DallasNews Corporation Announces Second Quarter 2025 Financial Results
Rhea-AI Summary
DallasNews Corporation (Nasdaq: DALN) reported Q2 2025 financial results, with a net loss of $33.5 million ($6.26 per share) compared to net income of $1.5 million in Q2 2024. The loss includes a $35.3 million non-cash pension settlement charge from pension plan annuitization. Total revenue was $29.8 million, down 7.2% year-over-year.
Notably, the company announced a merger agreement with Hearst, where shareholders will receive $15.00 per share in cash - a 242% premium to the July 9 closing price. The merger is expected to close in Q3 or early Q4 2025.
Operating performance showed improvement with adjusted operating income of $1.6 million, up 36.7% year-over-year, driven by cost savings in employee compensation, outside services, and printing facility transition.
Positive
- Merger with Hearst offering $15.00 per share, representing a 242% premium
- Adjusted operating income increased 36.7% to $1.6 million
- Operating costs reduced by $3.0 million or 9.5%
- Strong cash position of $33.7 million with no debt
- Agency segment profit improved $0.2 million year-over-year
Negative
- Net loss of $33.5 million due to pension settlement charge
- Total revenue declined 7.2% to $29.8 million
- Circulation revenue decreased 5.7% to $15.3 million
- Advertising revenue fell 3.8% to $12.3 million
- Employee headcount reduced by 15.4% year-over-year
News Market Reaction – DALN
In the trading session that priced this news, DALN gained 0.14%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
AI-generated analysis. How Rhea-AI works. Not financial advice.
- 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
For the second quarter of 2025, on a non-GAAP basis, DallasNews reported operating income adjusted for certain items (“adjusted operating income”) of
Second Quarter Results
Total revenue was
Revenue from advertising and marketing services, including print and digital revenues, was
Circulation revenue was
Printing, distribution and other revenue was
Total consolidated operating expense in the second quarter of 2025, on a GAAP basis, was
On a non-GAAP basis, adjusted operating expense was
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
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
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
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| In thousands, except share and per share amounts (unaudited) | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Net Operating Revenue: | ||||||||||||||||
| Advertising and marketing services | $ | 12,302 | $ | 12,784 | $ | 23,115 | $ | 24,430 | ||||||||
| Circulation | 15,263 | 16,181 | 30,710 | 32,481 | ||||||||||||
| Printing, distribution and other | 2,201 | 3,096 | 5,066 | 6,252 | ||||||||||||
| Total net operating revenue | 29,766 | 32,061 | 58,891 | 63,163 | ||||||||||||
| Operating Costs and Expense: | ||||||||||||||||
| Employee compensation and benefits | 13,592 | 14,738 | 28,439 | 30,855 | ||||||||||||
| Other production, distribution and operating costs | 13,713 | 15,046 | 28,384 | 30,105 | ||||||||||||
| Newsprint, ink and other supplies | 932 | 1,302 | 2,203 | 2,586 | ||||||||||||
| Depreciation | 370 | 407 | 704 | 805 | ||||||||||||
| Gain on sale/disposal of assets, net | (104 | ) | — | (36,310 | ) | — | ||||||||||
| Total operating costs and expense | 28,503 | 31,493 | 23,420 | 64,351 | ||||||||||||
| Operating income (loss) | 1,263 | 568 | 35,471 | (1,188 | ) | |||||||||||
| Other income (loss), net (1) | (34,979 | ) | 641 | (34,914 | ) | 1,252 | ||||||||||
| Income (Loss) Before Income Taxes | (33,716 | ) | 1,209 | 557 | 64 | |||||||||||
| Income tax provision (benefit) | (224 | ) | (241 | ) | 5,764 | (23 | ) | |||||||||
| Net Income (Loss) | $ | (33,492 | ) | $ | 1,450 | $ | (5,207 | ) | $ | 87 | ||||||
| Per Share Basis (2) | ||||||||||||||||
| Net income (loss) | ||||||||||||||||
| Basic | $ | (6.26 | ) | $ | 0.27 | $ | (0.97 | ) | $ | 0.02 | ||||||
| Diluted | $ | (6.26 | ) | $ | 0.27 | $ | (0.97 | ) | $ | 0.02 | ||||||
| Number of common shares used in the per share calculation: | ||||||||||||||||
| Basic | 5,352,490 | 5,352,490 | 5,352,490 | 5,352,490 | ||||||||||||
| Diluted | 5,352,490 | 5,352,490 | 5,352,490 | 5,352,490 | ||||||||||||
| (1) | Three and six months ended June 30, 2025, includes a non-cash pension settlement charge of |
| (2) | The Company’s Series A and Series B common stock equally share in the distributed and undistributed earnings. There were no options or RSUs outstanding as of June30, 2025 and 2024, that would result in dilution of shares or the calculation of EPS under the two-class method as prescribed under ASC 260 – Earnings Per Share. |
DallasNews Corporation and Subsidiaries
Consolidated Balance Sheets
| June 30, | December 31, | |||||
| In thousands (unaudited) | 2025 | 2024 | ||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 33,700 | $ | 9,594 | ||
| Accounts receivable, net | 8,981 | 10,662 | ||||
| Other current assets | 5,072 | 4,087 | ||||
| Total current assets | 47,753 | 24,343 | ||||
| Property, plant and equipment, net | 10,057 | 12,633 | ||||
| Operating lease right-of-use assets | 16,210 | 17,434 | ||||
| Deferred income taxes, net | 399 | 5,609 | ||||
| Other assets | 1,816 | 1,824 | ||||
| Total assets | $ | 76,235 | $ | 61,843 | ||
| Liabilities and Shareholders’ Equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 3,884 | $ | 4,808 | ||
| Accrued compensation and other current liabilities | 7,994 | 11,498 | ||||
| Contract liabilities | 8,852 | 8,689 | ||||
| Total current liabilities | 20,730 | 24,995 | ||||
| Long-term pension liabilities | — | 11,764 | ||||
| Long-term operating lease liabilities | 16,155 | 17,379 | ||||
| Other liabilities | 866 | 892 | ||||
| Total liabilities | 37,751 | 55,030 | ||||
| Commitments and contingencies | ||||||
| Total shareholders' equity | 38,484 | 6,813 | ||||
| Total liabilities and shareholders’ equity | $ | 76,235 | $ | 61,843 | ||
DallasNews Corporation and Subsidiaries
Disaggregated Revenue by Reportable Segment and Revenue Source
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| In thousands (unaudited) | 2025 | 2024 | 2025 | 2024 | ||||||||
| TDMN | ||||||||||||
| Print advertising | $ | 6,257 | $ | 6,558 | $ | 11,206 | $ | 12,197 | ||||
| Digital advertising | 2,164 | 2,274 | 4,055 | 4,232 | ||||||||
| Agency | ||||||||||||
| Marketing and media services | 3,881 | 3,952 | 7,854 | 8,001 | ||||||||
| Advertising and Marketing Services | $ | 12,302 | $ | 12,784 | $ | 23,115 | $ | 24,430 | ||||
| TDMN | ||||||||||||
| Print circulation | 10,915 | 11,603 | 21,962 | 23,359 | ||||||||
| Digital circulation | 4,348 | 4,578 | 8,748 | 9,122 | ||||||||
| Circulation | $ | 15,263 | $ | 16,181 | $ | 30,710 | $ | 32,481 | ||||
| TDMN | ||||||||||||
| Printing, Distribution and Other | $ | 2,201 | $ | 3,096 | $ | 5,066 | $ | 6,252 | ||||
| Total Revenue | $ | 29,766 | $ | 32,061 | $ | 58,891 | $ | 63,163 | ||||
DallasNews Corporation and Subsidiaries
Reconciliation of Segment Profit (Loss) to Operating Income (Loss)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| In thousands (unaudited) | 2025 | 2024 | 2025 | 2024 | |||||||||||
| TDMN | |||||||||||||||
| Net operating revenue | $ | 25,885 | $ | 28,109 | $ | 51,037 | $ | 55,162 | |||||||
| Employee compensation and benefits | 9,369 | 10,190 | 19,375 | 20,783 | |||||||||||
| Other production, distribution and operating costs | 9,302 | 10,442 | 19,541 | 20,574 | |||||||||||
| Newsprint, ink and other supplies | 837 | 1,162 | 1,980 | 2,240 | |||||||||||
| Operating costs and expense | 19,508 | 21,794 | 40,896 | 43,597 | |||||||||||
| TDMN Segment Profit | $ | 6,377 | $ | 6,315 | $ | 10,141 | $ | 11,565 | |||||||
| Agency | |||||||||||||||
| Net operating revenue | $ | 3,881 | $ | 3,952 | $ | 7,854 | $ | 8,001 | |||||||
| Employee compensation and benefits | 1,875 | 2,108 | 3,751 | 4,534 | |||||||||||
| Other production, distribution and operating costs | 1,678 | 1,673 | 3,407 | 3,492 | |||||||||||
| Newsprint, ink and other supplies | 95 | 140 | 223 | 346 | |||||||||||
| Operating costs and expense | 3,648 | 3,921 | 7,381 | 8,372 | |||||||||||
| Agency Segment Profit (Loss) | $ | 233 | $ | 31 | $ | 473 | $ | (371 | ) | ||||||
| Total Segment Profit | $ | 6,610 | $ | 6,346 | $ | 10,614 | $ | 11,194 | |||||||
| Reconciling items: | |||||||||||||||
| Corporate and Other (1) | (5,347 | ) | (5,778 | ) | 24,857 | (12,382 | ) | ||||||||
| Operating Income (Loss) (1) | $ | 1,263 | $ | 568 | $ | 35,471 | $ | (1,188 | ) | ||||||
| (1) Six months ended June 30, 2025, includes a net gain of | |||||||||||||||
DallasNews Corporation - Non-GAAP Financial Measures
Reconciliation of Operating Income (Loss) to Adjusted Operating Income
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| In thousands (unaudited) | 2025 | 2024 | 2025 | 2024 | |||||||||||
| Total net operating revenue | $ | 29,766 | $ | 32,061 | $ | 58,891 | $ | 63,163 | |||||||
| Total operating costs and expense | 28,503 | 31,493 | 23,420 | 64,351 | |||||||||||
| Operating Income (Loss) | $ | 1,263 | $ | 568 | $ | 35,471 | $ | (1,188 | ) | ||||||
| Total operating costs and expense | $ | 28,503 | $ | 31,493 | $ | 23,420 | $ | 64,351 | |||||||
| Less: | |||||||||||||||
| Depreciation | 370 | 407 | 704 | 805 | |||||||||||
| Severance expense | 75 | 198 | 542 | 776 | |||||||||||
| Gain on sale/disposal of assets, net | (104 | ) | — | (36,310 | ) | — | |||||||||
| Adjusted Operating Expense | $ | 28,162 | $ | 30,888 | $ | 58,484 | $ | 62,770 | |||||||
| Total net operating revenue | $ | 29,766 | $ | 32,061 | $ | 58,891 | $ | 63,163 | |||||||
| Adjusted operating expense | 28,162 | 30,888 | 58,484 | 62,770 | |||||||||||
| Adjusted Operating Income | $ | 1,604 | $ | 1,173 | $ | 407 | $ | 393 | |||||||
