DallasNews Corporation Announces First Quarter 2022 Financial Results

April 22, 2022 at 4:30 PM EDT

DALLAS, April 22, 2022 (GLOBE NEWSWIRE) -- 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 Subsidiaries
Consolidated 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 Subsidiaries
Consolidated 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 Measures
Reconciliation 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 Murray
214-977-8869


Primary Logo

Source: DallasNews Corporation

Investor Relations
Katy Murray
President / Chief Financial Officer
DallasNews Corporation
214-977-8869
invest@dallasnews.com

DallasNews Corporation Headquarters
Mailing Address:
P.O. Box 224866
Dallas, Texas 75222-4866
Street Address:
1954 Commerce Street
Dallas, Texas 75201
214-977-8222
214-977-8285 (fax)