Postmedia reviewing its options amid $225M Q2 loss
Biggest drop in revenue during the latest quarter was in automotive advertising
Amid what Postmedia Network Canada Corp. CEO Paul Godfrey called "an unrelentingly challenging environment," the company said Thursday it has set up a special board committee to oversee a review of its strategic options.
Postmedia said it is reviewing its "alternatives to improve our operations, capital structure and liquidity."
The struggling media company said those options could include "non-core asset sales, cost reductions, revenue enhancements and initiatives, refinancing or repayment of long-term debt and the issuance of new debt or equity."
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The announcement came as Postmedia reported a second-quarter net loss of $225.1 million, mainly due to an $187-million impairment charge. In the same quarter of last year, the company had a loss of $58.2 million.
Revenues for the most recent quarter were $209.1 million, up from $145.4 million a year earlier, thanks to the company's acquisition of Sun Media from Quebecor in 2015.
Factoring out the acquisition of Sun Media, Postmedia's revenue was down more than 13 per cent year over year. Print advertising revenue was down $13.8 million, the company said.
Chief financial officer Doug Lamb told analysts during a conference call that the biggest drop in revenue during the latest quarter was in automotive advertising, which accounts for about 31 per cent of the company's print ad decline.
"There's no doubt that we continue to see similar challenges as our industry competitors, both traditional and new players," Godfrey said during the call.
The company announced 90 job losses in January as it merged newsrooms in some cities. The business also said its its aiming to cut its costs by $80 million by the middle of 2017.
Postmedia's long-term debt stands at nearly $650 million, of which more than $300 million matures next year.
Postmedia also said Ted Lodge has resigned from its board of directors, effective immediately. Lodge is a partner at GoldenTree Asset Management LP, which owns 52 per cent of the outstanding variable voting shares, and some of its notes.
"Ted informed me that he was resigning from the board as GoldenTree has indicated that it wants to focus on GoldenTree's investment in Postmedia," said Rod Phillips, the chair of Postmedia's board.
GoldenTree has been looking to unload its stake in Postmedia, which has seen its stock trading around six to seven cents per share.
The company said it doesn't currently intend to fill the vacany on its board.
During a conference call with analysts, Godfrey said the company remains focused on improving its operations.
With files from The Canadian Press