DALLAS, March 06, 2024 (GLOBE NEWSWIRE) — DallasNews Corporation (NASDAQ:DALN) today reported a fourth quarter 2023 net loss of $2.2 million, or $(0.41) per share, and an operating loss of $2.5 million, which includes expense of $2.7 million related to the Voluntary Severance Program. In the fourth quarter of 2022, the Company reported a net loss of $2.1 million, or $(0.40) per share, and an operating loss of $1.9 million.
For the fourth quarter of 2023, on a non-GAAP basis, DallasNews reported operating income adjusted for certain items (“adjusted operating income (loss)”) of $0.6 million, an improvement of $1.6 million when compared to an adjusted operating loss of $1.0 million reported in the fourth quarter of 2022. The improvement is primarily due to expense savings of $3.1 million in distribution, $1.6 million in employee compensation and benefits, $1.1 million in newsprint and $0.6 million in outside services, partially offset by a total revenue decline of $5.1 million.
For the full year 2023, the Company reported a net loss of $7.1 million, or $(1.33) per share, and an operating loss of $8.1 million. For the full year 2022, the Company reported a net loss of $9.8 million, or $(1.83) per share, and an operating loss of $9.0 million.
For the full year 2023, on a non-GAAP basis, the Company reported an adjusted operating loss of $2.7 million, an improvement of $2.6 million when compared to an adjusted operating loss of $5.3 million reported for the full year 2022. The improvement is primarily due to expense savings of $7.0 million in distribution, $2.2 million in outside services, $2.2 million in newsprint, $0.8 million in property rental and $0.6 million in employee compensation and benefits, partially offset by a total revenue decline of $11.0 million. The $7.0 million expense savings in distribution and total revenue decline of $11.0 million are primarily the result of the Company’s strategic decision to exit its shared mail program and discontinue print-only editions of its niche publications, Al Dia and Briefing, at the end of August 2023.
Grant Moise, Chief Executive Officer, said, “I am pleased with the progress we made in 2023 as we get closer to our objective of creating a sustainably profitable media and marketing company. I am encouraged by our ability to grow membership revenue for the third consecutive year, as a result of our focus on balancing volume and price. In the fourth quarter, we executed a successful voluntary severance offering which was a necessary step to improve our operating margins entering 2024.”
Fourth Quarter Results
Total revenue was $34.0 million in the fourth quarter of 2023, a decrease of $5.1 million or 13.1 percent when compared to the fourth quarter of 2022.
Revenue from advertising and marketing services, including print and digital revenues, was $12.8 million in the fourth quarter of 2023, a decrease of $5.6 million or 30.5 percent when compared to the $18.4 million reported for the fourth quarter of 2022. The decline is primarily due to a $5.3 million or 45.6 percent reduction in print advertising revenue resulting from the Company ending its shared mail program to deliver weekly preprints and inserts.
Circulation revenue was $17.1 million in the fourth quarter of 2023, an increase of $0.5 million or 3.2 percent when compared to the fourth quarter of 2022. Digital-only subscription revenue increased $1.2 million or 34.1 percent, partially offset by a print circulation decline of $0.6 million or 4.8 percent.
Printing, distribution and other revenue was $4.0 million, a slight decrease when compared to the fourth quarter of 2022.
Total consolidated operating expense in the fourth quarter of 2023, on a GAAP basis, was $36.5 million, an improvement of $4.6 million or 11.2 percent when compared to the fourth quarter of 2022. The improvement is primarily due to expense savings of $3.1 million in distribution, $1.1 million in newsprint and $0.6 million in outside services, partially offset by an increase of $0.8 million in employee compensation and benefits expense.
On a non-GAAP basis, adjusted operating expense was $33.4 million, an improvement of $6.7 million or 16.7 percent when compared to the fourth quarter of 2022. In addition to the expense savings discussed above, excluding severance, employee compensation and benefits expense improved $1.6 million.
Full Year Results
Total revenue was $139.7 million for the full year 2023, a decrease of $11.0 million or 7.3 percent when compared to the full year 2022.
Revenue from advertising and marketing services, including print and digital revenues, was $59.0 million in 2023, a decrease of $10.6 million or 15.3 percent when compared to the $69.7 million reported for the full year 2022. Print advertising revenue declined $9.8 million or 21.8 percent, driven by an $8.8 million reduction in preprint advertising revenue primarily resulting from the Company ending its shared mail program. Digital advertising and marketing services revenue declined $0.9 million or 3.5 percent.
Circulation revenue was $65.3 million for the full year 2023, an increase of $0.2 million when compared to the full year 2022. Digital-only subscription revenue increased $3.2 million or 24.1 percent, partially offset by a print circulation decline of $3.0 million or 5.8 percent.
Printing, distribution and other revenue decreased $0.5 million, or 3.1 percent, to $15.3 million, primarily due to reductions in revenue from commercial printing and third-party distribution.
Total consolidated operating expense for the full year 2023, on a GAAP basis, was $147.8 million, an improvement of $11.9 million or 7.4 percent compared to the full year 2022. The improvement is primarily due to expense savings of $7.0 million in distribution, $2.2 million in outside services, $2.2 million in newsprint, $1.2 million in depreciation, $0.8 million in property rental, partially offset by an increase of $2.3 million in employee compensation and benefits expense. The $7.0 million expense savings in distribution is primarily the result of the Company exiting its shared mail program and discontinuing print-only editions of its niche publications.
On a non-GAAP basis, adjusted operating expense was $142.4 million, an improvement of $13.5 million or 8.7 percent when compared to $155.9 million of adjusted operating expense in the full year 2022. In addition to the expense savings discussed above, excluding severance, employee compensation and benefits expense improved $0.6 million.
As of December 31, 2023, the Company had 601 employees, a headcount decrease of 62 or 9.4 percent when compared to the prior year period, not including Voluntary Severance Program participants departing in 2024. As of February 29, the Company had 546 employees. Cash and cash equivalents along with short-term investments were $22.5 million and the Company had no debt as of December 31, 2023.
Non-GAAP Financial Measures
Reconciliations of operating loss to adjusted operating income (loss) 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 Thursday, March 7, 2024, at 9:00 a.m. CST 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: 4561809. A replay line will be available at 1-866-207-1041 from 12:00 p.m. CST on March 7, 2024 until 11:59 p.m. CDT on March 13, 2024. The access code for the replay is 8115710.
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 an excellent journalistic reputation, intense regional focus and close community ties. With offices in Dallas and Tulsa, Medium Giant is a full-service advertising agency dedicated to designing, creating and delivering stories that drive customers to act. 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, business initiatives, working capital, 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.
Contact:
Katy Murray
214-977-8869
Kmurray@dallasnews.com
DallasNews Corporation and Subsidiaries
Consolidated Statements of Operations
Three Months Ended December 31,
Years Ended December 31,
In thousands, except share and per share amounts (unaudited)
2023
2022
2023
2022
Net Operating Revenue:
Advertising and marketing services
$
12,807
$
18,421
$
59,038
$
69,667
Circulation
17,148
16,615
65,349
65,191
Printing, distribution and other
4,028
4,067
15,309
15,793
Total net operating revenue
33,983
39,103
139,696
150,651
Operating Costs and Expense:
Employee compensation and benefits
18,271
17,454
69,445
67,096
Other production, distribution and operating costs
15,909
19,973
68,008
78,638
Newsprint, ink and other supplies
1,881
2,976
8,793
11,035
Depreciation
402
582
1,520
2,709
Loss on sale/disposal of assets, net