daln-20230424x8k
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549  

FORM 8-K 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): April 24, 2023

 

DallasNews CORPORATION

(Exact name of registrant as specified in its charter)

 

Commission file number: 1-33741

 

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

 

(214977-8869

(Address of principal executive offices, including zip code)

 

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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.  


Item 2.02.  Results of Operations and Financial Condition.

On April 24, 2023, DallasNews Corporation announced its consolidated financial results for the three months ended March 31, 2023. A copy of the announcement press release is furnished with this report as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number

Description

99.1

Press Release issued by DallasNews Corporation on April 24, 2023

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 



SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Date: April 24, 2023

 

 

DALLASNEWS CORPORATION

 

 

By:

 

/s/ Katy Murray

 

 

 

Katy Murray

 

 

 

President and Chief Financial Officer

EX 991-Q1 2023 Earnings Release

Exhibit 99.1

Picture 1



DallasNews Corporation Announces First quarter 2023 Financial Results





DALLAS –  DallasNews Corporation (Nasdaq: DALN) today reported a  first quarter 2023 net loss of $2.6 million, or $(0.49) per share, and an operating loss of $2.8 million.  In the first quarter of 2022,  the Company reported a  net loss  of  $2.6 million, or $(0.49) per share, and an operating loss of $2.5 million.

For the first quarter of 2023, on a non-GAAP basis, DallasNews reported an operating loss adjusted for certain items (adjusted operating loss)  of $2.2 million,  a $0.5 million greater loss when compared to an adjusted operating loss of $1.6 million reported in the first quarter of 2022. The decrease is primarily due to a total revenue decline of $1.1 million, partially offset by expense savings of $0.6 million.

Grant Moise, Chief Executive Officer, said, “We conducted a nationwide search to find someone to lead Medium Giant who has a wealth of experience in the full service agency space, and we feel confident we have found the right person. An announcement will be made before mid-May. In addition, The Dallas Morning News team is focused on improving audience engagement on our digital platforms. That focus has resulted in an increase in unique visitors and page views in the first quarter which are two important metrics that contribute to our growth in digital membership and advertising.”

First Quarter Results



Total revenue was $35.2 million in the first quarter of 2023,  a decrease of $1.1 million or 3.0 percent when compared to the first quarter of 2022.

Revenue from advertising and marketing services, including print and digital revenues, was $15.3 million in the  first quarter of 2023,  a decrease of $1.0 million or 5.9 percent when compared to the $16.3 million reported for the first quarter of 2022. The decline is due to a $1.3 million or 12.3 percent decrease in print advertising revenue, partially offset by a $0.3 million or 6.1 percent increase in digital advertising and marketing services revenue.


 

DallasNews Corporation Announces First quarter 2023 Financial Results

April 24, 2023

Page 2

 

Circulation revenue was $16.0 million in the first quarter of 2023,  a decrease of less than $0.1 million when compared to the first quarter of 2022.  The print circulation revenue decline of $0.7 million or 5.6 percent was offset by the digital-only subscription revenue increase of $0.7 million or 21.9 percent.

Printing, distribution and other revenue was $3.9 million, flat when compared to the first quarter of 2022.

Total consolidated operating expense in the first quarter of 2023, on a GAAP basis, was $38.0 million, an improvement of $0.8 million or 2.1 percent when compared to the first quarter of 2022. The improvement is primarily due to expense savings of $1.0 million in distribution, $0.3 million in depreciation and $0.2 million in newsprint,  partially offset by an increase of $1.0 million in employee compensation and benefits expense.

On a non-GAAP basis, adjusted operating expense was  $37.4 million, an improvement of $0.6 million or 1.5 percent when compared to the first quarter of 2022.

As of March 31,  2023,  the Company had 652 employees, a decrease of 10 full-time equivalents, or 1.5 percent, when compared to the prior year period. Cash and cash equivalents along with short-term investments were $25.8 million and the Company had no debt.


 

DallasNews Corporation Announces First quarter 2023 Financial Results

April 24, 2023

Page 3

 

Non-GAAP Financial Measures





Reconciliations of operating loss to adjusted operating loss and total operating costs and expense to adjusted operating expense are included in the exhibits to this release.

 


 

DallasNews Corporation Announces First quarter 2023 Financial Results

April 24, 2023

Page 4

 

 

Financial Results Conference Call





DallasNews Corporation will conduct a conference call on Tuesday,  April 25, 2023, at 9:00 a.m. CDT to discuss financial results. The conference call will be available via webcast by accessing the Company’s website at investor.dallasnewscorporation.com/events.  An archive of the webcast will be available at dallasnewscorporation.com in the Investor Relations section.

To access the listen-only conference call, dial 1-877-226-8196 and enter the following access code when prompted: 5560218.  A replay line will be available at 1-866-207-1041 from 12:00 p.m. CDT on April 25, 2023 until 11:59 p.m. CDT on May 1, 2023.  The access code for the replay is 8273961.


 

DallasNews Corporation Announces First quarter 2023 Financial Results

April 24, 2023

Page 5

 

 

About DallasNews Corporation





DallasNews Corporation is the Dallas-based holding company of The Dallas Morning News and Medium Giant. The Dallas Morning News is Texas leading daily newspaper with a strong journalistic reputation, intense regional focus and close community ties. Medium Giant is a media and marketing agency of divergent thinkers who devise strategies that deepen connections, expand influence, and scale success for clients nationwide. For additional information, visit dallasnewscorporation.com or email invest@dallasnews.com



Statements in this communication concerning DallasNews Corporation’s (the “Company”) business outlook or future economic performance, revenues, expenses, cash balance, investments and other financial and non-financial items that are not historical facts are “forward-looking statements” as the term is defined under applicable federal securities laws. Words such as “anticipate,” “assume,” “believe,” “can,” “could,”  “estimate,” “forecast,” “intend,” “expect,” “may,” “project,” “plan,” “seek,” “should,” “target,” “will,” “would” and their opposites and similar expressions are intended to identify forward-looking statements. Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those 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 and distribution prices; program costs; the success of the Company’s digital strategy; labor relations; cybersecurity incidents; and technological obsolescence. Among other risks, there can be no guarantee that the board of directors will approve 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.



 


 

 

DallasNews Corporation and Subsidiaries

Consolidated Statements of Operations





 

 

 

 

 

 



 

 

 

 

 

 



 

Three Months Ended March 31,

In thousands, except share and per share amounts (unaudited)

 

2023

 

2022

Net Operating Revenue:

 

 

 

 

 

 

Advertising and marketing services

 

$

15,309 

 

$

16,264 

Circulation

 

 

16,011 

 

 

16,096 

Printing, distribution and other

 

 

3,882 

 

 

3,927 

Total net operating revenue

 

 

35,202 

 

 

36,287 

Operating Costs and Expense:

 

 

 

 

 

 

Employee compensation and benefits

 

 

17,373 

 

 

16,410 

Other production, distribution and operating costs

 

 

18,028 

 

 

19,249 

Newsprint, ink and other supplies

 

 

2,184 

 

 

2,394 

Depreciation

 

 

373 

 

 

712 

Total operating costs and expense

 

 

37,958 

 

 

38,765 

Operating loss

 

 

(2,756)

 

 

(2,478)

Other income, net

 

 

362 

 

 

18 

Loss Before Income Taxes

 

 

(2,394)

 

 

(2,460)

Income tax provision

 

 

232 

 

 

184 

Net Loss

 

$

(2,626)

 

$

(2,644)



 

 

 

 

 

 

Per Share Basis (1)

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

Basic

 

$

(0.49)

 

$

(0.49)

Number of common shares used in the per share calculation:

 

 

 

 

 

 

Basic

 

 

5,352,490 

 

 

5,352,490 





(1)

The Company’s Series A and Series B common stock equally share in the distributed and undistributed earnings. There were no options or RSUs outstanding as of March 31,  2023 and 2022, 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.

 


 

 

DallasNews Corporation and Subsidiaries

Consolidated Balance Sheets





 

 

 

 

 

 



 

 

 

 

 

 



 

March 31,

 

December 31,

In thousands (unaudited)

 

2023

 

2022

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

15,258 

 

$

27,825 

Short-term investments

 

 

10,500 

 

 

 —

Accounts receivable, net

 

 

11,604 

 

 

14,023 

Other current assets

 

 

7,713 

 

 

6,077 

Total current assets

 

 

45,075 

 

 

47,925 

Property, plant and equipment, net

 

 

7,301 

 

 

7,438 

Operating lease right-of-use assets

 

 

14,991 

 

 

14,811 

Deferred income taxes, net

 

 

293 

 

 

282 

Other assets

 

 

1,805 

 

 

1,809 

Total assets

 

$

69,465 

 

$

72,265 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

4,318 

 

$

5,041 

Accrued compensation and other current liabilities

 

 

8,173 

 

 

8,214 

Contract liabilities

 

 

10,932 

 

 

9,504 

Total current liabilities

 

 

23,423 

 

 

22,759 

Long-term pension liabilities

 

 

19,229 

 

 

19,455 

Long-term operating lease liabilities

 

 

16,802 

 

 

16,546 

Other liabilities

 

 

1,140 

 

 

1,142 

Total liabilities

 

 

60,594 

 

 

59,902 

Total shareholders' equity

 

 

8,871 

 

 

12,363 

Total liabilities and shareholders’ equity

 

$

69,465 

 

$

72,265 

 


 

 

DallasNews Corporation - Non-GAAP Financial Measures

Reconciliation of Operating Loss to Adjusted Operating Loss







 

 

 

 

 

 



 

 

 

 

 

 



 

Three Months Ended March 31,

In thousands (unaudited)

 

2023

 

2022

Total net operating revenue

 

$

35,202 

 

$

36,287 

Total operating costs and expense

 

 

37,958 

 

 

38,765 

Operating Loss

 

$

(2,756)

 

$

(2,478)



 

 

 

 

 

 

Total operating costs and expense

 

$

37,958 

 

$

38,765 

Less:

 

 

 

 

 

 

Depreciation

 

 

373 

 

 

712 

Severance expense

 

 

217 

 

 

132 

Adjusted Operating Expense

 

$

37,368 

 

$

37,921 



 

 

 

 

 

 

Total net operating revenue

 

$

35,202 

 

$

36,287 

Adjusted operating expense

 

 

37,368 

 

 

37,921 

Adjusted Operating Loss

 

$

(2,166)

 

$

(1,634)



The Company calculates adjusted operating income (loss) by adjusting operating income (loss) to exclude depreciation, amortization, severance expense, (gain) loss on sale/disposal of assets, and asset impairments (“adjusted operating income (loss)”). The Company believes that inclusion of certain noncash expenses and other items in the results makes for more difficult comparisons between years and with peer group companies.

Adjusted operating income (loss) is not a measure of financial performance under generally accepted accounting principles (“GAAP”). Management uses adjusted operating income (loss) and similar measures in internal analyses as supplemental measures of the Company’s financial performance, and for performance comparisons versus its peer group of companies. Management uses this non-GAAP financial measure for the purposes of evaluating consolidated Company performance. The Company therefore believes that the non-GAAP measure presented provides useful information to investors by allowing them to view the Company’s business through the eyes of management and the Board of Directors, facilitating comparison of results across historical periods and providing a focus on the underlying ongoing operating performance of its business. Adjusted operating income (loss) should not be considered in isolation or as a substitute for net income (loss), cash flows provided by (used for) operating activities or other comparable measures prepared in accordance with GAAP. Additionally, this non-GAAP measure may not be comparable to similarly-titled measures of other companies.