Belo Reports Net Income on Bond Retirement
DALLAS: Belo’s 20 TV stations reported first-quarter net income of $8.9 million on revenues of $133.5 million, compared to a $15.3 million loss on revenues of $178.8 million in 1Q08. The quarter included a $9.1 million gain net of taxes on retirement of company bonds, while 1Q08 included a one-time $21.4 million charge related to spinning out the newspaper division.
Excluding the gain on bond retirement and spin-off charges, pro former earnings per share were break-even for 1Q09 and 10 cents in 1Q08.
Total spot revenue for the quarter, including political, was down 28 percent; down 26 percent in local and 24 percent in national spot. Automotive fell 51 percent. Political revenues in 1Q09 were down $4.4 million from a year ago.
Online ad revenue decreased 5.4 percent to $6.5 million and represented almost 5 percent of total revenues. Retransmission generated $9.7 million, up 10 percent from a year earlier and more than 7 percent of total revenues.
Belo chief Dunia Shive said job cuts and a wage freeze imposed last November have reduced operating costs by 14 percent in a year-over-year quarterly comparison.
“The company reduced its debt by $15 million during the quarter,” she said. “For the remainder of the year, the company’s primary focus will continue to be on cash generation and reducing debt.”
Total debt at March 31, 2009 was $1.078 billion. Belo’s leverage and interest coverage ratios, were 4.8x and 3.1x at the end of the quarter. A total of $1.1 million was invested in capital expenditures in 1Q09, down from $6.4 million in 1Q08. The company indefinitely suspended dividend payments after one due June 5.
“Looking to second quarter,” Shive said, “current local and national spot pacing trends are similar to our experience in the first quarter of 2009. For full year 2009, retransmission revenues are expected to grow double digits and Internet revenues are expected to be flat to down slightly, which is lower than our previous guidance.
“In March, we announced several additional cost-saving measures that will affect the remainder of 2009, including the suspension of the company’s 401(k) matching contribution for all employees, a 5 percent salary reduction for employees who are part of the company’s management compensation programs, and a companywide staff reduction of approximately 150 positions.
“These cost-saving measures along with others previously implemented are expected to lower full year 2009 combined station and corporate operating costs, excluding spin-off related charges, by at least 11 percent, an improvement from previous guidance. Capital expenditures are not expected to exceed $12 million for the year, down from $25.4 million in 2008.” -- Deborah D. McAdams