Television Company Belo Corp. (BLC) Reports Earnings For Third Quarter 2013
DALLAS, Oct. 31, 2013 /PRNewswire/ -- Television company Belo Corp. (NYSE: BLC) today reported net earnings per share of $0.18 in the third quarter of 2013 compared to net earnings per share of $0.24 in the third quarter of 2012. The third quarter of 2013 includes costs, net of tax, associated with the Company's previously announced and pending merger with Gannett Co., Inc. of $2.1 million, or $0.02 per share. Closing of the merger, which was approved by the Company's shareholders on September 25, 2013, is subject to required regulatory approvals and other closing conditions.
Third Quarter in Review
Operating Results
Total revenue of $166 million in the third quarter of 2013 was $10 million, or 5.7 percent, lower than the third quarter of 2012 as the Company cycled against political revenue, which was $15 million less than the third quarter of 2012, and $13.4 million of non-returning Olympics revenue on the Company's NBC-affiliated television stations in the third quarter of 2012. Total revenue excluding political in the third quarter of 2013 was 3.1 percent higher than the third quarter of 2012.
Core spot revenue was down 1.3 percent with a decrease in national spot of 3 percent and local spot basically flat. The decline in core spot revenue was primarily due to the non-returning Olympics revenue from the third quarter of 2012. Major advertising categories that were up in the third quarter of 2013 included travel, automotive and furniture, which were up 13 percent, 4 percent and 4 percent, respectively. Major advertising categories that were down in the third quarter of 2013 included retail, restaurants and grocery, which were down 11 percent, 8 percent and 6 percent, respectively.
Political revenue in the third quarter of 2013 totaled $2.6 million, compared to $17.7 million in the third quarter of 2012. Total spot revenue, including political, was down 11.5 percent in the third quarter of 2013 compared to the third quarter of 2012.
Other revenue, which is comprised primarily of Internet advertising, retransmission revenue, and barter and trade advertising, was up 21 percent in the third quarter of 2013 compared to the third quarter of 2012, including a 20 percent increase in Internet advertising revenue and a 28 percent increase in retransmission revenue.
Station salaries, wages and employee benefits were up slightly in the third quarter of 2013 compared to the third quarter of 2012. Station programming and other operating costs in the third quarter of 2013 were also up slightly compared to the third quarter of 2012.
The Company's station-adjusted EBITDA margin for the third quarter of 2013 was 36 percent.
Corporate
Corporate operating costs were $3.4 million higher in the third quarter of 2013 compared to the third quarter of 2012. The increase is primarily due to $3.2 million in pre-tax costs related to the pending merger with Gannett.
Combined station and corporate operating costs were $3.9 million, or 3.5 percent, higher in the third quarter of 2013 than the third quarter of 2012. Excluding pre-tax costs associated with the Company's pending merger with Gannett of $3.2 million, combined station and corporate operating costs were up less than one percent.
Other Items
Belo's depreciation expense totaled $7.1 million in the third quarter of 2013, which was down about 5 percent when compared with the third quarter of 2012.
The Company's interest expense of $14.5 million in the third quarter of 2013 was $3.1 million lower than the third quarter of 2012 due primarily to lower debt levels associated with the early redemption of the Company's May 2013 notes in November 2012.
Income tax expense decreased $4.4 million in the third quarter of 2013 compared to the third quarter of 2012 due primarily to lower pre-tax earnings.
Total debt at September 30, 2013 was $713 million. The Company had nothing drawn on its credit facility and $28 million in cash and temporary cash investments at September 30, 2013. The Company's total leverage ratio, as defined in the Company's credit facility, was 2.8 times at September 30, 2013. Belo invested $9.5 million in capital expenditures and made pension contributions totaling $10 million in the third quarter of 2013.
Non-GAAP Financial Measures
A reconciliation of station-adjusted EBITDA to earnings from operations and a reconciliation of net earnings to pro forma net earnings are set forth in an exhibit to this release.
About Belo Corp.
Television company Belo Corp. (NYSE: BLC) owns and operates 20 television stations (nine in the top 25 markets) and their associated websites. Belo stations, which include affiliations with ABC, CBS, NBC, FOX, and the CW, reach more than 14 percent of U.S. television households in 15 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 & Assistant Treasurer, at 214-977-4465.
Statements in this communication concerning Belo's business outlook or future economic performance, anticipated profitability, revenues, expenses, capital expenditures, dividends, 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 predicted in any such forward-looking statement. Belo undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.
Such risks, uncertainties and other factors include, but are not limited to, uncertainties regarding the changes in capital market conditions and prospects, and other factors such as changes in advertising demand, interest and discount rates and programming and production costs; changes in viewership patterns and demography, and actions by viewership measurement services; changes in the network-affiliate business model for broadcast television; technological changes, and the development of new systems and devices to distribute and consume 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, including changes regarding spectrum; 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; the ability to meet the conditions to closing the transactions with Gannett, including receipt of regulatory approvals and clearances, within the time frame contemplated or at all; the effect of transaction-related costs and expenses; the potentially adverse effect of the transactions on the ability of Belo to retain employees and maintain business relationships; 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 |
Nine months ended |
||||||||||||||
| September 30, |
September 30, |
||||||||||||||
| In thousands, except per share amounts |
2013 |
2012 |
2013 |
2012 |
|||||||||||
| (unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
||||||||||||
| Net Operating Revenues |
$ |
166,192 |
$ |
176,273 |
$ |
500,037 |
$ |
509,790 |
|||||||
| Operating Costs and Expenses |
|||||||||||||||
| Station salaries, wages and employee benefits |
55,084 |
54,776 |
167,162 |
166,912 |
|||||||||||
| Station programming and other operating costs |
50,695 |
50,520 |
147,615 |
143,911 |
|||||||||||
| Corporate operating costs |
10,920 |
7,501 |
32,477 |
23,783 |
|||||||||||
| Depreciation |
7,129 |
7,528 |
21,232 |
22,462 |
|||||||||||
| Total operating costs and expenses |
123,828 |
120,325 |
368,486 |
357,068 |
|||||||||||
| Earnings from operations |
42,364 |
55,948 |
131,551 |
152,722 |
|||||||||||
| Other Income and (Expense) |
|||||||||||||||
| Interest expense |
(14,538) |
(17,683) |
(43,715) |
(53,059) |
|||||||||||
| Other income, net |
989 |
497 |
1,718 |
2,376 |
|||||||||||
| Total other income and (expense) |
(13,549) |
(17,186) |
(41,997) |
(50,683) |
|||||||||||
| Earnings before income taxes |
28,815 |
38,762 |
89,554 |
102,039 |
|||||||||||
| Income tax expense |
9,720 |
14,148 |
31,920 |
37,300 |
|||||||||||
| Net earnings |
19,095 |
24,614 |
57,634 |
64,739 |
|||||||||||
| Less: Net (loss) attributable to noncontrolling interests |
- |
(203) |
- |
(301) |
|||||||||||
| Net earnings attributable to Belo Corp. |
$ |
19,095 |
$ |
24,817 |
$ |
57,634 |
$ |
65,040 |
|||||||
| Net earnings per share - Basic |
$ |
0.18 |
$ |
0.24 |
$ |
0.55 |
$ |
0.62 |
|||||||
| Net earnings per share - Diluted |
$ |
0.18 |
$ |
0.24 |
$ |
0.55 |
$ |
0.62 |
|||||||
| Weighted average shares outstanding |
|||||||||||||||
| Basic |
104,019 |
103,120 |
103,804 |
103,607 |
|||||||||||
| Diluted |
104,899 |
103,420 |
104,566 |
103,914 |
|||||||||||
| Dividends declared per share |
$ |
0.16 |
$ |
0.16 |
$ |
0.24 |
$ |
0.24 |
|||||||
| Belo Corp. |
||||||||||
| Consolidated Condensed Balance Sheets |
||||||||||
| September 30, |
December 31, |
|||||||||
| In thousands |
2013 |
2012 |
||||||||
| (unaudited) |
||||||||||
| Assets |
||||||||||
| Current assets |
||||||||||
| Cash and temporary cash investments |
$ |
28,196 |
$ |
9,437 |
||||||
| Accounts receivable, net |
137,166 |
140,605 |
||||||||
| Other current assets |
15,476 |
17,757 |
||||||||
| Total current assets |
180,838 |
167,799 |
||||||||
| Property, plant and equipment, net |
146,314 |
146,522 |
||||||||
| Intangible assets, net |
725,399 |
725,399 |
||||||||
| Goodwill |
423,873 |
423,873 |
||||||||
| Other assets |
36,682 |
35,999 |
||||||||
| Total assets |
$ |
1,513,106 |
$ |
1,499,592 |
||||||
| Liabilities and Shareholders' Equity |
||||||||||
| Current liabilities |
||||||||||
| Accounts payable |
$ |
16,099 |
$ |
20,348 |
||||||
| Accrued expenses |
48,920 |
42,057 |
||||||||
| Short-term pension obligation |
8,200 |
20,000 |
||||||||
| Accrued interest payable |
14,142 |
9,123 |
||||||||
| Income taxes payable |
3,607 |
9,043 |
||||||||
| Dividends payable |
8,390 |
8,331 |
||||||||
| Deferred revenue |
3,874 |
2,911 |
||||||||
| Total current liabilities |
103,232 |
111,813 |
||||||||
| Long-term debt |
712,599 |
733,025 |
||||||||
| Deferred income taxes |
266,938 |
257,864 |
||||||||
| Pension obligation |
75,659 |
86,590 |
||||||||
| Other liabilities |
11,725 |
10,576 |
||||||||
| Total shareholders' equity |
342,953 |
299,724 |
||||||||
| Total liabilities and shareholders' equity |
$ |
1,513,106 |
$ |
1,499,592 |
||||||
| Belo Corp. |
|||||||||||||||||
| Non-GAAP to GAAP Reconciliations |
|||||||||||||||||
| Station-Adjusted EBITDA |
|||||||||||||||||
| Three months ended |
Nine months ended |
||||||||||||||||
| September 30, |
September 30, |
||||||||||||||||
| In thousands (unaudited) |
2013 |
2012 |
2013 |
2012 |
|||||||||||||
| Station-Adjusted EBITDA (1) |
$ |
60,413 |
$ |
70,977 |
$ |
185,260 |
$ |
198,967 |
|||||||||
| Corporate operating costs |
(10,920) |
(7,501) |
(32,477) |
(23,783) |
|||||||||||||
| Depreciation |
(7,129) |
(7,528) |
(21,232) |
(22,462) |
|||||||||||||
| Earnings from operations |
$ |
42,364 |
$ |
55,948 |
$ |
131,551 |
$ |
152,722 |
|||||||||
| Note 1: |
Belo's management uses Station-Adjusted EBITDA as the primary measure of profitability to evaluate operating performance and to allocate capital resources and bonuses to eligible operating company employees. Station-Adjusted EBITDA represents the Company's earnings from operations before interest expense, income taxes, depreciation, amortization, impairment charges and corporate 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). |
||||||||||||||||
| Pro Forma Net Earnings (2) |
|||||||||||||||||||||
| In thousands, except per share amounts (unaudited) |
|||||||||||||||||||||
| Three months ended |
Three months ended |
||||||||||||||||||||
| September 30, 2013 |
September 30, 2012 |
||||||||||||||||||||
| Earnings |
EPS |
Earnings |
EPS |
||||||||||||||||||
| Net earnings attributable to Belo Corp. |
$ |
19,095 |
$ |
0.18 |
$ |
24,817 |
$ |
0.24 |
|||||||||||||
| Adjustment for costs associated with Merger Agreement, net of tax |
2,130 |
0.02 |
- |
- |
|||||||||||||||||
| Pro forma net earnings attributable to Belo Corp. |
$ |
21,225 |
$ |
0.20 |
$ |
24,817 |
$ |
0.24 |
|||||||||||||
| Nine months ended |
Nine months ended |
||||||||||||||||||||
| September 30, 2013 |
September 30, 2012 |
||||||||||||||||||||
| Earnings |
EPS |
Earnings |
EPS |
||||||||||||||||||
| Net earnings attributable to Belo Corp. |
$ |
57,634 |
$ |
0.55 |
$ |
65,040 |
$ |
0.62 |
|||||||||||||
| Adjustment for costs associated with Merger Agreement, net of tax |
4,870 |
0.05 |
- |
- |
|||||||||||||||||
| Pro forma net earnings attributable to Belo Corp. |
$ |
62,504 |
$ |
0.60 |
$ |
65,040 |
$ |
0.62 |
|||||||||||||
| Note 2: |
There were no pro forma adjustments for the three or nine months ended September 30, 2012. |
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SOURCE Belo Corp.
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