Torstar Corporation Reports Third Quarter Results
(firmenpresse) - TORONTO, ONTARIO -- (Marketwire) -- 10/31/12 -- Torstar Corporation (TSX: TS.B) today reported financial results for the third quarter ended September 30, 2012.
Highlights for the quarter:
"Results in the quarter were not immune from the challenges of the current environment," said David Holland, President and CEO of Torstar Corporation. "EBITDA of $43.2 million was down $10.5 million versus prior year. In the Media Segment, after experiencing some improvement in year-over-year trending in July and August, the advertising trend weakened in September, resulting in EBITDA of $26.7 million in the quarter, down $6.1 million versus prior year. At Harlequin, given the particularly strong performance in the third quarter of 2011, results were lower as expected. The decline of $5.0 million was more than anticipated as results were affected by the market share impact of the exceptional performance of a competitor's bestseller and weak global economic conditions. On a positive note at Harlequin, the print market in the third quarter continued to exhibit the stability that emerged in the second quarter."
"Looking forward, visibility remains limited. In the Media Segment, the advertising weakness experienced in September has continued into October. As we did this quarter, we will continue to take action on costs within the Media Segment as we work through the current challenges. At Harlequin, we would anticipate a modest decline in results in the fourth quarter attributable to factors such as the increase in digital royalty rates and weak global economic conditions."
"Across the Torstar operations, we are very committed to the long-term and will continue investing back into the business when appropriate. Our modest leverage is beneficial as we continue to progress and adapt to this dynamic environment."
The following table provides a continuity of earnings per share from 2011 to 2012:
Revenue
Total revenue was $355.3 million in the third quarter of 2012, down $23.4 million (6.2%) from $378.7 million in the third quarter of 2011. Excluding the impact of acquisitions and Metroland Media Group's TMGTV product sales, revenue was down $16.0 million (4.5%) in the third quarter.
Media Segment revenues were down $15.5 million in the third quarter of 2012 including an increase of $9.5 million from acquisitions made in 2011 and a decrease of $16.8 million in product sale revenues in Metroland Media Group's TMGTV operations. Excluding the impact of acquisitions and product sales, revenues were down $8.2 million in the quarter, or 3.4%. The declines in product sale revenues in Metroland Media Group's TMGTV operations are consistent with expected product life cycles in this business. Digital revenues were down in the quarter. The quarter was impacted by the comparison to particularly strong digital revenue in 2011 which included the roll-out of WagJag. The quarter was also impacted by a change in accounting for the investment in Tuango in the first quarter of 2012 (changed to equity accounting in the first quarter of 2012 when Torstar's ownership interest decreased to 38.2%). Digital revenues in 2012 were 11.4% of total Media Segment revenues in the third quarter versus 11.2% last year.
Book Publishing Segment revenues were down $7.9 million in the third quarter of 2012 including a $1.9 million decline from the impact of foreign exchange. Excluding the impact of foreign exchange, revenues were down $6.0 million in the quarter with declines in print revenues more than offsetting digital revenue growth.
EBITDA
Total EBITDA was $43.2 million in the third quarter of 2012, down $10.5 million from $53.7 million in the third quarter of 2011.
Media Segment EBITDA was down $6.1 million in the third quarter. Prior year acquisitions provided $1.1 million of EBITDA growth in the quarter. Advertising revenue declines and Metroland Media Group's TMGTV lower product sales were partially offset by $4.4 million of cost savings from restructuring initiatives, lower marketing costs in the digital properties and general cost savings.
Book Publishing Segment EBITDA decreased $5.0 million in the third quarter. The third quarter included revenue declines in most markets and increased spending in the North American digital business.
Corporate expenses were $3.3 million in the third quarter of 2012, down $0.5 million from $3.8 million in the third quarter of 2011. The decrease was primarily related to year over year differences in the mark-to-market of a share-based hedging instrument.
Restructuring and other charges
Restructuring and other charges of $7.9 million were recorded in the third quarter of 2012. In 2011, restructuring and other charges were $2.0 million in the third quarter. In the third quarter of 2012, the Media Segment recorded $6.6 million of restructuring charges and $1.0 million of impairment charges related to software and property, plant and equipment. In the third quarter of 2011, the Media Segment recorded $1.5 million of restructuring charges. The restructuring charges reflect the ongoing focus on cost reduction. In the third quarter, the Book Publishing Segment also recorded restructuring charges of $0.3 million in 2012 and $0.4 million in 2011.
Operating profit
Operating profit was $25.7 million in the third quarter of 2012, down $17.5 million from $43.2 million in the third quarter of 2011.
Loss of associated businesses
The loss of associated businesses was $3.1 million in the third quarter of 2012 versus losses in 2011 of $0.6 million. The 2012 loss included a loss of $2.7 million from Blue Ant in the quarter. Blue Ant completed its acquisition of High Fidelity HDTV in the quarter and the loss includes expenses for Canadian Radio-television Telecommunication Commission benefit obligations and reorganization charges. The Shop.ca website was launched late in the second quarter of 2012 and Torstar's loss was $0.5 million in the third quarter. The 2011 loss in the third quarter included a loss of $0.5 million from Canadian Press and a loss of $0.1 million from Q-ponz Inc.
Net income attributable to equity shareholders
Torstar reported net income attributable to equity shareholders of $14.1 million or $0.18 per share in the third quarter of 2012 down $11.1 million or $0.14 per share from $25.2 million or $0.32 per share in the third quarter of 2011.
DIVIDEND
On October 30, 2012, 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, 2012, to shareholders of record at the close of business on December 7, 2012. 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, 2012. Both documents will be filed today on SEDAR and are available on Torstar's corporate website .
CONFERENCE CALL
Torstar has scheduled a conference call for October 31, 2012 at 8:15 a.m. to discuss its third quarter results. The dial-in number is 416-340-8527 or 1-877-240-9772. 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 . 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 7117631. 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 .
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 operating earnings as measures to assess the consolidated performance and the performance of the reporting units and business segments.
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. Torstar's method of calculating EBITDA may differ from other companies and accordingly may not be comparable to measures used by other companies.
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 other operating costs, salaries and benefits and amortization and depreciation. Operating earnings excludes restructuring and other charges. Torstar's method of calculating operating earnings 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 report. 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. 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 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 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; pension fund obligations; results of impairment tests; reliance on its printing operations; reliance on technology and information systems; risks related to business development; interest rates; availability of insurance; litigation; environmental, privacy, communications and e-commerce laws and regulations applicable generally to our businesses; dependence on key personnel; 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 economy; 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 2011 Management's Discussion & Analysis which has been filed on and is available on Torstar's corporate website .
Torstar's new releases are available on the Internet at .
Contacts:
Torstar Corporation
L. DeMarchi
Executive Vice-President and Chief Financial Officer
(416) 869-4776
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Datum: 31.10.2012 - 05:30 Uhr
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