Financial Data and Key Metrics Changes - For Q1 2025, Dallas News Corporation reported a net income of $28.3 million or $5.28 per share, compared to a net loss of $1.4 million in Q1 2024 [5] - Operating income for the quarter was $34.2 million, which includes a net gain of $36.2 million from the sale of the Plano printing facility [5] - Total revenue decreased to $29.1 million from $31.1 million year-over-year, a decline of $2 million [5] - On a non-GAAP basis, the adjusted operating loss was $1.2 million, an improvement of $400,000 compared to the adjusted operating loss of $800,000 in the same period last year [5][6] Business Line Data and Key Metrics Changes - Advertising and marketing services revenue was $800,000, a decrease of $800,000 or 7.2% compared to $11.6 million reported last year, primarily due to a print advertising revenue decline of $700,000 or 12.2% [6] - Circulation revenue was $15.4 million, down $900,000 or 5.2% from $16.3 million last year, mainly due to a print circulation revenue decrease of $700,000 or 6% [6] - Total membership, including both print and digital, was 125,972 as of March 31, down from 126,973 as of December 31 [6] Market Data and Key Metrics Changes - Digital-only subscriptions increased to 65,028, reflecting a 1.1% increase from December 31 and a 4.2% increase compared to March of last year [7] - The company noted softness in print advertising, particularly in real estate and retail sectors, while financial services advertising remained robust [32][33] Company Strategy and Development Direction - The company is focused on transitioning print operations to a smaller, more efficient facility, with expected expense savings starting in May [10][11] - The board is discussing capital allocation strategies, including investing in digital revenue growth and returning capital to shareholders [11] - The company aims to improve margins at Medium Giant by focusing on larger, more profitable accounts and discontinuing relationships with smaller clients [43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the return to growth plan, highlighting the successful funding of pension obligations and the transition to a new printing facility [9][10] - The management acknowledged the slower-than-expected growth in digital subscriptions but is implementing more aggressive offers to stimulate growth [25][26] - Economic uncertainties, including tariffs and consumer demand, are being closely monitored as they may impact advertising budgets [11][32] Other Important Information - The company recorded $6 million in tax expense for the quarter, but cash taxes are expected to be approximately $700,000 due to the utilization of net operating loss carryforwards [8] - As of April 25, the company had approximately $36 million in cash and cash equivalents following the sale of the Plano property [11] Q&A Session Summary Question: Is the company still on track for the $5 million profit improvement expected for 2025? - Management confirmed that they expect to realize the $5 million in savings starting in May, with a partial realization in Q2 and full realization in Q3 and Q4 [21][22] Question: Can you explain the 16% lift in starts from the new dynamic paywall? - The 16% lift refers to the increase in new subscriptions generated by the dynamic paywall compared to the previous meter strategy, which was based on fixed business rules [24] Question: How are subscribers trending in Q2? - Subscriber growth is still occurring, but at a slower pace than desired. The company is testing a more aggressive offer to boost subscription volume [25][26] Question: What areas of advertising showed weakness in Q1? - The company noted softness in real estate and retail advertising, while financial services remained strong. The agency side is steadier compared to print [32][33] Question: Will the increase in newsprint usage normalize in Q2? - Yes, the newsprint usage will return to 2024 levels, although pricing may fluctuate due to market conditions [38][39] Question: What is the status of pension obligations? - The company spent $10 million to fully fund the pension, which was less than the initially expected $14 to $16 million [41] Question: What is the expected profitability level for Medium Giant going forward? - Management aims to improve Medium Giant's margins into the double digits, focusing on larger clients to enhance profitability [44]

Financial Data and Key Metrics Changes - For Q4 2024, Dallas News Corporation reported a net income of $4 million or $0.74 per share, compared to a net loss of $2.2 million in Q4 2023 [6] - The total revenue for Q4 2024 was $31.1 million, down from $34 million in Q4 2023, marking a decline in advertising and marketing services revenue by $1.3 million [6][7] - For the full year 2024, the company reported a net income of $131,000 or $0.02 per share, compared to a net loss of $7.1 million in 2023 [8] - Total revenue for the year was $125.4 million, down from $139.7 million in 2023, reflecting a decline of $14.3 million [8][9] Business Line Data and Key Metrics Changes - Advertising and marketing services revenue decreased by $11.1 million or 18.9% year-over-year, with print advertising revenue declining by $10.7 million due to discontinued product lines [9] - Circulation revenue decreased by $500,000, driven by a decline in print circulation, although digital-only circulation revenue increased [9][10] - Total adjusted operating expenses for Q4 2024 were $32.4 million, an improvement of $1 million compared to the same period last year [7] Market Data and Key Metrics Changes - The average newsprint industry cost per metric ton decreased to $637 from $687 in 2023, a reduction of 7.3% [11] - As of December 31, 2024, the company had 64,334 digital-only subscribers, an increase of 1,334 or 2.1% compared to the previous year [9] Company Strategy and Development Direction - The company has transitioned its print operations to a smaller, more efficient facility, generating over $5 million in annualized expense savings starting in 2025 [15] - The sale of the Plano property for $43.5 million has strengthened the balance sheet and allowed the company to fully fund its pension plan [15][16] - The focus for 2025 includes enhancing digital products, growing digital subscriptions, and maintaining high-quality journalism [24] Management's Comments on Operating Environment and Future Outlook - Management noted that print advertising revenue has shown volatility, particularly in classified revenue, but expressed optimism for recovery in early 2025 [30] - The company is implementing new AI technology for its paywall to improve digital subscription growth, although initial results may be affected by market conditions [36] - Management emphasized the importance of stabilizing the digital audience before expanding the digital product portfolio [19] Other Important Information - The company recorded a non-cash tax benefit of $5 million due to a reduction in the valuation allowance, which is expected to offset gains from the sale of the Plano property [8][12] - As of March 17, 2025, cash and short-term investments were reported at $47 million [12] Q&A Session Summary Question: What led to the substantial decrease in print advertising? - Management indicated that print advertising is volatile, with less than 10% on annual contracts, and noted a significant drop in classified revenue in Q4 2024 [28][30] Question: Can you provide total operating expenses related to the Plano separation plan? - Management stated that detailed expenses would be clearer in the first quarter of 2025, with substantial savings expected from the transition [31][34] Question: What are the expected after-tax proceeds from the asset sale? - The expected net proceeds from the sale of the Plano property are approximately $39 million after taxes and sales costs [41][62] Question: What will be the capital expenditure requirements going forward? - Management indicated that capital expenditures would be minimal after the first quarter, estimating around $250,000 to $500,000 per quarter [45][59] Question: Are digital margins improving? - Management confirmed that digital margins are strong and improving, particularly with the addition of video content, which commands higher advertising rates [68][70]