DallasNews Corporation Announces Second Quarter 2024 Financial Results
Rhea-AI Summary
DallasNews (Nasdaq: DALN) reported net income of $1.5 million ($0.27 per share) and operating income of $0.6 million for Q2 2024, compared to a net loss of $0.9 million in Q2 2023. The company's total revenue decreased by 11% to $32.1 million, primarily due to exiting its shared mail program and discontinuing print-only niche publications. Despite this, circulation revenue increased by 1.2% to $16.2 million, with digital-only subscription revenue growing by 18.8%. The company achieved expense savings of $5.4 million, resulting in an adjusted operating income of $1.2 million, an improvement from the $0.3 million loss in Q2 2023. DallasNews had $17.1 million in cash and cash equivalents with no debt as of June 30, 2024.
Positive
- Net income improved from a loss of $0.9 million in Q2 2023 to a profit of $1.5 million in Q2 2024
- Adjusted operating income of $1.2 million, up from a $0.3 million loss in Q2 2023
- Digital-only subscription revenue increased by 18.8%
- Expense savings of $5.4 million achieved
- Strong cash position of $17.1 million with no debt
Negative
- Total revenue decreased by 11% to $32.1 million
- Advertising and marketing services revenue declined by 21.2%
- Print advertising revenue decreased by $3.9 million
- Print circulation revenue declined by 4.5%
- Headcount decreased by 17.2% compared to the previous year
News Market Reaction
On the day this news was published, DALN gained 39.57%, reflecting a significant positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
DALLAS, July 30, 2024 (GLOBE NEWSWIRE) -- DallasNews Corporation (Nasdaq: DALN) (the “Company”) today reported second quarter 2024 net income of
For the second quarter of 2024, on a non-GAAP basis, DallasNews reported operating income adjusted for certain items (“adjusted operating income (loss)”) of
Grant Moise, Chief Executive Officer, said, “The second quarter showed positive year-over-year financial performance due to disciplined expense management and improved revenue performance from Medium Giant and Circulation at The Dallas Morning News. I am very pleased with the team’s performance, and these improved results continue to move us closer to our goal of becoming a sustainably profitable media and marketing company.”
Second 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 second quarter of 2024, on a GAAP basis, was
On a non-GAAP basis, adjusted operating expense was
As of June 30, 2024, the Company had 533 employees, a headcount decrease of 111 or 17.2 percent when compared to the prior year period, resulting from the 2023 Voluntary Severance Program participants and additional first quarter headcount reductions at Medium Giant. Cash and cash equivalents along with short-term investments were
Segment Information
In the second quarter of 2024, based on changes made in the reporting package used by the Company’s Chief Operating Decision Maker (“CODM”) for purposes of allocating resources and assessing performance, the Company determined it has two reportable segments. The two reportable segments are the following:
- TDMN is comprised of the Company’s traditional print business that includes operating The Dallas Morning News and related digital platforms including dallasnews.com.
- Agency is comprised of the Company’s full-service advertising agency, Medium Giant.
In addition to the reportable segments, the Company has a Corporate and Other category that includes expenses not directly attributable to a specific reportable segment.
The CODM, who is the Chief Executive Officer, uses adjusted operating income (loss) for the purposes of evaluating performance and allocating resources. Adjusted operating income (loss) by reportable segment, and corporate and other is included in the exhibits to this release.
Non-GAAP Financial Measures
Reconciliations of operating income (loss) to adjusted operating income (loss), and total operating costs and expense to adjusted operating expense are included in the exhibits to this release.
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.
Financial Results Conference Call
DallasNews Corporation will conduct a conference call on Wednesday, July 31, 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 conference call, dial 1-877-336-4436 and enter the following access code when prompted: 8453121. A replay line will be available at 1-866-207-1041 from 12:00 p.m. CDT on July 31, 2024 until 11:59 p.m. CDT on August 6, 2024. The access code for the replay is 4993908.
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 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; the timeline for transitioning print operations; consumers’ tastes; newsprint and distribution prices; program costs; the Company’s ability to successfully execute the Return to Growth Plan; the Company’s ability to maintain compliance with the continued listing requirements of The Nasdaq Capital Market; 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 June 30, | Six Months Ended June 30, | ||||||||||||||
| In thousands, except share and per share amounts (unaudited) | 2024 | 2023 | 2024 | 2023 | |||||||||||
| Net Operating Revenue: | |||||||||||||||
| Advertising and marketing services | $ | 12,784 | $ | 16,223 | $ | 24,430 | $ | 31,532 | |||||||
| Circulation | 16,181 | 15,996 | 32,481 | 32,007 | |||||||||||
| Printing, distribution and other | 3,096 | 3,793 | 6,252 | 7,675 | |||||||||||
| Total net operating revenue | 32,061 | 36,012 | 63,163 | 71,214 | |||||||||||
| Operating Costs and Expense: | |||||||||||||||
| Employee compensation and benefits | 14,738 | 17,236 | 30,855 | 34,609 | |||||||||||
| Other production, distribution and operating costs | 15,046 | 17,293 | 30,105 | 35,321 | |||||||||||
| Newsprint, ink and other supplies | 1,302 | 2,346 | 2,586 | 4,530 | |||||||||||
| Depreciation | 407 | 357 | 805 | 730 | |||||||||||
| Total operating costs and expense | 31,493 | 37,232 | 64,351 | 75,190 | |||||||||||
| Operating income (loss) | 568 | (1,220 | ) | (1,188 | ) | (3,976 | ) | ||||||||
| Other income, net | 641 | 378 | 1,252 | 740 | |||||||||||
| Income (Loss) Before Income Taxes | 1,209 | (842 | ) | 64 | (3,236 | ) | |||||||||
| Income tax provision (benefit) | (241 | ) | 26 | (23 | ) | 258 | |||||||||
| Net Income (Loss) | $ | 1,450 | $ | (868 | ) | $ | 87 | $ | (3,494 | ) | |||||
| Per Share Basis (1) | |||||||||||||||
| Net income (loss) | |||||||||||||||
| Basic | $ | 0.27 | $ | (0.16 | ) | $ | 0.02 | $ | (0.65 | ) | |||||
| Diluted | $ | 0.27 | $ | (0.16 | ) | $ | 0.02 | $ | (0.65 | ) | |||||
| Number of common shares used in the per share calculation: | |||||||||||||||
| Basic | 5,352,490 | 5,352,490 | 5,352,490 | 5,352,490 | |||||||||||
| Diluted | 5,352,490 | 5,352,490 | 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 June 30, 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
| June 30, | December 31, | ||||||
| In thousands (unaudited) | 2024 | 2023 | |||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 16,601 | $ | 11,697 | |||
| Short-term investments | 500 | 10,781 | |||||
| Accounts receivable, net | 9,120 | 9,923 | |||||
| Other current assets | 5,062 | 4,532 | |||||
| Total current assets | 31,283 | 36,933 | |||||
| Property, plant and equipment, net | 9,280 | 7,099 | |||||
| Operating lease right-of-use assets | 18,690 | 16,141 | |||||
| Deferred income taxes, net | 273 | 271 | |||||
| Other assets | 1,779 | 1,790 | |||||
| Total assets | $ | 61,305 | $ | 62,234 | |||
| Liabilities and Shareholders’ Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 5,111 | $ | 3,963 | |||
| Accrued compensation and other current liabilities | 6,926 | 10,449 | |||||
| Contract liabilities | 9,969 | 9,511 | |||||
| Total current liabilities | 22,006 | 23,923 | |||||
| Long-term pension liabilities | 16,180 | 17,353 | |||||
| Long-term operating lease liabilities | 18,848 | 16,924 | |||||
| Other liabilities | 1,022 | 1,076 | |||||
| Total liabilities | 58,056 | 59,276 | |||||
| Contingent liabilities | |||||||
| Total shareholders' equity | 3,249 | 2,958 | |||||
| Total liabilities and shareholders’ equity | $ | 61,305 | $ | 62,234 | |||
DallasNews Corporation and Subsidiaries
Revenue by Reportable Segment
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| In thousands (unaudited) | 2024 | 2023 (Recast) | 2024 | 2023 (Recast) | |||||||||||
| TDMN | |||||||||||||||
| Print advertising (1) | $ | 6,558 | $ | 10,294 | $ | 12,197 | $ | 19,590 | |||||||
| Digital advertising (2) | 2,274 | 2,255 | 4,232 | 4,332 | |||||||||||
| Agency | |||||||||||||||
| Marketing and media services (2) | 3,952 | 3,674 | 8,001 | 7,610 | |||||||||||
| Advertising and Marketing Services | $ | 12,784 | $ | 16,223 | $ | 24,430 | $ | 31,532 | |||||||
| TDMN | |||||||||||||||
| Print circulation | 11,603 | 12,144 | 23,359 | 24,525 | |||||||||||
| Digital circulation | 4,578 | 3,852 | 9,122 | 7,482 | |||||||||||
| Circulation | $ | 16,181 | $ | 15,996 | $ | 32,481 | $ | 32,007 | |||||||
| TDMN | 3,096 | 3,634 | 6,252 | 7,357 | |||||||||||
| Agency | — | 159 | — | 318 | |||||||||||
| Printing, Distribution and Other | $ | 3,096 | $ | 3,793 | $ | 6,252 | $ | 7,675 | |||||||
| Total Net Operating Revenue | $ | 32,061 | $ | 36,012 | $ | 63,163 | $ | 71,214 | |||||||
(1) Includes
(2) Prior to the segment reporting change, digital advertising, and marketing and media services revenues were reported in aggregate.
DallasNews Corporation - Non-GAAP Financial Measures
Reconciliation of Operating Income (Loss) to Adjusted Operating Income (Loss)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| In thousands (unaudited) | 2024 | 2023 | 2024 | 2023 | |||||||||||
| Total net operating revenue | $ | 32,061 | $ | 36,012 | $ | 63,163 | $ | 71,214 | |||||||
| Total operating costs and expense | 31,493 | 37,232 | 64,351 | 75,190 | |||||||||||
| Operating Income (Loss) | $ | 568 | $ | (1,220 | ) | $ | (1,188 | ) | $ | (3,976 | ) | ||||
| Total operating costs and expense | $ | 31,493 | $ | 37,232 | $ | 64,351 | $ | 75,190 | |||||||
| Less: | |||||||||||||||
| Depreciation | 407 | 357 | 805 | 730 | |||||||||||
| Severance expense | 198 | 608 | 776 | 825 | |||||||||||
| Adjusted Operating Expense | $ | 30,888 | $ | 36,267 | $ | 62,770 | $ | 73,635 | |||||||
| Total net operating revenue | $ | 32,061 | $ | 36,012 | $ | 63,163 | $ | 71,214 | |||||||
| Adjusted operating expense | 30,888 | 36,267 | 62,770 | 73,635 | |||||||||||
| Adjusted Operating Income (Loss) | $ | 1,173 | $ | (255 | ) | $ | 393 | $ | (2,421 | ) | |||||
DallasNews Corporation - Non-GAAP Financial Measures
Adjusted Operating Income (Loss) by Reportable Segment, and Corporate and Other
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| In thousands (unaudited) | 2024 | 2023 | 2024 | 2023 | |||||||||||
| TDMN | |||||||||||||||
| Total net operating revenue | $ | 28,109 | $ | 32,179 | $ | 55,162 | $ | 63,286 | |||||||
| Adjusted operating expense | 21,794 | 27,151 | 43,597 | 55,097 | |||||||||||
| Adjusted Operating Income (Loss) | $ | 6,315 | $ | 5,028 | $ | 11,565 | $ | 8,189 | |||||||
| Agency | |||||||||||||||
| Total net operating revenue | $ | 3,952 | $ | 3,833 | $ | 8,001 | $ | 7,928 | |||||||
| Adjusted operating expense | 3,921 | 4,338 | 8,372 | 8,872 | |||||||||||
| Adjusted Operating Income (Loss) | $ | 31 | $ | (505 | ) | $ | (371 | ) | $ | (944 | ) | ||||
| Corporate and Other | |||||||||||||||
| Total net operating revenue | $ | — | $ | — | $ | — | $ | — | |||||||
| Adjusted operating expense | 5,173 | 4,778 | 10,801 | 9,666 | |||||||||||
| Adjusted Operating Income (Loss) | $ | (5,173 | ) | $ | (4,778 | ) | $ | (10,801 | ) | $ | (9,666 | ) | |||
| Total Adjusted Operating Income (Loss) | $ | 1,173 | $ | (255 | ) | $ | 393 | $ | (2,421 | ) | |||||
| Excluded expenses: | |||||||||||||||
| Depreciation | 407 | 357 | 805 | 730 | |||||||||||
| Severance expense | 198 | 608 | 776 | 825 | |||||||||||
| Operating Income (Loss) | $ | 568 | $ | (1,220 | ) | $ | (1,188 | ) | $ | (3,976 | ) | ||||
| Other income, net | 641 | 378 | 1,252 | 740 | |||||||||||
| Income (Loss) Before Income Taxes | $ | 1,209 | $ | (842 | ) | $ | 64 | $ | (3,236 | ) | |||||
FAQ
What was DallasNews 's (DALN) net income for Q2 2024?
How did DALN's revenue change in Q2 2024 compared to Q2 2023?
What was the growth rate of DALN's digital-only subscription revenue in Q2 2024?
How much did DallasNews (DALN) save in expenses during Q2 2024?
What was DALN's cash position as of June 30, 2024?
