Q3 Investor Presentation November 3, 2025 NON-GAAP FINANCIAL MEASURES This presentation contains references to non-GAAP measures. Adjusted EBITDA (Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization) is defined as operating income excluding: (1) stock-based compensation expense; (2) depreciation; and (3) acquisition-related items consisting of (i) amortization of intangible assets and impairments of goodwill and intangible assets, if applicable, and (ii) gains and losses recognized on ch ...

Core Insights - DallasNews Corporation (DALN) shares have declined 12.4% since the earnings report for Q1 2025, underperforming the S&P 500 index which grew by 1.6% during the same period [1] - The company reported a net income of $5.28 per share for Q1 2025, a significant improvement from a net loss of $0.25 per share in the prior year, primarily due to a $36.2 million gain from the sale of its Plano printing facility [2] - Total revenue decreased by 6.4% year-over-year to $29.1 million, with declines across advertising, circulation, and other revenue lines [2] Financial Performance - Net income for the quarter was $28.3 million, compared to a net loss of $1.4 million in the prior-year period [3] - Advertising and marketing services revenue fell by 7.2% to $10.8 million, driven by a 12.2% drop in print advertising, while digital advertising slightly decreased to $1.9 million [4] - Circulation revenue declined by 5.2% to $15.4 million, largely due to a 6% drop in print circulation [4] Segment Analysis - The core TDMN segment experienced a 28.3% year-over-year decline in profit to $3.8 million, while the Agency segment improved from a $0.4 million loss to a $0.2 million profit [5] - The adjusted operating loss widened to $1.2 million from $0.8 million in the previous year, indicating ongoing revenue pressures despite cost containment efforts [2][8] Management Strategy - CEO Grant Moise described the quarter as a milestone in the "Return to Growth Plan," emphasizing the strategic sale of the Plano printing facility which unlocked capital for reinvestment and fully funded pension obligations [6] - The company completed its transition in printing operations and expects to realize cost savings starting in May [7] - Management highlighted that the sale of the Plano property significantly boosted GAAP profitability, although underlying operations continued to face challenges [8] Cost Management - Total adjusted operating expenses decreased by 4.9% year-over-year to $30.3 million, primarily due to headcount rationalization and lower severance and depreciation costs [9] - A 13.2% reduction in workforce year-over-year contributed to employee compensation and benefit savings of $1.2 million [8] Pension Obligations - In April, DallasNews used proceeds from the Plano property sale to fully fund its pension liabilities through an annuity purchase agreement, relieving the company of long-term pension obligations [11] - This move simplified the balance sheet and aligned with broader efforts to streamline operations and reduce financial risk [11]