TORONTO--(BUSINESS WIRE)--Postmedia Network Canada Corp. (“Postmedia” or the “Company”) today released financial information for the three months ended November 30, 2024.
“The results of our first quarter signal a positive start to the 2025 fiscal year and demonstrate meaningful progress, with total revenue growing compared to this time last year,” said Andrew MacLeod, Postmedia President and Chief Executive Officer.
“I am particularly encouraged by the trajectory of our advertising revenue stream, which is showing positive year-over-year growth. This, combined with strong performance in our circulation and parcel divisions, reflects the successful execution of our strategic initiatives and the increasing value we deliver to our partners,” said MacLeod. “As we move forward, we remain focused on sustainable growth and operational excellence across all our business segments."
First Quarter Operating Results
Revenue for the quarter was $110.3 million as compared to $104.6 million in the same period in the prior year, representing an increase of $5.7 million (5.4%). The revenue increase was primarily due to increases in advertising revenue of $5.6 million (11.1%), circulation revenue of $3.3 million (10.3%) and parcel revenue of $0.4 million (2.8%), partially offset by decreases in other revenue of $3.6 million (43.8%). Excluding the impact of the Saltwire asset acquisition, advertising revenue for the quarter increased by 1.4%. As such, excluding the impact of any acquisition related activity, advertising revenue has increased in comparison to the same quarter in the prior year for the first time since the third quarter in 2022.
Total operating expenses excluding depreciation, amortization and restructuring increased $6.1 million, or 6.1%, for the quarter ended November 30, 2024, relative to the same period in the prior year. The increase relates to increases in compensation, distribution and other operating expenses, partially offset by a decrease in newsprint and production expense.
Operating income before depreciation, amortization and restructuring in the quarter was $5.5 million, a decrease of $0.4 million relative to the same period in the prior year. The decrease in operating income before depreciation, amortization and restructuring is due to an increase in operating expenses excluding depreciation, amortization and restructuring, partially offset by an increase in total revenue. Excluding the impact of the Saltwire asset acquisition, operating income before depreciation, amortization and restructuring in the quarter was $3.1M.
Net loss in the quarter ended November 30, 2024 was $24.5 million, as compared to a net loss of $10.6 million in the same period in the prior year. The increase in net loss was primarily the result of an increase in restructuring expenses, interest expense, loss on disposal of right-of-use assets, foreign currency exchange losses and a decrease in operating income before depreciation, amortization and restructuring, partially offset by a decrease depreciation, amortization, and net financing expense.
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 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 130 brands across multiple print and digital 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. Our expertise in home delivery and expanding distribution network powers Postmedia Parcel Services. For more information, visit www.postmedia.com, www.postmediasolutions.com and www.postmediaparcelservices.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 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 August 31, 2024 and 2023. 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) |
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(In thousands of Canadian dollars, except per share amounts) |
For the three months ended |
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|
November 30, 2024 |
November 30, 2023 |
||
|
|
|
||
Revenues |
|
|
||
Advertising |
56,473 |
50,852 |
||
Circulation |
35,936 |
32,588 |
||
Parcel Services |
13,149 |
12,791 |
||
Other |
4,712 |
8,383 |
||
Total revenues |
110,270 |
104,614 |
||
Expenses |
|
|
||
Compensation |
35,608 |
35,261 |
||
Newsprint |
2,872 |
3,250 |
||
Distribution |
37,514 |
31,894 |
||
Production |
10,639 |
11,274 |
||
Other operating |
18,167 |
17,062 |
||
Operating income before depreciation, amortization, impairment, and restructuring |
5,470 |
5,873 |
||
Depreciation |
2,233 |
3,495 |
||
Amortization |
1,742 |
2,114 |
||
Restructuring |
2,026 |
1,561 |
||
Operating loss |
(531) |
(1,297) |
||
Interest expense |
10,743 |
8,678 |
||
Foreign currency exchange losses |
12,914 |
748 |
||
Net financing expense related to employee benefit plans |
289 |
346 |
||
Loss (gain) on disposal of right of use assets and other assets |
250 |
(914) |
||
(Gain) loss on derivative financial instruments and financial assets at fair value through profit and loss |
(242) |
86 |
||
Loss on debt refinancing |
- |
367 |
||
Net loss after income taxes |
(24,485) |
(10,608) |
||
|
|
|
||
|
|
|
||
Loss per share |
|
|
||
Basic and diluted |
$(0.25) |
$(0.11) |
||
|
|
|
||
Postmedia Network Canada Corp. Consolidated Statements of Financial Position (UNAUDITED) |
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(In thousands of Canadian dollars) |
As at November 30, 2024 |
As at August 31, 2024 |
||
|
|
|
||
Assets |
|
|
||
Current Assets |
|
|
||
Cash |
6,203 |
2,454 |
||
Trade and other receivables |
58,990 |
53,931 |
||
Assets held-for-sale |
2,560 |
2,560 |
||
Inventory |
1,973 |
2,318 |
||
Prepaid expenses and other assets |
7,324 |
8,522 |
||
Total current assets |
77,050 |
69,785 |
||
Non-Current Assets |
|
|
||
Property and equipment |
32,983 |
35,089 |
||
Intangible assets |
22,012 |
19,868 |
||
Right of use assets |
18,316 |
19,783 |
||
Derivative financial instruments and other assets |
4,656 |
4,399 |
||
Total assets |
155,017 |
148,924 |
||
|
|
|
||
Liabilities and Deficiency |
|
|
||
Current Liabilities |
|
|
||
Accounts payable and accrued liabilities |
61,821 |
38,509 |
||
Provisions |
1,179 |
1,514 |
||
Contract Liabilities |
16,399 |
16,716 |
||
Current portion of lease obligations |
7,648 |
7,773 |
||
Current portion of long-term debt |
27,676 |
29,509 |
||
Total current liabilities |
114,723 |
94,021 |
||
Non-Current Liabilities |
|
|
||
Long-term debt |
334,940 |
323,129 |
||
Employee benefit obligations and other liabilities |
34,218 |
34,250 |
||
Lease obligations |
17,856 |
19,345 |
||
Total liabilities |
501,737 |
470,745 |
||
|
|
|
||
Deficiency |
|
|
||
Capital stock |
820,357 |
820,357 |
||
Contributed surplus |
19,679 |
19,511 |
||
Deficit |
(1,186,756) |
(1,161,689) |
||
Total deficiency |
(346,720) |
(321,821) |
||
Total liabilities and deficiency |
155,017 |
148,924 |
||
Postmedia Network Canada Corp. Consolidated Statements of Cash Flows (UNAUDITED) |
||||
(In thousands of Canadian dollars) |
For the three months ended |
|||
|
November 30, 2024 |
November 30, 2023 |
||
|
|
|
||
Cash Generated (Utilized) by: |
|
|
||
Operating Activities |
|
|
||
Net loss after income taxes |
(24,485) |
(10,608) |
||
Items not affecting cash: |
|
|
||
Depreciation |
2,233 |
3,495 |
||
Amortization |
1,742 |
2,114 |
||
Loss on debt refinancing |
- |
367 |
||
(Gain) loss on derivative financial instruments and financial assets at fair value through profit and loss |
(242) |
86 |
||
Non-cash interest |
9,822 |
7,251 |
||
Loss (gain) on disposal of right of use assets and other assets |
250 |
(914) |
||
Non-cash foreign currency exchange losses |
12,951 |
1,008 |
||
Share-based compensation plans |
168 |
203 |
||
Net financing expense relating to employee benefit plans |
289 |
346 |
||
Employee benefit plan funding in excess of compensation expense |
(761) |
(780) |
||
Net change in non-cash operating accounts |
7,523 |
(7,577) |
||
Cash flows from (used in) in operating activities |
9,490 |
(5,009) |
||
Investing Activities |
|
|
||
Net proceeds from the sale of assets held-for-sale and other assets |
- |
2,365 |
||
Purchases of property and equipment |
(127) |
(244) |
||
Purchases of intangible assets |
(376) |
(123) |
||
Cash flows (used in) from investing activities |
(503) |
1,998 |
||
Financing activities |
|
|
||
Advances from asset-based lending credit facility |
1,376 |
15,393 |
||
Repayment of short term promissory note |
(5,000) |
- |
||
Repayment of unsecured promissory notes |
- |
(4,696) |
||
Repayment of senior secured asset-based revolving credit facility |
- |
(14,500) |
||
Advances from senior secured asset-based revolving credit facility |
- |
8,500 |
||
Advances of first lien senior secured notes |
- |
20,158 |
||
Repayment of senior secured notes |
- |
(24,475) |
||
Proceeds from sale of building classified as restricted cash |
- |
6,968 |
||
Debt issuance costs |
- |
(1,740) |
||
Lease payments |
(1,614) |
(1,581) |
||
Cash flows (used in) from financing activities |
(5,238) |
4,027 |
||
Net change in cash for the period |
3,749 |
1,016 |
||
Cash at beginning of period |
2,454 |
6,191 |
||
Cash at end of period |
6,203 |
7,207 |
||
Supplemental disclosure of operating cash flows |
|
|
||
Interest paid |
921 |
2,280 |
||
