SOURCE: Torstar Corporation

Torstar Corporation

November 27, 2017 09:00 ET

Torstar announces community and daily newspaper transaction with Postmedia

TORONTO, ON--(Marketwired - November 27, 2017) - Torstar Corporation (TSX: TS.B) today announced it has completed a transaction with Postmedia Network Inc. ("Postmedia") relating to the purchase and sale of a number of community and daily newspapers.

As part of the transaction, Torstar has acquired eight weekly community publications, seven daily community newspapers and two free daily newspapers from Postmedia.

The daily publications are the Barrie Examiner, Niagara Falls Review, Northumberland Today, Orillia Packet & Times, Peterborough Examiner, St. Catharines Standard and Welland Tribune. The community papers are the Bradford Times, Collingwood Enterprise Bulletin, Fort Erie Times, Innisfil Examiner, Niagara Advance, Pelham News, Inport News (Port Colborne) and Thorold Niagara News.

As well, Torstar acquired the free dailies 24Hours Toronto and 24Hours Vancouver.

In addition, Torstar has sold 22 weekly community newspapers in eastern and southern Ontario and the Metro Winnipeg and Metro Ottawa free daily publications to Postmedia.

The community publications sold are the Brant News, Belleville News, Central Hastings News, Frontenac Gazette, Kingston Heritage, Kanata Kourier-Standard, Nepean/Barrhaven News, Orleans News, Ottawa East News, Ottawa South News, Ottawa West News, Stittsville News, West Carleton Review, Quinte West News, St. Lawrence News, Our London, St. Thomas/Elgin Weekly News, Exeter Times-Advocate, St. Mary's Journal Argus, Stratford City Gazette, Norfolk News and Meaford Express.

"This transaction will allow us to operate more efficiently through increased geographic synergies in a number of our primary regions," said John Boynton, President and CEO of Torstar Corporation. "By acquiring publications within or adjacent to our primary areas and selling publications outside our primary areas we will be able to put a greater focus on regions where we believe we can be more effective in serving both customers and clients."

The transaction is effectively a non-cash transaction, as the consideration for the publications purchased is approximately equal to the consideration for the publications sold.

Synergies associated with this transaction are expected to contribute to an improvement in annualized operating earnings at Torstar in the range of $5 million to $7 million.

Non-IFRS measures

Operating earnings (loss) is used by management to represent the results of ongoing operations inclusive of amortization and depreciation. We use operating earnings (loss) as a measure of the amount of income generated by our ongoing operations (or by a reporting unit or business segment) after giving effect to amortization and depreciation. We believe this metric is also useful for investors for this purpose. We calculate operating earnings (loss) as operating revenue less salaries and benefits, other operating costs, share based compensation and amortization and depreciation. Operating earnings (loss) excludes restructuring and other charges and impairment of assets. Restructuring and other charges and impairment of assets are eliminated as these activities are not related to ongoing operations as of the end of the period. Our method of calculating operating earnings (including calculating operating earnings (loss) on an adjusted basis to exclude restructuring and other charges and impairment of assets) may differ from other companies and accordingly may not be comparable to measures used by other companies. The intent of operating earnings (loss) is to provide additional useful information to investors, analysts and readers of our financial statements. The measure does not have any standardized meaning under IFRS, is not a recognized measure of financial performance under IFRS, and accordingly may not be comparable to measures used by other companies. Please refer to Section 11 of Torstar's Management's Discussion & Analysis for the three and nine months ended September 30, 2017 for a reconciliation of operating earnings (loss) with operating profit (loss) for such periods.

Forward-looking statements

Certain statements in this press release and in Torstar's oral and written public communications may constitute forward-looking statements that reflect management's expectations regarding Torstar's future growth, financial performance and business prospects and opportunities as of the date of this press release. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "anticipate", "believe", "plan", "forecast", "expect", "estimate", "intend", "would", "could", "if", "may" and similar expressions.

This press release includes, among others, forward-looking statements regarding Torstar's expectations in relation to synergies associated with the transaction and the impact of those synergies on future operating earnings. All such statements are made pursuant to the "safe harbour" provisions of applicable Canadian securities legislation. These statements reflect current expectations of management regarding future events and operating performance, and speak only as of the date of this press release. In addition, forward-looking statements are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes.

By their very nature, forward-looking statements require management to make assumptions and are subject to inherent risks and uncertainties. There is a significant risk that predictions, forecasts, conclusions or projections will not prove to be accurate, that management's assumptions may not be accurate and that actual results, performance or achievements may differ significantly from such predictions, forecasts, conclusions or projections expressed or implied by such forward-looking statements. We caution readers not to place undue reliance on the forward-looking statements in this press release as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, outlooks, expectations, goals, estimates or intentions expressed in the forward-looking statements.

These factors include, but are not limited to: Torstar's ability to successfully integrate the operations of the acquired newspapers; Torstar's ability to operate in highly competitive industries; Torstar's ability to compete with digital media, other newspapers and other forms of media; Torstar's ability to respond to the shift to digital media and the shift by advertisers to other digital platforms; Torstar's ability to attract, grow and retain its digital audience and profitably develop its digital platforms; Torstar's ability to attract and retain advertisers; Torstar's ability to maintain adequate circulation/subscription levels; Torstar's ability to attract and retain readers and traffic; Torstar's ability to integrate the technology associated with new digital platforms; general economic conditions and customer prospects in the principal markets in which Torstar operates; Torstar's ability to reduce costs; loss of reputation; dependence on third party suppliers and service providers; reliance on technology and information systems and risks of security breaches; changes in employee future benefit obligations; Torstar's ability to execute appropriate strategic growth initiatives including acquisitions; unexpected costs or liabilities related to acquisitions and dispositions; investments in other businesses; labour disruptions; reliance on printing operations, newsprint costs; litigation; privacy, anti-spam, communications, e-commerce and environmental laws, health and safety regulations and other laws and regulations applicable generally to Torstar's businesses; foreign exchange fluctuations and foreign operations; availability of insurance; dependence on key personnel; intellectual property rights; credit risk; availability of capital and restrictions imposed by credit facilities; income tax and other taxes; dividend policy; results of impairment tests and uncertainties associated with critical accounting estimates; holding company structure; and control of Torstar by the Voting Trust. Torstar cautions that the foregoing list is not exhaustive of all possible factors, as other factors could adversely affect our results.

In addition, a number of assumptions, including those assumptions specifically identified throughout this press release, were applied in making the forward-looking statements set forth in this press release. Some of the key assumptions include, without limitation, assumptions regarding the performance of the North American economies; tax laws; continued availability of printing operations; availability of financing on appropriate terms; exchange rates; market competition; rates of return and discount rates relating to pension expense and pension plan obligations; expected future revenues; expected future liabilities; expected future cash flows and discount rates relating to valuation of goodwill and intangible assets; and successful development and launch of new products. There is a risk that some or all of these assumptions may prove to be incorrect.

When relying on our forward-looking statements to make decisions with respect to Torstar and its securities, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Torstar does not intend, and disclaims any obligation, to update any forward-looking statements, whether written or oral, or whether as a result of new information or otherwise, except as may be required by law.

For more information, please see the discussion of risks affecting Torstar and its businesses in Torstar's 2016 Management's Discussion & Analysis which has been filed on www.sedar.com and is available on Torstar's corporate website www.torstar.com.

Torstar's news releases are available on the Internet at www.torstar.com.

About Torstar Corporation

Torstar Corporation is a broadly based media company listed on the Toronto Stock Exchange (TS.B). Its businesses include the Star Media Group led by the Toronto Star, Canada's largest daily newspaper, Free Daily News Group Inc., which publishes the English-language Metro newspapers in several Canadian cities; Metroland Media Group, publisher of community and daily newspapers in Ontario; and also includes digital properties including thestar.com, Workopolis, toronto.com, save.ca and eyeReturn Marketing. It also holds a majority interest in VerticalScope, a North American vertically-focused digital media company.

Contact Information

  • For more information please contact:

    Investor Inquiries:

    Lorenzo DeMarchi
    Executive Vice-President and Chief Financial Officer, Torstar Corporation
    (416) 869-4776
    ldemarchi@torstar.ca

    Media Inquiries:

    Bob Hepburn
    Director, Community Relations and Communications
    Toronto Star
    416-869-4947
    bhepburn@thestar.ca