8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549  

FORM 8-K 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): March 6, 2024

DallasNews CORPORATION

(Exact name of registrant as specified in its charter)

Commission file number: 1-33741

Texas	38-3765318
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
P. O. Box 224866, Dallas, Texas 75222-4866	(214) 977-8869
(Address of principal executive offices, including zip code)	(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Series A Common Stock, $0.01 par value	DALN	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
‎

Item 2.02.  Results of Operations and Financial Condition.

On March 6, 2024, DallasNews Corporation announced its consolidated financial results for the fourth quarter and full year ended December 31, 2023. A copy of the announcement press release is furnished with this report as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
99.1	Press Release issued by DallasNews Corporation on March 6, 2024
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

‎

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: March 6, 2024	DALLASNEWS CORPORATION
	By:	/s/ Katy Murray
		Katy Murray
		President and Chief Financial Officer

EX-99.1

Exhibit 99.1

DallasNewsCorporationAnnouncesFourth Quarter and Full Year 2023Financial Results

DALLAS–  DallasNewsCorporation(Nasdaq:DALN)todayreporteda  fourthquarter2023net lossof $2.2 million, or $(0.41)pershare, andan operating loss of $2.5 million, which includes expense of $2.7 million related to the Voluntary Severance Program.  In thefourth quarter of 2022,  the Company reported a net loss of  $2.1 million, or $(0.40) per share, and an operating loss of $1.9million.

For the fourth quarter of 2023, on a non-GAAP basis, DallasNewsreported operating income adjusted for certain items (“adjusted operating income  (loss)”)  of $0.6million, an improvement of $1.6million when compared to an adjusted operating loss of $1.0 millionreported 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 year2022, the Company reported a net loss of $9.8 million, or $(1.83) per share, and an operating loss of $9.0million.

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 improvementis primarily due to expense savings of $7.0million 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 $11.0million are primarily the result of theCompany’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.

DallasNewsCorporationAnnouncesFourthQuarterand Full Year 2023Financial Results

March 6, 2024

Page2

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 $34.0million in the fourth quarter of 2023,  a decrease of $5.1million or13.1percent when compared to thefourth 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 $17.1million in the fourth quarter of 2023,  anincrease of $0.5 millionor 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 $36.5million, 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 savingsof $3.1 million in distribution, $1.1 million in newsprintand $0.6 million in outside services, partially offset by an increase of $0.8 million in employee compensation and benefits expense.

DallasNewsCorporationAnnouncesFourthQuarterand Full Year 2023Financial Results

March 6, 2024

Page3

On a non-GAAP basis,adjusted operating expensewas  $33.4million, animprovement of $6.7 millionor 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 $139.7million 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 millionfor 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, or3.1 percent, to $15.3 million, primarily due to reductions in revenue from commercial printing and third-party distribution.

DallasNewsCorporationAnnouncesFourthQuarterand Full Year 2023Financial Results

March 6, 2024

Page4

Total consolidated operating expense for the full year2023, 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 expensesavings 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 expensewas $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 62or 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.

DallasNewsCorporationAnnouncesFourthQuarterand Full Year 2023Financial Results

March 6, 2024

Page5

Non-GAAPFinancialMeasures

Reconciliationsof operating loss to adjusted operating income (loss) and total operating costs and expense to adjusted operating expense areincludedin the exhibits to this release.

DallasNewsCorporationAnnouncesFourthQuarter and Full Year 2023Financial Results

March 6, 2024

Page6

Financial Results Conference Call

DallasNews Corporation will conduct a conference call on Thursday,  March7,2024, at 9:00 a.m. CST to discuss financial results. The conference call will be available via webcast by accessing the Company’s website atinvestor.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 March7, 2024 until 11:59p.m. CDT on March13, 2024.  The access code for the replay is 8115710.

DallasNewsCorporationAnnouncesFourthQuarter and Full Year 2023Financial Results

March 6, 2024

Page7

AboutDallasNewsCorporation

DallasNews Corporation is the Dallas-based holding company of The Dallas Morning News and Medium Giant.TheDallasMorningNews 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 andnon-financialitems 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.

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		—		58		—		58
Asset impairments		—		—		—		102
Total operating costs and expense		36,463		41,043		147,766		159,638
Operating loss		(2,480)		(1,940)		(8,070)		(8,987)
Other income (loss), net		340		(193)		1,422		(241)
Loss Before Income Taxes		(2,140)		(2,133)		(6,648)		(9,228)
Income tax provision		67		8		464		558
Net Loss	$	(2,207)	$	(2,141)	$	(7,112)	$	(9,786)
Per Share Basis
Net loss
Basic	$	(0.41)	$	(0.40)	$	(1.33)	$	(1.83)
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 ofDecember 31,  2023and 2022, 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

	December 31,		December 31,
In thousands (unaudited)	2023		2022
Assets
Current assets:
Cash and cash equivalents	$	11,697	$	27,825
Short-term investments		10,781		—
Accounts receivable, net		9,923		14,023
Other current assets		4,532		6,077
Total current assets		36,933		47,925
Property, plant and equipment, net		7,099		7,438
Operating lease right-of-use assets		16,141		14,811
Deferred income taxes, net		271		282
Other assets		1,790		1,809
Total assets	$	62,234	$	72,265
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	3,963	$	5,041
Accrued compensation and other current liabilities		10,449		8,214
Contract liabilities		9,511		9,504
Total current liabilities		23,923		22,759
Long-term pension liabilities		17,353		19,455
Long-term operating lease liabilities		16,924		16,546
Other liabilities		1,076		1,142
Total liabilities		59,276		59,902
Total shareholders' equity		2,958		12,363
Total liabilities and shareholders’ equity	$	62,234	$	72,265

DallasNews Corporation - Non-GAAP Financial Measures

Reconciliation of Operating Loss to Adjusted Operating Income (Loss)

	Three Months Ended December 31,				Years Ended December 31,
In thousands (unaudited)	2023		2022		2023		2022
Total net operating revenue	$	33,983	$	39,103	$	139,696	$	150,651
Total operating costs and expense		36,463		41,043		147,766		159,638
Operating Loss	$	(2,480)	$	(1,940)	$	(8,070)	$	(8,987)
Total operating costs and expense	$	36,463	$	41,043	$	147,766	$	159,638
Less:
Depreciation		402		582		1,520		2,709
Severance expense		2,673		304		3,834		845
Loss on sale/disposal of assets, net		—		58		—		58
Asset impairments		—		—		—		102
Adjusted Operating Expense	$	33,388	$	40,099	$	142,412	$	155,924
Total net operating revenue	$	33,983	$	39,103	$	139,696	$	150,651
Adjusted operating expense		33,388		40,099		142,412		155,924
Adjusted Operating Income (Loss)	$	595	$	(996)	$	(2,716)	$	(5,273)

The Company calculates adjusted operating income (loss) by adjusting operating income (loss) to exclude depreciation, 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.

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’sbusiness 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.

XML

Document and Entity Information	Mar. 06, 2024
Document and Entity Information [Abstract]
Document Type	8-K
Document Period End Date	Mar. 06, 2024
Entity Registrant Name	DallasNews CORPORATION
Entity File Number	1-33741
Entity Incorporation, State or Country Code	TX
Entity Tax Identification Number	38-3765318
Entity Address, Address Line One	P. O. Box 224866
Entity Address, City or Town	Dallas
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75222-4866
City Area Code	214
Local Phone Number	977-8869
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Title of 12(b) Security	Series A Common Stock, $0.01 par value
Trading Symbol	DALN
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Central Index Key	0001413898
Amendment Flag	false