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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2021

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file no. 1-33741

DallasNews CORPORATION

(Exact name of registrant as specified in its charter)


Texas		38-3765318
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

P. O. Box 224866, Dallas, Texas 75222-4866		(214) 977-7342
(Address of principal executive offices, including zip code)		(Registrant’s telephone number, including area code)
Former name, former address and former fiscal year, if changed since last report.
None

Securities registered pursuant to Section 12(b) of the Act:




Title of each class	Trading Symbol	Name of each exchange on which registered
Series A Common Stock, $0.01 par value	DALN	The Nasdaq Stock Market LLC

Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large Accelerated Filer: ¨

Accelerated Filer: ¨

Non-Accelerated Filer: þ

Smaller Reporting Company: þ

Emerging Growth Company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No þ

Shares of Common Stock outstanding at October 21, 2021: 5,352,490 shares (consisting of 4,737,280 shares of Series A Common Stock and 615,210 shares of Series B Common Stock).

Table of Contents

DALLASNEWS CORPORATION

FORM 10-Q

TABLE OF CONTENTS




		Page
PART I
Item 1.	Financial Information		PAGE 3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		PAGE 18
Item 4.	Controls and Procedures		PAGE 26

PART II
Item 1.	Legal Proceedings		PAGE 27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		PAGE 27
Item 3.	Defaults Upon Senior Securities		PAGE 27
Item 4.	Mine Safety Disclosures		PAGE 27
Item 5.	Other Information		PAGE 27
Item 6.	Exhibits		PAGE 28
Signatures			PAGE 31
Exhibit Index			PAGE 32

DallasNews Corporation Third Quarter 2021 on Form 10-Q

Table of Contents

PART I

Item 1. Financial Information

DallasNews Corporation and Subsidiaries

Consolidated Statements of Operations



	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands, except share and per share amounts (unaudited)	2021		2020		2021		2020
Net Operating Revenue:
Advertising and marketing services	$	18,101	$	17,474	$	53,471	$	52,392
Circulation		16,157		16,111		48,272		48,248
Printing, distribution and other		4,053		4,157		12,051		12,860
Total net operating revenue		38,311		37,742		113,794		113,500
Operating Costs and Expense:
Employee compensation and benefits		17,131		16,499		53,194		52,512
Other production, distribution and operating costs		20,041		19,307		59,282		58,958
Newsprint, ink and other supplies		2,439		2,476		7,158		8,018
Depreciation		1,018		1,753		3,127		5,320
Amortization		—		63		64		191
Loss on sale/disposal of assets, net		30		61		29		56
Asset impairments		232		—		232		—
Total operating costs and expense		40,891		40,159		123,086		125,055
Operating loss		(2,580)		(2,417)		(9,292)		(11,555)
Other income, net		1,827		2,095		4,694		4,778
Loss Before Income Taxes		(753)		(322)		(4,598)		(6,777)
Income tax benefit		(2,384)		(224)		(1,982)		(1,644)
Net Income (Loss)	$	1,631	$	(98)	$	(2,616)	$	(5,133)

Per Share Basis
Net income (loss)
Basic and diluted ⁽¹⁾	$	0.30	$	(0.02)	$	(0.49)	$	(0.96)
Number of common shares used in the per share calculation:
Basic and diluted ⁽¹⁾		5,352,490		5,352,490		5,352,490		5,352,490

(1)Share and per share amounts have been retroactively adjusted to reflect the one-for-four reverse stock split effective June 8, 2021. See Note 1 – Basis of Presentation and Recently Issued Accounting Standards for additional information.

See the accompanying Notes to the Consolidated Financial Statements.

‎

DallasNews Corporation Third Quarter 2021 on Form 10-Q 3

Table of Contents

DallasNews Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)



	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands (unaudited)	2021		2020		2021		2020
Net Income (Loss)	$	1,631	$	(98)	$	(2,616)	$	(5,133)
Other Comprehensive Income, Net of Tax:
Amortization of actuarial losses		360		219		1,080		657
Total other comprehensive income, net of tax		360		219		1,080		657
Total Comprehensive Income (Loss)	$	1,991	$	121	$	(1,536)	$	(4,476)

See the accompanying Notes to the Consolidated Financial Statements.

‎

DallasNews Corporation Third Quarter 2021 on Form 10-Q 4

Table of Contents

DallasNews Corporation and Subsidiaries

Consolidated Balance Sheets



	September 30,		December 31,
In thousands, except share amounts (unaudited)	2021		2020
Assets
Current assets:
Cash and cash equivalents	$	34,659	$	42,015
Accounts receivable (net of allowance of $584 and $712 at September 30, 2021 and December 31, 2020, respectively)		14,249		16,562
Notes receivable		22,400		22,775
Inventories		2,201		1,974
Prepaids and other current assets		5,216		4,780
Total current assets		78,725		88,106
Property, plant and equipment, at cost		312,664		312,532
Less accumulated depreciation		(303,456)		(300,573)
Property, plant and equipment, net		9,208		11,959
Operating lease right-of-use assets		18,219		20,406
Intangible assets, net		—		64
Deferred income taxes, net		102		76
Other assets		2,203		2,604
Total assets	$	108,457	$	123,215
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	6,197	$	7,759
Accrued compensation and benefits		6,868		5,754
Other accrued expense		5,283		5,075
Contract liabilities		12,139		12,896
Total current liabilities		30,487		31,484
Long-term pension liabilities		14,317		18,520
Long-term operating lease liabilities		19,863		21,890
Other post-employment benefits		1,336		1,372
Other liabilities		151		3,541
Total liabilities		66,154		76,807
Shareholders’ equity:
Preferred stock, $0.01 par value; Authorized 2,000,000 shares; none issued		—		—
Common stock, $0.01 par value; Authorized 31,250,000 shares ⁽¹⁾
Series A: issued 5,215,745 and 5,213,710 shares at September 30, 2021 and December 31, 2020, respectively ⁽¹⁾		52		209
Series B: issued 615,210 and 617,245 shares at September 30, 2021 and December 31, 2020, respectively ⁽¹⁾		6		24
Treasury stock, Series A, at cost; 478,465 shares held at September 30, 2021 and December 31, 2020 ⁽¹⁾		(13,443)		(13,443)
Additional paid-in capital		494,563		494,389
Accumulated other comprehensive loss		(31,388)		(32,468)
Accumulated deficit		(407,487)		(402,303)
Total shareholders’ equity		42,303		46,408
Total liabilities and shareholders’ equity	$	108,457	$	123,215

(1)Share amounts have been retroactively adjusted to reflect the one-for-four reverse stock split effective June 8, 2021. The number of authorized shares of common stock was reduced proportionately. See Note 1 – Basis of Presentation and Recently Issued Accounting Standards for additional information.

See the accompanying Notes to the Consolidated Financial Statements.

‎

DallasNews Corporation Third Quarter 2021 on Form 10-Q 5

Table of Contents

DallasNews Corporation and Subsidiaries

Consolidated Statements of Shareholders’ Equity



	Nine Months Ended September 30, 2021 and 2020
	Common Stock						Treasury Stock
In thousands, except share and per share amounts (unaudited)	Shares Series A	Shares Series B	Amount		Additional ‎Paid-in ‎Capital		Shares ‎Series A	Amount		Accumulated ‎Other ‎Comprehensive ‎Loss		Accumulated ‎Deficit		Total
Balance at December 31, 2019 ⁽¹⁾	5,213,654	617,301	$	233	$	494,389	(478,465)	$	(13,443)	$	(32,294)	$	(391,148)	$	57,737
Net loss	—	—		—		—	—		—		—		(5,133)		(5,133)
Other comprehensive income	—	—		—		—	—		—		657		—		657
Conversion of Series B to Series A ⁽¹⁾	56	(56)		—		—	—		—		—		—		—
Dividends declared ($0.64 per share) ⁽¹⁾	—	—		—		—	—		—		—		(3,425)		(3,425)
Balance at September 30, 2020 ⁽¹⁾	5,213,710	617,245	$	233	$	494,389	(478,465)	$	(13,443)	$	(31,637)	$	(399,706)	$	49,836
Balance at December 31, 2020 ⁽¹⁾	5,213,710	617,245	$	233	$	494,389	(478,465)	$	(13,443)	$	(32,468)	$	(402,303)	$	46,408
Net loss	—	—		—		—	—		—		—		(2,616)		(2,616)
Other comprehensive income	—	—		—		—	—		—		1,080		—		1,080
Conversion of Series B to Series A ⁽¹⁾	2,035	(2,035)		—		—	—		—		—		—		—
Dividends declared ($0.48 per share) ⁽¹⁾	—	—		—		—	—		—		—		(2,568)		(2,568)
Fractional shares paid out related to the reverse stock split	—	—		—		(1)	—		—		—		—		(1)
Reduction of shares at par value related to the reverse stock split	—	—		(175)		175	—		—		—		—		—
Balance at September 30, 2021	5,215,745	615,210	$	58	$	494,563	(478,465)	$	(13,443)	$	(31,388)	$	(407,487)	$	42,303



	Three Months Ended September 30, 2021 and 2020
	Common Stock						Treasury Stock
In thousands, except share and per share amounts (unaudited)	Shares ‎Series A	Shares ‎Series B	Amount		Additional ‎Paid-in ‎Capital		Shares ‎Series A	Amount		Accumulated ‎Other ‎Comprehensive ‎Loss		Accumulated ‎Deficit		Total
Balance at June 30, 2020 ⁽¹⁾	5,213,710	617,245	$	233	$	494,389	(478,465)	$	(13,443)	$	(31,856)	$	(398,752)	$	50,571
Net loss	—	—		—		—	—		—		—		(98)		(98)
Other comprehensive income	—	—		—		—	—		—