Postmedia Reports Third Quarter Results - Business Wire

sisilihya.blogspot.com

TORONTO--(BUSINESS WIRE)--Postmedia Network Canada Corp. (“Postmedia” or the “Company”) today released financial information for the three and nine months ended May 31, 2020.

“Results in our third quarter reflect the impacts of the near economic standstill brought on by the COVID-19 pandemic,” said Andrew MacLeod, President and Chief Executive Officer, Postmedia. “Our focus has been on implementing measures focused on keeping our people safe, preserving liquidity, constraining costs, maximizing revenue and pursuing government support in order to emerge from the crisis as strong as possible.”

• Safety of Our People – Most of Postmedia moved to mandatory work from home mid-March. At operations where this isn’t possible, we implemented extensive health and safety measures. These measures will continue to be revisited on an ongoing basis.
• Preserving Liquidity - Cash management, including the waiver of payments related to first-lien debt and the deferral of certain government remittances to June 30, 2020, has resulted in a cash balance of $35.2 million as at May 31, 2020.
• Constraining Costs – In the quarter we realized a 26.2% reduction in operating costs¹, which includes the impact of initiatives implemented in the quarter that are expected to result in approximately $8 million of net annualized cost savings.
• Maximizing Revenue – Third quarter revenue was down 28.4% from the prior year and significantly impacted due to the pandemic.
• Government Support – Canada Emergency Wage Subsidy (“CEWS”) of $20.4 million recognized and $14.0 million received during the quarter.

Third Quarter Operating Results

Significantly impacted by the global economic impacts brought on by the COVID-19 pandemic, revenue for the quarter was $112.4 million as compared to $157.1 million in the same period in the prior year, representing a decrease of $44.6 million or 28.4%. The revenue decline was primarily due to decreases in print advertising revenue of $23.7 million or 36.6% and digital revenue of $10.7 million or 32.5% with digital advertising down 37.7%. Print circulation revenue declined $5.4 million or 10.5% versus the same period in the prior year.

Excluding the impact of the adoption of the IFRS 16 – Leases accounting policy in Fiscal 2020, total operating expenses excluding depreciation, amortization, impairment and restructuring decreased $57.9 million or 39.2% for the quarter, relative to the same period in the prior year. The decrease was a result of lower compensation expense and newspaper circulation volumes as well as the implementation of various cost reduction initiatives. Included in the operating expense decreases is the impact of compensation expense recoveries of $19.3 million and $1.2 million related to CEWS and the journalism tax credits, respectively.

Operating income before depreciation, amortization, impairment and restructuring of $24.2 million in the quarter represents an increase of $14.6 million relative to the same period in the prior year. The increase is due to a decrease in operating expenses, partially offset by decreases in total revenue. Included in operating expenses are the impact of the change in accounting policy related to leases and the compensation expense recoveries related to CEWS and journalism tax credits.

Net loss in the quarter ended May 31, 2020 was $13.8 million, as compared to $7.7 million in the same period in the prior year. The change was primarily the result of an impairment recognized in the current quarter of $12.5 million, a loss on derivative financial instruments in Fiscal 2020 and an increase in interest expense partially offset by an increase in operating income before depreciation, amortization, impairment and restructuring.

__________________________________

¹ Operating expenses excluding depreciation, amortization and restructuring as adjusted for the impacts of the Canada Emergency Wage Subsidy and the adoption of IFRS 16 - Leases in Fiscal 2020.

Year-to-Date Operating Results

Revenue for the nine months ended May 31, 2020 was $403.2 million as compared to $474.0 million in the same period in the prior year, a decrease of $70.8 million or 14.9%. The revenue decline was primarily due to decreases in print advertising revenue of $46.6 million or 23.1% and decreases in print circulation revenue of $10.6 million or 6.8%. Digital revenue decreased by $6.3 million or 6.7% year to date with digital advertising revenue down 7.8%.

Excluding the impact of the adoption of the IFRS 16 – Leases accounting policy in Fiscal 2020, total operating expenses excluding depreciation, amortization, impairment and restructuring decreased $80.3 million or 18.3% for the nine months ended May 31, 2020, relative to the same period in the prior year. The decrease was as a result of lower compensation expense and newspaper circulation volumes as well as the implementation of various cost reduction initiatives. Included in the operating expense decrease is the impact of compensation expense recoveries of $19.3 million and $4.9 million related to CEWS and the journalism tax credits, respectively.

Operating income before depreciation, amortization, impairment and restructuring of $51.0 million in the in the nine months ended May 31, 2020 represents an increase of $15.0 million or 41.7% relative to the same period in the prior year. The increase is due to a decrease in operating expenses, partially offset by decreases in total revenue. Included in operating expenses are the impact of the change in accounting policy related to leases and the compensation expense recoveries related to CEWS and journalism tax credits.

Net loss in the nine months ended May 31, 2020 was $29.6 million, as compared to $14.2 million in the same period in the prior year. The change was primarily the result of a gain on disposal of property and equipment and assets held-for-sale in Fiscal 2019, a loss in derivative financial instruments in Fiscal 2020, increases in impairment and interest expenses partially offset by an increase in operating income before depreciation, amortization, impairment and restructuring and a decrease in depreciation expense.

COVID-19 Update

The COVID-19 pandemic has resulted in governments worldwide enacting emergency measures to combat the spread of the virus including travel bans, self-imposed quarantine periods and social distancing that have caused disruption to businesses resulting in an economic slowdown. The Company is generally exempt from mandates requiring closures of non-essential businesses and therefore has been able to continue operations however, during the three months ended May 31, 2020, advertising revenues have declines have accelerated as a result of the COVID-19 pandemic and related government measures. The Company is continuing to address the current challenges related to the COVID-19 pandemic and on April 6, 2020 received a waiver of certain terms related to its 8.25% first lien notes, maturing July 2023 (the “Notes”) which provided for the cash interest payment of $3.9 million due on April 30, 2020 to be satisfied through the issuance of additional Notes and the waiver in full of the Company’s obligation to make a mandatory excess cash flow redemption related to the six months ended February 29, 2020. On April 11, 2020, the Government of Canada passed CEWS to support employers facing financial hardship as measured by certain revenue declines as a result of the COVID-19 pandemic. The Company applied for CEWS for the period from March 15 to June 6, 2020 and during the three and nine months ended May 31, 2020, recognized a recovery of compensation expense of $19.3 million and has since received a total of $20.7 million related to these claims. On May 15, 2020, the Government of Canada announced they will extend CEWS by an additional 12 weeks to August 29, 2020. The Company has qualified for the first 4 week period and will continue to monitor its eligibility for further periods. On April 28, 2020, the Company implemented additional cost saving measures including temporary layoffs affecting approximately 50 employees, the closure of 15 community publications in Manitoba and Ontario resulting in approximately 30 permanent layoffs and temporary salary reductions from 5% to 30% for a range of employees with salaries in excess of $60,000. On May 27, 2020 the Company implemented additional permanent layoffs impacting approximately 40 unionized employees.

We are pleased to announce that we will be lifting the salary rollback one month early, retroactively to July 6, 2020. This is due to government programs that have benefited the company, most notably the extension of the CEWS benefit as well as exceptional work done by our teams to constrain costs and conserve cash.

Business Transformation Initiatives

During the three months ended May 31, 2020, the Company implemented initiatives including those discussed above related to the COVID-19 pandemic as well as additional compensation expense reductions, real estate rationalization, production efficiencies and other transformation programs, which are expected to result in approximately $8 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.

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.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 125 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 www.postmedia.com.

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 impact of the COVID-19 pandemic on the Company’s business, the implementation and results of the Company’s transformation initiatives, continued benefits of historical results into future periods, and the realization of anticipated cost savings and 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.

In addition, we are subject to the risk and uncertainties related to the COVID-19 pandemic. The pandemic has resulted in governments worldwide enacting emergency measures to combat the spread of the virus including travel bans, self-imposed quarantine periods and social distancing that have caused disruption to businesses resulting in an economic slowdown. We are generally exempt from mandates requiring closures of non-essential businesses and therefore have been able to continue operations however, advertising revenues have declined as a result of COVID-19 pandemic and related government measures. The outbreak of contagious illness such as this can impact our operations in a number of ways including quarantined employees, travel restrictions, temporary closure of our facilities, a decrease in demand for advertising, as well as interruptions to our supply chain, including temporary closure of supplier facilities. Given the high level of uncertainty surrounding the duration of the COVID-19 pandemic it is difficult to reliably estimate its potential impact on the financial condition and results of our business. We are continuing to address the current challenges related to the COVID-19 pandemic and monitoring these challenges as they evolve so as to minimize this risk however it could have a material adverse effect on our business, financial condition, results of operations, liquidity and cash flow. 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, 2019 and 2018. 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.

Postmedia Network Canada Corp. Consolidated Statements of Operations (UNAUDITED)
(In thousands of Canadian dollars, except per share amounts)	For the three months ended May 31,		For the nine months ended May 31,
	2020	2019	2020	2019
Revenues
Print advertising	41,023	64,756	155,338	201,943
Print circulation	45,976	51,384	144,973	155,540
Digital	22,225	32,902	87,512	93,834
Other	3,197	8,016	15,420	22,713
Total revenues	112,421	157,058	403,243	474,030
Expenses
Compensation	24,734	59,181	128,162	174,513
Newsprint	4,363	9,132	18,501	27,754
Distribution	25,893	30,195	82,133	91,070
Production	12,746	19,940	51,605	59,294
Other operating	20,493	28,995	71,836	85,406
Operating income before depreciation, amortization, impairment and restructuring	24,192	9,615	51,006	35,993
Depreciation	2,879	3,853	8,816	13,140
Amortization	3,382	3,119	11,675	10,640
Impairment	12,507	-	12,507	6,600
Restructuring and other items	4,844	482	14,549	4,255
Operating income	580	2,161	3,459	1,358
Interest expense	7,756	6,608	22,579	20,827
Net financing expense related to employee benefit plans	610	541	1,829	1,622
Gain on disposal of property and equipment and assets held-for-sale	-	(1)	(16)	(11,446)
(Gain) loss on derivative financial instruments	1,447	(1,436)	2,364	(10)
Foreign currency exchange losses	4,572	4,130	6,328	5,335
Loss before income taxes	(13,805)	(7,681)	(29,625)	(14,970)
Provision for income taxes	-	-	-	-
Net loss from continuing operations	(13,805)	(7,681)	(29,625)	(14,970)
Net earnings from discontinued operations, net of tax of nil	-	-	-	791
Net loss attributable to equity holders of the Company	(13,805)	(7,681)	(29,625)	(14,179)
Loss per share from continuing operations
Basic	$(0.15)	$(0.08)	$(0.32)	$(0.16)
Diluted	$(0.15)	$(0.08)	$(0.32)	$(0.16)
Earnings per share attributable from discontinued operations
Basic	-	$ -	-	$0.01
Diluted	-	$ -	-	$0.01
Loss per share attributable to equity holders of the Company
Basic	$(0.15)	$(0.08)	$(0.32)	$(0.15)
Diluted	$(0.15)	$(0.08)	$(0.32)	$(0.15)

Postmedia Network Canada Corp. Consolidated Statements of Financial Position (UNAUDITED)
(In thousands of Canadian dollars)	As at May 31, 2020	As at August 31, 2019
Assets
Current Assets
Cash	35,207	15,464
Restricted cash	-	13
Trade and other receivables	75,638	72,228
Assets held-for-sale	29,029	24,475
Inventory	3,661	3,554
Prepaid expenses and other assets	10,341	10,269
Total current assets	153,876	126,003
Non-Current Assets
Property and equipment	96,287	109,860
Right of use assets	43,214	-
Derivative financial instruments and other assets	1,352	2,829
Intangible assets	42,158	60,367
Total assets	336,887	299,059
Liabilities and Equity
Current Liabilities
Accounts payable and accrued liabilities	54,616	54,122
Provisions	10,514	5,893
Deferred revenue	25,584	25,907
Current portion of lease obligations	9,128	-
Current portion of long-term debt	5,000	5,000
Total current liabilities	104,842	90,922
Non-Current Liabilities
Long-term debt	268,193	250,011
Employee benefit obligations and other liabilities	87,532	94,537
Lease obligations	39,572	-
Total liabilities	500,139	435,470
Deficiency
Capital stock	810,861	810,861
Contributed surplus	15,269	14,770
Deficit	(989,382)	(962,042)
Total deficiency	(163,252)	(136,411)
Total liabilities and deficiency	336,887	299,059

Postmedia Network Canada Corp. Consolidated Statements of Cash Flows (UNAUDITED)
(In thousands of Canadian dollars)	For the three months ended May 31,		For the nine months ended May 31,
	2020	2019	2020	2019
Cash Generated (Utilized) by:
Operating Activities
Net loss attributable to equity holders of the Company	(13,805)	(7,681)	(29,625)	(14,179)
Items not affecting cash:
Depreciation	2,879	3,853	8,816	13,140
Amortization	3,382	3,119	11,675	10,640
Impairment	12,507	-	12,507	6,600
Loss (gain) on derivative financial instruments	1,447	(1,436)	2,364	(10)
Non-cash interest	9,694	4,590	20,489	13,710
Gain on disposal of property and equipment and assets held-for-sale	-	(1)	(16)	(11,446)
Non-cash foreign currency exchange losses	4,533	4,169	6,320	5,405
Gain on sale of discontinued operations	-	-	-	(791)
Share-based compensation plans	128	243	499	951
Net financing expense relating to employee benefit plans	610	541	1,829	1,622
Non-cash compensation expense of employee benefit plans	-	218	-	639
Employee benefit plan funding in excess of compensation expense	(883)	-	(1,948)	-
Net change in non-cash operating accounts	1,069	(6,047)	(4,771)	(22,328)
Cash flows from operating activities	21,611	1,568	28,139	3,953
Investing Activities
Net proceeds from the sale of property and equipment and assets held-for-sale	-	1	96	20,736
Purchases of property and equipment	(287)	(1,034)	(2,203)	(2,479)
Purchases of intangible assets	(238)	(1,150)	(538)	(1,341)
Cash flows from (used in) investing activities	(525)	(2,183)	(2,645)	16,916
Financing activities
Net proceeds from issuance of long-term debt	-	-	95,235	-
Repayment of long-term debt	-	(10,510)	(94,761)	(39,583)
Restricted cash	-	5,700	13	5,698
Debt issuance costs	-	-	(1,710)	-
Issuance of shares	-	-	-	25
Lease payments	(1,346)	-	(4,528)	-
Cash flow used in financing activities	(1,346)	(4,810)	(5,751)	(33,860)
Net change in cash for the period	19,740	(5,425)	19,743	(12,991)
Cash at beginning of period	15,467	18,471	15,464	26,037
Cash at end of period	35,207	13,046	35,207	13,046
Supplemental disclosure of operating cash flows
Interest paid	41	4,310	4,006	10,200
Income taxes paid	-	-	-	-

 

Let's block ads! (Why?)

"results" - Google News
July 09, 2020 at 11:18PM
https://ift.tt/2O7ZQ9p

Postmedia Reports Third Quarter Results - Business Wire
"results" - Google News
https://ift.tt/2SvRPxx
https://ift.tt/2Wp5bNh

Bagikan Berita Ini