Postmedia Reports Second Quarter Results

TORONTO--(BUSINESS WIRE)-- Postmedia Network Canada Corp. (“Postmedia” or the “Company”) today released financial information for the three and six months ended February 28, 2026.

“While we continue to navigate ongoing pressures in advertising and the broader media environment, growth in parcel and content revenue helped offset some of these declines in the quarter,” said Andrew MacLeod, President and Chief Executive Officer of Postmedia. “At the same time, optimized cost management initiatives continue to improve our operating profile year over year.”

“Looking ahead, we are encouraged by the opportunities created through the recent acquisition of accelerate360 Canada and by our continued investment in digital transformation, highlighted most recently by the launch of the new Montreal Gazette website. Together, these efforts strengthen our connection with audiences and customers, support our diversified revenue strategy, and position the company for growth and sustainable long-term performance.”

Second Quarter Operating Results

Revenue for the quarter was $110.0 million as compared to $110.8 million in the same period in the prior year, representing a decrease of $0.8 million (0.8%). The revenue decrease was primarily due to decreases in advertising revenue of $4.8 million (9.6%) and circulation revenue of $2.5 million (7.2%), partially offset by increases in parcel revenue of $3.5 million (25.4%) other revenue of $3.0 million (24.9%).

Total operating expenses excluding depreciation, amortization, impairment and restructuring and other decreased $1.8 million, or 1.8%, for the quarter ended February 28, 2026, relative to the same period in the prior year. The decrease relates to decreases in compensation, newsprint and production expense, partially offset by an increase in distribution expense.

Operating income before depreciation, amortization and restructuring and other in the quarter ended February 28, 2026 was $10.7 million, an increase of $0.9 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 and other, partially offset by a decrease in total revenue.

Net income in the quarter ended February 28, 2026 was $3.5 million, as compared to a net loss of $16.0 million in the same period in the prior year. The increase in net income was primarily the result of an increase in operating income before depreciation, amortization, impairment and restructuring and other, an increase in foreign currency exchange gains and a decrease in losses on derivative financial instruments, partially offset by an increase in interest expense and a decrease in gain on disposal of right of use assets and assets held-for-sale.

Year to Date Operating Results

Revenue for the six months ended February 28, 2026 was $221.8 million as compared to $221.1 million in the same period in the prior year, representing a increase of $0.7 million (0.3%). The revenue increase was primarily due to increases in parcel revenue of $7.0 million (26.2%) and other revenue of $3.3 million (19.7%), partially offset by decreases in advertising revenue of $4.9 million (4.6%) and circulation revenue of $4.7 million (6.7%).

Total operating expenses excluding depreciation, amortization, impairment and restructuring and other increased $0.2 million, or 0.1%, for the six months ended February 28, 2026, relative to the same period in the prior year. The increase relates to increases in distribution and production expenses, partially offset by a decrease in compensation, newsprint, and other operating expenses.

Operating income before depreciation, amortization, impairment and restructuring and other for the six months ended February 28, 2026 was $15.8 million, an increase of $0.5 million relative to the same period in the prior year. The increase in operating income before depreciation, amortization, impairment and restructuring and other is due to an increase in total revenue, partially offset by an increase in operating expenses excluding depreciation, amortization, impairment and restructuring and other.

Net loss in the six months ended February 28, 2026 was $16.9 million, as compared to a net loss of $40.5 million in the same period in the prior year. The decrease in net loss was primarily the result of an increase in operating income before depreciation, amortization, impairment and restructuring and other, an increase in foreign currency exchange gains and a decrease in restructuring and other expenses, partially offset by an increase in losses on disposal of right of use assets and assets held-for-sale, an increase in interest expense, and an increase in losses on derivative financial instruments.

Additional Information

Additional information, including financial statements and management’s discussion and analysis can be found on the Company’s website at www.postmedia.com or on SEDAR+ at www.sedarplus.ca.

Note: All dollar amounts are expressed in Canadian dollars unless otherwise specified.

About Postmedia Network Canada Corp.

Postmedia Network Canada Corp. (TSX:PNC.A, PNC.B) is the holding company that owns Postmedia Network Inc., a Canadian newsmedia company representing more than 130 brands across multiple print and digital 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. Our expertise in home delivery and expanding distribution network powers Postmedia Parcel Services. For more information, visit www.postmedia.com, www.postmediasolutions.com and www.postmediaparcelservices.com.

Forward-Looking Information

This news release may include information that is “forward-looking information” under applicable Canadian securities laws. The Company has tried, where possible, to identify such information and statements by using words such as “believe,” “expect,” “intend,” “estimate,” “anticipate,” “may,” “will,” “could,” “would,” “should” 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 the implementation and results of the Company’s transformation initiatives, continued benefits of historical results into future periods, the realization of anticipated cost savings, 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’s 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.

For a complete list of our risk factors please refer to the section entitled “Risk Factors” contained in our annual management’s discussion and analysis for the years ended August 31, 2025 and 2024. 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.


Postmedia Network Canada Corp. Consolidated Statements of Operations (UNAUDITED)

(In thousands of Canadian dollars, except per share amounts)	For the three months ended	For the six months ended
	February 28, 2026	February 28, 2025	February 28, 2026	February 28, 2025

Revenues
Advertising	45,219	50,043	101,656	106,516
Circulation	32,534	35,050	66,254	70,986
Parcel services	17,245	13,756	33,951	26,905
Other	14,954	11,971	19,966	16,683
Total revenues	109,952	110,820	221,827	221,090
Expenses
Compensation	32,451	34,188	68,458	69,796
Newsprint	2,359	2,512	4,901	5,384
Distribution	37,885	37,003	77,012	74,517
Production	9,675	10,393	21,594	21,032
Other operating	16,873	16,936	34,058	35,103
Operating income before depreciation, amortization, impairment and restructuring and other	10,709	9,788	15,804	15,258
Depreciation	3,122	3,221	6,250	6,640
Amortization	570	554	1,130	1,110
Impairment	1,567	1,501	1,755	1,501
Restructuring and other	1,275	1,475	2,330	3,501
Operating income	4,175	3,037	4,339	2,506
Interest expense	11,156	10,484	22,614	21,227
Foreign currency exchange (gains) losses	(10,728)	10,993	(2,527)	23,907
Net financing expense relating to employee benefit plans	263	288	525	577
(Gain) loss on disposal of right of use assets and assets held for sale	(87)	(3,076)	23	(2,826)
Loss on derivative financial instruments and financial assets at fair value through profit and loss	98	335	610	93
Net income (loss) after income taxes	3,473	(15,987)	(16,906)	(40,472)


Earning (loss) per share
Basic and diluted	$0.04	$(0.16)	$(0.17)	$(0.41)


Postmedia Network Canada Corp. Consolidated Statements of Financial Position (UNAUDITED)

(In thousands of Canadian dollars)	As at February 28, 2026	As at August 31, 2025

Assets
Current Assets
Cash	5,054	3,278
Trade and other receivables	57,596	59,169
Assets held-for-sale	4,263	-
Inventory	1,293	1,615
Prepaid expenses and other assets	7,215	6,449
Total current assets	75,421	70,511
Non-Current Assets
Property and equipment	13,764	22,986
Intangible assets	16,465	15,313
Right of use assets	13,933	14,543
Derivative financial instruments and other assets	3,873	4,672
Total assets	123,456	128,025

Liabilities and Deficiency
Current Liabilities
Accounts payable and accrued liabilities	49,815	53,312
Provisions	971	1,253
Contract Liabilities	14,922	16,127
Current portion of lease obligations	7,666	7,742
Total current liabilities	73,374	78,434
Non-Current Liabilities
Long-term debt	404,774	388,964
Employee benefit obligations	29,205	30,084
Lease obligations	11,065	12,775
Other long-term liabilities	19,075	16,753
Total liabilities	537,493	527,010

Deficiency
Capital stock	820,357	820,357
Contributed surplus	22,316	19,960
Deficit	(1,256,710)	(1,239,302)
Total deficiency	(414,037)	(398,985)
Total liabilities and deficiency	123,456	128,025


Postmedia Network Canada Corp. Consolidated Statements of Cash Flows (UNAUDITED)

(In thousands of Canadian dollars)	For the three months ended	For the year ended
	February 28, 2026	February 28, 2025	February 28, 2026	February 28, 2025
Cash Generated (Utilized) by:
Operating Activities
Net income (loss) after income taxes	3,473	(15,987)	(16,906)	(40,472)
Items not affecting cash:
Depreciation	3,122	2,088	6,250	4,321
Amortization	570	1,687	1,130	3,429
Impairment	1,567	1,501	1,755	1,501
Loss on derivative financial instruments and financial assets at fair value through profit and loss	98	335	610	93
Non-cash interest	9,965	9,944	20,900	19,766
(Gain) loss on disposal of right of use assets and assets held for sale	(87)	(3,076)	23	(2,826)
Non-cash foreign currency exchange (gains) losses	(10,425)	11,157	(2,667)	24,107
Share-based compensation plans	(21)	82	430	250
Net financing expense relating to employee benefit plans	263	288	525	577
Employee benefit plan funding in excess of compensation expense	(715)	(796)	(1,361)	(1,557)
Net change in non-cash operating accounts	129	(4,317)	1,728	3,207
Cash flows from operating activities	7,939	2,906	12,417	12,396

Investing Activities
Net proceeds from the sale of assets held-for-sale and other assets	-	5,630	-	5,630
Purchases of property and equipment	(316)	(219)	(558)	(346)
Purchases of intangible assets	(1,934)	(747)	(2,282)	(1,123)
Cash flows (used in) from investing activities	(2,250)	4,664	(2,840)	4,161

Financing activities
Advances from asset-based lending facility	4,327	2,365	6,432	3,741
Repayment of asset-based lending facility	(6,891)	(3,152)	(8,313)	(3,152)
Repayment of short term promissory note	-	-	-	(5,000)
Repayment of first lien senior secured notes	-	(4,930)	-	(4,930)
Repayment of contingent consideration	(1,700)	(672)	(2,620)	(672)
Lease payments	(1,701)	(1,515)	(3,300)	(3,129)
Cash flow used in from financing activities	(5,965)	(7,904)	(7,801)	(13,142)
Net change in cash for the period	(276)	(334)	1,776	3,415
Cash at beginning of period	5,330	6,203	3,278	2,454
Cash at end of period	5,054	5,869	5,054	5,869
Supplemental disclosure of operating cash flows
Interest paid	1,191	539	1,714	1,461