DallasNews Corporation Reports Larger Loss, Stock Rises Amid Market Changes
Shares of DallasNews Corporation (DALN) rose by 4.8% following the release of its earnings for the quarter ending September 30, 2024. This growth outpaced the S&P 500 index, which saw a slight decline of -0.3% during the same period. In the last month, DALN surged 27.4%, contrasting with the S&P 500’s modest increase of 3.3%.
Snapshot of Q3 Finances
In the third quarter of 2024, DallasNews reported a net loss of $3.9 million, or 73 cents per share. This was a significant increase from the previous year’s loss of $1.4 million, or 26 cents per share.
Total revenues were $31.1 million, a 9.7% decrease from $34.5 million in the same quarter last year. This decline was primarily driven by an 18.5% drop in advertising and marketing services revenue, which fell from $14.7 million to $12 million. Additionally, circulation revenue dipped slightly by 0.8%, totaling $16.1 million compared to $16.2 million the previous year.
Revenue from printing, distribution, and other services decreased by 14% to $3.1 million, mainly due to lower commercial printing and advertisement mail services.
Key Operational Metrics
DallasNews experienced an adjusted operating loss of $0.7 million this quarter, improving slightly from a $0.9 million loss a year prior, thanks to cost-saving measures that reduced adjusted operating expenses by 10% to $31.9 million. However, these savings were partially offset by revenue losses stemming from the company’s exit from the shared mail program and the discontinuation of print-only niche publications in August 2023.
The results across the company’s two reporting segments varied. TDMN’s adjusted operating income was $4.8 million, down from $5 million in Q3 2023. Meanwhile, the Agency segment, operating under the brand Medium Giant, managed a modest adjusted operating income of $0.05 million, recovering from a $0.7 million loss in the previous year.
Management’s Perspectives
CEO Grant Moise emphasized the company’s strategic pivot towards digital growth, pointing out the success of its adjusted digital subscription model in reversing declines in subscription volume. Despite anticipating gradual revenue growth from this strategy, Moise reiterated the company’s commitment to achieving profitability through streamlined operations and strategic adjustments.
Context of Revenue Challenges
The significant drop in advertising revenue has been crucial to the company’s overall revenue fall, influenced by DallasNews’ decision to phase out its shared mail program and certain print-only niche offerings.
Operating expenses decreased by 2.4% year-over-year to $35.3 million, supported by a $1.9 million cut in distribution costs and $1.1 million in newsprint savings. However, these reductions were counterbalanced by increased employee compensation, including a $3 million severance related to workforce restructuring as DallasNews transitions to a smaller printing facility.
Workforce Management Changes
In the quarter, DallasNews also cut its workforce by 12.2%, leaving it with 534 employees as of September 30, 2024. This move is part of an ongoing restructuring effort designed to streamline operations and align with the company’s focus on a leaner, digitally-driven business model.
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