DallasNews Corporation Announces Second Quarter 2022 Financial Results
DallasNews Corporation (Nasdaq: DALN) reported a net loss of $2.4 million, or $(0.45) per share, in Q2 2022, compared to a loss of $1.5 million, or $(0.28) per share, in Q2 2021. The company experienced a revenue decline of $1.1 million, totaling $37.6 million in Q2 2022. While advertising revenue fell by 6.2%, circulation revenue slightly increased by 1.2%. Adjusted operating loss was $1.0 million, worsening from the previous year. Operational expenses decreased by 4.4% year-over-year, attributed to reduced employee costs and distribution expenses. Cash reserves stood at $26.6 million with no debt.
- Adjusted operating expense improved by 3.7% year-over-year.
- Digital-only subscription revenue surged by 42.9%.
- Net loss increased from $1.5 million in Q2 2021 to $2.4 million in Q2 2022.
- Total revenue decreased by 2.8% year-over-year.
DALLAS, July 26, 2022 (GLOBE NEWSWIRE) -- DallasNews Corporation (Nasdaq: DALN) today reported a second quarter 2022 net loss of
For the second quarter of 2022, on a non-GAAP basis, DallasNews reported an operating loss adjusted for certain items (“adjusted operating loss”) of
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
Revenue from advertising and marketing services, including print and digital revenues, was
Circulation revenue was
Printing, distribution and other revenue decreased
Total consolidated operating expense in the second quarter of 2022, on a GAAP basis, was
In the second quarter of 2022, on a non-GAAP basis, adjusted operating expense was
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
The Company expects to receive cash proceeds of
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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