Postmedia Reports Second Quarter Results

April 11, 2019 (TORONTO) – Postmedia Network Canada Corp. (“Postmedia” or the “Company”) today released financial information for the three and six months ended February 28, 2019.

Management’s Discussion and Analysis

Consolidated Financial Statements

Investor and Analyst Conference Call – Slide Presentation

Also announced today, Andrew MacLeod, Postmedia’s President and Chief Executive Officer has been appointed to the boards of both the Company and its subsidiary, Postmedia Network Inc.

Highlights from the Quarter

  • Continued digital growth – Ninth consecutive quarter of double digit digital advertising revenue –
    up 10.2%
  • Slowing legacy decline – Print advertising revenue down 14.2% and print circulation revenue down 5.4% versus 18.8% and 7.9% respectively in Q2 F2018
  • Business Transformation initiatives implemented in the quarter are expected to result in approximately $6 million of net annualized cost savings – an 8.1% reduction in operating costs1
  • Operating income before depreciation amortization and restructuring was $4.7 million in the quarter and excluding the Ontario Interactive Digital Media Tax Credit (“Tax Credit”) in Fiscal 2018 represents an increase of $0.6 million
  • Debt repayment in the quarter was $20.4 million and subsequent to quarter end a further debt repayment of $5.5 million was made
  • With these repayments, first-lien debt has been reduced by 56% by retiring $125.3 million of the original $225.0 million since October 2016 – bringing the total principal amount of first-lien notes outstanding to $99.7 million

Second Quarter Operating Results

Revenue for the quarter was $145.7 million as compared to $157.6 million in the same period in the prior year, a decrease of $11.9 million or 7.5%. The revenue decline was primarily due to decreases in print advertising revenue of $10.0 million or 14.2% and print circulation revenue of $2.9 million or 5.4%. Digital revenue increased by $1.8 million or 6.9% in the quarter with digital advertising revenue up 10.2%.

“Our two pronged strategy – extend our legacy runway and grow digital revenues – is working,” said Andrew MacLeod, President and Chief Executive Officer, Postmedia. “We continue to slow the declines in traditional revenues, deliver results on our business transformation initiatives and reduce our debt. Our success in extending the legacy runway is providing us the time to allow our digital transformation to continue demonstrating traction with its ninth consecutive quarter of double digit digital advertising growth”.

Excluding the impact of the Tax Credit in Fiscal 2018, total operating expenses excluding depreciation, amortization, impairment and restructuring decreased $12.4 million or 8.1% for the quarter, relative to the same period in the prior year. The decrease was as a result of lower newspaper circulation volumes as well as the implementation of various cost reduction initiatives.

Excluding the impact of the Tax Credit in Fiscal 2018, operating income before depreciation, amortization, impairment and restructuring of $4.7 million in the quarter represents an increase of $0.6 million or 13.6% relative to the same period in the prior year. The increase is due to increased digital revenue and operating expense decreases, partially offset by decreases in print advertising and circulation revenues.

Net loss in the quarter ended February 28, 2019 was $5.1 million, as compared to $1.3 million in the same period in the prior year. The change was primarily the result of an impairment charge in Q2 F2019 and the Tax Credit recovery in Q2 F2018 partially offset by a gain on disposal of property and equipment and assets held-for-sale in Q2 of Fiscal 2019.

Year-to-Date Operating Results

Revenue for the six months ended February 28, 2019 was $317.0 million as compared to $346.6 million in the same period in the prior year, a decrease of $29.6 million or 8.5%. The revenue decline was primarily due to decreases in print advertising revenue of $24.0 million or 14.9% and decreases in print circulation revenue of $7.5 million or 6.7%. Digital revenue increased by $3.3 million or 5.7% year to date with digital advertising revenue up 8.1%.

Notably, adjusted for the impact of the publications acquired and sold in the Company’s first quarter of Fiscal 2018, revenue for the six months ended February 28, 2019 decreased 6.3% relative to the same period in the prior year including decreases in print advertising revenue of 14.5%, print circulation revenue of 5.1% and an increase in digital revenue of 7.4% which includes an increase in digital advertising revenue of 10.1%.

Excluding the impact of the Tax Credit in Fiscal 2018, total operating expenses excluding depreciation, amortization, impairment and restructuring decreased $28.0 million or 8.8% for the six months ended February 28, 2019, relative to the same period in the prior year. The decrease was as a result of lower newspaper circulation volumes as well as the implementation of various cost reduction initiatives.

Excluding the impact of the Tax Credit in Fiscal 2018, operating income before depreciation, amortization, impairment and restructuring of $26.4 million in the six months ended February 28, 2019 represents a decrease of $1.6 million relative to the same period in the prior year. The decrease is due to decreases in print advertising and circulation revenues partially offset by an increase in digital revenue and operating expense decreases.

Net loss in the six months ended February 28, 2019 was $6.5 million, as compared to net earnings of $4.5 million in the same period in the prior year. The change was primarily the result of an impairment charge in Fiscal 2019 as well as the Tax Credit recovery and a gain on disposal of operations in Fiscal 2018 partially offset by an increase in gain on disposal of property and equipment and assets held-for-sale.

Business Transformation Initiatives

During the three months ended February 28, 2019, the Company implemented initiatives – including compensation expense reductions, real estate rationalization, production efficiencies and other transformation programs – which are expected to result in approximately $6 million of net annualized cost savings.

The Company intends to continue to identify and undertake ongoing cost reduction initiatives in an effort to address revenue declination in the legacy print business.

Debt Repayment

During the three months ended February 28, 2019, the Company sold the Ottawa Citizen facility and the net proceeds from the sale were included in a redemption of $20.4 million first-lien notes at par in accordance with the terms and conditions of the amended and restated first-lien notes indenture. Subsequent to quarter end, the Company made an additional redemption of $5.5 million first-lien notes bringing the total principal amount of first-lien notes outstanding to $99.7 million and the total repayments made, since October 2016, to $125.3 million.

CAAT Pension Plan

On January 29, 2019, Postmedia entered into an agreement with the Colleges of Applied Arts & Technology Pension Plan (the “CAAT Pension Plan”) to merge Postmedia’s defined benefit pension plans (the “Postmedia Plans”), with the CAAT Pension Plan effective July 1, 2019. The merger is subject to customary closing conditions including approval from both Postmedia Plan members and the Financial Services Commission of Ontario, or its successor (collectively, “FSCO”). Assuming all approvals are obtained, Postmedia will become a participating employer under the CAAT Pension Plan and all members of the Postmedia Plans, as well as members of the defined contribution pension plan will become members of the CAAT Pension Plan and will begin accruing benefits under the DBplus provisions of the CAAT Pension Plan beginning July 1, 2019. DBplus is a defined benefit pension plan with a fixed contribution rate for members, matched dollar for dollar by employers. The CAAT Pension Plan will assume defined benefit obligations accrued prior to July 1, 2019 contingent on the approval by FSCO of the transfer of assets from the Postmedia Plans.

Additional Information

Additional information, including financial statements and management’s discussion and analysis can be found on the Company’s website at www.postmedia.com/investors/financial-reports or on SEDAR at www.sedar.com.

Note: All dollar amounts are expressed in Canadian dollars unless otherwise specified.

About Postmedia Network Canada Corp.

Postmedia Network Canada Corp. (TSX:PNC.A, PNC.B) is the holding company that owns Postmedia Network Inc., a Canadian newsmedia company representing more than 140 brands across multiple print, online, and mobile platforms. Award-winning journalists and innovative product development teams bring engaging content to millions of people every week whenever and wherever they want it. This exceptional content, reach and scope offers advertisers and marketers compelling solutions to effectively reach target audiences. For more information, visit 12bet slot online12bet slot online www.jolasveinarnir.net.

Forward-Looking Information

This news release may include information that is “forward-looking information” under applicable Canadian securities laws. The Company has tried, where possible, to identify such information and statements by using words such as “believe,” “expect,” “intend,” “estimate,” “anticipate,” “may,” “will,” “could,” “would,” “should” and similar expressions and derivations thereof in connection with any discussion of future events, trends or prospects or future operating or financial performance. Forward-looking statements in this news release include statements with respect to the implementation and results of the Company’s transformation initiatives, the realization of anticipated cost savings, the identification and undertaking of ongoing cost savings initiatives and the proposed pension plan merger. By their nature, forward-looking information and statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These risks and uncertainties include, among others: competition from digital and other forms of media; the effect of economic conditions on advertising revenue; the ability of the Company to build out its digital media and online businesses; the failure to maintain current print and online newspaper readership and circulation levels; the realization of anticipated cost savings; possible damage to the reputation of the Company’s brands or trademarks; possible labour disruptions; possible environmental liabilities, litigation and pension plan obligations; fluctuations in foreign exchange rates and the prices of newsprint and other commodities. For a complete list of our risk factors please refer to the section entitled “Risk Factors” contained in our annual management’s discussion and analysis for the years ended August 31, 2018 and 2017. Although the Company bases such information and statements on assumptions believed to be reasonable when made, they are not guarantees of future performance and actual results of operations, financial condition and liquidity, and developments in the industry in which the Company operates, may differ materially from any such information and statements in this press release. Given these risks and uncertainties, undue reliance should not be placed on any forward-looking information or forward-looking statements, which speak only as of the date of such information or statements. Other than as required by law, the Company does not undertake, and specifically declines, any obligation to update such information or statements or to publicly announce the results of any revisions to any such information or statements.

?

For more information:
Media Contact
Phyllise Gelfand
Vice President, Communications
(416) 442-2936
12bet slot onlinepgelfand@ 12bet slot online www.jolasveinarnir.net

?

Investor Contact
Brian Bidulka
Executive Vice President and Chief Financial Officer
(416) 383-2325
bbidulka@ 12bet slot online www.jolasveinarnir.net

 

1 Operating expenses excluding depreciation, amortization, impairment and restructuring as adjusted for the impact of a compensation expense recovery totaling $17.0 million related to the Ontario Interactive Digital Media Tax Credit in the second quarter of Fiscal 2018.

 

Consolidated Statements of Operations

12bet slot online sitemap Slotpantip scr888login gclub royal1688 W88 W88 W88.com online slots
www.simonkirkeofficial.com| www.az-sunnah.com| www.tjzhihuicanyin.com| www.evalshawtraining.com| www.diets-today.com| www.bettingbookmakers.net| www.jolasveinarnir.net| www.doubledipdepot.com| www.wrightswindows.com| www.oakleysociety.com| www.globalw88.com| www.shimi2zumba.com| www.w88vwin.org| www.bridgetsbreads.com| www.grishamgaines.com| www.zjjhengxing.com| www.infobooksonline.com| www.calendari2014.com| www.evalshawtraining.com| www.desiredirectory.com| www.fourwindshomes.com| www.w88center.com| www.mycentrefitness.com| www.kreativ-kids.net| www.daschosting.com| www.stripeatyellow.com| www.daschosting.com| www.bestjackandcoke.com| www.lolhardonline.com| www.stripeatyellow.com| www.weareprettypleased.com| www.wangshangsongxi.com| www.basecampmaricopa.com| www.zhaoyiqiang.com| www.zhaoyiqiao.com| www.bjxiaofanggs.com| www.hongw88.com| www.clock-music.net| www.bijouxpopulaire.com| www.legaltipsonline.com| www.truthofyoursoul.com| www.solidhomedubai.com|