DallasNews Corporation (Nasdaq: DALN) today reported a second
quarter 2021 net loss of $1.5 million, or
$(0.28) per share, and an operating loss of $3.0 million.
In the second quarter of 2020, the Company reported a net loss of
$3.4 million, or $(0.64) per share, and an operating loss of
$4.4 million. The 2021 net loss includes severance expense of
$1.4 million related to the previously announced voluntary
severance offer.
For the second quarter of 2021, on a non-GAAP basis, DallasNews
reported an operating loss adjusted for certain items (“adjusted
operating loss”) of $0.6 million, an improvement of
$1.9 million when compared to an adjusted operating loss of
$2.5 million reported in the second quarter of 2020.
Robert W. Decherd, chairman, president and Chief Executive
Officer, said, “We continue to see signs of progress across
DallasNews’ businesses and are encouraged by the surprisingly rapid
pace at which the United States and Texas are returning to
pre-pandemic levels of activity. The Company’s primary objective of
becoming a sustainably profitable digital news and information
provider remains paramount to the Board and management. Growth in
total membership revenue in the second quarter extends a trend that
has been in evidence now for more than a year. The addition of
Katrice Hardy as Executive Editor of
The Dallas Morning News will significantly advance
the Company’s strategy. With almost $39 million in cash and no
debt, DallasNews Corporation continues to occupy a highly-preferred
position in the newspaper and digital media space.”
Second Quarter Results
Total revenue was $38.7 million in the second quarter of
2021, an increase of $3.3 million or 9.2 percent when
compared to the second quarter of 2020.
Revenue from advertising and marketing services, including print
and digital revenues, was $18.6 million in the second quarter
of 2021, an increase of $3.0 million or 19.3 percent when
compared to the $15.6 million reported for the second quarter
of 2020. The improvement is due primarily to a $3.4 million
increase in print advertising revenue.
Circulation revenue was $16.1 million, an increase of
$0.4 million or 2.4 percent when compared to the second
quarter of 2020. Home delivery revenue decreased 2.4 percent
and single copy revenue decreased 7.6 percent, offset by an
increase of $0.8 million or 52.3 percent in digital-only
subscription revenue.
Printing, distribution and other revenue decreased
$0.1 million, or 3.1 percent, to $4.0 million,
primarily due to a reduction in commercial printing revenue.
Total consolidated operating expense in the second quarter of
2021, on a GAAP basis, was $41.7 million, an increase of
$1.9 million or 4.7 percent compared to the second
quarter of 2020. The change is primarily due to expense increases
of $1.1 million in employee compensation and benefits related
to the voluntary severance offer; $1.1 million in advertising
and promotion; and $0.9 million in distribution. These
increases were partially offset by expense decreases of
$0.8 million in depreciation and $0.3 million in outside
services.
In the second quarter of 2021, on a non-GAAP basis, adjusted
operating expense was $45.6 million, an increase of
$6.7 million or 17.1 percent when compared to
$38.9 million of adjusted operating expense in the second
quarter of 2020. The change is primarily due to increases of
$5.3 million in contra expense and $1.1 million in
advertising and promotion expense.
As of June 30, 2021, the Company had 724 employees, a decrease
of 45 full-time equivalents, or 5.9 percent, when compared to
the prior year period. Cash and cash equivalents were
$37.8 million and the Company had no debt.
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
Tuesday, July 27, 2021, 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 1-844-291-6362
and enter the following access code when prompted: 8079115. A
replay line will be available at 1-866-207-1041 from 12:00 p.m. CDT
on July 27, 2021 until 11:59 p.m. CDT on
August 2, 2021. The access code for the replay is
9670389.
About DallasNews
Corporation
DallasNews Corporation is the leading local news and information
publishing company in Texas. The Company has a growing presence in
emerging media and digital marketing, and maintains capabilities
related to commercial printing, distribution and direct mail.
DallasNews delivers news and information in innovative ways to a
broad range of audiences with diverse interests and lifestyles. 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,
including statements about the Company’s expectations relating to
the reverse stock split, 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 public health
crisis. 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.
DallasNews Corporation
and SubsidiariesConsolidated Statements of
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
In thousands, except share and per share amounts
(unaudited) |
2021 |
|
2020 |
|
2021 |
|
2020 |
Net Operating Revenue: |
|
|
|
|
|
|
|
|
|
|
|
Advertising and marketing services |
$ |
18,601 |
|
|
$ |
15,591 |
|
|
$ |
35,370 |
|
|
$ |
34,918 |
|
Circulation |
|
16,093 |
|
|
|
15,723 |
|
|
|
32,115 |
|
|
|
32,137 |
|
Printing, distribution and other |
|
3,974 |
|
|
|
4,101 |
|
|
|
7,998 |
|
|
|
8,703 |
|
Total net operating revenue |
|
38,668 |
|
|
|
35,415 |
|
|
|
75,483 |
|
|
|
75,758 |
|
Operating Costs and
Expense: |
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
18,116 |
|
|
|
16,997 |
|
|
|
36,063 |
|
|
|
36,013 |
|
Other production, distribution and operating costs |
|
20,151 |
|
|
|
18,659 |
|
|
|
39,241 |
|
|
|
39,651 |
|
Newsprint, ink and other supplies |
|
2,378 |
|
|
|
2,271 |
|
|
|
4,719 |
|
|
|
5,542 |
|
Depreciation |
|
1,035 |
|
|
|
1,802 |
|
|
|
2,109 |
|
|
|
3,567 |
|
Amortization |
|
— |
|
|
|
64 |
|
|
|
64 |
|
|
|
128 |
|
Gain on sale/disposal of assets, net |
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
(5 |
) |
Total operating costs and expense |
|
41,680 |
|
|
|
39,793 |
|
|
|
82,195 |
|
|
|
84,896 |
|
Operating loss |
|
(3,012 |
) |
|
|
(4,378 |
) |
|
|
(6,712 |
) |
|
|
(9,138 |
) |
Other income, net |
|
1,613 |
|
|
|
1,331 |
|
|
|
2,867 |
|
|
|
2,683 |
|
Loss Before Income
Taxes |
|
(1,399 |
) |
|
|
(3,047 |
) |
|
|
(3,845 |
) |
|
|
(6,455 |
) |
Income tax provision (benefit) |
|
83 |
|
|
|
367 |
|
|
|
402 |
|
|
|
(1,420 |
) |
Net Loss |
$ |
(1,482 |
) |
|
$ |
(3,414 |
) |
|
$ |
(4,247 |
) |
|
$ |
(5,035 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Per Share
Basis |
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted (1) |
$ |
(0.28 |
) |
|
$ |
(0.64 |
) |
|
$ |
(0.79 |
) |
|
$ |
(0.94 |
) |
Number of common shares used in the per share calculation: |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted (1) |
|
5,352,490 |
|
|
|
5,352,490 |
|
|
|
5,352,490 |
|
|
|
5,352,490 |
|
(1) All share and per share amounts have been
retroactively adjusted to reflect the one-for-four reverse stock
split effective June 8, 2021. All fractional shares were
settled in cash in connection with the reverse stock split.
DallasNews Corporation
and SubsidiariesConsolidated Balance
Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
In thousands (unaudited) |
2021 |
|
2020 |
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
37,770 |
|
$ |
42,015 |
Accounts receivable, net |
|
14,585 |
|
|
16,562 |
Notes receivable |
|
22,400 |
|
|
22,775 |
Other current assets |
|
7,093 |
|
|
6,754 |
Total current assets |
|
81,848 |
|
|
88,106 |
Property, plant and equipment, net |
|
9,996 |
|
|
11,959 |
Operating lease right-of-use assets |
|
19,112 |
|
|
20,406 |
Intangible assets, net |
|
— |
|
|
64 |
Deferred income taxes, net |
|
94 |
|
|
76 |
Other assets |
|
2,208 |
|
|
2,604 |
Total assets |
$ |
113,258 |
|
$ |
123,215 |
Liabilities and
Shareholders’ Equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
$ |
6,621 |
|
$ |
7,759 |
Accrued compensation and other current liabilities |
|
11,507 |
|
|
10,829 |
Contract liabilities |
|
13,137 |
|
|
12,896 |
Total current liabilities |
|
31,265 |
|
|
31,484 |
Long-term pension liabilities |
|
15,718 |
|
|
18,520 |
Long-term operating lease liabilities |
|
20,527 |
|
|
21,890 |
Other liabilities |
|
4,580 |
|
|
4,913 |
Total liabilities |
|
72,090 |
|
|
76,807 |
Total shareholders' equity |
|
41,168 |
|
|
46,408 |
Total liabilities and shareholders’ equity |
$ |
113,258 |
|
$ |
123,215 |
DallasNews Corporation
- Non-GAAP Financial MeasuresReconciliation of
Operating Loss to Adjusted Operating Loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
In thousands (unaudited) |
2021 |
|
2020 |
|
2021 |
|
2020 |
Total net operating revenue |
$ |
38,668 |
|
|
$ |
35,415 |
|
|
$ |
75,483 |
|
|
$ |
75,758 |
|
Total operating costs and expense |
|
41,680 |
|
|
|
39,793 |
|
|
|
82,195 |
|
|
|
84,896 |
|
Operating
Loss |
$ |
(3,012 |
) |
|
$ |
(4,378 |
) |
|
$ |
(6,712 |
) |
|
$ |
(9,138 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Total net operating revenue |
$ |
38,668 |
|
|
$ |
35,415 |
|
|
$ |
75,483 |
|
|
$ |
75,758 |
|
Addback: |
|
|
|
|
|
|
|
|
|
|
|
Advertising contra revenue |
|
6,234 |
|
|
|
934 |
|
|
|
12,312 |
|
|
|
2,388 |
|
Circulation contra revenue |
|
95 |
|
|
|
63 |
|
|
|
190 |
|
|
|
101 |
|
Adjusted Operating
Revenue |
$ |
44,997 |
|
|
$ |
36,412 |
|
|
$ |
87,985 |
|
|
$ |
78,247 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs and expense |
$ |
41,680 |
|
|
$ |
39,793 |
|
|
$ |
82,195 |
|
|
$ |
84,896 |
|
Addback: |
|
|
|
|
|
|
|
|
|
|
|
Advertising contra expense |
|
6,234 |
|
|
|
934 |
|
|
|
12,312 |
|
|
|
2,388 |
|
Circulation contra expense |
|
95 |
|
|
|
63 |
|
|
|
190 |
|
|
|
101 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
1,035 |
|
|
|
1,802 |
|
|
|
2,109 |
|
|
|
3,567 |
|
Amortization |
|
— |
|
|
|
64 |
|
|
|
64 |
|
|
|
128 |
|
Severance expense |
|
1,398 |
|
|
|
17 |
|
|
|
1,606 |
|
|
|
203 |
|
Gain on sale/disposal of assets, net |
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
(5 |
) |
Adjusted Operating
Expense |
$ |
45,576 |
|
|
$ |
38,907 |
|
|
$ |
90,919 |
|
|
$ |
83,492 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating revenue |
$ |
44,997 |
|
|
$ |
36,412 |
|
|
$ |
87,985 |
|
|
$ |
78,247 |
|
Adjusted operating expense |
|
45,576 |
|
|
|
38,907 |
|
|
|
90,919 |
|
|
|
83,492 |
|
Adjusted Operating
Loss |
$ |
(579 |
) |
|
$ |
(2,495 |
) |
|
$ |
(2,934 |
) |
|
$ |
(5,245 |
) |
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.
The Company adopted the new revenue guidance (Topic 606) using
the modified retrospective approach as of January 1, 2018.
While the Company adjusts operating revenue and expense for
non-GAAP presentation, 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.
Contact:Katy Murray214-977-8869
DallasNews (NASDAQ:DALN)
Historical Stock Chart
From Jun 2024 to Jul 2024
DallasNews (NASDAQ:DALN)
Historical Stock Chart
From Jul 2023 to Jul 2024