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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.

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DallasNews Corporation Third Quarter 2022 on Form 10-Q 3

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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

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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.

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DallasNews Corporation Third Quarter 2022 on Form 10-Q 5

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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 ($0.16 per share)	—	—		—		—	—		—		—		(856)		(856)
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 June 30, 2022	5,216,103	614,852	$	58	$	494,563	(478,465)	$	(13,443)	$	(32,145)	$	(412,967)	$	36,066
Net loss	—	—		—		—	—		—		—		(2,586)		(2,586)
Other comprehensive income	—	—		—		—	—		—		130		—		130
Conversion of Series B to Series A	105	(105)		—		—	—		—		—		—		—
Dividends declared ($1.66 per share)	—	—		—		—	—		—		—		(8,885)		(8,885)
Balance at September 30, 2022	5,216,208	614,747	$	58	$	494,563	(478,465)	$	(13,443)	$	(32,015)	$	(424,438)	$	24,725

See the accompanying Notes to the Consolidated Financial Statements.

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DallasNews Corporation Third Quarter 2022 on Form 10-Q 6

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DallasNews Corporation and Subsidiaries

Consolidated Statements of Cash Flows



	Nine Months Ended September 30,
In thousands (unaudited)	2022		2021
Operating Activities
Net loss	$	(7,645)	$	(2,616)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation and amortization		2,127		3,191
Net periodic costs and contributions related to employee benefit plans		(4,318)		(3,105)
Bad debt expense		165		106
Deferred income taxes		72		(26)
Loss on sale/disposal of assets, net		—		29
Asset impairments		102		232
Changes in working capital and other operating assets and liabilities:
Accounts receivable		2,591		2,207
Inventories, prepaids and other current assets		119		(663)
Other assets		101		401
Accounts payable		(3,198)		(1,562)
Compensation and benefit obligations		1,069		1,114
Other accrued expenses		225		(3,137)
Contract liabilities		(1,203)		(757)
Other post-employment benefits		(58)		(54)
Net cash used for operating activities		(9,851)		(4,640)
Investing Activities
Purchases of assets		(1,359)		(523)
Sales of assets		—		1
Note payment received for asset sales		22,400		375
Net cash provided by (used for) investing activities		21,041		(147)
Financing Activities
Dividends paid		(10,598)		(2,568)
Fractional share payments related to the reverse stock split		—		(1)
Net cash used for financing activities		(10,598)		(2,569)
Net increase (decrease) in cash and cash equivalents		592		(7,356)
Cash and cash equivalents, beginning of period		32,439		42,015
Cash and cash equivalents, end of period	$	33,031	$	34,659

Supplemental Disclosures
Income tax paid, net	$	652	$	693
Noncash investing and financing activities:
Dividends payable		856		856

See the accompanying Notes to the Consolidated Financial Statements.

DallasNews Corporation Third Quarter 2022 on Form 10-Q 7

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DallasNews Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

Note 1: Basis of Presentation and Recently Issued Accounting Standards

Description of Business. DallasNews Corporation, formerly A. H. Belo Corporation, and its subsidiaries are referred to collectively herein as “DallasNews” or the “Company.” DallasNews was formed in February 2008 through a spin-off from its former parent company and is registered on The Nasdaq Stock Market LLC (Nasdaq trading symbol: DALN). DallasNews is the Dallas-based holding company of The Dallas Morning News and Medium Giant.

The Company operates The Dallas Morning News (dallasnews.com), Texas’ leading newspaper and winner of nine Pulitzer Prizes, and various niche publications targeting specific audiences. These operations generate revenue from sales of advertising within the Company’s newspaper and digital platforms, subscriptions and retail sales of its newspapers, commercial printing and distribution services primarily related to national newspapers, and preprint advertising.

In addition, the Company has a full-service agency, Medium Giant, with capabilities including strategy, creative and media management with a focus on strategic and digital marketing, and data intelligence that provide a measurable return on investment to its clients.

Name Change and Stock Exchange Listing. The Company transferred its stock exchange listing from the New York Stock Exchange (“NYSE”) to The Nasdaq Stock Market LLC (“Nasdaq”) and changed its corporate name to DallasNews Corporation. The listing and trading of the Company’s Series A common stock on the NYSE ceased trading at market close on June 28, 2021, and began trading on Nasdaq at market open on June 29, 2021, under the ticker symbol “DALN.”

Reverse Stock Split. In May 2021, at the Company’s 2021 annual meeting of shareholders, its shareholders approved a reverse stock split at a ratio of not less than one-for-three and not more than one-for-five, with the exact ratio to be determined by the Company’s board of directors. Following the annual meeting, the Company’s board of directors approved a one-for-four reverse stock split of its issued, outstanding and treasury shares of common stock, par value $0.01 per share, which became effective June 8, 2021. As a result, every four shares of the Company’s issued and outstanding Series A common stock and Series B common stock (and any such shares held in treasury) were converted into one share of Series A common stock and Series B common stock, respectively. All fractional shares were settled in cash in connection with the reverse stock split on June 9, 2021. The par value of the Series A and Series B common stock was not adjusted as a result of the reverse stock split and the Company reclassified an amount equal to the reduction in the number of Company shares at par value to additional paid-in capital.

COVID-19 Pandemic. Beginning in early 2020, the COVID-19 pandemic impacted, and may continue to impact, the Company’s customers, distribution partners, advertisers, production facilities, and third parties, and could result in additional loss of advertising revenue or supply chain disruption. If the pandemic were to affect a significant number of the workforce employed in printing operations, the Company may experience delays or be unable to produce, print and deliver its publications and other third-party print publications on a timely basis. The Company continues to evaluate for any future material impacts on its consolidated financial statements.

Basis of Presentation. The interim consolidated financial statements included herein are unaudited; however, they include adjustments of a normal recurring nature which, in the Company’s opinion, are necessary to present fairly the consolidated financial information as of and for the periods indicated in conformity with accounting principles generally accepted in the United States of America (“GAAP”) applicable to interim periods. All intercompany balances and transactions have been eliminated in consolidation. The Company consolidates its majority owned subsidiaries over which the Company exercises control. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. All dollar amounts presented herein, except share and per share amounts, are in thousands, unless the context indicates otherwise.

Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and (iii) the reported amount of net operating revenues and expenses recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements; accordingly, actual results could differ from these estimates.

Areas where estimates are used include valuation allowances for doubtful accounts, fair value measurements, pension plan assets, pension and other post-employment benefit obligation assumptions, income taxes, leases, self-insured liabilities, and assumptions related to long-lived assets impairment review.

DallasNews Corporation Third Quarter 2022 on Form 10-Q 8

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Segment Presentation. Based on the Company’s structure and organizational chart, the Company’s chief operating decision-maker (the “CODM”) is its Chief Executive Officer, Grant S. Moise. Based on how the Company’s CODM makes decisions about allocating resources and assessing performance, the Company determined it has one reportable segment.

New Accounting Pronouncements. The Financial Accounting Standards Board (“FASB”) issued the following accounting pronouncements and guidance, which may be applicable to the Company but have not yet become effective.

In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. Since June 2016, the FASB issued clarifying updates to the new standard including changing the effective date for smaller reporting companies. The guidance will be effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted. The Company currently anticipates adopting this ASU on January 1, 2023, using the modified retrospective approach and does not expect a material impact on its consolidated financial statements.

Note 2: Revenue

Revenue Recognition

Revenue is recognized when obligations under the terms of a contract with our customer are satisfied. This occurs when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services, typically at contract price or determined by stand-alone selling price. The Company has an estimated allowance for credits, refunds and similar obligations. Sales tax collected concurrent with revenue-producing activities are excluded from revenue.

Accounts receivable are reported net of a valuation reserve that represents an estimate of amounts considered uncollectible. The Company estimates the allowance for doubtful accounts based on historical write-off experience and the Company’s knowledge of the customers’ ability to pay amounts due. Accounts are written-off after all collection efforts fail; generally, after one year has expired. Expense for such uncollectible amounts is included in other production, distribution and operating costs. Credit terms are customary.

The table below sets forth revenue disaggregated by revenue source.



	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Advertising and Marketing Services
Print advertising	$	11,069	$	11,236	$	33,082	$	34,727
Digital advertising and marketing services		6,456		6,865		18,164		18,744
Total	$	17,525	$	18,101	$	51,246	$	53,471

Circulation
Print circulation	$	12,746	$	13,661	$	38,863	$	41,455
Digital circulation		3,484		2,496		9,713		6,817
Total	$	16,230	$	16,157	$	48,576	$	48,272

Printing, Distribution and Other	$	3,933	$	4,053	$	11,726	$	12,051

Total Revenue	$	37,688	$	38,311	$	111,548	$	113,794

Advertising and Marketing Services

Print advertising is comprised of display, classified and preprint advertising revenue. Display revenue results from sales of advertising space within the Company’s core newspapers and niche publications to local, regional or national businesses with local operations, affiliates or resellers. Classified revenue, which includes automotive, real estate, employment, obituaries and other, results from sales of advertising space in the classified and other sections of the Company’s newspapers.

DallasNews Corporation Third Quarter 2022 on Form 10-Q 9

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Preprint revenue results from sales of preprinted advertisements or circulars inserted into the Company’s core newspapers, niche publications, and distributed to publications in other markets, or distributed by mail or third-party distributors to households in targeted areas in order to provide total market coverage for advertisers. The Company’s capabilities allow its advertisers to target preprint distribution selectively at the sub-zip code level in order to optimize coverage for the advertisers’ locations. Preprint advertising also includes other services revenue related to the Company’s niche publications.

Advertising and marketing services revenue is primarily recognized at a point in time when the ad or service is complete and delivered, based on the customers’ contract price. Barter advertising transactions are recognized at estimated fair value based on the negotiated contract price and the range of prices for similar advertising from customers unrelated to the barter transaction. The Company expenses barter costs as incurred, which is independent from the timing of revenue recognition. In addition, certain digital advertising revenue related to website access is recognized over time, based on the customers’ monthly rate. The Company typically extends credit to advertising and marketing services customers, although for certain advertising campaigns the customer may pay in advance.

For ads placed on certain third-party websites, the Company must evaluate and use judgment to determine whether it is acting as the principal, where revenue is reported on a gross basis, or acting as the agent, where revenue is reported on a net basis. Generally, the Company reports advertising revenue for ads placed on third-party websites on a net basis, meaning the amount recorded to revenue is the amount billed to the customer net of amounts paid to the publisher of the third-party website. The Company is acting as the agent because the publisher controls the advertising inventory. The Company will record certain arrangements gross when it has latitude in establishing price or it determines the placement of the ads as a value added service to the customer.

Circulation

Print circulation revenue is generated primarily by selling home delivery subscriptions, including premium publications, and from single copy sales to non-subscribers. Home delivery revenue is recognized over the subscription period based on the days of actual delivery over the total subscription days and single copy revenue is recognized at a point in time when the paper is purchased. Revenue is directly reduced for any non-payment for the grace period of home delivery subscriptions where the Company recorded revenue for newspapers delivered after a subscription expired.

Digital circulation revenue is generated by digital-only subscriptions and is recognized over the subscription period based on daily or monthly access to the content in the subscription period.

Payment of circulation fees is typically received in advance and deferred over the subscription period. There is little judgment required for valuation or timing of circulation revenue recognition.

Printing, Distribution and Other

Printing, distribution and other revenue is primarily generated from printing and distribution of other newspapers, as well as production of preprinted advertisements for other newspapers. Printing, distribution and other revenue is recognized at a point in time when the product or service is delivered, which requires little judgment to determine. The Company typically extends credit to printing and distribution customers.

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DallasNews Corporation Third Quarter 2022 on Form 10-Q 10

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Deferred Revenue

Deferred revenue is recorded when cash payments are received in advance of the Company’s performance, including amounts which are refundable. The Company’s primary sources of deferred revenue are from circulation subscriptions and advertising paid in advance of the service provided. These up-front payments are recorded upon receipt as contract liabilities in the Consolidated Balance Sheets and the revenue is recognized when the Company’s obligations under the terms of the contract are satisfied. In the three and nine months ended September 30, 2022, the Company recognized $271 and $9,650, respectively, of revenue that was included in the contract liabilities balance as of December 31, 2021. The Company typically recognizes deferred revenue within 1 to 12 months.

Practical Expedients and Exemptions

The Company generally expenses sales commissions and circulation acquisition costs when incurred because the amortization period would have been one year or less. These costs are recorded within employee compensation and benefits expense and other production, distribution and operating costs expense, respectively.

The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less and contracts for which revenue is recognized at the amount invoiced for services performed.

Note 3: Leases

Lease Accounting

The Company has various operating leases primarily for office space and other distribution centers, some of which include escalating lease payments and options to extend or terminate the lease. The Company’s leases have remaining terms of less than 1 year to 12 years. The Company determines if a contract is a lease at the inception of the arrangement.

Operating lease right-of-use assets and liabilities are recognized at commencement date of lease agreements greater than one year based on the present value of lease payments over the lease term. In determining the present value of lease payments, the implicit rate was not readily determinable in the Company’s lease agreements. Therefore, the Company used an estimated secured incremental borrowing rate, based on the Company’s credit rating, adjusted for the weighted average term of each lease. Lease expense is recognized on a straight-line basis over the lease term and variable lease costs are expensed as incurred. For leases with terms of 12 months or less, no asset or liability is recorded and lease expense is recognized on a straight-line basis over the lease term. The exercise of lease renewal options are at the Company’s sole discretion and options are recognized when it is reasonably certain the Company will exercise the option. The recognized right-of-use assets and lease liabilities as calculated do not assume renewal options. The Company does not have lease agreements with residual value guarantees, sale leaseback terms or material restrictive covenants. Additionally, the Company does not separately identify lease and nonlease components, such as maintenance costs.

The Company subleases office space in Dallas, Texas, with a remaining lease term of approximately one year. Additionally, the Company has various subleases with distributors, for distribution center space, with varying remaining lease terms of less than one year to two years and are cancellable with notice by either party. The Company terminated the lease and sublease agreements for the office space of the Denton Publishing Company, resulting in a right-of-use asset impairment of $102 recorded in the second quarter of 2022. In the third quarter of 2021, the Company subleased office space in Dallas, Texas at a lower rate than the head lease, resulting in a right-of-use asset impairment of $232. Sublease income is included in printing, distribution and other revenue in the Consolidated Statements of Operations. As of September 30, 2022, sublease income is expected to approximate $230 for the remainder of 2022, $640 in 2023, and $5 in 2024.

As of September 30, 2022, the Company renewed three operating leases with lease terms of three years, which will result in a right-of-use asset and lease liability of approximately $810 in aggregate upon commencement in the first quarter of 2023.

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DallasNews Corporation Third Quarter 2022 on Form 10-Q 11

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The table below sets forth supplemental Consolidated Balance Sheet information for the Company’s leases.



	Classification		September 30, 2022		December 31, 2021
Assets
Operating	Operating lease right-of-use assets	$	15,449	$	17,648

Liabilities
Operating
Current	Other accrued expense	$	1,945	$	2,430
Noncurrent	Long-term operating lease liabilities		16,815		19,181
Total lease liabilities		$	18,760	$	21,611

Lease Term and Discount Rate
Operating leases
Weighted average remaining lease term (years)			10.1		10.2
Weighted average discount rate (%)			7.7		7.5

The table below sets forth components of lease cost and supplemental cash flow information for the Company’s leases.



	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Lease Cost
Operating lease cost	$	991	$	1,075	$	3,096	$	3,226
Short-term lease cost		29		—		48		—
Variable lease cost		156		194		496		518
Sublease income		(257)		(256)		(898)		(741)
Total lease cost	$	919	$	1,013	$	2,742	$	3,003

Supplemental Cash Flow Information
Cash paid for operating leases included in operating activities					$	3,180	$	3,249
Right-of-use assets obtained in exchange for operating lease liabilities						424		—

The table below sets forth the remaining maturities of the Company’s lease liabilities as of September 30, 2022.



Years Ending December 31,	Operating Leases
2022	$	697
2023		3,202
2024		2,348
2025		2,315
2026		2,366
Thereafter		16,719
Total lease payments		27,647
Less: imputed interest		8,887
Total lease liabilities	$	18,760

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DallasNews Corporation Third Quarter 2022 on Form 10-Q 12

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Note 4: Income Taxes

The Company calculated the income tax provision (benefit) for the 2022 and 2021 interim periods using an estimated annual effective tax rate based on its expected annual loss before income taxes, adjusted for permanent differences, which it applied to the year-to-date loss before income taxes and specific events that are discretely recognized as they occur.

The Company recognized an income tax provision (benefit) of $201 and $(2,384) for the three months ended September 30, 2022 and 2021, respectively, and $550 and $(1,982) for the nine months ended September 30, 2022 and 2021, respectively. Effective income tax rates were (7.8) percent and 43.1 percent for the nine months ended September 30, 2022 and 2021, respectively.

The income tax provision for the three and nine months ended September 30, 2022, was due to the effect of the Texas franchise tax.

The income tax benefit for the three and nine months ended September 30, 2021, was due to the release of $2,575, included in other liabilities, for a federal uncertain tax reserve resulting from the statute of limitations lapsing in August 2021, partially offset by the effect of the Texas franchise tax. In connection with the release of a federal uncertain tax reserve, the Company released a reserve for interest included in other liabilities and recognized $548 in other income (loss), net in the three months ended September 30, 2021.

The American Rescue Plan Act of 2021 (the “ARP Act”), was passed and signed into law on March 11, 2021, and was designed to speed up the United States’ economic recovery. The ARP Act contains many provisions, including direct cash payments to eligible taxpayers below specified income limits, extended unemployment insurance benefits, additional relief designed to prevent layoffs and business closures at small businesses, and pension relief provisions. The pension relief provisions include extending the interest rate relief passed in previous years, permanently adding a floor to funding interest rates, and permanently changing the amortization period for pension underfunding from 7 to 15 years. All provisions are required to be effective for plan years beginning in 2022, but plan sponsors can elect certain provisions to apply to plan years beginning as early as 2019. The Company benefited from the shortfall amortization relief provisions and the segment interest rate relief provisions contained in the ARP Act effective for the 2020 plan year.

On August 9, 2022, the CHIPS and Science Act of 2022 (“the CHIPS Act”) was enacted and signed into law. The CHIPS Act is legislation that is designed to boost domestic semiconductor manufacturing and encourage US research activities through federal funding and tax credits that will not have a material impact on the Company’s consolidated financial statements.

On August 16, 2022, the Inflation Reduction Act (the “Act”) was enacted and signed into law. The Act is a budget reconciliation package that includes significant law changes relating to tax, climate change, energy, and health care. The tax provisions include, among other items, a corporate alternative minimum tax of 15 percent, an excise tax of 1 percent on corporate stock buy-backs, energy-related tax credits, and additional IRS funding. The Company does not expect the tax provisions to have a material impact on its consolidated financial statements.

Note 5: Pension and Other Retirement Plans

Defined Benefit Plans. The Company sponsors the DallasNews Corporation Pension Plans (the “Pension Plans”), formerly the A. H. Belo Pension Plans, which provide benefits to approximately 1,350 current and former employees of the Company. DallasNews Pension Plan I provides benefits to certain current and former employees primarily employed with The Dallas Morning News or the DallasNews corporate offices. DallasNews Pension Plan II provides benefits to certain former employees of The Providence Journal Company. This obligation was retained by the Company upon the sale of the newspaper operations of The Providence Journal. No additional benefits are accruing under the DallasNews Pension Plans, as future benefits were frozen.

No contributions are required to the DallasNews Pension Plans in 2022 under the applicable tax and labor laws governing pension plan funding. On August 31, 2022, the Company made a board approved voluntary contribution of $5,000 to the Pension Plans, reflected in long-term pension liabilities in the Consolidated Balance Sheet.

Net Periodic Pension Expense (Benefit)

The Company’s estimates of net periodic pension expense or benefit are based on the expected return on plan assets, interest on the projected benefit obligations and the amortization of actuarial gains and losses that are deferred in accumulated other comprehensive loss. Participation in and accrual of new benefits to participants has been frozen since 2007 and, accordingly, on-going service costs are not a component of net periodic pension expense (benefit). For 2022, based on the re-allocation of the Pension Plans’ assets, the Company assumed a lower rate of return on the assets resulting in net periodic pension expense.

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DallasNews Corporation Third Quarter 2022 on Form 10-Q 13

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The table below sets forth components of net periodic pension expense (benefit), which are included in other income (loss), net in the Consolidated Statements of Operations.



	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Interest cost	$	1,328	$	1,174	$	3,983	$	3,522
Expected return on plans' assets		(1,237)		(2,574)		(3,711)		(7,723)
Amortization of actuarial loss		131		361		394		1,083
Net periodic pension expense (benefit)	$	222	$	(1,039)	$	666	$	(3,118)

Defined Contribution Plans. The DallasNews Savings Plan (the “Savings Plan”), a defined contribution 401(k) plan, covers substantially all employees of DallasNews. Participants may elect to contribute a portion of their pretax compensation as provided by the Savings Plan and the Internal Revenue Code. Employees can contribute up to 100 percent of their annual eligible compensation less required withholdings and deductions up to statutory limits. The Company provides an ongoing dollar-for-dollar match of eligible employee contributions, up to 1.5 percent of the employees’ compensation. Aggregate expense for matching contributions to the Savings Plan was $178 and $175 for the three months ended September 30, 2022 and 2021, respectively, and $567 and $568 for the nine months ended September 30, 2022 and 2021, respectively.

Note 6: Shareholders’ Equity

Reverse Stock Split. The Company’s board of directors approved a one-for-four reverse stock split of its issued, outstanding and treasury shares of common stock, par value $0.01 per share, which became effective June 8, 2021. See Note 1 – Basis of Presentation and Recently Issued Accounting Standards for additional information.

Dividends. On August 22, 2022, the Company’s board of directors declared a special, one-time $1.50 per share dividend to shareholders of record as of the close of business on September 9, 2022, which was paid on September 30, 2022, returning $8,029 to shareholders. On September 22, 2022, the Company’s board of directors declared a $0.16 per share dividend to shareholders of record as of the close of business on November 10, 2022, which is payable on December 2, 2022.

Outstanding Shares. The Company had Series A and Series B common stock outstanding of 4,737,743 and 614,747, respectively, net of treasury shares at September 30, 2022. At December 31, 2021, the Company had Series A and Series B common stock outstanding of 4,737,580 and 614,910, respectively, net of treasury shares.

Accumulated Other Comprehensive Loss. Accumulated other comprehensive loss consists of actuarial gains and losses attributable to the DallasNews Pension Plans, gains and losses resulting from Pension Plans’ amendments and other actuarial experience attributable to other post-employment benefit (“OPEB”) plans. The Company records amortization of the components of accumulated other comprehensive loss in other income (loss), net in its Consolidated Statements of Operations. Gains and losses are amortized over the weighted average remaining life expectancy of the OPEB plans and Pension Plans’ participants.

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DallasNews Corporation Third Quarter 2022 on Form 10-Q 14

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The tables below set forth the changes in accumulated other comprehensive loss, net of tax, as presented in the Company’s consolidated financial statements.



	Three Months Ended September 30,
	2022						2021
	Total		Defined ‎benefit pension ‎plans		Other post- ‎ employment ‎benefit plans		Total		Defined ‎benefit pension ‎plans		Other post- ‎ employment ‎benefit plans
Balance, beginning of period	$	(32,145)	$	(32,222)	$	77	$	(31,748)	$	(31,849)	$	101
Amortization		130		131		(1)		360		361		(1)
Balance, end of period	$	(32,015)	$	(32,091)	$	76	$	(31,388)	$	(31,488)	$	100



	Nine Months Ended September 30,
	2022						2021
	Total		Defined ‎benefit pension ‎plans		Other post- ‎ employment ‎benefit plans		Total		Defined ‎benefit pension ‎plans		Other post- ‎ employment ‎benefit plans
Balance, beginning of period	$	(32,406)	$	(32,485)	$	79	$	(32,468)	$	(32,571)	$	103
Amortization		391		394		(3)		1,080		1,083		(3)
Balance, end of period	$	(32,015)	$	(32,091)	$	76	$	(31,388)	$	(31,488)	$	100

Note 7: Earnings Per Share

The table below sets forth the net income (loss) available to common shareholders and weighted average shares used for calculating basic earnings per share (“EPS”). The Company’s Series A and Series B common stock equally share in the distributed and undistributed earnings.



	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Earnings (Numerator)
Net income (loss) available to common shareholders	$	(2,586)	$	1,631	$	(7,645)	$	(2,616)

Shares (Denominator)
Weighted average common shares outstanding (basic)		5,352,490		5,352,490		5,352,490		5,352,490

Income (Loss) Per Share
Basic	$	(0.48)	$	0.30	$	(1.43)	$	(0.49)

There were no options or RSUs outstanding as of September 30, 2022 and 2021, 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.

Note 8: Contingencies

Legal proceedings. From time to time, the Company is involved in a variety of claims, lawsuits and other disputes arising in the ordinary course of business. Management routinely assesses the likelihood of adverse judgments or outcomes in these matters, as well as the ranges of probable losses to the extent losses are reasonably estimable. Accruals for contingencies are recorded when, in the judgment of management, adverse judgments or outcomes are probable and the financial impact, should an adverse outcome occur, is reasonably estimable. The determination of likely outcomes of litigation matters relates to factors that include, but are not limited to, past experience and other evidence, interpretation of relevant laws or regulations and the specifics and status of each matter. Predicting the outcome of claims and litigation and estimating related costs and financial exposure involves substantial uncertainties that could cause actual results to vary materially from estimates and accruals. In the opinion of management, liabilities, if any, arising from other currently existing claims against the Company would not have a material adverse effect on DallasNews’ results of operations, liquidity or financial condition.

DallasNews Corporation Third Quarter 2022 on Form 10-Q 15

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Note 9: Disposal of Assets

In May 2019, the Company finalized a Purchase and Sale Agreement with Charter DMN Holdings, LP (the “Purchaser”) for the sale of the real estate assets in downtown Dallas, Texas, previously used as the Company’s headquarters for a sale price of $28,000 and a pretax gain of $25,908. The sale price consisted of $4,597 cash received, after selling costs of approximately $1,000, and a two year seller-financed promissory note of $22,400 (the “Promissory Note”), included in current notes receivable in the December 31, 2021 Consolidated Balance Sheet.

Effective June 30, 2022, the Company and the Purchaser entered into an agreement extending the maturity date of the Promissory Note to July 29, 2022 (the “Third Modification Agreement”). The unpaid, original principal balance of the Promissory Note accrued interest at the rate of 6.5 percent.

On July 29, 2022, the Company was paid in full, receiving cash proceeds of $22,516, including interest, due from the Purchaser under the Third Modification Agreement

In the three months ended September 30, 2022 and 2021, the Company recorded $116 and $254, respectively, and $616 and $774 in the nine months ended September 30, 2022 and 2021, respectively, of interest income related to the Promissory Note, included in other income (loss), net in the Consolidated Statements of Operations.

Notes receivable are recorded net of an allowance for doubtful accounts. Interest income is accrued on the unpaid principal balance, included in accounts receivable in the Consolidated Balance Sheets. The Company puts notes receivable on non-accrual status and provides an allowance against accrued interest if it is determined the likelihood of collecting substantially all of the note and accrued interest is not probable. Notes are written-off against the allowance when all possible means of collection have been exhausted and the potential for recovery is considered remote. As of December 31, 2021, there was no allowance recorded for the notes receivable or accrued interest receivable.

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DallasNews Corporation Third Quarter 2022 on Form 10-Q 16

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

DallasNews Corporation (“DallasNews” or the “Company”) intends for the discussion of its financial condition and results of operations that follows to provide information that will assist in understanding its financial statements, the changes in certain key items in those statements from period to period, and the primary factors that accounted for those changes, as well as how certain accounting principles, policies and estimates affect its financial statements. The following information should be read in conjunction with the Company’s consolidated financial statements and related notes filed as part of this report. All dollar amounts presented herein, except share and per share amounts, are in thousands, unless the context indicates otherwise.

This section and other parts of this Quarterly Report on Form 10-Q contain certain forward-looking statements. Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those statements. See Forward-Looking Statements of this Quarterly Report for further discussion.

OVERVIEW

DallasNews Corporation, formerly A. H. Belo Corporation, and its subsidiaries are referred to collectively herein as “DallasNews” or the “Company.” DallasNews was formed in February 2008 through a spin-off from its former parent company and is registered on The Nasdaq Stock Market LLC (Nasdaq trading symbol: DALN). DallasNews is the Dallas-based holding company of The Dallas Morning News and Medium Giant.

The Company transferred its stock exchange listing from the New York Stock Exchange (“NYSE”) to The Nasdaq Stock Market LLC (“Nasdaq”) and changed its corporate name to DallasNews Corporation. The listing and trading of the Company’s Series A common stock on the NYSE ceased trading at market close on June 28, 2021, and began trading on Nasdaq at market open on June 29, 2021, under the ticker symbol “DALN.”

In May 2021, at the Company’s 2021 annual meeting of shareholders, its shareholders approved a reverse stock split at a ratio of not less than one-for-three and not more than one-for-five, with the exact ratio to be determined by the Company’s board of directors. Following the annual meeting, the Company’s board of directors approved a one-for-four reverse stock split of its issued, outstanding and treasury shares of common stock, par value $0.01 per share, which became effective June 8, 2021. As a result, every four shares of the Company’s issued and outstanding Series A common stock and Series B common stock (and any such shares held in treasury) were converted into one share of Series A common stock and Series B common stock, respectively. All fractional shares were settled in cash in connection with the reverse stock split on June 9, 2021. The par value of the Series A and Series B common stock was not adjusted as a result of the reverse stock split and the Company reclassified an amount equal to the reduction in the number of Company shares at par value to additional paid-in capital.

Beginning in early 2020, the COVID-19 pandemic impacted, and may continue to impact, the Company’s customers, distribution partners, advertisers, production facilities, and third parties, and could result in additional loss of advertising revenue or supply chain disruption. If the pandemic were to affect a significant number of the workforce employed in printing operations, the Company may experience delays or be unable to produce, print and deliver its publications and other third-party print publications on a timely basis. The Company continues to evaluate for any future material impacts on its consolidated financial statements.

Effective June 30, 2022, the Company and Charter DMN Holdings, LP (the “Purchaser”) entered into an agreement (the “Third Modification Agreement”) extending the maturity date of the promissory note of $22,400 (the “Promissory Note”), for the sale of the real estate assets previously used as the Company’s headquarters, to July 29, 2022. The unpaid, original principal balance of the Promissory Note accrued interest at the rate of 6.5 percent. On July 29, 2022, the Company was paid in full, receiving cash proceeds of $22,516, including interest, due from the Purchaser under the Third Modification Agreement.

In the third quarter, the Company made a board approved voluntary contribution of $5,000 to the DallasNews Corporation Pension Plans (the “Pension Plans”) and its board declared a special, one-time $1.50 per share dividend, paid on September 30, 2022, returning $8,029 to shareholders.

DallasNews Corporation Third Quarter 2022 on Form 10-Q 17

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RESULTS OF OPERATIONS

Consolidated Results of Operations (unaudited)

This section contains discussion and analysis of net operating revenue, operating costs and expense and other information relevant to an understanding of results of operations for the three and nine months ended September 30, 2022 and 2021. Based on how the Company’s chief operating decision-maker makes decisions about allocating resources and assessing performance, the Company determined it has one reportable segment.

The table below sets forth the components of the Company’s operating loss.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2022		Percentage ‎Change		2021			2022	Percentage ‎Change		2021
Advertising and marketing services	$	17,525	(3.2)	%	$	18,101	$	51,246	(4.2)	%	$	53,471
Circulation		16,230	0.5	%		16,157		48,576	0.6	%		48,272
Printing, distribution and other		3,933	(3.0)	%		4,053		11,726	(2.7)	%		12,051
Total Net Operating Revenue		37,688	(1.6)	%		38,311		111,548	(2.0)	%		113,794

Total Operating Costs and Expense		39,979	(2.2)	%		40,891		118,595	(3.6)	%		123,086

Operating Loss	$	(2,291)	11.2	%	$	(2,580)	$	(7,047)	24.2	%	$	(9,292)

Traditionally, the Company’s primary revenues are generated from advertising within its core newspapers, niche publications and related websites and from subscription and single copy sales of its printed newspapers. As a result of competitive and economic conditions, the newspaper industry has faced a significant revenue decline over the past decade. Therefore, the Company has sought to diversify its revenues through development and investment in new product offerings, increased circulation rates and leveraging of its existing assets to offer cost efficient commercial printing and distribution services. The Company continually evaluates the overall performance of its core products to ensure existing assets are deployed adequately to maximize return.

The Company’s advertising revenue from its core newspapers continues to be adversely affected by the shift of advertiser spending to other forms of media and the increased accessibility of free online news content, as well as news content from other sources, which resulted in declines in advertising and paid print circulation volumes and revenue. Decreases in print display and classified categories are indicative of continuing trends by advertisers towards digital platforms, which are widely available from many sources. In the current environment, companies are allocating more of their advertising spending towards programmatic channels that provide digital advertising on multiple platforms with enhanced technology for targeted delivery and measurement. In addition, the Company has experienced declines resulting from the COVID-19 pandemic.

In response to the decline in print revenue, the Company has developed agency capabilities, including strategy, creative and media management with a focus on strategic and digital marketing, and data intelligence that provide a measurable return on investment to its clients. The Company leverages its news content to improve engagement on the Company’s digital platforms that results in increased digital subscriptions and associated revenue. The Company also continues to diversify its revenue base by leveraging the available capacity of its existing assets to provide print and distribution services for newspapers and other customers requiring these services, by introducing new advertising and marketing services products, and by increasing circulation prices.

Because of declining print circulation, the Company has developed broad digital strategies designed to provide readers with multiple platforms for obtaining online access to local news. The Company continues to obtain additional key demographic data from readers, which allows the Company to provide content desired by readers and to modify marketing and distribution strategies to target and reach audiences valued by advertisers. The Company has access to programmatic digital advertising platforms that provide digital ad placement and targeting efficiencies and increases utilization of digital inventory within the Company’s websites. Additionally, in order to optimize owned and operated digital advertising revenue, the Company has adopted a holistic yield management approach powered by real-time bidding technologies and data analysis to ensure the optimal mix of direct sales and programmatic ad sales is achieved.

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DallasNews Corporation Third Quarter 2022 on Form 10-Q 18

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Advertising and marketing services revenue

Advertising and marketing services revenue was 46.5 percent and 45.9 percent of total revenue for the three and nine months ended September 30, 2022, respectively, and 47.2 percent and 47.0 percent of total revenue for the three and nine months ended September 30, 2021, respectively.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2022		Percentage ‎Change		2021			2022	Percentage ‎Change		2021
Print advertising	$	11,069	(1.5)	%	$	11,236	$	33,082	(4.7)	%	$	34,727
Digital advertising and marketing services		6,456	(6.0)	%		6,865		18,164	(3.1)	%		18,744
Advertising and Marketing Services	$	17,525	(3.2)	%	$	18,101	$	51,246	(4.2)	%	$	53,471

Print advertising

Print advertising is comprised of display, classified and preprint advertising revenue.

Display and classified print revenue primarily represents sales of advertising space within the Company’s core and niche newspapers. Display and classified print revenue increased $176 and $553 in the three and nine months ended September 30, 2022, respectively, primarily due to volume increases in display and employment classified advertisements.

Preprint revenue primarily reflects preprinted advertisements inserted into the Company’s core newspapers, niche publications, and distributed to publications in other markets, or distributed to non-subscribers through the mail. Preprint advertising also includes other services revenue related to the Company’s niche publications. Revenue decreased $343 and $2,198 in the three and nine months ended September 30, 2022, respectively, primarily due to a volume decline in preprinted advertisements and reduced advertiser spending.

Digital advertising and marketing services

Digital advertising and marketing services revenue consists of strategic marketing management, consulting, creative services, targeted and multi-channel (programmatic) advertising placed on third-party websites, digital sales of banner, classified and native advertisements on the Company’s news and entertainment-related websites and mobile apps, social media management, search optimization, direct mail and the sale of promotional materials. Revenue decreased $409 and $580 in the three and nine months ended September 30, 2022, respectively, primarily due to a decline in direct mail and the sale of promotional materials, partially offset by an increase in marketing services resulting from the start of new contracts.

Circulation revenue

Circulation revenue was 43.1 percent and 43.6 percent of total revenue for the three and nine months ended September 30, 2022, respectively, and 42.2 percent and 42.4 percent of total revenue for the three and nine months ended September 30, 2021, respectively.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2022		Percentage ‎Change		2021			2022	Percentage ‎Change		2021
Print circulation	$	12,746	(6.7)	%	$	13,661	$	38,863	(6.3)	%	$	41,455
Digital circulation		3,484	39.6	%		2,496		9,713	42.5	%		6,817
Circulation	$	16,230	0.5	%	$	16,157	$	48,576	0.6	%	$	48,272

Print circulation

Revenue decreased primarily driven by volume declines, partially offset by rate increases. Home delivery revenue decreased $722 or 5.8 percent in the three months ended September 30, 2022, and $2,089 or 5.5 percent in the nine months ended September 30, 2022. Single copy revenue decreased $193 or 16.8 percent in the three months ended September 30, 2022, and $503 or 14.0 percent in the nine months ended September 30, 2022.

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DallasNews Corporation Third Quarter 2022 on Form 10-Q 19

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Digital circulation

Revenue increased in the three and nine months ended September 30, 2022, due to an increase in digital-only subscriptions of approximately 7,088 or 12.4 percent when compared to September 30, 2021, reflecting the Company’s continued focus on growing its paid digital memberships and improving the member experience.

Printing, distribution and other revenue

Printing, distribution and other revenue was 10.4 percent and 10.5 percent of total revenue for the three and nine months ended September 30, 2022, respectively, and 10.6 percent and 10.6 percent of total revenue for the three and nine months ended September 30, 2021, respectively.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2022		Percentage ‎Change		2021			2022	Percentage ‎Change		2021
Printing, Distribution and Other	$	3,933	(3.0)	%	$	4,053	$	11,726	(2.7)	%	$	12,051

Revenue decreased in the three and nine months ended September 30, 2022, primarily due to a decline in revenue from mailed advertisements for business customers.

Operating Costs and Expense

The table below sets forth the components of the Company’s operating costs and expense.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2022		Percentage ‎Change		2021		2022		Percentage ‎Change		2021
Employee compensation and benefits	$	16,428	(4.1)	%	$	17,131	$	49,642	(6.7)	%	$	53,194
Other production, distribution and operating costs		19,691	(1.7)	%		20,041		58,665	(1.0)	%		59,282
Newsprint, ink and other supplies		3,161	29.6	%		2,439		8,059	12.6	%		7,158
Depreciation		699	(31.3)	%		1,018		2,127	(32.0)	%		3,127
Amortization		—	N/A			—		—	(100.0)	%		64
Loss on sale/disposal of assets, net		—	(100.0)	%		30		—	(100.0)	%		29
Asset impairments		—	(100.0)	%		232		102	(56.0)	%		232
Total Operating Costs and Expense	$	39,979	(2.2)	%	$	40,891	$	118,595	(3.6)	%	$	123,086

Employee compensation and benefits – The Company continues to implement measures to optimize its workforce and evaluate strategies to reduce risk associated with future obligations for employee benefit plans. Employee compensation and benefits decreased $703 and $3,552 in the three and nine months ended September 30, 2022, respectively, primarily due to a reduction in medical expense.

Other production, distribution and operating costs – Expense decreased $350 and $617 in the three and nine months ended September 30, 2022, respectively, primarily due to a decrease in distribution expense.

Newsprint, ink and other supplies – Expense increased $722 and $901 in the three and nine months ended September 30, 2022, respectively. Competitive pricing is available under the Company’s paper supply agreement; however, the price of newsprint increased, partially offset by savings from reduced newsprint costs associated with lower circulation volumes. Newsprint consumption for the three months ended September 30, 2022 and 2021, approximated 1,915 and 2,035 metric tons, respectively, and 5,705 and 6,298 metric tons for the nine months ended September 30, 2022 and 2021, respectively.

Depreciation – Expense decreased $319 and $1,000 in the three and nine months ended September 30, 2022, respectively, due to a lower depreciable asset base as a higher level of in-service assets are now fully depreciated.

Amortization – Expense decreased due to all intangible assets being fully amortized in the first quarter of 2021.

DallasNews Corporation Third Quarter 2022 on Form 10-Q 20

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Loss on sale/disposal of assets, net – The Company disposed assets that were no longer in use and from time to time, the Company will sell disposed assets.

Asset impairments – In the second quarter of 2022, the Company terminated the lease and sublease agreements for the office space of the Denton Publishing Company, resulting in a right-of-use asset impairment of $102. In the third quarter of 2021, the Company subleased office space in Dallas, Texas at a lower rate than the head lease, resulting in a right-of-use asset impairment of $232.

Other

The table below sets forth the other components of the Company’s results of operations.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2022		Percentage ‎Change		2021		2022		Percentage ‎Change		2021
Other income (loss), net	$	(94)	(105.1)	%	$	1,827	$	(48)	(101.0)	%	$	4,694

Income tax provision (benefit)	$	201	108.4	%	$	(2,384)	$	550	127.7	%	$	(1,982)

Other income (loss), net – Other income (loss), net includes net periodic pension and other post-employment expense (benefit) of $227 and $(1,035) for the three months ended September 30, 2022 and 2021, respectively, and $682 and $(3,105) for the nine months ended September 30, 2022 and 2021, respectively. Interest income (expense) and gain (loss) from investments and are also included in other income (loss), net. In the three months ended September 30, 2022 and 2021, the Company recorded $116 and $254, respectively, and $616 and $774 in the nine months ended September 30, 2022 and 2021, respectively, of interest income related to the Promissory Note from the sale of the Company’s former headquarters.

Income tax provision (benefit) – The Company recognized an income tax provision (benefit) of $201 and $(2,384) for the three months ended September 30, 2022 and 2021, respectively, and $550 and $(1,982) for the nine months ended September 30, 2022 and 2021, respectively. Effective income tax rates were (7.8) percent and 43.1 percent for the nine months ended September 30, 2022 and 2021, respectively.

The income tax provision for the three and nine months ended September 30, 2022, was due to the effect of the Texas franchise tax.

Legal proceedings – From time to time, the Company is involved in a variety of claims, lawsuits and other disputes arising in the ordinary course of business. Management routinely assesses the likelihood of adverse judgments or outcomes in these matters, as well as the ranges of probable losses to the extent losses are reasonably estimable. Accruals for contingencies are recorded when, in the judgment of management, adverse judgments or outcomes are probable and the financial impact, should an adverse outcome occur, is reasonably estimable. The determination of likely outcomes of litigation matters relates to factors that include, but are not limited to, past experience and other evidence, interpretation of relevant laws or regulations and the specifics and status of each matter. Predicting the outcome of claims and litigation and estimating related costs and financial exposure involves substantial uncertainties that could cause actual results to vary materially from estimates and accruals. In the opinion of management, liabilities, if any, arising from other currently existing claims against the Company would not have a material adverse effect on DallasNews’ results of operations, liquidity or financial condition.

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DallasNews Corporation Third Quarter 2022 on Form 10-Q 21

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Liquidity and Capital Resources

The Company’s cash balances as of September 30, 2022 and December 31, 2021, were $33,031 and $32,439, respectively.

The Company intends to hold the majority of existing cash for purposes of future investment opportunities, potential return of capital to shareholders and for contingency purposes. Although revenue is expected to continue to decline in future periods, cash flows and other expense reduction measures are expected to be sufficient to fund operating activities and capital spending.

The future approval of dividends is dependent upon available cash after considering future operating and investing requirements and cannot be guaranteed. The Company continues to have a board-authorized repurchase authority. However, the agreement to repurchase the Company’s stock expired and was not renewed.

The American Rescue Plan Act of 2021 (the “ARP Act”) was passed and signed into law on March 11, 2021, and was designed to speed up the United States’ economic recovery. The ARP Act contains many provisions, including direct cash payments to eligible taxpayers below specified income limits, extended unemployment insurance benefits, additional relief designed to prevent layoffs and business closures at small businesses, and pension relief provisions. The pension relief provisions include extending the interest rate relief passed in previous years, permanently adding a floor to funding interest rates, and permanently changing the amortization period for pension underfunding from 7 to 15 years. All provisions are required to be effective for plan years beginning in 2022, but plan sponsors can elect certain provisions to apply to plan years beginning as early as 2019. The Company benefited from the shortfall amortization relief provisions and the segment interest rate relief provisions contained in the ARP Act effective for the 2020 plan year.

The following discusses the changes in cash flows by operating, investing and financing activities.

Operating Cash Flows

Net cash used for operating activities for the nine months ended September 30, 2022 and 2021, was $9,851 and $4,640, respectively. Cash flows used for operating activities increased by $5,211 during the nine months ended September 30, 2022, when compared to the prior year period, primarily due to the board approved voluntary contribution of $5,000 to the Pension Plans made in the third quarter of 2022.

Investing Cash Flows

Net cash provided by (used for) investing activities was $21,041 and $(147) for the nine months ended September 30, 2022 and 2021, respectively. Cash flows from investing activities increased due to cash proceeds of $22,400, received in the third quarter of 2022, due under the Third Modification Agreement as discussed above. Cash flows from investing activities also included $1,359 and $523 of capital spending in 2022 and 2021, respectively.

Financing Cash Flows

Net cash used for financing activities was $10,598 and $2,569 for the nine months ended September 30, 2022 and 2021, respectively, primarily attributable to dividend payments. On August 22, 2022, the Company’s board of directors declared a special, one-time $1.50 per share dividend to shareholders of record as of the close of business on September 9, 2022, which was paid on September 30, 2022, returning $8,029 to shareholders.

Financing Arrangements

None.

DallasNews Corporation Third Quarter 2022 on Form 10-Q 22

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Contractual Obligations

The Company has contractual obligations for operating leases, primarily for office space and other distribution centers, some of which include escalating lease payments. See Note 3 – Leases for future lease payments by year.

Under the applicable tax and labor laws governing pension plan funding, no contributions to the DallasNews Pension Plans are required in 2022.

On September 22, 2022, the Company’s board of directors declared a $0.16 per share dividend to shareholders of record as of the close of business on November 10, 2022, which is payable on December 2, 2022.

Additional information related to the Company’s contractual obligations is available in Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed on March 7, 2022, with the Securities and Exchange Commission (“SEC”).

Critical Accounting Policies and Estimates

No material changes were made to the Company’s critical accounting policies as set forth in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”, included in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2021.

Forward-Looking Statements

Statements in this communication concerning DallasNews Corporation’s business outlook or future economic performance, revenues, expenses, cash balance 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,” “believe,” “could,” “estimate,” “intend,” “expect,” “may,” “project,” “plan,” “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 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 or that our 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.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, are controls that are designed to ensure that information required to be disclosed by the Company in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing disclosure controls and procedures, management is required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures is also based, in part, upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

The Company’s management, with the participation of its Chief Executive Officer and Principal Financial Officer, evaluated the effectiveness of the design and operation of its disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, as of September 30, 2022, management concluded that the Company’s disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting that occurred during the third fiscal quarter ended September 30, 2022, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

‎

DallasNews Corporation Third Quarter 2022 on Form 10-Q 23

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PART II

Item 1. Legal Proceedings

A number of legal proceedings are pending against DallasNews. In the opinion of management, liabilities, if any, arising from these legal proceedings would not have a material adverse effect on DallasNews’ results of operations, liquidity or financial condition.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

There were no unregistered sales of the Company’s equity securities during the period covered by this report.

Issuer Purchases of Equity Securities

The Company continues to have a board-authorized repurchase authority. However, the agreement to repurchase the Company’s stock expired and was not renewed.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

‎

DallasNews Corporation Third Quarter 2022 on Form 10-Q 24

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Item 6. Exhibits

Exhibits marked with an asterisk (*) are incorporated by reference to documents previously filed by the Company with the SEC, as indicated. In accordance with Regulation S-T, the XBRL-related information marked with a double asterisk (**) in Exhibit No. 101 to this Quarterly Report on Form 10-Q is deemed filed. All other documents are filed with this report. Exhibits marked with a tilde (~) are management contracts, compensatory plan contracts or arrangements filed pursuant to Item 601(b)(10)(iii)(A) of Regulation S-K.

Exhibit Number

Description

3.1

Certificate of Formation of A. H. Belo Corporation (successor to A. H. Belo Texas, Inc.)(Exhibit 3.1 to the April 23, 2018 Form 8-K)

3.2

Certificate of Merger (Delaware) of A. H. Belo Corporation with and into A. H. Belo Texas, Inc. (Exhibit 3.3 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 2, 2018 (Securities and Exchange Commission File No. 001-33741) (the “July 2, 2018 Form 8-K”))

3.3

Certificate of Merger (Texas) of A. H. Belo Corporation with and into A. H. Belo Texas, Inc. (Exhibit 3.4 to the July 2, 2018 Form 8-K)

3.4

Certificate of Amendment to Certificate of Formation effective June 8, 2021 (Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 8, 2021 (Securities and Exchange Commission File No. 001-33741))

3.5

Certificate of Amendment to Certificate of Formation (changing Company name to DallasNews Corporation) effective June 29, 2021 (Exhibit 3.1 to the Company’s Current Report of Form 8-K filed with the Securities and Exchange Commission on June 30, 2021 (Securities and Exchange Commission File No. 001-33741) (the “June 30, 2021 Form 8-K”))

3.6

Certificate of Correction to Certificate of Amendment (Exhibit 3.2 to the June 30, 2021 Form 8-K)

3.7

Amended and Restated Bylaws of DallasNews Corporation (Exhibit 3.3 to the June 30, 2021 Form 8-K)

4.1

Description of Capital Stock (Exhibit 4.1 to the July 2, 2018 Form 8-K)

4.2

Specimen Form of Certificate representing shares of the Company’s Series A Common Stock (Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on July 26, 2021 (Securities and Exchange Commission File No. 001-33741) (the “2^nd Quarter 2021 Form 10-Q”))

4.3

Specimen Form of Certificate representing shares of the Company’s Series B Common Stock (Exhibit 4.3 to the 2^nd Quarter 2021 Form 10-Q)

10.1

Material Contracts

(1)

Sublease Agreement for Old Dallas Library Building dated December 30, 2016 (Exhibit 10.1 to A. H. Belo Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 3, 2017 (Securities and Exchange Commission File No. 001-33741) (the “January 3, 2017 Form 8-K”))

(2)

Guaranty of Lease dated December 30, 2016 (Exhibit 10.2 to the January 3, 2017 Form 8-K)

(3)

Paper Supply Agreement effective as of August 5, 2019, by and between The Dallas Morning News, Inc. and Gannett Supply Corporation (Exhibit 10.1 to A. H. Belo Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 6, 2019 (Securities and Exchange Commission File No. 001-33741))

(4)

Purchase and Sale Agreement effective as of May 17, 2019, by and between The Dallas Morning News, Inc. and Charter DMN Holdings, LP, together with related Promissory Note dated May 17, 2019, in the original principal amount of $22.4 million made by Charter DMN Holdings, LP, payable to The Dallas Morning News, Inc. (Exhibit 10.1 to A. H. Belo Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 17, 2019 (Securities and Exchange Commission File No. 001-33741))

(a)

Modification Agreement effective April 1, 2020 to Promissory Note dated May 17, 2020 (Exhibit 10.1 to the April 6, 2020 Form 8-K)

(b)

Promissory Note (Interest and Property Tax Reconciliation) effective April 1, 2020 (Exhibit 10.2 to the April 6, 2020 Form 8-K)

(c)

Second Modification Agreement effective June 30, 2021 (Exhibit 10.1 to the June 30, 2021 Form 8-K)

‎

DallasNews Corporation Third Quarter 2022 on Form 10-Q 25

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Exhibit Number	Description
				*	(d)	Third Modification Agreement effective June 30, 2022 (Exhibit 10.1 to DallasNews Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 30, 2022 (Securities and Exchange Commission File No. 001-33741))
10.2	*	Compensatory plans and arrangements:
		~(1)		*	DallasNews Savings Plan as Amended and Restated Effective January 1, 2022 (Exhibit 10.2(1) to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on July 29, 2022 (Securities and Exchange Commission File No. 001-33741))
		~(2)		*	A. H. Belo 2017 Incentive Compensation Plan (Exhibit I to A. H. Belo Corporation’s Schedule 14A Proxy Statement filed with the Securities and Exchange Commission on March 28, 2017)
				*	(a)	Form of A. H. Belo 2017 Incentive Compensation Plan Evidence of Grant (for Non-Employee Directors) (Exhibit 10.1 to A. H. Belo Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 12, 2017 (Securities and Exchange Commission File No. 001-33741) (the “May 12, 2017 Form 8-K”))
				*	(b)	Form of A. H. Belo 2017 Incentive Compensation Plan Evidence of Grant (for Employee Awards) (Exhibit 10.2 to the May 12, 2017 Form 8-K)
				*	(c)	First Amendment to the A. H. Belo 2017 Incentive Compensation Plan (Exhibit 10.1 to the July 2, 2018 Form 8-K)
				*	(d)	Second Amendment to the A. H. Belo 2017 Incentive Compensation Plan (Exhibit 10.3 to A. H. Belo Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 11, 2018 (Securities and Exchange Commission File No. 001-33741))
				*	(e)	Third Amendment to the A. H. Belo 2017 Incentive Compensation Plan (changing name of plan to the DallasNews 2017 Incentive Compensation Plan) (Exhibit 10.1 to A. H. Belo Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 18, 2021 (Securities and Exchange Commission File No. 001-33741))
		~(3)		*	Form of A. H. Belo Cash Long-Term Incentive Compensation Evidence of Grant (for Employee Awards) (Exhibit 10.1 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2019 (Securities and Exchange Commission File No. 001-33741))
		~(4)		*	Robert W. Decherd Compensation Agreement dated May 12, 2022 (Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 12, 2022 (Securities and Exchange Commission File No. 001-33741) (the “May 12, 2022 Form 8-K”))
		~(5)		*	Grant S. Moise Compensation Agreement dated May 12, 2022 (Exhibit 10.2 to the May 12, 2022 Form 8-K)
		~(6)		*	Katy Murray Compensation Agreement dated May 12, 2022 (Exhibit 10.3 to the May 12, 2022 Form 8-K)
10.3	*		Agreements relating to the separation of A. H. Belo from its former parent company:
		(1)		*	Pension Plan Transfer Agreement by and between Belo Corp. and A. H. Belo Corporation dated as of October 6, 2010 (Exhibit 10.1 to the Company’s current Report on Form 8-K filed with the Securities and Exchange Commission on October 8, 2010 (Securities and Exchange Commission File No. 001-33741))
		(2)		*	Agreement among the Company, Belo Corp., and The Pension Benefit Guaranty Corporation, effective March 9, 2011 (Exhibit 10.3(6) to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 11, 2011 (Securities and Exchange Commission File No. 001-33741))
31.1					Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2					Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32					Certifications of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

‎

DallasNews Corporation Third Quarter 2022 on Form 10-Q 26

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Exhibit Number	Description
101.INS		**	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH		**	Inline XBRL Taxonomy Extension Schema Document
101.CAL		**	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		**	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		**	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		**	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		**	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

‎

DallasNews Corporation Third Quarter 2022 on Form 10-Q 27

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.




DALLASNEWS CORPORATION

By:	/s/	Katy Murray
		Katy Murray
		President and Chief Financial Officer
		(Principal Financial Officer)

Dated:	October 25, 2022

‎

DallasNews Corporation Third Quarter 2022 on Form 10-Q 28

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EXHIBIT INDEX



Exhibit Number		Description
31.1		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32		Certifications of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	**	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	**	Inline XBRL Taxonomy Extension Schema Document
101.CAL	**	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	**	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	**	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	**	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	**	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

In accordance with Regulation S-T, the XBRL-related information marked with a double asterisk (**) in Exhibit No. 101 to this Quarterly Report on Form 10-Q is deemed filed.

DallasNews Corporation Third Quarter 2022 on Form 10-Q 29

Exhibit 311

Exhibit 31.1

SECTION 302 CERTIFICATION

I, Grant S. Moise, Chief Executive Officer of DallasNews Corporation, certify that:

I have reviewed this quarterly report on Form 10-Q of DallasNews Corporation;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


	By:	/s/ Grant S. Moise
		Grant S. Moise
		Chief Executive Officer


	Date:	October 25, 2022

Exhibit 312

Exhibit 31.2

SECTION 302 CERTIFICATION

I, Katy Murray, President and Chief Financial Officer of DallasNews Corporation, certify that:

I have reviewed this quarterly report on Form 10-Q of DallasNews Corporation;

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


	By:	/s/ Katy Murray
		Katy Murray
		President and Chief Financial Officer


	Date:	October 25, 2022

Exhibit 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of DallasNews Corporation (the “Company”) on Form 10-Q for the period ended September 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Grant S. Moise, Chief Executive Officer of the Company, and Katy Murray, President and Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


	By:	/s/ Grant S. Moise
		Grant S. Moise
		Chief Executive Officer


	Date:	October 25, 2022


	By:	/s/ Katy Murray
		Katy Murray
		President and Chief Financial Officer


	Date:	October 25, 2022