Dallasnews Corp Q2 2021 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Chris Mooney - Wedbush Securities, Inc. - Analyst : So if I look at the employee compensation, $18.116 million to normalize that for the June quarter, I should back out $1.4 million in severance. Is that?...

Question: Chris Mooney - Wedbush Securities, Inc. - Analyst : And so you would have had lower employee comp costs by a couple of hundred thousand in the quarter...

Question: Chris Mooney - Wedbush Securities, Inc. - Analyst : Without -- okay... REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 27, 2021 / 2:00PM, DALN.OQ - Q2 2021 Dallasnews Corp Earnings Call

Question: Chris Mooney - Wedbush Securities, Inc. - Analyst : And you said something about $3 million in savings going forward. Can you? (inaudible)...

Question: Chris Mooney - Wedbush Securities, Inc. - Analyst : Okay. So the -- I heard numbers on employee headcount of 724 with 45 departing and then I heard another 36 subsequent -- So where are (inaudible)?

Question: Chris Mooney - Wedbush Securities, Inc. - Analyst : So we would be at 650 or so employees at the moment. Is that about?

Question: Chris Mooney - Wedbush Securities, Inc. - Analyst : Okay. And will there be additional severance expenses in this quarter and subsequent quarters? Is that planned or expected?

Question: Chris Mooney - Wedbush Securities, Inc. - Analyst : Okay. That's great. Katy, you gave us a lot of numbers and it may be in the Q, which I haven't looked at yet on digital advertising and subscribers, et cetera. Could you go over those again? I wasn't writing fast enough. I suspect other people weren't even.

Question: Chris Mooney - Wedbush Securities, Inc. - Analyst : No, no. I understand the single copy phenomena. Anyway, go ahead.

Question: Chris Mooney - Wedbush Securities, Inc. - Analyst : Okay. But that's good news.

Question: Chris Mooney - Wedbush Securities, Inc. - Analyst : I've got a number of other questions, but I didn't want to just -- should I just want to put me back in the queue and see if there were other people like we did last time?

Question: Joel Marcus - - Analyst : Yes, I follow this closely. I've got a small position in it for my personal account and my customers question with large. You currently counting the note, which one would assume, since it's securitized by a property worth a lot more than the note is going to be paid and you can retrieve that, you currently have over $60 million in cash, cash equivalents, et cetera. And which comes to about $12 a share. You're currently trading sporadically at under $7, which would sort of indicate that you have a huge negative enterprise value. And basically, anybody could make a move on this and acquire it. And basically, that acquisition would be at a price that would be highly detrimental to shareholder interest. Don't you need to on a much more expedited basis need to focus on the price of your stock, which is trading at about a market that at all-time highs trading at about half of cash. And don't you think that you really need to focus on doing something vis-a-vis the price of the stock to protect your shareholders.

Question: Joel Marcus - - Analyst : As a follow-up to that, you realize you are on or were on, this published maybe about two or three months ago by Mario Gabelli, and you were #6 in his list of the top 10 dividend stocks in the United States. Certainly, your yield right now, taking the dividend on an annualized basis is 10%, which is somewhat ridiculous in this interest rate environment. Have you considered increasing the dividend further basically to just make value so compelling without launching a stock buyback, but just increasing the dividend to a point where this would go to a reasonable value at this point in time, which is probably around $15 to $20 a share, which is 250% to 300% above where the stock is trading? So I mean, obviously, there's other ways to achieve an equitable valuation to protect your holdings and your shareholders interest in this without necessarily doing the stock buyback. So have you considered the dividend side of this, as a way to increase the valuation of this to get this to where it's at a rational valuation because listen, you both sound like you're tremendously bright, tremendously confident. But certainly, one could almost say that with the price of the stock at current levels, you're certainly not -- and I don't think this is deliberate, but just the facts would lead one to the conclusion that you're really not, I guess, fulfilling one of your fundamental duties to your shareholders, which is basically managing this company in a way that assures that your shareholders can have access to fair value for their holdings. So I mean, that is a fiduciary responsibility that with the stock at current levels, is not being fulfilled by management of this company. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 27, 2021 / 2:00PM, DALN.OQ - Q2 2021 Dallasnews Corp Earnings Call

Question: Joel Marcus - - Analyst : Okay. I mean I do look forward, I mean, as this obviously I bought this and basically recommended this to my clients as a long-term investment. I look forward to management, the Board of Directors of this company taking the necessary steps to achieve a fundamentally fair valuation for this company in the marketplace. And I think I have every reason to expect that the company is going to be cognizant of that. I mean, certainly, perhaps engaging an IR firm to introduce this to other institutional investors, et cetera, has the company considered given the tremendous undervaluation of the stock in the marketplace, has the company consider engaging a really white shoe investor relations firm to take this story and bring this to the investment community. I mean, if you look at the stock even today with the earnings being released and with this call going on, I mean volume is pretty much next to nothing. I mean, the last time I looked, it was under 3,000 shares on the day, which would indicate that there is nobody out there with this on their radar screen, and there is nobody out there with an active interest in investing in this company.

Question: Joel Marcus - - Analyst : Okay. I look forward to development next quarter and look forward to being on the next conference call. And obviously, I will if nothing changes, I will bring this up again, but an IR firm, an increase in dividend, the share buyback. I mean currently, your investors are not being very well served REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 27, 2021 / 2:00PM, DALN.OQ - Q2 2021 Dallasnews Corp Earnings Call with being able to access liquidity and their investment at 60% of cash with this having zero enterprise value in, you've got a story to tell in the here and now. And I mean, I think this company does need to make a greater effort to get that story in front of the investment community.

Question: Chris Mooney - Wedbush Securities, Inc. - Analyst : Okay. Just to note, looking at the undervalue under funding of the pension plan, you own real estate aside from the note on the downtown building that Collin County thinks is worth considerably more than your pension plan liability. And I know you're not going to sell the building anytime soon. But your pension plan doesn't require any payments for 10 years either. On more serious note, can you give us a quick update on the status of Belo Company and Google and Facebook potential payments? And then just for interest, how have you handled the return to office phenomena?

Question: Chris Mooney - Wedbush Securities, Inc. - Analyst : Okay. Let's see, I'll note -- the prior questioner was I looked to see -- and the last time I can see that there was any insider activity in the shares was in June of last year. And if you really think you have the capital that you do and the progress being made and a dividend level of just under 10%, it seems a bit surprising that others inside the company wouldn't have interest. Robert, I know you paid a lot higher price from stock some time ago. You don't need to respond to that. And I do want to complement Cheryl Hall on a very good write-up this weekend on Jacobs. That was very well done, company think so as well.

Question: Chris Mooney - Wedbush Securities, Inc. - Analyst : I know the company reasonably well, and she did a very good job, and I've communicated with the company about it as well.