TORONTO, ONTARIO--(Marketwired - Nov. 6, 2013) - Torstar Corporation (TSX:TS.B) today reported financial results for the third quarter ended September 30, 2013.
Highlights for the quarter:
- Total Segmented revenue was $328.0 million in the third quarter of 2013, down $27.4 million (7.7%) from $355.3 million in the third quarter of 2012.
- Total Segmented EBITDA (see "non-IFRS measures") was $35.7 million in the third quarter of 2013, down $6.0 million from $41.7 million in the third quarter of 2012.
- Net loss attributable to equity shareholders was $70.8 million ($0.89 per share) in the third quarter of 2013 down $81.9 million ($1.03 per share) from net income of $11.1 million ($0.14 per share) in the third quarter of 2012 and reflects an $84.5 million increase in impairment of assets over the third quarter of 2012 resulting from impairments of goodwill and intangible assets.
- Adjusted earnings per share (see "non-IFRS measures") was $0.21 in the third quarter of 2013, up $0.01 from $0.20 in the third quarter of 2012.
- Net debt was $174.5 million at September 30, 2013, down $13.1 million from $187.6 million at June 30, 2013.
- In the first nine months of 2013, Torstar's net benefit obligation related to its defined benefit pension and post retirement benefit plans decreased by $161.2 million primarily as a result of increased long-term interest rates, asset returns and contributions.
"Results in the quarter were mixed across the operations with EBITDA from the segments down $6.0 million to $35.7 million" said David Holland, President and CEO of Torstar Corporation. "Harlequin's results were down $4.8 million. Lower revenues globally were the primary challenge in the book publishing operation as the transition to the more digital environment continues. The media operations were down $1.6 million, an accomplishment given the continued pressures on print advertising revenues. We were encouraged that our community media operation, Metroland Media, grew earnings in the quarter. We are also pleased to report that our pension situation continued to improve in the quarter and funding into the plan is expected to be lower in 2014."
"Looking forward, Harlequin's fourth quarter results are expected to be lower than last year but not to the same extent as the decrease experienced in the third quarter. In the media operations, we expect print advertising revenues will continue to be under pressure. We remain focused on resizing the cost base but are also very disciplined and committed to continue to invest in those areas of highest value to our customers as we adapt to the changing media environment."
| The following table provides a continuity of earnings per share from 2012 to 2013: |
| Third Quarter | |||
| Net income attributable to equity shareholders per share 2012 | $0.14 | ||
| Changes | |||
| - | Operations | (0.05 | ) |
| - | Interest and financing costs | 0.01 | |
| - | Income (loss) of associated businesses | 0.05 | |
| Change in adjusted earnings per share 2013 | 0.01 | ||
| - | Restructuring and other charges | 0.01 | |
| - | Impairment of assets | (1.06 | ) |
| - | Adjustment to contingent consideration | 0.01 | |
| Net loss attributable to equity shareholders per share 2013 | ($0.89 | ) | |
| OPERATING RESULTS - THIRD QUARTER 2013 |
| Overall Performance |
| The following table sets out the segmented results for the three months ended September 30, 2013 and 2012. |
| Three months ended September 30, 2013 |
| Adjustments | ||||||||||||
| & | Total Per | |||||||||||
| Eliminations | Consolidated | |||||||||||
| Book | Total | for Joint | Statement of | |||||||||
| (in $000's) | Media* | Publishing* | Corporate | Segmented* | Ventures | Income | ||||||
| Operating revenue | $227,383 | $100,592 | $327,975 | ($17,562 | ) | $310,413 | ||||||
| Salaries and benefits | (96,636 | ) | (24,216 | ) | ($2,122 | ) | (122,974 | ) | 6,238 | (116,736 | ) | |
| Other operating costs | (107,270 | ) | (61,296 | ) | (689 | ) | (169,255 | ) | 8,885 | (160,370 | ) | |
| EBITDA | 23,477 | 15,080 | (2,811 | ) | 35,746 | (2,439 | ) | 33,307 | ||||
| Amortization & depreciation | (8,834 | ) | (1,023 | ) | (10 | ) | (9,867 | ) | 746 | (9,121 | ) | |
| Operating earnings | 14,643 | 14,057 | (2,821 | ) | 25,879 | (1,693 | ) | 24,186 | ||||
| Restructuring and other charges | (5,506 | ) | (763 | ) | (6,269 | ) | 269 | (6,000 | ) | |||
| Impairment of assets | (85,458 | ) | (85,458 | ) | (85,458 | ) | ||||||
| Operating profit (loss) | ($76,321 | ) | $13,294 | ($2,821 | ) | ($65,848 | ) | ($1,424 | ) | ($67,272 | ) |
| Three months ended September 30, 2012 | ||||||||||||
| Adjustments | ||||||||||||
| & | Total Per | |||||||||||
| Eliminations | Consolidated | |||||||||||
| Book | Total | for Joint | Statement of | |||||||||
| (in $000's) | Media* | Publishing* | Corporate | Segmented* | Ventures | Income | ||||||
| Operating revenue | $247,531 | $107,805 | $355,336 | ($19,514 | ) | $335,822 | ||||||
| Salaries and benefits | (103,203 | ) | (22,715 | ) | ($2,445 | ) | (128,363 | ) | 6,597 | (121,766 | ) | |
| Other operating costs | (119,259 | ) | (65,228 | ) | (775 | ) | (185,262 | ) | 8,602 | (176,660 | ) | |
| EBITDA | 25,069 | 19,862 | (3,220 | ) | 41,711 | (4,315 | ) | 37,396 | ||||
| Amortization & depreciation | (8,525 | ) | (1,030 | ) | (10 | ) | (9,565 | ) | 760 | (8,805 | ) | |
| Operating earnings | 16,544 | 18,832 | (3,230 | ) | 32,146 | (3,555 | ) | 28,591 | ||||
| Restructuring and other charges | (6,567 | ) | (336 | ) | (6,903 | ) | (6,903 | ) | ||||
| Impairment of assets | (980 | ) | (980 | ) | (980 | ) | ||||||
| Operating profit | $8,997 | $18,496 | ($3,230 | ) | $24,263 | ($3,555 | ) | $20,708 | ||||
| * Includes proportionately consolidated share of joint venture operations |
Revenue
Segmented revenue was $328.0 million down $27.4 million or 7.7% in the third quarter of 2013 inclusive of a $5.1 million decrease in revenue at Metroland Media Group's TMGTV which was primarily due to lower product sales. Year to date, total segmented revenue was $1,015.3 million, down $74.7 million or 6.9% from $1,090.0 million in the first nine months of 2012 inclusive of a $15.2 million decrease in revenue at Metroland Media Group's TMGTV.
Media Segment revenues, excluding the $5.1 million decrease in Metroland Media Group's TMGTV, were down $15.0 million or 6.1% in the third quarter, largely due to print advertising revenue declines at the newspapers partially offset by growth in distribution revenue at Metroland Media Group. Year to date, Media Segment revenues excluding the $15.2 million decrease in revenue at Metroland Media Group's TMGTV were down $40.7 million or 5.3%.
While digital profitability increased during the third quarter and first nine months of 2013, digital revenues in the Media Segment were down 8.0% in the third quarter and 8.4% for the nine months ended September 30, 2013. These declines were primarily the result of lower revenues at Workopolis and Wagjag offset by growth in other digital properties including eyeReturn Marketing and local digital revenue at thestar.com. Digital revenues were 11.1% of total Media Segment revenues in the third quarter and 10.9% in the first nine months of 2013 compared to 11.4% in the third quarter and 11.2% in the first nine months of 2012.
Book Publishing Segment revenues were down $7.2 million in the third quarter of 2013 including a $2.1 million increase from the impact of foreign exchange. Year to date, Book Publishing Segment revenues were down $18.8 million including a $0.9 million increase from the impact of foreign exchange. These decreases were the result of revenue declines in the retail print and direct-to-consumer channels in North America combined with challenging economic conditions in Overseas markets.
EBITDA
Total Segmented EBITDA was $35.7 million down $6.0 million in the third quarter of 2013 reflecting a $1.6 million decrease in EBITDA in the Media Segment and a $4.8 million decrease in EBITDA in the Book Publishing Segment, partially offset by a decrease of $0.4 million in Corporate expenses. Year to date, total segmented EBITDA was $110.3 million in 2013, down $28.5 million from $138.8 million in the first nine months of 2012 reflecting a $13.1 million decrease in EBITDA in the Media Segment and a $15.6 million decrease in EBITDA in the Book Publishing Segment, partially offset by a decrease of $0.2 million in Corporate expenses.
Media Segment EBITDA was $23.5 million in the third quarter, down $1.6 million from $25.1 million in the third quarter of 2012 largely due to print advertising revenue declines, $0.5 million of higher pension costs as well as general wage increases partially offset by cost reduction initiatives. Overall Media Segment costs decreased by $18.6 million in the third quarter of 2013, which included $7.5 million of savings from restructuring initiatives. Year to date, Media Segment EBITDA was down $13.1 million also reflecting lower revenues, higher pension costs and general wage increases, partially offset by cost reductions. Year to date, Media Segment costs decreased by $42.9 million and included $19.5 million of cost savings resulting from restructuring initiatives. Profitability in the digital properties improved in the third quarter and for the first nine months of 2013 across the Media Segment.
Excluding the impact of foreign exchange, Book Publishing Segment EBITDA was down $5.0 million compared to the third quarter of 2012 primarily due to lower sales of print books and lower favourable adjustments to prior year returns provisions. This was partially offset by higher digital sales, lower advertising and promotional spending and savings from restructuring initiatives. Excluding the impact of foreign exchange, Book Publishing Segment EBITDA was down $15.3 million in the first nine months of 2013 reflecting the above noted factors and higher author royalties for digital sales.
Corporate expenses were lower by $0.4 million in the third quarter of 2013. Year to date, Corporate expenses were lower by $0.2 million as compared to the first nine months of 2012 and reflects the absence of a $0.3 million gain associated with a share-based hedging instrument recorded in 2012. Excluding the impact of this gain in 2012, corporate expenses were lower by $0.5 million during the nine months ended September 30, 2013.
Impairment of assets
During the third quarter of 2013, Torstar incurred charges related to asset impairment totaling $85.5 million related to certain intangible assets and goodwill in the Media Segment. Year to date, these charges totaled $85.8 million. These charges have no impact on cash flows.
During the third quarter, Torstar conducted an impairment test on the carrying value of intangible assets with a finite useful life, intangible assets with an indefinite useful life and goodwill. In carrying out this testing, it was determined that the carrying amount of certain intangible assets within the Metroland Media Group CGU and goodwill in the Toronto Star Group CGU and Metro CGU exceeded the value in use. Accordingly, Torstar recorded impairment of $12.5 million for intangible assets in the Metroland Media Group, $61.0 million for goodwill in the Toronto Star Group CGU and $3.0 million in the Metro CGU. These impairments were the result of lower forecasted revenues reflecting shifts in spending by advertisers. Certain of the impairment charges related to intangible assets within the Metroland Media Group CGU were also the result of internal reorganization, realignment and integration of certain digital businesses within the Media Segment which occurred during the third quarter of 2013. As a result of this testing and factors noted above, Torstar also recorded a $9.0 million impairment charge in respect of its Sing Tao Daily joint venture investment.
Operating profit (loss)
Segmented operating loss was $65.8 million in the third quarter of 2013, down $90.1 million from segmented operating profit of $24.3 million in the third quarter of 2012 and reflects an $84.5 million increase in impairment of assets over the third quarter of 2012. Year to date, segmented operating loss was $26.1 million in 2013, down $124.2 million from segmented operating profit of $98.2 million in the first nine months of 2012 and reflects a $94.8 million increase in impairment of assets and restructuring and other charges.
Net income (loss) attributable to equity shareholders
Torstar reported a net loss attributable to equity shareholders of $70.8 million or $0.89 per share in the third quarter of 2013 down $81.9 million or $1.03 per share from net income attributable to equity shareholders of $11.1 million or $0.14 per share in the third quarter of 2012. Year to date, Torstar reported a net loss attributable to equity shareholders of $48.6 million or $0.61 per share in 2013, down $109.9 million or $1.38 per share from net income attributable to equity shareholders of $61.3 million or $0.77 per share in the same period last year.
Outlook
In the third quarter and first nine months of 2013, the Media Segment continued to face challenges as a result of shifts in spending by advertisers combined with economic uncertainty. For the balance of the year, print advertising revenues are likely to continue to be under pressure. However, distribution revenue is expected to continue to grow. Across Torstar, restructuring and operating cost reduction has been and is expected to remain an important area of focus. The Media Segment is anticipated to realize $26.8 million of savings in 2013 from restructuring initiatives in 2013 including $7.3 million of savings from restructuring initiatives expected to be realized in the fourth quarter of 2013. The fourth quarter of 2013 will also include the reversal of the extra week reported in the first quarter at Metroland with five fewer publishing days at the Metroland daily newspapers and at least one less publishing day for the Metroland weekly newspapers. Net investment spending associated with growth initiatives in 2013 is currently expected to be somewhat lower than 2012 levels.
Harlequin finished the first nine months of 2013 with operating earnings down compared to prior year, reflecting lower revenues, higher author royalties for digital sales and lower favourable adjustments to prior year returns provisions. With revenues weaker than anticipated through the first nine months of the year, Harlequin's fourth quarter results are expected to be lower than the fourth quarter of 2012, but not to the same extent as the decrease experienced in the third quarter. If the Canadian dollar remains at its current levels relative to the U.S. dollar and overseas currencies, Harlequin anticipates that the impact from foreign exchange for the balance of the year will be neutral including the impact of the U.S. dollar hedges currently in place ($0.3 million negative impact in the first nine months of 2013).
From a cash flow perspective, in 2013, Torstar anticipates spending approximately $60.0 million for the minimum required funding of its registered defined benefit pension plans. In the first nine months of 2013, Torstar's net benefit obligation related to its defined benefit pension and post retirement benefit plans decreased by $161.2 million primarily as a result of increased long-term interest rates, asset returns and contributions. Looking forward, based on current market conditions, Torstar anticipates that the funding obligation for its registered defined benefit pension plans for 2014 will be in the order of $40.0 million.
Capital expenditures in 2013 are currently anticipated to be approximately $28 million for additions to property, plant, equipment and intangible assets.
DIVIDEND
On November 5, 2013, Torstar declared a quarterly dividend of 13.125 cents per share on its Class A shares and Class B non-voting shares, payable on December 31, 2013, to shareholders of record at the close of business on December 6, 2013. 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 for the period ended September 30, 2013. 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 November 6, 2013 at 8:15 a.m. to discuss its third quarter results. The dial-in number is 416-340-2216 or 1-866-226-1792. A live broadcast of the conference call will also be available over the internet at the Investor Relations section (Presentations, Events and Conference Calls) on Torstar's website www.torstar.com. A recording of the conference call will be available for 9 days by calling 905-694-9451 or 1-800-408-3053 and entering reservation number 5628301. An online archive of the broadcast will be available shortly after the completion of the call and will be accessible by visiting the Investor Relations section (Presentations, Events and Conference Calls) 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 and digital properties including thestar.com, toronto.com, Workopolis, Olive Media, and eyeReturn Marketing; Metroland Media Group, publisher of community and daily newspapers in Ontario; and Harlequin, a leading global publisher of books for women.
Non-IFRS measures
In addition to operating profit, as presented in the consolidated statement of income, management uses EBITDA (and where applicable Segmented EBITDA) and operating earnings (and where applicable Segmented operating earnings) as measures to assess the consolidated performance and the performance of the reporting units and business segments.
Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA")/Segmented EBITDA
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. EBITDA excludes restructuring and other charges and impairment of assets. Torstar's method of calculating EBITDA 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 and 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 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, adjustments to contingent consideration, gain (loss) on sale of assets and investment write-down and loss. 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.
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, but is not limited to, forward-looking statements regarding the Company's outlook for the balance of 2013. 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 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; general economic conditions in the principal markets in which the Company operates; the Company's ability to attract and retain advertisers; the Company's ability to maintain adequate circulation 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; the trend towards digital books and the Company's ability to distribute its books through the changing distribution landscape; the Company's ability to accurately estimate the rate of book returns through the wholesale and retail channels; the popularity of its authors and its ability to retain popular authors; labour disruptions; newsprint costs; the Company's ability to reduce costs; foreign exchange fluctuations; credit risk; restrictions imposed by existing credit facilities, debt financing and availability of capital; changes in pension fund obligations; results of impairment tests; reliance on its printing operations; reliance on technology and information systems; risks related to business development and acquisition integration; 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; loss of reputation; product liability; intellectual property rights; 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, 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 2012 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 September 30 2013 |
As at December 31 2012 Restated* |
||||
| Assets | |||||
| Current: | |||||
| Cash and cash equivalents | $25,631 | $24,827 | |||
| Receivables | 241,771 | 263,606 | |||
| Inventories | 29,790 | 31,637 | |||
| Derivative financial instruments | 1,046 | 1,272 | |||
| Prepaid expenses and other current assets | 49,291 | 43,254 | |||
| Prepaid and recoverable income taxes | 11,736 | 10,775 | |||
| Total current assets | 359,265 | 375,371 | |||
| Property, plant and equipment | 153,605 | 161,872 | |||
| Investments in joint ventures | 80,020 | 91,258 | |||
| Investments in associated businesses | 39,774 | 32,921 | |||
| Intangible assets | 73,553 | 87,475 | |||
| Goodwill | 533,362 | 596,703 | |||
| Other assets | 10,730 | 8,323 | |||
| Deferred income tax assets | 61,471 | 89,965 | |||
| Total assets | $1,311,780 | $1,443,888 | |||
| Liabilities and Equity | |||||
| Current: | |||||
| Bank overdraft | $5,416 | $9,767 | |||
| Accounts payable and accrued liabilities | 184,333 | 195,822 | |||
| Provisions | 14,541 | 15,649 | |||
| Income tax payable | 9,409 | 11,016 | |||
| Total current liabilities | 213,699 | 232,254 | |||
| Long-term debt | 194,744 | 178,027 | |||
| Derivative financial instruments | 4,855 | 7,018 | |||
| Provisions | 12,734 | 14,520 | |||
| Other liabilities | 23,294 | 25,362 | |||
| Employee benefits | 94,276 | 255,434 | |||
| Deferred income tax liabilities | 18,419 | 7,593 | |||
| Equity: | |||||
| Share capital | 398,453 | 397,425 | |||
| Contributed surplus | 17,060 | 16,057 | |||
| Retained earnings | 340,291 | 317,033 | |||
| Accumulated other comprehensive loss | (8,366 | ) | (9,699 | ) | |
| Total equity attributable to equity shareholders | 747,438 | 720,816 | |||
| Minority interests | 2,321 | 2,864 | |||
| Total equity | 749,759 | 723,680 | |||
| Total liabilities and equity | $1,311,780 | $1,443,888 | |||
| *Certain amounts shown here do not correspond to the annual consolidated financial statements as at December 31, 2012 and reflect adjustments made. |
| Torstar Corporation | |||||||||
| Consolidated Statement of Income | |||||||||
| (Thousands of Canadian Dollars except per share amounts) | |||||||||
| (Unaudited) | |||||||||
| Three months ended | Nine months ended | ||||||||
| September 30 | September 30 | ||||||||
| 2013 | 2012 Restated* |
2013 | 2012 Restated* |
||||||
| Operating revenue | $310,413 | $335,822 | $960,416 | $1,028,876 | |||||
| Salaries and benefits | (116,736 | ) | (121,766 | ) | (361,819 | ) | (371,966 | ) | |
| Other operating costs | (160,370 | ) | (176,660 | ) | (496,565 | ) | (531,728 | ) | |
| Amortization and depreciation | (9,121 | ) | (8,805 | ) | (26,950 | ) | (25,984 | ) | |
| Restructuring and other charges | (6,000 | ) | (6,903 | ) | (21,033 | ) | (11,128 | ) | |
| Impairment of assets | (85,458 | ) | (980 | ) | (85,828 | ) | (1,269 | ) | |
| Operating profit (loss) | (67,272 | ) | 20,708 | (31,779 | ) | 86,801 | |||
| Interest and financing costs | (4,363 | ) | (4,971 | ) | (13,154 | ) | (15,124 | ) | |
| Foreign exchange | 2 | 269 | (551 | ) | (145 | ) | |||
| Adjustment to contingent consideration | 288 | (239 | ) | 908 | (239 | ) | |||
| Income from joint ventures | 1,351 | 2,764 | 4,637 | 12,016 | |||||
| Income (loss) of associated businesses | 1,228 | (2,949 | ) | 2,914 | (3,024 | ) | |||
| Gain (loss) on sale of assets | 105 | (152 | ) | 3,417 | |||||
| Investment write-down and loss | (500 | ) | (93 | ) | (562 | ) | (93 | ) | |
| (69,161 | ) | 15,489 | (37,739 | ) | 83,609 | ||||
| Income and other taxes | (1,700 | ) | (4,200 | ) | (10,800 | ) | (22,000 | ) | |
| Net income (loss) | ($70,861 | ) | $11,289 | ($48,539 | ) | $61,609 | |||
| Attributable to: | |||||||||
| Equity shareholders | ($70,800 | ) | $11,142 | ($48,621 | ) | $61,265 | |||
| Minority interests | ($61 | ) | $147 | $82 | $344 | ||||
| Net income (loss) attributable to equity shareholders per Class A (voting) and Class B (non-voting) share: | |||||||||
| Basic and Diluted | ($0.89 | ) | $0.14 | ($0.61 | ) | $0.77 | |||
| *Certain amounts shown here do not correspond to the condensed consolidated financial statements as at September 30, 2012 and reflect adjustments made. |
| Torstar Corporation | |||||||||
| Consolidated Statement of Cash Flows | |||||||||
| (Thousands of Canadian Dollars) | |||||||||
| (Unaudited) | |||||||||
| Three months ended | Nine months ended | ||||||||
| September 30 | September 30 | ||||||||
| 2013 | 2012 Restated* |
2013 | 2012 Restated* |
||||||
| Cash was provided by (used in) | |||||||||
| Operating activities | $29,384 | $29,375 | $44,774 | $60,837 | |||||
| Investing activities | (8,850 | ) | (20,939 | ) | (22,074 | ) | (40,065 | ) | |
| Financing activities | (8,388 | ) | (5,555 | ) | (17,713 | ) | (23,705 | ) | |
| Increase (decrease) in cash | 12,146 | 2,881 | 4,987 | (2,933 | ) | ||||
| Effect of exchange rate changes | 529 | (525 | ) | 168 | (658 | ) | |||
| Cash, beginning of period | 7,540 | 23,090 | 15,060 | 29,037 | |||||
| Cash, end of period | $20,215 | $25,446 | $20,215 | $25,446 | |||||
| Operating activities: | |||||||||
| Net income (loss) | ($70,861 | ) | $11,289 | ($48,539 | ) | $61,609 | |||
| Amortization and depreciation | 9,121 | 8,805 | 26,950 | 25,985 | |||||
| Deferred income taxes | 300 | 3,600 | 4,300 | 11,300 | |||||
| Income from joint ventures | (1,351 | ) | (2,764 | ) | (4,637 | ) | (12,016 | ) | |
| Distributions from joint ventures | 1,808 | 6,379 | 6,934 | 11,048 | |||||
| Loss (income) of associated businesses | (1,228 | ) | 2,949 | (2,914 | ) | 3,024 | |||
| Dividend from associated businesses | 382 | ||||||||
| Impairment of assets | 85,458 | 980 | 85,828 | 1,269 | |||||
| Non-cash employee benefit expense | 8,242 | 8,209 | 24,918 | 24,444 | |||||
| Employee benefits funding | (16,682 | ) | (18,490 | ) | (49,090 | ) | (55,715 | ) | |
| Other | (1,157 | ) | (2,473 | ) | (4,815 | ) | (8,080 | ) | |
| 13,650 | 18,484 | 39,317 | 62,868 | ||||||
| Decrease (increase) in non-cash working capital | 15,734 | 10,891 | 5,457 | (2,031 | ) | ||||
| Cash provided by operating activities | $29,384 | $29,375 | $44,774 | $60,837 | |||||
| Investing activities: | |||||||||
| Additions to property, plant and equipment and intangible assets | ($6,575 | ) | ($8,700 | ) | ($16,986 | ) | ($22,551 | ) | |
| Investment in joint ventures | (30 | ) | (30 | ) | |||||
| Investment in associated businesses | (2,500 | ) | (5,765 | ) | (3,000 | ) | (11,265 | ) | |
| Acquisitions and investments | (32 | ) | (6,455 | ) | (2,459 | ) | (10,473 | ) | |
| Proceeds from sale of assets | 253 | 253 | 4,250 | ||||||
| Other | 4 | 11 | 118 | 4 | |||||
| Cash used in investing activities | ($8,850 | ) | ($20,939 | ) | ($22,074 | ) | ($40,065 | ) | |
| Financing activities: | |||||||||
| Issuance of bankers' acceptances | $1,743 | $4,488 | $13,428 | $5,991 | |||||
| Repayment of bankers' acceptances | (111 | ) | |||||||
| Dividends paid | (10,381 | ) | (10,392 | ) | (31,123 | ) | (30,668 | ) | |
| Exercise of share options | 413 | ||||||||
| Other | 250 | 349 | (18 | ) | 670 | ||||
| Cash used in financing activities | ($8,388 | ) | ($5,555 | ) | ($17,713 | ) | ($23,705 | ) | |
| Cash represented by: | |||||||||
| Cash | $22,064 | $26,383 | $22,064 | $26,383 | |||||
| Cash equivalents - short-term deposits | 3,567 | 8,740 | 3,567 | 8,740 | |||||
| Cash and cash equivalents | 25,631 | 35,123 | 25,631 | 35,123 | |||||
| Bank overdraft | (5,416 | ) | (9,677 | ) | (5,416 | ) | (9,677 | ) | |
| $20,215 | $25,446 | $20,215 | $25,446 | ||||||
| *Certain amounts shown here do not correspond to the condensed consolidated financial statements as at September 30, 2012 and reflect adjustments made. |
Contact Information:
L. DeMarchi
Executive Vice-President and Chief Financial Officer
www.torstar.com