\nPostmedia Network Canada Corp. (\u201cPostmedia\u201d or the \u201cCompany\u201d) today released financial information for the three months ended November 30, 2020.\n<\/p>\n
\n\u201cWith the effects of the global pandemic continuing to weigh on our communities and our people, our focus remains on the safety of our teams, preserving liquidity, constraining costs, maximizing revenue and pursuing government support,\u201d said Andrew MacLeod, President and Chief Executive Officer, Postmedia.\n<\/p>\n
- \n
- \nSafety of Our People \u2013 Where possible, our employees are working from home and we expect that to continue into the spring. At operations where on-site work is required, we are vigilant about strict safety measures and keeping in step with the recommendations of health authorities.\n<\/li>\n
- \nConstraining Costs \u2013In the quarter we realized a 21.4% reduction in operating costs1<\/sup>, which includes the impact of initiatives implemented in the quarter that are expected to result in approximately $9 million of net annualized cost savings.\n<\/li>\n
- \nPreserving Liquidity \u2013 Cash management, including the impact of cost savings and government assistance, has resulted in an unrestricted cash balance of $47.8 million as at November 30, 2020.\n<\/li>\n
- \nMaximizing Revenue \u2013 First quarter revenue was down 25.4% from the prior quarter and was significantly impacted by the pandemic. We have been working to support local business efforts and have added to our digital acquisition team to expand our reach and grow relationships with new small and medium businesses.\n<\/li>\n
- \nGovernment Support \u2013 Canada Emergency Wage Subsidy (\u201cCEWS\u201d) of $6.6 million recognized and $14.0 million received during the quarter.\n<\/li>\n<\/ul>\n
First Quarter Operating Results<\/b><\/p>\n
\nThree quarters into the COVID-19 pandemic, the Company continued to navigate through the pandemic\u2019s significant business impacts. Revenue for the quarter was $116.9 million as compared to $156.7 million in the same period in the prior year, representing a decrease of $39.7 million or 25.4%. The revenue decline was primarily due to decreases in print advertising revenue of $20.6 million or 32.1% and digital revenue of $10.7 million or 31.1% with digital advertising revenue down 36.0%. Print circulation revenue declined $6.2 million or 12.4% versus the same period in the prior year.\n<\/p>\n
\nTotal operating expenses excluding depreciation, amortization, impairment and restructuring decreased $35.5 million or 26.3% for the quarter, relative to the same period in the prior year. The decrease was a result of lower compensation expense and newspaper circulation volumes as well as the implementation of various cost reduction initiatives. Included in the decrease of operating expenses is the impact of a compensation expense recovery of $6.6 million related to CEWS, partially offset by a decrease in compensation recovery related to journalism tax credits of $0.9 million.\n<\/p>\n
\nOperating income before depreciation, amortization, impairment and restructuring of $17.2 million in the quarter represents a decrease of $4.2 million relative to the same period in the prior year. The decrease is due to the decrease in total revenue partially offset by decreases in operating expenses. Included in the operating expense decreases is the impact of the compensation expense recoveries related to CEWS and journalism tax credits.\n<\/p>\n
\nNet earnings in the quarter ended November 30, 2020 was $52.8 million, as compared to a loss of $3.0 million in the same period in the prior year. The change was primarily the result of a non-cash settlement gain related to employee benefit plans of $63.1 million, gains on derivative financial instruments and foreign exchange in the three months ended November 30, 2020, decreases in depreciation, amortization and restructuring expenses partially offset by impairment expense of $13.5 million in the three months ended November 30, 2020, a decrease in operating income depreciation, amortization, impairment, settlement gains and restructuring and an increase in interest expense.\n<\/p>\n
COVID-19 Update <\/b><\/p>\n
\nThe COVID-19 pandemic has resulted in governments worldwide enacting emergency measures to combat the spread of the virus including travel bans, self-imposed quarantine periods and social distancing that have caused disruption to businesses resulting in an economic slowdown. The Company is generally exempt from mandates requiring closures of non-essential businesses and therefore has been able to continue operations, however, advertising revenue declines have accelerated as a result of the COVID-19 pandemic and related government measures. On April 11, 2020, the Government of Canada passed CEWS to support employers facing financial hardship as measured by certain revenue declines as a result of the COVID-19 pandemic. CEWS currently provides a reimbursement of compensation expense to June 2021 provided the applicant has met the applicable criteria, which criteria have been established up to March 13, 2021. During the three months ended November 30, 2020, the Company recognized a recovery of compensation expense of $6.6 million and in total has recognized $46.7 million related to CEWS since the program was announced. As at November 30, 2020, the Company has an amount receivable related to CEWS of $5.6 million.\n<\/p>\n
Debt Repayment<\/b><\/p>\n
\nDuring the three months ended November 30, 2020, the Company redeemed $3.3 million of first-lien debt on October 1, 2020 and an additional $5.2 million on November 5, 2020, both from the proceeds of assets sales. In addition, the Company redeemed $6.9 million of first-lien debt on November 13, 2020, as required pursuant to the annual excess cash flow requirement pursuant to the first-lien notes indenture. After these aggregate redemptions of $15.4 million, the Company has $83.8 million of first-lien debt outstanding of the original $225.0 million that was issued in October 2016.\n<\/p>\n
CAAT Pension Plan<\/b><\/p>\n
\nOn January 29, 2019, the Company entered into an agreement with the Colleges of Applied Arts & Technology Pension Plan (the \u201cCAAT Pension Plan\u201d), a multi-employer defined benefit plan, to merge the Company\u2019s defined benefit pension plans (the \u201cPostmedia Plans\u201d), with the CAAT Pension Plan. Effective July 1, 2019, the Company received approval from members of the Postmedia Plans and the Company became a participating employer under the CAAT Pension Plan and all members of the Postmedia Plans, as well as members of the Company\u2019s defined contribution pension plan, began accruing benefits under the DBplus provisions of the CAAT Pension Plan. On October 8, 2020, the Company received approval from the Financial Services Regulatory Authority of Ontario to transfer the Postmedia Plans assets to the CAAT Pension Plan, which was completed in November 2020. On completion of the asset transfer, the CAAT Pension Plan assumed defined benefit obligations of the Postmedia Plans and the Company commenced additional cash funding obligations of $11.0 million related to the transferred Postmedia Plans deficits payable over the next ten years and recognized a non-cash gain on settlement of $63.1 million.\n<\/p>\n
Business Transformation Initiatives<\/b><\/p>\n
\nDuring the three months ended November 30, 2020, the Company implemented initiatives including those discussed above related to the COVID-19 pandemic as well as additional compensation expense reductions, real estate rationalization, production efficiencies and other transformation programs, which are expected to result in approximately $9 million of net annualized cost savings.\n<\/p>\n
\nThe Company intends to continue to identify and undertake ongoing cost reduction initiatives in an effort to address revenue declination in the legacy print business.\n<\/p>\n
Additional Information <\/b><\/p>\n
\nAdditional information, including financial statements and management\u2019s discussion and analysis can be found on the Company\u2019s website at www.postmedia.com<\/span><\/a><\/b> or on SEDAR at www.sedar.com<\/span><\/a>.<\/b><\/p>\n
\nNote: All dollar amounts are expressed in Canadian dollars unless otherwise specified.\n<\/p>\n
About Postmedia Network Canada Corp.<\/b><\/p>\n
\nPostmedia Network Canada Corp. (TSX:PNC.A, PNC.B) is the holding company that owns Postmedia Network Inc., a Canadian newsmedia company representing more than 120 brands across multiple print, online, and mobile platforms. Award-winning journalists and innovative product development teams bring engaging content to millions of people every week whenever and wherever they want it. This exceptional content, reach and scope offers advertisers and marketers compelling solutions to effectively reach target audiences. For more information, visit www.postmedia.com<\/a>.\n<\/p>\n
Forward-Looking Information <\/strong><\/p>\n
\nThis news release may include information that is \u201cforward-looking information\u201d under applicable Canadian securities laws. The Company has tried, where possible, to identify such information and statements by using words such as \u201cbelieve,\u201d \u201cexpect,\u201d \u201cintend,\u201d \u201cestimate,\u201d \u201canticipate,\u201d \u201cmay,\u201d \u201cwill,\u201d \u201ccould,\u201d \u201cwould,\u201d \u201cshould\u201d and similar expressions and derivations thereof in connection with any discussion of future events, trends or prospects or future operating or financial performance. Forward-looking statements in this news release include statements with respect to the impact of the COVID-19 pandemic on the Company\u2019s business, the implementation and results of the Company\u2019s transformation initiatives, continued benefits of historical results into future periods, the realization of anticipated cost savings, the completion of asset transfers related to the Company\u2019s pension plans, the receipt of anticipated government assistance and the identification and undertaking of ongoing cost savings initiatives. By their nature, forward-looking information and statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These risks and uncertainties include, among others: competition from digital and other forms of media; the effect of economic conditions on advertising revenue; the ability of the Company to build out its digital media and online businesses; the failure to maintain current print and online newspaper readership and circulation levels; the realization of anticipated cost savings; possible damage to the reputation of the Company\u2019s brands or trademarks; possible labour disruptions; possible environmental liabilities, litigation and pension plan obligations; fluctuations in foreign exchange rates and the prices of newsprint and other commodities.\n<\/p>\n
\nIn addition, we are subject to the risk and uncertainties related to the COVID-19 pandemic. The pandemic has resulted in governments worldwide enacting emergency measures to combat the spread of the virus including travel bans, self-imposed quarantine periods and social distancing that have caused disruption to businesses resulting in an economic slowdown. We are generally exempt from mandates requiring closures of non-essential businesses and therefore have been able to continue operations however, advertising revenues have declined as a result of COVID-19 pandemic and related government measures. The outbreak of contagious illness such as this can impact our operations in a number of ways including quarantined employees, travel restrictions, temporary closure of our facilities, a decrease in demand for advertising, as well as interruptions to our supply chain, including temporary closure of supplier facilities. Given the high level of uncertainty surrounding the duration of the COVID-19 pandemic it is difficult to reliably estimate its potential impact on the financial condition and results of our business. We are continuing to address the current challenges related to the COVID-19 pandemic and monitoring these challenges as they evolve so as to minimize this risk however it could have a material adverse effect on our business, financial condition, results of operations, liquidity and cash flow. For a complete list of our risk factors please refer to the section entitled \u201cRisk Factors\u201d contained in our annual management\u2019s discussion and analysis for the years ended August 31, 2020 and 2019. Although the Company bases such information and statements on assumptions believed to be reasonable when made, they are not guarantees of future performance and actual results of operations, financial condition and liquidity, and developments in the industry in which the Company operates, may differ materially from any such information and statements in this press release. Given these risks and uncertainties, undue reliance should not be placed on any forward-looking information or forward-looking statements, which speak only as of the date of such information or statements. Other than as required by law, the Company does not undertake, and specifically declines, any obligation to update such information or statements or to publicly announce the results of any revisions to any such information or statements.\n<\/p>\n
Postmedia Network Canada Corp.
\n
Consolidated Statements of Operations
\n
(UNAUDITED)<\/b><\/p>\n\n
\n \n \n(In thousands of Canadian dollars, except per share amounts)\n<\/p>\n<\/td>\n
\n For the three months
\n
ended November 30,<\/b><\/p>\n<\/td>\n<\/tr>\n\n \n \n\u00a0\n<\/p>\n<\/td>\n
\n 2020<\/b><\/p>\n<\/td>\n
\n 2019<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n Revenues<\/b><\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nPrint advertising\n<\/p>\n<\/td>\n
\n \n43,532\n<\/p>\n<\/td>\n
\n \n64,143\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nPrint circulation\n<\/p>\n<\/td>\n
\n \n44,100\n<\/p>\n<\/td>\n
\n \n50,327\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nDigital\n<\/p>\n<\/td>\n
\n \n24,869\n<\/p>\n<\/td>\n
\n \n35,586\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nOther\n<\/p>\n<\/td>\n
\n \n4,429\n<\/p>\n<\/td>\n
\n \n6,599\n<\/p>\n<\/td>\n<\/tr>\n
\n \n Total revenues<\/b><\/p>\n<\/td>\n
\n 116,930 <\/b><\/p>\n<\/td>\n
\n 156,655 <\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n Expenses<\/b><\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nCompensation\n<\/p>\n<\/td>\n
\n \n36,812\n<\/p>\n<\/td>\n
\n \n52,283\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNewsprint\n<\/p>\n<\/td>\n
\n \n4,990\n<\/p>\n<\/td>\n
\n \n7,477\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nDistribution\n<\/p>\n<\/td>\n
\n \n24,686\n<\/p>\n<\/td>\n
\n \n28,906\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nProduction\n<\/p>\n<\/td>\n
\n \n14,944\n<\/p>\n<\/td>\n
\n \n20,939\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nOther operating\n<\/p>\n<\/td>\n
\n \n18,320\n<\/p>\n<\/td>\n
\n \n25,672\n<\/p>\n<\/td>\n<\/tr>\n
\n \n Operating income before depreciation, amortization, impairment, settlement gain and restructuring<\/b><\/p>\n<\/td>\n
\n 17,178<\/b><\/p>\n<\/td>\n
\n 21,378<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \nDepreciation\n<\/p>\n<\/td>\n
\n \n2,783\n<\/p>\n<\/td>\n
\n \n3,011\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAmortization\n<\/p>\n<\/td>\n
\n \n2,555\n<\/p>\n<\/td>\n
\n \n4,248\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nImpairment\n<\/p>\n<\/td>\n
\n \n13,464\n<\/p>\n<\/td>\n
\n \n–\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nSettlement gain\n<\/p>\n<\/td>\n
\n \n(63,079)\n<\/p>\n<\/td>\n
\n \n–\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nRestructuring\n<\/p>\n<\/td>\n
\n \n2,935\n<\/p>\n<\/td>\n
\n \n8,569\n<\/p>\n<\/td>\n<\/tr>\n
\n \n Operating income<\/b><\/p>\n<\/td>\n
\n 58,520<\/b><\/p>\n<\/td>\n
\n 5,550<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \nInterest expense\n<\/p>\n<\/td>\n
\n \n7,826\n<\/p>\n<\/td>\n
\n \n7,378\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNet financing expense related to employee benefit plans\n<\/p>\n<\/td>\n
\n \n636\n<\/p>\n<\/td>\n
\n \n610\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nGain on disposal of property and equipment and assets held-for-sale\n<\/p>\n<\/td>\n
\n \n(6)\n<\/p>\n<\/td>\n
\n \n(3)\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \n(Gain) loss on derivative financial instruments\n<\/p>\n<\/td>\n
\n \n(1,604)\n<\/p>\n<\/td>\n
\n \n519\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nForeign currency exchange (gains) losses\n<\/p>\n<\/td>\n
\n \n(1,157)\n<\/p>\n<\/td>\n
\n \n46\n<\/p>\n<\/td>\n<\/tr>\n
\n \n Earnings (loss) before income taxes<\/b><\/p>\n<\/td>\n
\n 52,825<\/b><\/p>\n<\/td>\n
\n (3,000)<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \nProvision for income taxes\n<\/p>\n<\/td>\n
\n \n–\n<\/p>\n<\/td>\n
\n \n–\n<\/p>\n<\/td>\n<\/tr>\n
\n \n Net earnings (loss) attributable to equity holders of the Company<\/b><\/p>\n<\/td>\n
\n 52,825<\/b><\/p>\n<\/td>\n
\n (3,000)<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n Earnings (loss) per share attributable to equity holders of the Company<\/b><\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nBasic\n<\/p>\n<\/td>\n
\n \n$0.56\n<\/p>\n<\/td>\n
\n \n$(0.03)\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nDiluted\n<\/p>\n<\/td>\n
\n \n$0.54\n<\/p>\n<\/td>\n
\n \n$(0.03)\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n
Postmedia Network Canada Corp.
\n
Consolidated Statements of Financial Position
\n
(UNAUDITED)<\/b><\/p>\n\n
\n \n \n(In thousands of Canadian dollars)\n<\/p>\n<\/td>\n
\n As at
\n
November 30, <\/b><\/p>\n2020<\/b><\/p>\n<\/td>\n
\n As at
\n
August 31, <\/b><\/p>\n2020<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n Assets<\/b><\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nCurrent Assets\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nCash\n<\/p>\n<\/td>\n
\n \n47,752\n<\/p>\n<\/td>\n
\n \n49,795\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nRestricted cash\n<\/p>\n<\/td>\n
\n \n–\n<\/p>\n<\/td>\n
\n \n3,402\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nTrade and other receivables\n<\/p>\n<\/td>\n
\n \n67,496\n<\/p>\n<\/td>\n
\n \n65,548\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAssets held-for-sale\n<\/p>\n<\/td>\n
\n \n18,427\n<\/p>\n<\/td>\n
\n \n28,229\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nInventory\n<\/p>\n<\/td>\n
\n \n3,021\n<\/p>\n<\/td>\n
\n \n3,260\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nPrepaid expenses and other assets\n<\/p>\n<\/td>\n
\n \n9,228\n<\/p>\n<\/td>\n
\n \n10,338\n<\/p>\n<\/td>\n<\/tr>\n
\n \n Total current assets<\/b><\/p>\n<\/td>\n
\n 145,924<\/b><\/p>\n<\/td>\n
\n 160,572<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n Non-Current Assets<\/b><\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nProperty and equipment\n<\/p>\n<\/td>\n
\n \n83,387\n<\/p>\n<\/td>\n
\n \n90,778\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nRight of use assets\n<\/p>\n<\/td>\n
\n \n39,065\n<\/p>\n<\/td>\n
\n \n40,857\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nDerivative financial instruments and other assets\n<\/p>\n<\/td>\n
\n \n4,942\n<\/p>\n<\/td>\n
\n \n3,338\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nIntangible assets\n<\/p>\n<\/td>\n
\n \n37,166\n<\/p>\n<\/td>\n
\n \n41,334\n<\/p>\n<\/td>\n<\/tr>\n
\n \n Total assets<\/b><\/p>\n<\/td>\n
\n 310,484<\/b><\/p>\n<\/td>\n
\n 336,879<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n Liabilities and Equity<\/b><\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nCurrent Liabilities\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAccounts payable and accrued liabilities\n<\/p>\n<\/td>\n
\n \n51,373\n<\/p>\n<\/td>\n
\n \n48,041\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nProvisions\n<\/p>\n<\/td>\n
\n \n6,483\n<\/p>\n<\/td>\n
\n \n6,856\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nDeferred revenue\n<\/p>\n<\/td>\n
\n \n24,196\n<\/p>\n<\/td>\n
\n \n24,369\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nCurrent portion of lease obligations\n<\/p>\n<\/td>\n
\n \n8,025\n<\/p>\n<\/td>\n
\n \n9,482\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nCurrent portion of long-term debt\n<\/p>\n<\/td>\n
\n \n5,000\n<\/p>\n<\/td>\n
\n \n20,372\n<\/p>\n<\/td>\n<\/tr>\n
\n \n Total current liabilities<\/b><\/p>\n<\/td>\n
\n 95,077<\/b><\/p>\n<\/td>\n
\n 109,120<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n Non-Current Liabilities<\/b><\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nLong-term debt\n<\/p>\n<\/td>\n
\n \n252,107\n<\/p>\n<\/td>\n
\n \n252,983\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nEmployee benefit obligations and other liabilities\n<\/p>\n<\/td>\n
\n \n48,962\n<\/p>\n<\/td>\n
\n \n101,862\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nLease obligations\n<\/p>\n<\/td>\n
\n \n36,597\n<\/p>\n<\/td>\n
\n \n37,136\n<\/p>\n<\/td>\n<\/tr>\n
\n \n Total liabilities<\/b><\/p>\n<\/td>\n
\n 432,743<\/b><\/p>\n<\/td>\n
\n 501,101<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n Deficiency<\/b><\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nCapital stock\n<\/p>\n<\/td>\n
\n \n810,861\n<\/p>\n<\/td>\n
\n \n810,861\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nContributed surplus\n<\/p>\n<\/td>\n
\n \n16,198\n<\/p>\n<\/td>\n
\n \n15,925\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nDeficit\n<\/p>\n<\/td>\n
\n \n(949,318)\n<\/p>\n<\/td>\n
\n \n(991,008)\n<\/p>\n<\/td>\n<\/tr>\n
\n \n Total deficiency<\/b><\/p>\n<\/td>\n
\n (122,259)<\/b><\/p>\n<\/td>\n
\n (164,222)<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n Total liabilities and deficiency<\/b><\/p>\n<\/td>\n
\n 310,484 <\/b><\/p>\n<\/td>\n
\n 336,879 <\/b><\/p>\n<\/td>\n<\/tr>\n<\/table>\n
Postmedia Network Canada Corp.
\n
Consolidated Statements of Cash Flows
\n
(UNAUDITED)<\/b><\/p>\n\n
\n \n \n(In thousands of Canadian dollars)\n<\/p>\n<\/td>\n
\n For the three months
\n
ended November 30,<\/b><\/p>\n<\/td>\n<\/tr>\n\n \n \n\u00a0\n<\/p>\n<\/td>\n
\n 2020<\/b><\/p>\n<\/td>\n
\n 2019<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n Cash Generated (Utilized) by:<\/b><\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n Operating Activities<\/b><\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNet earnings (loss) attributable to equity holders of the Company\n<\/p>\n<\/td>\n
\n \n52,825\n<\/p>\n<\/td>\n
\n \n(3,000)\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nItems not affecting cash:\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nDepreciation\n<\/p>\n<\/td>\n
\n \n2,783\n<\/p>\n<\/td>\n
\n \n3,011\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAmortization\n<\/p>\n<\/td>\n
\n \n2,555\n<\/p>\n<\/td>\n
\n \n4,248\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nImpairment\n<\/p>\n<\/td>\n
\n \n13,464\n<\/p>\n<\/td>\n
\n \n–\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \n(Gain) loss on derivative financial instruments\n<\/p>\n<\/td>\n
\n \n(1,604)\n<\/p>\n<\/td>\n
\n \n519\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNon-cash interest\n<\/p>\n<\/td>\n
\n \n5,855\n<\/p>\n<\/td>\n
\n \n5,358\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nGain on disposal of property and equipment and assets held-for-sale\n<\/p>\n<\/td>\n
\n \n(6)\n<\/p>\n<\/td>\n
\n \n(3)\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNon-cash foreign currency exchange gains\n<\/p>\n<\/td>\n
\n \n(1,124)\n<\/p>\n<\/td>\n
\n \n(51)\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nShare-based compensation plans expense\n<\/p>\n<\/td>\n
\n \n273\n<\/p>\n<\/td>\n
\n \n222\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNet financing expense relating to employee benefit plans\n<\/p>\n<\/td>\n
\n \n636\n<\/p>\n<\/td>\n
\n \n610\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNon-cash settlement gain relating to employee benefit plans\n<\/p>\n<\/td>\n
\n \n(63,079)\n<\/p>\n<\/td>\n
\n \n–\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nEmployee benefit plan funding in excess of compensation expense\n<\/p>\n<\/td>\n
\n \n(538)\n<\/p>\n<\/td>\n
\n \n(452)\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNet change in non-cash operating accounts\n<\/p>\n<\/td>\n
\n \n(3,767)\n<\/p>\n<\/td>\n
\n \n(7,714)\n<\/p>\n<\/td>\n<\/tr>\n
\n \n Cash flows from operating activities<\/b><\/p>\n<\/td>\n
\n 8,273<\/b><\/p>\n<\/td>\n
\n 2,748<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n Investing Activities<\/b><\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNet proceeds from the sale of property and equipment and assets held-for-sale\n<\/p>\n<\/td>\n
\n \n4,708\n<\/p>\n<\/td>\n
\n \n33\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nPurchases of property and equipment\n<\/p>\n<\/td>\n
\n \n(392)\n<\/p>\n<\/td>\n
\n \n(1,122)\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nPurchases of intangible assets\n<\/p>\n<\/td>\n
\n \n(15)\n<\/p>\n<\/td>\n
\n \n(196)\n<\/p>\n<\/td>\n<\/tr>\n
\n \n Cash flows from (used in) investing activities<\/b><\/p>\n<\/td>\n
\n 4,301<\/b><\/p>\n<\/td>\n
\n (1,285)<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n Financing activities<\/b><\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNet proceeds from issuance of long-term debt\n<\/p>\n<\/td>\n
\n \n–\n<\/p>\n<\/td>\n
\n \n95,235\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nRepayment of long-term debt\n<\/p>\n<\/td>\n
\n \n(15,372)\n<\/p>\n<\/td>\n
\n \n(94,761)\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nRestricted cash\n<\/p>\n<\/td>\n
\n \n3,402\n<\/p>\n<\/td>\n
\n \n13\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nDebt issuance costs\n<\/p>\n<\/td>\n
\n \n–\n<\/p>\n<\/td>\n
\n \n(1,710)\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nLease payments\n<\/p>\n<\/td>\n
\n \n(2,647)\n<\/p>\n<\/td>\n
\n \n(2,158)\n<\/p>\n<\/td>\n<\/tr>\n
\n \n Cash flow used in financing activities<\/b><\/p>\n<\/td>\n
\n (14,617)<\/b><\/p>\n<\/td>\n
\n (3,381)<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNet change in cash for the period\n<\/p>\n<\/td>\n
\n \n(2,043)\n<\/p>\n<\/td>\n
\n \n(1,918)\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nCash at beginning of period\n<\/p>\n<\/td>\n
\n \n49,795\n<\/p>\n<\/td>\n
\n \n15,464\n<\/p>\n<\/td>\n<\/tr>\n
\n \n Cash at end of period<\/b><\/p>\n<\/td>\n
\n 47,752 <\/b><\/p>\n<\/td>\n
\n 13,546 <\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n
\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n
\n \n Supplemental disclosure of operating cash flows<\/b><\/p>\n<\/td>\n
\n \u00a0<\/td>\n<\/tr>\n \n \n \nInterest paid\n<\/p>\n<\/td>\n
\n \n4,162\n<\/p>\n<\/td>\n
\n \n3,948\n<\/p>\n<\/td>\n<\/tr>\n
\n \n \nIncome taxes paid\n<\/p>\n<\/td>\n
\n \n–\n<\/p>\n<\/td>\n
\n \n–\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n
\n1<\/sup> Operating expenses excluding depreciation, amortization and restructuring as adjusted for the impact of the Canada Emergency Wage Subsidy.<\/p>\n
<\/p>\n
View source version on businesswire.com: <\/span>https:\/\/www.businesswire.com\/news\/home\/20210113005690\/en\/<\/a><\/span><\/p>\n
Media Contact
\n<\/b>
Phyllise Gelfand
\n
Vice President, Communications
\n
(647) 273-9287
\n
pgelfand@postmedia.com <\/a><\/p>\nInvestor Contact
\n<\/b>
Brian Bidulka
\n
Executive Vice President and Chief Financial Officer
\n
(416) 383-2499
\n
bbidulka@postmedia.com <\/a><\/p>\nKEYWORDS:<\/b> North America Canada<\/p>\n
INDUSTRY KEYWORDS:<\/b> Communications Other Communications Publishing Public Relations\/Investor Relations<\/p>\n
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<\/td>\n<\/tr>\n