DallasNews Corporation (Nasdaq: DALN) today reported fourth quarter
2021 net income of $2.1 million, or $0.40 per share, and
an operating loss of $0.7 million. The fourth quarter 2021 net
income includes a non-cash pension benefit of $1.0 million and
cash proceeds of $1.3 million related to the sale of inactive
IP addresses. In the fourth quarter of 2020, the Company reported a
net loss of $1.7 million, or $(0.32) per share, and an
operating loss of $4.0 million.
For the fourth quarter of 2021, on a non-GAAP basis, DallasNews
reported operating income adjusted for certain items (“adjusted
operating income (loss)”) of $0.3 million, a decrease of
$0.2 million when compared to adjusted operating income of
$0.5 million reported in the fourth quarter of 2020. The
decline is primarily due to expense increases of $0.6 million
in newsprint, $0.4 million in outside services, and
$0.2 million in distribution, and an operating revenue decline
of $0.2 million, partially offset by a $1.3 million
improvement in employee compensation and benefits expense.
For the full year 2021, the Company reported a net loss of
$0.5 million, or $(0.09) per share, and an operating
loss of $10.0 million. The 2021 net loss includes a non-cash
pension benefit of $4.2 million, a non-cash tax benefit of
$2.6 million related to the release of an uncertain tax
reserve and cash proceeds of $1.3 million related to the sale
of inactive IP addresses. For the full year 2020, the Company
reported a net loss of $6.9 million, or $(1.28) per
share, and an operating loss of $15.6 million.
For the full year 2021, on a non-GAAP basis, the Company
reported an adjusted operating loss of $3.8 million, an
improvement of $1.1 million when compared to an adjusted
operating loss of $4.9 million reported for the full year
2020. The improvement is primarily due to a decrease of
$1.8 million in employee compensation and benefits expense,
partially offset by an increase of $0.8 million in advertising
and promotion expense.
Robert W. Decherd, chairman, president and Chief Executive
Officer, said, “DallasNews Corporation continued to make progress
in 2021 toward being a sustainably profitable digital news and
information company. Our management team and every employee
contributed to this progress during another trying year caused by
the pandemic and related factors. The directors and I express our
thanks and appreciation to all.
“DALN experienced important growth in digital membership volume
and pricing during 2021, while print circulation and print
subscription pricing held up well. The resultant increase in
digital membership revenue and total subscription revenue are
important indicators that the Company is moving in the right
direction. We are also pleased with the inroads Medium Giant is
making in developing a meaningful revenue stream in its agency
business.
“In parallel with these business
activities, The Dallas Morning News continued
to excel in its journalistic endeavors throughout 2021 and in the
vital matter of diversity, equity and inclusion. At the corporate
level, the Company's name was changed in 2021 to reflect our
long-standing values and DALN began trading on the Nasdaq exchange
midyear.
“DALN continues to be advantaged by its strong balance sheet and
the Board regularly reviews the Company's cash position in relation
to shareholder interests and the pension plans.”
Fourth Quarter Results
Total revenue was $40.6 million in the fourth quarter of
2021, a decrease of $0.2 million or 0.5 percent when
compared to the fourth quarter of 2020.
Revenue from advertising and marketing services, including print
and digital revenues, was $19.8 million in the fourth quarter
of 2021, flat when compared to the fourth quarter of 2020. Digital
advertising revenue improved $0.3 million or 4.8 percent,
offset by a print advertising decline of $0.3 million or
2.6 percent.
Circulation revenue was $16.7 million in the fourth quarter
of 2021, flat when compared to the fourth quarter of 2020.
Digital-only subscription revenue increased $0.9 million or
48.5 percent, offset by a print circulation decline of
$0.9 million or 6.2 percent.
Printing, distribution and other revenue decreased
$0.2 million, or 4.2 percent, to $4.1 million,
primarily due to a reduction in commercial printing revenue.
Total consolidated operating expense in the fourth quarter of
2021, on a GAAP basis, was $41.2 million, an improvement of
$3.6 million or 8.0 percent compared to the fourth
quarter of 2020, primarily due to expense decreases of
$3.4 million in employee compensation and benefits, and
$0.8 million in depreciation, partially offset by increases of
$0.6 million in newsprint expense and $0.4 million in
outside services expense.
In the fourth quarter of 2021, on a non-GAAP basis, adjusted
operating expense was $47.9 million, an increase of
$1.8 million or 3.9 percent when compared to
$46.1 million of adjusted operating expense in the fourth
quarter of 2020. The increase is primarily due to $1.9 million
in contra expense, which includes agency fees related to digital
advertising and marketing services.
Full Year Results
Total revenue was $154.4 million for the full year 2021, a
slight increase of $0.1 million when compared to the full year
2020.
Revenue from advertising and marketing services, including print
and digital revenues, was $73.3 million in 2021, an increase
of $1.1 million or 1.5 percent when compared to the
$72.2 million reported for the full year 2020. The improvement
is due to a $1.2 million or 2.5 percent increase in print
advertising revenue.
Circulation revenue was $64.9 million in the full year
2021, flat when compared to the full year 2020. Digital-only
subscription revenue increased $3.1 million or
47.3 percent, offset by a print circulation decline of
$3.1 million or 5.3 percent.
Printing, distribution and other revenue decreased
$1.0 million, or 5.8 percent, to $16.2 million,
primarily due to a reduction in commercial printing and
distribution revenue.
Total consolidated operating expense for the full year 2021, on
a GAAP basis, was $164.3 million, an improvement of
$5.5 million or 3.3 percent compared to the full year
2020. The improvement is primarily due to expense decreases of
$3.0 million in depreciation, $2.7 million in employee
compensation and benefits, and $0.3 million in newsprint,
partially offset by increases of $0.8 million in advertising
and promotion expense, and $0.6 million in distribution
expense.
For the full year 2021, on a non-GAAP basis, adjusted operating
expense was $185.0 million, an increase of $14.5 million
or 8.5 percent when compared to $170.6 million of
adjusted operating expense in the full year 2020. The increase is
primarily due to $15.5 million in contra expense.
As of December 31, 2021, the Company had 656 employees, a
decrease of 87 full-time equivalents, or 11.7 percent, when
compared to the prior year period. Cash and cash equivalents were
$32.4 million and the Company had no debt.
Non-GAAP Financial
Measures
Reconciliations of operating loss to adjusted operating income
(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, March 8, 2022, 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 1-844-867-6169
and enter the following access code when prompted: 215776. A replay
line will be available at 1-866-207-1041 from 12:00 p.m. CST on
March 8, 2022 until 11:59 p.m. CDT on
March 14, 2022. The access code for the replay is
7869676.
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,
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 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.
DallasNews Corporation and
SubsidiariesConsolidated Statements of
Operations
|
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|
|
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Three Months Ended December 31, |
|
Years Ended December 31, |
In thousands, except share and per share amounts
(unaudited) |
2021 |
|
2020 |
|
2021 |
|
2020 |
Net Operating Revenue: |
|
|
|
|
|
|
|
|
|
|
|
Advertising and marketing services |
$ |
19,800 |
|
|
$ |
19,822 |
|
|
$ |
73,271 |
|
|
$ |
72,214 |
|
Circulation |
|
16,671 |
|
|
|
16,687 |
|
|
|
64,943 |
|
|
|
64,935 |
|
Printing, distribution and other |
|
4,109 |
|
|
|
4,290 |
|
|
|
16,160 |
|
|
|
17,150 |
|
Total net operating revenue |
|
40,580 |
|
|
|
40,799 |
|
|
|
154,374 |
|
|
|
154,299 |
|
Operating Costs and
Expense: |
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
15,884 |
|
|
|
19,260 |
|
|
|
69,078 |
|
|
|
71,772 |
|
Other production, distribution and operating costs |
|
21,759 |
|
|
|
21,050 |
|
|
|
81,041 |
|
|
|
80,008 |
|
Newsprint, ink and other supplies |
|
2,720 |
|
|
|
2,150 |
|
|
|
9,878 |
|
|
|
10,168 |
|
Depreciation |
|
875 |
|
|
|
1,696 |
|
|
|
4,002 |
|
|
|
7,016 |
|
Amortization |
|
— |
|
|
|
64 |
|
|
|
64 |
|
|
|
255 |
|
Loss on sale/disposal of assets, net |
|
— |
|
|
|
34 |
|
|
|
29 |
|
|
|
90 |
|
Asset impairments |
|
— |
|
|
|
563 |
|
|
|
232 |
|
|
|
563 |
|
Total operating costs and expense |
|
41,238 |
|
|
|
44,817 |
|
|
|
164,324 |
|
|
|
169,872 |
|
Operating loss |
|
(658 |
) |
|
|
(4,018 |
) |
|
|
(9,950 |
) |
|
|
(15,573 |
) |
Other income, net |
|
2,638 |
|
|
|
2,236 |
|
|
|
7,332 |
|
|
|
7,014 |
|
Income (Loss) Before
Income Taxes |
|
1,980 |
|
|
|
(1,782 |
) |
|
|
(2,618 |
) |
|
|
(8,559 |
) |
Income tax benefit |
|
(169 |
) |
|
|
(43 |
) |
|
|
(2,151 |
) |
|
|
(1,687 |
) |
Net Income
(Loss) |
$ |
2,149 |
|
|
$ |
(1,739 |
) |
|
$ |
(467 |
) |
|
$ |
(6,872 |
) |
|
|
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|
|
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|
|
|
Per Share
Basis |
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|
|
|
Net income (loss) |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted(1) |
$ |
0.40 |
|
|
$ |
(0.32 |
) |
|
$ |
(0.09 |
) |
|
$ |
(1.28 |
) |
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 on June 9, 2021, in connection with the
reverse stock split.
DallasNews Corporation and
SubsidiariesConsolidated Balance
Sheets
|
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|
|
|
December 31, |
|
December 31, |
In thousands (unaudited) |
2021 |
|
2020 |
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
32,439 |
|
$ |
42,015 |
Accounts receivable, net |
|
16,012 |
|
|
16,562 |
Notes receivable |
|
22,400 |
|
|
22,775 |
Other current assets |
|
5,677 |
|
|
6,754 |
Total current assets |
|
76,528 |
|
|
88,106 |
Property, plant and equipment, net |
|
8,822 |
|
|
11,959 |
Operating lease right-of-use assets |
|
17,648 |
|
|
20,406 |
Intangible assets, net |
|
— |
|
|
64 |
Deferred income taxes, net |
|
257 |
|
|
76 |
Other assets |
|
2,197 |
|
|
2,604 |
Total assets |
$ |
105,452 |
|
$ |
123,215 |
Liabilities and
Shareholders’ Equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
$ |
7,821 |
|
$ |
7,759 |
Accrued compensation and other current liabilities |
|
9,505 |
|
|
10,829 |
Contract liabilities |
|
10,592 |
|
|
12,896 |
Total current liabilities |
|
27,918 |
|
|
31,484 |
Long-term pension liabilities |
|
14,275 |
|
|
18,520 |
Long-term operating lease liabilities |
|
19,181 |
|
|
21,890 |
Other liabilities |
|
1,501 |
|
|
4,913 |
Total liabilities |
|
62,875 |
|
|
76,807 |
Total shareholders' equity |
|
42,577 |
|
|
46,408 |
Total liabilities and shareholders’ equity |
$ |
105,452 |
|
$ |
123,215 |
DallasNews Corporation - Non-GAAP
Financial MeasuresReconciliation of Operating Loss
to Adjusted Operating Income (Loss)
|
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|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Years Ended December 31, |
In thousands (unaudited) |
2021 |
|
2020 |
|
2021 |
|
2020 |
Total net operating revenue |
$ |
40,580 |
|
|
$ |
40,799 |
|
|
$ |
154,374 |
|
|
$ |
154,299 |
|
Total operating costs and expense |
|
41,238 |
|
|
|
44,817 |
|
|
|
164,324 |
|
|
|
169,872 |
|
Operating
Loss |
$ |
(658 |
) |
|
$ |
(4,018 |
) |
|
$ |
(9,950 |
) |
|
$ |
(15,573 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Total net operating revenue |
$ |
40,580 |
|
|
$ |
40,799 |
|
|
$ |
154,374 |
|
|
$ |
154,299 |
|
Addback: |
|
|
|
|
|
|
|
|
|
|
|
Advertising contra revenue |
|
7,550 |
|
|
|
5,643 |
|
|
|
26,458 |
|
|
|
11,043 |
|
Circulation contra revenue |
|
88 |
|
|
|
110 |
|
|
|
384 |
|
|
|
315 |
|
Adjusted Operating
Revenue |
$ |
48,218 |
|
|
$ |
46,552 |
|
|
$ |
181,216 |
|
|
$ |
165,657 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs and expense |
$ |
41,238 |
|
|
$ |
44,817 |
|
|
$ |
164,324 |
|
|
$ |
169,872 |
|
Addback: |
|
|
|
|
|
|
|
|
|
|
|
Advertising contra expense |
|
7,550 |
|
|
|
5,643 |
|
|
|
26,458 |
|
|
|
11,043 |
|
Circulation contra expense |
|
88 |
|
|
|
110 |
|
|
|
384 |
|
|
|
315 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
875 |
|
|
|
1,696 |
|
|
|
4,002 |
|
|
|
7,016 |
|
Amortization |
|
— |
|
|
|
64 |
|
|
|
64 |
|
|
|
255 |
|
Severance expense |
|
95 |
|
|
|
2,127 |
|
|
|
1,816 |
|
|
|
2,748 |
|
Loss on sale/disposal of assets, net |
|
— |
|
|
|
34 |
|
|
|
29 |
|
|
|
90 |
|
Asset impairments |
|
— |
|
|
|
563 |
|
|
|
232 |
|
|
|
563 |
|
Adjusted Operating
Expense |
$ |
47,906 |
|
|
$ |
46,086 |
|
|
$ |
185,023 |
|
|
$ |
170,558 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating revenue |
$ |
48,218 |
|
|
$ |
46,552 |
|
|
$ |
181,216 |
|
|
$ |
165,657 |
|
Adjusted operating expense |
|
47,906 |
|
|
|
46,086 |
|
|
|
185,023 |
|
|
|
170,558 |
|
Adjusted Operating
Income (Loss) |
$ |
312 |
|
|
$ |
466 |
|
|
$ |
(3,807 |
) |
|
$ |
(4,901 |
) |
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.
Contact:Katy Murray214-977-8869
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