FP Newspapers Inc. Reports Third Quarter 2014 Results
(firmenpresse) - WINNIPEG, MANITOBA -- (Marketwired) -- 11/13/14 -- FP Newspapers Inc. ("FPI") (TSX: FP) announces financial results for the quarter ended September 30, 2014. FPI is the successor to the business of the FP Newspapers Income Fund and owns securities entitling it to 49% of the distributable cash of FP Canadian Newspapers Limited Partnership ("FPLP").
Third quarter operating results of FPI
FPI had net earnings of $0.7 million, or $0.107 per share, during the three months ended September 30, 2014, compared to net earnings of $0.9 million, or $0.125 per share in the same quarter last year.
Third quarter operating results of FPLP
FPLP's revenue for the three months ended September 30 2014 was $23.6 million, a decrease of $1.6 million or 6.2% from the same three months in the prior year. FPLP's print advertising revenues for the three months ended September 2014 were $14.7 million, a $1.7 million or 10.6% decrease compared to the same period last year. FPLP's largest advertising revenue category, display advertising including colour, was $8.9 million, a decrease of $1.5 million or 14.2% from the same period in the prior year, primarily due to decreased spending in the national automotive and telecommunications categories. Classified advertising revenues for the third quarter decreased by $0.1 million or 4.0% compared to the same period last year, primarily due to decreased spending in automotive, real estate and employment categories, partly offset by increased obituary category revenues. Flyer distribution revenues decreased by $0.2 million or 4.6% compared to the third quarter in 2013, primarily due to a decrease in flyer volumes.
Print circulation revenues for the three months ended September 30, 2014 were unchanged from the third quarter of 2013, with lower unit sales offsetting increased revenue from higher subscription and single copy rates. Digital revenues for the third quarter increased by $0.1 million or 17.4%, primarily due to an increase in on-line web ads together with mobile product ad revenues.
Operating expenses for the three months ended September 30, 2014 were $21.0 million, a decrease of $1.2 million or 5.5% compared to the same quarter last year. Employee compensation costs for the third quarter decreased by $0.7 million or 6.4% from the same period in the prior year, primarily due to a reduction in the number of employees. Newsprint expense for FPLP's own publications for the third quarter decreased by $0.1 million or 6.9% compared to the same period in the prior year, primarily due to lower volumes resulting from fewer circulation copies and a slightly lower average rate per metric tonne. Newsprint expense for commercial printing for the three months ended September 30, 2014 remained at relatively the same level compared to last year. Other expenses decreased by $0.4 million or 8.8% compared to the same quarter last year, primarily due to lower contracted inserting costs from consolidating our inserting in-house. Delivery costs decreased by $0.1 million or 3.2% primarily resulting from fewer products delivered.
EBITDA(1) for the three months ended September 30, 2014 was $3.7 million compared to $4.0 million for the same period last year, a decrease of 7.1%. EBITDA(1) margin for the three months ending September 30, 2014 was 15.6% compared to 15.8% in the same period last year.
FPLP's net earnings were $2.1 million for the three months ended September 30, 2014, compared to $2.5 million for the same period last year.
Distributable cash attributable to FPI(2) for the three months ended September 30, 2014 was $1.0 million or $0.140 per share, compared to $0.5 million or $0.077 per share for the same period last year.
Dividends
FPI declared dividends to shareholders of $1.0 million or $0.150 per share for the three months ended September 30, 2014, unchanged from the same period in 2013.
Outlook
Advertising revenue declines similar to levels we experienced during the third quarter are being experienced early into the fourth quarter. An increased level of year-over-year expense reductions that we started to see in the third quarter from reductions in employee levels will continue throughout the fourth quarter. We are not anticipating newsprint price changes in the fourth quarter and if this is the case, average newsprint prices will be approximately 4 percent lower than the fourth quarter last year.
All business units continue to review all operational areas to look for ways to run the businesses more efficiently in light of the continued declining in advertising revenues. Exploring ways technology can help streamline processes is constantly being carried out by operating business leaders together with internal and external technology experts.
Digital department, staff together with leaders of other operational departments, continue to work on the planning and set-up work required to launch the new Winnipeg Free Press paid web and mobile platforms. The new subscriber based digital products are planned to be launched during the first half of next year.
Additional Information
Additional information including financial statements and management's discussion and analysis can be found on the Company's website at or on SEDAR at .
Caution Regarding Forward-looking Statements
Certain statements in this news release may constitute forward-looking statements within the meaning of applicable securities laws. All statements other than statements of historical fact are forward-looking statements. These statements include but are not limited to statements regarding management's intent, belief or current expectations with respect to market and general economic conditions, future costs and operating performance. Generally, but not always, forward-looking statements will be indicated by words such as "may", "will", "intend", "anticipate", "expect", "believe", "plan", "is budgeting for" or similar terminology.
Forward-looking statements are subject to known and unknown risks and uncertainties that may cause the actual results, performance or achievements of FPI or FPLP, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the current general economic uncertainty, FPLP's ability to effectively manage growth and maintain its profitability, FPLP's ability to operate in a highly competitive industry, FPLP's ability to compete with other forms of media, FPLP's ability to attract advertisers, FPLP's reliance upon key personnel, FPLP's relatively high fixed costs, FPLP's dependence upon particular advertising customer segments, indebtedness incurred in making acquisitions, the availability of financing for capital improvements, the availability of an extension on refinancing of FPLP's term loan facilities, costs related to capital expenditures, cyclical and seasonal variations in FPLP's revenues, the risk of acts of terrorism, the cost of newsprint, the potential for labour disruptions, the risk of equipment failure, and the effect of Canadian tax laws. Additional information about these and other factors is discussed under "Risk Factors" in FPI's Annual Information Form dated March 13, 2014, which is available at .
In addition, although the forward-looking statements contained in this news release are based upon assumptions that management of FPI and FPLP believe to be reasonable, such assumptions may prove to be incorrect.
Forward-looking statements speak only as of the date hereof and, except as required by law, FPI and FPLP assume no obligation to update or revise them to reflect new events or circumstances. Because forward-looking statements are inherently uncertain, readers should not place undue reliance on them.
About FPI
FPI owns securities entitling it to 49% of the distributable cash of FP Canadian Newspapers Limited Partnership ("FPLP"). FPLP owns the Winnipeg Free Press, the Brandon Sun, and their related businesses, as well as the Canstar Community News division, the publisher of six community newspapers in the Winnipeg region, The Carillon in Steinbach with its related commercial printing operations and the Carberry News Express weekly publication. The Winnipeg Free Press publishes six days a week for delivery to subscribers and single copy sales, serving Winnipeg and Manitoba with an average Monday through Saturday circulation of approximately 109,700 copies. On Sundays the Winnipeg Free Press publishes a newspaper sold through single-copy retail outlets and vending boxes. The Brandon Sun publishes six days a week, serving the region with an average circulation of approximately 11,900 copies. Canstar Community News publishes weekly with an average circulation of approximately 200,000 copies. The businesses employ approximately 510 full-time equivalent people in Winnipeg, Brandon, Steinbach and Carberry, Manitoba.
Conference Call
FPI invites you to participate in a conference call on Friday, November 14, 2014 at 12:00 p.m. Eastern (11:00 a.m. Central) to discuss the third quarter results.
The dial-in number is 416-340-2218, or dial toll free at 866-225-0198. To ensure your participation, please dial in five minutes before the start of the conference call. Management's presentation will be followed by a question and answer period.
For those unable to participate, the call will be available to listeners upon completion of the call until December 4, 2014. To hear the replay, dial 905-694-9451 or dial toll free at 800-408-3053. The replay code is 9773463.
Non-IFRS financial measures
(1) EBITDA
FPLP believes that in addition to net earnings as reported on FPLP's interim condensed consolidated statements of earnings, EBITDA is a useful supplemental measure as it is a measure used by many of FPLP's unitholders, creditors and analysts as a proxy for the amount of cash generated by FPLP's operating activities and is not a recognized measure of financial performance under IFRS. Investors are cautioned that EBITDA should not be construed as an alternative to net earnings determined in accordance with IFRS as an indicator of FPLP`s performance. FPLP's method of calculating EBITDA may differ from other issuers and, accordingly, EBITDA may not be comparable to measures used by other issuers. FPLP's method of calculating EBITDA is detailed in the Management's Discussion and Analysis for the quarter ended September 30, 2014 on FPI's website or on SEDAR at .
(2) Distributable Cash Attributable to FPI
FPI believes that in addition to the disclosure of cash flow from operations, distributable cash attributable to FPI is an important supplemental measure of cash flow because it provides investors with an indication of the amount of cash available for distribution to Shareholders and because such calculations are required by the terms of the partnership agreement governing FPLP. Distributable cash attributable to FPI is not a defined term under IFRS, and it should not be construed as an alternative to using net earnings or the statements of cash flows as measures of profitability and cash flow. Readers are cautioned that distributable cash as calculated by FPI may not be comparable to similar measures presented by other issuers. FPI uses this measure as a factor to determine whether to adjust its monthly dividends to Shareholders. FPLP's method of calculating distributable cash attributable to FPI is detailed in the Management's Discussion and Analysis for the quarter ended September 30, 2014 on FPI's website or on SEDAR at .
Contacts:
FP Newspapers Inc.
Daniel Koshowski
CFO
(204) 697-7425
(204) 632-0281 (FAX)
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Datum: 14.11.2014 - 00:38 Uhr
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