Postmedia Network Canada : Reports First Quarter Results
January 14, 2021 at 09:52 am EST
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Postmedia Network Canada Corp. ('Postmedia' or the 'Company') today released financial information for the three months ended November 30, 2020.
'With the effects of the global pandemic continuing to weigh on our communities and our people, our focus remains on the safety of our teams, preserving liquidity, constraining costs, maximizing revenue and pursuing government support,' said Andrew MacLeod, President and Chief Executive Officer, Postmedia.
First Quarter Operating Results Three quarters into the COVID-19 pandemic, the Company continued to navigate through the pandemic's significant business impacts. Revenue for the quarter was $116.9 million as compared to $156.7 million in the same period in the prior year, representing a decrease of $39.7 million or 25.4%. The revenue decline was primarily due to decreases in print advertising revenue of $20.6 million or 32.1% and digital revenue of $10.7 million or 31.1% with digital advertising revenue down 36.0%. Print circulation revenue declined $6.2 million or 12.4% versus the same period in the prior year. Total operating expenses excluding depreciation, amortization, impairment and restructuring decreased $35.5 million or 26.3% 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 decrease of operating expenses is the impact of a compensation expense recovery of $6.6 million related to CEWS, partially offset by a decrease in compensation recovery related to journalism tax credits of $0.9 million. Operating income before depreciation, amortization, impairment and restructuring of $17.2 million in the quarter represents a decrease of $4.2 million relative to the same period in the prior year. The decrease is due to the decrease in total revenue partially offset by decreases in operating expenses. Included in the operating expense decreases is the impact of the compensation expense recoveries related to CEWS and journalism tax credits. Net earnings in the quarter ended November 30, 2020 was $52.8 million, as compared to a loss of $3.0 million in the same period in the prior year. The change was primarily the result of a noncash settlement gain related to employee benefit plans of $63.1 million, gains on derivative financial instruments and foreign exchange in the three months ended November 30, 2020, decreases in depreciation, amortization and restructuring expenses partially offset by impairment expense of $13.5 million in the three months ended November 30, 2020, a decrease in operating income depreciation, amortization, impairment, settlement gains and restructuring and an increase in interest expense.
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 120 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.
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, the realization of anticipated cost savings, the completion of asset transfers related to the Company's pension plans, the receipt of anticipated government assistance 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 COVID19 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, 2020 and 2019. 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. is a Canada-based holding company that owns Postmedia Network Inc., a Canadian news media company representing approximately 130 brands across multiple print, online, and mobile platforms. The Company operates through the Newsmedia segment that publishes daily and non-daily newspapers and operates digital media and online assets, including each newspaperâs online website. Its operations consist of news and information gathering and dissemination operations, with products offered in local, regional, and major metropolitan markets in Canada through print, online and mobile platforms. Its brands include National Post, Financial Post, Canadian Family Offices, Airdrie Echo, Bow Valley Crag & Canyon, The Vancouver Sun, The Province, The Graphic Leader, Edmonton Journal, Edmonton Sun, Business London, Cochrane Times-Post, Community Press, The Daily Press, The Londoner, The Expositor, The Timmins Times, The Courier Press, St. Thomas Times-Journal, and others.
POSTMEDIA NETWORK CANADA CORP. 
