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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2023

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file no. 1-33741

Picture 1

DallasNews CORPORATION

(Exact name of registrant as specified in its charter)

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

 

(214977-8869

(Address of principal executive offices, including zip code)

 

(Registrant’s telephone number, including area code)

Former name, former address and former fiscal year, if changed since last report.

None

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 registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes þ     No ¨ 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes þ     No ¨ 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large Accelerated Filer:  ¨

Accelerated Filer:  ¨

Non-Accelerated Filer:  þ

Smaller Reporting Company:  þ

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. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).      Yes ¨     No þ

Shares of Common Stock outstanding at October 19, 2023: 5,352,490 shares (consisting of 4,737,792 shares of Series A Common Stock and 614,698 shares of Series B Common Stock).


DALLASNEWS CORPORATION

FORM 10-Q

TABLE OF CONTENTS

 

 

Page

PART I

Item 1.

Financial Information

 

PAGE 3

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

PAGE 16

Item 4.

Controls and Procedures

 

PAGE 23

 

 

 

 

PART II 

 

 

Item 1.

Legal Proceedings

 

PAGE 24

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

PAGE 24

Item 3.

Defaults Upon Senior Securities

 

PAGE 24

Item 4.

Mine Safety Disclosures

 

PAGE 24

Item 5.

Other Information

 

PAGE 24

Item 6.

Exhibits

 

PAGE 25

Signatures

 

PAGE 28

Exhibit Index

 

PAGE 29

DallasNews Corporation Third Quarter 2023 on Form 10-Q


PART I

Item 1. Financial Information

DallasNews Corporation and Subsidiaries

Consolidated Statements of Operations

Three Months Ended September 30,

Nine Months Ended September 30,

In thousands, except share and per share amounts (unaudited)

2023

2022

2023

2022

Net Operating Revenue:

Advertising and marketing services

$

14,699

$

17,525

$

46,231

$

51,246

Circulation

16,194

16,230

48,201

48,576

Printing, distribution and other

3,606

3,933

11,281

11,726

Total net operating revenue

34,499

37,688

105,713

111,548

Operating Costs and Expense:

Employee compensation and benefits

16,565

16,428

51,174

49,642

Other production, distribution and operating costs

16,778

19,691

52,099

58,665

Newsprint, ink and other supplies

2,382

3,161

6,912

8,059

Depreciation

388

699

1,118

2,127

Asset impairments

102

Total operating costs and expense

36,113

39,979

111,303

118,595

Operating loss

(1,614)

(2,291)

(5,590)

(7,047)

Other income (loss), net

342

(94)

1,082

(48)

Loss Before Income Taxes

(1,272)

(2,385)

(4,508)

(7,095)

Income tax provision

139

201

397

550

Net Loss

$

(1,411)

$

(2,586)

$

(4,905)

$

(7,645)

Per Share Basis

Net loss

Basic

$

(0.26)

$

(0.48)

$

(0.92)

$

(1.43)

Number of common shares used in the per share calculation:

Basic

5,352,490

5,352,490

5,352,490

5,352,490

See the accompanying Notes to the Consolidated Financial Statements.

 

DallasNews Corporation Third Quarter 2023 on Form 10-Q 3


DallasNews Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended September 30,

Nine Months Ended September 30,

In thousands (unaudited)

2023

2022

2023

2022

Net Loss

$

(1,411)

$

(2,586)

$

(4,905)

$

(7,645)

Other Comprehensive Income (Loss), Net of Tax:

Amortization of actuarial (gains) losses

(10)

130

(30)

391

Total other comprehensive income (loss), net of tax

(10)

130

(30)

391

Total Comprehensive Loss

$

(1,421)

$

(2,456)

$

(4,935)

$

(7,254)

See the accompanying Notes to the Consolidated Financial Statements.

 

DallasNews Corporation Third Quarter 2023 on Form 10-Q 4


DallasNews Corporation and Subsidiaries

Consolidated Balance Sheets

  

September 30,

December 31,

In thousands, except share amounts (unaudited)

2023

2022

Assets

Current assets:

Cash and cash equivalents

$

13,782

$

27,825

Short-term investments

10,672

Accounts receivable (net of allowance of $189 and $490 at September 30, 2023

and December 31, 2022, respectively)

10,407

14,023

Inventories

1,860

2,725

Prepaids and other current assets

4,159

3,352

Total current assets

40,880

47,925

Property, plant and equipment, at cost

313,325

313,440

Less accumulated depreciation

(306,031)

(306,002)

Property, plant and equipment, net

7,294

7,438

Operating lease right-of-use assets

16,439

14,811

Deferred income taxes, net

304

282

Other assets

1,795

1,809

Total assets

$

66,712

$

72,265

Liabilities and Shareholders’ Equity

Current liabilities:

Accounts payable

$

4,413

$

5,041

Accrued compensation and benefits

5,777

4,154

Other accrued expense

4,189

4,060

Contract liabilities

10,420

9,504

Total current liabilities

24,799

22,759

Long-term pension liabilities

18,778

19,455

Long-term operating lease liabilities

17,251

16,546

Other post-employment benefits

968

982

Other liabilities

58

160

Total liabilities

61,854

59,902

Shareholders’ equity:

Preferred stock, $0.01 par value; Authorized 2,000,000 shares; none issued

Common stock, $0.01 par value; Authorized 31,250,000 shares

Series A: issued 5,216,257 and 5,216,237 shares at September 30, 2023 and December 31, 2022, respectively

52

52

Series B: issued 614,698 and 614,718 shares at September 30, 2023 and December 31, 2022, respectively

6

6

Treasury stock, Series A, at cost; 478,465 shares held at September 30, 2023 and December 31, 2022

(13,443)

(13,443)

Additional paid-in capital

494,563

494,563

Accumulated other comprehensive loss

(41,410)

(41,380)

Accumulated deficit

(434,910)

(427,435)

Total shareholders’ equity

4,858

12,363

Total liabilities and shareholders’ equity

$

66,712

$

72,265

See the accompanying Notes to the Consolidated Financial Statements.


DallasNews Corporation Third Quarter 2023 on Form 10-Q 5


DallasNews Corporation and Subsidiaries

Consolidated Statements of Shareholders’ Equity

Nine Months Ended September 30, 2023 and 2022

Common Stock

Treasury Stock

In thousands, except share and per share amounts (unaudited)

Shares

Series A

Shares

Series B

Amount

Additional
Paid-in
Capital

Shares
Series A

Amount

Accumulated
Other
Comprehensive
Loss

Accumulated
Deficit

Total

Balance at December 31, 2021

5,216,045 

614,910 

$

58 

$

494,563 

(478,465)

$

(13,443)

$

(32,406)

$

(406,195)

$

42,577 

Net loss

(7,645)

(7,645)

Other comprehensive income

391

391

Conversion of Series B to Series A

163

(163)

Dividends declared ($1.98 per share)

(10,598)

(10,598)

Balance at September 30, 2022

5,216,208

614,747

$

58 

$

494,563 

(478,465)

$

(13,443)

$

(32,015)

$

(424,438)

$

24,725

Balance at December 31, 2022

5,216,237 

614,718 

$

58 

$

494,563 

(478,465)

$

(13,443)

$

(41,380)

$

(427,435)

$

12,363 

Net loss

(4,905)

(4,905)

Other comprehensive loss

(30)

(30)

Conversion of Series B to Series A

20 

(20)

Dividends declared ($0.48 per share)

(2,570)

(2,570)

Balance at September 30, 2023

5,216,257 

614,698 

$

58 

$

494,563 

(478,465)

$

(13,443)

$

(41,410)

$

(434,910)

$

4,858

Three Months Ended September 30, 2023 and 2022

Common Stock

Treasury Stock

In thousands, except share and per share amounts (unaudited)

Shares
Series A

Shares
Series B

Amount

Additional
Paid-in
Capital

Shares
Series A

Amount

Accumulated
Other
Comprehensive
Loss

Accumulated
Deficit

Total

Balance at June 30, 2022

5,216,103 

614,852 

$

58 

$

494,563 

(478,465)

$

(13,443)

$

(32,145)

$

(412,967)

$

36,066 

Net loss

(2,586)

(2,586)

Other comprehensive income

130 

130 

Conversion of Series B to Series A

105 

(105)

Dividends declared ($1.66 per share)

(8,885)

(8,885)

Balance at September 30, 2022

5,216,208 

614,747 

$

58 

$

494,563 

(478,465)

$

(13,443)

$

(32,015)

$

(424,438)

$

24,725 

Balance at June 30, 2023

5,216,257 

614,698 

$

58 

$

494,563 

(478,465)

$

(13,443)

$

(41,400)

$

(432,642)

$