EX-99.1 2 d67475exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
     
 
  FOR IMMEDIATE RELEASE
 
  Thursday, April 30, 2009
 
  7:30 A.M. CDT
TELEVISION COMPANY BELO CORP. (BLC) REPORTS RESULTS
FOR FIRST QUARTER 2009
EPS results exceed analysts’ estimates
     DALLAS — Belo Corp. (NYSE: BLC), one of the nation’s largest pure-play, publicly-traded television companies, today reported GAAP net earnings per share of $0.09 in the first quarter of 2009 compared to a GAAP net loss per share of ($0.15) in the first quarter of 2008.
     The first quarter of 2009 included a gain, net of taxes, of $9.1 million, or $0.09 per share, associated with the purchase and retirement of Company bonds. The first quarter of 2008 included spin-off related transaction and financing costs and a one-time tax charge related to the spin-off of the Company’s newspaper businesses and related assets on February 8, 2008 totaling $21.4 million, or $0.21 per share. The results of Belo’s newspaper businesses and related assets from January 1 to February 8, 2008 are included in discontinued operations and total a loss of ($0.04) per share in the first quarter of 2008.
     Excluding the gain on the purchase and retirement of Company bonds in the first quarter of 2009, and spin-off related charges and discontinued operations in the first quarter of 2008, pro forma earnings per share from continuing operations were break-even ($0.00) in the first quarter of 2009, exceeding analysts’ estimates, and $0.10 in the first quarter of 2008.
     Dunia A. Shive, Belo’s president and Chief Executive Officer, said, “The Company’s cost-saving measures, which included the holding of open positions Company-wide, a wage freeze enacted in November 2008, staff reductions in certain markets and other cost-saving measures, led to a 14 percent reduction in combined station and corporate operating costs in the first quarter of 2009 compared to the first quarter of 2008, excluding spin-off related charges and non-cash pension expense. Belo’s first quarter total revenue declined 23.6 percent from the first quarter of 2008 and is indicative of the soft advertising environment prevalent throughout the country, especially in the automotive category. Retransmission revenue, however, increased 10 percent in the first quarter of 2009. For the remainder of the year, the Company’s primary focus will continue to be on cash generation and reducing debt. The Company reduced its debt by $15 million during the quarter.”
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Belo Announces First Quarter 2009 Results
April 30, 2009
Page Two
First Quarter in Review
Operating Results
     Total revenues decreased 23.6 percent in the first quarter of 2009 versus the first quarter of 2008. Total spot revenue, including political, was down 27.5 percent with 26 percent and 24 percent decreases in local and national spot, respectively. First quarter 2009 revenues were affected by the soft advertising environment, particularly in the automotive category which was down 51 percent. Political revenues in the first quarter of 2009 were $4.4 million lower than the first quarter of 2008.
     Advertising revenue associated with Belo’s Web sites decreased 5.4 percent to $6.5 million in the first quarter 2009, representing almost 5 percent of Belo’s total revenue. Retransmission revenue totaled $9.7 million in the first quarter of 2009, a 10 percent increase compared to the first quarter of 2008, and represents over 7 percent of the Company’s total revenue.
     Total station expenses decreased 13 percent in the first quarter of 2009 versus the same period last year. Station EBITDA in the first quarter of 2009 was down 45 percent versus the prior year. The station EBITDA margin for the first quarter of 2009 was 24.3 percent compared to 33.6 percent in the first quarter of 2008.
Corporate
     Corporate operating costs were $9 million in the first quarter of 2009 as compared to $9.1 million in the first quarter of 2008, a decrease of 1.5 percent. First quarter 2009 corporate operating costs included a $1.4 million increase in non-cash pension expense. Excluding non-cash pension expense from both years, first quarter 2009 corporate operating costs decreased 16 percent compared to the prior year.
Other Items
     Belo’s depreciation and amortization expense decreased slightly to $10.8 million in the first quarter of 2009, from $10.9 million in the first quarter of 2008.
     Interest expense decreased $8.2 million, or 36 percent, in the first quarter of 2009.
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Belo Announces First Quarter 2009 Results
April 30, 2009
Page Three
     Other income, net, increased $16.1 million in the first quarter of 2009 due primarily to a pre-tax gain on the retirement of $40.5 million of bonds due in 2013 that were purchased for $25.3 million.
     Income tax expense decreased $17.3 million in the first quarter of 2009 due primarily to a one-time $18.2 million tax charge in the first quarter of 2008 related to the transfer of certain intangible assets in connection with the spin-off.
     Total debt at March 31, 2009 was $1.078 billion, a reduction of $15 million from December 31, 2008. The Company’s leverage and interest coverage ratios, as defined in the Company’s credit facility, were 4.8 and 3.1 times, respectively, at March 31, 2009. The Company invested $1.1 million in capital expenditures in the first quarter of 2009, down from $6.4 million in the first quarter of 2008.
Discontinued Operations
     On February 8, 2008, Belo completed the spin-off of its newspaper businesses and related assets into a separate publicly-traded company, A. H. Belo Corporation. The results of operations of the Newspaper Group and related corporate expenses are classified as discontinued operations for all periods prior to the spin-off.
Other Matters
     In the first quarter, the Company successfully completed an amendment to its bank credit facility. Although Belo was in compliance with the terms of its bank facility, the Company entered into the amendment to allow for additional capacity under the agreement’s leverage and interest coverage covenants. The amendment reduced the banks’ commitment from $600 million to $550 million at February 26, 2009, with a further reduction to $525 million at December 31, 2009. The amendment provides for an increase in pricing, based on the Company’s leverage ratio, in addition to other modifications to the existing agreement. The credit facility retains its June 2011 expiration date.
     In March, the Company announced the suspension of its dividend for an indefinite period following the June 5, 2009 payment of the second quarter dividend.
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Belo Announces First Quarter 2009 Results
April 30, 2009
Page Four
Non-GAAP Financial Measures
     A reconciliation of station EBITDA to earnings from operations, a reconciliation of cash operating costs and expenses before spin-off related costs and pension expense to total operating costs and expenses, and a reconciliation of net earnings from continuing operations to pro forma net earnings from continuing operations, are set forth in an exhibit to this release.
Outlook
     “Looking to second quarter,” Shive said, “current local and national spot pacing trends are similar to our experience in the first quarter of 2009. For full year 2009, retransmission revenues are expected to grow double digits and Internet revenues are expected to be flat to down slightly, which is lower than our previous guidance. In March, we announced several additional cost-saving measures that will affect the remainder of 2009, including the suspension of the Company’s 401(k) matching contribution for all employees, a 5 percent salary reduction for employees who are part of the Company’s management compensation programs, and a Company-wide staff reduction of approximately 150 positions. These cost-saving measures along with others previously implemented are expected to lower full year 2009 combined station and corporate operating costs, excluding spin-off related charges, by at least 11 percent, an improvement from previous guidance. Capital expenditures are not expected to exceed $12 million for the year, down from $25.4 million in 2008.”
     A conference call to discuss this earnings 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 the Company’s Web site (www.belo.com/invest). Following the conclusion of the Webcast, a replay of the conference call will be archived on Belo’s Web site. To access the listen-only conference lines, dial 1-800-230-1085. A replay line will be open from 3:00 p.m. CDT on April 30 until 11:59 p.m. CDT on May 7, 2009. To access the replay, dial 1-800-475-6701 or 320-365-3844. The access code for the replay is 995897.
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Belo Announces First Quarter 2009 Results
April 30, 2009
Page Five
About Belo Corp.
     Belo Corp. (BLC) is one of the nation’s largest pure-play, publicly-traded television companies, with 2008 annual revenue of $733 million. The Company 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. A Belo station ranks 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 & Corporate Communications, at 214-977-6835.
     Statements in this communication concerning Belo’s business outlook or future economic performance, anticipated profitability, revenues, expenses, dividends, capital expenditures, investments, future financings, 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 Company’s 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, including the transition to digital television 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 and co-owned ventures; general economic conditions; and significant armed conflict, as well as other risks detailed in Belo’s other public disclosures and filings with the SEC including Belo’s Annual Report on Form 10-K.

 

 

Belo Corp.
Consolidated Statements of Operations
                 
    Three months ended  
    March 31,  
 
In thousands, except per share amounts   2009     2008  
 
    (unaudited)     (unaudited)  
 
                
Net Operating Revenues
   $ 133,536     $ 174,827  
 
                
Operating Costs and Expenses
                
Station salaries, wages and employee benefits
     52,673       62,149  
Station programming and other operating costs
     48,364       53,938  
Corporate operating costs
     8,950       9,090  
Spin-off related costs
     —       4,249  
Depreciation
     10,792       10,884  
 
            
Total operating costs and expenses
     120,779       140,310  
 
                
Earnings from operations
     12,757       34,517  
 
                
Other income and expense
                
Interest expense
     (14,580 )     (22,744 )
Other income, net
     16,369       269  
 
            
Total other income and expense
     1,789       (22,475 )
 
                
Earnings from continuing operations before income taxes
     14,546       12,042  
Income taxes
     5,635       22,922  
 
            
 
                
Net earnings (loss) from continuing operations
     8,911       (10,880 )
 
                
Discontinued operations, net of tax
     —       (4,499 )
 
            
 
                
Net earnings (loss)
   $ 8,911     $ (15,379 )
 
            
 
                
Net earnings (loss) per share — Basic
                
Earnings (loss) per share from continuing operations
   $ 0.09     $ (0.11 )
Loss per share from discontinued operations
     —       (0.04 )
 
            
Net earnings (loss) per share — Basic
   $ 0.09     $ (0.15 )
 
            
 
                
Net earnings (loss) per share — Diluted
                
Earnings (loss) per share from continuing operations
   $ 0.09     $ (0.11 )
Loss per share from discontinued operations
     —       (0.04 )
 
            
Net earnings (loss) per share — Diluted
   $ 0.09     $ (0.15 )
 
            
 
                
Average shares outstanding
                
Basic
     104,194       104,146  
Diluted
     104,214       104,146  
 
                
Cash dividends declared per share
   $ 0.075     $ 0.075  
 
            

 

 

Belo Corp.
Consolidated Condensed Balance Sheets
                 
 
    March 31,     December 31,  
In thousands   2009     2008  
 
    (unaudited)          
 
                
Assets
                
Current assets
                
Cash and temporary cash investments
   $ 4,308     $ 5,770  
Accounts receivable, net
     114,946       138,638  
Other current assets
     21,354       22,276  
 
            
Total current assets
     140,608       166,684  
 
                
Property, plant and equipment, net
     203,190       209,988  
Intangible assets, net
     1,581,033       1,581,033  
Other assets
     80,092       81,091  
 
            
 
                
Total assets
   $ 2,004,923     $ 2,038,796  
 
            
 
                
Liabilities and Shareholders’ Equity
                
Current liabilities
                
Accounts payable
   $ 12,391     $ 19,385  
Accrued expenses
     44,757       51,399  
Other current liabilities
     23,507       39,027  
 
            
Total current liabilities
     80,655       109,811  
 
                
Long-term debt
     1,077,803       1,092,765  
Deferred income taxes
     317,989       311,053  
Other liabilities
     224,965       225,248  
Total shareholders’ equity
     303,511       299,919  
 
            
 
                
Total liabilities and shareholders’ equity
   $ 2,004,923     $ 2,038,796  
 
            

 

 

Belo Corp.
Non-GAAP to GAAP Reconciliations
Station EBITDA
                 
    Three months ended  
    March 31,  
 
In thousands (unaudited)   2009     2008  
 
 
                
Station EBITDA (1)
   $ 32,499     $ 58,740  
Corporate operating costs
     8,950       9,090  
Spin-off related costs
     —       4,249  
Depreciation
     10,792       10,884  
 
            
Earnings from operations
   $ 12,757     $ 34,517  
 
            
 
Note 1:   Belo’s 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 Company’s earnings from operations before interest expense, income taxes, depreciation, amortization, corporate expense and spin-off related operating costs. 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).
Total Operating Costs and Expenses Before Spin-Off Related Costs and Pension Expense
In thousands (unaudited)
                                                 
    Three months ended March 31, 2009     Three months ended March 31, 2008  
    Station     Corporate     Combined     Station     Corporate     Combined  
 
                                                
Cash operating costs and expenses before spin-off related costs and pension expense
   $ 100,704     $ 8,283     $ 108,987     $ 116,744     $ 9,849     $ 126,593  
Depreciation
     9,043       1,749       10,792       9,598       1,286       10,884  
Spin-off related costs
     —       —       —       —       4,249       4,249  
Pension expense (credit)
     333       667       1,000       (657 )     (759 )     (1,416 )
 
                                    
 
                                                
Total operating costs and expenses
   $ 110,080     $ 10,699     $ 120,779     $ 125,685     $ 14,625     $ 140,310  
 
                                    

 

 

Belo Corp.
Non-GAAP to GAAP Reconciliations
(continued)
Pro Forma Net Earnings From Continuing Operations
In thousands (unaudited)
                                                 
    Three months ended March 31, 2009     Three months ended March 31, 2008  
    Earnings     EPS     Shares     Earnings     EPS     Shares(1)  
 
                                                
Net earnings (loss) from continuing operations
   $ 8,911     $ 0.09       104,214     $ (10,880 )   $ (0.11 )     104,146  
Spin-off related operating and financing costs, net of tax
     —                       3,151     $ 0.03       104,146  
Gain from extinguishment of debt, net of tax
     (9,131 )   $ (0.09 )     104,214       —                  
Spin-off related tax charge
     —                       18,235     $ 0.18       104,146  
 
                                            
Pro forma net earnings from continuing operations
   $ (220 )   $ —       104,214     $ 10,506     $ 0.10       104,259  
 
                                            
 
Note 1:   Potential dilutive common shares were antidilutive as a result of the Company’s net loss from continuing operations for the three months ended March 31, 2008. As a result, basic weighted average shares were used in the calculations of net loss from continuing operations per share. In the absence of the net loss from continuing operations, potential dilutive common shares were added to the weighted average common shares outstanding in the calculation of net earnings per share.