 2010 Results
May 3, 2010
Page Four
May 3, 2010
Page Four
Non-GAAP Financial Measures
A reconciliation of station EBITDA to earnings from operations and a reconciliation of net
earnings to pro forma net earnings (loss) are set forth in an exhibit to this release.
2010 Outlook
Looking to the second quarter, Shive said, We are optimistic that the advertising momentum we
experienced in our core business in the first quarter of 2010 will continue in the second quarter.
Total spot revenue in April is expected to finish up about 10 percent compared to April 2009 with
little political revenue, and the months of May and June are currently pacing above that level.
Based on these pacing trends, total spot advertising revenue could approach a mid-teen increase in
the second quarter of 2010 compared to the second quarter of 2009. Within these estimates, the
automotive category is currently pacing up more than 40 percent. We continue to expect robust
political spending in 2010, most of which will come in the second half of the year.
While combined station and corporate operating costs were down 3.2 percent in the first
quarter of 2010, expenses will be up in the second quarter due to several factors listed below,
some of which are credits recorded in the second quarter of 2009.
| The Company converted to a paid time-off (PTO) vacation policy in the second
quarter of 2009 resulting in a non-cash credit of $3.3 million in the second
quarter of 2009. The credit for full year 2009 related to the PTO conversion was
$8.1 million. |
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| The second quarter of 2009 included an insurance reimbursement of $1.7 million. |
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| Pension expense is currently estimated to be $3.2 million higher in the second
quarter of 2010 compared to 2009, including the effect of reinstating the pension
transition supplement benefit that was suspended last year. |
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Belo Announces First Quarter 2010 Results
May 3, 2010
Page Five
May 3, 2010
Page Five
| Accrued bonus expenses, including revenue-based bonuses, are currently estimated
to be $3 million in the second quarter of 2010 compared to virtually no bonus
expense last year. |
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| Offsetting a portion of the above expense increases in the second quarter of
2010 is a projected $2.4 million favorable non-cash expense variance related to
third-party funding of certain newsgathering equipment. |
Excluding the above items, second quarter combined station and corporate operating costs are
currently expected to be up in the low-to-mid single digits. This increase is due to the lifting
of the wage freeze and partial reinstatement of salary reductions in April of 2010, higher
sales-related costs associated with higher revenue, and investments in the launch of new local
programs in two markets late in the first quarter of 2010 that are expected to be more than offset
by incremental revenue.
A conference call to discuss this release and other matters of interest to shareholders and
analysts will follow at 1:00 p.m. CDT this afternoon. The conference call will be simultaneously
Webcast on Belo Corp.s Web site (www.belo.com/invest). Following the conclusion of the Webcast, a
replay of the conference call will be archived on Belos Web site. To access the listen-only
conference lines, dial 1-877-209-9920. A replay line will be open from 3:00 p.m. CDT on May 3
until 11:59 p.m. CDT May 17. To access the replay, dial 800-475-6701 or 320-365-3844. The access
code for the replay is 154067.
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Belo Announces First Quarter 2010 Results
May 3, 2010
Page Six
May 3, 2010
Page Six
About Belo Corp.
Belo Corp. (BLC), one of the nations largest pure-play, publicly-traded television companies,
owns and operates 20 television stations (nine in the top 25 markets) and their associated Web
sites. Belo stations, which include affiliations with ABC, CBS, NBC, FOX, CW and MyNetwork TV,
reach more than 14 percent of U.S. television households in 15 highly- attractive markets. Belo
stations rank first or second in nearly all of their local markets. Additional information is
available at www.belo.com or by contacting Paul Fry, vice president/Investor Relations & Treasury
Operations, at 214-977-6835.
Statements in this communication concerning Belos business outlook or future economic
performance, anticipated profitability, revenues, expenses, capital expenditures, investments,
future financings, impairments, pension matters, and other financial and non-financial items 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, uncertainties and factors include, but are not limited to, uncertainties regarding
the costs, consequences (including tax consequences) and other effects of the Companys spin-off
distribution of its newspaper businesses and related assets to A. H. Belo Corporation and the
associated agreements between the Company and A. H. Belo relating to various matters; changes in
capital market conditions and prospects, and other factors such as changes in advertising demand,
interest rates and programming and production costs; changes in viewership patterns and demography,
and actions by Nielsen; changes in the network-affiliate business model for broadcast television;
technological changes, and the development of new systems to
distribute television and other audio-visual content; changes in the ability to secure, and in the
terms of, carriage of Belo programming on cable, satellite, telecommunications and other program
distribution methods; development of Internet commerce; industry cycles; changes in pricing or
other actions by competitors and suppliers; Federal Communications Commission and other regulatory,
tax and legal changes; adoption of new accounting standards or changes in existing accounting
standards by the Financial Accounting Standards Board or other accounting standard-setting bodies
or authorities; the effects of Company acquisitions, dispositions, co-owned ventures, and
investments; pension plan matters; general economic conditions; and significant armed conflict, as
well as other risks detailed in Belos other public disclosures and filings with the SEC including
Belos Annual Report on Form 10-K.
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Belo Corp.
Consolidated Statements of Operations
Consolidated Statements of Operations
Three months ended | ||||||||
March 31, | ||||||||
In thousands, except per share amounts | 2010 | 2009 | ||||||
(unaudited) | (unaudited) | |||||||
Net Operating Revenues |
$ | 154,332 | $ | 133,536 | ||||
Operating Costs and Expenses |
||||||||
Station salaries, wages and employee benefits |
51,224 | 52,673 | ||||||
Station programming and other operating costs |
45,631 | 48,364 | ||||||
Corporate operating costs |
9,609 | 8,950 | ||||||
Pension contribution reimbursement |
(4,072 | ) | | |||||
Depreciation |
9,243 | 10,792 | ||||||
Total operating costs and expenses |
111,635 | 120,779 | ||||||
Earnings from operations |
42,697 | 12,757 | ||||||
Other income and expense |
||||||||
Interest expense |
(19,888 | ) | (14,580 | ) | ||||
Other income (expense), net |
(267 | ) | 16,369 | |||||
Total other income and expense |
(20,155 | ) | 1,789 | |||||
Earnings before income taxes |
22,542 | 14,546 | ||||||
Income tax expense |
9,000 | 5,635 | ||||||
Net earnings |
$ | 13,542 | $ | 8,911 | ||||
Net earnings per share Basic |
$ | 0.13 | $ | 0.09 | ||||
Net earnings per share Diluted |
$ | 0.13 | $ | 0.09 | ||||
Cash dividends declared per share |
$ | | $ | 0.075 | ||||
Belo Corp.
Consolidated Condensed Balance Sheets
Consolidated Condensed Balance Sheets
March 31, | December 31, | |||||||
In thousands | 2010 | 2009 | ||||||
(unaudited) | ||||||||
Assets |
||||||||
Current assets |
||||||||
Cash and temporary cash investments |
$ | 4,916 | $ | 4,800 | ||||
Accounts receivable, net |
128,009 | 139,911 | ||||||
Other current assets |
28,589 | 31,413 | ||||||
Total current assets |
161,514 | 176,124 | ||||||
Property, plant and equipment, net |
174,762 | 177,475 | ||||||
Intangible assets, net |
1,149,272 | 1,149,272 | ||||||
Other assets |
76,005 | 81,590 | ||||||
Total assets |
$ | 1,561,553 | $ | 1,584,461 | ||||
Liabilities and Shareholders Equity |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ | 17,362 | $ | 20,736 | ||||
Accrued expenses |
58,493 | 56,199 | ||||||
Other current liabilities |
27,659 | 26,962 | ||||||
Total current liabilities |
103,514 | 103,897 | ||||||
Long-term debt |
993,443 | 1,028,219 | ||||||
Deferred income taxes |
175,354 | 169,888 | ||||||
Other liabilities |
202,051 | 210,626 | ||||||
Total shareholders equity |
87,191 | 71,831 | ||||||
Total liabilities and shareholders equity |
$ | 1,561,553 | $ | 1,584,461 | ||||
Belo Corp.
Non-GAAP to GAAP Reconciliations
Non-GAAP to GAAP Reconciliations
Station EBITDA
Three months ended | ||||||||
March 31, | ||||||||
In thousands (unaudited) | 2010 | 2009 | ||||||
Station EBITDA (1) |
$ | 57,477 | $ | 32,499 | ||||
Corporate operating costs |
(9,609 | ) | (8,950 | ) | ||||
Depreciation |
(9,243 | ) | (10,792 | ) | ||||
Pension contribution reimbursement |
4,072 | | ||||||
Earnings from operations |
$ | 42,697 | $ | 12,757 | ||||
Note 1: | Belos management uses Station EBITDA as the primary measure of profitability to evaluate operating performance and to allocate capital resources and bonuses to eligible operating company employees. Station EBITDA represents the Companys earnings from operations before interest expense, income taxes, depreciation, amortization, impairment charges, pension contribution reimbursements and corporate expense. Other income (expense), net is not allocated to television station earnings from operations because it consists primarily of equity in earnings (losses) from investments in partnerships and joint ventures and other non-operating income (expense). |
Pro Forma Net Earnings
In thousands (unaudited)
In thousands (unaudited)
Three months ended March 31, 2010 | Three months ended March 31, 2009 | |||||||||||||||
Earnings | EPS | Earnings | EPS | |||||||||||||
Net earnings |
$ | 13,542 | $ | 0.13 | $ | 8,911 | $ | 0.09 | ||||||||
Pension contribution reimbursement, net
of tax |
(2,484 | ) | (0.02 | ) | | |||||||||||
Gain from extinguishment of debt,
net of tax |
| (9,131 | ) | (0.09 | ) | |||||||||||
Pro forma net earnings (loss) |
$ | 11,058 | $ | 0.11 | $ | (220 | ) | $ | (0.00 | ) | ||||||