DallasNews Corporation Announces Second Quarter 2025 Financial Results

• Agency segment profit improved $0.2 million on a year-over-year basis
• Pension annuitization is complete and the Company recognized a non-cash pension settlement charge of $35.3 million
• On July 9, the Company entered into an Agreement and Plan of Merger with Hearst
  

DALLAS, July 30, 2025 (GLOBE NEWSWIRE) -- DallasNews Corporation (Nasdaq: DALN) (the “Company” or “DallasNews”), the Dallas-based holding company of The Dallas Morning News and Medium Giant, today reported financial results for the second quarter of 2025.

For the second quarter of 2025, the Company reported a net loss of $33.5 million, or $(6.26) per share, and operating income of $1.3 million. The second quarter net loss includes a non-cash pension settlement charge of $35.3 million resulting from the annuitization of the Company’s pension plans. In the second quarter of 2024, the Company reported net income of $1.5 million, or $0.27 per share, and operating income of $0.6 million.

For the second quarter of 2025, on a non-GAAP basis, DallasNews reported operating income adjusted for certain items (“adjusted operating income”) of $1.6 million, an increase of $0.4 million or 36.7 percent when compared to adjusted operating income of $1.2 million reported in the second quarter of 2024. The improvement is primarily due to expense savings of $1.0 million in employee compensation and benefits, $0.8 million in outside services, and $0.6 million attributable to the transition to a smaller, leased printing facility, partially offset by a total revenue decline of $2.3 million.

Second Quarter Results

Total revenue was $29.8 million in the second quarter of 2025, a decrease of $2.3 million or 7.2 percent when compared to the second quarter of 2024.

Revenue from advertising and marketing services, including print and digital revenues, was $12.3 million in the second quarter of 2025, a decrease of $0.5 million or 3.8 percent when compared to the $12.8 million reported for the second quarter of 2024. The decline is primarily due to a print advertising revenue decrease of $0.3 million or 4.6 percent.

Circulation revenue was $15.3 million in the second quarter of 2025, a decrease of $0.9 million or 5.7 percent when compared to the $16.2 million reported for the second quarter of 2024. The decline is primarily due to a print circulation revenue decrease of $0.7 million or 5.9 percent.

Printing, distribution and other revenue was $2.2 million, a decrease of $0.9 million or 28.9 percent when compared to the second quarter of 2024, due to the cancellation of a mailed advertisements partnership in April 2025.

Total consolidated operating expense in the second quarter of 2025, on a GAAP basis, was $28.5 million, an improvement of $3.0 million or 9.5 percent. The improvement is primarily due to expense savings of $1.1 million in employee compensation and benefits, $0.8 million in outside services, $0.6 million attributable to the transition to a smaller, leased printing facility and $0.4 million in newsprint. $0.5 million of the savings in outside services is a result of the canceled mailed advertisements partnership, partially offsetting the loss in revenue associated with this partnership.

On a non-GAAP basis, adjusted operating expense was $28.2 million, an improvement of $2.7 million or 8.8 percent when compared to the second quarter of 2024. Excluding the change in severance expense of $0.1 million, employee compensation and benefits expense improved $1.0 million.

As of June 30, 2025, the Company had 451 employees, a headcount decrease of 82 or 15.4 percent when compared to the prior year period, primarily the result of transitioning to a smaller, more efficient printing facility. Cash and cash equivalents were $33.7 million at June 30, 2025, and the Company has no debt.

Merger with Hearst

As previously announced, in July the Company entered into an Agreement and Plan of Merger with Hearst Media West, LLC (“Parent”), Destiny Merger Sub, Inc., a wholly owned subsidiary of Parent (“Merger Sub”), and, solely for the purposes specified therein, Hearst Communications, Inc., the indirect owner of all of the outstanding equity of each of Parent and Merger Sub (as amended on July 27, 2025, the “Merger Agreement”). The Merger Agreement is subject to customary closing conditions including, among other things, a shareholder vote in favor of the Merger Agreement, and it may be terminated under certain circumstances. If the Merger Agreement is consummated, the Company’s Series A Common Stock will be delisted from The Nasdaq Stock Market LLC and deregistered under the Securities Exchange Act of 1934, as amended. DallasNews shareholders will receive $15.00 in cash for each share of common stock - a premium of approximately 242 percent based on the closing price of DallasNews’ common stock of $4.39 per share on July 9, 2025. The transaction, which has been unanimously approved by the boards of directors of both companies, is expected to close during the third or early fourth quarter of 2025.

Segment Information

The Company determined it has the following two reportable segments:

• TDMN primarily generates revenue from subscriptions and retail sales of The Dallas Morning News, and sales of advertising within its newspaper and on related digital platforms by Medium Giant’s cross-functional sales team.
• Agency generates revenue from the services offered by the Company’s full-service advertising agency, Medium Giant.

The primary measure of segment profitability utilized by the Chief Operating Decision Maker (“CODM”) is segment profit (loss), which excludes Corporate and Other costs that are not associated with the ongoing operations of the segments. Reconciliation of segment profit (loss) to consolidated operating income (loss), and disaggregated revenue by reportable segment and revenue source are included in the exhibits to this release.

Non-GAAP Financial Measures

The CODM uses adjusted operating income (loss) for the purposes of evaluating consolidated performance and allocating resources.

Reconciliations of operating income (loss) to adjusted operating income and total operating costs and expense to adjusted operating expense are included in the exhibits to this release.

The Company calculates adjusted operating income (loss) by adjusting operating income (loss) to exclude depreciation, severance expense, (gain) loss on sale/disposal of assets, and asset impairments (“adjusted operating income (loss)”). The Company believes that inclusion of certain noncash expenses and other items in the results makes for more difficult comparisons between years and with peer group companies.

Adjusted operating income (loss) is not a measure of financial performance under generally accepted accounting principles (“GAAP”). Management uses adjusted operating income (loss) and similar measures in internal analyses as supplemental measures of the Company’s financial performance, and for performance comparisons versus its peer group of companies. Management uses this non-GAAP financial measure for the purposes of evaluating consolidated Company performance. The Company therefore believes that the non-GAAP measure presented provides useful information to investors by allowing them to view the Company’s business through the eyes of management and the Board of Directors, facilitating comparison of results across historical periods and providing a focus on the underlying ongoing operating performance of its business. Adjusted operating income (loss) should not be considered in isolation or as a substitute for net income (loss), cash flows provided by (used for) operating activities or other comparable measures prepared in accordance with GAAP. Additionally, this non-GAAP measure may not be comparable to similarly-titled measures of other companies.

About DallasNews Corporation

DallasNews Corporation is the Dallas-based holding company of The Dallas Morning News and Medium Giant.

The Dallas Morning News, Texas’ leading daily newspaper, is renowned for its excellent journalistic reputation, intense regional focus, and close community ties. As a testament to its commitment to quality journalism, the publication has been honored with nine Pulitzer Prizes.

Medium Giant, an integrated creative marketing agency with offices in Dallas and Tulsa, works with a roster of premium brands and companies. In 2024, the agency earned top industry recognition, winning an AAF Addy and the AMA DFW Annual Marketer of the Year Award for Campaign of the Year, along with six prestigious Davey Awards. Medium Giant is a wholly owned business of DallasNews Corporation. For additional information, visit mediumgiant.co.

Statements in this communication concerning the Merger, the expected timing and completion of the Merger, the Company’s business outlook or future economic performance, revenues, expenses, cash balance, investments, business initiatives, working capital, and other financial and non-financial items that are not historical facts are “forward-looking statements” as the term is defined under applicable federal securities laws. Words such as “anticipate,” “assume,” “believe,” “can,” “could,” “estimate,” “forecast,” “intend,” “expect,” “may,” “project,” “plan,” “seek,” “should,” “target,” “will,” “would” and their opposites and similar expressions are intended to identify 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. Such risks, trends and uncertainties are, in most instances, beyond the Company’s control, and include but are not limited to, the factors and matters described in this communication and the Company’s other public disclosures and filings with the Securities and Exchange Commission, and the following factors: the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement; the Company’s obligation to pay a termination fee if the Merger is terminated under certain circumstances; the outcome of any legal proceedings that may be instituted against the Company and others following announcement of the Merger Agreement or the adoption of the Rights Agreement; the inability to complete the proposed Merger due to the failure to obtain the requisite approval of the Company’s shareholders or the failure to satisfy other conditions to completion of the Merger; risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the Merger; the impact, if any, of the announcement or pendency of the Merger on the Company’s business and relationships with customers or other commercial partners; the impact, if any, of the restrictions on the conduct of the Company’s business imposed by the Merger Agreement; the amount of the costs, fees, expenses and charges related to the Merger and the shareholder rights agreement (the “Rights Agreement”); the ability of the Rights Agreement to protect shareholders’ interests and to effectively ensure that the Board has sufficient time to make informed judgments that are in the best interests of the Company and its shareholders; changes in advertising demand and other economic conditions; consumers’ tastes; newsprint and distribution prices; program costs; the Company’s ability to successfully execute the Return to Growth Plan; the Company’s ability to maintain compliance with the continued listing requirements of The Nasdaq Capital Market; the success of the Company’s digital strategy; changes in economic policies and tariffs; labor relations; cybersecurity incidents; and technological obsolescence. Forward-looking statements, which are as of the date of this communication, are not updated to reflect events or circumstances after the date of the statement.

Contact:
Katy Murray
214-977-8869
KMurray@dallasnews.com

DallasNews Corporation and Subsidiaries
Consolidated Statements of Operations

DallasNews Corporation and Subsidiaries
Consolidated Balance Sheets

DallasNews Corporation and Subsidiaries
Disaggregated Revenue by Reportable Segment and Revenue Source

DallasNews Corporation and Subsidiaries
Reconciliation of Segment Profit (Loss) to Operating Income (Loss)

DallasNews Corporation - Non-GAAP Financial Measures
Reconciliation of Operating Income (Loss) to Adjusted Operating Income

Source: DallasNews Corporation