\nPostmedia Network Canada Corp. (\u201cPostmedia\u201d or the \u201cCompany\u201d) today released financial information for the three and six months ended February 28, 2021.\n<\/p>\n
\n\u201cOur second quarter represents continued progress on our strategy with measured optimism for the future,\u201d said Andrew MacLeod, President and Chief Executive Officer, Postmedia. \u201cAcross our organization, our teams are working together to accelerate our transformation, grow our audiences and architect new digital models to monetize. The reduction of debt and leverage remains a core focus and management expects to further reduce first lien debt by an additional $17 million through mandatory payments by the end of May. This would result in a decline of over 70% of our first lien debt from $225 million to $67 million since our 2016 recapitalization. It is our collective hope that an end to the global pandemic is closer than further and it is Postmedia\u2019s commitment to continue delivering thought-provoking journalism that Canadians rely upon and strong platform solutions for businesses.\u201d\n<\/p>\n
Updates from the Quarter<\/b><\/p>\n Second Quarter Operating Results<\/b><\/p>\n \nRevenue for the quarter was $106.0 million as compared to $134.2 million in the same period in the prior year, representing a decrease of $28.2 million or 21.0%. The revenue decline was primarily due to decreases in print advertising revenue of $14.7 million or 29.3% and digital revenue of $6.2 million or 20.9%. Print circulation revenue decreased by $5.6 million or 11.6%.\n<\/p>\n \nTotal operating expenses excluding depreciation, amortization, impairment and restructuring decreased $31.0 million or 24.1% 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 operating expense decrease is the impact of a compensation expense recovery of $5.7 million related to CEWS, partially offset by a decrease in compensation recovery related to journalism tax credits of $0.3 million.\n<\/p>\n \nOperating income before depreciation, amortization, impairment and restructuring of $8.3 million in the quarter represents an increase of $2.9 million relative to the same period in the prior year. The increase is due to a decrease in operating expenses excluding depreciation, amortization, impairment and restructuring partially offset by decreases in total revenue 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 February 28, 2021 were $0.7 million, as compared to a net loss of $12.8 million in the same period in the prior year. The change was primarily the result of gains on derivative financial instruments and foreign exchange in the three months ended February 28, 2021, the increase in operating income before depreciation, amortization, impairment and restructuring as well as decreases in depreciation and amortization expenses partially offset by impairment expense of $7.0 million in the three months ended February 28, 2021, and an increase in interest and restructuring expenses.\n<\/p>\n Year-to-Date Operating Results <\/b><\/p>\n \nRevenue for the six months ended February 28, 2021 was $222.9 million as compared to $290.8 million in the same period in the prior year, a decrease of $67.9 million or 23.3%. The revenue decline was primarily due to decreases in print advertising revenue of $35.3 million or 30.9% and decreases in digital revenue of 16.9 million or 25.9%. Print circulation revenue declined $11.9 million or 12.0%.\n<\/p>\n \nTotal operating expenses excluding depreciation, amortization, impairment, settlement gains and restructuring decreased $66.5 million or 25.2% for the six months ended February 28, 2021, 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 operating expense decrease is the impact of a compensation expense recovery of $12.3 million related to CEWS, partially offset by a decrease in compensation recovery related to journalism tax credits of $1.2 million.\n<\/p>\n \nOperating income before depreciation, amortization, impairment and restructuring of $25.5 million in the quarter represents a decrease of $1.3 million or 5.0% 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 six months ended February 28, 2021 were $53.5 million, as compared to a net loss of $15.8 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 six months ended February 28, 2021, decreases in depreciation, amortization and restructuring expenses partially offset by impairment expense of $20.5 million in the six months ended February 28, 2021, the 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 5, 2021, provided the applicant has met the applicable criteria. During the three and six months ended February 28, 2021, the Company recognized a recovery of compensation expense of $5.7 million and $13.3 million, respectively, and in total has recognized $52.4 million related to CEWS since the program was announced. As at February 28, 2021, the Company has a receivable related to CEWS in the amount of $4.0 million.\n<\/p>\n Debt Repayment<\/b><\/p>\n \nSubsequent to February 28, 2021, the Company gave notice to its first-lien noteholders of its intention to redeem $9.6 million of first-lien debt on April 30, 2021 with the proceeds of asset sales. In addition, as required pursuant to the semi-annual excess cash flow requirement contained in the first-lien notes indenture the excess cash flow for the six months ended February 28, 2021 was $7.3 million which is expected to be used to redeem a portion of first-lien debt by May 8, 2021. After these aggregate redemptions of approximately $17 million the Company will have approximately $67 million of first-lien debt outstanding of the original $225.0 million that was issued in October 2016.\n<\/p>\n Business Transformation Initiatives<\/b><\/p>\n \nDuring the three months ended February 28, 2021, the Company implemented initiatives related to compensation expense reductions, real estate rationalization, production efficiencies and other transformation programs, which are expected to result in approximately $5 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\/investors-governance\/quarterly-filings<\/span><\/a><\/i><\/b>or on SEDAR at www.sedar.com<\/span><\/a><\/b>.<\/span><\/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 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(In thousands of Canadian dollars, except per share amounts)\n<\/p>\n<\/td>\n For the three months ended<\/b><\/p>\n<\/td>\n For the six months ended <\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0\n<\/p>\n<\/td>\n February 28, 2021<\/b><\/p>\n<\/td>\n February 29, 2020<\/b><\/p>\n<\/td>\n February 28, 2021<\/b><\/p>\n<\/td>\n February 29, 2020<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n Revenues<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \nPrint advertising\n<\/p>\n<\/td>\n \n35,475\n<\/p>\n<\/td>\n \n50,172\n<\/p>\n<\/td>\n \n79,007\n<\/p>\n<\/td>\n \n114,315\n<\/p>\n<\/td>\n<\/tr>\n \nPrint circulation\n<\/p>\n<\/td>\n \n43,028\n<\/p>\n<\/td>\n \n48,670\n<\/p>\n<\/td>\n \n87,128\n<\/p>\n<\/td>\n \n98,997\n<\/p>\n<\/td>\n<\/tr>\n \nDigital\n<\/p>\n<\/td>\n \n23,480\n<\/p>\n<\/td>\n \n29,701\n<\/p>\n<\/td>\n \n48,349\n<\/p>\n<\/td>\n \n65,287\n<\/p>\n<\/td>\n<\/tr>\n \nOther\n<\/p>\n<\/td>\n \n4,031\n<\/p>\n<\/td>\n \n5,624\n<\/p>\n<\/td>\n \n8,460\n<\/p>\n<\/td>\n \n12,223\n<\/p>\n<\/td>\n<\/tr>\n Total revenues<\/b><\/p>\n<\/td>\n 106,014<\/b><\/p>\n<\/td>\n 134,167<\/b><\/p>\n<\/td>\n 222,944<\/b><\/p>\n<\/td>\n 290,822<\/b><\/p>\n<\/td>\n<\/tr>\n Expenses<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \nCompensation\n<\/p>\n<\/td>\n \n38,603\n<\/p>\n<\/td>\n \n51,145\n<\/p>\n<\/td>\n \n75,415\n<\/p>\n<\/td>\n \n103,428\n<\/p>\n<\/td>\n<\/tr>\n \nNewsprint\n<\/p>\n<\/td>\n \n4,127\n<\/p>\n<\/td>\n \n6,661\n<\/p>\n<\/td>\n \n9,117\n<\/p>\n<\/td>\n \n14,138\n<\/p>\n<\/td>\n<\/tr>\n \nDistribution\n<\/p>\n<\/td>\n \n22,851\n<\/p>\n<\/td>\n \n27,334\n<\/p>\n<\/td>\n \n47,537\n<\/p>\n<\/td>\n \n56,240\n<\/p>\n<\/td>\n<\/tr>\n \nProduction\n<\/p>\n<\/td>\n \n14,529\n<\/p>\n<\/td>\n \n17,920\n<\/p>\n<\/td>\n \n29,473\n<\/p>\n<\/td>\n \n38,859\n<\/p>\n<\/td>\n<\/tr>\n \nOther operating\n<\/p>\n<\/td>\n \n17,605\n<\/p>\n<\/td>\n \n25,671\n<\/p>\n<\/td>\n \n35,925\n<\/p>\n<\/td>\n \n51,343\n<\/p>\n<\/td>\n<\/tr>\n Operating income before depreciation, amortization, impairment, settlement gain and restructuring<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n 8,299<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n 5,436<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n 25,477<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n 26,814<\/b><\/p>\n<\/td>\n<\/tr>\n \nDepreciation\n<\/p>\n<\/td>\n \n2,811\n<\/p>\n<\/td>\n \n2,926\n<\/p>\n<\/td>\n \n5,594\n<\/p>\n<\/td>\n \n5,937\n<\/p>\n<\/td>\n<\/tr>\n \nAmortization\n<\/p>\n<\/td>\n \n2,477\n<\/p>\n<\/td>\n \n4,045\n<\/p>\n<\/td>\n \n5,032\n<\/p>\n<\/td>\n \n8,293\n<\/p>\n<\/td>\n<\/tr>\n \nImpairment\n<\/p>\n<\/td>\n \n7,000\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n \n20,464\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n<\/tr>\n \nSettlement gain\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n \n(63,079)\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n<\/tr>\n \nRestructuring\n<\/p>\n<\/td>\n \n1,861\n<\/p>\n<\/td>\n \n1,136\n<\/p>\n<\/td>\n \n4,796\n<\/p>\n<\/td>\n \n9,705\n<\/p>\n<\/td>\n<\/tr>\n Operating income (loss)<\/b><\/p>\n<\/td>\n (5,850)<\/b><\/p>\n<\/td>\n (2,671)<\/b><\/p>\n<\/td>\n 52,670<\/b><\/p>\n<\/td>\n 2,879<\/b><\/p>\n<\/td>\n<\/tr>\n \nInterest expense\n<\/p>\n<\/td>\n \n7,545\n<\/p>\n<\/td>\n \n7,445\n<\/p>\n<\/td>\n \n15,371\n<\/p>\n<\/td>\n \n14,823\n<\/p>\n<\/td>\n<\/tr>\n \nNet financing expense related to employee benefit plans\n<\/p>\n<\/td>\n \n230\n<\/p>\n<\/td>\n \n609\n<\/p>\n<\/td>\n \n866\n<\/p>\n<\/td>\n \n1,219\n<\/p>\n<\/td>\n<\/tr>\n \nGain on disposal of property and equipment and assets held-for-sale\n<\/p>\n<\/td>\n \n(270)\n<\/p>\n<\/td>\n \n(13)\n<\/p>\n<\/td>\n \n(276)\n<\/p>\n<\/td>\n \n(16)\n<\/p>\n<\/td>\n<\/tr>\n \n(Gain) loss on derivative financial instruments\n<\/p>\n<\/td>\n \n(10,110)\n<\/p>\n<\/td>\n \n398\n<\/p>\n<\/td>\n \n(11,714)\n<\/p>\n<\/td>\n \n917\n<\/p>\n<\/td>\n<\/tr>\n \nForeign currency exchange (gains) losses\n<\/p>\n<\/td>\n \n(3,962)\n<\/p>\n<\/td>\n \n1,710\n<\/p>\n<\/td>\n \n(5,119)\n<\/p>\n<\/td>\n \n1,756\n<\/p>\n<\/td>\n<\/tr>\n Earnings (loss) before income taxes<\/b><\/p>\n<\/td>\n 717<\/b><\/p>\n<\/td>\n (12,820)<\/b><\/p>\n<\/td>\n 53,542<\/b><\/p>\n<\/td>\n (15,820)<\/b><\/p>\n<\/td>\n<\/tr>\n \nProvision for income taxes\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n –<\/b><\/p>\n<\/td>\n –<\/b><\/p>\n<\/td>\n<\/tr>\n Net earnings (loss) attributable to equity holders of the Company<\/b><\/p>\n<\/td>\n 717<\/b><\/p>\n<\/td>\n (12,820)<\/b><\/p>\n<\/td>\n 53,542<\/b><\/p>\n<\/td>\n (15,820)<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n Earnings (loss) per share attributable to equity holders of the Company<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \nBasic\n<\/p>\n<\/td>\n \n$0.01\n<\/p>\n<\/td>\n \n$(0.14)\n<\/p>\n<\/td>\n \n$0.57\n<\/p>\n<\/td>\n \n$(0.17)\n<\/p>\n<\/td>\n<\/tr>\n \nDiluted\n<\/p>\n<\/td>\n \n$0.01\n<\/p>\n<\/td>\n \n$(0.14)\n<\/p>\n<\/td>\n \n$0.54\n<\/p>\n<\/td>\n \n$(0.17)\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n Postmedia Network Canada Corp. \n(In thousands of Canadian dollars)\n<\/p>\n<\/td>\n As at <\/b><\/p>\n February 28, <\/b><\/p>\n 2021<\/b><\/p>\n<\/td>\n As at <\/b><\/p>\n August 31, <\/b><\/p>\n 2020<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n Assets<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n Current Assets<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \nCash\n<\/p>\n<\/td>\n \n52,837\n<\/p>\n<\/td>\n \n49,795\n<\/p>\n<\/td>\n<\/tr>\n \nRestricted cash\n<\/p>\n<\/td>\n \n538\n<\/p>\n<\/td>\n \n3,402\n<\/p>\n<\/td>\n<\/tr>\n \nTrade and other receivables\n<\/p>\n<\/td>\n \n55,407\n<\/p>\n<\/td>\n \n65,548\n<\/p>\n<\/td>\n<\/tr>\n \nAssets held-for-sale\n<\/p>\n<\/td>\n \n18,427\n<\/p>\n<\/td>\n \n28,229\n<\/p>\n<\/td>\n<\/tr>\n \nInventory\n<\/p>\n<\/td>\n \n3,108\n<\/p>\n<\/td>\n \n3,260\n<\/p>\n<\/td>\n<\/tr>\n \nPrepaid expenses and other assets\n<\/p>\n<\/td>\n \n7,921\n<\/p>\n<\/td>\n \n10,338\n<\/p>\n<\/td>\n<\/tr>\n Total current assets<\/b><\/p>\n<\/td>\n 138,238<\/b><\/p>\n<\/td>\n 160,572<\/b><\/p>\n<\/td>\n<\/tr>\n Non-Current Assets<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \nProperty and equipment\n<\/p>\n<\/td>\n \n80,789\n<\/p>\n<\/td>\n \n90,778\n<\/p>\n<\/td>\n<\/tr>\n \nRight of use assets\n<\/p>\n<\/td>\n \n37,279\n<\/p>\n<\/td>\n \n40,857\n<\/p>\n<\/td>\n<\/tr>\n \nDerivative financial instruments and other assets\n<\/p>\n<\/td>\n \n15,252\n<\/p>\n<\/td>\n \n3,338\n<\/p>\n<\/td>\n<\/tr>\n \nIntangible assets\n<\/p>\n<\/td>\n \n29,382\n<\/p>\n<\/td>\n \n41,334\n<\/p>\n<\/td>\n<\/tr>\n Total assets<\/b><\/p>\n<\/td>\n 300,940<\/b><\/p>\n<\/td>\n 336,879<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n Liabilities and Deficiency<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n Current Liabilities<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \nAccounts payable and accrued liabilities\n<\/p>\n<\/td>\n \n39,989\n<\/p>\n<\/td>\n \n48,041\n<\/p>\n<\/td>\n<\/tr>\n \nProvisions\n<\/p>\n<\/td>\n \n5,504\n<\/p>\n<\/td>\n \n6,856\n<\/p>\n<\/td>\n<\/tr>\n \nDeferred revenue\n<\/p>\n<\/td>\n \n22,938\n<\/p>\n<\/td>\n \n24,369\n<\/p>\n<\/td>\n<\/tr>\n \nCurrent portion of lease obligations\n<\/p>\n<\/td>\n \n7,827\n<\/p>\n<\/td>\n \n9,482\n<\/p>\n<\/td>\n<\/tr>\n \nCurrent portion of long-term debt\n<\/p>\n<\/td>\n \n16,968\n<\/p>\n<\/td>\n \n20,372\n<\/p>\n<\/td>\n<\/tr>\n Total current liabilities<\/b><\/p>\n<\/td>\n \n93,226<\/b><\/p>\n<\/td>\n 109,120<\/b><\/p>\n<\/td>\n<\/tr>\n Non-Current Liabilities<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \nLong-term debt\n<\/p>\n<\/td>\n \n246,086\n<\/p>\n<\/td>\n \n252,983\n<\/p>\n<\/td>\n<\/tr>\n \nEmployee benefit obligations and other liabilities\n<\/p>\n<\/td>\n \n46,940\n<\/p>\n<\/td>\n \n101,862\n<\/p>\n<\/td>\n<\/tr>\n \nLease obligations\n<\/p>\n<\/td>\n \n34,847\n<\/p>\n<\/td>\n \n37,136\n<\/p>\n<\/td>\n<\/tr>\n Total liabilities<\/b><\/p>\n<\/td>\n 421,099<\/b><\/p>\n<\/td>\n 501,101<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n Deficiency<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \nCapital stock\n<\/p>\n<\/td>\n \n810,861\n<\/p>\n<\/td>\n \n810,861\n<\/p>\n<\/td>\n<\/tr>\n \nContributed surplus\n<\/p>\n<\/td>\n \n16,307\n<\/p>\n<\/td>\n \n15,925\n<\/p>\n<\/td>\n<\/tr>\n \nDeficit\n<\/p>\n<\/td>\n \n(947,327)\n<\/p>\n<\/td>\n \n(991,008)\n<\/p>\n<\/td>\n<\/tr>\n Total deficiency<\/b><\/p>\n<\/td>\n (120,159)<\/b><\/p>\n<\/td>\n (164,222)<\/b><\/p>\n<\/td>\n<\/tr>\n Total liabilities and deficiency<\/b><\/p>\n<\/td>\n 300,940 <\/b><\/p>\n<\/td>\n 336,879 <\/b><\/p>\n<\/td>\n<\/tr>\n<\/table>\n Postmedia Network Canada Corp. \n(In thousands of Canadian dollars)\n<\/p>\n<\/td>\n For the three months ended <\/b><\/p>\n<\/td>\n For the six months ended <\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0\n<\/p>\n<\/td>\n February 29, 2020<\/b><\/p>\n<\/td>\n February 28, 2019<\/b><\/p>\n<\/td>\n February 29, 2020<\/b><\/p>\n<\/td>\n February 28, 2019<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n Cash Generated (Utilized) by:<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n Operating Activities<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \nNet earnings (loss) attributable to equity holders of the Company\n<\/p>\n<\/td>\n \n717\n<\/p>\n<\/td>\n \n(12,820)\n<\/p>\n<\/td>\n \n53,542\n<\/p>\n<\/td>\n \n(15,820)\n<\/p>\n<\/td>\n<\/tr>\n \nItems not affecting cash:\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \nDepreciation\n<\/p>\n<\/td>\n \n2,811\n<\/p>\n<\/td>\n \n2,926\n<\/p>\n<\/td>\n \n5,594\n<\/p>\n<\/td>\n \n5,937\n<\/p>\n<\/td>\n<\/tr>\n \nAmortization\n<\/p>\n<\/td>\n \n2,477\n<\/p>\n<\/td>\n \n4,045\n<\/p>\n<\/td>\n \n5,032\n<\/p>\n<\/td>\n \n8,293\n<\/p>\n<\/td>\n<\/tr>\n \nImpairment\n<\/p>\n<\/td>\n \n7,000\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n \n20,464\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n<\/tr>\n \n(Gain) loss on derivative financial instruments\n<\/p>\n<\/td>\n \n(10,110)\n<\/p>\n<\/td>\n \n398\n<\/p>\n<\/td>\n \n(11,714)\n<\/p>\n<\/td>\n \n917\n<\/p>\n<\/td>\n<\/tr>\n \nNon-cash interest\n<\/p>\n<\/td>\n \n5,699\n<\/p>\n<\/td>\n \n5,437\n<\/p>\n<\/td>\n \n11,554\n<\/p>\n<\/td>\n \n10,795\n<\/p>\n<\/td>\n<\/tr>\n \nGain on disposal of property and equipment and assets held-for-sale\n<\/p>\n<\/td>\n \n(270)\n<\/p>\n<\/td>\n \n(13)\n<\/p>\n<\/td>\n \n(276)\n<\/p>\n<\/td>\n \n(16)\n<\/p>\n<\/td>\n<\/tr>\n \nNon-cash foreign currency exchange (gains) losses\n<\/p>\n<\/td>\n \n(3,934)\n<\/p>\n<\/td>\n \n1,838\n<\/p>\n<\/td>\n \n(5,058)\n<\/p>\n<\/td>\n \n1,787\n<\/p>\n<\/td>\n<\/tr>\n \nShare-based compensation plans\n<\/p>\n<\/td>\n \n109\n<\/p>\n<\/td>\n \n149\n<\/p>\n<\/td>\n \n382\n<\/p>\n<\/td>\n \n371\n<\/p>\n<\/td>\n<\/tr>\n \nNet financing expense relating to employee benefit plans\n<\/p>\n<\/td>\n \n230\n<\/p>\n<\/td>\n \n609\n<\/p>\n<\/td>\n \n866\n<\/p>\n<\/td>\n \n1,219\n<\/p>\n<\/td>\n<\/tr>\n \nNon-cash settlement gain\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n \n(63,079)\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n<\/tr>\n \nEmployee benefit plan funding in excess of compensation expense\n<\/p>\n<\/td>\n \n(780)\n<\/p>\n<\/td>\n \n(663)\n<\/p>\n<\/td>\n \n(1,318)\n<\/p>\n<\/td>\n \n(1,115)\n<\/p>\n<\/td>\n<\/tr>\n \nNet change in non-cash operating accounts\n<\/p>\n<\/td>\n \n4,145\n<\/p>\n<\/td>\n \n1,874\n<\/p>\n<\/td>\n \n378\n<\/p>\n<\/td>\n \n(5,840)\n<\/p>\n<\/td>\n<\/tr>\n Cash flows from operating activities<\/b><\/p>\n<\/td>\n 8,094<\/b><\/p>\n<\/td>\n 3,780<\/b><\/p>\n<\/td>\n 16,367<\/b><\/p>\n<\/td>\n 6,528<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n Investing Activities<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \nNet proceeds from the sale of property and equipment and assets held-for-sale\n<\/p>\n<\/td>\n \n617\n<\/p>\n<\/td>\n \n63\n<\/p>\n<\/td>\n \n5,325\n<\/p>\n<\/td>\n \n96\n<\/p>\n<\/td>\n<\/tr>\n \nPurchases of property and equipment\n<\/p>\n<\/td>\n \n(577)\n<\/p>\n<\/td>\n \n(794)\n<\/p>\n<\/td>\n \n(969)\n<\/p>\n<\/td>\n \n(1,916)\n<\/p>\n<\/td>\n<\/tr>\n \nPurchases of intangible assets\n<\/p>\n<\/td>\n \n(23)\n<\/p>\n<\/td>\n \n(104)\n<\/p>\n<\/td>\n \n(38)\n<\/p>\n<\/td>\n \n(300)\n<\/p>\n<\/td>\n<\/tr>\n Cash flows from (used in) investing activities<\/b><\/p>\n<\/td>\n 17<\/b><\/p>\n<\/td>\n (835)<\/b><\/p>\n<\/td>\n 4,318<\/b><\/p>\n<\/td>\n (2,120)<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n Financing activities<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \nNet proceeds from issuance of long-term debt\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n \n95,235\n<\/p>\n<\/td>\n<\/tr>\n \nRepayment of long-term debt\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n \n(15,372)\n<\/p>\n<\/td>\n \n(94,761)\n<\/p>\n<\/td>\n<\/tr>\n \nRestricted cash\n<\/p>\n<\/td>\n \n(538)\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n \n2,864\n<\/p>\n<\/td>\n \n13\n<\/p>\n<\/td>\n<\/tr>\n \nDebt issuance costs\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n \n-)\n<\/p>\n<\/td>\n \n(1,710)\n<\/p>\n<\/td>\n<\/tr>\n \nLease payments\n<\/p>\n<\/td>\n \n(2,488)\n<\/p>\n<\/td>\n \n(1,024)\n<\/p>\n<\/td>\n \n(5,135)\n<\/p>\n<\/td>\n \n(3,182)\n<\/p>\n<\/td>\n<\/tr>\n Cash flow used in financing activities<\/b><\/p>\n<\/td>\n (3,026)<\/b><\/p>\n<\/td>\n (1,024)<\/b><\/p>\n<\/td>\n (17,643)<\/b><\/p>\n<\/td>\n (4,405)<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \nNet change in cash for the period\n<\/p>\n<\/td>\n \n5,085\n<\/p>\n<\/td>\n \n1,921\n<\/p>\n<\/td>\n \n3,042\n<\/p>\n<\/td>\n \n3\n<\/p>\n<\/td>\n<\/tr>\n \nCash at beginning of period\n<\/p>\n<\/td>\n \n47,752\n<\/p>\n<\/td>\n \n13,546\n<\/p>\n<\/td>\n \n49,795\n<\/p>\n<\/td>\n \n15,464\n<\/p>\n<\/td>\n<\/tr>\n Cash at end of period<\/b><\/p>\n<\/td>\n 52,837<\/b><\/p>\n<\/td>\n 15,467<\/b><\/p>\n<\/td>\n 52,837<\/b><\/p>\n<\/td>\n 15,467<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n Supplemental disclosure of operating cash flows<\/b><\/p>\n<\/td>\n \nInterest paid\n<\/p>\n<\/td>\n \n141\n<\/p>\n<\/td>\n \n17\n<\/p>\n<\/td>\n \n4,303\n<\/p>\n<\/td>\n \n3,965\n<\/p>\n<\/td>\n<\/tr>\n \nIncome taxes paid\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n \n\u00a0–\n<\/p>\n<\/td>\n<\/tr>\n 1<\/sup> Operating expenses excluding depreciation, amortization and restructuring as adjusted for the impact of the Canada Emergency Wage Subsidy (\u201cCEWS\u201d).<\/p>\n View source version on businesswire.com: <\/span>https:\/\/www.businesswire.com\/news\/home\/20210408005705\/en\/<\/a><\/span><\/p>\n Media Contact Investor Contact KEYWORDS:<\/b> North America Canada<\/p>\n INDUSTRY KEYWORDS:<\/b> Marketing Advertising Communications Other Communications Publishing Public Relations\/Investor Relations<\/p>\n\n
\n
Consolidated Statements of Operations
\n
(UNAUDITED)<\/b><\/p>\n\n
\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n
\n
Consolidated Statements of Financial Position
\n
(UNAUDITED)<\/b><\/p>\n\n
\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n
\n
Consolidated Statements of Cash Flows
\n
(UNAUDITED)<\/b><\/p>\n\n
\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n<\/table>\n
\n<\/p>\n
\n<\/b>
Phyllise Gelfand
\n
Vice President, Communications
\n
(647) 273-9287
\n
pgelfand@postmedia.com <\/a><\/p>\n
\n<\/b>
Brian Bidulka
\n
Executive Vice President and Chief Financial Officer
\n
(416) 383-2325
\n
bbidulka@postmedia.com<\/a><\/p>\n
![\"Logo\"](\"https:\/\/mms.businesswire.com\/media\/20210408005705\/en\/419718\/3\/Postmedia_lock-up_RGB.jpg\")
<\/td>\n<\/tr>\n