DALN - Earnings call transcript Q2 2024

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the DallasNews Corporation Investor Q2 Earnings Call. This call is being recorded, and a replay will be available starting at 11:00 a.m. Central Time today through midnight on August 7. To access the replay dial (866) 207 1041 and enter access code 4993908. [Operator Instructions]

would host, turn of Vice Gary I over conference DallasNews time, Cobleigh. your to President this like the to call Corporation, At and Controller ahead, go Please sir.

Gary Cobleigh

Controller is quarter second investor a reviewing of Financial call. Cathy Officer, remarks. Yesterday Vice quarter President everyone. Murray, Officer, to by XXXX filed Gary joined DallasNews's DallasNews; morning, Corporation. release Welcome This issued President who Good afternoon, provide Katy financial Moise, we and Collins, of Executive I'm who and DallasNews our be quarter Cobleigh, Chief results; Chief XX-Q. second business will brief we and XXXX press announcing Grant will results, second our

comparisons these website, measure on our call are against Investor second dallasnewscorporation.com quarter of XXXX Relations quarter posted on otherwise used XXXX performance. performance today's the All specified, second under section. Unless

statements. include Our forward-looking today discussion will

to Forward-looking update except cause differ required results to could statements and assumes by as are obligation that those company subject other this factors law. communication, actual information The in no from risks, materially otherwise uncertainties statements. the to

factors detailed about these releases with the is available information in SEC. press the and Additional publicly company's filings

our that will release. comparisons A information financial non-GAAP discussion We financial press GAAP to determining measures. of supplemental is reconciliation Today's provide with measures to measures useful to believe included in include investors peers. assist non-GAAP performance our financial non-GAAP

I'll Cathy. the turn now call to over

Catherine Collins

last and an in reported income due year. The non-GAAP same GAAP operating $X.X loss a is call. in income in a $X that mail XXXX $XXX,XXX discontinued net over a an niche million operating revenue just the adjusted decline $X.XX savings million operating $X.X period the today's to of in preprint third due partially the that decision the quarter, mentioned, Good and publications. to $X.X the for quarter In share, of weekly adjusted compensation to by due last employee distribution, income or joining loss advertising All million reported $X.X million when net end total million and of services $X.X basis program of to $XXX,XXX, offset million. million, basis the $XXX,XXX. morning, us. $X.X per quarter, of when XXXX. benefits, we of $XXX,XXX everyone, fairly thanks revenue is of and expense to $X for be classified for the compared of million On to is a reported excluding Corporation an products of or operating and additions increased advertising a source primarily QX marketing of the improvement of improvement of newsprint, On for we loss print-only deliver second revenue, to DallasNews other steady primarily and reported compared quarter for X.X% year, This and to continues I shared

increased by digital X.X%, revenue in focus specifically pricing, on Circulation or our $XXX,XXX subscriptions. driven

and subscription XX.X% Moving subscribers, XXX,XXX and XXX,XXX was compared home last or goal last including subscribers, focus year. revenue. generating the of me, June year. X,XXX Digital-only optimal with price, forward, longest XX, December to compared both delivery and as at QX Total XX June digital as to of XXX,XXX to the digital company decreased the find excuse ultimate volume most balance the -- of subscriptions XX its between

year. XX.X% newsprint, to which distribution expense savings was decreased and distribution compared basis, and in revenue due million non-GAAP On commercial newsprint, driven the cost by $X.X quarter prior in a expenses $X.X adjusted operating discontinued to printing the from primarily in decline declines was $X in million the primarily revenue. Other $XXX,XXX, total million for resulting products a down of and of

compensation In $X.X employee million. addition, improved

resulting from quarter Severance headcount Giant. year, headcount XX, was fall Program XXXX June additional in the offered As Medium of a down within of first to Voluntary last reductions XXX, compared and XXX

the the interim effective We a Consistent Texas expense $XXX,XXX. year-to-date We tax company rate for approximately tax tax used QX franchise paid periods, resulted the XXXX estimated benefit with do of applied in method, annual second of income, expect in the Texas tax to this fiscal franchise year which the year. $XXX,XXX when quarter.

We And and million a end $XX.X equivalents. no as June, as sheet cash we balance short-term have of cash $XX.X And continue to July investments million. with in strong of cash the were debt. XX, of had

pleased we in the was the second to I made progress see quarter. financial

management, the we expense capital we As this will crane year, operating but will to look and will of the our transition we on. facility costs incurring half year, continue new to disciplined elaborate the which second the require

call the to turn now will I over Katy.

Mary Murray

morning, an planned to May print on we provide print operation in I want Good announced existing update our transition everyone. facility. and

is annual facility As smaller a of a Once transition reminder, company's transition of a million. the our completed, to from operations expect plan. of expense approximately we the is $X to benefit the return element to growth print savings pivotal

capital June On X-year plant and into for facility. begun the press printing as expect other the so we equipment to $X Carrollton, Modifications and the needed QX, additional remaining million an future of the transition for year printing capital for million Texas. in the in In beginning entered to production lease can this new we operations transition have prepare we XX, a around the spent spend location for planned. next in $X.X and

this Times, schedule national also in completion planned to and Journal again, currently XXXX. and In pleased partners for I deliver we very is, will am TODAY. is continue early addition USA say in the New print to and York The news, Wall on Street our that transition to

current the to print Turning facility.

actively a sale. for we industrial Texas. foot acres data includes We foundry reminder, in approximately hired are Lunsford the located a they and represent is marketing Plano, property XXX,XXX live and property industrial, and building own square As for and The XX recently zoned us, development Holt centers. which to

property interest the and the property, value in the on to of but great could it when sell early deal of too a transaction. had have is We the speculate

However, $XX and with offset growth greater does I a million operating million XX, expiration total we million an the everyone XXXX that as to of that in $XX of These amount significant will want loss not leading company. gain date. to base the have NOLs in to carryforwards, tell December net have approximately $XX

I additional will now the turn the to call over on who quarter. insights will Grant, provide

Grant Moise

Thanks, Katy, everyone. and good morning,

that natural but our revenue operations News. are Media to strong and The making our -- if at to investors Medium expense both and revenue in success. As areas. Cathy growth profitability. company, second financial we've from progress. and continued in are reporting grow is yet, is both Circulation essential progress planned grow out reached signs circulation The question revenue most key from The sustainable revenue we're we noted earlier, generated results from and Giant, savings the The not quarter operating ability growth and at having the stand largest areas answer Giant to revenue is X are Dallas Morning of sources

the I to of the decline subscriptions. digital in would like our volume also address

and volume also of strong to which the declines operations we generated I've that cover the news, pricing subscriptions. calls, have foundation for has the on earnings We for our editorial benchmarking, local And in digital revenue committed a top discussed news. over this previous cost will past XX% it year. print while our premium As newsroom industry digital subscription we through chosen in year, the strategy has know are of a for

points will year-over-year, of have enhancing while overlook we to and However, price our for include XXXX. find growth. second we growing going where focus focus new grown and we need inflection ours volume, realized This Circulation of subscription half the revenue a the products base cannot to technology point will the return digital digital and that's into testing

Medium operating and and better the Morning effectively. the reports of operating reporting segments allows component which News them our Katy on more Finally, parts the all a to margin these business me breaks segment. under profile on each operating manage We this segment quarter, helps separately Giant segment of introduced the we as and investors understand different, reporting, understand company, separate out of Agency and is Dallas

our agency with an years ago, to A John help agency how in from XX understand media year the veteran better separate traditional the business agency hired we to Kiker, business.

current way the operations now profile. from the for by synergies. clients Agency $XXX,XXX real maintaining by a ultimate have business significant the clear grow segment. fit that which has clients while ideal their from fit income know reorganized while And Agency room we foundation a past operating financial we streamlines build. Over our will added our in new -- in can effectively year, client of their continuing retaining the larger and John we've there's leaner-based win The driven Year-to-date, business growth, to that we

who has this progress year, meaningful In and proud last I'm of team this from closing, time our made happen. we've made

we're become is have in confident to quarter. but path, the on the sustainably results evidenced which financial right work profitable company, We more a by second to do our I'm

we ready John, for are now questions.

Operator

Instructions] question from our [Operator And Rohan first Gilmore. comes

Unknown Analyst

of have centered a hopes be that? the digital that of just can say digital be products. fair new time digital quarter. congratulations I question line of future there products? kind shared from that the on Is First these is -- And that to majority management my around very strong be will all, around would growth any new it

Grant Moise

these extreme it's formas future Thanks are scrutinizing to now, for doing Grant. you. Rohan, Good in. pro Right to calling talk Yes. we products. on of

new, we're kind the something have of pro can forma sure phase know, ultimately success rate. get are which and people are you at best As build this products We're can content in accretive into. married new scrutinizing that to we these to formas is looking is also what you pro you're whenever areas, hope realistic, areas, that a truly trying our making where digging

a product of potential with hyperlocal other looking digital look more things of into of we're a at that at expansion school kind example, things for looking So into strategy. high We're like the sports. expansion suburbs,

that But against that pro But trying realistic hearts start just to something investing in will of accretive really be formas terms we are right are now, the our and make we future development. sure the that I before for a both. investing versus clear don't come much in answer of how the have of digital why into products, yet, new we're will that and products looking from enhancing that's current Rohan,

carries a come product now, right and is it like For that core premium advertising. price to subscribers, features digital current also our of video. additional need engagement meaningful for for example, into we've Video got

those where building while type Looking the question. new the thanks kind current the are But we're for of products. at enhance things trying of to products, also features

Unknown Analyst

follow-up, have if all just one right. I that's

Grant Moise

Sure.

Unknown Analyst

business, advertising just in of tailwind that from On revenue I'm see from side was generated much the how to improvement conditions general just versus to the business? able Eclipse? trying the of guys was revenue quantify nature the from in Advertising in how much are I one you guess the market a

Grant Moise

Yes.

question. good a it's Rohan, think, I

the within we're at of point is one-time event,and it's when that things always material, the One a out. looking it's Eclipse we like that

in publicly Eclipse for Rangers advertising have we meaningful very the because spike a was nice was event. top page the of example, -- We not I'm a winning some Rohan, advertising Texas World but it's it looking was the is material at don't documented mind So was Cathy. number not revenue. revenue very grew material. short-term It and financially views, had it The it of was Series -- a

Unknown Analyst

Well, are whole my to team. questions. Congratulations it. Got the those again

Catherine Collins

Thanks, Rohan.

Operator

John Next Wagner. from question comes

Unknown Analyst

a on great Congrats quarter.

any brief you the the update you Just on today. release of a had future color with on conducted the being asset that and know press study one XX out guys plant. I hear. on would a firm that you working me remarks, brokerage mentioned but be put the a are to May shared market use company for great assess question to front was The on prepared can the marketing additional share

Mary Murray

sure. John,

we that significant looking really, the in So uses would what property property. spent One, is what possible infill the Plano. is of be it at time best last

to of with lot hard find to XX the acres a getting the access highways that. between is one and significant So It's -- roads and interest.

power was requirements. So center and had. then what sitting perspective, really perspective, on data But from there an the benefits key really were to understanding a what focusing property from that the industrial redevelopment

in As lines can is on It that going have pretty X growth is Austin, the generate know, you as significant. in Texas property. people data most know much into power to center how We power of property. that reliant you do

in going to really with So to kind that potentially opportunity. understand wanted doing. lot center were come of was somebody that work were what we we have requirements power trying a We're have if data of to the a to

We spur of which active on property, think the also manufacturing rail a industry. have unique -- is an lot you about from

we So John, were that's doing. really what

on Also the know there. probably the and up industrial data lot the of area in you of near experience They've in And a name, us. lot Foundry, properties that Holt significant sold activity center Lunsburd redevelopment. are a side, the

with again, which marketing excited of don't been they've excited about great. them. sell how the has the just it's the potential interest off been solid, I really very take that. partnering to just So to And kicked Again, long know the just exactly outcome. about But really has property, but going

Operator

going on Blank. We're a Barry

Unknown Analyst

question a the the asking listing. are get you received about the cap exactly reinstated was any first Is would possibility purchases line market to that second in question. stock you to the have be, market? may they my you get the price to I market I to my know there for and/or dividend. a certain the And paused or level? up a in dividend level that be certain to regarding letter up do, What That the

Mary Murray

it's Barry, to again. to you good talk

that meant, $X.X received news has the requirement June, what when we we is below actually is requirement NASDAQ, and letter over when our good the stockholder equity. were we're equity the at of a back on million. that specifically $X.X stockholders' closed June, fallen So The in million we

in of about that middle or July, that. the a did X file an we ago, So week stated X-K

we're again, perspective. a equity this from show to June need share There's XX. at do to compliance. related in to perspective we a there's was we point, with market stockholders' NASDAQ. remitted XX. And as or strictly do. of need price we But March from nothing We back in need that cap that stay so And balance can the compliance back at we nothing consistently else to It

great dividend, I on question, and the you that up, and On stock repurchase. appreciate bringing the

about have think the the about We about we of into the kind back business. cash amount I think about with ways. we think everybody And allocation we capital to of think books, -- when talk have capital on allocation. we as X really investments the

to this a facility, XXXX. of in print us which As going is starting we mentioned, generate even transition, to spend million net $X transitioning annualized, going we're our $X million for savings,

have think have The And to we a we do perspective. about shareholder issued other piece of what dividends. is that from do we historically,

last do had the pension nothing have that see about now. desire But share active to then repurchase piece also right how to in that of think our obligations that's We There's completion. capital we of our terms program. allocation is and

responsibility. we XX%. has that, today feel little pension bit a Our funded over But again, our that's

of that While all it's at we're to we that that not look it the technically going company. obligation way have honor and debt, we this to the former employees

that around have now. and time, of So right on path decision Board, now, obviously, with seeing. how about capital investing I Barry, to capital of be our thinking transition, be we of the change it there's can At the been ways: Board also be conversations look completed in think print share really that the on about expense Grant's But the will do in X there'll this that. right which And capital with property, our that the lot then this Again, no a savings we of in and beginning our focus of specific about business, at active we Directors, kind allocation conversations then allocation pension to returning sale in obligation. the shareholders has should the year. -- ultimately, again,

Unknown Analyst

property the you acre at, you real per the any one gone area? you'll to can't have your give what guidance comparable price estate but Got what that sell in I know for predict question. can prices

Mary Murray

effectively don't redevelopment, make comparable just different What focus right we're When center. again, be that early thinking have to say, and Barry, that our that I I now. price can. a too is about than would about set the value property, But to a to this could that's you little It's if of pure industrial that think going it commitment. kind and hard. be you're a we as of doing maximize just property ensure as efficiently data

Grant Moise

Grant. it's Barry, And

to a building I the about of us that thing square think also our only than XXX,XXX it that expenses think a used and we the selling can it's can just obviously, the difference something buyer selling be different of add homes. who when we're of feet can no all think transaction, I where, of would I is if can reduce And the that impact the other on obviously use lot than find for price. of side their can't value. kind There's that's

So kind building. why this significant size of a just and the X someone the fluctuate widely. use that's three, And data ranges the areas is property; here: could existing one development two, of center;

Unknown Analyst

I got make which will future? you all time purchasing you supposed liabilities. period substantial like of but your get cash a employees expense the me pay that have is that, for to option would A to into companies annuity, at one lot your last the reducing a of discount, Have have looked of an used question give the regarding out pension payments.

Mary Murray

So here, the Barry, participants over our liability. X,XXX I've thanks have we pension. we I for offerings reduce with over pension When the we've to pension X the separate question. the And derisking done joined, X yes, years in had been

now are about We planned that million million $XX we of It's back contribution and an liability XXXX, in took we advisers. we took did XXX. time. something $XX where with assets, that annuitized think and at down our pension We $XX at then of we right annuitization million

We have offered cash out.

to ability have We into the XXX(k). a also pension roll the offered over

a consistently, So at something and lot have success that's of look had with. Barry, that we

managers. on other thing the investment now we is side favorable The asset with are our performance seeing

equity the that great the reduce gap that the interest it's right on and opportunity we But the quality. we that and to how possibly and to something rates. close return now, want between focused market question, a it's on So think about

Unknown Analyst

question, purchase of employee of plan? employees owners time. they're like they beneficial that gets you of your to and much the the mean Got It's benefit can appreciation, the one for possible don't too production of price I hopefully, the company, stock work stock. better, Have very take they ever harder the the up thought feel last of

Mary Murray

it's Barry, another question. great

correct. that. have and it's years we're ago company our volatility future. talk we and might plan, looked do not place. focus is the to stock back consider about, it on one in something reimplement not structure to but in that we did right that have again, that, do of You're be growth our plan. not employee discontinued. an our have the a years last number The We It putting of was One, given now, several return something looking at But something

Operator

this we queue. at moment, And additional have in the no questions

Catherine Collins

All you, on assistance John, morning. the for Thank call, our who right. you in this listening to updating to your look call, quarter results be has everyone again for earnings quarter to our fourth second And which will the held forward we thank third and joined everyone quarter.

Operator

Central gentlemen, code for participation a XXX-XXXX do (XXX) your dialing again August midnight using by be will your and today and Time accessible for for today. this We Ladies a.m. entering from conference and XXXXXXX. AT&T conclude call call does Event through you that of replay And XX:XX on thank X. available It's access Conferencing.

You disconnect. may now

DallasNews (DALN) 31 Jul 242024 Q2 Earnings call transcript