Financial Data and Key Metrics Changes - DallasNews Corporation reported a net loss of $3.9 million or $0.73 per share for Q3 2024, compared to a net loss of $1.4 million in Q3 2023 [5] - The operating loss for Q3 2024 was $4.1 million, an increase from an operating loss of $1.6 million in the same period last year [5] - On a non-GAAP basis, the adjusted operating loss improved to $700,000, a $200,000 improvement from an adjusted operating loss of $900,000 in Q3 2023 [5][6] Business Line Data and Key Metrics Changes - Total revenue declined by $3.4 million primarily due to the discontinuation of the shared mail program and niche publications [6] - Digital advertising revenue increased by $48,000, while print advertising revenue decreased [6] - Marketing and media services revenue improved by $900,000 due to two new customer contracts [6] - Circulation revenue decreased by $100,000, with digital circulation revenue increasing by $400,000, offsetting a $500,000 decline in print circulation revenue [7] Market Data and Key Metrics Changes - The total number of subscribers decreased to 124,886 as of September 30, down from 137,493 a year earlier [7] - Digital-only subscription rates increased by approximately 13.5%, despite an 8% decline in digital subscribers [7] Company Strategy and Development Direction - The company is transitioning to a smaller printing facility, which is expected to incur additional capital and operating costs in the short term but will lead to annual expense savings [10] - The focus is on building a sustainably profitable media company while managing pension plan funding, which is currently over 90% funded [11][14] - The strategy includes extending the introductory pricing window for digital subscriptions to increase volume [17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges in digital advertising due to declining referral traffic from Google, which has impacted overall digital advertising revenue [16] - The company is optimistic about the new digital pricing strategy, which has already shown positive results in subscriber growth [17] - Management expects to see continued improvement in adjusted operating loss and is focused on disciplined expense management [10][15] Other Important Information - The company has no debt and reported cash and cash equivalents of $14 million as of September 30, with a slight decrease to $11.6 million by November 8 [9][10] - The transition of printing operations is expected to be completed in the first quarter of 2025 [12] Q&A Session Summary Question: What was the digital circulation volume growth since the change in pricing midway through the quarter? - The company reported a growth of over 3,100 digital subscribers since the strategy change in early September [18] Question: Has there been any meaningful pickup in advertising revenue related to election spending? - There has not been a significant increase in advertising revenue from election spending, as most funds are directed towards television and streaming [23] Question: What is the total addressable market (TAM) for the digital news product at the current price point? - The estimated TAM for digital subscribers is around 600,000 in North Texas, with the company currently serving a little over 10% of that market [22] Question: What are the expectations for pricing growth as subscription volumes increase? - The company is testing different price points to determine the optimal balance between subscription volume and pricing, with a focus on reducing churn [32][34] Question: What is the expected annualized expense savings from the transition to the new printing facility? - The expected annualized expense savings from the transition is around $5 million [43]
DallasNews (DALN) - 2024 Q3 - Earnings Call Transcript