By: Mark Fitzgerald Salaries will be frozen at A.H. Belo papers, property in Dallas and Providence, R.I., will be put on the market, and the quarterly dividend will be suspended, Chairman and CEO Robert W. Decherd said in letters to shareholders and employees Friday.
Belo said wages will remain frozen from Nov. 1 until the parent company of The Dallas Morning News and The Providence Journal returns to profitability, Decherd said.
A.H. Belo was spun off from Belo Corp. as a newspaper pure-play company with no debt. But Friday, the company disclosed in a Securities and Exchange Commission filing that it had reached agreement with its bank lenders to amend its credit agreement -- cutting available funds to $50 million from $100 million, increasing the interest rate on borrowings, and ending dividend payouts until at least Jan. 31, 2009.
In the letter to shareholders, Decherd said the company's directors had reaffirmed "its commitment to AHC (A.H. Belo's New York Stock Exchange symbol) being a dividend-paying company over the intermediate to long term." The amended credit agreement does not apply to the dividend declared on Sept. 24 for payout Nov. 10, A.H. Belo said.
Decherd said the company has hired the real estate firm CB Richard Ellis "to recommend options for monetizing AHC real estate in Dallas and Providence that is unrelated to daily operations or can be included in a strategic plan to modify where daily operations take place."
Even with the poor real estate market, the company is hoping to sell some property in 2009, Decherd said.
In July, some 412 employees left A.H. Belo under a voluntary severance offer. Decherd said the departures will sale $24 million annually. The company is also laying off 90 employees, for a savings of about $5 million.
"All employment expense reductions in 2008, taken as a whole, have reduced the size of our workforce by 13%," Decherd said.
In addition to dealing with the economic pressures faced by any newspaper company, A.H. Belo's stock has been especially punished on Wall Street. Since its launch in February at a share price of $16.35, it has been hammered down steadily. AHC closed Thursday at $3.54.
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This story has been changed to clarify that the dividend was suspended under terms of A.H.Belo's loan agreement, but that the board of directors has taken no action to "drop" the dividend.
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