BELO CORP 
By DALLAS, April 25, 2013 /PRNewswire/ -- Television company Belo Corp. (NYSE: BLC) today reported net earnings per share of $0.16 in the first quarter of 2013 compared to net earnings per share of $0.14 in the first quarter of 2012.
Dunia A. Shive, Belo's president and Chief Executive Officer, said, "The Company's total revenue grew almost 3 percent in the first quarter of 2013 compared to the first quarter of 2012, with gains in core spot and total spot revenue. Also, our ongoing investments in interactive products and services contributed to a 22 percent increase in Internet revenue.
"Combined station and corporate operating costs were 4.1 percent higher in the first quarter of 2013 compared to the first quarter of 2012 due primarily to higher share-based compensation expense associated with the Company's higher stock price and higher programming expense.
"Our station-adjusted EBITDA totaled $56.1 million in the first quarter of 2013 compared to $54.9 million in the first quarter of 2012. Our station-adjusted EBITDA margin was 35 percent."
First Quarter in Review
Operating Results
Total revenue of $160.3 million in the first quarter of 2013 was $4.4 million, or 2.8 percent, higher than the first quarter of 2012.
Core spot revenue was up about 2 percent with a 7 percent increase in national spot revenue and 1 percent decrease in local spot revenue. Super Bowl revenue was approximately $1.4 million higher in the first quarter of 2013 versus the first quarter of 2012. Core spot revenue growth came primarily from strength in the automotive, retail and telecommunications categories, partially offset by lower spending in the healthcare, restaurants and entertainment categories. Political revenue in the first quarter of 2013 totaled $0.6 million, which was $1 million lower than the first quarter of 2012. Total spot revenue, including political, was up 1 percent in the first quarter of 2013 compared to the first quarter of 2012.
Other revenue, which is comprised primarily of Internet advertising, retransmission revenue, and barter and trade advertising, was up 11 percent in the first quarter of 2013 compared to the first quarter of 2012, including a 22 percent increase in Internet advertising revenue and an 8 percent increase in retransmission revenue.
Station salaries, wages and employee benefits were basically flat in the first quarter of 2013 compared to the first quarter of 2012. Station programming and other operating costs in the first quarter of 2013 were up $3.3 million compared to the first quarter of 2012 due to higher programming expense associated with reverse compensation and higher sales-related costs associated with the Company's increase in revenue.
Corporate
Corporate operating costs were $1.1 million higher in the first quarter of 2013 compared to the first quarter of 2012, mostly due to higher share-based compensation expense associated with the increase in the Company's stock price.
Other Items
Belo's depreciation expense totaled $7 million in the first quarter of 2013, down from $7.5 million in the first quarter of 2012.
The Company's interest expense of $14.6 million in the first quarter of 2013 was $3 million lower than the first quarter of 2012 due primarily to lower debt levels associated with the early redemption of the Company's May 2013 notes in November of 2012.
Income tax expense increased $1.4 million in the first quarter of 2013 compared to the first quarter of 2012 due primarily to higher pre-tax earnings.
Total debt at March 31, 2013 was $720 million. The Company had $7.8 million drawn on its credit facility and $5.1 million in cash and temporary cash investments at March 31, 2013. The Company's total leverage ratio, as defined in the Company's credit facility, was 2.7 times at March 31, 2013. Belo invested $4.7 million in capital expenditures in the first quarter of 2013.
Non-GAAP Financial Measures
A reconciliation of station-adjusted EBITDA to earnings from operations is set forth in an exhibit to this release.
Outlook
Looking forward, Shive said, "Based on recent pacings, we currently estimate core spot revenue to be up 2 to 2.5 percent in the second quarter of 2013 compared to the second quarter of 2012. As we cycle against $9.5 million of political revenue in the second quarter of last year, we currently estimate total revenue to be down 1.5 to 2 percent in the second quarter of 2013, with total revenue excluding political estimated to be up 3 to 3.5 percent. Combined station and corporate operating costs are currently estimated to be up around 4 percent in the second quarter of 2013 when compared to the second quarter of 2012."
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 1-866-269-9608. A replay line will be open from 12:00 p.m. CDT on April 25, 2013 until 11:59 p.m. CDT on May 9, 2013. To access the replay, dial 800-475-6701 or 320-365-3844. The access code for the replay is 288408.
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 & 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 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, 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 2013 2012
-------------------------------------- ---- ----
(unaudited) (unaudited)
Net Operating Revenues $160,338 $155,898
Operating Costs and Expenses
Station salaries,
wages and
employee
benefits 55,634 55,699
Station
programming and
other operating
costs 48,647 45,317
Corporate
operating costs 8,880 7,732
Depreciation 6,976 7,462
Total operating costs and
expenses 120,137 116,210
Earnings from operations 40,201 39,688
Other Income and (Expense)
Interest expense (14,613) (17,662)
Other income, net 682 501
Total other income and
(expense) (13,931) (17,161)
Earnings before income taxes 26,270 22,527
Income tax expense 9,603 8,235
Net earnings 16,667 14,292
Less: Net (loss) attributable to noncontrolling interests (5) -
--- ---
Net earnings attributable to Belo Corp. $16,672 $14,292
Net earnings per share - Basic $0.16 $0.14
Net earnings per share - Diluted $0.16 $0.14
Weighted average shares outstanding
Basic 103,567 103,934
Diluted 104,174 104,257
Dividends declared per share $0.08 $0.08
Belo Corp.
Consolidated Condensed Balance Sheets
March 31, December 31,
In thousands 2013 2012
------------ ---- ----
(unaudited)
Assets
Current assets
Cash and temporary cash
investments $5,086 $9,437
Accounts receivable, net 135,878 140,605
Other current assets 16,769 17,757
Total current
assets 157,733 167,799
Property, plant
and equipment,
net 144,082 146,522
Intangible
assets, net 725,399 725,399
Goodwill 423,873 423,873
Other assets 35,371 35,999
Total assets $1,486,458 $1,499,592
Liabilities and Shareholders' Equity
Current
liabilities
Accounts payable $14,580 $20,348
Accrued expenses 33,418 42,057
Short-term pension obligation 20,000 20,000
Accrued interest payable 14,146 9,123
Income taxes payable 7,665 9,043
Dividends payable 8,332 8,331
Deferred revenue 3,392 2,911
Total current
liabilities 101,533 111,813
Long-term debt 720,014 733,025
Deferred income
taxes 261,708 257,864
Pension
obligation 81,415 86,590
Other liabilities 10,357 10,576
Total
shareholders'
equity 311,431 299,724
Total liabilities and shareholders' equity $1,486,458 $1,499,592
Belo Corp.
Non-GAAP to GAAP Reconciliations
Station-Adjusted EBITDA
Three months ended
March 31,
---------
In thousands (unaudited) 2013 2012
----------------------- ---- ----
Station-Adjusted EBITDA (1) $56,057 $54,882
Corporate
operating
costs (8,880) (7,732)
Depreciation (6,976) (7,462)
Earnings from
operations $40,201 $39,688
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).
SOURCE Belo Corp.
