Dallasnews Corp (DALN) 2023 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the DallasNews Corporation Third Quarter 2023 Investor Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Gary Cobleigh. Please go ahead.

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 年第三季投資者電話會議。 （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主持人加里·科布萊 (Gary Cobleigh)。請繼續。

Good morning, everyone. This is Gary Cobleigh, Vice President and Controller of DallasNews Corporation. Welcome to our third 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'll 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 年第三季投資者電話會議。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 third quarter 2023 results and filed our Q3 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 third quarter 2023 performance against third quarter 2022 performance.

昨天下午，我們發布了新聞稿，宣布 2023 年第三季業績，並提交了 2023 年第三季 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，今天的電話會議中使用的比較是衡量 2023 年第三季的業績與 2022 年第三季的業績。

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。除非法律另有要求，否則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. I'll now turn the call over to Katy.

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。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 $1.4 million or $0.26 per share and an operating loss of $1.6 million. In Q3 of last year, we reported a net loss of $2.6 million and an operating loss of $2.3 million. On a non-GAAP basis for the quarter, we reported an adjusted operating loss of $900,000, an improvement of $700,000 when compared to an adjusted operating loss of $1.6 million reported for the same period last year. The improvement is primarily due to expense savings of $3.9 million, partially offset by a total revenue decline of $3.2 million.

大家早安，感謝您參加今天的電話會議。根據公認會計原則，達拉斯新聞公司本季淨虧損 140 萬美元，即每股 0.26 美元，營運虧損 160 萬美元。去年第三季度，我們報告淨虧損 260 萬美元，營運虧損 230 萬美元。按照非公認會計原則，本季調整後營運虧損為 90 萬美元，比去年同期報告的調整後營運虧損 160 萬美元減少了 70 萬美元。這一改善主要是由於節省了 390 萬美元的費用，但部分被總收入下降 320 萬美元所抵消。

We reported $34.5 million of total revenue for the quarter compared to $37.7 million last year. The decline is primarily due to a $2 million or 18% decrease in print advertising revenue, which was driven by the company's strategic decision to exit its shared mail program to deliver weekly preprints and inserts. After accounting for this decline, core print advertising was flat year-over-year. Digital advertising and marketing services revenue was down $800,000 or 13% year-over-year, primarily due to a decline in marketing services revenue resulting from some contracts ending, partially offset by an increase in digital advertising on dallasnews.com primarily related to financial service clients.

我們報告本季總收入為 3,450 萬美元，而去年為 3,770 萬美元。下降的主要原因是印刷廣告收入減少了 200 萬美元，即 18%，這是由於該公司退出其共享郵件計劃以提供每週預印本和插頁的戰略決定。考慮到這一下降，核心平面廣告與去年同期持平。數位廣告和行銷服務收入較去年同期下降 80 萬美元，或 13%，主要是由於部分合約終止導致行銷服務收入下降，但 dallasnews.com 上主要與金融服務相關的數位廣告增加部分抵消了這一下降客戶。

Circulation revenue was flat compared to last year. The digital-only subscription revenue increase of $700,000 or 21.4% mostly offset the print circulation revenue decline of $800,000 or 6.1%. As of September 30, The News had 66,563 digital-only subscribers, which is a 2,391 or 3.7% year-over-year improvement. However, we did have a sequential decline in our digital-only subscribers. Grant is going to provide some additional comments on overall digital subscriber trends in a moment. Total subscribers, including both home delivery and digital subscribers, was 137,493 as of September 30 compared to 144,631 as of Q3 last year and 142,436 as of June 30.

流通收入與去年持平。純數位訂閱收入成長了 70 萬美元，即 21.4%，大部分抵消了印刷發行收入下降的 80 萬美元，即 6.1%。截至 9 月 30 日，《新聞報》擁有 66,563 名純數位訂閱者，較去年同期成長 2,391 名，即 3.7%。然而，我們的數位訂閱用戶確實出現了連續下降。格蘭特稍後將就整體數位用戶趨勢提供一些補充評論。截至 9 月 30 日，訂戶總數（包括送貨上門和數位訂戶）為 137,493 人，而去年第三季的訂戶總數為 144,631 人，截至 6 月 30 日的訂戶總數為 142,436 人。

Printing, distribution and other revenue was $3.6 million, a decrease of $300,000 or 8.3% when compared to the third quarter of 2022, primarily due to a decline in commercial printing revenue. On a non-GAAP basis, total adjusted operating expense for the quarter was $35.4 million, an improvement of $3.9 million or 9.9% when compared to the same period of last year, driven by expense savings of $1.7 million in distribution, $900,000 in outside services and $800,000 in newsprint. The company will continue to experience savings in distribution expense for the remainder of the year with the recent discontinuation of the Briefing and Al Día publications.

印刷、發行和其他收入為 360 萬美元，較 2022 年第三季減少 30 萬美元，即 8.3%，主要是由於商業印刷收入下降。以非公認會計準則計算，本季調整後營運費用總額為3,540 萬美元，與去年同期相比增加了390 萬美元，即9.9%，這得益於170 萬美元的分銷費用節省和90 萬美元的外部服務費用節省以及80萬美元的新聞紙。隨著最近《簡報》和《Al Día》出版物的停刊，該公司將在今年剩餘時間內繼續節省發行費用。

Newsprint expense is favorable year-over-year as a result of lower circulation and fewer out-of-market preprints when compared to last year. The newsprint purchase price has continued to trend favorably down. The cost of newsprint in September was $683 per metric ton, a decrease of $91 or 11.8% per metric ton when compared to September of last year. We expect to continue realizing these savings in late Q4 and early next year.

與去年相比，由於發行量下降和市場外預印本減少，新聞紙費用較去年同期有利。新聞紙採購價格持續呈現有利下降趨勢。 9月新聞紙成本為每噸683美元，比去年9月每噸下降91美元，下降11.8%。我們預計將在第四季末和明年初繼續實現這些節省。

As of September 30, headcount was 608, down 60 headcount compared to last year. Headcount reductions and increased severance expense are expected to continue into the fourth quarter related to the previously announced voluntary staff reduction program. Cash and short-term investments was $24.5 million on September 30. As of October 20, we have $23.3 million in cash, including short-term investments. For the fourth quarter, the company recorded $100,000 of tax expense for the Texas franchise tax. I will now turn the call over to Grant.

截至9月30日，員工總數為608人，比去年減少60人。與先前宣布的自願裁員計劃相關的裁員和遣散費增加預計將持續到第四季度。截至 9 月 30 日，現金和短期投資為 2,450 萬美元。截至 10 月 20 日，我們擁有 2,330 萬美元現金，包括短期投資。第四季度，該公司記錄了 10 萬美元的德州特許經營稅稅費。我現在將把電話轉給格蘭特。

Thanks, Katy, and good morning, everyone. I want to start by mentioning an important event that took place in September of this year when Robert Decherd retired after 50 years of service as an employee and 47 years as a director. Robert's commitment to DallasNews Corporation and the North Texas region is hard to capture in words, but on behalf of the Board and our employees, I want to thank Robert for his commitment to journalism and for being a pillar of this institution for 5 wonderful decades.

謝謝凱蒂，大家早安。首先，我想提一下今年 9 月發生的一件重要事件，羅伯特·德克德 (Robert Decherd) 在工作了 50 年的員工和 47 年的董事職務後退休。羅伯特對達拉斯新聞公司和北德克薩斯地區的承諾很難用言語表達，但我謹代表董事會和我們的員工，感謝羅伯特對新聞事業的承諾以及在過去5 個美好的十年中成為該機構的支柱。

While I'm on the topic of our commitment to journalism, I'm proud of our newsroom for the ambitious fentanyl series that was entitled Deadly Fake where we published a story per day every day for the entire month of September. We focused on fentanyl in this unique way because we -- because last year, fentanyl killed an average of 5 Texans every day and almost 500 of them lived in North Texas. Most North Texans did not know how to identify nor treat the lethal effects of fentanyl. And in the words of Katrice Hardy, our executive editor, if this series helped save 1 life, it was worth it.

當我談到我們對新聞業的承諾時，我為我們雄心勃勃的芬太尼系列的新聞編輯室感到自豪，該系列的標題為“致命假貨”，整個九月份我們每天都會發布一個故事。我們以這種獨特的方式關注芬太尼，因為去年，芬太尼平均每天殺死 5 名德克薩斯人，其中近 500 人居住在北德克薩斯州。大多數北德克薩斯人不知道如何識別或治療芬太尼的致命影響。用我們的執行主編 Katrice Hardy 的話來說，如果這個系列能夠拯救 1 條生命，那就是值得的。

Shifting topics from journalism to the financial progress at the company, we have had a year of mixed results. I've been pleased with the team's ongoing expense management Katy was just referring to, but our revenue performance has fallen short of our expectations. Many of you are familiar with the Return to Growth Plan we have in place with our Board that we've been discussing for quite some time. The goal of what we call the RTG Plan is to build a sustainably profitable media and marketing company. For this plan to ultimately be successful, we need to grow revenue from the core product lines of digital membership, digital advertising and marketing services. This year, we have grown in 2 of those 3 areas, but we want to see growth in all 3.

將話題從新聞轉向公司的財務進展，我們這一年的結果好壞參半。我對凱蒂剛剛提到的團隊正在進行的費用管理感到滿意，但我們的收入表現沒有達到我們的預期。你們中的許多人都熟悉我們與董事會制定的恢復成長計劃，我們已經討論了相當長一段時間。我們所說的 RTG 計劃的目標是建立一家可持續盈利的媒體和行銷公司。為了使這項計劃最終成功，我們需要增加數位會員、數位廣告和行銷服務等核心產品線的收入。今年，我們在這 3 個領域中的 2 個領域取得了成長，但我們希望看到所有 3 個領域都實現成長。

In the third quarter, we were more aggressive with the pricing of our digital subscription offering, and I'm pleased with the early returns from this change. This change will result, as we are seeing, in short-term volume declines but will improve the revenue trajectory of digital subscription revenue.

在第三季度，我們對數位訂閱產品的定價更加積極，我對這項變化的早期回報感到滿意。正如我們所看到的，這一變化將導致短期銷量下降，但將改善數位訂閱收入的收入軌跡。

On the marketing services side of the business at Medium Giant, this year has been marked by trepidation from our current clients who are being cautious with their advertising dollars in the midst of a challenging economic environment. In order for us to return to growth in this important area, we are focused on attracting new retainer-based clients while helping our current clients with marketing solutions to help them grow their businesses. Greg, we will now open up the line for questions.

在 Medium Giant 的行銷服務業務方面，今年我們現有的客戶感到惶恐不安，他們在充滿挑戰的經濟環境中對廣告費用持謹慎態度。為了讓我們在這一重要領域恢復成長，我們專注於吸引新的保留客戶，同時幫助我們現有的客戶提供行銷解決方案，幫助他們發展業務。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。

Well, Greg, thank you. Thank you, everyone, for joining our call. I'm sorry, Greg?

好吧，格雷格，謝謝你。謝謝大家加入我們的電話會議。對不起，格雷格？

You just had 1 queue up. Would you like to take that question?

您剛剛排隊 1 個。你願意回答這個問題嗎？

Absolutely.

絕對地。

Okay. That question comes from the line of Chris Mooney from Wedbush Securities.

好的。這個問題來自韋德布希證券公司 (Wedbush Securities) 的 Chris Mooney。

The 608 headcount, where do you anticipate that going to by the end of the year?

608 名員工，您預計到年底會去哪裡？

Chris, as we announced earlier, probably about a month ago, we did have a -- we're having a voluntary severance offer. We expect probably about maybe 40 or so people to take that, give or take. We don't know yet. There was not a set target. We didn't have any kind of specific headcount number or expense number. So I expect that this number, we will probably be -- we're going to be below 600, probably maybe 580, 570, just depending on what we do with the VSO. And again, that's just to be determined.

克里斯，正如我們早些時候宣布的那樣，大約一個月前，我們確實有一個自願的遣散費。我們預計大約有 40 人左右會接受、給予或接受。我們還不知道。沒有設定目標。我們沒有任何具體的人數或費用數字。所以我預計這個數字可能會低於 600，可能會低於 580、570，這取決於我們對 VSO 的處理。再說一次，這還有待確定。

Understood. And the cost of this will appear in the fourth quarter. Will it roll into the first quarter as well?

明白了。而這個成本將在第四季顯現出來。它也會延續到第一季嗎？

No, it won't. The cost of the offering in the program will be fully booked in the fourth quarter. And while there may be cash payments in 2024, the expense will be in 2023.

不，不會的。該計劃中的發行費用將在第四季度全部預訂完畢。雖然 2024 年可能會有現金支付，但支出將在 2023 年進行。

Okay. And what was the union response to this?

好的。工會對此有何反應？

As part of our collective bargaining agreement, we have the ability to offer a voluntary severance offering whenever we would like to, so there really was no response from the guild.

作為集體談判協議的一部分，我們有能力在任何願意的時候提供自願遣散費，所以行會確實沒有回應。

(Operator Instructions) There are no further questions.

（操作員說明）沒有其他問題。

Greg, thank you. Everyone, thank you again for joining our third quarter call. We look forward to a great fourth quarter, and we'll have our earnings call in the first quarter of next year. And for those of you in Dallas and Texas, go Rangers.

格雷格，謝謝你。大家，再次感謝您參加我們的第三季電話會議。我們期待第四季度的出色業績，我們將在明年第一季召開財報電話會議。對於那些在達拉斯和德克薩斯州的人來說，去流浪者隊吧。

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T Teleconferencing. 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。