DALN - Earnings call transcript Q3 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the DallasNews Corporation Investor Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Gary Cobleigh. Please go ahead.

Gary Cobleigh

Good morning, everyone. Vice Controller Cobleigh, DallasNews Gary is President of and Corporation. This investor our third to call. quarter Welcome XXXX I'm joined President we results, Collins, will a reviewing XX-Q. Grant by press Cathy quarter Chief filed provide financial will Officer, Moise, third afternoon, results; our be brief who release business third Katy we Officer, announcing and Murray, Executive of remarks. Tuesday and DallasNews' DallasNews; who Chief issued Financial XXXX quarter section. of under Relations Both are the our posted dallasnewscorporation.com website, these on Investor comparisons today's performance. on third XXXX specified, measure otherwise XXXX Unless quarter performance used quarter call against third

Our discussion today will include forward-looking statements.

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

in is financial about will SEC. Today's the to the call is detailed the filings company's publicly Cathy. to measures. provide press discussion non-GAAP turn included measures information now useful and determining measures information these We release. I'll in press available performance with releases financial Additional believe with A financial investors our reconciliation over include GAAP non-GAAP non-GAAP comparisons factors assist supplemental our to of peers. to

Catherine Collins

savings facility. On for reported today's we transition adjusted and of to $X.X loss net operating The severance to in an DallasNews revenue decline million. by million of related In total call. an our is everyone, million due $XXX,XXX compared headcount due for reported employee smaller million offset expense in year. net shared mail of our and last just anticipated last newsprint, and services discontinued in compared $XXX,XXX quarter and the loss of an other and products last operating or a of discontinuing loss printing million adjusted All we $X.X share to advertising loss an niche of $X.X a to thank morning, reductions due or improvement XXXX the excluding for net to revenue, you includes $X printing partially $X.X Corporation an loss GAAP expense to basis distribution, benefits reported marketing Good same $X.X X.X% a and mentioned, the loss period and loss million $X.X that I primarily the of $XXX,XXX million. of million On improvement operating a $X.X of operating when compensation, joining quarter, reported $X.XX the for year, of basis a the per year. $X.X million is program increased publications. QX when to $XXX,XXX, quarter, non-GAAP a third the

decline was decreased has on $XX,XXX advertisement revenue in subscription increase decline circulation $XXX,XXX began than digital digital a digital a also Grant as to dallasnews.com. primarily ePaper, compared their in delivery are advertising digital In offsetting partner third to or partially an in last in X-month mails advertisements XXX,XXX revenue News to offset including advertising subscribers. the down, distribute Arizona, program print distribution our advertising by Tempe, and declines shared of the provide on trends the been trends. business customers. In due XX declines advertisements our located and September increase XXX,XXX website. Marketing Grant year. primarily and moment, our quarter, revenue our the will to digital due This Morning into XXX,XXX seeing on Total XX, in to revenue improved overall Dallas on X% commentary September While decreased consistent improved revenue insight the home of will $XXX,XXX, was experiencing increased and digital in mostly pricing services third as quarter revenue the for year. in offset X,XXX of of gave circulation mailed rates of December contracts print the as X of printing approximately subscribers, $XXX,XXX. Digital-only services of program the from strategy. Other termination or media commercial provide focused and digital industry customer $XXX,XXX XX.X% media subscribers, resulting decline revenue $XXX,XXX, that with the revenue Circulation new primarily revenue both we less X%, notice. and

$X.X impact adjusted business XXXX. business mail this we operating We the of in So do shared April $X.X and compensation significant ending products termination with improved million not distribution, X.X% was this $X.X prior discontinued exited for resulting million the ends a in and a of in from agreement $X.X of million the the in expense of expenses driven XXXX. On Dallas primarily million non-GAAP when basis, relationship which financial that total benefits is from in the newsprint, down and expect employee in cost decline production consistent savings year. to compared a by quarter in newsprint,

down was Giant. voluntary to last the the first Medium XXX, headcount year, program in resulting from of and offered of severance XXXX headcount fall XX, compared within As reductions XX additional September quarter

in recorded first due this transition the our franchise to and operate the to tax we of reductions the in expect a smaller quarter effective with estimated of used to announced method Texas year, expense modern less the company more headcount periods, we needed a $XXX,XXX facility XXXX As May previously press. Consistent staff printing for tax additional of tax. in and the quarter interim annual

and were of sheet cash no as And At We $XX.X September, X, the strong had balance we November equivalents. with continue of in have cash debt. to equivalents and a $XX million. end cash cash million

quarter of to the look new once capital over our this but printing to we that expense last the turn operating Katy. costs and result disciplined to is savings annual will will to year, transition facility the in requires return-to-growth management. key our continue The will call additional incurring now complete, expense As year, plan. I we the

Mary Murray

the funding sale of status, our our printing marketing I'm plan on Thank some pension printing morning, everyone. facility and you, transition the updates existing facility Cathy. Good to and for providing be in our Plano. distribution the status going on

As management the Board funding and pleased for the is be plan say funded stated, XX% we the a term. over of are of the am and any priority have have we contributions mandatory Directors. our do to in I for that that plans and always to pension near not currently continues

continue first Carrollton to new considerable Plano the we We we installing the to to will in from forward, and look at and to first the quarter complete our to in There of opportunities the and operations printing the receipt distribution to the second Plano move of are X installation plan. The process the the of of do, transition XXXX. any derisk the operations Carrollton optimistic of from that is presses. remain but we still including press, work of continues transition

this have October New USA we by no Worth Fort national this and transition. The are a happy their quarter move of continue year Star-Telegram our mail, part York distribution As to worked and part cease printing the decided with as longer I'm their printing print to distribution third Wall say the that in Times to the Street and of distribute partners, and transition, X-day and and daily TODAY and distributed print product Journal, product. we printing partnership week this of to will in a

XXX,XXX engaged call, acres Plano. to our square last assist facility the discussed of in the with us brokers foot sale we investor we on and As XX.X

I say level end specific a we by encouraged from interest on update the of can status all do redevelopment. the we I of not that While including and and have industrial are types users of centers, have activity buyers, process, seen the data

the future about thinks company the this how view we proceeds, use distinct of lenses. terms X In any potential of through

build to need company. need in media -- to a we company the into investments investments the sustainably the First, first, build profitable we

company's And over returning our Second, to shareholders. I will to turn to the capital continuing Grant. pension responsible now of be stewards call third, plan. the

Grant Moise

Thanks, sustainable we steady Katy. investor Good second In while profitability, making are that to discussed everyone. have progress. I morning, we reach yet quarter call, the

mail remember, reflected Giant third quarter quarter with a was last shared I all discontinued revenue very year. to Giant from see you the a $XXX,XXX. revenue by ended program, that the this of third grow $XXX,XXX in loss. At including they as operating Medium The quarter quarter company's been year-over-year has third which was the growing in will its in our happy improvement the continued comparisons, detailed so revenue level, which reported adjusted more and progress focused on Medium last operations,

dallasnews.com, this are new coming which and been decline, company. power to most audience source we've consumers been but digital digital were members. engines volume coming this the the and the X% News, website Dallas has our of the trends On year, referral our audience find traffic since a source and website. Referral subscription been between team Morning from News. search newsroom the traffic the pricing. we the overcome. Shifting from our years. strategy on optimal in convert that of slight to and is reviewing call of strategies have last steady the it growth focused our side our to And in year significant engagement referral provides can side significant is a audience generates is The in of our the difficult for contributed offset creating this for revenue of decline advertising we September to Morning has advertising at because beginning digital digital into with whom down decrease I to we through Google witnessed decline to many the traffic subscription in business investor noted typically balance of traffic Google. This of revenue potential

to digital take consumers we successfully also modified I'm price to member This the local ready our XX-month new implemented testing exceeded in strategy. open introductory by growth to is we to revenue willing but decision decision in quarter, our new be consumer growth, expectations now cautiously month its stages. Greg, and an we optimistic ended more are on have strategy the X will how our news strategic extending reflected for while that responded to given pay we to digital say pricing questions. subscription for our it X be ongoing this are the member since volume-centric decline, digital basis. This pleased ongoing early digital pricing the has early from volume the to window up time This

Operator

[Operator investor. first ] [ a from Instructions] Gilmour, comes private Your Rohan question

Unknown Analyst

for a I okay. if questions you, that's few have

quarter? midway the the was number So growth in one, the digital pricing, circulation what since through volume change

Grant Moise

X,XXX so the ] over we grown early September. changed since a bit strategy Rohan, back little have in subscribers [ digital Yes, we

Unknown Analyst

continued? in it. that, quarter, current of has the that trend say would the Got you months And then X.X

Grant Moise

you're Yes. of that better, that has It's X. referring gotten X,XXX, quarter. come been have if even in say, October Rohan, Out to since things [ little fourth fourth of from quarter, of where the of kind the kind X,XXX would of the a bit about ] I beginning

Unknown Analyst

Okay.

then and QX So XXX it's in from what that change Is in to you're about the saying? the quarter X,XXX strategy in date.

Grant Moise

Correct.

Unknown Attendee

and kind Where point? I the helpful. you back-of-the-napkin I've guys how Or the for do way product do digital the current estimate guys research it TAM what math, and you be a that -- and mean my between somewhere XXX,XXX. figure? That's done XXX,XXX price that? off? some Okay. of But about about Is do is guys at ballpark that think you news think could is

Grant Moise

for So clarify on talking the to saying? digital [ subscribers addressable market ] what Rohan, you're about just guessing News. call, and Is you're I dallasnews.com total guess, for Dallas the I'm Morning TAM, for just from that everyone

Unknown Analyst

correct. that's Yes,

Grant Moise

then to at we in tells XXX,XXX. the down million mean XXX,XXX, of addressable can North I are for Yes. news is X.X amount we take who market paying is people people are for roughly and the total about we our think which is look intelligence us, Texas the paying you news, many, North in so narrow how it the Texas, that way

if little at we today, So you look we're that. are XX% a of of where north

when the also pricing, and the done what trying point what to we're figure question thinking to on we're be So ongoing also in of just about why what play. we're price going at volume, we've -- -- is that out is that's heels on volume

if at way taking through do for the get this closer paying XX% if thinking from to we keep accurate. to to of how market. I X% we XX,XXX roughly know digital can in people subscribers XX% of XX%. our would I strategically look addressable think market don't just market that And can is addressable it that's increments, as number, attainable. your get that XX% would is say that of be size you to obviously, just Frankly, XX% every news up XX% tell, if we So

Unknown Analyst

great That's color.

advertising spending? side, any pickup current the On advertising -- there to election has in to been quarter meaningful related revenue in the related

Grant Moise

No.

industry. last of may the the side in It's our good quarter. asked believe the news at bad I question I someone think of I that have kind end news, of and guess, the

If the obviously, lift a they you in revenue. business, television saw the look just side of significant at ad

to Ours fourth of not just quarter. not the ] if the streaming. about video going in putting We matter. but rounding and newspaper is a into got probably Rohan a of in money it, a revenue kind enough ad of error they're you to revenue, of lot just [ the be -- digital bit think It's little or material television side

Unknown Analyst

Okay. And digital. there? release products of on update kind any then last digital on there the question Is news or new any of

Grant Moise

Yes.

with own own So its and the new when that we we're always its product, for everyone thinking to things website think most up clarify app. think a own digital -- mean one standing of on its of likely and I brand, the I'm just something assessing, about call, I

And cost right launching would a the versus are where launching on also of to like we're product so we look -- really, weighing Katy especially that [ a Rohan, of formas us I lot features. And new them. new not at see products -- for we're new the and the running pro ] also now,

possible turned rather, income. so short new operating many attention launching as to term and And just the as the drive team's revenue in features we to

couple Let examples mean what by you that. a of me give I of

a first tested of video out will sports. in in new is are the We to an That our beta platform the It website. entirely website test roll full quarter. on in being

that video for from more us pay ad. are revenue than for to engagement for the the -- to Now, they advertising that's static and advertiser adds is more is comes willing it because great video a

We just are our also updated -- app week. we new this

that iTunes. updated actually in launched. not has the you've iTunes If

the launched We which bringing the store. not in Android to first we'll in yet launch commenting quarter. have in website, But the that, plus

But the for is focusing benefit seen because still we've these But are to it looking math to we us, in be that the run something going to [ are products new of investment dollars valuable. keep yet. provide diversification putting is again, term showing behind short that the All can our Rohan, on features long ] in to going pencil out where company. financial initial not more we

Unknown Analyst

Got it. it. Got

Just last that's X if questions, okay.

revenue-related So onetime that's going kind on was in expenses improvement believe that revenue there Or outside an year-over-year, services. What strong expenses quarter-over-quarter ongoing? for And was I that? nature? and be agency's of associated that is something -- -- is to

Grant Moise

Yes.

So the from that, we we ] think [ Rohan, of what agency. is the call coming revenue mix that's

you most that example, our So where that comes in quarter for revenue expense. for the recent of mix, from saw media

had behalf. is what record agency on clients. there we these actually a media for saw where was in that Medium So that Giant when And place of quarter their outside And the we higher clients type -- we winning. for we're think matters we the it see should second for of that clients. To we as that as of just an expenses what of basis, question ongoing them COGS buy media on your you

strategy low we clients, for is are bunch a buying the doing us. a services more for expenses to COGS their will are that media these outside on they see and outside us, of with more related creative higher But -- very media doing us work behalf, that companies. media placing if if area Some you of

Unknown Analyst

would some provide cash growth? think last guys to balances on upon target modeling like where return wondering My question purposes, about if cash insight it. could you Got you how balances, a just is for see on to you

Mary Murray

a we ] think lot. Yes. Katy. a question. that It's great Rohan, is It's one [ this about

to this said on profitability path sitting we're you as mentioned had now, of in of need growth. back Grant the to going profitability. a second see and that at Right kind continue it, business. just bit ourselves quarter enough? We the call million be depends bouncing It that $XX be hit we're getting cash. about, investments what make into we around return today, know, the As we to to Would we on we

As look Grant at continue to mentioned, that. we

speculate the is. see will that cash we But think what early 'XX, to property little of to of through as if sale kind be get that me and target But the impact as we our an on building So it's balance that obviously, for now, continue and where right we business. that for great think question, about. I and going come cash balance something about I a as But about feel think well. we're more good thinking we're investments the in I to

Operator

Gondolin next Capital. of ] ] question line Adam Valentine Your from comes [ from the [

Unknown Analyst

digital It's subs the again. really growing great see to

becomes And an sense. kind of the around over X least, that subscription the of it XX% lot down that, kind of just expectations sort substantially What growth, the there? see higher as as a to line, at of makes last for that of that your example, years. maybe price kind top give it sort experienced Or sort was of of does levels sort strategy offset trials? of volumes? Does us color -- kind we we've believe, you of of wondering, I I of flat you average Your slow could kind of regrow on pricing some given just are of sort increases

Grant Moise

Yes, media Adam, years of time of who of partnership considerable through something mean, how couple a of the called partner it's I trends question, understand our been checking happening in a what's we're our at also with we it's a in subscription It's time. only the a a with almost all spend have Grant. a to country partner it's trying Mather different that local ago. we ours with and parts that has we consumers of and not the internally but amount peers responding, are around that looking good really country launched

them. We're an where the months, taking same into is where stages that we the them been be for also outside the -- probably -- -- with things different with growth. will at are we're now, the more Rohan through X reducing us kind window growth to bunch that paying The about. The we a next what is of going when end many we introductory go ] stick of ideal that's because going of But the also, the we is volume We're important an to think where is have to revenue -- was price as to finish we part this a to ongoing most here of improve sticking see our starts how of because from in not people the pricing quarter keenly in phase how of from window, digital test to probably further and many of going the $X of light But focused because on lot churn us asking get but to the of in for a they do will time, let a price will important at leveling are yes, in what part -- very we're I is that's once percentage the out kind first a really us but [ is price like year, they stay these see to churn. A-B part of with do as to price introductory see me short introductory price. say with keep points increase will couple look, volume taking go that important there early the subscription are right going window. volume at and new see kind of expectations, roll-to take standpoint we've dictate really just And for -- you where our going and people testing. meeting us go

Mary Murray

Grant how referenced are there the Adam, was on increase this that. going revenue stay the the in to these price some seeing in window impact revenue to clarifying slowdown. in and talking, increases really on how the be point is volume they the we that. seeing long But will He a side volume, us. was growth. as That brief one on And that with subscribers the And there. it's take next be

Grant Moise

point. Good

Unknown Analyst

a product. I'm you And fairly of through versus the just all years? really meandered up digital guys color, to follow volume helpful guys nascent X guys. side push, But of churn sort understanding kind noticed noticed there, potential various trend there's understanding, in noticed is That's have on X churn, over you've last for and what changes the just still an And reduction or that kind broad churn. as may over churn What or -- a you might if what your I'm the price way the pull have levels? Like at Great. last you've you X the long-term apples-to-apples curious of there look where X, to years or there? increase is reduction of color pricing in in share course, trials decrease

Grant Moise

we straight-line you be that I very I seeing, was little publication, political I'm look Yes. on It's if a if we're wish but Adam. see around I probably churn. more will bit. -- when -- a the say the also were season, -- recent trend it's it can churn. most of at question, good looking national impactful a can the industry, When we a were it Even more bounces -- at

also But you what how have -- is the say an window introductory churn. impact I improve can will long

for for better X someone some percentage. than your You country looks months newspaper Well, will paying is the $X doing if churn around months. see as X only $X a rather companies $X,

understand $X do telling that got product my become national versus a fully imagine, see you to in X value like because that paying from guess test are the product short do first it, -- you is the find want especially X in better, window some months to they to month to a people enough year free getting you've So because for I basically churn are papers consumer. $X And for us trends as there looks for who $X point they are to hard months. for doing to the a much of were can

the are some media weeks. I've is couple testing introductory XX because for windows. of And my to of hard find different that point past companies of very in $X trends. seen is many it guess weeks So different I

So throw I off churn bit. year, doing for if going mean who's the you're someone to a quite a that's $X trends

Unknown Analyst

Understood. in That's year-over-year. and anything is housed And if the media I I is And wondering believe the or terms special there's big mentioned to strong maybe wins. growth, Giant very, then growth, in big XX% very call really helpful. of I services was Medium which segment customer I know election Okay. mostly think, there, impact. one-offs out marketing you no --

of So just it'd to be great break that kind one...

Grant Moise

of majority that and growth, business, Adam, side that the of has COGS the out clients. ] go been win it's the Giant, that The So of are is a coming as agency to Rohan's that distinctively split from the coming larger we segments Medium well. through focus [ it's even why into -- because question agency on different business it's to

big year. $XXX,XXX So And that I've is growth. clients us drive those that the grown been also that oftentimes But XX% this clients will as doing reducing a about take with work for profitable are really have bigger spend or small and the this improved is small while helping and us. really year because more our we're clients ones. that clients simultaneously pleased much less

bottom nice look, of as still is more done has room we've clients, top is line. on the got bigger the of that been improvement bottom well. a simplifying the for and who strategy big helping business, just of seeing our is line very what a so grow line improving But the which and and John you're attracting the agency there the And part Kiker, job that's President

Unknown Analyst

just great. more guys question, some see my to I I guess And That's Glad final find success if you there. could.

the more forma, each products including taking pro give us would what that distribution, In if the item, that changes XXXX. of of potentially or benefits? of was kind changes place, taking headcount ballpark employee your reductions, line it's rate $XX wondering about run averaged a of these about maybe first the mostly sort so. terms the comp quarter could of are that are same, structure they've million other operating in the for place you be, figure Or I so

down of So have curious will I of back well was just probably the into what some that understanding sort you kind as step investments that business? be,

Mary Murray

I we're question. in Look, the right still a it's great Adam, now. think transition

where XXXX in be a headcount I we on quarter our -- with we think when was first we in March, to the is reduction going targeted did have we we'll in sense still range come little sorry, savings to down, about. that It early obviously, did operational, feel $X That's is I'm have call the a going a being thing comp quarter. have able bit has our did this annualized been. of in more we give when kind first better expense give of I and May, once believe million. good that One around that still up back to color something

give see better in the will And that we'll be been already have call, to just where transition we so the be insight it implemented really, that's again, the all will into think, I can give you able I right and now. given March trends complete. And

Operator

are questions. at no further [Operator time, And this there Instructions]

Catherine Collins

assistance right. forward XXXX quarter year again our on this All morning and XXXX Thank to call our March and be thank you fourth results, joined, listening third you, look we everyone your who earnings everyone for of and quarter for XXXX. which updating will full to held Greg, to in

Operator

gentlemen, teleconference. and conference your Ladies for does Thank participation for for today. using and your AT&T you that conclude

disconnect. now may You

DallasNews (DALN) 14 Nov 242024 Q3 Earnings call transcript