Postmedia Reports Second Quarter Results
“Despite anticipated positive impacts from revisions to the Journalism Tax Credit and implementation of the Online News Act, the media industry in
Second Quarter Operating Results
Revenue for the quarter was
Total operating expenses excluding depreciation, amortization and restructuring decreased
Operating loss before depreciation, amortization and restructuring in the quarter was
Net loss in the quarter ended
Year-to-Date Operating Results
Revenue for the six months ended
Total operating expenses excluding depreciation, amortization and restructuring decreased
Operating income before depreciation, amortization and restructuring of
Net loss in the six months ended
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 or on SEDAR+ at www.sedarplus.ca.
Note: All dollar amounts are expressed in Canadian dollars unless otherwise specified.
About
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 the implementation and results of the Company’s transformation initiatives, continued benefits of historical results into future periods, the realization of anticipated cost savings, the identification and undertaking of ongoing cost savings initiatives. 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
Consolidated Statements of Operations (UNAUDITED) |
||||||||||||
(In thousands of Canadian dollars, except per share amounts) |
For the three months ended |
For the six months ended |
||||||||||
|
|
|
|
|
||||||||
|
|
|
|
|
||||||||
Revenues |
|
|
|
|
||||||||
Advertising |
|
43,152 |
|
|
54,483 |
|
|
94,004 |
|
|
119,756 |
|
Circulation |
|
32,865 |
|
|
36,988 |
|
|
65,453 |
|
|
76,638 |
|
Parcel services |
|
14,170 |
|
|
11,762 |
|
|
26,961 |
|
|
20,958 |
|
Other |
|
7,151 |
|
|
8,592 |
|
|
15,534 |
|
|
18,649 |
|
Total revenues |
|
97,338 |
|
|
111,825 |
|
|
201,952 |
|
|
236,001 |
|
Expenses |
|
|
|
|
||||||||
Compensation |
|
34,513 |
|
|
40,777 |
|
|
69,774 |
|
|
84,855 |
|
Newsprint |
|
2,812 |
|
|
4,321 |
|
|
6,062 |
|
|
9,647 |
|
Distribution |
|
37,491 |
|
|
33,085 |
|
|
69,385 |
|
|
66,304 |
|
Production |
|
10,340 |
|
|
14,169 |
|
|
21,614 |
|
|
30,448 |
|
Other operating |
|
16,975 |
|
|
20,003 |
|
|
34,037 |
|
|
40,447 |
|
Operating (loss) income before depreciation, amortization and restructuring |
|
(4,793 |
) |
|
(530 |
) |
|
1,080 |
|
|
4,300 |
|
Depreciation |
|
2,271 |
|
|
4,220 |
|
|
5,766 |
|
|
6,884 |
|
Amortization |
|
2,059 |
|
|
2,483 |
|
|
4,173 |
|
|
4,618 |
|
Restructuring |
|
1,719 |
|
|
4,444 |
|
|
3,280 |
|
|
6,059 |
|
Operating loss |
|
(10,842 |
) |
|
(11,677 |
) |
|
(12,139 |
) |
|
(13,261 |
) |
Interest expense |
|
9,092 |
|
|
8,625 |
|
|
17,770 |
|
|
16,942 |
|
Net financing expense related to employee benefit plans |
|
343 |
|
|
350 |
|
|
689 |
|
|
699 |
|
Gain on disposal of property and equipment, assets held-for-sale, and other assets |
|
(84 |
) |
|
(1,609 |
) |
|
(998 |
) |
|
(3,136 |
) |
(Gain) loss on derivative financial instruments and financial assets at fair value through profit and loss |
|
(217 |
) |
|
(55 |
) |
|
(131 |
) |
|
386 |
|
Loss on debt refinancing |
|
- |
|
|
- |
|
|
367 |
|
|
- |
|
Foreign currency exchange losses |
|
121 |
|
|
1,793 |
|
|
869 |
|
|
8,535 |
|
Loss before income taxes |
|
(20,097 |
) |
|
(20,781 |
) |
|
(30,705 |
) |
|
(36,687 |
) |
Net loss attributable to equity holders of the Company |
|
(20,097 |
) |
|
(20,781 |
) |
|
(30,705 |
) |
|
(36,687 |
) |
|
|
|
|
|
||||||||
|
|
|
|
|
||||||||
Loss per share attributable to equity holders of the Company |
|
|
|
|
||||||||
Basic |
$ |
(0.20 |
) |
$ |
(0.21 |
) |
$ |
(0.31 |
) |
$ |
(0.37 |
) |
Diluted |
$ |
(0.20 |
) |
$ |
(0.21 |
) |
$ |
(0.31 |
) |
$ |
(0.37 |
) |
Consolidated Statements of Financial Position (UNAUDITED) |
||||
(In thousands of Canadian dollars) |
As at
|
As at
|
||
|
|
|
||
Assets |
|
|
||
Current Assets |
|
|
||
Cash |
5,486 |
|
6,191 |
|
Restricted cash |
- |
|
6,968 |
|
Trade and other receivables |
38,530 |
|
46,764 |
|
Assets held-for-sale |
5,174 |
|
2,560 |
|
Inventory |
2,758 |
|
3,408 |
|
Prepaid expenses and other assets |
9,084 |
|
8,837 |
|
Total current assets |
61,032 |
|
74,728 |
|
Non-Current Assets |
|
|
||
Property and equipment |
39,689 |
|
48,299 |
|
Right of use assets |
23,804 |
|
26,780 |
|
Derivative financial instruments and other assets |
2,016 |
|
3,335 |
|
Intangible assets |
15,366 |
|
16,236 |
|
Total assets |
141,907 |
|
169,378 |
|
|
|
|
||
Liabilities and Deficiency |
|
|
||
Current Liabilities |
|
|
||
Accounts payable and accrued liabilities |
35,923 |
|
35,609 |
|
Provisions |
4,685 |
|
10,201 |
|
Deferred revenue |
16,683 |
|
17,841 |
|
Current portion of lease obligations |
7,894 |
|
8,320 |
|
Current portion of long-term debt |
15,728 |
|
17,772 |
|
Total current liabilities |
80,913 |
|
89,743 |
|
Non-Current Liabilities |
|
|
||
Long-term debt |
308,252 |
|
292,524 |
|
Employee benefit obligations and other liabilities |
34,613 |
|
35,131 |
|
Lease obligations |
21,503 |
|
24,286 |
|
Total liabilities |
445,281 |
|
441,684 |
|
|
|
|
||
Deficiency |
|
|
||
Capital stock |
820,357 |
|
820,131 |
|
Contributed surplus |
19,077 |
|
18,923 |
|
Deficit |
(1,142,808 |
) |
(1,111,360 |
) |
Total deficiency |
(303,374 |
) |
(272,306 |
) |
Total liabilities and deficiency |
141,907 |
|
169,378 |
|
Consolidated Statements of Cash Flows (UNAUDITED) |
||||||||
(In thousands of Canadian dollars) |
For the three months ended |
For the six months ended |
||||||
|
|
|
|
|
||||
|
|
|
|
|
||||
Cash Generated (Utilized) by: |
|
|
|
|
||||
Operating Activities |
|
|
|
|
||||
Net loss attributable to equity holders of the Company |
(20,097 |
) |
(20,781 |
) |
(30,705 |
) |
(36,687 |
) |
Items not affecting cash: |
|
|
|
|
||||
Depreciation |
2,271 |
|
4,220 |
|
5,766 |
|
6,884 |
|
Amortization |
2,059 |
|
2,483 |
|
4,173 |
|
4,618 |
|
Loss on debt refinancing |
- |
|
- |
|
367 |
|
- |
|
(Gain) loss on derivative financial instruments and financial assets at fair value through profit and loss |
(217 |
) |
(55 |
) |
(131 |
) |
386 |
|
Non-cash interest |
8,598 |
|
6,527 |
|
15,849 |
|
12,937 |
|
Gain on disposal of property and equipment, assets held-for-sale and other assets |
(84 |
) |
(1,609 |
) |
(998 |
) |
(3,136 |
) |
Non-cash foreign currency exchange (gains) losses |
(266 |
) |
1,815 |
|
742 |
|
8,540 |
|
Share-based compensation plans |
177 |
|
236 |
|
380 |
|
531 |
|
Net financing expense relating to employee benefit plans |
343 |
|
350 |
|
689 |
|
699 |
|
Employee benefit plan funding in excess of compensation expense |
(692 |
) |
(1,011 |
) |
(1,472 |
) |
(1,886 |
) |
Net change in non-cash operating accounts |
9,055 |
|
6,171 |
|
1,478 |
|
(2,813 |
) |
Cash flows from (used in) operating activities |
1,147 |
|
(1,654 |
) |
(3,862 |
) |
(9,927 |
) |
|
|
|
|
|
||||
Investing Activities |
|
|
|
|
||||
Net proceeds from the sale of property, plant and equipment, assets held-for-sale and other assets |
707 |
|
16,310 |
|
3,072 |
|
20,866 |
|
Purchases of property and equipment |
(153 |
) |
(29 |
) |
(397 |
) |
(107 |
) |
Purchases of intangible assets |
(203 |
) |
(163 |
) |
(326 |
) |
(165 |
) |
Cash flows from investing activities |
351 |
|
16,118 |
|
2,349 |
|
20,594 |
|
|
|
|
|
|
||||
Financing activities |
|
|
|
|
||||
Repayment of senior secured notes |
- |
|
(21,060 |
) |
(24,475 |
) |
(21,060 |
) |
Repayment of first lien senior secured notes |
(699 |
) |
- |
|
(699 |
) |
- |
|
Restricted cash |
- |
|
5,286 |
|
6,968 |
|
730 |
|
Advances from senior secured asset-based revolving credit facility |
- |
|
7,000 |
|
8,500 |
|
14,000 |
|
Repayment of senior secured asset-based revolving credit facility |
- |
|
- |
|
(14,500 |
) |
- |
|
Advances from asset-based lending credit facility |
3,956 |
|
- |
|
3,956 |
|
- |
|
Repayment of asset-based lending facility |
(4,170 |
) |
- |
|
(4,170 |
) |
- |
|
Repayment of unsecured promissory notes |
- |
|
- |
|
(4,696 |
) |
- |
|
Issuance of first lien senior secured notes |
- |
|
- |
|
20,158 |
|
- |
|
Issuance of asset-based lending facility |
- |
|
- |
|
15,393 |
|
- |
|
Debt issuance costs |
(678 |
) |
- |
|
(2,418 |
) |
- |
|
Lease payments |
(1,628 |
) |
(1,860 |
) |
(3,209 |
) |
(3,451 |
) |
Cash flow (used in) from financing activities |
(3,219 |
) |
(10,634 |
) |
808 |
|
(9,781 |
) |
|
|
|
|
|
||||
Net change in cash for the period |
(1,721 |
) |
3,830 |
|
(705 |
) |
886 |
|
Cash at beginning of period |
7,207 |
|
9,117 |
|
6,191 |
|
12,061 |
|
Cash at end of period |
5,486 |
|
12,947 |
|
5,486 |
|
12,947 |
|
Supplemental disclosure of operating cash flows |
||||||||
Interest paid |
427 |
1,401 |
2,707 |
4,112 |
||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240411223408/en/
For more information:
Media Contact
Communications
inquiries@postmedia.com
Investor Contact
Executive Vice President, Chief Financial Officer and Chief Transformation Officer
investors@postmedia.com
Source: