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DallasNews (DALN) - 2024 Q4 - Earnings Call Transcript
DALNDallasNews (DALN)2025-03-18 20:29
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Financial Data and Key Metrics Changes - For Q4 2024, DallasNews Corporation reported a net income of 4millionor4 million or 0.74 per share, compared to a net loss of 2.2millioninQ42023[6]−TotalrevenueforQ42024was2.2 million in Q4 2023 [6] - Total revenue for Q4 2024 was 31.1 million, down from 34millioninthesamequarterlastyear[6]−Forthefullyear2024,thecompanyreportedanetincomeof34 million in the same quarter last year [6] - For the full year 2024, the company reported a net income of 131,000 or 0.02pershare,animprovementfromanetlossof0.02 per share, an improvement from a net loss of 7.1 million in 2023 [10] - Total revenue for the year was 125.4million,downfrom125.4 million, down from 139.7 million in 2023 [11] Business Line Data and Key Metrics Changes - Advertising and marketing services revenue decreased by 1.3millioninQ42024,primarilyduetoa61.3 million in Q4 2024, primarily due to a 6% decline in print advertising revenue [7] - Circulation revenue decreased by 800,000 in Q4 2024, mainly due to a 700,000declineinprintcirculationrevenue[7]−Forthefullyear,advertisingmarketingservicesrevenuedecreasedby700,000 decline in print circulation revenue [7] - For the full year, advertising marketing services revenue decreased by 11.1 million or 18.9% year over year [12] - Digital-only subscribers increased by 1,334 or 2.1% year over year, totaling 64,334 as of December 31, 2024 [13] Market Data and Key Metrics Changes - The average newsprint industry cost per metric ton decreased by 7.3% to 637comparedto637 compared to 687 in 2023 [16] - The company had 60.1millionoffederalnetoperatinglosscarryforwardasofDecember31,2024[19]CompanyStrategyandDevelopmentDirection−Thecompanyhastransitionedprintoperationstoasmaller,moreefficientfacility,generatingover60.1 million of federal net operating loss carryforward as of December 31, 2024 [19] Company Strategy and Development Direction - The company has transitioned print operations to a smaller, more efficient facility, generating over 5 million in annualized expense savings starting in 2025 [21] - The sale of the Plano property for 43.5millionwillallowthecompanytofullyfunditspensionplan[22]−Investmentsinwebsiteandappenhancementswereprioritizedtostabilizethedigitalaudiencebeforeexpandingthedigitalproductportfolio[27]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementnotedthatprintadvertisingrevenueisvolatileduetothelackoflong−termcontractswithadvertisers,butthereispotentialforrecovery[40]−Thecompanyisfocusedonbecomingcashflowpositiveassoonaspossible,althoughspecificguidancewasnotprovided[67]−Managementexpressedoptimismabouttheprogressmadein2024andtheexpectedbenefitsfromoperationalchangesin2025[19][20]OtherImportantInformation−Thecompanyrecordedanon−cashtaxbenefitof43.5 million will allow the company to fully fund its pension plan [22] - Investments in website and app enhancements were prioritized to stabilize the digital audience before expanding the digital product portfolio [27] Management's Comments on Operating Environment and Future Outlook - Management noted that print advertising revenue is volatile due to the lack of long-term contracts with advertisers, but there is potential for recovery [40] - The company is focused on becoming cash flow positive as soon as possible, although specific guidance was not provided [67] - Management expressed optimism about the progress made in 2024 and the expected benefits from operational changes in 2025 [19][20] Other Important Information - The company recorded a non-cash tax benefit of 5 million due to a reduction in the valuation allowance [10] - As of March 17, 2025, cash and short-term investments totaled 47 million [18] Q&A Session Summary Question: What led to the decrease in print advertising revenue? - Management indicated that print advertising is volatile, with less than 10% of advertisers on annual contracts, leading to a significant drop in classified revenue in Q4 2024 [39][40] Question: Can you provide details on the operating expenses related to the severance plan? - Management stated that specific fourth-quarter expenses would be clearer in the first quarter call, with substantial savings expected from the severance plan [43][45] Question: What are the expected after-tax proceeds from the asset sale? - The gross proceeds from the sale were 43.5 million, with expected net proceeds around 39millionaftertaxesandexpenses[57][58]Question:Whatistheexpectedcapitalexpenditureafterthefirstquarter?−Managementindicatedthatcapitalexpenditureswouldreturntoarangeof39 million after taxes and expenses [57][58] Question: What is the expected capital expenditure after the first quarter? - Management indicated that capital expenditures would return to a range of 250,000 to $500,000 per quarter after the initial expenses related to the new facility [59][75] Question: How are digital margins performing? - Management noted that video advertising yields higher returns than print, contributing positively to digital margins [91][92]