Belo Corp. Series A has a market cap of $925.4 million; its shares were traded at around $8.99 with a P/E ratio of 25 and P/S ratio of 1.6. BLC is in the portfolios of John Keeley of Keeley Fund Management, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors, Kenneth Fisher of Fisher Asset Management, LLC.
Highlight of Business Operations:Non-political advertising revenues increased $13,748, or 11.7 percent, in the first three months of 2010 as compared to the first three months of 2009. This increase is primarily due to a $13,237, or 12.2 percent, increase in local and national spot revenue. Spot revenue increased in most categories but primarily in the automotive, healthcare, financial services, grocery and retail categories. Internet advertising revenues increased $648, or 9.9 percent. Political advertising revenues increased $5,609 in the first quarter 2010 as compared with the first quarter 2009. Political revenues are generally higher in even-numbered years than in odd-numbered years due to elections for various state and national offices. Other revenues increased primarily due to increases in retransmission revenues.
Station salaries, wages and employee benefits decreased $1,449, or 2.8 percent, primarily due to decreases in salary expense of $2,305, severance costs of $1,855, and 401(k) plan expense of $1,503. These decreases were partially offset by an increase in bonus expense of $1,811, medical expense of $1,008, share-based compensation of $855 and pension transition supplement plan expense of $780. Station programming and other operating costs decreased $2,733, or 5.7 percent, primarily related to a non-cash expense reduction of $2,019, relating to a 2005 Federal Communications Commission (FCC) decision that allowed a major wireless provider to finance the replacement of analog newsgathering equipment with digital equipment in exchange for stations vacating the analog spectrum earlier than required. Four Belo markets converted to this digital equipment in the first quarter 2010 and only one Belo market converted in the first quarter 2009. Corporate operating costs increased $659, or 7.4 percent, in the first quarter 2010, primarily related to an increase of $1,405 in share-based compensation expense and an increase in bonus expense of $1,368. These increases were partially offset by decreases in legal expense, consulting expense and technology expense.
Interest expense increased $5,308, or 36.4 percent, due primarily to increased interest costs associated with the issuance of $275,000 in 8% Senior Notes in November 2009, and the amortization of the discount and refinancing costs associated with the note offering. These borrowings were previously included in the Companys lower-rate revolving credit facility. Other income (expense), net decreased $16,636 in the first quarter 2010 compared to the first quarter 2009 primarily due to a $14,905 gain related to the Companys first quarter 2009 purchase of debt securities. The debt securities were purchased on the open market at a discount. Additionally in the first quarter 2009, the Company sold its interest in a Web site joint venture for a gain of $1,616.
The Company made $6,787 in contributions to its Pension Plan during the first quarter of 2010 and expects to make a total of $14,277 in contributions to its Pension Plan during the year ended December 31, 2010. No pension contributions were made or required to be made in 2009. As previously discussed, A. H. Belo is obligated to reimburse the Company for 60 percent of any contributions the Company makes to its Pension Plan. Such reimbursements totaled $4,072 during the first quarter of 2010.
Net cash flows used for investing activities were $2,612 in the first quarter 2010 compared to $1,254 provided by investing activities in the first quarter 2009. The 2010 investing cash flows were primarily used for capital expenditures and the 2009 cash flows were primarily provided by the Companys sale of its interest in a Web site joint venture for a gain of $1,616.
At March 31, 2010, Belo had $885,443 in fixed-rate debt securities as follows: $175,533 of 63/4% Senior Notes due 2013, $269,910 of 8% Senior Notes due 2016, $200,000 of 73/4% Senior Debentures due 2027 and $240,000 of 71/4% Senior Debentures due 2027. The weighted average effective interest rate for the fixed-rate debt instruments is 7.5%.
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