Dallasnews Corp (DALN) 2023 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Second Quarter 2023 DallasNews Corporation Investor Conference Call. (Operator Instructions)

女士們先生們，謝謝你們的支持。歡迎參加達拉斯新聞公司 2023 年第二季投資者電話會議。 （操作員說明）

Later, we will conduct a question-and-answer session. Instructions will be given at that time. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Gary Cobleigh. Please go ahead.

隨後，我們將進行問答環節。屆時將給予指示。 （操作員指示）謹此提醒，本次會議正在錄製中。現在我想將會議交給東道主加里·科布萊先生。請繼續。

Good morning, everyone. This is Gary Cobleigh, Vice President and Controller of DallasNews Corporation. Welcome to our second quarter 2023 investor call. I'm joined by Katy Murray, President and Chief Financial Officer, who will be reviewing financial results; and Grant Moise, Chief Executive Officer, who will provide brief business remarks.

大家，早安。我是達拉斯新聞公司副總裁兼財務總監加里‧科布萊 (Gary Cobleigh)。歡迎參加我們的 2023 年第二季投資者電話會議。總裁兼財務長 Katy Murray 也將與我一起審查財務業績；執行長 Grant Moise 將發表簡短的業務演講。

Yesterday afternoon, we issued a press release announcing second quarter 2023 results and filed our 2023 10-Q. Both of these are posted on our website, dallasnewscorporation.com, under the Investor Relations section. Unless otherwise specified, comparisons used on today's call measure second quarter 2023 performance against second quarter 2022 performance.

昨天下午，我們發布了一份新聞稿，宣布 2023 年第二季業績，並提交了 2023 年 10 季報告。這些資訊均發佈在我們網站 dallasnewscorporation.com 的「投資者關係」部分下。除非另有說明，今天電話會議中使用的比較是衡量 2023 年第二季的業績與 2022 年第二季的業績。

Our discussion today will include forward-looking statements. Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those statements. The company assumes no obligation to update the information in this communication except as otherwise required by law. Additional information about these factors is detailed in the company's press releases and publicly available filings with the SEC.

我們今天的討論將包括前瞻性陳述。前瞻性陳述受到風險、不確定性和其他因素的影響，這些因素可能導致實際結果與這些陳述有重大差異。除法律另有要求外，本公司不承擔更新本通訊中資訊的義務。有關這些因素的更多資​​訊詳見該公司的新聞稿和向 SEC 公開提交的文件。

Today's discussion will include non-GAAP financial measures. We believe that non-GAAP financial measures provide useful, supplemental information to assist investors in determining performance comparisons to our peers. A reconciliation of GAAP to non-GAAP financial measures is included with our press release.

今天的討論將包括非公認會計準則財務指標。我們相信，非公認會計準則財務指標提供了有用的補充信息，可幫助投資者確定與同行的績效比較。我們的新聞稿中包含了 GAAP 與非 GAAP 財務指標的調整表。

I'll now turn the call over to Katy.

我現在將把電話轉給凱蒂。

Good morning, everyone, and thank you for joining today's call. On a GAAP basis, for the quarter DallasNews Corporation reported a net loss of $900,000 or $0.16 per share and an operating loss of $1.2 million. In Q2 last year, we reported a et loss of $2.4 million and an operating loss of $2.3 million. On a non-GAAP basis for the quarter, we reported an adjusted operating loss of $300,000, an improvement of $800,000 when compared to the adjusted operating loss of $1 million for the same period last year. This improvement is primarily due to expense savings of $2.3 million, partially offset by a total revenue decline of $1.6 million.

大家早安，感謝您參加今天的電話會議。以 GAAP 計算，達拉斯新聞公司本季淨虧損 90 萬美元，即每股 0.16 美元，營運虧損 120 萬美元。去年第二季度，我們報告的預計虧損為 240 萬美元，營運虧損為 230 萬美元。根據非公認會計原則，本季調整後營運虧損為 30 萬美元，比去年同期調整後營運虧損 100 萬美元減少了 80 萬美元。這一改善主要是由於節省了 230 萬美元的費用，但部分被總收入下降 160 萬美元所抵消。

We reported $36 million of total revenue for the quarter compared to $37.6 million last year. The year-over-year decline is primarily due to an $800,000 or 17.3% reduction in preprint advertising revenue. The decline in preprint is consistent with the decline we reported in the first quarter of this year and the decline we expect to see going forward.

我們報告本季總收入為 3,600 萬美元，而去年為 3,760 萬美元。年比下降的主要原因是預印本廣告收入減少了 80 萬美元，即 17.3%。預印本的下降與我們今年第一季報告的下降以及我們預計未來會出現的下降一致。

Last month, we announced our decision to exit a shared mail and delivery partnership for delivering weekly preprints and inserts on August 31 of this year. After the elimination of associated expenses, including employee-related expenses, we expect the impact to the bottom line to be net neutral.

上個月，我們宣布決定退出共享郵件和投遞合作夥伴關係，以便於今年 8 月 31 日投遞每週預印本和插頁。在消除相關費用（包括員工相關費用）後，我們預期對淨利潤的影響為淨中性。

Digital advertising and marketing services revenue was down $100,000 or 1.9% year-over-year. Circulation revenue decreased $300,000 compared to Q2 of last year. The print circulation revenue decline of $900,000 or 6.6% was partially offset by digital-only subscription revenue increase of $600,000 or 18.5%. As of June 30, The News had 68,846 digital-only subscribers, which is a 6,158 or 9.8% year-over-year improvement. However, we did have a slight sequential decline in our digital-only subscribers. Grant will provide some additional comments on overall digital subscriber trends. Total subscribers, including both home delivery and digital, was 142,436 as of June 30 compared to 146,065 as of Q2 of last year and 145,369 as of March 31.

數位廣告和行銷服務收入較去年同期下降 10 萬美元，成長 1.9%。流通收入比去年第二季減少了 30 萬美元。印刷版發行收入下降了 90 萬美元，即 6.6%，但數位版訂閱收入增加了 60 萬美元，即 18.5%，部分抵消了這一下降。截至 6 月 30 日，《新聞報》擁有 68,846 名純數位訂閱者，較去年同期增加 6,158 名，即 9.8%。然而，我們的數位訂閱用戶數量確實略有下降。格蘭特將對整體數位用戶趨勢提供一些額外的評論。截至 6 月 30 日，訂戶總數（包括送貨上門和數位訂戶）為 142,436 人，而去年第二季的訂戶總數為 146,065 人，截至 3 月 31 日的訂戶總數為 145,369 人。

On a non-GAAP basis, total adjusted operating expense for the quarter was $36.3 million, an improvement of $2.3 million or 6.1% when compared to last year. This was driven by expense savings of $1.2 million in distribution, $600,000 related to a nonrecurring lease cost benefit we recognized this quarter, $500,000 in outside services and $200,000 in newsprint. Regarding distribution expense, the year-over-year decrease was driven by our decision to eliminate [The Bulldog] and Briefing Saturday print editions. In addition, with the recent announcement of the discontinuation of the Briefing and Al Dia publication at the end of August, the company will experience additional savings for the remainder of the year.

以非公認會計原則計算，本季調整後營運費用總額為 3,630 萬美元，比去年增加 230 萬美元，即 6.1%。這是由於120 萬美元的分銷費用節省、60 萬美元的與我們本季度認識到的非經常性租賃成本效益相關的費用節省、50 萬美元的外部服務費用以及20 萬美元的新聞紙費用節省所致。關於發行費用，年減是由於我們決定取消《鬥牛犬》和《週六簡報》印刷版。此外，隨著最近宣布將於 8 月底停止出版 Briefing 和 Al Dia 出版物，該公司將在今年剩餘時間內實現額外的節省。

Turning to newsprint expense. The newsprint purchase price has recently been trending favorably, down with our latest pricing of $715 per metric ton in June, a decrease of $7.30 per metric ton or 1% when compared to this time last year. This last month was the lowest average newsprint purchase price we've seen since April of last year, and we expect to continue to see expense favorability as newsprint is consumed.

轉向新聞紙費用。新聞紙採購價格近期走勢良好，6 月最新定價為每噸 715 美元，比去年同期下降了 7.30 美元每噸，即 1%。上個月是自去年 4 月以來我們看到的最低平均新聞紙採購價格，隨著新聞紙的消耗，我們預計將繼續看到費用優惠。

As of June 30, headcount was 644, down 27 headcount compared to last year. Cash and short-term investments was $22.6 million on June 30. This quarter, we recorded approximately $400,000 in severance expense related to the 13 terminations announced in late June. June's ending headcount of 644 does not reflect these terminations. In addition, as of July 21, we showed $25 million in cash, including short-term investments.

截至6月30日，員工總數為644人，比去年減少27人。截至 6 月 30 日，現金和短期投資為 2,260 萬美元。 6 月的期末員工人數為 644 人，但並未反映這些解僱情況。此外，截至 7 月 21 日，我們還展示了 2,500 萬美元的現金，包括短期投資。

For the quarter, the company recorded $26,000 of tax expense for the Texas franchise tax, lower this quarter, primarily due to the reversal of a recorded uncertain tax position which had expired. In Q2, we paid $609,000 of Texas franchise tax for fiscal year 2022.

本季度，該公司記錄的德克薩斯州特許經營稅稅費為 26,000 美元，本季度有所下降，主要是由於扭轉了已過期的記錄的不確定稅收狀況。第二季度，我們繳納了 2022 財年 609,000 美元的德州特許經營稅。

I will now turn the call over to Grant.

我現在將把電話轉給格蘭特。

Thank you, Katy, and good morning, everyone. I want to expand on our decision to exit the Wednesday preprint business. We expected to continue to see the declines in preprint advertising when we entered 2023. However, the declines have been greater than we anticipated. When the contract with our preprint partner came up for renewal in June, we made the decision to exit this line of business to allow us more visibility into our revenue.

謝謝你，凱蒂，大家早安。我想詳細闡述我們退出週三預印本業務的決定。進入 2023 年，我們預計預印本廣告將繼續下降。當六月與預印本合作夥伴續約時，我們決定退出這條業務線，以便更清楚地了解我們的收入。

Providing more detail, Medium Giant's revenue associated with the Wednesday preprint program declined by $2.3 million year-to-date through June, which accounted for more than the total advertising decline of all of Medium Giant, which was $2.2 million. By exiting this line of business, we can rightsize our expense structure and realign the Medium Giant sales resources towards the products our clients value most. This decision was affirmed when Kroger, the nation's largest grocery store chain, announced in May that they would be exiting the preprint business in favor of digital solutions.

提供更多詳細信息，截至 6 月份，Medium Giant 與週三預印本計劃相關的收入下降了 230 萬美元，這一數字超過了 Medium Giant 全部廣告下降的總收入（220 萬美元）。透過退出這條業務線，我們可以調整我們的費用結構，並將中型巨人的銷售資源重新調整為客戶最重視的產品。當美國最大的雜貨連鎖店 Kroger 在 5 月宣布他們將退出預印本業務並轉而採用數位解決方案時，這一決定得到了確認。

Medium Giant is well positioned through its digital portfolio of marketing solutions to help advertisers like Kroger well into the future with its marketing strategies that provide a return on investment for our clients. These strategic changes at Medium Giant were led by John Kiker, the new President of Medium Giant, who we announced in May. John comes to us from The Integer Group, where he spent the last 11 years and most recently was President for the agency. Integer is owned by Omnicom, one of the world's most respected agency holding companies, and a place where John learned how to run profitable and sustainable agency models. We're so happy to have him.

Medium Giant 透過其數位行銷解決方案組合佔據有利地位，透過其行銷策略為我們的客戶提供投資回報，幫助克羅格等廣告商走向未來。 Medium Giant 的這些策略變革由我們於 5 月宣布的 Medium Giant 新任總裁 John Kiker 領導。 John 來自 Integer Group，他在該集團工作了 11 年，最近擔任該機構的總裁。 Integer 隸屬於 Omnicom，這是世界上最受尊敬的代理控股公司之一，也是 John 學習如何運作獲利且永續的代理模式的地方。我們很高興擁有他。

Shifting our focus to The Morning News. I was pleased to see our digital audiences begin to grow again, following an audience decline that occurred late in the pandemic. Our visitors to dallasnews.com have increased by 8% this year, allowing us to grow our digital membership base and our digital advertising related to the website. That said, our digital membership volume momentum slowed down in the second quarter. Two contributing factors led to this decline.

將我們的注意力轉移到《晨間新聞》上。我很高興看到我們的數位觀眾在大流行後期出現觀眾下降之後再次開始增長。今年 dallasnews.com 的訪客增加了 8%，這使我們能夠擴大數位會員基礎以及與該網站相關的數位廣告。也就是說，我們的數位會員量成長動能在第二季放緩。有兩個因素導致了這種下降。

The first is the result of holiday promotions we ran in December of last year, where we had significant starts from a 6-month introductory offer. When those introductory prices expired and they began to pay full price, we had higher cancellation volumes than we had experienced with past discount offers. The second contributing factor to our digital membership decline is seasonality. Our digital traffic is always lower in the summer, and we will rebound as families return to regular routines in August when kids return to school and the Texas football season begins.

第一個是我們去年 12 月進行的假期促銷活動的結果，我們從 6 個月的介紹優惠開始就取得了重大進展。當這些介紹價格到期並且他們開始支付全價時，我們的取消量比過去的折扣優惠要高。導致我們數位會員數量下降的第二個因素是季節性。我們的數字流量在夏季總是較低，隨著家庭在八月孩子們返回學校和德克薩斯州橄欖球賽季開始時恢復正常生活，我們的數字流量將會反彈。

Digital memberships will remain an essential part of our business strategy moving forward, and we will continue to optimize between volume and price as we grow this important line of revenue for the company.

數位會員仍將是我們未來業務策略的重要組成部分，隨著公司這一重要收入來源的成長，我們將繼續在數量和價格之間進行優化。

Greg, we will now open up the line for questions.

格雷格，我們現在開放提問熱線。

(Operator Instructions) And at this time, there are no questions.

（操作員指示）此時，沒有任何問題。

All right. Well, Greg, well, thank you. I'd like to thank everyone for joining us on our second quarter call. We hope you all have an enjoyable remainder of your summer, and we will speak with you after the end of our third quarter in late October. Thank you. Bye-bye.

好的。好吧，格雷格，好吧，謝謝你。我要感謝大家參加我們的第二季電話會議。我們希望大家度過一個愉快的夏天，我們將在 10 月下旬第三季結束後與您交談。謝謝。再見。

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T teleconference. You may now disconnect.

女士們、先生們，今天的會議到此結束。感謝您的參與和使用 AT&T 電話會議。您現在可以斷開連線。