• DallasNews Corporation Announces Second Quarter 2022 Financial Results

    ソース: Nasdaq GlobeNewswire / 26 7 2022 15:30:00   America/Chicago

    DALLAS, July 26, 2022 (GLOBE NEWSWIRE) -- DallasNews Corporation (Nasdaq: DALN) today reported a second quarter 2022 net loss of $2.4 million, or $(0.45) per share, and an operating loss of $2.3 million. In the second quarter of 2021, the Company reported a net loss of $1.5 million, or $(0.28) per share, and an operating loss of $3.0 million.

    For the second quarter of 2022, on a non-GAAP basis, DallasNews reported an operating loss adjusted for certain items (“adjusted operating loss”) of $1.0 million, a $0.5 million greater loss when compared to an adjusted operating loss of $0.6 million reported for the second quarter of 2021. The decrease is primarily due to a decline in total revenue of $1.1 million, partially offset by expense improvements of $0.5 million in distribution and $0.3 million in employee compensation and benefits.

    Grant Moise, Chief Executive Officer, said, “The second quarter showed steady progress in our pursuit to become a sustainably profitable digital media company and DallasNews’ financial performance was in line with our internal expectations. We continue to invest in our growing digital business, while efficiently managing our more mature print business which continues to experience headwinds from significantly higher newsprint and fuel costs. Medium Giant had a strong quarter closing new business, while the subscription side of our business continued to grow year-over-year.”

    Second Quarter Results

    Total revenue was $37.6 million in the second quarter of 2022, a decrease of $1.1 million or 2.8 percent when compared to the second quarter of 2021.

    Revenue from advertising and marketing services, including print and digital revenues, was $17.5 million in the second quarter of 2022, a decrease of $1.1 million or 6.2 percent when compared to the $18.6 million reported for the second quarter of 2021. The decline is primarily due to a $0.8 million decrease in print advertising revenue.

    Circulation revenue was $16.3 million in the second quarter of 2022, an increase of $0.2 million when compared to the $16.1 million reported for the second quarter of 2021. Digital-only subscription revenue increased $1.0 million or 42.9 percent, partially offset by a print circulation decline of $0.8 million or 5.9 percent.

    Printing, distribution and other revenue decreased $0.1 million, or 2.7 percent, to $3.9 million, primarily due to a slight reduction in commercial printing and distribution revenue.

    Total consolidated operating expense in the second quarter of 2022, on a GAAP basis, was $39.9 million, an improvement of $1.8 million or 4.4 percent compared to the second quarter of 2021. The improvement is primarily due to decreases of $1.3 million in employee compensation and benefits expense and $0.5 million in distribution expense.

    In the second quarter of 2022, on a non-GAAP basis, adjusted operating expense was $43.9 million, an improvement of $1.7 million or 3.7 percent when compared to $45.6 million of adjusted operating expense in the second quarter of 2021.

    As of June 30, 2022, the Company had 671 employees, a decrease of 53 full-time equivalents, or 7.3 percent, when compared to the prior year period. Cash and cash equivalents were $26.6 million and the Company had no debt.

    The Company expects to receive cash proceeds of $22.5 million on July 29, 2022, from the collection of the Charter DMN Holdings, LP note receivable, related to the sale of the Company’s former headquarters.

    Non-GAAP Financial Measures

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

    Financial Results Conference Call

    DallasNews Corporation will conduct a conference call on Wednesday, July 27, 2022, 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 1-844-291-5489 and enter the following access code when prompted: 9691263. A replay line will be available at 1-866-207-1041 from 12:00 p.m. CDT on July 27, 2022 until 11:59 p.m. CDT on August 2, 2022. The access code for the replay is 9944335.

    About DallasNews Corporation

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

    Statements in this communication concerning DallasNews Corporation’s business outlook or future economic performance, revenues, expenses, and other financial and non-financial items that are not historical facts are “forward-looking statements” as the term is defined under applicable federal securities laws. Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those statements. Such risks, trends and uncertainties are, in most instances, beyond the Company’s control, and include changes in advertising demand and other economic conditions; consumers’ tastes; newsprint prices; program costs; labor relations; cybersecurity incidents; technological obsolescence; and the current and future impacts of the COVID-19 pandemic. Among other risks, there can be no guarantee that the board of directors will approve a quarterly dividend in future quarters; as well as other risks described in the Company’s Annual Report on Form 10-K and in the Company’s other public disclosures and filings with the Securities and Exchange Commission. Forward-looking statements, which are as of the date of this filing, are not updated to reflect events or circumstances after the date of the statement.

    Contact:
    Katy Murray
    214-977-8869

    DallasNews Corporation and Subsidiaries
    Consolidated Statements of Operations

      Three Months Ended June 30, Six Months Ended June 30,
    In thousands, except share and per share amounts (unaudited) 2022 2021 2022 2021
    Net Operating Revenue:            
    Advertising and marketing services $17,457  $18,601  $33,721  $35,370 
    Circulation  16,250   16,093   32,346   32,115 
    Printing, distribution and other  3,866   3,974   7,793   7,998 
    Total net operating revenue  37,573   38,668   73,860   75,483 
    Operating Costs and Expense:            
    Employee compensation and benefits  16,804   18,116   33,214   36,063 
    Other production, distribution and operating costs  19,725   20,151   38,974   39,241 
    Newsprint, ink and other supplies  2,504   2,378   4,898   4,719 
    Depreciation  716   1,035   1,428   2,109 
    Amortization           64 
    Gain on sale/disposal of assets, net           (1)
    Asset impairments  102      102    
    Total operating costs and expense  39,851   41,680   78,616   82,195 
    Operating loss  (2,278)  (3,012)  (4,756)  (6,712)
    Other income, net  28   1,613   46   2,867 
    Loss Before Income Taxes  (2,250)  (1,399)  (4,710)  (3,845)
    Income tax provision  165   83   349   402 
    Net Loss $(2,415) $(1,482) $(5,059) $(4,247)
                 
    Per Share Basis (1)            
    Net loss            
    Basic $(0.45) $(0.28) $(0.95) $(0.79)
    Number of common shares used in the per share calculation:            
    Basic  5,352,490   5,352,490   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 June 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.

    DallasNews Corporation and Subsidiaries
    Consolidated Balance Sheets

      June 30, December 31,
    In thousands (unaudited) 2022 2021
    Assets        
    Current assets:        
    Cash and cash equivalents $26,560  $32,439 
    Accounts receivable, net  13,600   16,012 
    Notes receivable  22,400   22,400 
    Other current assets  6,103   5,677 
    Total current assets  68,663   76,528 
    Property, plant and equipment, net  8,091   8,822 
    Operating lease right-of-use assets  15,655   17,648 
    Deferred income taxes, net  210   257 
    Other assets  2,200   2,197 
    Total assets $94,819  $105,452 
    Liabilities and Shareholders’ Equity        
    Current liabilities:        
    Accounts payable $5,873  $7,821 
    Accrued compensation and other current liabilities  9,397   9,505 
    Contract liabilities  10,683   10,592 
    Total current liabilities  25,953   27,918 
    Long-term pension liabilities  14,456   14,275 
    Long-term operating lease liabilities  16,864   19,181 
    Other liabilities  1,480   1,501 
    Total liabilities  58,753   62,875 
    Total shareholders' equity  36,066   42,577 
    Total liabilities and shareholders’ equity $94,819  $105,452 
             

    DallasNews Corporation - Non-GAAP Financial Measures
    Reconciliation of Operating Loss to Adjusted Operating Loss

      Three Months Ended June 30, Six Months Ended June 30,
    In thousands (unaudited) 2022 2021 2022 2021
    Total net operating revenue $37,573  $38,668  $73,860  $75,483 
    Total operating costs and expense  39,851   41,680   78,616   82,195 
    Operating Loss $ (2,278) $ (3,012) $ (4,756) $ (6,712)
                 
    Total net operating revenue $37,573  $38,668  $73,860  $75,483 
    Addback:            
    Advertising contra revenue  5,189   6,234   11,110   12,312 
    Circulation contra revenue  84   95   160   190 
    Adjusted Operating Revenue $ 42,846  $ 44,997  $ 85,130  $ 87,985 
                 
    Total operating costs and expense $39,851  $41,680  $78,616  $82,195 
    Addback:            
    Advertising contra expense  5,189   6,234   11,110   12,312 
    Circulation contra expense  84   95   160   190 
    Less:            
    Depreciation  716   1,035   1,428   2,109 
    Amortization           64 
    Severance expense  428   1,398   560   1,606 
    Gain on sale/disposal of assets, net           (1)
    Asset impairments  102      102    
    Adjusted Operating Expense $ 43,878  $ 45,576  $ 87,796  $ 90,919 
                 
    Adjusted operating revenue $42,846  $44,997  $85,130  $87,985 
    Adjusted operating expense  43,878   45,576   87,796   90,919 
    Adjusted Operating Loss $ (1,032) $ (579) $ (2,666) $ (2,934)
                     

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

    Advertising contra represents agency fees related to digital advertising and marketing services. Circulation contra represents revenue recorded for the grace period of expired home delivery subscriptions. These adjustments have no effect on adjusted operating income (loss).

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


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