DallasNews Corporation (Nasdaq: DALN) today reported a first
quarter 2022 net loss of $2.6 million, or
$(0.49) per share, and an operating loss of $2.5 million.
In the first quarter of 2021, the Company reported a net loss of
$2.8 million, or $(0.52) per share, and an operating loss of
$3.7 million.
For the first quarter of 2022, on a non-GAAP basis, DallasNews
reported an operating loss adjusted for certain items (“adjusted
operating loss”) of $1.6 million, an improvement of
$0.7 million or 30.6 percent when compared to an adjusted
operating loss of $2.4 million reported in the first quarter
of 2021. The improvement is primarily due to a decrease of
$1.5 million in employee compensation and benefits, partially
offset by a decrease in total revenue of $0.5 million.
Robert W. Decherd, chairman, president and Chief Executive
Officer, said, “DallasNews Corporation continued to experience
encouraging operating trends during the first quarter, and
financial results reflect these. Membership growth in digital
subscriptions was strong and The Dallas Morning News
continues to achieve favorable pricing for both digital and print
subscriptions. The News has thus far been able to manage
through increased costs in newsprint and gasoline, and broader
plans are in place to respond to inflation over the next few
planning periods. The Company’s balance sheet remains strong and we
continue to expect full payment by July 1 of the promissory note
related to the sale of The News’ former campus in downtown
Dallas.”
First Quarter Results
Total revenue was $36.3 million in the first quarter of
2022, a decrease of $0.5 million or 1.4 percent when
compared to the first quarter of 2021.
Revenue from advertising and marketing services, including print
and digital revenues, was $16.3 million in the first quarter
of 2022, a decrease of $0.5 million or 3.0 percent when
compared to the $16.8 million reported for the first quarter
of 2021. The decline is due to a $0.6 million decrease in
print advertising revenue, partially offset by a $0.1 million
increase in digital advertising and marketing services revenue.
Circulation revenue was $16.1 million in the first quarter
of 2022, a slight increase when compared to the $16.0 million
reported for the first quarter of 2021. Digital-only subscription
revenue increased $0.9 million or 45.5 percent, offset by
a print circulation decline of $0.9 million or 6.1
percent.
Printing, distribution and other revenue decreased
$0.1 million, or 2.4 percent, to $3.9 million,
primarily due to a reduction in commercial printing and
distribution revenue.
Total consolidated operating expense in the first quarter of
2022, on a GAAP basis, was $38.8 million, an improvement of
$1.8 million or 4.3 percent compared to the first quarter
of 2021. The improvement is primarily due to decreases of
$1.5 million in employee compensation and benefits expense and
$0.4 million in distribution expense.
In the first quarter of 2022, on a non-GAAP basis, adjusted
operating expense was $43.9 million, an improvement of
$1.4 million or 3.1 percent when compared to
$45.3 million of adjusted operating expense in the first
quarter of 2021.
As of March 31, 2022, the Company had 662 employees, a decrease
of 51 full-time equivalents, or 7.2 percent, when compared to
the prior year period. Cash and cash equivalents were
$30.9 million and the Company had no debt.
Non-GAAP Financial
Measures
Reconciliations of operating loss to adjusted operating loss,
total net operating revenue to adjusted operating revenue, and
total operating costs and expense to adjusted operating expense are
included in the exhibits to this release.
Financial Results Conference Call
DallasNews Corporation will conduct a conference call on Monday,
April 25, 2022, at 10:00 a.m. CDT to discuss financial
results. The conference call will be available via webcast by
accessing the Company’s website at
investor.dallasnewscorporation.com/events. An archive of the
webcast will be available at dallasnewscorporation.com in the
Investor Relations section.
To access the listen-only conference call, dial 1-844-291-6362
and enter the following access code when prompted: 8280267. A
replay line will be available at 1-866-207-1041 from 1:00 p.m. CDT
on April 25, 2022 until 11:59 p.m. CDT on
May 1, 2022. The access code for the replay is
3340914.
About DallasNews
Corporation
DallasNews Corporation is the Dallas-based holding company
of The Dallas Morning News and Medium
Giant. The Dallas Morning News is Texas'
leading daily newspaper with a strong journalistic reputation,
intense regional focus and close community ties. Medium Giant is a
media and marketing agency of divergent thinkers who devise
strategies that deepen connections, expand influence, and scale
success for clients nationwide. For additional information,
visit dallasnewscorporation.com or email
invest@dallasnews.com.
Statements in this communication concerning DallasNews
Corporation’s business outlook or future economic performance,
revenues, expenses, and other financial
and non-financial items that are not historical facts are
“forward-looking statements” as the term is defined under
applicable federal securities laws. Forward-looking statements are
subject to risks, uncertainties and other factors that could cause
actual results to differ materially from those statements. Such
risks, trends and uncertainties are, in most instances, beyond the
Company’s control, and include changes in advertising demand
and other economic conditions; consumers’ tastes; newsprint prices;
program costs; labor relations; cybersecurity incidents;
technological obsolescence; and the current and future impacts of
the COVID-19 pandemic. Among other risks, there can be no guarantee
that the board of directors will approve a quarterly dividend in
future quarters; as well as other risks described in the Company’s
Annual Report on Form 10-K and in the Company’s other
public disclosures and filings with the Securities and Exchange
Commission. Forward-looking statements, which are as of the date of
this filing, are not updated to reflect events or circumstances
after the date of the statement.
DallasNews Corporation and
SubsidiariesConsolidated Statements of
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
In thousands, except share and per share amounts
(unaudited) |
2022 |
|
2021 |
Net Operating Revenue: |
|
|
|
|
|
Advertising and marketing services |
$ |
16,264 |
|
|
$ |
16,769 |
|
Circulation |
|
16,096 |
|
|
|
16,022 |
|
Printing, distribution and other |
|
3,927 |
|
|
|
4,024 |
|
Total net operating revenue |
|
36,287 |
|
|
|
36,815 |
|
Operating Costs and
Expense: |
|
|
|
|
|
Employee compensation and benefits |
|
16,410 |
|
|
|
17,947 |
|
Other production, distribution and operating costs |
|
19,249 |
|
|
|
19,090 |
|
Newsprint, ink and other supplies |
|
2,394 |
|
|
|
2,341 |
|
Depreciation |
|
712 |
|
|
|
1,074 |
|
Amortization |
|
— |
|
|
|
64 |
|
Gain on sale/disposal of assets, net |
|
— |
|
|
|
(1 |
) |
Total operating costs and expense |
|
38,765 |
|
|
|
40,515 |
|
Operating loss |
|
(2,478 |
) |
|
|
(3,700 |
) |
Other income, net |
|
18 |
|
|
|
1,254 |
|
Loss Before Income
Taxes |
|
(2,460 |
) |
|
|
(2,446 |
) |
Income tax provision |
|
184 |
|
|
|
319 |
|
Net Loss |
$ |
(2,644 |
) |
|
$ |
(2,765 |
) |
|
|
|
|
|
|
Per Share
Basis |
|
|
|
|
|
Net loss |
|
|
|
|
|
Basic and diluted(1) |
$ |
(0.49 |
) |
|
$ |
(0.52 |
) |
Number of common shares used in the per share calculation: |
|
|
|
|
|
Basic and diluted(1) |
|
5,352,490 |
|
|
|
5,352,490 |
|
(1) All share and per share amounts have been
retroactively adjusted to reflect the one-for-four reverse stock
split effective June 8, 2021. All fractional shares were
settled in cash in connection with the reverse stock split on
June 9, 2021.
DallasNews Corporation and
SubsidiariesConsolidated Balance
Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
In thousands (unaudited) |
2022 |
|
2021 |
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
30,892 |
|
$ |
32,439 |
Accounts receivable, net |
|
12,758 |
|
|
16,012 |
Notes receivable |
|
22,400 |
|
|
22,400 |
Other current assets |
|
6,514 |
|
|
5,677 |
Total current assets |
|
72,564 |
|
|
76,528 |
Property, plant and equipment, net |
|
8,091 |
|
|
8,822 |
Operating lease right-of-use assets |
|
16,982 |
|
|
17,648 |
Deferred income taxes, net |
|
232 |
|
|
257 |
Other assets |
|
2,194 |
|
|
2,197 |
Total assets |
$ |
100,063 |
|
$ |
105,452 |
Liabilities and
Shareholders’ Equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
$ |
5,832 |
|
$ |
7,821 |
Accrued compensation and other current liabilities |
|
9,986 |
|
|
9,505 |
Contract liabilities |
|
10,652 |
|
|
10,592 |
Total current liabilities |
|
26,470 |
|
|
27,918 |
Long-term pension liabilities |
|
14,365 |
|
|
14,275 |
Long-term operating lease liabilities |
|
18,529 |
|
|
19,181 |
Other liabilities |
|
1,492 |
|
|
1,501 |
Total liabilities |
|
60,856 |
|
|
62,875 |
Total shareholders' equity |
|
39,207 |
|
|
42,577 |
Total liabilities and shareholders’ equity |
$ |
100,063 |
|
$ |
105,452 |
DallasNews Corporation - Non-GAAP
Financial MeasuresReconciliation of Operating Loss
to Adjusted Operating Loss
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
In thousands (unaudited) |
2022 |
|
2021 |
Total net operating revenue |
$ |
36,287 |
|
|
$ |
36,815 |
|
Total operating costs and expense |
|
38,765 |
|
|
|
40,515 |
|
Operating
Loss |
$ |
(2,478 |
) |
|
$ |
(3,700 |
) |
|
|
|
|
|
|
Total net operating revenue |
$ |
36,287 |
|
|
$ |
36,815 |
|
Addback: |
|
|
|
|
|
Advertising contra revenue |
|
5,921 |
|
|
|
6,078 |
|
Circulation contra revenue |
|
76 |
|
|
|
95 |
|
Adjusted Operating
Revenue |
$ |
42,284 |
|
|
$ |
42,988 |
|
|
|
|
|
|
|
Total operating costs and expense |
$ |
38,765 |
|
|
$ |
40,515 |
|
Addback: |
|
|
|
|
|
Advertising contra expense |
|
5,921 |
|
|
|
6,078 |
|
Circulation contra expense |
|
76 |
|
|
|
95 |
|
Less: |
|
|
|
|
|
Depreciation |
|
712 |
|
|
|
1,074 |
|
Amortization |
|
— |
|
|
|
64 |
|
Severance expense |
|
132 |
|
|
|
208 |
|
Gain on sale/disposal of assets, net |
|
— |
|
|
|
(1 |
) |
Adjusted Operating
Expense |
$ |
43,918 |
|
|
$ |
45,343 |
|
|
|
|
|
|
|
Adjusted operating revenue |
$ |
42,284 |
|
|
$ |
42,988 |
|
Adjusted operating expense |
|
43,918 |
|
|
|
45,343 |
|
Adjusted Operating
Loss |
$ |
(1,634 |
) |
|
$ |
(2,355 |
) |
The Company calculates adjusted operating income (loss) by
adjusting operating income (loss) to exclude depreciation,
amortization, severance expense, (gain) loss on sale/disposal of
assets, and asset impairments (“adjusted operating income (loss)”).
The Company believes that inclusion of certain noncash expenses and
other items in the results makes for more difficult comparisons
between years and with peer group companies.
Advertising contra represents agency fees related to digital
advertising and marketing services. Circulation contra represents
revenue recorded for the grace period of expired home delivery
subscriptions. These adjustments have no effect on adjusted
operating income (loss).
Adjusted operating income (loss) is not a measure of financial
performance under generally accepted accounting principles
(“GAAP”). Management uses adjusted operating income (loss) and
similar measures in internal analyses as supplemental measures of
the Company’s financial performance, and for performance
comparisons versus its peer group of companies. Management uses
this non-GAAP financial measure for the purposes of evaluating
consolidated Company performance. The Company therefore believes
that the non-GAAP measure presented provides useful information to
investors by allowing them to view the Company’s business through
the eyes of management and the Board of Directors, facilitating
comparison of results across historical periods and providing a
focus on the underlying ongoing operating performance of its
business. Adjusted operating income (loss) should not be considered
in isolation or as a substitute for net income (loss), cash flows
provided by (used for) operating activities or other comparable
measures prepared in accordance with GAAP. Additionally, this
non-GAAP measure may not be comparable to similarly-titled measures
of other companies.
Contact:Katy Murray214-977-8869
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