TORONTO, ON--(Marketwired - January 15, 2016) - Torstar Corporation (TSX:TS.B) today announced that the Toronto Star has entered into an agreement with Transcontinental Printing to print the Toronto Star, Canada's largest daily newspaper. The agreement is for a term of five years with the possibility to extend, and services are expected to commence in July 2016.
This decision was made following a thorough review of printing options for the newspaper, and will result in the closure of the Toronto Star's existing printing plant in Vaughan, affecting about 220 full-time and 65 part-time staff. The Toronto Star has commenced discussions with unions representing the affected employees to develop a transition plan.
Torstar expects that the combined severance provision and various other transition costs associated with this decision, which will be recorded as a restructuring charge in 2016, will be in the range of approximately $22 million. The annualized operating savings are expected to be in the range of approximately $10 million once the printing has been fully transitioned to Transcontinental. Also in connection with this decision, Torstar will commence exploration of the sale of the existing printing facility and land in Vaughan. This property includes approximately 43 acres of land, of which roughly half is subject to a hydro easement, and a 675,000 square foot printing facility.
Delivery of the Toronto Star will continue under its current arrangements.
"This decision represents another important step forward in the evolution of the Toronto Star," said David Holland, President and CEO of Torstar Corporation. "After consideration of many factors, we feel we are making this move at the right time with terms that are attractive."
"This move will allow us to focus our efforts increasingly on creating great content and engaging audiences across many platforms while at the same time reducing costs and improving the production quality of the newspaper," said John Cruickshank, Publisher of the Toronto Star and President of Star Media Group. "Transcontinental Printing has newer, more modern presses and this decision will result in our very loyal print readers and subscribers receiving a high-quality print product with enhanced reproduction."
"This is an important step for the Toronto Star, but unfortunately it also means we will be saying goodbye to our long-time Vaughan printing plant employees," Cruickshank said.
Transcontinental is Canada's largest printer and the owner of community newspapers in Quebec, Ontario, Saskatchewan and the Atlantic provinces. Transcontinental also prints other Canadian daily newspapers, including the Globe and Mail, the Montreal Gazette and the Vancouver Sun as well as the San Francisco Chronicle in the United States under contract.
About Torstar Corporation
Torstar Corporation is a broadly based media company listed on the Toronto Stock Exchange (TSX:TS.B). Its businesses include the Star Media Group led by the Toronto Star, Canada's largest daily newspaper and Free Daily News Group Inc., which publishes the English-language Metro newspapers in several Canadian cities; Metroland Media Group, publisher of community and daily newspapers in Ontario; and also include digital properties including thestar.com, Toronto Star Touch, Workopolis, wagjag.com, toronto.com, save.ca and eyeReturn Marketing Inc. It also holds a majority interest in VerticalScope, a North American vertically-focused digital media company.
This press release contains forward-looking statements related to the outsourcing of the Toronto Star's printing operations and the closure of the Toronto Star's Vaughan printing plant including, among others, forward looking statements that reflect management's expectations regarding the date of commencement of the outsourced services, restructuring, severance and transition costs, operating savings and production quality. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "believe", "expect" and similar expressions. All such statements are made pursuant to the "safe harbour" provisions of applicable Canadian securities legislation. These statements reflect current expectations of management regarding future events and operating performance, and speak only as of the date of this release. In addition, forward-looking statements are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes.
By their very nature, forward-looking statements require management to make assumptions and are subject to inherent risks and uncertainties. There is a significant risk that predictions, forecasts, conclusions or projections will not prove to be accurate, that management's assumptions may not be accurate and that actual results, performance or achievements may differ significantly from such predictions, forecasts, conclusions or projections expressed or implied by such forward-looking statements. Torstar cautions readers not to place undue reliance on the forward-looking statements in this press release as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, outlooks, expectations, goals, estimates or intentions expressed in the forward-looking statements.
These factors include, but are not limited to the risk that the commencement of the outsourced services may be delayed, unanticipated costs associated with the outsourced printing services or the closure of the Vaughan printing plant, labour disruption and reliance on Transcontinental Printing's printing operations. In addition, a number of assumptions were applied in making the forward-looking statements set forth in this press release. Some of the key assumptions include, without limitation, assumptions regarding expected future liabilities, costs and savings. There is a risk that some or all of these assumptions may prove to be incorrect.
When relying on our forward-looking statements to make decisions with respect to Torstar and its securities, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Torstar does not intend, and disclaims any obligation, to update any forward-looking statements, whether written or oral, or whether as a result of new information or otherwise, except as may be required by law.
For more information, please see the discussion of risks affecting Torstar and its businesses in Torstar's 2014 Management's Discussion & Analysis which has been filed on www.sedar.com and is available on Torstar's corporate website www.torstar.com.