DallasNews Corporation Takes Further Steps to Advance Return to Growth Strategy
DallasNews (Nasdaq: DALN) has announced plans to relocate its print operations from Plano, Texas, to a smaller leased facility in Carrollton, Texas, as part of its Return to Growth Plan initiated in 2021. The new facility will be operational by early 2025 and will result in annual savings of approximately $5 million. The company will invest around $8 million in more efficient printing technology. This move will reduce staffing by about 60%, affecting approximately 85 employees. Additionally, DallasNews has suspended its dividend payments indefinitely.
- Expected annual expense savings of approximately $5 million.
- Capital investments of $8 million in more efficient printing technology.
- The new facility will continue producing a seven-day print edition.
- The smaller facility in Carrollton, Texas has been secured with a five-year lease.
- Relocation will result in a reduction of approximately 85 employees.
- Dividend payments have been suspended indefinitely.
- Capital investments require $8 million in expenditure.
- Transition to a smaller facility indicates potential downsizing of operations.
DallasNews Corporation's decision to relocate and optimize its print operations is a significant strategic move. By shifting to a smaller facility and investing in more efficient technology, the company aims to reduce annual expenses by approximately
From a financial standpoint, the relocation requires a capital investment of
The suspension of dividend payments, while possibly disappointing to some investors, is a prudent move to conserve cash for the necessary investments. In the long term, this reallocation of resources is expected to support the company's return to growth strategy, potentially leading to a more sustainable and profitable business.
Investors should monitor how these changes impact the company’s financial performance over the next few quarters, especially focusing on expense reductions and any potential revenue changes resulting from the operational shift.
The relocation of DallasNews Corporation’s print operations reflects broader industry trends towards efficiency and cost reduction. The media industry, particularly print, has been under pressure from digital transformation and declining print circulation. By moving to a smaller, more efficient facility, DallasNews Corporation is aligning itself with industry norms that favor leaner operations.
This move also highlights the company's commitment to maintaining a physical print presence, which, while declining, still holds value for certain demographics and advertisers. The decision to continue producing a seven-day print edition suggests that there is still a viable market for this format, although shrinking.
For investors, it's important to understand this pivot as part of a larger strategy to balance traditional and digital media. The success of this transition will depend on how well DallasNews Corporation can maintain print quality while reducing costs and simultaneously expand its digital operations to capture new revenue streams.
Relocation of North Texas Print Operations
Key Decision in the Company’s Return to Growth Plan
Dividend Suspension
DALLAS, May 14, 2024 (GLOBE NEWSWIRE) -- DallasNews Corporation (Nasdaq: DALN) (the “Company”), the parent company of The Dallas Morning News, announced today a plan to relocate and optimize its print operations currently located in Plano, Texas. The Company will streamline its printing operations into a smaller, leased facility in Carrollton, Texas, and make capital investments in more efficient technology. This transition will allow The News to keep its operations in North Texas and continue to produce a seven-day print edition for the foreseeable future. The new facility is expected to be operational in early 2025, and until then, all print operations will remain in the current facility.
The News’ current print facility, built in phases starting in 1980, is approximately 620,000 square feet and is located on nearly 29 acres in Collin County at the intersection of Coit Road and West Plano Parkway. The Company is conducting a market study and assessing the best future use for the property, including a potential sale of the property.
This transition of the Company’s print operations to a smaller facility is a pivotal element of its Return to Growth Plan, which started in 2021. Once the transition is completed, the Company expects to benefit from annual expense savings of approximately
“Our Return to Growth Plan remains well on track to achieve the targets we have laid out, and this decision contributes significantly to achieving those goals,” said Grant Moise, The News’ publisher, and chief executive officer of DallasNews Corporation. “We have continued to produce a premier print product that reflects our dedication to quality journalism. With this decision, we will be better positioned to do so profitably.”
The News has entered into a letter of intent for a five-year lease for a 67,000 square foot facility in Carrollton, Texas. This facility is significantly smaller than the existing print facility and will require considerably less expense to operate and maintain. As part of this transition, the Company expects to make capital investments of approximately
The new facility and operations are expected to require about 60 percent fewer staff, equivalent to about 85 fewer employees, compared to the current print operations. This transition will trigger notification requirements under the Worker Adjustment and Retraining Notification Act (WARN Act). These notifications will be provided to all impacted employees and the appropriate local and state agencies.
“We regret that we will lose valued employees due to this decision. Over the next eight months, we will have the opportunity to offer individualized guidance to our print production employees on what this printing transition plan and timeline means to each of them,” said Katy Murray, president of DallasNews Corporation.
Murray also commented, “Based on the required capital investments to support the transition of the print operations, the Board of Directors of DallasNews Corporation has decided to suspend the declaration and payment of dividends until further notice.”
The News does not expect any interruption in subscriber or distribution services from this change and will continue to print and deliver on its current schedule.
By prioritizing improvement and efficiency, DallasNews Corporation is poised to continue its progress toward becoming a sustainably profitable organization, further solidifying its position as a leader in the media industry while maintaining its unwavering commitment to serving the North Texas community.
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@dallasews.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
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