AHC - Earnings call transcript Q1 2021

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Operator

I would now like to turn the conference over to Katy Murray. Please go ahead.

Katy Murray

Good morning, everyone, and welcome to our First Quarter 2021 Investor Call. I am joined by Robert Decherd, Chairman, President and Chief Executive Officer of A. H. Moise, available President for Grant Morning the and who News, Q&A. Corporation, Publisher of and Dallas Belo Yesterday afternoon quarter we quarter XXXX issued a press and filed release we our first XX-Q. results announcing first

these performance. We have Relations Unless performance, measure specified, otherwise against our call under used today's quarter the section. on on comparisons first posted Investor website first of both XXXX quarter XXXX

forward-looking today will include statements. discussion Our

statements. factors except differ in are statements subject those company Forward-looking materially could to actual results this required uncertainties obligation other to no law. cause that and information from to as The assumes the by risks, update otherwise communication,

or reported of the the an $X.X disposals million depreciation, operating $X.X of $X.XX our posted to We severance loss net information XXXX loss about reported of loss reconciliation impairment per GAAP measures or included exclude asset provide that permitted company supplemental million. to releases non-GAAP financial the loss press first improvement $X.X XX.X% GAAP operating loss, last operating was XXXX, in This filings of share or our the million the non-GAAP $X.X quarter A.H. the compared tax $X.XX the first for expense, information which Additional of company's under useful Belo adjusted In Adjusted is with million. $X.X in to quarter. The operating included investors quarter of measures to reported website. to million factors measures. these per and and loss when press with a SEC. comparisons $X.X share refund Today's net operating loss million in include determining our believe the million a an publicly peers. will loss A CARES of net release is XXXX performance adjusts first first available detailed financial federal and discussion quarter year. of and of and Act. of $XXX,XXX on assist and is an $X.X a financial amortization non-GAAP

the this revenue quarter the For $X.X year-over-year or first compared quarter first compared The the XX,XXX pandemic. $XX.X in GAAP first reported $XXX,XXX million advertising million last XX.X% was an increase of year. revenue. is quarter this to and decline, the revenue when of news Of subscriptions, $XX.X million first to total approximately to quarter or year. the first $X to decrease million, X.X% of compared in ended in is year, decrease last the was Digital compared by last revenue Both $XX circulation of the paid quarter a revenue year. of the revenue year. or quarter circulation COVID-XX print when increase the digital of for or first $X.X XX,XXX with this million Print year, of digital-only been an million a year X.X% in XX.X% of impacted $X of $X have the million was million, prior advertising

revenue delivery decline due newspaper first decrease XXXX was stability a relative print and significantly as a in COVID-XX result XX.X%, compared million the quarter Single of reported our is experienced member home only distribution quarter the printing number in pandemic. as to sales the declined the Other commercial first $X.X last $XXX,XXX reported due of of revenue of primarily selling in to revenue. $X The million declined revenue year. have reduced We locations of the X.X%. base copy to

and due travel $XXX,XXX The the of depreciation, $XXX,XXX $XXX,XXX in relating approximately in $XXX,XXX reductions is employee benefits, recorded margin quarter entertainment. was First Texas the improvement GAAP expense The operating tax in in million quarter to XXXX total primarily to company outside to million, improvement quarter last XX.X% of an $XX.X $X.X services, in or of and compared expense expense million $XXX,XXX distribution, year. $X.X tax. newsprint, $XXX,XXX in compensation of and this first

had the prior XXst year. XXX had the a employees, compared no March this when to company cash and the or were decrease of X.X% As XX% debt. company Cash of equivalents million of year, and $XX.X

XXrd, approximately As the of April and $XX company cash million in equivalents. had cash

payments yesterday disclosed may at any that conditions, payable As MOU the not of the reminder, XX of of company and have XX%. subsequent in if note services company of required to currently began return now lien and strength provide quarter has its funded over events print clients from on I quarter the updates. the plans operating signed reached, of months. In do also years $XX.X had additional filed an and we impact real next a the investment bear approximately that levels. to exist. realized outlines we are afternoon, next pension pandemic interest. an This of mandatory maintain markets we The some development in pension extend pre-pandemic our thus first footnote company's the with is will in June has Belo memorandum the due XX, first a the capital this to June commercial payable to the XXXX. million year quarterly, Charter commercial were terms agreement + the timing date estate shows and We constraints understanding income XX X.X% Holdings. will note the XX-Q secured XX interest interest advertising priority increasing digital payable Company's If in first million marketing generating of $X will

Company its clients average the both campaign and has our increased per print years. focus in our + and own XX% digital + us market our increase Belo The portfolio week print focused also for average membership has to their the from account user has on in levels, $X.XX in per on year-over-year $X.XX begun to growth Company to is and past Compared We digital share. Belo look to year-over-year. continue growing rate increased retention volume services, XXXX from increase and marketing highest week service per to while five continue emerge membership week. pre-COVID which $X.XX as resulted rates rate membership $X.XX digital to X% from performance of to within has customer per to to XXXX, average return revenue strongest

print last have declined, an While XX.X% new in print subscriptions we have when for seen to retention improvement membership compared of subscriptions year.

making we both will are call We the advertising revenue now results with are the base I very the growing digital pleased our and in Robert. financial and circulation. in turn progress to over in

Robert Decherd

And of good to forward here looking Katy, Katy We're morning, your the the questions Grant is us as those. noted, thank business. and to about address with everyone. operating you, side

of Just a points couple there. on the way

our of some or baked a build at with or point, Pricing are we stability increase our you including And membership When very be membership seeing coming traditional confidence as in pricing. legacy of important but not That would the that's this the circulation through home maintain We return flows we to levels, numbers side us in year. encouraging digital expect is pre-pandemic can signs. through and see delivery together to this out and gives cash advertisers. that know. to going that we the up continue digital say they're trend fully

again. ultimately majority reflects months. the we've six business balance this last sized the severance we did of between levers company offer. environment we the using flow about that that to if we positive growing members our our as will revenue The is structure we we sheet in down will the observed and way how is manage noted of on need we're digital both get idea that That's one expense revenue a the equilibrium have or press reliance announced The a company conduct you the we've release We're often. stability ultimately smaller become go company and to that migrate print and just encouraged VSO we we've properly company to cash how of the many voluntary digital be. So to talked to so the

is at you I'm didn't a certainly out. And And there otherwise seen Katy if very would XXXX probably terms around We're a with occurred digital-first XXXX. look it's if extension, back track gap not the anyone hedged enable business a the so mentioned We've very we in impressed last is portfolio now that on that cash, that to Charter funded. rather year, conversation market $XX legacy the volatility what's so the at million, It's not good pension. XX are at during that but well In million still in for exist, the that income months. XX% that it's million state assured. despite to that get as hold it digital not works important. of also of company, the we it significantly advance we $X resolved towards sitting up in didn't transition scenario be $XX as the us, while of

As rely opportunities long-term. long to forward, for to on pensioners a stable have present that we we through themselves should be plan we're on made pension they going and ago that manage going promise, the deliver our that able can the

at we're As a.m. going Time. virtually meeting Central again. It'd you at May be know, hold X:XX XX to our annual

issued timely, split plans the And Lewis split, the to underlying forward payout that the at sure, reverse and that be dollar so you the the votes shares company, that then meeting. we'll a on stock actively and name reverse one essentially get own given that we'll the the The split the the be of traded talk to if Glass for to way have at that rationale, look proposals items would to of same such in agenda very both the And we authority the after course, the the should going have up exchanges. the done together – know now make looking reverse reverse that, the stock close adjust supporting of month. depending are prominent occur. consider the in Board affect It'll us. today. And flexibility, is a about do that's voter four split. the the dividends, shareholder the of on someone you to non-typical optimistic are flexibility undertaking on if for have annual expecting very And are important achieve believes proposal. just the from to we is And are is from or are it the ISS more transition I'm rationale happy wish. fact, that as person for we the next how at obviously dividend, of standpoint if on as meeting Board believe, many would terms, the that We that stock remain timely all report we the The on in and change year quickly. which

Let Katy, there, me questions that and and of Katy have address. can I anything there are other see you said, and pause course, if questions about Grant

Katy Murray

So it Gloria, are questions. we for ready open up to

Operator

Thank Securities. to you. of [Operator the go ahead. go We'll Please Mooney with line Wedbush Chris Instructions]

Chris Mooney

Good all. morning,

Katy Murray

Hi, Chris.

Chris Mooney

I've in to get I'll me of and need got like not other a If lot questions. eight if you just people start in tell queue can to. there's back queue, you

and what you level of know, this, assumptions would digital I to cash flow? into So be get is with there but subscriber to do some to thrown – subscribers where need a – breakeven have there

Grant Moise

market way who over some when Chris, have to at to they're support mean, is volume; pulled companies I revenue it's the it digital subscribers. I the I on would two charging, get to of trying at speaking, needed average our the about do flow, gone roughly and think price. as there I trying size newsroom know think terms at so cost to that reaching metro to referring in at by was is million to the to I I the of it's many Grant. I is, to in kind are two, that always we're is is newspaper And that. XXX,XXX levers just kind that be levers one One hurdle the first covered obviously, And of cash DFW newsroom what digital our that, achieve. there's difficult the we out rate to digital think subscriptions is answer cover I'll that's first expense something. a yourself subscriptions. rate of and is the subscriptions. that, the really you market scale. obviously would say Robert guessing be have The $XX there digital of get our look look major business. Chris the But the of a company But that

goal for hit clear million it And subscriptions. the that on but want so, that is at do I to nearer-term don't least is we're trying that, us I digital reach mark $XX to that think to

Robert Decherd

of and course it's digital. a advertising revenue and circulation Chris, between print blend And

we So grow we need as a to have pointed we're to – but opportunistically. grow base, continue to price suggesting, for not XXX% go to digital out, And it Grant significantly.

big get that's a That with can You numbers price, nonstarter. does no work. not

managing to revenue ultimately receiving print to legacy printed long equilibrium that I form our in digital. we we of have how migrate importance long-term the It the subscribers the either underscores along. newspaper them and between different going So that that bring are digital. a cohorts for term, all and all for them Not making it's our the our with plans ready or mentioned relationship but of

Chris Mooney

come on to your color a there. after on And That the VSO, background the got VSO open started. XX pandemic you've year the was the useful. sort seems jobs website. The I appreciate of

So us cost details on The costs? waste or goal? are you a did you expected? more – the And good crisis, you the give can savings

Robert Decherd

company. question for And Chris, that and during we what in to do supported. would our that looking smaller lot we're very XXXX XXXX. employee our was a to now do made need A acknowledged it pain stable, continue to a sure of being this properly it's is were important characterize we more in cared people things I and pathway a lot at crisis and of was cohort that decision-making are a

long-haul. who I restored There decrease you because a more And this dire this when important success people in of very we're first a the the voluntary. our step we up make than are things company. with that, but initially where need as we we no looked for make As worked we way of side an to is implemented consistent way across-the-board more we're the is we know, aspect wage consequence that think key adjustments that And a on company the is we through can now company it's way and this in in position the our be. the much expense the in the

provide exit School through see then who their during able studies can the three got evolved the to business. evaluate and and an have for that's XXXX, if a out. from Harvard work how we continue of expense we're figure we've to as equation. smaller That for side Grant be And to time, we here folks case revenue So to long a Obviously, take doesn't Business Katy patterns good. teams, been

Chris Mooney

And any give there can far details or cost which expected? us as are goal you as or cost savings

Katy Murray

Chris, is Katy. Hey, this

open you headcount. asked is first the in So about open company. There the headcount

newsroom. in hiring are We the

And We are developers. and hiring hiring within Belo also Company. then we're

Robert revenue, areas, say voluntary would what now IT again, both growth consumer Plant so I strategy really service on the the back was this of we and did our and mentioned. the focused it's on we like of to around our as offered are that all accounting, Right finance that. kind more office What shared and the on areas North side. advertising areas on digital And VSO membership

are in them This this target seeing organizations it's a point, opportunity let's is and made do time company. to But the we we in to to And an we're gave forward. what a decision there's and at point maybe how all or – comes we going decision make not specific out differently. to and for those where do need that have a really so, that see goal something move a a or these what that on at really information decide forward. we'll that to – that taking take And look at retire for

Chris Mooney

Okay.

support of you Google in Have payments global receiving either you now from or industry? creators – Facebook are sort their news Let's see.

Grant Moise

Grant It's Chris.

that Facebook, some believe if XXXX. which receiving was my from memory in something part started payments are specifically, We me of was I serves correctly

reported are in agreement more from those in hope we and we payments States. United However, of But soon been companies Facebook, current we're France, at type more with that's that not that done have and have receiving to are countries of industry-wide Australia like different share Google. the quite do a the Obviously, licensing that but that coming was here point. agreements than revenue types

Chris Mooney

at Okay. trends the Since any is trends And just for digital? there ad change trends the... we or now, are looking where subscriber both printed in of and

Grant Moise

stabilized on side, channel our on script, being has had Katy call the XX%. house, reached that the print Sue between Yes. The very the side kind Chris. price. done membership copy like kind getting single start I as we've become side subscription I'll for stable we as in Obviously, of runs pressured the delivery of for job, us. is volume earnings what who especially mentioned a of home quite has that group, healthy down good Kerr, us. very and feel extremely equilibrium a

range, significant we of of Boston, -- the On deploying quarters have shoes, on horizon on the very -- on we've were really this volumes subscription Relations house. obviously some to that. all subscription pleased and gain levels last or on that in third the Globe those. in the believe, of the But pandemic But helped of incremental out gain shown second softer who in We've The tab, with that got strategies are help talent Investor year. they Boston of some the and the of really net hired high XX% here going side the we're been reach digital kind of than side, could have us in some kind stage we we're early you our the middle

going where kind to feel that near -- in volume to back ourselves that good be get to some able term. of we're And so, the about increases

side it obviously say was call down XX%, That I'd print the what programmatic and as mentioned, of is house dallasnews.com. other strategic better pandemic. services on the or where where really print where rebound we about is off, Those that business, as of very seeing we Chris, house year, we the on we the our range as lines around prepandemic which level, in What turn of for settled call advertising. were of easier in things has kind are which things average quick XX% our the some on but first advertising digital on we're quarter, that side than advertising. far like advertising with is I like on the profitable reached On us, last search of a and to not our

do online, advertisers that industries the we're more Travel see obviously believe, that. as just see are again. starting having and well. will and of is lagging on these in we as in categories improve is of those, come out parts to The reaching we tourism where categories signs that business example event to one of pandemic back us that and and for are return are However, and them normal. of that us help Those as an advertising an economy really important once interest another to

Katy Murray

Hey was our to Chris, if question, for a queue else going but Gloria, we in there if I was continue. could operator see, not anybody if

queue? So in Gloria, else there anyone is

Operator

Yes ma'am.

with Jonathan Investments in queue. KMF have You

Katy Murray

do Chris, if right. questions? you come mind, four your All Jonathan back we next move to to and

Chris Mooney

all. at Happy. Not

Operator

moment ahead. And please. One Okay. please go

Jonathon Fite

you okay? Thanks Good hear for the consideration. morning. Can me

Katy Murray

Absolutely.

Jonathon Fite

Excellent.

Just two questions. quick had

or see capital well. balance digital of balance $XX allocation that And subscription and grow had do XX just investments $XX I the progressing see a digital accelerate more Given $X months, the transition, million, the million cash as next million, question cash follow-up the worth to to over you then, XX to the meaningful do this year steadily? the business, desire you

Robert Decherd

camp. ride for It's the decade. the Jonathan, this would steadily folks be in last we along for been who've progressing

did balance pretty accelerate the actually on in distractions. Now, to were maintaining mid-XXXX, some We I'll we one-off and turned frame significant focused our cash be are do, say digital out but significant sheet our investments time XXXX presence, that very balances. intended to

determine two we opportunities may in as of orders ultimately If focused a presence kind convinced that we invest, world around we that combination -- So, having software have moves grinded or again in our in not so of but seems evaluate a potential competencies that. effect. we the large had to place predictably and that opportunity, journalistic fast whether measurably and growth of to that in in the translate the to that. have on increase that do investment membership is out this the so But we has happen make have we but we we've this the whether contrarian is local that distinguished talent we and and think would advertising you're metrics to components digital it a a the core the to digital think changes magnitude all digital is digital can describing. do right organization rate positive focused that of long-term fact it's a would internal or or those This be strategy that in it

it we again circling and would your to and out. obvious million opportunity So, back if something building it invest would in an outside our invested $X that's us so million the question have line or to the be crowd to around $XX core business

Jonathon Fite

saw, Understood. great do paid I strategic at that close subscription-based top-of-funnel for just versus opportunities a followers how number you Twitter platform? question. wondering last has XX,XXX, more north revenue products right? XX,XXX between through kind the one I subs -- you to One channel other Have Twitter look for on digital subs. XXX,XXX I If Twitter drive more then I think side paid that that look in a conversion well It's is you launching at the but just the that's content range, the of your million followers we the of guess owners. the But higher And evaluated subs? generation commentary. appreciate

Grant Moise

I manages funnel. of person our is call what -- a who have kind top of Jonathan we specifically all basically media the of -- Twitter a social

have sure Globe not that we found relationship social capture be monthly little we is of but it. someone turns the a into We can or one-time And then bit of and Boston that content into that top receiving of of mentioned we e-mail. e-mail that'd a also to subscribers the can study a kind well we bring kind social we're revenue not what an the basics that get found trying trying also in Twitter sure the a and we're e-mail directly, only funnel to make a through -- to about now over range from of XXX,XXX in, one-time north through that where kind we're people ourselves continue stick part of them addresses then have make whether all have our other funnel Boston have top of playbook lot XX media a that not XXX first finding just obviously, so of to social platforms has of of from But of they not peers have long-term. the media us just recurring only really and our subscribers, hit. but digital with and this we of with conversion those what rate are themselves to stick especially do type only I relationship talking get -- and really what is to but allowing seeing to we're stealing

we're And a registration top it than role would more more and sure so a but of got e-mail that trying I been make relationships social a call with and and through would relationship that's dominant Google, we're we've can played top edge Facebook to everything in strategy funnel a anything say cutting Twitter, great eye of building that we're I that on lighter our primary strategy, acquisition that has directly on the probably us. But of help with role. we're following. with the obviously, of keeping has part

Robert Decherd

users, which able in or our members larger site. one I'd content is on in and willing just the interested are time add depends context who on thing

really it content on slightly a of converting chance site, And our not the quick is hit the the is keep longer So, as longer on to the greater time geared people we them. site. as

key world present our So, from strategy the avalanche how we is really in is content of to social how long-term. that the content and differentiated content

Jonathan Fite

you. Thank

Robert Decherd

Thank you.

Katy Murray

Gloria? Thank you.

Operator

[Operator line of Instructions] We'll Mooney. go back the go ahead. Please Chris to

Chris Mooney

Hi, there. questions. Interesting

me in. I’m So you glad got

question, Let's see budget year? your again. a the related do building be you last where seem cash to this sounds have quarter you it what's And CapEx now first exited slightly year? on for currently that the that expectation to Is and -- based for you the

Katy Murray

on outlay, North from that. a million kind is of focused the year. that, a any things lot Plant $X nothing -- and our perspective, CapEx anything but Chris, So replacements things with like with Obviously, budget there's than we on consistent last Really less like perspective. What balance expenses, brand minimize any do capital, I'll balance can do new anything a from significant minimize a preserve what doing. cash to kind we're perspective, you cash CapEx to we tell is of anything can to the

who out collections. how we And QX in bills figured pay back. remotely a maybe that and and would really in strong where really, about familiar weren't to of pre-pandemic but people coming so saw of and year, collections some -- quarter say last their first now we've some had turned as I that have now work QX they back to people kind

everything call expenses, as role are a which the money, But portion do I'd we So collections is that we CapEx, out. cash. are we minimize significant doing but to losing -- look, definitely preserve still that significant a that well, playing VSO, in to can

Chris Mooney

Okay. a Company? color little on you and and Grant, can more give Belo update And us

Grant Moise

Sure.

we've celebrating and would that that me been the Chris, I focused I key number is of has who's customer running clients. we Eric call in been service for one hyper organization campaign what say the Myers, our internally, think management. thing retention

And what campaigns performing these make terms sure so in those understand to are well. that KPIs need of to clients the kind their of

can us. them it's As in e-commerce. strategy that funnel years build how clients hitting that that it's has us a the feel of we from three not not because has of year we build was could performance of were to and standards their I'm last in and of and model trade kind their ours to drive very and down to felt order nice kind trend you brick-and-mortar as is that we they them with adjustment help out. we the a kind with strength. we partner theirs, they Company partner of two relationship were very staying and the commerce big of top allowed to websites vendor clients That proud needed because levels a because these a own a focus that sites. Belo been clients like not that's know to and our really ago And of what's were these as with of is a saw our a for all slowing And just strategic We to

And pleased. so that's I'm what most

they're only the members. to those target can they to we're As us. a which retaining build is people programmatic trying business from exactly some think what also and has a make operated privacy of you're customer and paying that terms trying And is dallasnews.com to we us clients We targeting. become business, search a more meaningful are target getting the of you clients we strategically and keep critically are as preserving of that of your largest we to lines lines know, responsible those our that assets just members mentioned that all to who in and the with their upgrade entrust owned I'd sure and mix. capabilities what well do those people important basically that's in well video to as investment I their tools that to just using part the comes our technical entrust we grow lot you're what growing e-commerce say, call as business down to us that now. How want right of we're we unless need, of earlier while can't where to that who we

Chris Mooney

revenue for And item cleanup one me. sort Okay. Katy of Advertising much larger. contra was

Katy Murray

It to goes about Grant provide of is cost we're other And Google, some of was. to looking to be they're that using what pass-through, back our for partners a these was what for. of business. of The lines whether really sale talking complete types on clients just able

a one lines thing need because of to of important that's growing just and while not advertising be just revenue of point, seeing a a establishing that a you that point, So, on. margin They to client of to different was spike one coming but the bit COGS for relationship, able types has saw. those in. and Grant's lot advertise right Grant's a them, business is they're in little And great of multiple that looking it we're capabilities to lower and high now

seeing So a we're quarter going past longer. for I you're see say that bit that to this going be trend would probably COGS a to the is

Chris Mooney

And it sounds like final all did My you approach to relates approach Washburne you note. Ray Okay. approached Did you? almost him, question all or he him. the

Robert Decherd

happened. we have that's presented, may but what Well, not

Things we Ray not and you thought sources in brands. several progress ago. long had we And events were XXXX a -- main He why is And in us and through fine cash getting broached we ago Now and as with payment as know has of from that's is commercial flow. one across business his of are the the timing quarter everyone estate the restaurant was this sheet He a extended. in the in important. and balance tough were where business, he's income standpoint about pretty business the mode, with back the a with a real large the year. touch first year colleagues

we fine. immediate And mindful a we plan and and if whole payment and later for Board that distributing slightly ultimately a paid June have or gives is But why above-average we've rate So in or We're full, made discussed the cash. choices concept the dividend this several we once an for the that don't in paid to that's dividend with of further shareholders paid an progressed strategic number of it's of were and our whether that's capital if time. long the you very are that plan in our shareholders we all business that has percent June years. full payout for of

what expect, we listening that and the the current. rate be would which would MOU I'll everything it So, we're ears getting makes very put clear and We're interest X.X% way. it all

Chris Mooney

finished. you. I’m Thank Okay.

Katy Murray

Thanks, Chris.

Robert Decherd

questions. so. the always your We knowledge, No, and we appreciate do

Katy Murray

Gloria?

Operator

are Yes, this no time. There at ma’am. questions

Katy Murray

quarterly on Bye-bye. next And to will All virtually our for you. today. meeting thank great were X:XX. thank this everybody our shareholder May at at summer. right. Well, hope see Thursday later which as They the Thank Robert We questions. earnings said, And XX questions you you call everybody. be

Operator

today. Service. gentlemen for your Teleconference and our you and you. conclude for does participation Ladies Thank AT&T that conference Thank for using

disconnect. You may now

DallasNews (DALN) 27 Apr 212021 Q1 Earnings call transcript