Torstar Corporation Reports First Quarter Results

By: May. 03, 2017
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TORONTO, ON - Torstar Corporation (TSX: TS.B) today reported financial results for the first quarter ended March 31, 2017.

Highlights for the first quarter:

  • On March 31, 2017, John Boynton was appointed President and Chief Executive Officer of Torstar and Publisher of the Toronto Star. Mr. Boynton comes to Torstar with deep expertise in marketing, technology and business transformation.
  • Ended the first quarter of 2017 with $59.4 million of cash and cash equivalents and $9.1 million of restricted cash; Torstar has no bank indebtedness.
  • Our net loss was $24.4 million ($0.30 per share) in the first quarter of 2017. This compares to a net loss of $53.5 million ($0.66 per share) in the first quarter of 2016.
  • Our net loss attributable to equity shareholders was $24.3 million ($0.30 per share) in the first quarter of 2017 compared to a net loss attributable to equity shareholders of $53.5 million ($0.66 per share) in the first quarter of 2016.
  • Adjusted loss per share was $0.22 in the first quarter of 2017, an improvement of $0.18 from adjusted loss per share of $0.40 in the first quarter of 2016. Adjusted loss per share in 2017 and 2016 included $0.21 and $0.52 per share effects of amortization and depreciation.
  • Our segmented operating loss was $23.4 million in the first quarter of 2017 which included $17.2 million of non-cash amortization and depreciation expense as well as $4.9 million of restructuring and other charges and $3.0 million of impairment charges.
  • Our segmented adjusted EBITDA was $2.0 million in the first quarter of 2017 up $2.7 million from the prior year. Segmented adjusted EBITDA in the Digital Ventures segment was $5.1 million in the quarter which benefitted from 21% growth in adjusted EBITDA at VerticalScope (25% growth in USD). In the newspaper operations the segmented adjusted EBITDA loss at the Star Media Group was $2.9 million, an improvement of $3.3 million, while segmented adjusted EBITDA at the Metroland Media Group was $1.8 million, down $1.5 million in the quarter.
  • Segmented revenue was $156.7 million in the first quarter of 2017, down $18.1 million (10%) from $174.8 million in the first quarter of 2016 and which included revenue growth of $1.5 million or 18% (22% growth in USD) from VerticalScope.

"Segmented adjusted EBITDA was up $2.7 million to $2.0 million in the first quarter and included $5.1 million from our Digital Ventures segment which continues to benefit from very strong year over year growth in revenue and adjusted EBITDA at VerticalScope. At Metroland and the Star Media Group, we benefitted from continuing efforts on costs which offset the impact of the continuing challenges in the print advertising environment with earnings up $1.9 million across the two operations," said John Boynton, President and CEO of Torstar Corporation. "Looking forward, we expect earnings in the balance of the year to continue to benefit from growth at VerticalScope and efforts on reducing costs."

The following chart provides a continuity of earnings per share from the first quarter of 2016 to the first quarter of 2017:

      
   Three months ended March 31  
   Earnings (Loss) Per Share   Adjusted Earnings (Loss) Per Share**  
Earnings (loss) per share from continuing operations attributable to equity shareholders in 2016  ($0.66 ) ($0.40 )
Changes         
 • Adjusted EBITDA*  0.03   0.03  
 • Amortization and depreciation*  0.31   0.31  
 • Operating earnings*  (0.32 ) (0.06 )
 • Restructuring and other charges*  0.33      
 • Impairment of assets*  (0.04 )    
 • Operating loss*  (0.03 ) (0.06 )
 • Non-cash foreign exchange  (0.03 )    
 • Income from associated businesses (excluding VerticalScope)  (0.01 ) (0.01 )
 • Other income  (0.02 )    
 • Change in current and future taxes (including associated businesses)  (0.21 ) (0.15 )
Earnings (loss) per share attributable to equity shareholders in 2017  ($0.30 ) ($0.22 )

*Includes proportionately consolidated share of joint venture and VerticalScope's operations. These include Non-IFRS or additional IFRS measures.
** Refer to discussion of "Non-IFRS measures" including definition of adjusted earnings (loss) per share.

OPERATING RESULTS - FIRST QUARTER 2017
The following tables sets out, in $000's the segmented results for the three months ended March 31, 2017 and 2016

   
Three months ended March 31, 2017  
(in $000's)  MMG   SMG   Digital Ventures   Corporate   Total Segmented*   Adjustments 
& 
Eliminations1		   Total Per Consolidated Statement of Loss  
Operating revenue  $81,486   $59,414   $15,815       $156,715   ($18,039 ) $138,676  
Salaries and benefits  (41,503 ) (22,085 ) (5,577 ) ($1,485 ) (70,650 ) 5,907   (64,743 )
Other operating costs  (38,153 ) (40,232 ) (5,141 ) (540 ) (84,066 ) 5,576   (78,490 )
Adjusted EBITDA**  1,830   (2,903 ) 5,097   (2,025 ) 1,999   (6,556 ) (4,557 )
Amortization & depreciation  (3,760 ) (5,797 ) (7,613 )     (17,170 ) 7,105   (10,065 )
Share based compensation  (130 ) (103 ) (120 ) 25   (328 ) 328      
Operating earnings (loss)**  (2,060 ) (8,803 ) (2,636 ) (2,000 ) (15,499 ) 877   (14,622 )
Restructuring and other charges  (2,937 ) (1,801 ) (141 )     (4,879 ) 396   (4,483 )
Impairment of assets          (3,000 )     (3,000 ) 3,000      
Operating profit (loss)**  ($4,997 ) ($10,604 ) ($5,777 ) ($2,000 ) ($23,378 ) $4,273   ($19,105 )
Net loss                          ($24,397 )
                      
   
Three months ended March 31, 2016  
(in $000's)  MMG   SMG   Digital Ventures   Corporate   Total Segmented*   Adjustments
&
Eliminations1		   Total Per Consolidated Statement of Loss  
Operating revenue  $89,065   $69,815   $15,939       $174,819   ($18,138 ) $156,681  
Salaries and benefits  (44,888 ) (30,973 ) (5,649 ) ($2,037 ) (83,547 ) 6,324   (77,223 )
Other operating costs  (40,924 ) (45,042 ) (5,376 ) (636 ) (91,978 ) 5,699   (86,279 )
Adjusted EBITDA**  3,253   (6,200 ) 4,914   (2,673 ) (706 ) (6,115 ) (6,821 )
Amortization & depreciation  (3,383 ) (9,519 ) (28,944 ) (7 ) (41,853 ) 28,588   (13,265 )
Share based compensation  (118 ) (163 ) (245 ) 128   (398 ) 398      
Operating earnings (loss)**  (248 ) (15,882 ) (24,275 ) (2,552 ) (42,957 ) 22,871   (20,086 )
Restructuring and other charges  (2,262 ) (29,538 )         (31,800 )     (31,800 )
Operating profit (loss)**  ($2,510 ) ($45,420 ) ($24,275 ) ($2,552 ) ($74,757 ) 


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