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Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2020

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file no. 1-33741

A. H. Belo Corporation

(Exact name of registrant as specified in its charter)


Texas		38-3765318
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

P. O. Box 224866, Dallas, Texas 75222-4866		(214) 977-7342
(Address of principal executive offices, including zip code)		(Registrant’s telephone number, including area code)
Former name, former address and former fiscal year, if changed since last report.
None

Securities registered pursuant to Section 12(b) of the Act:




Title of each class	Trading Symbol	Name of each exchange on which registered
Series A Common Stock, $0.01 par value	AHC	New York Stock Exchange

Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large Accelerated Filer: ¨

Accelerated Filer: þ

Non-Accelerated Filer: ¨

Smaller Reporting Company: þ

Emerging Growth Company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No þ

Shares of Common Stock outstanding at July 22, 2020: 21,410,423 shares (consisting of 18,941,340 shares of Series A Common Stock and 2,469,083 shares of Series B Common Stock).

Table of Contents

A. H. BELO CORPORATION

FORM 10-Q

TABLE OF CONTENTS




		Page
PART I
Item 1.	Financial Information		PAGE 3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		PAGE 18
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		PAGE 26
Item 4.	Controls and Procedures		PAGE 26

PART II
Item 1.	Legal Proceedings		PAGE 28
Item 1A.	Risk Factors		PAGE 28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		PAGE 28
Item 3.	Defaults Upon Senior Securities		PAGE 28
Item 4.	Mine Safety Disclosures		PAGE 28
Item 5.	Other Information		PAGE 28
Item 6.	Exhibits		PAGE 29
Signatures			PAGE 32
Exhibit Index			PAGE 33

A. H. Belo Corporation Second Quarter 2020 on Form 10-Q

Table of Contents

PART I

Item 1. Financial Information

A. H. Belo Corporation and Subsidiaries

Consolidated Statements of Operations



	Three Months Ended June 30,				Six Months Ended June 30,
In thousands, except share and per share amounts (unaudited)	2020		2019		2020		2019
Net Operating Revenue:
Advertising and marketing services	$	15,591	$	25,300	$	34,918	$	49,341
Circulation		15,723		17,013		32,137		34,286
Printing, distribution and other		4,101		4,802		8,703		10,077
Total net operating revenue		35,415		47,115		75,758		93,704
Operating Costs and Expense:
Employee compensation and benefits		16,997		19,828		36,013		40,952
Other production, distribution and operating costs		18,659		23,845		39,651		46,029
Newsprint, ink and other supplies		2,271		4,022		5,542		8,769
Depreciation		1,802		2,333		3,567		4,719
Amortization		64		140		128		216
Gain on sale/disposal of assets, net		—		(25,908)		(5)		(25,908)
Total operating costs and expense		39,793		24,260		84,896		74,777
Operating income (loss)		(4,378)		22,855		(9,138)		18,927
Other income, net		1,331		1,133		2,683		1,962
Income (Loss) Before Income Taxes		(3,047)		23,988		(6,455)		20,889
Income tax provision (benefit)		367		7,460		(1,420)		6,496
Net Income (Loss)	$	(3,414)	$	16,528	$	(5,035)	$	14,393

Per Share Basis
Net income (loss)
Basic and diluted	$	(0.16)	$	0.77	$	(0.24)	$	0.67
Number of common shares used in the per share calculation:
Basic and diluted		21,410,423		21,525,971		21,410,423		21,578,014

See the accompanying Notes to the Consolidated Financial Statements.

‎

A. H. Belo Corporation Second Quarter 2020 on Form 10-Q 3

Table of Contents

A. H. Belo Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)



	Three Months Ended June 30,				Six Months Ended June 30,
In thousands (unaudited)	2020		2019		2020		2019
Net Income (Loss)	$	(3,414)	$	16,528	$	(5,035)	$	14,393
Other Comprehensive Income (Loss), Net of Tax:
Amortization of actuarial losses		219		62		438		125
Total other comprehensive income, net of tax		219		62		438		125
Total Comprehensive Income (Loss)	$	(3,195)	$	16,590	$	(4,597)	$	14,518

See the accompanying Notes to the Consolidated Financial Statements.

‎

A. H. Belo Corporation Second Quarter 2020 on Form 10-Q 4

Table of Contents

A. H. Belo Corporation and Subsidiaries

Consolidated Balance Sheets



	June 30,		December 31,
In thousands, except share amounts (unaudited)	2020		2019
Assets
Current assets:
Cash and cash equivalents	$	42,310	$	48,626
Accounts receivable (net of allowance of $1,116 and $671 at June 30, 2020 ‎and December 31, 2019, respectively)		13,019		18,441
Notes receivable		22,775		—
Inventories		3,060		2,573
Prepaids and other current assets		8,550		5,164
Total current assets		89,714		74,804
Property, plant and equipment, at cost		314,418		343,893
Less accumulated depreciation		(299,237)		(325,440)
Property, plant and equipment, net		15,181		18,453
Operating lease right-of-use assets		21,871		21,371
Intangible assets, net		191		319
Deferred income taxes, net		22		50
Long-term note receivable		—		22,400
Other assets		3,627		3,648
Total assets	$	130,606	$	141,045
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	4,903	$	6,103
Accrued compensation and benefits		5,733		7,407
Other accrued expense		6,359		5,930
Contract liabilities		14,012		12,098
Total current liabilities		31,007		31,538
Long-term pension liabilities		20,275		23,039
Long-term operating lease liabilities		23,051		23,120
Other post-employment benefits		1,330		1,347
Other liabilities		4,372		4,264
Total liabilities		80,035		83,308
Shareholders’ equity:
Preferred stock, $0.01 par value; Authorized 2,000,000 shares; none issued		—		—
Common stock, $0.01 par value; Authorized 125,000,000 shares
Series A: issued 20,855,200 and 20,854,975 shares at June 30, 2020 ‎and December 31, 2019, respectively		209		209
Series B: issued 2,469,083 and 2,469,308 shares at June 30, 2020 ‎and December 31, 2019, respectively		24		24
Treasury stock, Series A, at cost; 1,913,860 shares held at June 30, 2020 and December 31, 2019		(13,443)		(13,443)
Additional paid-in capital		494,389		494,389
Accumulated other comprehensive loss		(31,856)		(32,294)
Accumulated deficit		(398,752)		(391,148)
Total shareholders’ equity		50,571		57,737
Total liabilities and shareholders’ equity	$	130,606	$	141,045

See the accompanying Notes to the Consolidated Financial Statements.

‎

A. H. Belo Corporation Second Quarter 2020 on Form 10-Q 5

Table of Contents

A. H. Belo Corporation and Subsidiaries

Consolidated Statements of Shareholders’ Equity



	Six Months Ended June 30, 2020 and 2019
	Common Stock						Treasury Stock
In thousands, except share amounts (unaudited)	Shares ‎Series A	Shares ‎Series B	Amount		Additional ‎Paid-in ‎Capital		Shares ‎Series A	Amount		Accumulated ‎Other ‎Comprehensive ‎Loss		Accumulated ‎Deficit		Total
Balance at December 31, 2018	20,854,728	2,469,555	$	233	$	494,389	(1,697,370)	$	(12,601)	$	(37,641)	$	(393,582)	$	50,798
Net income	—	—		—		—	—		—		—		14,393		14,393
Other comprehensive income	—	—		—		—	—		—		125		—		125
Shares repurchased	—	—		—		—	(131,613)		(527)		—		—		(527)
Conversion of Series B to Series A	43	(43)		—		—	—		—		—		—		—
Dividends declared ($0.16 per share)	—	—		—		—	—		—		—		(3,436)		(3,436)
Balance at June 30, 2019	20,854,771	2,469,512	$	233	$	494,389	(1,828,983)	$	(13,128)	$	(37,516)	$	(382,625)	$	61,353
Balance at December 31, 2019	20,854,975	2,469,308	$	233	$	494,389	(1,913,860)	$	(13,443)	$	(32,294)	$	(391,148)	$	57,737
Net loss	—	—		—		—	—		—		—		(5,035)		(5,035)
Other comprehensive income	—	—		—		—	—		—		438		—		438
Conversion of Series B to Series A	225	(225)		—		—	—		—		—		—		—
Dividends declared ($0.12 per share)	—	—		—		—	—		—		—		(2,569)		(2,569)
Balance at June 30, 2020	20,855,200	2,469,083	$	233	$	494,389	(1,913,860)	$	(13,443)	$	(31,856)	$	(398,752)	$	50,571



	Three Months Ended June 30, 2020 and 2019
	Common Stock						Treasury Stock
In thousands, except share amounts (unaudited)	Shares ‎Series A	Shares ‎Series B	Amount		Additional ‎Paid-in ‎Capital		Shares ‎Series A	Amount		Accumulated ‎Other ‎Comprehensive ‎Loss		Accumulated ‎Deficit		Total
Balance at March 31, 2019	20,854,739	2,469,544	$	233	$	494,389	(1,780,899)	$	(12,941)	$	(37,578)	$	(397,437)	$	46,666
Net income	—	—		—		—	—		—		—		16,528		16,528
Other comprehensive income	—	—		—		—	—		—		62		—		62
Shares repurchased	—	—		—		—	(48,084)		(187)