TORONTO, ONTARIO--(Marketwired - May 7, 2014) - Torstar Corporation (TSX:TS.B) today reported financial results for the first quarter ended March 31, 2014.
Highlights for the first quarter:
- Segmented revenue was $310.5 million in the first quarter of 2014, down $21.8 million (6.6%) from the first quarter of 2013.
- Segmented adjusted EBITDA ("Segmented EBITDA") (see "non-IFRS measures") was $28.5 million in the first quarter of 2014, down $0.9 million from $29.4 million in the first quarter of 2013.
- Segmented operating profit was $14.5 million in the first quarter of 2014, up $2.6 million from $11.9 million in the first quarter of 2013.
- Net income attributable to equity shareholders was $7.1 million ($0.09 per share) in the first quarter of 2014 up $2.9 million from $4.2 million ($0.05 per share) in the first quarter of 2013.
- Adjusted earnings per share (see "non-IFRS measures") was $0.14 in the first quarter of 2014, consistent with the first quarter of 2013.
- Acquired the remaining 10% interest in Free Daily News Group Inc. ("Metro English Canada") for $10.1 million bringing Torstar's ownership to 100%.
- Net debt (see "non-IFRS measures") was $172.7 million at March 31, 2014, up $14.2 million from $158.5 million at December 31, 2013.
- Subsequent to the end of the first quarter, Torstar entered into an agreement to sell all of the shares of Harlequin, (which represents Torstar's Book Publishing Segment) to HarperCollins Publishers, a subsidiary of News Corp for $455 million in cash. The transaction is subject to customary approvals and closing conditions, including regulatory approvals and approval by Torstar's Class A shareholders. A meeting of the holders of Torstar's Class A shares will be held on July 8, 2014, and the Board has fixed June 3, 2014 as the record date for the meeting. An information circular will be mailed to shareholders in June 2014. The parties anticipate closing the transaction by the end of the third quarter of 2014.
"Results in the quarter were relatively stable with segment EBITDA down $0.9 million to $28.5 million" said David Holland, President and CEO of Torstar Corporation. "A strong earnings performance in the media businesses, up $2.8 million, was more than offset by an earnings decline at Harlequin. In the media operations, continuing efforts on costs exceeded the impact of revenue declines. Revenues were affected by continued shifts in spending by advertisers. Harlequin's results were down $4.2 million to $13.9 million. Lower results were anticipated due to the comparison to a very strong first quarter in 2013."
"Looking forward, Harlequin's results for the balance of the year are expected to be relatively stable compared to 2013. In the media operations, for the balance of the year, we expect continued pressure on print advertising revenues, relative stability in multi-platform subscriber revenues, and a continuation of modest growth in distribution revenues. Our results will continue to benefit from restructuring efforts to date and ongoing efforts to control costs. We will remain committed to investing in those areas of highest value to our customers as we adapt to the changing media environment."
"The recently announced agreement to sell Harlequin is subject to regulatory approval. We will be working through this process in the coming months."
The following table provides a continuity of earnings per share from the first quarter of 2013 to the first quarter of 2014:
| Earnings Per Share | Adjusted Earnings Per Share | ||||
| Earnings per share attributable to equity shareholders in the first quarter of 2013 | $0.05 | $0.14 | |||
| Changes | |||||
| Operations | (0.01 | ) | (0.01 | ) | |
| Interest and financing costs | 0.02 | 0.02 | |||
| Loss of associated businesses | (0.01 | ) | (0.01 | ) | |
| Restructuring and other charges* | 0.04 | ||||
| Non-cash foreign exchange* | (0.01 | ) | |||
| Other income (expense) * | 0.01 | ||||
| Earnings per share attributable to equity shareholders in the first quarter of 2014 | $0.09 | $0.14 | |||
* Items are excluded from definition of adjusted earnings per share
OPERATING RESULTS - FIRST QUARTER 2014
The following tables sets out, in $000's the segmented results for the three months ended March 31, 2014 and 2013.
| 2014 | ||||||||||||
| (in $000's) | Media* | Book Publishing* | Corporate | Total Segmented* | Adjustments & Eliminations for Joint Ventures |
Total Per Consolidated Statement of Income | ||||||
| Operating revenue | $211,289 | $99,242 | $310,531 | ($18,098 | ) | $292,433 | ||||||
| Salaries and benefits | (92,009 | ) | (26,824 | ) | ($2,361 | ) | (121,194 | ) | 6,291 | (114,903 | ) | |
| Other operating costs | (101,682 | ) | (58,470 | ) | (713 | ) | (160,865 | ) | 8,251 | (152,614 | ) | |
| EBITDA** | 17,598 | 13,948 | (3,074 | ) | 28,472 | (3,556 | ) | 24,916 | ||||
| Amortization & depreciation | (8,987 | ) | (1,105 | ) | (15 | ) | (10,107 | ) | 747 | (9,360 | ) | |
| Operating earnings** | 8,611 | 12,843 | (3,089 | ) | 18,365 | (2,809 | ) | 15,556 | ||||
| Restructuring and other charges | (3,564 | ) | (2 | ) | (3,566 | ) | 46 | (3,520 | ) | |||
| Impairment of assets | (266 | ) | (266 | ) | (266 | ) | ||||||
| Operating profit** | $4,781 | $12,841 | ($3,089 | ) | $14,533 | ($2,763 | ) | $11,770 | ||||
| 2013 | ||||||||||||
| (in $000's) | Media* | Book Publishing* | Corporate | Total Segmented* | Adjustments & Eliminations for Joint Ventures |
Total Per Consolidated Statement of Income | ||||||
| Operating revenue | $229,818 | $102,554 | $332,372 | ($18,954 | ) | $313,418 | ||||||
| Salaries and benefits | (102,080 | ) | (25,143 | ) | ($2,858 | ) | (130,081 | ) | 6,773 | (123,308 | ) | |
| Other operating costs | (112,928 | ) | (59,225 | ) | (727 | ) | (172,880 | ) | 8,906 | (163,974 | ) | |
| EBITDA** | 14,810 | 18,186 | (3,585 | ) | 29,411 | (3,275 | ) | 26,136 | ||||
| Amortization & depreciation | (8,533 | ) | (1,006 | ) | (10 | ) | (9,549 | ) | 749 | (8,800 | ) | |
| Operating earnings** | 6,277 | 17,180 | (3,595 | ) | 19,862 | (2,526 | ) | 17,336 | ||||
| Restructuring and other charges | (5,718 | ) | (2,289 | ) | (8,007 | ) | 11 | (7,996 |
) | |||
| Operating profit** | $559 | $14,891 | ($3,595 | ) | $11,855 | ($2,515 | ) | $9,340 | ||||
* Includes proportionately consolidated share of joint venture operations
** These are non-IFRS or additional IFRS measures, see "non-IFRS measures."
Revenue
Segmented revenue was $310.5 million down $21.8 million or 6.6% in the first quarter of 2014 inclusive of a $3.9 million decrease in revenue at Metroland Media Group's TMGTV which was primarily due to lower product sales.
Media Segment revenues, excluding the $3.9 million decrease in Metroland Media Group's TMGTV, were down $14.6 million or 6.5% in the first quarter, largely due to print advertising revenue declines at the newspapers partially offset by growth in distribution revenue. Print advertising revenues continued to be under pressure during the first quarter of 2014, and were believed to be negatively impacted in part by reduced retailer advertising on account of poor winter weather and the impact of the transition of advertising sales for the Toronto Star to Metro effective February 28, 2014. Digital revenue in the Media Segment was down 2.7% in the first quarter of 2014 primarily as a result of lower revenues at WagJag and Workopolis largely offset by growth in other digital properties including eyeReturn Marketing, the Metroland community websites and Olive Media. Digital revenues were 12.2% of total Media Segment revenues in the first quarter of 2014 up from 11.3% in the same period last year.
Book Publishing Segment revenues were down $3.3 million in the first quarter of 2014 including a $7.6 million increase from the impact of foreign exchange. Excluding the impact of foreign exchange, revenues were down $10.9 million in the first quarter primarily as a result of revenue declines in all channels compared to a strong first quarter in 2013. Book Publishing revenues in the first quarter of 2014 were comparable to the fourth quarter of 2013.
EBITDA
Total Segmented EBITDA was $28.5 million down $0.9 million in the first quarter of 2014 reflecting a $2.8 million increase in EBITDA in the Media Segment and a decrease of $0.5 million in Corporate expenses, offset by a $4.2 million decrease in EBITDA in the Book Publishing Segment.
Media Segment EBITDA was $17.6 million, up $2.8 million in the first quarter as cost reductions exceeded print advertising revenue declines and general wage increases. Overall Media Segment costs decreased by $21.3 million in the first quarter of 2014 including $6.7 million of savings from restructuring initiatives, the benefit of other cost reduction initiatives, lower pension costs, and the impact of lower newsprint price and consumption.
Book Publishing Segment EBITDA was down $4.2 million compared to a very strong first quarter in 2013. Results in the first quarter included a $1.6 million positive impact from foreign exchange and primarily reflect lower revenues which were partially offset by lower advertising and promotional spending and savings from restructuring initiatives.
Operating earnings
Total Segmented operating earnings were down $1.5 million in the first quarter of 2014, from $19.9 million in the first quarter of 2013.
Restructuring and other charges
Segmented restructuring and other charges of $3.6 million were recorded in the first quarter of 2014. These charges primarily related to the Media Segment and reflect ongoing efforts to reduce costs and reflect a reduction of approximately 55 positions which are expected to result in annualized net labour savings of $3.4 million in the Media Segment. Of the annualized savings anticipated as a result of the initiatives undertaken within the first quarter of 2014, $2.9 million of the savings are expected to be realized in 2014 (including $0.5 million in the first quarter) and $0.5 million in 2015.
Operating profit
Segmented operating profit was $14.5 million in the first quarter of 2014, up $2.6 million from $11.9 million in the first quarter of 2013.
Interest and financing costs
Interest and financing costs were $2.4 million in the first quarter of 2014, down $1.9 million from the first quarter of 2013. The lower expense primarily reflects lower financing costs related to employee benefit plans. Average net debt (current portion of long-term debt, long-term debt and bank overdraft, net of cash and cash equivalents) was $165.6 million during the first quarter of 2014 up marginally from $165.3 million in the same period last year. Torstar's effective interest rate on long-term debt was 4.3% in the first quarter of 2014, compared to 4.1% in the same period last year.
Foreign exchange
Torstar reported a non-cash foreign exchange loss of $1.8 million in the first quarter of 2014 and a loss of $0.2 million in the same period last year. The loss in the first quarter of 2014 was the result of the Canadian dollar being weaker at the end of the quarter relative to the beginning of the quarter and with Torstar's Canadian operations being in a net liability position in U.S. dollars for the quarter.
Income from joint ventures
Income from joint ventures was $2.1 million in the first quarter of 2014 and $2.0 million in the first quarter of 2013 as included in the above discussions of Segmented Revenue and Segmented EBITDA.
Loss of associated businesses
Loss of associated businesses was $0.7 million in the first quarter of 2014 and $0.5 million in the first quarter of 2013. The 2014 loss includes a loss of $0.4 million from Blue Ant and a loss of $0.4 million from Shop.ca partially offset by income of $0.1 million from Tuango and income of less than $0.1 million from Black Press. The 2013 loss included a loss of $0.3 million from Blue Ant and a loss of $0.6 million from Shop.ca partially offset by income of $0.4 million from Black Press and less than $0.1 million from Tuango. Subsequent to March 31, 2014, as part of a broader financing Torstar invested an additional $1.0 million in Shop.ca.
Other income (expense)
In March 2014, Torstar and Metro International S.A. agreed to an early settlement of the existing put and call arrangements between them with regards to the remaining 10% interest in Metro English Canada (previously owned by Metro International S.A.). The agreed upon price for the early settlement was $10.1 million. The existing put and call arrangements were both exerciseable at the same fixed price of $11.2 million beginning in October 2014. Accordingly, Torstar recorded a gain of $1.1 million on the transaction.
Net income attributable to equity shareholders
Torstar reported net income attributable to equity shareholders of $7.1 million or $0.09 per share in the first quarter of 2014 up $2.9 million or $0.04 per share from $4.2 million or $0.05 per share in the first quarter of 2013.
OUTLOOK
Through the first quarter of 2014, the Media Segment continued to face challenges as a result of continued shifts in spending by advertisers. Print advertising revenue was also believed to be impacted by reduced retailer advertising on account of poor winter weather and the impact of the transition of advertising sales for the Toronto Star to Metro effective February 28, 2014. Visibility on how advertising revenues will evolve over the balance of the year remains limited. However, distribution revenues are expected to grow in the balance of the year. Across Torstar, cost reduction has been and is expected to remain an important area of focus. The Media Segment is anticipated to realize $17.1 million of savings in the balance of 2014 from restructuring initiatives undertaken through the end of the first quarter of 2014. Net investment spending associated with growth initiatives in 2014 is currently expected to be consistent with 2013 levels.
Harlequin anticipated that earnings would be lower in the first quarter of 2014 relative to the very strong results posted in the first quarter of 2013 which represented the strongest quarter of 2013. Harlequin's underlying revenues were stable in the first quarter of 2014 relative to the fourth quarter of 2013. Looking forward to the balance of the year, with comparable earnings less challenging for the remaining three quarters of 2014, Harlequin's results in the balance of 2014 are expected to be relatively stable compared to 2013, including the benefit of foreign exchange. If the Canadian dollar remains at its current levels relative to the U.S. dollar and overseas currencies, Harlequin anticipates a year over year positive foreign currency impact of approximately $5.7 million including the impact of U.S. dollar hedges currently in place. The impact of Harlequin's earnings on Torstar's 2014 results will be dependent upon the timing of the anticipated closing of the announced agreement to sell Harlequin. The transaction is subject to customary approvals and closing conditions, including regulatory approvals and approval by Torstar's Class A shareholders.
DIVIDEND
On May 6, 2014, Torstar declared a quarterly dividend of 13.125 cents per share on its Class A shares and Class B non-voting shares, payable on June 30, 2014, to shareholders of record at the close of business on June 13, 2014. Torstar advises that, for the purposes of the Income Tax Act, Canada and for any relevant provincial tax legislation, this dividend is designated as an eligible dividend.
ADDITIONAL INFORMATION
For additional information, please refer to Torstar's condensed consolidated financial statements and interim Management's Discussion and Analysis ("MD&A") for the period ended March 31, 2014. Both documents will be filed today on SEDAR and are available on Torstar's corporate website www.torstar.com.
CONFERENCE CALL
Torstar has scheduled a conference call for May 7, 2014 at 8:15 a.m. to discuss its first quarter results. The dial-in number is (416) 340-8527 or 1-800-766-6630. A live broadcast of the conference call will be available over the internet on the Presentations, Events and Conference Calls page (Investor Relations) on Torstar's website www.torstar.com. A recording of the conference call will be available for 9 days at (905) 694-9451 or 1-800-408-3053 reservation number 7117631. An online archive of the broadcast will be available shortly after the completion of the call and will be accessible by visiting the Presentations, Events and Conference Calls (Investor Relations) page on Torstar's website www.torstar.com.
ANNUAL GENERAL MEETING
Torstar will be holding its Annual General Meeting at 10:00 a.m. on May 7, 2014 at The Westin Harbour Castle Hotel, 1 Harbour Square, Toronto, Ontario in the B&C Room. The Annual General Meeting will also be webcast live on the Presentations, Events and Conference Calls Page (Investor Relations) at www.torstar.com with interactive capabilities. An online archive of the webcast will be available shortly after the completion of the meeting and will be accessible by visiting the Presentations, Events and Conference Calls (Investor Relations) page on Torstar's website www.torstar.com.
About Torstar Corporation
Torstar Corporation is a broadly based media and book publishing 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 include digital properties including thestar.com, Workopolis, wagjag.com, toronto.com, save.ca, Olive Media and eyeReturn Marketing; and Harlequin, a leading global publisher of books for women.
Non-IFRS measures
In addition to operating profit, an additional IFRS measure, as presented in the consolidated statement of income, management uses Adjusted EBITDA ("EBITDA") (and where applicable Segmented EBITDA) operating earnings (and where applicable Segmented operating earnings) and Adjusted earnings per share as measures to assess the consolidated performance and the performance of the reporting units and business segments. Torstar also reports net debt, which is also a non-IFRS measure. Please refer to Section 11 of Torstar's 2014 First Quarter MD&A for a reconciliation of EBITDA and Operating earnings (and Segmented EBITDA/Segmented Operating earnings - as applicable) with Operating profit (Segmented Operating profit - as applicable), Adjusted earnings per share to earnings per share and Net debt to Long-term debt.
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA")/Segmented Adjusted EBITDA ("Segmented EBITDA")
Unless otherwise indicated, references to EBITDA throughout this press release means adjusted EBITDA or adjusted Segmented EBITDA, as applicable. EBITDA (earnings before interest, taxes, depreciation and amortization) is a measure that is also used by many of Torstar's shareholders, creditors, other stakeholders and analysts as a proxy for the amount of cash generated by Torstar's operations or by a reporting unit or business segment. EBITDA is not the actual cash provided by operating activities and is not a recognized measure of financial performance under IFRS. Torstar calculates EBITDA as operating revenue less salaries and benefits and other operating costs as presented on the consolidated statement of income. Torstar further adjusts EBITDA to exclude restructuring and other charges and impairment of assets. Torstar's method of calculating EBITDA (including calculating EBITDA 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. Segmented EBITDA is calculated in the same manner described above, except that it is calculated using total segment results prior to the elimination of proportionately consolidated results for joint ventures.
Operating earnings/Segmented operating earnings
Operating earnings is used by management to represent the results of ongoing operations and is not a recognized measure of financial performance under IFRS. Torstar calculates operating earnings as operating revenue less salaries and benefits, other operating costs and amortization and depreciation. Operating earnings excludes restructuring and other charges and impairment of assets. Torstar's method of calculating operating earnings (including calculating operating earnings 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. Segmented operating earnings is calculated in the same manner described above, except that it is calculated using total segment results prior to the elimination of proportionately consolidated results for joint ventures.
Adjusted earnings per share
Adjusted earnings per share is used by management to represent the per share earnings of results of ongoing operations and is not a recognized measure of financial performance under IFRS. Torstar calculates adjusted earnings per share as earnings per share less the per share effect of impairment of assets, restructuring and other charges, non-cash foreign exchange and other income (expense). Torstar's method of calculating adjusted earnings per share may differ from other companies and accordingly may not be comparable to measures used by other companies.
Net debt
Net debt is used by management to represent the amount of borrowings outstanding and is calculated as the sum of Long-term debt, Current portion of long-term debt and Bank overdraft less Cash and cash equivalents.
Operating profit
Operating profit is an additional IFRS measure used by management to represent the results of operations inclusive of impairments and restructuring and other charges and appears in Torstar's consolidated statement of income.
Forward-looking statements
Certain statements in this press release and in the Company's oral and written public communications may constitute forward-looking statements that reflect management's expectations regarding the Company'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", "intend", "would", "could", "if", "may" and similar expressions.
This press release includes, among others, forward-looking statements regarding the proposed acquisition by HarperCollins Publishers of all of the outstanding shares of Harlequin, including management's expectations regarding the expected timing of the approval and completion of the transaction, Company's expected net savings from restructuring initiatives and the outlook for the balance of 2014. 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 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: the ultimate outcome of the transaction to sell Harlequin, including the risk that the transaction may not close, the risk that Harlequin's business will be adversely impacted during the pendency of the acquisition and the parties' ability to obtain regulatory approvals on a timely basis in connection with the transaction, the Company's ability to operate in highly competitive industries; the Company's ability to compete with other newspapers and other forms of media and media platforms; the Company's ability to attract and retain advertisers; the Company's ability to maintain adequate circulation/subscription levels; the Company's ability to attract and retain readers; the Company's ability to retain and grow its digital audience and profitably develop its digital businesses; general economic conditions in the principal markets in which the Company operates; the Company's ability to compete with book publishers, self-publishing and other providers of entertainment; the trend towards digital books and the Company's ability to distribute its books through the changing distribution landscape; the popularity of its authors and its ability to retain popular authors; the contraction and concentration of the wholesale and retail print channels; the Company's ability to accurately estimate the rate of book returns through the wholesale and retail channels; the decline of the Company's direct-to-consumer book publishing operations; labour disruptions; the Company's ability to reduce costs; loss of reputation; newsprint costs; foreign operations and foreign exchange fluctuations; credit risk; restrictions imposed by existing credit facilities, debt financing and availability of capital; changes in pension fund obligations; reliance on its printing operations; reliance on technology and information systems; interest rates; availability of insurance; litigation; environmental, privacy, anti-spam, communications and e-commerce laws and regulations applicable generally to the Company's businesses; dependence on key personnel; dependence on third party suppliers and service providers; intellectual property rights; results of impairment tests; risks related to business development and acquisition integration; product revenue and product liability; control of Torstar by the Voting Trust; and uncertainties associated with critical accounting estimates.
We caution 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, the expected benefits of the transaction to sell Harlequin, assumptions regarding the performance of the North American and global economies; tax laws in the countries in which we operate; continued availability of printing operations; continued availability of financing on appropriate terms; exchange rates; market competition; rates of return and discount rates relating to pension expense and pension plan obligations; royalty rates, expected future revenues, expected future cash flows and discount rates relating to valuation of goodwill and intangible assets; and successful development 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 the Company and its securities, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company 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 2013 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.
| Torstar Corporation | |||||
| Consolidated Statement of Financial Position | |||||
| (Thousands of Canadian Dollars) (Unaudited) | |||||
| As at March 31 2014 | As at December 31 2013 | ||||
| Assets | |||||
| Current: | |||||
| Cash and cash equivalents | $20,210 | $19,151 | |||
| Receivables | 218,413 | 261,485 | |||
| Inventories | 28,919 | 29,368 | |||
| Prepaid expenses and other current assets | 51,860 | 47,872 | |||
| Prepaid and recoverable income taxes | 4,718 | 3,765 | |||
| Total current assets | 324,120 | 361,641 | |||
| Investments in joint ventures | 82,306 | 80,901 | |||
| Investments in associated businesses | 39,804 | 40,215 | |||
| Property, plant and equipment | 147,013 | 150,665 | |||
| Intangible assets | 72,505 | 73,942 | |||
| Goodwill | 534,515 | 533,982 | |||
| Other assets | 13,247 | 11,465 | |||
| Employee benefits assets | 30,248 | 44,532 | |||
| Deferred income tax assets | 52,454 | 51,369 | |||
| Total assets | $1,296,212 | $1,348,712 | |||
| Liabilities and Equity | |||||
| Current: | |||||
| Bank overdraft | $1,529 | $1,741 | |||
| Current portion of long-term debt | 90,508 | ||||
| Accounts payable and accrued liabilities | 162,643 | 202,888 | |||
| Derivative financial instruments | 3,022 | 911 | |||
| Provisions | 19,213 | 20,807 | |||
| Income tax payable | 6,755 | 9,810 | |||
| Total current liabilities | 283,670 | 236,157 | |||
| Long-term debt | 100,841 | 175,898 | |||
| Derivative financial instruments | 3,413 | 4,125 | |||
| Provisions | 12,722 | 16,251 | |||
| Other liabilities | 12,328 | 12,425 | |||
| Employee benefits | 90,419 | 82,641 | |||
| Deferred income tax liabilities | 18,704 | 24,431 | |||
| Equity: | |||||
| Share capital | 398,769 | 398,605 | |||
| Contributed surplus | 17,714 | 17,383 | |||
| Retained earnings | 359,879 | 385,589 | |||
| Accumulated other comprehensive loss | (5,081 | ) | (7,603 | ) | |
| Total equity attributable to equity shareholders | 771,281 | 793,974 | |||
| Minority interests | 2,834 | 2,810 | |||
| Total equity | 774,115 | 796,784 | |||
| Total liabilities and equity | $1,296,212 | $1,348,712 | |||
| Torstar Corporation | |||||
| Consolidated Statement of Income | |||||
| (Thousands of Canadian Dollars except per share amounts) (Unaudited) | |||||
| Three months ended March 31 | |||||
| 2014 | 2013 | ||||
| Operating revenue | $292,433 | $313,418 | |||
| Salaries and benefits | (114,903 | ) | (123,308 | ) | |
| Other operating costs | (152,614 | ) | (163,974 | ) | |
| Amortization and depreciation | (9,360 | ) | (8,800 | ) | |
| Restructuring and other charges | (3,520 | ) | (7,996 | ) | |
| Impairment of assets | (266 | ) | |||
| Operating profit | 11,770 | 9,340 | |||
| Interest and financing costs | (2,443 | ) | (4,340 | ) | |
| Foreign exchange | (1,763 | ) | (161 | ) | |
| Income from joint ventures | 2,070 | 2,025 | |||
| Loss of associated businesses | (668 | ) | (466 | ) | |
| Other income (expense) | 1,162 | (16 | ) | ||
| 10,128 | 6,382 | ||||
| Income and other taxes | (3,000 | ) | (2,200 | ) | |
| Net income | $7,128 | $4,182 | |||
| Attributable to: | |||||
| Equity shareholders | $7,104 | $4,173 | |||
| Minority interests | $24 | $9 | |||
| Net income attributable to equity shareholders per Class A (voting) and Class B (non-voting) share: | |||||
| Basic and Diluted | $0.09 | $0.05 | |||
| Torstar Corporation | |||||
| Consolidated Statement of Cash Flows | |||||
| (Thousands of Canadian Dollars) | |||||
| (Unaudited) | |||||
| Three months ended March 31 | |||||
| 2014 | 2013 | ||||
| Cash was provided by (used in) | |||||
| Operating activities | $14,390 | $13,184 | |||
| Investing activities | (14,659 | ) | (5,549 | ) | |
| Financing activities | 978 | (10,243 | ) | ||
| Increase (decrease) in cash | 709 | (2,608 | ) | ||
| Effect of exchange rate changes | 562 | (202 | ) | ||
| Cash, beginning of period | 17,410 | 15,060 | |||
| Cash, end of period | $18,681 | $12,250 | |||
| Operating activities: | |||||
| Net income | $7,128 | $4,182 | |||
| Amortization and depreciation | 9,360 | 8,800 | |||
| Deferred income taxes | 2,500 | 2,000 | |||
| Income from joint ventures | (2,070 | ) | (2,025 | ) | |
| Distributions from joint ventures | 823 | 500 | |||
| Loss of associated businesses | 668 | 466 | |||
| Dividend from associated businesses | 194 | 382 | |||
| Impairment of assets | 266 | ||||
| Non-cash employee benefit expense | 4,772 | 8,292 | |||
| Employee benefits funding | (13,455 | ) | (16,231 | ) | |
| Other | (2,968 | ) | (2,771 | ) | |
| 7,218 | 3,595 | ||||
| Decrease in non-cash working capital | 7,172 | 9,589 | |||
| Cash provided by operating activities | $14,390 | $13,184 | |||
| Investing activities: | |||||
| Additions to property, plant and equipment and intangible assets | ($3,945 | ) | ($4,090 | ) | |
| Investment in associated businesses | (417 | ) | (500 | ) | |
| Acquisitions and investments | (10,696 | ) | (1,062 | ) | |
| Other | 399 | 103 | |||
| Cash used in investing activities | ($14,659 | ) | ($5,549 | ) | |
| Financing activities: | |||||
| Issuance of bankers' acceptances | $11,199 | $11 | |||
| Dividends paid | (10,326 | ) | (10,362 | ) | |
| Other | 105 | 108 | |||
| Cash provided by (used in) financing activities | $978 | ($10,243 | ) | ||
| Cash represented by: | |||||
| Cash | $16,879 | $18,897 | |||
| Cash equivalents - short-term deposits | 3,331 | 3,473 | |||
| Cash and cash equivalents | 20,210 | 22,370 | |||
| Bank overdraft | (1,529 | ) | (10,120 | ) | |
| $18,681 | $12,250 | ||||
Contact Information:
Executive Vice-President and Chief Financial Officer
Torstar Corporation
(416) 869-4776
www.torstar.com