DALLAS - DallasNews Corporation (NASDAQ:DALN), the owner of The Dallas Morning News, announced plans to relocate its print operations from Plano to a smaller, leased facility in Carrollton, Texas. The move is part of the company's broader Return to Growth Plan initiated in 2021. The new site is set to be operational in early 2025, with the current facility remaining in use until then.
The existing Plano print facility, spanning 620,000 square feet on nearly 29 acres, is being considered for sale following a market study to determine its future use. The move to the 67,000 square foot Carrollton facility is expected to save DallasNews Corporation approximately $5 million annually in expenses. The transition will also involve a reduction in staff by about 60 percent, equating to 85 fewer employees. These changes will necessitate compliance with the Worker Adjustment and Retraining Notification Act, requiring notifications to be sent to affected employees and relevant agencies.
As part of the transition, the company plans to invest around $8 million in more efficient printing technology, which they anticipate funding through existing cash, operations-generated cash, and available liquidity sources. DallasNews Corporation's President, Katy Murray, expressed regret over the loss of valued employees due to this strategic decision but emphasized the company's commitment to guiding affected staff through the transition.
In light of the necessary investments for the relocation, the company's Board of Directors has decided to suspend dividend payments until further notice. However, The Dallas Morning News does not foresee any disruption in subscriber or distribution services and will maintain its current printing and delivery schedule.
This strategic move is aimed at positioning DallasNews Corporation for sustainable profitability and reinforcing its status as a media industry leader committed to serving the North Texas community. Information on this announcement is based on a press release statement from DallasNews Corporation.
InvestingPro Insights
DallasNews Corporation (NASDAQ:DALN) is navigating a transformative period as it relocates its print operations to streamline costs and enhance efficiency. The company's financial health and market performance are critical to understanding the potential impact of these operational changes.
InvestingPro Data indicates a market capitalization of $19.64 million, reflecting the company's size and market value. Despite a challenging period, with a negative revenue growth of 7.27% over the last twelve months as of Q4 2023, DALN is taking proactive steps to reposition itself for growth. The company's price to earnings (P/E) ratio stands at -4.6, suggesting that investors are anticipating future earnings to outweigh current losses.
From the InvestingPro Tips, it's notable that DALN holds more cash than debt, which provides financial flexibility during this transition phase. This is particularly relevant as the company plans significant investments in new printing technology. Moreover, DALN has maintained dividend payments for 14 consecutive years, although it has recently suspended these payments to prioritize operational investments. This history of consistent dividends may reassure investors about the company's commitment to shareholder returns once it stabilizes financially.
Investors may find additional insights by exploring the 11 InvestingPro Tips available for DallasNews Corporation, which include analysis on dividend yields, valuation multiples, and profitability metrics. For those interested in a deeper dive, they can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro. This strategic move by DallasNews Corporation underscores the importance of staying informed on financial metrics and market performance, which can be further enriched by the comprehensive analysis provided by InvestingPro.
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