AH Belo Chairman Decherd: Spin-Off ‘Right Decision’ For Shareholders

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By: Mark Fitzgerald

Despite reporting a loss for its first quarter as a separate company — and with its stock down 38% since its Feb. 11 launch — spinning off A.H. Belo from Belo Corp. was the “right decision for shareholders of both companies,” A.H. Belo Chairman and CEO Robert Decherd told analysts in a conference call Monday.

Decherd said the company — consisting of The Dallas Morning News, three dailies, and their Web sites and niche products — is growing readership and added $18.5 million in cash to the balance sheet since the start of the year, in spite of “the worst newspaper economy in decades.”

First-quarter results were pulled down by the brutal California newspaper market. Ad revenue at The Press-Enterprise in Riverside plunged 25.6%, A.H. Belo said.

The general economy is A.H. Belo’s biggest challenge, according to Decherd. “The Dallas Morning News is performing as well as or better than almost any paper in the country, but it’s down 9% on the revenue side,” he said, noting the flagship paper generates 65% of A.H. Belo’s revenues.

In a recent letter to shareholders, Decherd said that he expects revenue results to be poor in the second quarter of the year. On Monday, he suggested the papers are likely to look bad when the next Audit Bureau of Circulations FAS-FAX arrives in the fall.

“We’ll probably get some bad press relative to our peers because we’re eliminating bonus days,” he said. “Other newspapers are taking them out gradually. We’re just going to do it. Advertisers really place no value on bonus days, and thankfully there’s no real revenue impact. It may get a little negative press, but we’re used to that.”

Bonus days occur when home with a limited subscription are delivered a paper on a day they would not normally get one. The chain has also eliminated third-party sales.

A.H. Belo (NYSE: AHC) stock closed Monday at $10.21, up 6 cents, or 0.59%.

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