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.

 

 

 

SOURCE Belo Corp.



RELATED LINKS
http://www.belo.com

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