DallasNews Corporation Announces First Quarter 2024 Financial Results
DallasNews (Nasdaq: DALN) reported a Q1 2024 net loss of $1.4 million or $(0.25) per share, showing an improvement from the Q1 2023 net loss of $2.6 million or $(0.49) per share. The adjusted operating loss was $0.8 million, a 64% improvement from the previous year's $2.2 million. This improvement is attributed to cost reductions in distribution, employee compensation, and newsprint, despite a $4.1 million revenue decline. The revenue drop stemmed from the strategic exit of the shared mail program and discontinuation of print-only niche publications.
Total revenue for Q1 2024 was $31.1 million, down 11.6% from Q1 2023. Advertising revenue fell by 23.9% to $11.6 million, while circulation revenue increased by 1.8% to $16.3 million. The company recorded total operating expenses of $32.9 million, a 13.4% improvement from Q1 2023. DallasNews plans to relocate print operations, expecting $5 million in annual savings by early 2025.
As of March 31, 2024, the company had 531 employees, a reduction of 18.6% from the previous year. The company holds $18.4 million in cash and short-term investments and reported no debt.
- Net loss reduced to $1.4 million in Q1 2024 from $2.6 million in Q1 2023.
- Adjusted operating loss improved by 64%, reaching $0.8 million from $2.2 million in Q1 2023.
- Total operating expenses decreased by 13.4% to $32.9 million.
- Cost reductions in distribution ($2.5 million), employee compensation ($1.6 million), and newsprint ($0.9 million).
- Circulation revenue increased by 1.8% to $16.3 million.
- Digital-only subscription revenue grew by 25.2%.
- Relocation of print operations expected to save $5 million annually by early 2025.
- No debt reported; cash and short-term investments at $18.4 million.
- Total revenue declined by 11.6% to $31.1 million.
- Advertising and marketing services revenue dropped by 23.9% to $11.6 million.
- Total revenue decrease primarily due to the end of the shared mail program and discontinuation of print-only niche publications.
- Printing, distribution, and other revenue fell by 18.7% to $3.2 million.
Insights
DallasNews Corporation's first quarter 2024 results reflect a noteworthy improvement in reducing its losses compared to the same period last year. The company reported a net loss of
Revenue from advertising and marketing services dropped by
For retail investors, the continuing losses, albeit reduced, might be a concern. However, the strategic cost-cutting measures and the shift towards digital could signal a positive long-term outlook. The absence of debt and a robust cash position of
The transition mentioned in the report suggests a strategic pivot towards a more digital-focused operational model. The growth in digital-only subscription revenue by
The decline in revenue from advertising and marketing services, particularly the drop in preprint advertising, reflects broader industry challenges in monetizing traditional print media. However, the increase in digital subscription revenue highlights the company's potential to capitalize on digital platforms, which could attract younger, tech-savvy audiences and advertisers.
Investors should note the company's proactive measures in addressing its operational inefficiencies and shifting market dynamics. The eventual profitability hinges on the successful implementation of these strategies and continued adoption of digital media by its readership.
DALLAS, May 15, 2024 (GLOBE NEWSWIRE) -- DallasNews Corporation (Nasdaq: DALN) (the “Company”) today reported a first quarter 2024 net loss of
For the first quarter of 2024, on a non-GAAP basis, DallasNews reported an operating loss adjusted for certain items (“adjusted operating loss”) of
Grant Moise, Chief Executive Officer, said, “I am pleased with the progress we saw in the first quarter reducing our adjusted operating loss 64 percent on a year-over-year basis. This improvement is consistent with the Company’s Return to Growth Plan and reassures me we are on the right path towards future profitability. From its inception, the Return to Growth Plan was designed to allow the Company to maintain a newsroom large enough to provide the North Texas market with exceptional journalism that responsibly serves over eight million residents, and we remain committed to this essential element of our Plan.
“Yesterday we announced that we will be relocating and streamlining our print operations from Plano to a smaller facility in Carrollton. We expect this transition to be completed in early 2025 and to generate
First Quarter Results
Total revenue was
Revenue from advertising and marketing services, including print and digital revenues, was
Circulation revenue was
Printing, distribution and other revenue was
Total consolidated operating expense in the first quarter of 2024, on a GAAP basis, was
On a non-GAAP basis, adjusted operating expense was
As of March 31, 2024, the Company had 531 employees, a headcount decrease of 121 or 18.6 percent when compared to the prior year period, resulting from the 2023 Voluntary Severance Program participants and additional first quarter headcount reductions. Cash and cash equivalents along with short-term investments were
Non-GAAP Financial Measures
Reconciliations of operating loss to adjusted operating 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 Thursday, May 16, 2024, at 9:00 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 1-844-291-4185 and enter the following access code when prompted: 6757376. A replay line will be available at 1-866-207-1041 from 12:00 p.m. CDT on May 16, 2024 until 11:59 p.m. CDT on May 22, 2024. The access code for the replay is 4664664.
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 an excellent journalistic reputation, intense regional focus and close community ties. With offices in Dallas and Tulsa, Medium Giant is a full-service advertising agency dedicated to designing, creating and delivering stories that drive customers to act. For additional information, visit dallasnewscorporation.com or email invest@dallasnews.com.
Statements in this communication concerning the Company’s planned transition of print operations, expected capital investments and expense savings related to the transition, the Company’s business outlook or future economic performance, revenues, expenses, cash balance, investments, business initiatives, working capital, dividends, future financings, 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 set forth in forward-looking 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; volatility in the North Texas real estate market; consumers’ tastes; newsprint and distribution prices; program costs; the Company’s ability to successfully execute the Return to Growth Plan; the success of the Company’s digital strategy; labor relations; cybersecurity incidents; and technological obsolescence. Among other risks, there can be no guarantee that the board of directors will approve dividends in the future or that the Company’s 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 Murray
214-977-8869
KMurray@dallasnews.com
DallasNews Corporation and Subsidiaries
Consolidated Statements of Operations
Three Months Ended March 31, | ||||||||
In thousands, except share and per share amounts (unaudited) | 2024 | 2023 | ||||||
Net Operating Revenue: | ||||||||
Advertising and marketing services | $ | 11,646 | $ | 15,309 | ||||
Circulation | 16,300 | 16,011 | ||||||
Printing, distribution and other | 3,156 | 3,882 | ||||||
Total net operating revenue | 31,102 | 35,202 | ||||||
Operating Costs and Expense: | ||||||||
Employee compensation and benefits | 16,117 | 17,373 | ||||||
Other production, distribution and operating costs | 15,059 | 18,028 | ||||||
Newsprint, ink and other supplies | 1,284 | 2,184 | ||||||
Depreciation | 398 | 373 | ||||||
Total operating costs and expense | 32,858 | 37,958 | ||||||
Operating loss | (1,756 | ) | (2,756 | ) | ||||
Other income, net | 611 | 362 | ||||||
Loss Before Income Taxes | (1,145 | ) | (2,394 | ) | ||||
Income tax provision | 218 | 232 | ||||||
Net Loss | $ | (1,363 | ) | $ | (2,626 | ) | ||
Per Share Basis (1) | ||||||||
Net loss | ||||||||
Basic | $ | (0.25 | ) | $ | (0.49 | ) | ||
Number of common shares used in the per share calculation: | ||||||||
Basic | 5,352,490 | 5,352,490 |
(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 March 31, 2024 and 2023, 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 Subsidiaries
Consolidated Balance Sheets
March 31, | December 31, | |||||||
In thousands (unaudited) | 2024 | 2023 | ||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 7,946 | $ | 11,697 | ||||
Short-term investments | 10,478 | 10,781 | ||||||
Accounts receivable, net | 8,582 | 9,923 | ||||||
Other current assets | 6,508 | 4,532 | ||||||
Total current assets | 33,514 | 36,933 | ||||||
Property, plant and equipment, net | 6,767 | 7,099 | ||||||
Operating lease right-of-use assets | 15,652 | 16,141 | ||||||
Deferred income taxes, net | 260 | 271 | ||||||
Other assets | 1,785 | 1,790 | ||||||
Total assets | $ | 57,978 | $ | 62,234 | ||||
Liabilities and Shareholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 3,660 | $ | 3,963 | ||||
Accrued compensation and other current liabilities | 7,878 | 10,449 | ||||||
Contract liabilities | 10,593 | 9,511 | ||||||
Total current liabilities | 22,131 | 23,923 | ||||||
Long-term pension liabilities | 16,766 | 17,353 | ||||||
Long-term operating lease liabilities | 16,356 | 16,924 | ||||||
Other liabilities | 1,028 | 1,076 | ||||||
Total liabilities | 56,281 | 59,276 | ||||||
Contingent liabilities | ||||||||
Total shareholders' equity | 1,697 | 2,958 | ||||||
Total liabilities and shareholders’ equity | $ | 57,978 | $ | 62,234 |
DallasNews Corporation - Non-GAAP Financial Measures
Reconciliation of Operating Loss to Adjusted Operating Loss
Three Months Ended March 31, | ||||||||
In thousands (unaudited) | 2024 | 2023 | ||||||
Total net operating revenue | $ | 31,102 | $ | 35,202 | ||||
Total operating costs and expense | 32,858 | 37,958 | ||||||
Operating Loss | $ | (1,756 | ) | $ | (2,756 | ) | ||
Total operating costs and expense | $ | 32,858 | $ | 37,958 | ||||
Less: | ||||||||
Depreciation | 398 | 373 | ||||||
Severance expense | 578 | 217 | ||||||
Adjusted Operating Expense | $ | 31,882 | $ | 37,368 | ||||
Total net operating revenue | $ | 31,102 | $ | 35,202 | ||||
Adjusted operating expense | 31,882 | 37,368 | ||||||
Adjusted Operating Loss | $ | (780 | ) | $ | (2,166 | ) |
The Company calculates adjusted operating income (loss) by adjusting operating income (loss) to exclude depreciation, 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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