DallasNews (US:DALN)2021-04-25 16:00Financial Performance - Total net operating revenue for the three months ended March 31, 2021, was $40,343, a decrease of 8.7% compared to $44,155 in 2020[104]. - For the three months ended March 31, 2021, the company reported a net loss of $2,765, leading to an increase in cash used for operating activities to $2,865 compared to $2,594 in the same period of 2020, an increase of $271[149]. - The income tax provision for the three months ended March 31, 2021, was $319, compared to a benefit of $(1,787) in 2020, reflecting an effective income tax rate of (13.0)% in 2021 versus 52.4% in 2020[133]. Revenue Breakdown - Advertising and marketing services revenue decreased by 13.2% to $16,769 in Q1 2021 from $19,327 in Q1 2020, with print advertising down 12.3% and digital advertising down 15.1%[111]. - Circulation revenue decreased by 2.4% to $16,022 in Q1 2021 from $16,414 in Q1 2020, with print circulation down 6.9% and digital circulation up 46.5%[117]. - Digital subscriptions increased by 29.2% compared to March 31, 2020, driven by heightened interest in news topics related to the COVID-19 pandemic[121]. Cost Management - Total operating costs and expenses decreased by 10.2% to $40,515 in Q1 2021 from $45,103 in Q1 2020, primarily due to reductions in employee compensation and other discretionary spending[125]. - Employee compensation and benefits decreased by 5.6% to $17,947 in Q1 2021, reflecting a headcount reduction of 75 since March 31, 2020[125]. - Newsprint, ink, and other supplies expense decreased by 28.4% to $2,341 in Q1 2021, attributed to lower circulation volumes and competitive pricing[127]. - The company has implemented cost-saving measures in response to the financial impact of the COVID-19 pandemic, including reductions in outside services and travel expenses[126]. Cash Flow and Investments - The company recorded net cash used for investing activities of $162 for the three months ended March 31, 2021, down from $385 in the same period of 2020, primarily due to reduced capital spending[150]. - Net cash used for financing activities was $856 for the three months ended March 31, 2021, compared to $1,713 in 2020, all attributable to dividend payments[151]. - As of March 31, 2021, the company's cash balances were $38,132, down from $42,015 as of December 31, 2020[137]. - The company plans to hold the majority of existing cash for future investment opportunities and potential return of capital to shareholders, despite expected revenue declines[138]. Tax and Regulatory Matters - The company expects to recognize a tax benefit of approximately $2,575 within the next six months from the release of a federal uncertain tax reserve[133]. - The company has benefited from the CARES Act, resulting in additional tax depreciation of $1,017 and a cash refund of $2,425 received in October 2020[141]. - The company signed a non-binding Memorandum of Understanding to extend the due date of a $22,400 promissory note, with a one-year extension expected[144]. Strategic Initiatives - The company continues to diversify its revenue base by leveraging existing assets for print and distribution services and introducing new advertising products[108]. - The company maintains a focus on digital strategies to enhance engagement and increase digital subscriptions amid declining print circulation[109]. - The company declared a dividend of $0.04 per share, payable on June 4, 2021, to shareholders of record as of May 14, 2021[154].