Q4 2020 A. H. Belo Corp Earnings Call
Okay.
Ladies and gentlemen, thank you for standing by walking through the fourth quarter and for years.
Yeah.
H.
A.
At this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will be given at that time. If you should require assistance during the call. Please press Star then zero as a reminder of this conference is being recorded I'd now like to turn the conference over to Katie Murray. Please go ahead.
Good morning, everyone and welcome to our fourth quarter and full year 2020 investor call.
I am joined by Robert Decker, Chairman, President and Chief Executive Officer of H, Belo Corp, and grant Moise publisher and President of the Dallas morning News for also available for Q&A.
Yesterday afternoon, we issued a press release announcing fourth quarter and full year 2020 of results. We have posted this release on our website under the Investor Relations section.
Unless otherwise specified the comparisons used on todays call measure of fourth quarter 2020, and full year 2020 performance against the fourth quarter 2019, and full year 2019 performance.
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 on this communication, except as otherwise required by law and.
Additional information about these factors is detailed in the company's press releases and publicly available filings with the SEC.
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.
We reported a fourth quarter net loss of $1 7 million or <unk> <unk> per share and an operating loss of $4 million compared to a net loss of $1 1 million or five cents per share and an operating loss of $2 $4 million reported and the fourth quarter of 2019.
For the full year 2020 of the company reported a net loss of $6 9 million for 32 cents per share and an operating loss of $15 6 million.
For the full year 2019, the company reported net income of $9 3 million or <unk> 43 per fully diluted share.
And the operating income of $9 5 million driven by a pretax gain of $25 9 million from the sale of our previous headquarters.
Adjusted operating income, which adjust GAAP operating income or loss to exclude severance expense depreciation and amortization and asset disposals and impairments with 500000 and for the fourth quarter and improvement of 400000, when compared to adjusted operating income of 100000 day.
Reported and the fourth quarter of last year.
For the full year 2020, adjusted operating loss was $4 9 million a decline of $2 8 million when compared to an adjusted operating loss of $2 1 million reported for the full year 2019.
Fourth quarter total GAAP revenue was $40 8 million, a decrease of $6 million or 12, 8% when compared to the $46 8 million reported for the fourth quarter of last year.
Total revenue for the year was $154 3 million a decrease of $29 3 million or 15, 9% when compared to last year.
Approximately $15 9 million of the year over year revenue decline is in print advertising revenue, which has been significantly impacted by the COVID-19 pandemic.
Digital advertising revenue decreased $7 7 million, primarily attributable to the termination of the Dallas morning News affiliate relationship with cars Dot Com and September of 2019.
Digital circulation revenue was $1 9 million and the fourth quarter of this year and increase of 500000 or a 39, 7% compared to the fourth quarter of last year.
For the year digital circulation was $6 5 million and increase of $1 6 million or a <unk> 32%.
The news ended the year with 48, and 903 paid digital only subscriptions and increase of 13144 or 36, 8% year over year and an increase of 2180 subscription and since the third quarter.
And as of this last month I'm very pleased to report that the news has now surpassed 50000 digital only subscriptions.
A summary of digital only subscriptions by quarter and year is posted on our website under the Investor Relations section.
Print circulation revenue for the fourth quarter was $14 8 million, a decrease of 1 million or six 4% compared to the fourth quarter of last year.
For the year print circulation revenue was $58 4 million, a $4 9 million or seven 7% decline.
The decrease was primarily the result of a 24, 7% year over year decline and single copy sales.
COVID-19 has significantly reduced the number of locations where the paper paper is typically for sale home delivery was only down five 5% year over year.
Other revenue reported in the fourth quarter of 2020 was for $3 million compared to $4 7 million reported and the fourth quarter of last year.
For the year other revenue decreased $2 3 million or 11, 8% to $17 2 million.
The full year decline is due to an expected $3 6 million decrease and commercial printing revenue.
Fourth quarter total GAAP operating expense was $44 8 million, a decrease of $4 4 million or eight 9% compared to the fourth quarter of last year.
Full year operating expense was $169 9 million, a decrease of $4 2 million or two 4% excluding.
Excluding the $25 $9 million gain from the 2019 real estate sale the improvement of primarily due to expense reductions of $8 4 million and employee compensation and benefits.
$6 4 million of newsprint.
$6 3 million and outside services.
And $2 million, and depreciation and one 4 million and distribution and $1 2 million and advertising and promotion and.
And 900000 and travel and entertainment expense.
As of December 31, headcount was 743, a decrease of 87% or 10, 5% from December of 2019.
The company had approximately $42 million and cash and cash equivalents.
And no debt.
Cash as of Friday March 5th was $39 million.
And for this year, we expect capital expenditures to be approximately $1 million.
As a reminder of the Companys note receivable with charter holdings and connection with the 2019 sale of our former headquarters is due on June 30 of debt this year.
While the charter holdings and compliance with the terms of the note and as publicly indicating its intent to develop the property new commercial real estate development everywhere has been impacted by the economic effects of the pandemic.
We continue to monitor the situation closely and stay in contact with charter holdings.
With regard to the company's pension plans, we do not have any mandatory contributions in 2021 and do not expect to have any for several years.
The company recorded a tax benefit of $1 7 million for the for 2020 and for this year, we expect cash taxes to be approximately 700000 related to the Texas margin tax.
Thanks for the operating decisions implemented over the past year, including actions, we took and response to the financial impacts of the COVID-19 pandemic, we remain well positioned with a strong balance sheet and a very pleased with what we're seeing this year so far.
Now that we've covered the financials I'd like to highlight a few operational success stories.
And with the recent storm that batter, Texas, both of the newsroom and the north plant demonstrated the power and importance of a successful metro paper.
Our reporters led coverage with important information on changes and the weather boil water notices and much more we never missed a day to print while other newspapers across the state we're not able to do so.
Over the past two years the editorial page has led on pushing for a significant reforms and human trafficking the debt.
Dallas Police Department has adopted a policing strategy, we called for targeting traffickers instead of women being sold on our streets.
And notably, Texas Governor, Greg Abbott took two significant steps, we called on him to do.
The pardoned a trafficking victim and created a special process for tracking for track picking and domestic violence victims to apply for Clinton and soon.
It is unlikely that any of this would have happened without our advocacy on this topic.
Our digital product development team continues to enhance the quality of our digital experience. We partnered with the Texas debuted on election coverage to deliver real time results, which attracted a large election audiences and.
Every article on our web site now has and artificial intelligence audio feature which will allow the member to determine whether they want to read or listen to our articles.
Within the last few weeks, our digital subscriptions of surpassed 50000 and.
In addition, our print stops were down 28% year over year, which helped fuel a print and digital membership volume growth on.
Our monthly average membership grew by 384 members and 2020 versus losing 839 members and 2019.
Belo <unk> company started the year by retaining their 15 largest agency clients. These clients are turning to grow 9% and revenue and the first quarter of this year over the fourth quarter of last year.
Last year, we announced the senior leadership position focused on diversity equity and inclusion.
And internal counsel of employees is working together to provide feedback and guidance focused on key areas, such as work environment communication growth and development recruiting and hiring retention and community outreach the.
These efforts will ensure that we put talent first and that we are in graining diversity equity and inclusion at the forefront of everything we do.
We are incredibly proud of our successes last year and the momentum we have going into this year.
I will now turn the call over to Robert.
JD, Thank you and good morning, everyone.
There are two unusual items and this year's proxy that will require a shareholder approval.
But first is authorization for the board to effect, a reverse stock split with a time and within the prescribed ratio as of the directors deemed to be and the best interest of the company and its shareholders.
We announced on our Investor call last October that the company became Noncompliant with New York Stock exchange listing requirements as of the end of the third quarter of 2020.
Kt has been working closely with the exchange to engage and its procedures for addressing non compliance.
And most recently, we have involved the company's outside counsel and investment bankers to identify actions of the company can take to meet the listing requirements going forward the <unk>.
Board reviewed all of these factors of its regular meeting last Thursday.
<unk> the reverse stock split is the best course of action provided market conditions and other external factors for similar to what the company is presently experiencing.
A reverse stock split is commonly used in cases like ours.
Katie will be in touch with our largest shareholders to solicit your support of this proposal, which will be described in detail on the preliminary proxy statement, we expect to file next Tuesday March 16.
The second matter included and this year's proxy is a proposal to change the company's name for a H Belo Corp to Dallas News Corp.
While this new name aligns with the company's specific purposes and adds another dimension to our brand strategy. The impetus is my conviction and my recommendation to the board that we must collectively support a readers and our employees and our fellow citizens by embracing the social Justice movement under a.
And of America.
Since the first gained the influence over the company's broadest priorities and the early 19 eighties.
And throughout my 10 years, as Chief Executive Officer I.
Of strive to set high standards for diversity equity and inclusion.
The company has often been a first mover of both the operating and corporate levels and we recently redoubled our efforts as an enterprise that while smaller than before as just as a resolute about the.
Over the course of 60 years GB daily became one of the most imminent civic leaders and Dallas history.
And when do we bought our company and 1926 the kept the name of a H Belo we had built up the business from the newspaper Belo purchased outright and 18 81 of the Galveston and news.
The lowest one of the most admired and newspaper owners in America and by the time of his death, and 19 O one and given daily the chance to embark on his long distinguished career, when you assign daily the startup the Dallas morning News and $18 85 at the age of 26.
For this far more important today, however is that our company understand and respect the experiences and feelings of each and every person with whom we engage and upon whom we depend on.
This compact requires me and my colleagues to establish and maintain and unemotional perspective on below of himself.
A H Belo grew up in North Carolina during the pre Civil War era.
And his family was prominent and the town of Salem, and he volunteered for the Confederate Army at the age of 21.
He engaged and numerous battles was gravely wounded and advanced for the rank of Colonel.
<unk> family owned a number of slaves below of himself never did.
We are keenly aware of the relationship of our company's name for a person who figured prominently in the Confederate Army.
As the source of discomfort, even paying for many of our fellow citizens.
And that isn't a tolerable to the leaders of this enterprise.
The decision to adopt the named Dallas News Corp is made out of a respect for all of the companies many valued constituents and we look forward to a bright future as Dallas News Corp.
We are now I think ready for Q&A, So Stacy we're turning it over to you.
Thank you, ladies and gentlemen, if you wish to ask a question. Please press. The one then zero on your Touchtone phone and you may remove yourself by repeating the one zero I'll come and so once again if you have a question. Please press one and then zero at this time.
And our first question will go to Chris Mooney with Wedbush Securities. Please go ahead.
Good morning, all and Robert Thank you for that very interesting history lesson I didn't know so what you were just telling us.
And just the service.
Yes, yes, yes.
I would look forward to a conversation with more detail at some point.
And since you were talking about the potential for a reverse stock split would you first.
Clarify exactly what the issue is with the New York stock exchange for shareholders.
I will tag team that responses the cagy there too to standards that the exchange has and.
We do not qualify for either presently.
And then and it also relates to stock price. So there's a combination of factors the only way to cure the situation and our view of the board and our advisors.
And as to <unk>.
Conduct the reverse stock split to get the price up to a level, where we have ample cushion to anticipate future market conditions, but the the.
Simple reality is we don't think we can get there in terms of compliance during the 18 months that we are permitted to.
Remediate and if you will.
And of the places where were out of compliance, but let me ask Katy to elaborate on specifically those two factors.
Good morning, Chris and the two standards are and as an either or you have to maintain a $50 million market cap over a 30 day average and the other is you have to maintain eye stockholders' equity of $50 million as well and at the end of October or the end of September.
And we fell below the stockholders equity we had already fallen below the $50 million market cap 30 day average earlier and a year.
And so while we have an 18 month period of getting back in compliance with the New York Stock Exchange as you know a reverse stock split requires shareholder approval with the shareholder meeting in May and felt that it was the right thing to do to them.
Go ahead and seek the approval from our shareholders to give the board the authority to conduct a reverse stock split and what Youll see and the proxy is that it's going to be.
And make a conduct a reverse stock split up until the end of this year and again, it's an alternative for us when you look at other exchanges.
And the event that we cannot regain compliance with New York stock exchange or don't feel like we can if you look at other exchanges most of them have a requirement for a three or a $4 stock too.
Joined the exchange so really this is and.
A proposal that gives us the flexibility that we will need going forward.
When we need to make a decision around either regaining compliance on New York or looking at other exchanges.
Okay.
I guess I'll answer on.
I'll vote in favor of that.
And that's good thank you.
I count that much.
Some of a whole list of questions or is there a bunch of people and Qs, it's not I've got like five or six questions.
That's right now youre at the low you on okay.
I was on your website last night you have you have listed 28 job openings.
Eight of them I guess are and Campbell's center, so that would be below a <unk> company and 17 in downtown and the Dallas morning News three and Tulsa and then it also shows that you have the Denver location now maybe you did before and I didn't realize it.
So a great you are correct, we do have a personnel and Denver, we don't have an office in Denver. This is and the world of remote and working from anywhere and we've identified some talent. They are part of CLO and company.
And our revenue generators and you are correct, we do of a number of openings and our news department on.
Here, we also and Tulsa as you know that was the location of cubic. So that is our creative agency and a creative and strategy services and do have some opportunities and openings. There again, it's a great market for us.
Where we can hire some talent, but I'm going to turn it over to grant as well to let him add some commentary on that yeah, obviously and say, Chris I mean, obviously, we've got.
Positions that we're trying to fill yet obviously and the loss position that we're in and.
We're looking very closely at every position refill and we up and ask ourselves and this is a question is was this a position that was more intended for our.
Legacy business or is it a position that can help us grow into the future with a digital first mindset. So.
Especially being able to expand the areas like Denver, specifically, we have found that attracting tech talent and developer talent even.
To broaden that base and the the.
The areas, where we can have those employees has proven value both to us in terms of finding the best talent and a digital first business.
Okay.
Interesting.
And Ken and since you're on can you comment about the and I know there was a brief comment about the Belo <unk> company can you give us some additional detail on how things are going there.
Yeah, Chris I'm happy to.
I think let me start with kind of of the challenge, which is the print side of the business.
We have some of our largest areas of our print advertisers, who especially given the context of the pandemic obviously.
Obviously, you've had pressured businesses as a result of of the two categories I would highlight.
And as our furniture category and grocery categories, which are a rather large for us and print.
And we've been and frequent communication with those advertisers, but on the furniture side of things like inventory has been so difficult that their advertising spend has gone down because they don't have enough inventory to.
A market the volume.
Of furniture that they would like to sell a grocery has been a different challenge where.
Actually their demand for what they've had because of restaurant closures has gone up to where they have not had the need to advertise.
I will tell you on the digital side I've been very pleased with how much the digital side has rebounded more quickly than the print side.
And and I think it was really reflected and kind of a quicker balance back that we saw in the fourth quarter.
And all of the signs we see a continuing to look positive on that digital growth, which I think we've just found to be much quicker to rebound on the print side.
Okay.
Yeah, and Belo and color.
Okay.
Just with the company overall.
Look we of retaining the clients has been the number one piece of debt.
Equation as you can remember, Chris very well, if we rewind the clock of about two years ago, we were experiencing significant client churn at the low end company.
Which was a big part of our problem of why we were having a trouble finding stability and those revenue lines I'm very pleased to say as Katie referred to and the script that our top 15 advertisers between the fourth and first quarter, which is when we have our largest renewal periods on contracts, we have retained all of them.
So the client retention has been a number one priority keeping them as a very positive sign now whatever their business model that is impacted by the pandemic and when they choose to.
Continue basically reestablished normal spending levels as.
And as the pandemic hopefully continues to soften.
I think it looks very positive for us because we are a.
We have a loyalty of the client base. So I'm very very pleased for the progress that has been made on the Bureau and company side.
And just the replay the.
A <unk>.
15, or whatever more are on you have some type of retained a relationship with them. So they are revenue generating.
We do yes, yes, exactly they're all on revenue based contracts.
Okay great.
Katy on the pension plans.
And the commented in the past the week where it.
And maybe as many as 10 years before we're required to make the payment.
Can you comment about that you did you said it would be several years.
And then can use a suite.
Possible to tell us what the allocation was between debt and equity et cetera.
Absolutely so Chris I'm really pleased to say that our pension plans.
And again, given a lot of very smart decisions made historically, our pension plan is over 90% funded and a which is very different than a lot of our peer group and from.
From a payment perspective, I don't expect the payment on the next 10 years based on where we are on.
And looking at our investment allocation and that had been part of our de risking strategy last year, I think and before we actually did move from $50 52, a $45 50 555 on the liability hedging.
And to your question for this year, we have actually moved.
More significantly down the glide path and are now at a 10% asset return and a 90% hedging.
It's important to note on this no debt.
From an investment allocation.
You have the flexibility to revisit that at any point in time and.
And there are no fees. The change that is just the fees of whatever the investment is that you may be and but on the pension deficit Committee did feel that the 90% plus funded.
And we took the opportunity to take some of the gains that we saw on the asset side last year and and see how the market performs.
No.
Congratulations you all seem to be doing a very good job of dealing with that.
Thank you.
There's a line item in the.
Income statement.
And that seems to be getting larger as we over the last couple of years other income.
On a net what is that.
Let me look at the other income on the <unk>.
On other income net.
So that is going to be one we had interest income and there and Thats, where our charter holdings note is the interest is coming in so that's predominantly what that net debt number is.
Chris.
And the pinch on credit at the other item that's sitting in there as well, but it really is the interest income as a right now if you think about 2020 we.
We have increased the a the interest and went to four 5% so almost a $1 million this year compared to 19, where we only had.
The two quarters of interest payments, so that is the significant growth and year over.
The year on charter on charters for the charterer Noga, alright, and the China.
Okay and.
Great. Thank you and on charter.
Are they continuing the.
They they started demolition have they continue to sort of the build out phase and then and there for base.
No.
Chris we are told not having a inspected the property ourselves the demolition of the.
Dallas morning News building. The interior demolition is essentially complete that's a big project, so that would be well more than a million dollars of.
Demolition.
Our further understand and he is of the what's called the TXT and building behind it.
It is essentially and the condition. It was when we sold the <unk>.
And its occupy a bull in other words.
There's been no further debt.
<unk> on the site you can imagine that.
The full stop of the pandemic.
Caused really washroom and charter too.
On the spend any active.
Construction and the revisiting as we're told.
<unk> civic organizations revisiting the exactly what the mix would be of uses there.
But when you you sort through it all right.
It really has.
Somewhere around $8 million to $9 million invested and this property.
So he is he's got a a pretty pretty big stake there.
Yes, and I would assume you'd be able to resell it and get it back.
Oh sure.
Net debt and a downtown as a.
Coming along nicely you may have seen recent announcements adjacent to the site and there are.
And <unk> $300 million total investments by other substantial.
A substantial individual investors and backed by a financial partners, who are sophisticated and commercial development.
Yes, no that's the.
And that set of downtown is doing quite well.
Hmm.
Yes.
Have you all had any further communication with both of them.
Three and did.
And not no.
Yes.
Is it.
I have never actually I don't see them when I look at the holder's list.
Do they show us a different entities and dolphin.
Chris We don't know either but we do know that they have a low 5%.
I don't know exactly how the shares or are held and or and how many funds and their names.
Okay.
And there was a fairly high profile events and Australia recently.
Even with the payment for.
I use Facebook to the publishers and Australia.
Is there anything similar potentially or happening and the U S.
Chris Let me kick off that subject and grant and amplify of Google is really the entity, that's most prominent and everyone's.
Thinking about how this might play out yes, there have been.
Payments by Facebook, including to Us and.
And we talked about that last year of.
And we don't want to be over enthusiastic about this development, but it is very significant for the newspaper and print industry.
Print publications.
This is the.
Really the the centerpiece of <unk>.
20 years of discussion and negotiation.
Disagreement about whether we own our content and it should be paid for it and is.
If this continues to move and a positive direction, which grant and describe.
It certainly is a potential benefit for us and for us.
Any publisher with high quality content. So this comes back to the the value and the content is its quality and its breadth, which is what we have invested and all of these years that's a.
We feel.
I feel optimistic that we may.
B and a reasonably strong position here along with the other publications that of a similar philosophy grants on the the board of the industry organization. That's following this most closely let me let him elaborate yes, Chris this is a it.
It is something we've been focused on as an industry for quite some time and we're extremely pleased to see that some of the momentum that's happened not only in Australia, but it also happened and France prior to that and so we've been watching what's happening internationally and then seeing when that will come to the United States what is the most.
The important about what happened in Australia is the news Corp has quite a few Australia Holdings and addition to the Wall Street Journal and so what was reported there obviously is the the Wall Street Journal.
Also with the first I believe the first domestic hub.
Publishing organization and newspaper.
To basically come to a licensing deal.
Our hope is that that the begins the process of debt now.
Coming more deeply into the United States. So that the if that happens across the board and from everything that I'm hearing is that at least those early conversations are beginning which is very positive.
Okay well.
Ill remain hopeful.
Let's see Katie are there any.
Unusual or non normal.
The expenses expected during 2021.
Chris I can't think of anything that I would call out of the ordinary well I would say, though is that in 2020, we saw some real benefit from lower newsprint costs, what I would say is going into 'twenty. One we are starting to see that.
Newsprint pricing may come under pressure and we are paying.
Paying close attention to that that's really the only the only kind of expense that I would say that we may see go the other way and 21 as an increase versus the favorability that we saw in 2020.
What I would say on other expense lines.
I would continue to see a offered the opportunity and the comp and the band line compensation and benefits again, our head count is lower than where it has been a.
And from a trend perspective, obviously, we'll continue to monitor the asset other than that those are really the two key expense lines on our P&L as you know.
Yes.
Yes and.
Anything on the revenue side that would be.
There's nothing that I can call out I mean the.
And the very or the than the.
The variance that we have on.
On the digital side the of the cars Dot Com relationship ended in September of 19. So that has now moved on and so our year over year comparisons.
Will no longer include that nor on the commercial print side on that.
It also happened in the first quarter of 19th of that variance is now move I think the biggest.
Fluctuation and Youre going to see a year over year is just the comps compared to 2020, especially in the second and third quarter and just given you know the.
The challenges that we saw and that goes back to what grant.
Yeah. That's it goes back to a grant said and I'll, let him add some comments on the revenue I know, obviously and say Chris I think.
We're in such a unique phase of this pandemic, which is seeing what categories.
For example, the tourism category was just devastated for US last year, we oftentimes will have quite a bit of travel and advertising to Mexico. As an example of the ski areas of Colorado as an example, and so.
I think it's just going to be a big question marks for us of seeing kind of how.
Things returned to normal and how quickly marketing budgets are returned to normal IPO.
The the lines of our subscription revenue a R.
For.
A more controllable for us the things.
For the advertising spend on the Belo <unk> company side.
Yes.
Okay.
Yes.
And just trends I guess the.
Going into this year have noted any improvement.
What I would say on and the let grant talk for on this but on the circulation revenue.
And obviously, we've been very pleased with what we're seeing not only with the growth on the digital subscriber, but as I mentioned, we were in a net and position for our subscribers and.
That had been a positive coming out of 2020, yes. The only other thing I would say too Chris is on the <unk> side of print, which is our display advertising inside of the pages of the newspaper.
And I've been very pleased with seeing that rebound in the.
In the first couple of months of the year.
The insert or a pre print line.
Is not rebounding quite for the same rate debt that the aro pedal on news.
Yes.
Well. Thank you all I think of.
Covered up my legal pad here, so I'll I'll stop for now but.
Thank you.
Have a good day, thank you James.
And we'll go to a bill NASA Covid with Heartland Advisors. Please go ahead.
Well. Thank you good morning, everybody.
Good morning, Good morning Bill.
<unk> on a boy I missed that number in terms of.
The print subs, what was that number again Katy.
We said, we did not and we did not have the print sub number and there, but our print subscription if you think about kind of our Sunday as our as our stake hold is probably right around 100000, and so when you think about that plus our digital.
And we're north of a 150000 when you look at our total membership which is how we're looking at the business, okay, well congratulations on the digital growth too and keeping the.
The print subs, so what would be the average.
Selling price and for digital and customer today.
Digital customer Bill and good morning. Its grant is about <unk> 30, a little over a $13 about $13 and.
And 30 a month.
As opposed to a print side, which is now averaging around $42 a month.
Okay.
And then.
Any trends that you'd like to comment on in terms of digital.
Growth and also.
Eventual price increases.
Yeah, I mean, bill I mean part of what we've tried to do is not only on the volume and.
My team hears me per each this all the time if you could go discount your digital subscriptions to a to a dollar a year and we could be adding tens of thousands of just wouldn't it wouldn't benefit you as you would buy and getting them to pay you a $14 or more per month I've been pleased that we have gotten.
And improved actually our rate on the digital and print side more in the past 18 months.
And then we had our best about our three years prior and so I'm really pleased we're trying to always kind of balance about rate versus volume equation and so not only are we very pleased about the volumes that we experienced in 2020, but we're also equally as pleased with how we've been able to re.
The pain those members at a higher rate. So we're always just trying to figure out where is that optimal balance.
Okay.
So in your release grant.
You and Katy were mentioned I think by Robert as <unk>.
Continue to make investments and operations to enable the company to.
Build for sustainable profitable digital business.
And youre going to be defining this path could you just amplify on what that path might be and what do we need to break this company even.
Yes.
I think part of it is we're trying to make investments and our growth areas right and for.
And about the easiest example of that is to talk about developers.
And people, who are developing the digital product or the developers and.
Engineers that are making the digital subscription and digital advertising parts of this equation work.
We continue to need more of them a we continue to seek more of them and it's part of what I was referring to even with Chris Mooney of saying that our footprint geographically.
And expand at times to allow ourselves to attract the best talent and so I would say when we really talk about the investments, it's not only and the technology itself, where we move to things like the arc platform and 2020, which is the platform owned by the Washington Post company and Jeff Bezos, but it's also of the divi.
<unk> to develop on top of that platform. So that our digital products can be second to none I mean, we just know that for the type of prices that we are asking people and when a continue to ask those digital members to pay that they're going to they're going to put us up against the most sophisticated digital.
Products and the country and so we have to continue to improve not only do we have to continue to a first class content, but it has to be.
Within a first class digital product and so those of the kind of investments we need to make to ensure that a digital future.
And is not only growing but it's growing profitably.
And arc was added win.
The arc, we launched what was called there is two pieces of bark theres the content management system, which we launched in the fourth quarter of 2019, and then we launched on their subscription technology and the third quarter of 2020.
So it's relatively new.
Hmm.
And it sounds exciting.
So.
And I know you touched on this about $3 $3 million was spent last year in terms of severance and impairment.
And you don't anticipate anything.
Close to that and this year.
The bill.
Bill.
Yeah, I mean on the impairment side no we of impair.
All of the goodwill and intangibles and alike.
When we think about severance you know this kind of goes back to the then that lithium and grant and were just talking about for it and I continually look at the business.
And obviously aware of the market conditions and realize the importance of.
And what it's going to take to get back to profitability and being able to breakeven and.
Not sure at this point and time, whether that would include anything around having to do anything on the head count, but as we look at this year, we don't have anything planned for severance right now but continue to.
And keep that in mind.
Uh-huh Bill.
This is Robert going back to the work we did in 2019 and as you know we had a.
Very significant effort looking at.
With outside advisers, what the 357 year scenarios look like the <unk>.
For anyone to follow from an Investor standpoint, I think is the transition of the cost structure ultimately to align with a revenue base driven more by digital subscriptions and print subscriptions. If anybody has the real timeline on the call.
On a month on and investors I mean anybody and the industry, but that's what everyone is looking at.
And we're in the early stages I think of that transition.
But ultimately when we're talking about a sustainably profitable digital enterprise it has to be one where the revenue generated by our digital.
Subscriptions digital members is as grant said at the right price point can be increased over time as we provide them value for their subscription and ultimately get to a place where we're not as dependent on things that really are.
Old School, I mean, newsprint pricing, we have no control of the newsprint pricing publishers never have a years ago, we vertically integrated and all and the newsprint business and invested in newsprint production plants and so forth.
And then we Couldnt control.
So the beauty of the digital World is we have more control over more things. If we have a sufficient number of members at the right price point, and that's where we're trying to arrive as soon as possible.
Sure.
Well on that point.
The Texas and Dallas too of course has been and the news nationally as a beneficiary of.
From a macro mega trends going on and the country and that has to have had of a positive effect on the business.
Can you amplify on that of a bit.
Bill its bill.
We've had a lot of things go our way as an economy, but this is more about media habits.
The unmet or whether you are.
In South Dakota, Washington State, our North Texas.
We're dealing with a generational.
<unk>, obviously, that's been underway for a more than two decades and.
What we have to do is capture the first of the interest.
Of those cohorts.
Whichever.
Non deploy them and you wanted to put on them.
And then give them a reason to invest and a nation and a subscription to become a member.
The economies of boost of more people here and there are more you could argue more.
The middle and upper income folks who are digitally oriented, but we still got a go get them and that's good that's the challenge ever used for evidence.
Congratulations on the move for the proposal for the Dallas the change the name change I think that's congrats.
Congratulations.
Thank you and perhaps I missed it.
And I haven't found your U K for the year. So what is the NOL.
Our NOL going into this year is approximately $35 million or actually a little bit more than that and by $37 million of that.
The $17 million expires in 2037, and then $10 million has no expiration.
And on the timing of the K, we are working on that.
Again, we were able to have the earnings call and to the press release out of our financials are done and we're just working through the mechanics of getting the 10-K filed and hope to have that done as soon as possible.
That would be helpful. Thank you.
And then finally.
Yeah.
The Tribune has been brought out a what do you think of of that development and how does that.
Affect our business.
Bill of it doesn't doesn't affect our business.
And and I wanted to.
And the even.
About this.
The the consolidation that's gone on with the private equity and hedge funds is created entities that are following a different strategy than ours.
It's not about creating a digital business as I. Just described it's about the financial engineering approach I think more so.
And it has resulted and all sorts of disruptions.
And use paper companies across the country. There is a tremendous amount of consolidation, but the quality component of content and how a newspaper or a group of newspapers goes to market.
As.
Exists only with a few companies at this point and.
Spare you my view of whether that's a good or bad for the.
Of the country, but it's just a fact and we purposely.
Purposefully reduced the size of our company and to focus on the Dallas morning News, where we believe we have the opportunity to succeed in this transition.
And where we think our long standing commitment to delivering really outstanding news and information of the projects.
And the initiatives such as the ones the Katy.
<unk> mentioned earlier is the way home and I I would not be a sanguine about the financial engineering strategy frankly.
Okay. Thank you and then just finally, a kt in your presentation. There were a lot of of facts and figures there and trends that would be helpful for shareholders.
If we could have a.
A replay of that I know it's a.
Verbally, but also on print that would be helpful.
So that we don't Miss any of the details.
And Apple heavily that should be that bill and that should be on our website with and I would say probably the next 24 to 48 hours not only the audio but there will actually be a hard copy of that as well.
Perfect. Thank you so much.
Thanks Bill.
Thank you.
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Well Stacy. Thank you very much I think we're coming at the on on the hour, we'd like to thank everybody for listening to our fourth quarter and full year earnings.
And investor update and look forward to keeping in touch with everybody and our next earning call after our first quarter. Thank.
Thank you. Thank you.
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