Postmedia's fiscal Q1 net income soars to C$28.3M from C$6M in year-ago period influenced by gains from Glacier Media transaction; net sales down 9% to C$231.1M primarily due to decrease in print advertising revenue
January 11, 2012
– Postmedia Network Canada Corp. ("Postmedia" or "the Company") today released financial information for the first quarter ended November 30, 2011.
First Quarter Operating Results
Net earnings in the quarter ended November 30, 2011 were $28.3 million compared to $6.0 million in the same period in the prior year. The increase was due to an increase in net earnings from continuing operations as well as the gain resulting from the transaction with affiliates of Glacier Media Inc. ("Glacier") announced previously.
Net earnings from continuing operations in the quarter ended November 30, 2011 were $14.3 million, an increase of $9.7 million compared to the same period in the prior year.
Operating income for the quarter ended November 30, 2011 increased $4.8 million relative to the prior year due to decreases in restructuring of operations and other items of $18.3 million offset by declines in operating income before depreciation, amortization and restructuring.
For the quarter ended November 30, 2011, operating income before depreciation, amortization and restructuring was $54.6 million, a decrease of $14.5 million, or 21.0% relative to the same period in the prior year. The decrease was due to revenue declines partially offset by lower operating costs.
Revenue for the quarter ended November 30, 2011 totaled $231.1 million, a decrease of $23.0 million (down 9%) relative to the same period in the prior year. This decline was primarily due to a decrease in print advertising revenue of $19.8 million (down 11.7%) with approximately 75% of the print advertising decline due to weakness in the national category. Print circulation revenue declined $1.8 million (down 3.1%) and other revenue declined $1.1 million due to the previously reported loss of a commercial print contract in the first quarter of the prior fiscal year. Digital revenue was also affected by weakness in national advertising and was down $0.3 million or 1.4%, relative to the same period in the prior year.
Operating expenses excluding depreciation, amortization and restructuring and other items for the quarter ended November 30, 2011 declined $8.5 million or 4.6% relative to the same period in the prior year. This decrease was largely due to cost savings achieved through various restructuring and cost containment initiatives implemented during fiscal 2011.
Transaction with Glacier Media Inc.
On November 30, 2011, the Company completed the sale to Glacier of three daily newspapers (the Times Colonist, Nanaimo Daily News and Alberni Valley Times) and twenty British-Columbia based community publications for gross proceeds of $86.5 million. The proceeds of the transaction have been used to repay a portion of the US$ term loan. As a result of this transaction, the results of the newspapers that were sold are reported as earnings from discontinued operations for the three months ended November 30, 2011 and November 30, 2010.
For the quarter ended November 30, 2011, Postmedia made total debt repayments of $90.8 million (US$88.9 million) related to its US$ term loan, inclusive of the gross proceeds from the Glacier transaction. After giving effect to these payments, outstanding long term debt at November 30, 2011 consisted of US$251 million under our term loan credit facilities and US$275 million of 12.5% senior secured notes.
"In this first quarter of our second year, we continue to see the effects of a slower than expected economic recovery," said Paul Godfrey, President and CEO. "Some of our largest national advertisers have scaled back their spending and these cuts are being felt across our industry. In the near term, our priorities remain aggressive control of operating expenses and capital expenditures, and use of available cash flow to repay debt."
Transition to International Financial Reporting Standards ("IFRS")
Postmedia adopted IFRS on September 1, 2011. The Company's condensed consolidated financial statements for the three months ended November 30, 2011 have therefore been prepared in accordance with IFRS and comparative financial information for the three months ended November 30, 2010 has been restated.
Note: All dollar amounts are expressed in Canadian dollars unless otherwise specified.
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 , on SEDAR at www.sedar.com or on the website maintained by the U.S. Securities and Exchange Commission (the "SEC") at www.sec.gov .
About Postmedia Network Canada Corp.
Postmedia Network Canada Corp., is the holding company that owns Postmedia Network Inc., the largest publisher by circulation of paid English-language daily newspapers in Canada, representing some of the country's oldest and best known media brands. Reaching millions of Canadians every week, Postmedia engages readers and offers advertisers and marketers integrated solutions to effectively reach target audiences through a variety of print, online, digital, and mobile platforms.
© 2017 Business Wire, Inc., All rights reserved.