Television Company Belo Corp. (BLC) Reports Earnings For Third Quarter 2013

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 earningsfrom 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 Nine months
ended 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 Three months
ended ended

September September
30, 2013 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 Nine months
ended ended

September September
30, 2013 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
======= =======



There
were no
pro
forma
adjustments
for the
three or
nine
months
ended
September
30,
Note 2: 2012.






SOURCE Belo Corp.

Belo Corp.

Web Site: http://www.belo.com


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