DallasNews Shareholders to Receive All-Cash Consideration of $16.50 Per Share, a 276% Premium Over the Closing Price Per Share of Series A Common Stock on July 9, 2025 Hearst Merger Provides Certainty of Value, Accelerated ROI, and Immediate Liquidity, While Eliminating Company Ownership Risks for Shareholders Board Unanimously Recommends that Shareholders Vote “FOR” the Hearst Merger to Secure the Future of DallasNews and Realize a Significant Premium on their Investment DALLAS, Sept. 15, 2025 (GLOBE NEWSW ...

ISS Agrees that Hearst Merger Delivers Certain and Immediate Value for Shareholders at a “Triple-Digit Premium” ISS in Agreement with Glass, Lewis & Co. Recommendation to Vote FOR the Hearst Merger DallasNews Board Reiterates Recommendation that Shareholders Vote FOR the Hearst Merger to Secure a Certain and Substantial Premium DALLAS, Sept. 09, 2025 (GLOBE NEWSWIRE) -- DallasNews Corporation (Nasdaq: DALN) (the “Company” or “DallasNews”), the holding company of The Dallas Morning News and Medium Giant, ann ...

Core Viewpoint - The proposed merger between DallasNews Corporation and Hearst is recommended by Glass Lewis, highlighting a significant cash premium of 242% for shareholders, which is seen as a compelling value proposition [1][3][4]. Summary by Relevant Sections Merger Details - The Hearst Merger offers DallasNews shareholders $15.00 per share in cash, representing a substantial premium over the closing price of $4.39 per share on July 9, 2025 [1]. - Glass Lewis emphasizes that the deal-implied trailing revenue multiple of 0.54x is significantly higher than DallasNews' standalone average multiples of 0.10x, 0.13x, and 0.26x over the three years leading to the announcement [3]. Financial Analysis - J.P. Morgan Securities LLC provided a fairness opinion indicating an equity reference range of $8.10 to $8.45 per share based on a DCF analysis, suggesting that DallasNews was trading at a substantial discount to its intrinsic value prior to the merger announcement [4]. - The proposed terms of the merger at $15.00 per share exceed this range, reinforcing the notion of a material premium for DallasNews investors [4]. Shareholder Voting - The DallasNews Board strongly recommends that all shareholders vote FOR the Hearst Merger to secure the significant premium and certain liquidity [2][6]. - It is noted that not voting is equivalent to voting against the transaction, and the voting deadline is September 22, 2025, at 10:59 p.m. CT [6]. Market Implications - Glass Lewis cautions that rejecting the merger is unlikely to yield greater value from Hearst or any other party, and shares may revert to pre-announcement levels if the merger is not approved [5].

Core Viewpoint - The Board of Directors of DallasNews Corporation reaffirms its support for the Hearst Merger Agreement, emphasizing the significant cash premium it offers to shareholders, while rejecting a competing proposal from MNG Enterprises, Inc. [1][3] Group 1: Merger Details - DallasNews entered into a definitive agreement with Hearst on July 9, 2025, for Hearst to acquire all issued and outstanding shares at $14.00 per share in cash [2] - The purchase price was later amended to $15.00 per share, representing a 242% premium over the closing price on July 9, 2025 [2] Group 2: Board's Decision Process - The Board reviewed the Revised Alden Proposal and determined it was not a superior proposal, engaging with Robert W. Decherd, who controls over 96% of the voting power of Series B common stock [3] - Decherd confirmed his intent to vote in favor of the Hearst Merger Agreement and stated he would not support a sale to Alden or its affiliates [3] Group 3: Company Background - DallasNews Corporation is the holding company for The Dallas Morning News and Medium Giant, known for its strong journalistic reputation and community ties [4] - The Dallas Morning News has won nine Pulitzer Prizes, while Medium Giant has received multiple industry awards, including the AAF Addy and AMA DFW Annual Marketer of the Year Award [4]

Core Points - DallasNews Corporation is proposing a merger with Hearst, offering shareholders an all-cash consideration of $15 per share, which represents a 242% premium over the closing price of $4.39 on July 9, 2025 [1][4][8] - The Board of Directors unanimously supports the merger, emphasizing its potential to provide immediate liquidity and eliminate ownership risks for shareholders [2][4][7] - Shareholders are encouraged to vote "FOR" the merger at the special meeting scheduled for September 23, 2025, to secure the proposed cash premium [1][19][20] Company Overview - DallasNews Corporation is the holding company for The Dallas Morning News and Medium Giant, known for its strong journalistic reputation and community ties [20] - The Dallas Morning News has received nine Pulitzer Prizes, highlighting its commitment to quality journalism [20] - Medium Giant is recognized for its marketing excellence, having won several industry awards in 2024 [20] Merger Details - The merger with Hearst is positioned as a significant opportunity for DallasNews shareholders to realize immediate value and avoid market risks associated with public company ownership [7][12] - Hearst's offer is backed by its strong reputation in the media industry and financial capacity, providing assurance for the completion of the transaction [8][9] - The merger proposal requires approval from shareholders, with a two-thirds majority needed from both Series A and Series B Common Stock [19] Shareholder Communication - The Board has communicated the importance of the merger to shareholders, highlighting the risks of remaining a standalone public company if the merger is not approved [11][12] - DallasNews' largest shareholder, Mr. Robert W. Decherd, has publicly expressed his support for the merger and his commitment to preserving the legacy of DallasNews [10][13] - Shareholders are advised to disregard any competing proposals, particularly from Alden Global Capital, which has a controversial history in the newspaper industry [14][15][16]

Core Insights - DallasNews Corporation's shares have increased by 0.9% since the second-quarter 2025 results, outperforming the S&P 500's 0.6% decline, and have surged by 226.2% over the past month compared to the S&P 500's 2% growth, indicating positive investor sentiment towards strategic developments [1] Financial Performance - The company reported a net loss of $6.26 per share for Q2 2025, a significant decline from a net income of $0.27 per share in the same quarter last year [2] - Total net operating revenues for Q2 2025 were $29.8 million, down 7.2% from $32.1 million year-over-year [2] - The net loss for the quarter was $33.5 million, a stark contrast to a net income of $1.5 million a year earlier, primarily due to a non-cash pension settlement charge of $35.3 million [2] Adjusted Metrics - On a non-GAAP basis, adjusted operating income rose to $1.6 million from $1.2 million in the prior-year quarter, while adjusted operating expenses decreased to $28.2 million from $30.9 million [3] Revenue Breakdown - Revenue from advertising and marketing services fell by 3.8% year-over-year to $12.3 million, driven by a 4.6% decline in print advertising revenue [4] - Circulation revenue decreased by 5.7% to $15.3 million, largely due to a 5.9% drop in print circulation revenue [4] - Printing, distribution, and other revenues plummeted by 29% to $2.2 million, impacted by the cancellation of a printing contract in April 2025 [4] Segment Performance - The TDMN (The Dallas Morning News) business generated $25.9 million in revenue, down from $28.1 million in the prior-year quarter, while the agency segment posted $3.9 million in revenue, slightly down from $4 million last year [5] - Despite the revenue decline, the agency segment profit improved to $0.2 million from $0.03 million, indicating enhanced operational efficiency [5] Management Insights - Management highlighted the completion of the pension annuitization process as a key milestone, which, despite the current earnings drag, removes future pension-related volatility from the balance sheet [6] - Cost control measures led to a $2.4 million reduction in adjusted operating expenses year-over-year [6] Liquidity Position - As of June 30, 2025, DallasNews had no debt and held $33.7 million in cash, providing a solid liquidity cushion [7] - The company employed 451 individuals at the end of the quarter and is continuing to streamline operations following the transition out of its Plano printing facility in 2023 [7] Industry Context - The second-quarter results were influenced by strategic transitions and industry-wide pressures, with declines in print advertising and circulation revenue reflecting ongoing challenges in the traditional newspaper business [8] - The cancellation of a long-standing printing agreement in April 2025 significantly affected other revenue streams [8] Cost Management - Total operating expenses were $28.5 million, down from $31.5 million a year ago, primarily due to reductions in employee compensation and production costs, although this was partially offset by increased severance expenses [9] Strategic Developments - A significant development was the announcement of a definitive Agreement and Plan of Merger with Hearst Media West, LLC, on July 9, 2025, which could reshape DallasNews' operational and strategic direction [11]

-- Reiterates Proposed Merger with Hearst as Path to Certain, Premium Shareholder Value -- DALLAS, Aug. 04, 2025 (GLOBE NEWSWIRE) -- DallasNews Corporation (Nasdaq: DALN) (the "Company" or "DallasNews"), the holding company of The Dallas Morning News and Medium Giant, today filed a preliminary proxy statement in connection with its pending merger with Hearst, one of the nation's leading information, services and media companies, for $15.00 per share in cash (the "Hearst Merger"). The preliminary proxy state ...

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Information](index=3&type=section&id=Item%201.%20Financial%20Information) The company's Q2 2025 results show a net loss due to a pension charge, partially offset by an asset sale gain [Consolidated Statements of Operations](index=3&type=section&id=Consolidated%20Statements%20of%20Operations) A significant pension settlement charge drove a Q2 net loss despite an asset sale gain boosting operating income Consolidated Statements of Operations Highlights (In thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total net operating revenue** | $29,766 | $32,061 | $58,891 | $63,163 | | **Operating income (loss)** | $1,263 | $568 | $35,471 | $(1,188) | | **Other income (loss), net** | $(34,979) | $641 | $(34,914) | $1,252 | | **Net Income (Loss)** | **$(33,492)** | **$1,450** | **$(5,207)** | **$87** | | **Diluted EPS** | **$(6.26)** | **$0.27** | **$(0.97)** | **$0.02** | - The significant net loss in Q2 2025 was primarily driven by a **one-time non-cash pre-tax pension settlement charge of $35.3 million**, which was recorded under 'Other income (loss), net'[71](index=71&type=chunk)[75](index=75&type=chunk) - For the first six months of 2025, operating income was substantially boosted by a **$36.3 million net gain on the sale/disposal of assets**, specifically the North Plant Property[8](index=8&type=chunk)[90](index=90&type=chunk) [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet strengthened with increased cash from an asset sale and eliminated long-term pension liabilities Consolidated Balance Sheet Highlights (In thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $33,700 | $9,594 | | Property, plant and equipment, net | $10,057 | $12,633 | | **Total assets** | $76,235 | $61,843 | | **Long-term pension liabilities** | $— | $11,764 | | **Total liabilities** | $37,751 | $55,030 | | **Total shareholders' equity** | $38,484 | $6,813 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash from investing surged due to an asset sale, while operating cash flow was used for a pension contribution Consolidated Cash Flow Summary (In thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used for operating activities | $(13,770) | $(1,660) | | Net cash provided by investing activities | $37,876 | $7,420 | | Net cash used for financing activities | $— | $(856) | | **Net increase in cash** | **$24,106** | **$4,904** | | **Cash at end of period** | **$33,700** | **$16,601** | - The increase in cash used for operations was mainly due to a **voluntary cash contribution of approximately $10.0 million** to fully fund its pension plan liabilities[70](index=70&type=chunk)[196](index=196&type=chunk) - Cash from investing activities was primarily generated by **$40.8 million in proceeds from the sale of the North Plant Property**[16](index=16&type=chunk)[90](index=90&type=chunk) [Notes to the Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) Notes detail a major asset sale, pension plan annuitization, and a definitive merger agreement with Hearst - On March 11, 2025, the company completed the sale of its North Plant Property, receiving **net cash proceeds of $40,773** and generating a **net gain of $36,310**[89](index=89&type=chunk)[90](index=90&type=chunk) - On April 17, 2025, the company settled all its defined benefit pension obligations by purchasing a group annuity contract, funded by plan assets and a **~$10 million cash contribution**, resulting in a **one-time, non-cash pre-tax pension settlement charge of $35,266**[70](index=70&type=chunk)[71](index=71&type=chunk) - On July 9, 2025, the company entered into a merger agreement with Hearst Media West, LLC, which was later amended to increase the per-share consideration to **$15.00 in cash**[103](index=103&type=chunk)[104](index=104&type=chunk) - The company received an unsolicited, non-binding proposal from an affiliate of Alden Global Capital to be acquired for **$16.50 per share**, which the Board of Directors rejected on July 28, 2025[109](index=109&type=chunk) - On July 27, 2025, the company adopted a Rights Agreement (a 'poison pill') to protect shareholder interests, which will expire on July 26, 2026, or upon completion of the merger[110](index=110&type=chunk)[114](index=114&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses transformative events including a merger agreement, asset sale, and pension settlement [Recent Developments](index=20&type=section&id=Recent%20Developments) The company entered a merger agreement with Hearst, sold a major property, and annuitized its pension plans - Entered into a merger agreement with Hearst Media West, LLC, amended to a price of **$15.00 per share in cash**[122](index=122&type=chunk)[123](index=123&type=chunk) - Received and rejected an unsolicited, non-binding acquisition proposal from an affiliate of Alden Global Capital for **$16.50 per share**[129](index=129&type=chunk) - Adopted a Rights Agreement (poison pill) on July 27, 2025, to protect against hostile takeovers, set to expire on July 26, 2026[130](index=130&type=chunk)[135](index=135&type=chunk) - Completed the sale of the North Plant Property, receiving **net cash proceeds of $40,773** and generating a **net gain of $36,310**[137](index=137&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Total revenue declined across all segments, while a pension charge created a net loss despite lower operating costs Revenue by Source - Q2 2025 vs Q2 2024 (In thousands) | Revenue Source | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Advertising and marketing services | $12,302 | $12,784 | (3.8)% | | Circulation | $15,263 | $16,181 | (5.7)% | | Printing, distribution and other | $2,201 | $3,096 | (28.9)% | | **Total Net Operating Revenue** | **$29,766** | **$32,061** | **(7.2)%** | Segment Profit (Loss) - Six Months Ended June 30 (In thousands) | Segment | 2025 | 2024 | | :--- | :--- | :--- | | TDMN Segment Profit | $10,141 | $11,565 | | Agency Segment Profit (Loss) | $473 | $(371) | | **Total Segment Profit** | **$10,614** | **$11,194** | - The TDMN segment's profit **declined by $1.4 million** in the first six months of 2025 due to revenue declines in print advertising and circulation, despite expense savings from transitioning to a more efficient printing facility[188](index=188&type=chunk) - The Agency segment's profitability **improved by $0.8 million** in the first six months of 2025, primarily due to strategic expense savings initiatives[189](index=189&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity improved significantly due to a $40.8 million asset sale, which funded a $10 million pension contribution - **Cash and cash equivalents increased to $33,700 thousand** as of June 30, 2025, from $9,594 thousand at December 31, 2024[191](index=191&type=chunk) - The company received **net cash proceeds of $40,773 thousand** from the sale of its North Plant Property[193](index=193&type=chunk) - Net cash used for operating activities **increased by $12,110 thousand** year-over-year, primarily due to a voluntary cash contribution of approximately **$10,000 thousand** to fund pension liabilities[196](index=196&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes in the quarter - Management concluded that the Company's **disclosure controls and procedures were effective** as of June 30, 2025[208](index=208&type=chunk) - **No material changes** to the Company's internal control over financial reporting occurred during the second fiscal quarter of 2025[209](index=209&type=chunk) [PART II - OTHER INFORMATION](index=33&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) Existing legal claims are not expected to have a material adverse effect on the company's financial condition - In the opinion of management, liabilities from currently existing legal claims **would not have a material adverse effect** on DallasNews' results of operations, liquidity or financial condition[211](index=211&type=chunk) [Item 1A. Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) Primary risks relate to the pending merger with Hearst, including potential disruptions and failure to complete the deal - The announcement and pendency of the merger may **adversely affect business operations**, employee retention, and relationships with customers and partners[213](index=213&type=chunk) - **Failure to consummate the merger could materially harm the business and stock price**, as closing is subject to conditions including shareholder approval and the company maintaining at least **$20 million in Net Cash**[216](index=216&type=chunk) - The company may be required to pay a **$3,000,000 termination fee** to the acquirer, Parent, if the Merger Agreement is terminated under specific circumstances[218](index=218&type=chunk)[222](index=222&type=chunk) - While the merger is pending, the company is **subject to restrictions on its business**, limiting its ability to issue securities, acquire businesses, dispose of assets, or incur significant capital expenditures without consent[221](index=221&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered equity securities were sold in Q2 2025, and the stock repurchase program remains terminated - **No unregistered sales of equity securities** occurred during the reporting period[223](index=223&type=chunk) - The company's board of directors **terminated its stock repurchase authority** in the third quarter of 2024[224](index=224&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the second quarter - No director or officer adopted or terminated any **Rule 10b5-1 trading arrangements** during the second quarter of 2025[227](index=227&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists key filed exhibits, including the merger agreement, its amendment, and the Rights Agreement - Key exhibits filed include the **Merger Agreement (2.1)**, the **amendment to the Merger Agreement (2.2)**, and the **Rights Agreement (4.1)**[229](index=229&type=chunk)

Core Insights - DallasNews Corporation reported a net loss of $33.5 million, or $(6.26) per share, for Q2 2025, compared to a net income of $1.5 million, or $0.27 per share, in Q2 2024 [2][4] - The company experienced a total revenue decline of $2.3 million, or 7.2%, year-over-year, with total revenue at $29.8 million for Q2 2025 [4][6] - A merger agreement with Hearst Media West, LLC was announced, offering DallasNews shareholders $15.00 in cash per share, representing a 242% premium based on the stock price prior to the announcement [10][12] Financial Performance - The operating income for Q2 2025 was reported at $1.3 million, an increase from $0.6 million in Q2 2024 [2][3] - Adjusted operating income for Q2 2025 was $1.6 million, a 36.7% increase from $1.2 million in Q2 2024, primarily due to expense savings [3][8] - Total consolidated operating expenses decreased by $3.0 million, or 9.5%, to $28.5 million in Q2 2025 [7][8] Revenue Breakdown - Advertising and marketing services revenue was $12.3 million, down $0.5 million, or 3.8%, from $12.8 million in Q2 2024 [5][21] - Circulation revenue decreased by $0.9 million, or 5.7%, to $15.3 million, primarily due to a decline in print circulation [6][25] - Printing, distribution, and other revenue fell by $0.9 million, or 28.9%, to $2.2 million, attributed to the cancellation of a mailed advertisements partnership [6][21] Employee and Cash Position - As of June 30, 2025, the company had 451 employees, a decrease of 82, or 15.4%, from the previous year [9] - Cash and cash equivalents stood at $33.7 million, with no debt reported [9][23] Merger Details - The merger with Hearst is subject to customary closing conditions, including a shareholder vote, and is expected to close in Q3 or early Q4 2025 [10][12] - If completed, DallasNews' Series A Common Stock will be delisted from Nasdaq [12]

Core Viewpoint - DallasNews Corporation has rejected an unsolicited acquisition proposal from MNG Enterprises, Inc. and reaffirmed its commitment to a merger agreement with Hearst, which has been amended to increase the purchase price from $14.00 to $15.00 per share in cash [2][5]. Summary by Sections Acquisition Proposals - DallasNews received a non-binding proposal from MNG Enterprises to acquire its shares at $16.50 per share, which was reviewed and rejected by the Board [2][4]. - The Board concluded that the Alden Proposal does not qualify as a "Superior Proposal" under the existing Hearst Merger Agreement [4]. Hearst Merger Agreement - On July 9, 2025, DallasNews entered into a definitive agreement with Hearst to acquire all outstanding shares at $14.00 per share, which was later amended to $15.00 per share at the Board's request [3][5]. - Robert W. Decherd, who controls a significant portion of the voting power, has committed to vote in favor of the Hearst merger and against alternative proposals [3][4]. Shareholder Rights Plan - The Board adopted a shareholder rights plan to protect against potential hostile takeovers, particularly in response to the Alden Proposal [6][7]. - The rights plan allows shareholders to purchase additional shares at a discounted price if a person or group acquires 10% or more of the Company's Series A common stock without Board approval [8][9]. - The rights plan is effective immediately and will expire on July 26, 2026, unless terminated earlier [10]. Financial Advisory - J.P. Morgan Securities LLC is serving as the exclusive financial advisor to DallasNews, while Haynes Boone is providing legal advice [11].