Television Company Belo Corp. (BLC) Reports Earnings for Second Quarter 2012
DALLAS, July 27, 2012 /PRNewswire/ -- Television company Belo Corp. (NYSE: BLC) today reported net earnings per share of $0.24 in the second quarter of 2012 compared to net earnings per share of $0.17 in the second quarter of 2011.
Dunia A. Shive, Belo's president and Chief Executive Officer, said, "Second quarter total revenue increased 7 percent compared to the second quarter of 2011. Political revenue totaled $9.5 million, with $5 million attributable to the Senate primary in Texas. The Company also received meaningful political revenue in Charlotte, Norfolk and St. Louis. Core spot revenue was up in many of the Company's markets in the second quarter of 2012, but was down slightly overall compared to last year due to softness in national spot in certain markets. Third quarter total spot revenue is currently pacing up in the high-teens with strong core and political revenue.
"Combined station and corporate operating costs were 1 percent lower when compared to the second quarter of last year. Our station adjusted EBITDA grew 23 percent compared to the second quarter of 2011 and our station adjusted EBITDA margin was 41 percent.
"During the second quarter, the Company opportunistically repurchased over 1 million shares in the open market at an average price of $5.81."
Second Quarter in Review
Operating Results
The Company generated total revenue of $178 million in the second quarter of 2012, which was $11 million, or 7 percent, higher than the second quarter of 2011.
Political revenue in the second quarter of 2012 totaled $9.5 million, an $8.3 million increase compared to the second quarter of 2011. Total spot revenue, including political, was up 6 percent in the second quarter of 2012 compared to the second quarter of 2011. Total spot revenue, excluding political, was down 0.5 percent with a 2.3 percent increase in local spot revenue and a 5.5 percent decrease in national spot revenue.
Other revenue, which is comprised primarily of Internet advertising, retransmission revenue, and barter and trade advertising, was up 12 percent in the second quarter of 2012 due primarily to double-digit increases in both Internet and retransmission revenue.
Station salaries, wages and employee benefits increased $1.9 million, or 3.5 percent, during the second quarter of 2012 versus the second quarter of 2011 due primarily to annual merit increases for employees and higher accrued performance-based bonus expense. Station programming and other operating costs were down $4.5 million, or 8.5 percent, in the second quarter of 2012 compared to the second quarter of 2011 due primarily to lower syndicated programming expense.
Corporate
Corporate operating costs of $8.6 million in the second quarter of 2012 were $1.9 million higher than the second quarter of 2011 due primarily to higher accrued performance-based bonus expense and investments in interactive initiatives. The Company's combined station and corporate operating costs were 1 percent lower compared to the second quarter of 2011.
Other Items
Belo's depreciation expense totaled $7.5 million in the second quarter of 2012, down from $7.7 million in the second quarter of 2011.
The Company's interest expense was $17.7 million in the second quarter of 2012 compared to $18.1 million in the second quarter of 2011.
Income tax expense increased $5.5 million in the second quarter of 2012 compared to the second quarter of 2011 due primarily to higher pre-tax earnings.
Total debt at June 30, 2012 was $887 million and consisted entirely of fixed-rate debt. Of this amount, $176 million is due May 2013 and is therefore classified as current on the Company's June 30, 2012 balance sheet. Also as of June 30, 2012, the Company had $126 million in cash and temporary cash investments and had nothing drawn on its $200 million revolving credit facility, which does not expire until August 2016. The facility may be used, along with some level of cash, to retire the May 2013 notes.
The Company's total leverage ratio, as defined in the Company's credit facility, was 3.9 times at June 30, 2012, and 3.4 times when including the Company's cash. Belo invested $6.9 million in capital expenditures in the second quarter of 2012.
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.
Outlook
Looking forward, Shive said, "Third quarter total spot revenue is currently pacing up in the high-teens. We currently expect other revenue, which includes Internet and retransmission revenue, to be up in the low double-digits during the third quarter. As a result, we currently expect the percentage growth in total revenue for the third quarter of 2012 to be up in the mid-to-high teens compared to the prior year, depending on the strength of political. Combined station and corporate operating costs for the third quarter of 2012 are currently expected to be up about 6 percent compared to the prior year's quarter due primarily to higher variable costs associated with higher revenue."
A conference call to discuss this release and other matters of interest to shareholders and analysts will follow at 10:00 a.m. CDT this morning. The conference call will be simultaneously webcast on Belo Corp.'s website (www.belo.com/invest). Following the conclusion of the webcast, a replay of the conference call will be archived on Belo's website. To access the listen-only conference lines, dial 1-800-553-5260. A replay line will be open from 12:00 noon CDT on July 27 until 11:59 p.m. CDT on August 10. To access the replay, dial 800-475-6701 or 320-365-3844. The access code for the replay is 253026.
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 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 214-977-4465.
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 statements.
Such risks, uncertainties and factors include, but are not limited to, uncertainties regarding 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 Nielsen and its competitors; 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, 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 |
Six months ended |
||||||||||||||
June 30, |
June 30, |
||||||||||||||
In thousands, except per share amounts |
2012 |
2011 |
2012 |
2011 |
|||||||||||
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
||||||||||||
Net Operating Revenues |
$ |
177,619 |
$ |
166,379 |
$ |
333,517 |
$ |
317,849 |
|||||||
Operating Costs and Expenses |
|||||||||||||||
Station salaries, wages and employee benefits |
56,437 |
54,525 |
112,136 |
108,361 |
|||||||||||
Station programming and other operating costs |
48,074 |
52,565 |
93,391 |
102,761 |
|||||||||||
Corporate operating costs |
8,550 |
6,692 |
16,282 |
12,991 |
|||||||||||
Pension settlement charge and contribution |
|||||||||||||||
reimbursements |
- |
- |
- |
20,466 |
|||||||||||
Depreciation |
7,472 |
7,707 |
14,934 |
15,631 |
|||||||||||
Total operating costs and expenses |
120,533 |
121,489 |
236,743 |
260,210 |
|||||||||||
Earnings from operations |
57,086 |
44,890 |
96,774 |
57,639 |
|||||||||||
Other Income and (Expense) |
|||||||||||||||
Interest expense |
(17,714) |
(18,050) |
(35,376) |
(36,033) |
|||||||||||
Other income, net |
1,378 |
649 |
1,879 |
829 |
|||||||||||
Total other income and (expense) |
(16,336) |
(17,401) |
(33,497) |
(35,204) |
|||||||||||
Earnings before income taxes |
40,750 |
27,489 |
63,277 |
22,435 |
|||||||||||
Income tax expense |
14,917 |
9,402 |
23,152 |
8,662 |
|||||||||||
Net earnings |
25,833 |
18,087 |
40,125 |
13,773 |
|||||||||||
Less: Net (loss) attributable to noncontrolling interests |
(98) |
- |
(98) |
- |
|||||||||||
Net earnings attributable to Belo Corp. |
$ |
25,931 |
$ |
18,087 |
$ |
40,223 |
$ |
13,773 |
|||||||
Net earnings per share - Basic |
$ |
0.24 |
$ |
0.17 |
$ |
0.38 |
$ |
0.13 |
|||||||
Net earnings per share - Diluted |
$ |
0.24 |
$ |
0.17 |
$ |
0.38 |
$ |
0.13 |
|||||||
Weighted average shares outstanding |
|||||||||||||||
Basic |
103,774 |
103,626 |
103,854 |
103,515 |
|||||||||||
Diluted |
104,068 |
104,022 |
104,163 |
103,917 |
|||||||||||
Dividends declared per share |
$ |
- |
$ |
0.05 |
$ |
0.08 |
$ |
0.05 |
Belo Corp. |
|||||||||
Consolidated Condensed Balance Sheets |
|||||||||
June 30, |
December 31, |
||||||||
In thousands |
2012 |
2011 |
|||||||
(unaudited) |
|||||||||
Assets |
|||||||||
Current assets |
|||||||||
Cash and temporary cash investments |
$ |
125,669 |
$ |
61,118 |
|||||
Accounts receivable, net |
140,018 |
149,584 |
|||||||
Income tax receivable |
14 |
31,629 |
|||||||
Other current assets |
20,591 |
16,692 |
|||||||
Total current assets |
286,292 |
259,023 |
|||||||
Property, plant and equipment, net |
151,356 |
157,115 |
|||||||
Intangible assets, net |
725,399 |
725,399 |
|||||||
Goodwill |
423,873 |
423,873 |
|||||||
Other assets |
40,355 |
46,195 |
|||||||
Total assets |
$ |
1,627,275 |
$ |
1,611,605 |
|||||
Liabilities and Shareholders' Equity |
|||||||||
Current liabilities |
|||||||||
Current portion of long-term debt |
$ |
175,810 |
$ |
- |
|||||
Accounts payable |
17,839 |
19,677 |
|||||||
Accrued expenses |
36,468 |
34,961 |
|||||||
Short-term pension obligation |
19,737 |
19,300 |
|||||||
Accrued interest payable |
10,106 |
10,378 |
|||||||
Income taxes payable |
5,814 |
12,922 |
|||||||
Dividends payable |
- |
5,189 |
|||||||
Deferred revenue |
5,427 |
3,435 |
|||||||
Total current liabilities |
271,201 |
105,862 |
|||||||
Long-term debt |
711,638 |
887,003 |
|||||||
Deferred income taxes |
251,977 |
244,361 |
|||||||
Pension obligation |
83,968 |
93,012 |
|||||||
Other liabilities |
11,763 |
14,164 |
|||||||
Total shareholders' equity |
296,728 |
267,203 |
|||||||
Total liabilities and shareholders' equity |
$ |
1,627,275 |
$ |
1,611,605 |
Belo Corp. |
||||||||||||||||||
Non-GAAP to GAAP Reconciliations |
||||||||||||||||||
Station Adjusted EBITDA |
||||||||||||||||||
Three months ended |
Six months ended |
|||||||||||||||||
June 30, |
June 30, |
|||||||||||||||||
In thousands (unaudited) |
2012 |
2011 |
2012 |
2011 |
||||||||||||||
Station Adjusted EBITDA (1) |
$ |
73,108 |
$ |
59,289 |
$ |
127,990 |
$ |
106,727 |
||||||||||
Corporate operating costs |
(8,550) |
(6,692) |
(16,282) |
(12,991) |
||||||||||||||
Depreciation |
(7,472) |
(7,707) |
(14,934) |
(15,631) |
||||||||||||||
Pension settlement charge and contribution reimbursements |
- |
- |
- |
(20,466) |
||||||||||||||
Earnings from operations |
$ |
57,086 |
$ |
44,890 |
$ |
96,774 |
$ |
57,639 |
||||||||||
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, pension settlement charge and contribution reimbursements, 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 |
||||||||||||||||||
In thousands, except per share amounts (unaudited) |
||||||||||||||||||
Six months ended |
Six months ended |
|||||||||||||||||
June 30, 2012 |
June 30, 2011 |
|||||||||||||||||
Earnings |
EPS |
Earnings |
EPS |
|||||||||||||||
Net earnings attributable to Belo Corp. |
$ |
40,223 |
$ |
0.38 |
$ |
13,773 |
$ |
0.13 |
||||||||||
Pension settlement charge and contribution reimbursements, net of tax |
- |
- |
13,323 |
0.13 |
||||||||||||||
Pro forma net earnings attributable to Belo Corp. |
$ |
40,223 |
$ |
0.38 |
$ |
27,096 |
$ |
0.26 |
||||||||||
Note 2: |
There were no pro forma adjustments for the three months ended June 30, 2012 or 2011. |
SOURCE Belo Corp.
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article