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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, 2022

¨ 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, 2022: 5,352,490 shares (consisting of 4,737,772 shares of Series A Common Stock and 614,718 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 17
Item 4.	Controls and Procedures		PAGE 23

PART II
Item 1.	Legal Proceedings		PAGE 24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		PAGE 24
Item 3.	Defaults Upon Senior Securities		PAGE 24
Item 4.	Mine Safety Disclosures		PAGE 24
Item 5.	Other Information		PAGE 24
Item 6.	Exhibits		PAGE 25
Signatures			PAGE 28
Exhibit Index			PAGE 29

DallasNews Corporation Third Quarter 2022 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)	2022		2021		2022		2021
Net Operating Revenue:
Advertising and marketing services	$	17,525	$	18,101	$	51,246	$	53,471
Circulation		16,230		16,157		48,576		48,272
Printing, distribution and other		3,933		4,053		11,726		12,051
Total net operating revenue		37,688		38,311		111,548		113,794
Operating Costs and Expense:
Employee compensation and benefits		16,428		17,131		49,642		53,194
Other production, distribution and operating costs		19,691		20,041		58,665		59,282
Newsprint, ink and other supplies		3,161		2,439		8,059		7,158
Depreciation		699		1,018		2,127		3,127
Amortization		—		—		—		64
Loss on sale/disposal of assets, net		—		30		—		29
Asset impairments		—		232		102		232
Total operating costs and expense		39,979		40,891		118,595		123,086
Operating loss		(2,291)		(2,580)		(7,047)		(9,292)
Other income (loss), net		(94)		1,827		(48)		4,694
Loss Before Income Taxes		(2,385)		(753)		(7,095)		(4,598)
Income tax provision (benefit)		201		(2,384)		550		(1,982)
Net Income (Loss)	$	(2,586)	$	1,631	$	(7,645)	$	(2,616)

Per Share Basis
Net income (loss)
Basic	$	(0.48)	$	0.30	$	(1.43)	$	(0.49)
Number of common shares used in the per share calculation:
Basic		5,352,490		5,352,490		5,352,490		5,352,490

See the accompanying Notes to the Consolidated Financial Statements.

‎

DallasNews Corporation Third Quarter 2022 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)	2022		2021		2022		2021
Net Income (Loss)	$	(2,586)	$	1,631	$	(7,645)	$	(2,616)
Other Comprehensive Income (Loss), Net of Tax:
Amortization of actuarial losses		130		360		391		1,080
Total other comprehensive income, net of tax		130		360		391		1,080
Total Comprehensive Income (Loss)	$	(2,456)	$	1,991	$	(7,254)	$	(1,536)

See the accompanying Notes to the Consolidated Financial Statements.

‎

DallasNews Corporation Third Quarter 2022 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)	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	33,031	$	32,439
Accounts receivable (net of allowance of $435 and $551 at September 30, 2022 and December 31, 2021, respectively)		13,256		16,012
Notes receivable		—		22,400
Inventories		1,844		2,192
Prepaids and other current assets		3,714		3,485
Total current assets		51,845		76,528
Property, plant and equipment, at cost		313,583		312,979
Less accumulated depreciation		(305,773)		(304,157)
Property, plant and equipment, net		7,810		8,822
Operating lease right-of-use assets		15,449		17,648
Deferred income taxes, net		186		257
Other assets		2,096		2,197
Total assets	$	77,386	$	105,452
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	4,623	$	7,821
Accrued compensation and benefits		6,001		4,932
Other accrued expense		4,818		4,573
Contract liabilities		9,389		10,592
Total current liabilities		24,831		27,918
Long-term pension liabilities		9,546		14,275
Long-term operating lease liabilities		16,815		19,181
Other post-employment benefits		1,311		1,349
Other liabilities		158		152
Total liabilities		52,661		62,875
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
Series A: issued 5,216,208 and 5,216,045 shares at September 30, 2022 and December 31, 2021, respectively		52		52
Series B: issued 614,747 and 614,910 shares at September 30, 2022 and December 31, 2021, respectively		6		6
Treasury stock, Series A, at cost; 478,465 shares held at September 30, 2022 and December 31, 2021		(13,443)		(13,443)
Additional paid-in capital		494,563		494,563
Accumulated other comprehensive loss		(32,015)		(32,406)
Accumulated deficit		(424,438)		(406,195)
Total shareholders’ equity		24,725		42,577
Total liabilities and shareholders’ equity	$	77,386	$	105,452

See the accompanying Notes to the Consolidated Financial Statements.

‎

DallasNews Corporation Third Quarter 2022 on Form 10-Q 5

Table of Contents

DallasNews Corporation and Subsidiaries

Consolidated Statements of Shareholders’ Equity



	Nine Months Ended September 30, 2022 and 2021
	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, 2020	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	2,035	(2,035)		—		—	—		—		—		—		—
Dividends declared ($0.48 per share)	—	—		—		—	—		—		—		(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
Balance at December 31, 2021	5,216,045	614,910	$	58	$	494,563	(478,465)	$	(13,443)	$	(32,406)	$	(406,195)	$	42,577
Net loss	—	—		—		—	—		—		—		(7,645)		(7,645)
Other comprehensive income	—	—		—		—	—		—		391		—		391
Conversion of Series B to Series A	163	(163)		—		—	—		—		—		—		—
Dividends declared ($1.98 per share)	—	—		—		—	—		—		—		(10,598)		(10,598)
Balance at September 30, 2022	5,216,208	614,747	$	58	$	494,563	(478,465)	$	(13,443)	$	(32,015)	$	(424,438)	$	24,725



	Three Months Ended September 30, 2022 and 2021
	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, 2021	5,215,740	615,215	$	58	$	494,563	(478,465)	$	(13,443)	$	(31,748)	$	(408,262)	$	41,168
Net income	—	—		—		—	—		—		—		1,631		1,631
Other comprehensive income	—	—		—		—	—		—		360		—		360
Conversion of Series B to Series A	5	(5)		—		—	—		—		—		—		—
Dividends declared ($