Public companies are required to disclose risks that can affect the business and impact the stock. These disclosures are known as “Risk Factors”. Companies disclose these risks in their yearly (Form 10-K), quarterly earnings (Form 10-Q), or “foreign private issuer” reports (Form 20-F). Risk factors show the challenges a company faces. Investors can consider the worst-case scenarios before making an investment. TipRanks’ Risk Analysis categorizes risks based on proprietary classification algorithms and machine learning.

DallasNews disclosed 15 risk factors in its most recent earnings report. DallasNews reported the most risks in the “Finance & Corporate” category.

Risk Overview Q3, 2020

Risk Distribution

33% Finance & Corporate

33% Production

13% Ability to Sell

7% Tech & Innovation

7% Legal & Regulatory

7% Macro & Political

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

This chart displays the stock's most recent risk distribution according to category. TipRanks has identified 6 major categories: Finance & corporate, legal & regulatory, macro & political, production, tech & innovation, and ability to sell.

Risk Change Over Time

S&P500 Average

Sector Average

Risks removed

Risks added

Risks changed

DallasNews Risk Factors

New Risk (0)

Risk Changed (0)

Risk Removed (0)

No changes from previous report

The chart shows the number of risks a company has disclosed. You can compare this to the sector average or S&P 500 average.

The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.

Risk Highlights Q3, 2020

Main Risk Category

Finance & Corporate

With 5 Risks

Finance & Corporate

With 5 Risks

Number of Disclosed Risks

No changes from last report

S&P 500 Average: 31

No changes from last report

S&P 500 Average: 31

Recent Changes

0Risks added

0Risks removed

0Risks changed

Since Sep 2020

0Risks added

0Risks removed

0Risks changed

Since Sep 2020

Number of Risk Changed

No changes from last report

S&P 500 Average: 3

No changes from last report

S&P 500 Average: 3

See the risk highlights of DallasNews in the last period.

Risk Word Cloud

The most common phrases about risk factors from the most recent report. Larger texts indicate more widely used phrases.

Risk Factors Full Breakdown - Total Risks 15

Finance & Corporate

Total Risks: 5/15 (33%)Below Sector Average

Share Price & Shareholder Rights2 | 13.3%

Share Price & Shareholder Rights - Risk 1

The market price of A. H. Belo's common stock may be volatile.

Many factors could cause the trading price of the Company's common stock to rise and fall, including, but not limited to, declining newspaper print circulation, gain or loss of significant print and digital advertising or marketing services customers or other customers, acquisitions or investments, low stock trading volume, changes in recommendations by securities analysts who elect to follow the Company's stock, and changes in market conditions of the media industry or the economy as a whole, including the recent effects of the COVID-19 pandemic on the stock markets generally, and specifically on the Company's stock price.

Share Price & Shareholder Rights - Risk 2

A. H. Belo's directors and executive officers have significant combined voting power and significant influence over its management and affairs.

A. H. Belo directors and executive officers hold approximately 53 percent of the voting power of the Company's outstanding voting stock as of December 31, 2019. A. H. Belo's Series A common stock has one vote per share and Series B common stock has 10 votes per share. Accordingly, A. H. Belo's directors and executive officers will have significant influence over the Company's management and affairs and over all matters requiring shareholder approval, including the election of directors, amendment of the Company's Certificate of Formation and Bylaws, and significant corporate transactions and transactions with or benefitting certain "Interested Shareholders," as defined in the Company's Certificate of Formation.

Accounting & Financial Operations1 | 6.7%

Accounting & Financial Operations - Risk 1

The Company cannot guarantee the timing, declaration, amount, or payment of dividends on the Company's common stock.

The timing, declaration, amount and payment of future dividends to stockholders falls within the discretion of the board of directors. The board's decision regarding the payment of dividends will depend on many factors such as the Company's financial condition, earnings, capital requirements, potential future mandatory pension contributions and other factors the board deems relevant.

Debt & Financing2 | 13.3%

Debt & Financing - Risk 1

The sufficiency of the Company's liquidity is dependent upon meeting future financial goals.

Although the Company's cash holdings are sufficient to meet foreseeable operating needs, the Company must achieve expected financial goals. Unplanned events such as tax obligations, significant loss of revenue, unprofitable operations, deterioration of collections of receivables or mandatory pension plan contributions, could accelerate the use of the Company's cash balances. These factors may impact the Company's ability to pay dividends or to raise financial capital for investments or acquisitions necessary for the Company's long-term growth.

Debt & Financing - Risk 2

Market conditions could increase the funding requirements associated with the Company's pension plans.

The Company is the sole sponsor of A. H. Belo Pension Plans I and II (collectively, the "A. H. Belo Pension Plans") and is required to meet certain pension funding requirements as established under the Employment Retirement Income Security Act ("ERISA"). Instability in global and domestic capital markets may result in low returns on the assets contributed to the A. H. Belo Pension Plans. Additionally, low yields on corporate bonds may decrease the discount rate, resulting in a higher funding obligation. Although legislation was enacted into law in 2012 which provided limited funding relief, market conditions could materially increase the funding requirements associated with the A. H. Belo Pension Plans, with an adverse effect on the Company's liquidity and financial condition.

Production

Total Risks: 5/15 (33%)Above Sector Average

Employment / Personnel2 | 13.3%

Employment / Personnel - Risk 1

Significant turnover of key employees could expose the Company to loss.

A. H. Belo relies on the efforts of its senior executive officers and other members of management. The Company is located in a vibrant economic region of the United States with low unemployment and strong competition for senior management personnel. The success of the Company's businesses depends heavily on its ability to execute the required responsibilities of these roles as well as the Company's ability to retain current management and to attract and retain qualified personnel in the future. The loss of key personnel would result in additional recruiting and training costs to the Company, and the potential delay of operations until the hires have sufficient knowledge commensurate with their assigned duties.

Employment / Personnel - Risk 2

The success of the Company is dependent on the Company's ability to attract, hire, motivate and retain employees with the skills and technical knowledge required to successfully sell and implement its services and offerings.

There is intense competition for scarce talent with skills in new digital technologies, and the Company may be unable to cost-effectively hire new employees with these skills, which may incur increased costs. The ability to achieve significant future digital and marketing services revenue growth will depend on the Company's success in recruiting, training and retaining sufficient numbers of direct sales and implementation professionals. New and planned hires require significant training and time before sales and implementation teams become fully productive. The Company's growth could be hindered if these sales and implementation professionals are not successful in generating a corresponding significant increase in revenue.

Supply Chain1 | 6.7%

Supply Chain - Risk 1

A. H. Belo relies on third-party service providers for various services.

The Company relies on third-party providers for various technology and services including, but not limited to, network and infrastructure services, email, news content management, customer relationship management, circulation distribution, benefits and payroll processing, and financial management systems. The Company does not control the operations of these service providers, which are subject to similar security threats that the Company could experience, such as malicious activities or natural disasters. The continued and uninterrupted performance of third-party systems and services is critical to the Company's operations and any significant interruption due to system failures could be disruptive to the business. In addition, if third-party service providers face financial difficulties or terminate their relationship with the Company, this could adversely affect the Company's ability to satisfy its customers or operate the business, and could affect results of operations.

Costs2 | 13.3%

Costs - Risk 1

The Company's potential inability to execute cost control measures successfully could result in total operating costs that are greater than expected.

The primary costs of the Company's operations include employee compensation and benefits, followed by distribution costs, newsprint and other production materials and technology costs. The Company has taken steps to lower costs through selling or discontinuing unprofitable operations and products, reducing personnel, restructuring employee benefits, and implementing general cost control measures. Although the Company continues its cost control efforts, it may be unable to continue to match revenue declines with offsetting cost reductions. Certain operating costs may not fluctuate directly with changes in revenue, which could result in lower margins if advertising and circulation volumes decline. The Company could experience inflationary pressures from newsprint and other suppliers and be unable to generate additional revenue or additional cost reductions to offset these pressures. The Company utilizes outside service providers to distribute its newspaper and certain preprint advertising through the mail. Higher fuel costs and/or postage rates or an increase in rates from outside service providers could result in higher direct costs incurred by the Company. Increasing costs of healthcare benefits offered to employees requires the Company to evaluate the scope of benefits offered and the method by which health care benefits are delivered. Competition for qualified personnel may require the Company to spend more on compensation costs, including employee benefits, to attract and retain its workforce. There may be other factors outside of the Company's control that could increase employee compensation costs, including, but not limited to, an increase in the minimum wage. The Company may not be able to pass on to customers these potential cost increases given the significant competition for advertising dollars and the ability of customers to obtain news from other media at a low cost. If the Company does not achieve expected savings or if operating costs increase due to the creation and development of new products, total operating costs may be greater than anticipated. The Company believes appropriate steps are being taken to control costs. However, if the Company is not successful in matching revenue declines with corresponding cost reductions, the Company's ability to generate future profits could be affected.

Costs - Risk 2

Newsprint prices are volatile and may increase in the future, and newsprint supply may become increasingly scarce as paper mills exit the market.

The basic raw material for newspapers is newsprint, the cost of which for the last two years has represented between 5.0 percent and 6.0 percent of A. H. Belo's revenues. The Company's publishing operations depend significantly upon the continuing availability of newsprint and the Company's results of operations may be impacted significantly by changes in newsprint prices. The price of newsprint historically has been volatile. Consolidation in the North American newsprint industry has reduced the number of suppliers and has led to paper mill closures and conversions to other grades of paper, which in turn has decreased overall newsprint capacity and increased the likelihood of higher prices. Other factors that may increase prices for newsprint include: - The imposition of tariffs or other restrictions on non-U.S. suppliers of paper - Increases in supplier operating expenses due to rising raw material or energy costs or other factors - Decreases in the Company's current consumption levels - The Company's inability to maintain existing relationships with its newsprint suppliers In addition, the Company's ability to supply its publishing operation with newsprint has been and may continue to be disrupted by such factors as: - The Company's suppliers may be unable to deliver newsprint due to labor unrest - Trucks or other means of transporting newsprint may become unavailable - Paper mills may close at a faster rate than declines in the demand for paper The Company currently purchases its newsprint under a paper supply agreement with a newsprint broker, which is the Company's sole supplier of newsprint from designated newsprint suppliers at market-based prices during the term of the agreement. The agreement is renewable for successive one-year terms upon mutual agreement of the parties, and is terminable by either party on 180 days prior written notice. If this paper supply agreement is terminated or expires without renewal, significant increases in newsprint costs or the Company's inability to obtain an adequate supply of newsprint from other sources in the future could adversely affect its financial condition and results of operations. Significant increases in newsprint costs or the Company's inability to obtain an adequate supply of newsprint in the future could adversely affect its financial condition and results of operations.

Ability to Sell

Total Risks: 2/15 (13%)Below Sector Average

Brand / Reputation2 | 13.3%

Brand / Reputation - Risk 1

The Company's reputation and brands are key assets and negative perceptions or publicity could adversely affect the business, financial condition and results of operations.

The Company has a reputation for producing reliable, high-quality journalism and content. The Company's reputation and brands are key assets and must be preserved and leveraged for the Company to continue to be successful. If the Company's reputation is damaged or if consumers perceive the Company's products to be less reliable, the business, financial condition or results of operations may be adversely affected.

Brand / Reputation - Risk 2

The Company operates in a highly competitive media market, and the Company's ability to generate revenue depends on the effectiveness of the Company's strategy to promote new and existing products.

Historically, newspaper publishing was viewed as a cost-effective method of delivery for various forms of advertising to a large audience. The continued development and deployment of new technologies and greater competition from digital media increase the challenge to provide competitive offerings that retain the Company's print and digital advertisers. In addition, many national advertisers which place advertising in the Company's newspaper have significantly reduced marketing budgets. These advertisers are centralizing purchasing functions and streamlining the buying and negotiating process. This could result in further commoditization of certain advertising products, which limits the Company's ability to promote its position in the market, the customer service value of its relationship with advertisers, and the benefits of its suite of products, including the Company's ability to upsell other products. This may also put the Company in competition with other advertising companies that are able to offer lower prices for a larger geographical area than the Company covers. Accordingly, the Company could experience a decline in pricing which could result in lower revenues and profitability. The Company has introduced new services and offerings designed to grow the Company's full-service agency capabilities including strategy, creative and media management with a focus on strategic and digital marketing and data intelligence that provide a measurable return on investment to its clients. Full-service agency offerings are rapidly evolving as business customers seek quantifiable results to measure the effectiveness of advertising spending. The Company's customers primarily represent mid-sized businesses with varying degrees of knowledge and familiarity with online marketing and advertising campaigns. The success of the Company is dependent on various factors, including the ability to: - Increase the Company's client base and achieve broader market acceptance of its suite of cross-channel, full-service agency capabilities - Overcome challenges related to the accuracy or perceived accuracy of metrics provided and the ability of the customer to properly interpret the effectiveness of advertising campaigns against benchmarks that may not be reliable - Educate customers on the benefits of marketing services to their businesses - Obtain new clients as well as sell additional products and services to existing clients - Maintain or increase the rates on products - Leverage existing print products, brands and technologies to distinguish products and services from those of competitors A. H. Belo's newspaper and the newspaper industry as a whole are challenged to maintain and grow print circulation volume. To the extent circulation volume declines cannot be offset by rate increases, the Company will realize lower circulation revenue. Circulation volume declines could also result in lower rates and volumes for advertising revenue. The Company's ability to stabilize circulation revenue through price increases and by growing its paid digital subscriber base may be affected by competition from other forms of media and other publications available in the Company's markets, declining consumer spending on discretionary items such as newspapers, decreasing amounts of free time, and declining frequency of regular newspaper buying among certain demographic groups. The Company may also incur higher costs competing for paid circulation. If the Company is not able to compete effectively, revenue may decline and the Company's financial condition and results of operations may be adversely affected. The Company competes for advertising and circulation revenue with other newspapers, websites, digital applications, magazines, television, radio, direct mail and other media. The continued expansion of digital media and communications, particularly social media, mobile applications and the proliferation of tablet and mobile devices, has increased some consumers' preference to receive all or part of their news and information digitally. Websites such as craigslist.org, monster.com and cars.com provide a cost-efficient platform for reaching wide but targeted audiences for classified advertising. Websites such as Facebook, Twitter, Google and Yahoo! are successful in gathering and making available national and local news and information from multiple sources and attracting a broad readership base. The Company's success depends on its ability to develop and manage the Company's digital advertising and marketing services offerings and digital subscription business in response to the changes in consumers' preferences and behaviors, as well as changes to advertising expenditures, as described above. To be successful, the Company must: - Attract advertisers to the Company's full-service agency capabilities - Continue to increase digital audiences by providing consumers important and relevant news content regarding the North Texas market - Tailor products for mobile devices - Invest funds in digital technology software and platforms - Leverage existing print products, brands and technologies to distinguish digital products and services from those of competitors - Structure its sales force accordingly - Attract and retain employees with the skills and knowledge needed to support a successful full-service agency

Tech & Innovation

Total Risks: 1/15 (7%)Below Sector Average

Cyber Security1 | 6.7%

Cyber Security - Risk 1

Data security breaches, other security threats and information technology system disruptions could negatively impact A. H. Belo's businesses, reputation and results of operations.

The Company's information technology systems are critically important to operating its businesses efficiently and effectively. Information systems may be affected by cybersecurity incidents that can result from deliberate attacks or system failures. Maintaining network security is critical. Threats include, but are not limited to, ransomware attacks, computer viruses, computer hackings, disruptive software, error or malfeasance by an employee, or other malicious activities. Information systems may also be compromised by natural disasters, fire, power outages, terrorism or other similar events. The Company experienced a ransomware attack in November 2019, but did not experience any data breaches. The Company was able to successfully remediate, implement additional monitoring software and services, and continue operations without significant interruption to its operations. The Company depends on the security of its third-party service providers. Unauthorized use of or inappropriate access to the third-party service providers' networks, computer systems and services could potentially jeopardize the security of the Company's systems and confidential information. There can be no assurance that the actions and controls implemented by the Company, or its third-party service providers will be sufficient to prevent unauthorized access to the Company's data, release of confidential information, disruptions to critical systems or corruption of data. Cyber-attacks evolve quickly and often are not recognized until after they are launched, and the Company may be unable to anticipate them or implement adequate measures to prevent a breach or attack. Cyber-attacks, disruptions or failures could result in processing inefficiencies, late or missed publications, loss of sales and customers, and transaction errors, any of which could negatively affect the business or results of operations. The coverage and limits of the Company's insurance policies may not be adequate to reimburse the Company for all losses caused by security breaches and business interruptions.

Legal & Regulatory

Total Risks: 1/15 (7%)Below Sector Average

Litigation & Legal Liabilities1 | 6.7%

Litigation & Legal Liabilities - Risk 1

Adverse results from new litigation or governmental proceedings or investigations could adversely affect A. H. Belo's business, financial condition and results of operations.

A. H. Belo and its subsidiaries may be subject to litigation, including matters relating to alleged libel or defamation, governmental proceedings and investigations. Adverse determinations in any such matters could require A. H. Belo to make monetary payments or result in other sanctions or findings that could adversely affect the Company's business, financial condition and results of operations. Insurance coverage, if any, may not be adequate to cover all costs and/or losses. In some instances, the Company may have a contractual obligation from a third-party to indemnify liabilities related to litigation or governmental investigation, but if the third-party fails to indemnify us, the Company would be responsible for monetary damages.

Macro & Political

Total Risks: 1/15 (7%)Below Sector Average

Economy & Political Environment1 | 6.7%

Economy & Political Environment - Risk 1

The Company is susceptible to general economic conditions, natural catastrophic events and public health crises, and a downturn in advertising and marketing spending by advertisers could adversely affect its operating results.

The Company's operating results will be subject to fluctuations based on general economic conditions, in particular those conditions that impact advertiser-consumer transactions. Deterioration in economic conditions could cause decreases in or delays in advertising spending and reduce and/or negatively impact the Company's short-term ability to grow our revenues. Further, any decreased collectability of accounts receivable or early termination of agreements due to deterioration in economic conditions could negatively impact results of operations. Furthermore, the business is subject to the impact of natural catastrophic events such as earthquakes, floods or power outages, political crises such as terrorism or war, and public health crises, such as disease outbreaks, epidemics, or pandemics in the U.S. and global economies, its markets and business locations. Currently, the rapid spread of coronavirus (COVID-19) globally has resulted in increased travel restrictions and disruption and shutdown of businesses. The Company has experienced, and may continue to experience, impacts from quarantines, market downturns and changes in customer behavior related to the pandemic and impacts on its workforce if the spread of the virus widens and becomes of longer duration. The Company has been following the recommendations of local government and health authorities to minimize exposure risk for employees, including the temporary closure of some of the Company's offices and having employees work remotely. Employees, including financial reporting staff, have been working remotely since on or about March 10, 2020. If the virus were to affect a significant number of the workforce employed in printing operations, the Company may experience delays or be unable to produce, print and deliver its and third-party print publications on a timely basis. In addition, one or more printing customers, distribution partners, service providers or suppliers may experience financial distress, file for bankruptcy protection, go out of business, or suffer disruptions in its business due to the coronavirus outbreak. The extent to which the coronavirus impacts the Company's results will depend on future developments, which are highly uncertain and will include emerging information concerning the severity and length of the coronavirus pandemic and the actions taken by governments and private businesses to contain the coronavirus. The coronavirus is likely to have an adverse impact on the Company's business, results of operations and financial condition at least for the near term. The full impact of COVID-19 is not yet known and is rapidly evolving. The outbreak and any preventative or protective actions that the Company has taken and may continue to take, or may be imposed on the Company by governmental intervention, in respect of this virus may result in a period of disruption to the Company's financial reporting capabilities, its printing operations, and its operations generally. COVID-19 is impacting, and may continue to impact, the Company's customers, distribution partners, advertisers, production facilities, and third parties, and could result in a loss of advertising revenue or supply chain disruption.

See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.

FAQ

What are “Risk Factors”?

Risk factors are any situations or occurrences that could make investing in a company risky.

The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment.

They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result.

It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.

How do companies disclose their risk factors?

Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process.

Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”.

Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report.

According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.

How can I use TipRanks risk factors in my stock research?

Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing.

You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector.

Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements.

A simplified analysis of risk factors is unique to TipRanks.

What are all the risk factor categories?

TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below.

1. Financial & Corporate

Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results.
Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing.
Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments.
Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances.

2. Legal & Regulatory

Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company.
Regulation – risks related to compliance, GDPR, and new legislation.
Environmental / Social – risks related to environmental regulation and to data privacy.
Taxation & Government Incentives – risks related to taxation and changes in government incentives.

3. Production

Costs – risks related to costs of production including commodity prices, future contracts, inventory.
Supply Chain – risks related to the company’s suppliers.
Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls.
Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation.

4. Technology & Innovation

Innovation / R&D – risks related to innovation and new product development.
Technology – risks related to the company’s reliance on technology.
Cyber Security – risks related to securing the company’s digital assets and from cyber attacks.
Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying.

5. Ability to Sell

Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers.
Competition – risks related to the company’s competition including substitutes.
Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration.
Brand & Reputation – risks related to the company’s brand and reputation.

6. Macro & Political

Economy & Political Environment – risks related to changes in economic and political conditions.
Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19.
International Operations – risks related to the global nature of the company.
Capital Markets – risks related to exchange rates and trade, cryptocurrency.

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