?UPDATE: Circ Accounts for Nearly 30% of Total Revenue at ?Dallas Morning News? Parent A.H. Belo

By: Mark Fitzgerald

Circ is really pulling its weight at A.H. Belo Corp. In a conference call with analysts Monday afternoon, Belo executives said revenue from circulation now accounts for 29.2% of total revenue, principally a result of higher subscription prices at its flagship Dallas Morning News. The reason it gets those prices? The Morning News is a “substantial print product,” says Publisher Jim Moroney.

“We do continue to believe that putting out a particularly printed newspaper today that is substantial and of quality is part of our whole value proposition to our direct consumer that allows us to have some of the highest monthlysubscription prices in the industry,” Moroney said. “I think probably only The Boston Globe among metro papers, discounting The New York Times, has a higher average monthly price. And we believe that is directly correlated to the kind of quality and quantity ofcontent that we put in the newspapers.”

Dallas-based A.H. Belo Corp. reported a narrower second-quarter net loss of $171,000, or 1 cent a share, compared with a year-ago loss of $7.1 million, or 34 cents a share.

Advertising revenue was down 12% in the quarter.

Overall revenue fell 4.7% to $121.6 million, the lowest year-over-year decline in more than two years.

Consolidated EBITDA, excluding special items, increased $4.8 million from the year-ago results to $12.6 million.

Newspaper EBITDA fell $3 million to $10.1 million in the second quarter, mostly on incremental pension, bonus and legal settlement expenses.  Excluding those items, newspaper EBITDA jumped 38.2% to $18.1 million.

Belo’s overall newspaper EBITDA margin was 14.9%. The margin was highest at The Providence Journal, followed by the Morning News and The Press-Enterprise in Riverside, Calif.
 
Chairman and CEO Robert W. Decherd, said the improvement in the company’s EBITDA was primarily driven by The Dallas Morning News.

“As of June 30, the Company had approximately $60 million of cash and cash equivalents, no borrowings outstanding under its bank credit facility, and remained in compliance with the bank covenants,” he said. “We continue to manage the business to maximize operating cash flow over the long-term and monetize real estate in transactions that create value for shareholders at appropriate prices.”

Digital revenue decreased 4.3% to $9.3 million, but Belo noted that non-classified digital revenue increased 2.5% to $4.2 million.

Circulation revenue increased 66%, mostly on higher prices implemented in Dallas last year.

“Other” revenue increased 35.0 percent.

Expenses fell 4.5% overall, but excluding pension, legal and  other unusual expenses, operating expenses were down 9.6%.

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