DallasNews Corporation (Nasdaq: DALN) today reported a fourth
quarter 2022 net loss of $2.1 million, or $(0.40) per
share, and an operating loss of $1.9 million. In the fourth
quarter of 2021, the Company reported net income of
$2.1 million, or $0.40 per share, and an operating loss of
$0.7 million. The fourth quarter 2021 net income includes a
non-cash pension benefit of $1.0 million and cash proceeds of
$1.3 million related to the sale of inactive IP addresses.
For the fourth quarter of 2022, on a non-GAAP basis, DallasNews
reported an operating loss adjusted for certain items (“adjusted
operating income (loss)”) of $1.0 million, a decrease of
$1.3 million when compared to adjusted operating income of
$0.3 million reported in the fourth quarter of 2021. The
decrease is primarily due to a total revenue decline of
$1.5 million.
For the full year 2022, the Company reported a net loss of
$9.8 million, or $(1.83) per share, and an operating
loss of $9.0 million. For the full year 2021, the Company
reported a net loss of $0.5 million, or $(0.09) per
share, and an operating loss of $10.0 million. The 2021 net
loss includes a non-cash pension benefit of $4.2 million, a
non-cash tax benefit of $2.6 million related to the release of
an uncertain tax reserve and cash proceeds of $1.3 million
related to the sale of inactive IP addresses.
For the full year 2022, on a non-GAAP basis, the Company
reported an adjusted operating loss of $5.3 million, a
$1.5 million greater loss when compared to an adjusted
operating loss of $3.8 million reported for the full year
2021. The incremental loss is primarily due to a total revenue
decline of $3.7 million and a newsprint expense increase of
$1.2 million, partially offset by expense savings of
$2.7 million in distribution and $1.0 million in employee
compensation and benefits.
Grant Moise, Chief Executive Officer, said, “In 2022, our
performance met the Return to Growth Plan that we presented to our
Board in September of 2021. This plan is built with the intention
of creating a sustainably profitable digital media and marketing
services company, and our annual results in 2022 were consistent
with it. Simultaneously, we remain committed to returning capital
to shareholders during this transition which was evident in the
payment of our special dividend and regular dividends last year.
The current phase of the RTG Plan will be the most challenging and
our team is focused on the key business drivers that will determine
our success.”
Fourth Quarter Results
Total revenue was $39.1 million in the fourth quarter of
2022, a decrease of $1.5 million or 3.6 percent when
compared to the fourth quarter of 2021.
Revenue from advertising and marketing services, including print
and digital revenues, was $18.4 million in the fourth quarter
of 2022, a decrease of $1.4 million or 7.0 percent when
compared to the $19.8 million reported for the fourth quarter
of 2021. The decline is primarily due to a $1.0 million or
8.1 percent reduction in print advertising revenue.
Circulation revenue was $16.6 million in the fourth quarter
of 2022, a decrease of less than $0.1 million when compared to
the fourth quarter of 2021. Digital-only subscription revenue
increased $0.6 million or 23.2 percent, offset by a print
circulation decline of $0.7 million or 5.1 percent.
Printing, distribution and other revenue was $4.1 million,
a slight decrease when compared to the fourth quarter of 2021.
Total consolidated operating expense in the fourth quarter of
2022, on a GAAP basis, was $41.0 million, an improvement of
$0.2 million or 0.5 percent when compared to the fourth
quarter of 2021. The improvement is primarily due to expense
savings of $1.1 million in distribution and $0.6 million
in outside services, partially offset by an increase of
$1.6 million in employee compensation and benefits
expense.
On a non-GAAP basis, adjusted operating expense was
$40.1 million, an improvement of $0.2 million or
0.4 percent when compared to the fourth quarter of 2021.
Full Year Results
Total revenue was $150.7 million for the full year 2022, a
decrease of $3.7 million or 2.4 percent when compared to
the full year 2021.Revenue from advertising and marketing services,
including print and digital revenues, was $69.7 million in
2022, a decrease of $3.6 million or 4.9 percent when
compared to the $73.3 million reported for the full year 2021.
Print advertising revenue declined $2.7 million or
5.6 percent and digital advertising and marketing services
revenue declined $0.9 million or 3.6 percent.
Circulation revenue was $65.2 million for the full year
2022, an increase of $0.2 million or 0.4 percent when
compared to the full year 2021. Digital-only subscription revenue
increased $3.5 million or 36.9 percent, partially offset
by a print circulation decline of $3.3 million or
6.0 percent.
Printing, distribution and other revenue decreased
$0.4 million, or 2.3 percent, to $15.8 million,
primarily due to reductions in revenue from mailed advertisements
for business customers and distribution revenue from commercial
printing.
Total consolidated operating expense for the full year 2022, on
a GAAP basis, was $159.6 million, an improvement of
$4.7 million or 2.9 percent compared to the full year
2021. The improvement is primarily due to expense savings of
$2.7 million in distribution, $2.0 million in employee
compensation and benefits, and $1.3 million in depreciation,
partially offset by an increase of $1.2 million in newsprint
expense.
On a non-GAAP basis, adjusted operating expense was
$155.9 million, an improvement of $2.3 million or
1.4 percent when compared to $158.2 million of adjusted
operating expense in the full year 2021.
As of December 31, 2022, the Company had 663 employees, an
increase of 7 full-time equivalents, or 1.1 percent, when
compared to the prior year period. Cash and cash equivalents were
$27.8 million and the Company had no debt.
Non-GAAP Financial
Measures
Reconciliations of operating loss to adjusted operating income
(loss) 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 Friday,
March 10, 2023, at 9:00 a.m. CST 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 1-877-336-4441
and enter the following access code when prompted: 5166062. A
replay line will be available at 1-866-207-1041 from 12:00 p.m. CST
on March 10, 2023 until 11:59 p.m. CDT on
March 16, 2023. The access code for the replay is
1651323.
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 (the “Company”) business outlook or future economic
performance, revenues, expenses, cash balance 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. Words such as “anticipate,”
“assume,” “believe,” “can,” “could,” “estimate,” “forecast,”
“intend,” “expect,” “may,” “project,” “plan,” “seek,” “should,”
“target,” “will,” “would” and their opposites and similar
expressions are intended to identify forward-looking statements.
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 and distribution prices; program costs; the
success of the Company’s digital strategy; 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 or that our
financial projections are accurate, 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.
Contact:Katy Murray214-977-8869
DallasNews Corporation and
SubsidiariesConsolidated Statements of
Operations
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Three Months Ended December 31, |
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Years Ended December 31, |
In thousands, except share and per share amounts
(unaudited) |
2022 |
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2021 |
|
|
2022 |
|
|
2021 |
|
Net Operating Revenue: |
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|
|
|
|
|
|
|
|
|
Advertising and marketing services |
$ |
18,421 |
|
|
$ |
19,800 |
|
|
$ |
69,667 |
|
|
$ |
73,271 |
|
Circulation |
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16,615 |
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|
|
16,671 |
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|
65,191 |
|
|
|
64,943 |
|
Printing, distribution and other |
|
4,067 |
|
|
|
4,109 |
|
|
|
15,793 |
|
|
|
16,160 |
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Total net operating revenue |
|
39,103 |
|
|
|
40,580 |
|
|
|
150,651 |
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|
154,374 |
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Operating Costs and
Expense: |
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Employee compensation and benefits |
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17,454 |
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15,884 |
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|
67,096 |
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|
69,078 |
|
Other production, distribution and operating costs |
|
19,973 |
|
|
|
21,759 |
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|
|
78,638 |
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|
|
81,041 |
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Newsprint, ink and other supplies |
|
2,976 |
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|
|
2,720 |
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|
|
11,035 |
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|
|
9,878 |
|
Depreciation |
|
582 |
|
|
|
875 |
|
|
|
2,709 |
|
|
|
4,002 |
|
Amortization |
|
— |
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|
|
— |
|
|
|
— |
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|
|
64 |
|
Loss on sale/disposal of assets, net |
|
58 |
|
|
|
— |
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|
58 |
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|
29 |
|
Asset impairments |
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— |
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|
— |
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|
102 |
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|
232 |
|
Total operating costs and expense |
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41,043 |
|
|
|
41,238 |
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|
159,638 |
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|
164,324 |
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Operating loss |
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(1,940 |
) |
|
|
(658 |
) |
|
|
(8,987 |
) |
|
|
(9,950 |
) |
Other income (loss), net |
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(193 |
) |
|
|
2,638 |
|
|
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(241 |
) |
|
|
7,332 |
|
Income (Loss) Before
Income Taxes |
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(2,133 |
) |
|
|
1,980 |
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|
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(9,228 |
) |
|
|
(2,618 |
) |
Income tax provision (benefit) |
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8 |
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(169 |
) |
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|
558 |
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(2,151 |
) |
Net Income
(Loss) |
$ |
(2,141 |
) |
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$ |
2,149 |
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$ |
(9,786 |
) |
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$ |
(467 |
) |
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Per Share
Basis (1) |
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Net income (loss) |
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Basic |
$ |
(0.40 |
) |
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$ |
0.40 |
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$ |
(1.83 |
) |
|
$ |
(0.09 |
) |
Number of common shares used in the per share calculation: |
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Basic |
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5,352,490 |
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5,352,490 |
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5,352,490 |
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5,352,490 |
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(1) |
The Company’s Series A and Series B common stock equally share in
the distributed and undistributed earnings. There were no options
or RSUs outstanding as of December 31, 2022 and 2021, that
would result in dilution of shares or the calculation of EPS under
the two-class method as prescribed under ASC 260 – Earnings
Per Share. |
DallasNews Corporation and
SubsidiariesConsolidated Balance
Sheets
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December 31, |
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December 31, |
In thousands (unaudited) |
2022 |
|
2021 |
Assets |
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Current assets: |
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Cash and cash equivalents |
$ |
27,825 |
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$ |
32,439 |
Accounts receivable, net |
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14,023 |
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16,012 |
Notes receivable |
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— |
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22,400 |
Other current assets |
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6,077 |
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5,677 |
Total current assets |
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47,925 |
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76,528 |
Property, plant and equipment, net |
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7,438 |
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8,822 |
Operating lease right-of-use assets |
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14,811 |
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17,648 |
Deferred income taxes, net |
|
282 |
|
|
257 |
Other assets |
|
1,809 |
|
|
2,197 |
Total assets |
$ |
72,265 |
|
$ |
105,452 |
Liabilities and
Shareholders’ Equity |
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Current liabilities: |
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Accounts payable |
$ |
5,041 |
|
$ |
7,821 |
Accrued compensation and other current liabilities |
|
8,214 |
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|
9,505 |
Contract liabilities |
|
9,504 |
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|
10,592 |
Total current liabilities |
|
22,759 |
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|
27,918 |
Long-term pension liabilities |
|
19,455 |
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|
14,275 |
Long-term operating lease liabilities |
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16,546 |
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|
19,181 |
Other liabilities |
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1,142 |
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|
1,501 |
Total liabilities |
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59,902 |
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62,875 |
Total shareholders' equity |
|
12,363 |
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|
42,577 |
Total liabilities and shareholders’ equity |
$ |
72,265 |
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$ |
105,452 |
DallasNews Corporation - Non-GAAP
Financial MeasuresReconciliation of Operating Loss
to Adjusted Operating Income (Loss)
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Three Months Ended December 31, |
|
Years Ended December 31, |
In thousands (unaudited) |
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Total net operating revenue |
$ |
39,103 |
|
|
$ |
40,580 |
|
|
$ |
150,651 |
|
|
$ |
154,374 |
|
Total operating costs and expense |
|
41,043 |
|
|
|
41,238 |
|
|
|
159,638 |
|
|
|
164,324 |
|
Operating
Loss |
$ |
(1,940 |
) |
|
$ |
(658 |
) |
|
$ |
(8,987 |
) |
|
$ |
(9,950 |
) |
|
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|
|
|
|
|
|
|
|
Total operating costs and expense |
$ |
41,043 |
|
|
$ |
41,238 |
|
|
$ |
159,638 |
|
|
$ |
164,324 |
|
Less: |
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Depreciation |
|
582 |
|
|
|
875 |
|
|
|
2,709 |
|
|
|
4,002 |
|
Amortization |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
64 |
|
Severance expense |
|
304 |
|
|
|
95 |
|
|
|
845 |
|
|
|
1,816 |
|
Loss on sale/disposal of assets, net |
|
58 |
|
|
|
— |
|
|
|
58 |
|
|
|
29 |
|
Asset impairments |
|
— |
|
|
|
— |
|
|
|
102 |
|
|
|
232 |
|
Adjusted Operating
Expense |
$ |
40,099 |
|
|
$ |
40,268 |
|
|
$ |
155,924 |
|
|
$ |
158,181 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net operating revenue |
$ |
39,103 |
|
|
$ |
40,580 |
|
|
$ |
150,651 |
|
|
$ |
154,374 |
|
Adjusted operating expense |
|
40,099 |
|
|
|
40,268 |
|
|
|
155,924 |
|
|
|
158,181 |
|
Adjusted Operating Income
(Loss) |
$ |
(996 |
) |
|
$ |
312 |
|
|
$ |
(5,273 |
) |
|
$ |
(3,807 |
) |
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.
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.
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