Torstar Corporation Reports Third Quarter Results
TORONTO, ON - Torstar Corporation (
Highlights for the third quarter:
- Ended the third quarter of 2017 with $51.4 million of cash and cash equivalents and $9.1 million of restricted cash; Torstar has no bank indebtedness.
- Cash provided by operating activities was $9.7 million in the third quarter of 2017 reflecting a $7.8 million decrease in working capital combined with $1.9 million of cash generated by operating activities in the quarter.
- Our net loss attributable to equity shareholders was $6.6 million ($0.08 per share) in the third quarter of 2017. This compares to a net income of $1.4 million ($0.02 per share) in the third quarter of 2016.
- Adjusted loss per share was $0.08 in the third quarter of 2017, consistent with the third quarter of 2016. Adjusted loss per share in 2017 and 2016 included $0.19 and $0.30 per share effects, respectively, of amortization and depreciation.
- Our segmented operating loss was $6.2 million in the third quarter of 2017 which included $15.0 million of non-cash amortization and depreciation expense as well as $1.7 million of restructuring and other charges.
- Our segmented adjusted EBITDA was $11.2 million in the third quarter of 2017 down $1.9 million from the prior year. Segmented adjusted EBITDA in the Digital Ventures segment was $7.2 million in the quarter, down $0.9 million relative to the third quarter of 2016. In the newspaper operations, the segmented adjusted EBITDA at the Star Media Group was $0.1 million, an improvement of $0.8 million, while segmented adjusted EBITDA at the Metroland Media Group was $6.7 million, down $1.7 million in the quarter.
- Segmented revenue was $164.6 million in the third quarter of 2017, down $17.1 million (9.4%) from $181.7 million in the third quarter of 2016 and included revenue growth of $0.5 million or 4.8% (8.8% growth in USD) from VerticalScope.
"Segmented adjusted EBITDA of $11.2 million was down $1.9 million in the third quarter and included $7.2 million from our Digital Ventures segment which continued to benefit from solid earnings at VerticalScope. Results at VerticalScope in the quarter were in line with expectations but were up against very strong earnings reported a year ago. At Metroland and the Star Media Group, we benefitted from continuing efforts on costs which partially offset the impact of challenges in the print advertising environment." 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, helping to offset pressures on print advertising revenues in the newspaper operations. Transformation of our core brands remains our top priority and I am encouraged by the progress we are making."
The following chart provides a continuity of earnings per share from the third quarter and first nine months of 2016 to the third quarter and first nine months of 2017:
| Three months ended September 30 | Nine months ended September 30 | ||||||||
| Adjusted | Adjusted | ||||||||
| Earnings (Loss) | Earnings (Loss) | Earnings (Loss) | Earnings (Loss) | ||||||
| Per Share | Per Share** | Per Share | Per Share** | ||||||
| Earnings (loss) per share from continuing operations attributable to equity shareholders in 2016 | $0.01 | ($0.08 | ) | ($0.95 | ) | ($0.62 | ) | ||
| Changes | |||||||||
| • | Adjusted EBITDA* | (0.02 | ) | (0.02 | ) | 0.03 | 0.03 | ||
| • | Amortization and depreciation* | 0.11 | 0.11 | 0.68 | 0.68 | ||||
| • | Operating earnings (loss)* | 0.10 | 0.01 | (0.24 | ) | 0.09 | |||
| • | Restructuring and other charges* | 0.02 | 0.37 | ||||||
| • | Impairment of assets* | (0.04 | ) | ||||||
| • | Operating profit (loss)* | 0.12 | 0.01 | 0.09 | 0.09 | ||||
| • | Interest and financing costs | 0.01 | 0.01 | ||||||
| • | Non-cash foreign exchange | 0.02 | 0.01 | ||||||
| • | Loss from associated businesses (excluding VerticalScope) | (0.03 | ) | (0.03 | ) | (0.05 | ) | (0.05 | ) |
| • | Other income | (0.29 | ) | (0.30 | ) | ||||
| • | Change in current and future taxes (including associated businesses) | 0.10 | (0.06 | ) | (0.24 | ) | (0.36 | ) | |
| Loss per share from continuing operations attributable to equity shareholders in 2017 | ($0.08 | ) | ($0.08 | ) | ($0.48 | ) | ($0.31 | ) | |
| Earnings per share from discontinued operations attributable to equity shareholders in 2017 | $0.01 | ||||||||
| Loss per share attributable to equity shareholders in 2017 | ($0.08 | ) | ($0.08 | ) | ($0.47 | ) | ($0.31 | ) | |
| * 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 THIRD QUARTER 2017
The following tables sets out, in $000's, the segmented results for the three months ended September 30, 2017 and 2016
| Three months ended September 30, 2017 | ||||||||||||||
| Total Per | ||||||||||||||
| Adjustments | Consolidated | |||||||||||||
| Digital | Total | & | Statement of | |||||||||||
| (in $000's) | MMG | SMG | Ventures | Corporate | Segmented* | Eliminations1 | Income (Loss) | |||||||
| Operating revenue | $89,768 | $56,975 | $17,845 | $164,588 | ($18,675 | ) | $145,913 | |||||||
| Salaries and benefits | (42,603 | ) | (19,660 | ) | (5,174 | ) | ($1,509 | ) | (68,946 | ) | 5,603 | (63,343 | ) | |
| Other operating costs | (40,457 | ) | (37,257 | ) | (5,502 | ) | (1,200 | ) | (84,416 | ) | 5,494 | (78,922 | ) | |
| Adjusted EBITDA** | 6,708 | 58 | 7,169 | (2,709 | ) | 11,226 | (7,578 | ) | 3,648 | |||||
| Amortization & depreciation | (3,721 | ) | (3,311 | ) | (8,006 | ) | (15,038 | ) | 7,467 | (7,571 | ) | |||
| Share based compensation | (126 | ) | (91 | ) | (484 | ) | 88 | (613 | ) | 613 | - | |||
| Operating earnings (loss)** | 2,861 | (3,344 | ) | (1,321 | ) | (2,621 | ) | (4,425 | ) | 502 | (3,923 | ) | ||
| Restructuring and other charges | (874 | ) | (276 | ) | (575 | ) | (1,725 | ) | 678 | (1,047 | ) | |||
| Operating profit (loss)** | $1,987 | ($3,620 | ) | ($1,896 | ) | ($2,621 | ) | ($6,150 | ) | $1,180 | ($4,970 | ) | ||
| Net loss | ($6,589 | ) | ||||||||||||
| Three months ended September 30, 2016 | ||||||||||||||
| Total Per | ||||||||||||||
| Adjustments | Consolidated | |||||||||||||
| Digital | Total | & | Statement of | |||||||||||
| (in $000's) | MMG | SMG | Ventures | Corporate | Segmented* | Eliminations1 | Income (Loss) | |||||||
| Operating revenue | $97,756 | $63,909 | $20,005 | $181,670 | ($19,572 | ) | $162,098 | |||||||
| Salaries and benefits | (46,140 | ) | (22,724 | ) | (5,029 | ) | ($1,881 | ) | (75,774 | ) | 5,302 | (70,472 | ) | |
| Other operating costs | (43,226 | ) | (41,882 | ) | (6,865 | ) | (861 | ) | (92,834 | ) | 5,598 | (87,236 | ) | |
| Adjusted EBITDA** | 8,390 | (697 | ) | 8,111 | (2,742 | ) | 13,062 | (8,672 | ) | 4,390 | ||||
| Amortization & depreciation | (3,221 | ) | (6,554 | ) | (14,124 | ) | (23 | ) | (23,922 | ) | 13,703 | (10,219 | ) | |
| Share based compensation | ||||||||||||||