Glacier Reports First Quarter Results
VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 13, 2014) -
Glacier Media Inc. ("Glacier" or the "Company") (TSX:GVC) reported
cash flow, earnings and revenue for the quarter ended March 31,
2014.
Summary Results
Results are reported
below on an adjusted basis to include the Company's share of the
results of its joint ventures. Management bases its operating
decisions and performance evaluation utilizing these results.
(thousands of dollars) |
For the three months ended March 31, |
except share and per share amounts |
2014 (1)(5) |
2013 (1)(5) |
Revenue |
$76,895 |
$76,840 |
EBITDA (1) |
$8,927 |
$7,889 |
EBITDA margin (1) |
11.6% |
10.3% |
EBITDA per share (1) |
$0.10 |
$0.09 |
Net income attributable to common shareholders before non-recurring
items (1)(2)(3) |
$1,941 |
$540 |
Net income attributable to common shareholders per share before
non-recurring items (1)(2)(3) |
$0.02 |
$0.01 |
Cash flow from operations (1)(2)(3) |
$9,184 |
$8,261 |
Cash flow from operations per share (1)(2)(3) |
$0.10 |
$0.09 |
Debt net of cash outstanding before deferred financing charges |
$101,739 |
$120,907 |
Dividends paid (4) |
$1,838 |
- |
Dividends paid per share (4) |
$0.02 |
- |
Weighted average shares outstanding, net |
89,083,105 |
89,243,102 |
Notes: |
(1) Refer to "Non-IFRS Measures" section of the
financial statements. |
(2) 2014 excludes $0.8 million of restructuring
expense, $0.1 million of transaction and transition costs and $0.5
million of other income. |
(3) For non-recurring items excluded in the prior
period, refer to previously reported financial statements. |
(4) Dividends in 2014 and 2013 total $0.08 per share,
paid quarterly. Dividends in 2013 were declared in March and paid
in April. |
(5) These results are presented on an adjusted basis to
include the Company's share of the results of its joint ventures,
as management bases its operating decisions and performance
evaluation on the adjusted results. |
Key Financial
Highlights (1)
- For the quarter ended March 31, 2014, Glacier's adjusted
consolidated revenues increased $0.1 million to $76.9 million from
$76.8 million for the same quarter in the prior year;
- For the period ended March 31, 2014, adjusted consolidated
earnings before interest taxes, depreciation and amortization
(EBITDA) increased 13.2% to $8.9 million from $7.9 million for the
same period in the prior year;
- Adjusted cash flow from operations (before changes in non-cash
operating accounts and non-recurring items) increased 11.2% over
the same period in the prior year to $9.2 million;
- Adjusted net income attributable to common shareholders before
non-recurring items was $1.9 million for the quarter, compared to
$0.5 million for the same quarter in the prior year;
- Adjusted EBITDA per share increased 11.1% to $0.10 per share
from $0.09 per share for the quarter compared to the same quarter
in the prior year and net income attributable to common
shareholders before non-recurring items per share increased to
$0.02 per share from $0.01 per share for the same quarter in the
prior year;
- Adjusted cash flow from operations (before changes in non-cash
operating accounts and non-recurring items) increased to $0.10 per
share from $0.09 per for the same quarter in the prior year;
and
- Continued progress was made in reducing leverage, with
consolidated debt net of cash outstanding before deferred financing
charges and other expenses being lowered to 2.3x trailing 12 months
EBITDA as at March 31, 2014.
Note:
(1) These results
include non-IFRS measures such as EBITDA, cash flow from operations
and net income attributable to common shareholders before
non-recurring items, and are presented on a basis that includes the
Company's share of revenue, expenses, assets and liabilities from
its joint venture operations, which reflects the basis on which
management makes its operating decisions and performance
evaluation. Prior to January 1, 2013 the Company consolidated the
financial results of its joint ventures on a proportionate basis in
accordance with then applicable accounting standards. Since January
1, 2013, the Company has been required to report the financial
results of its joint ventures using equity accounting under the new
IFRS accounting standards.
The adjusted results
are not generally accepted measures of financial performance under
IFRS. The Company's method of calculating these financial
performance measures may differ from other companies and
accordingly, they may not be comparable to measures used by other
companies. Please refer to the MD&A for a reconciliation of
these non-IFRS measures and adjusted results.
Review of Operations
and Value Enhancement Initiatives
Glacier Media Inc.
("Glacier" or the "Company") completed the first quarter of 2014
with continued improvement. Consolidated EBITDA was up 13.2% for
the quarter compared to the same quarter in the prior year on an
adjusted basis(1). Consistent with Glacier's fourth quarter 2013
performance, revenues returned to prior year levels as a number of
the Company's operations experienced improved market opportunities
and revenue growth. The profit performance was also the result of a
variety of initiatives that are being undertaken to affect the
transformation of the Company and enhance value for shareholders.
These initiatives are discussed below.
For the quarter
ended March 31, 2014, adjusted consolidated revenue increased 0.1%
to $76.9 million and adjusted consolidated EBITDA increased to $8.9
million, from $7.9 million the prior year. Revenue remained
consistent despite the closure of the Kamloops Daily News and other
small publications. Revenues were also affected by weaker community
media revenues, which were impacted by overall economic conditions
first experienced in 2013 that continue in 2014, as well as digital
competition. The community media revenue shortfalls were offset by
stronger business information revenues and increased printing
revenues in one of Glacier's joint venture operations.
Improved operating
performance resulted as well from a series of value enhancement
initiatives first launched in 2013 and continued in 2014. They
include:
- Evolve, Enrich and Extend initiatives. The Company is pursuing
a comprehensive initiative to grow its business information
operations through an Evolve, Enrich and Extend strategy. This
strategy focuses on the provision of richer content, data and
information, related analytics and business and market
intelligence, and the achievement of greater customer utility and
decision dependence. Management is currently reviewing the spectrum
of verticals in which it operates with a view of focusing resources
and efforts on those verticals and opportunities deemed to have the
greatest growth potential that can be realized through this Evolve,
Enrich and Extend strategy. Management and staff are using the
strategy to develop the Company's community media operations as
well.
- Cost reduction initiatives. A variety of significant cost
reduction measures have and are being implemented to reduce overall
operating costs. The initiatives have been targeted to reduce costs
by more than $10.0 million on an annualized basis. Savings from
these initiatives began to be realized in both the third and fourth
quarters of 2013 - and continue in the first quarter of 2014. In
implementing these initiatives, management has been diligent to
maintain the operating integrity of the businesses, and maintain
development spending in areas where growth opportunities
exist.
- Sale of real estate assets. The Company has been selling real
estate properties to strengthen its financial position. In 2013,
more than $12.0 million was raised through the sale of property. In
early 2014, the Company entered into an agreement to sell its
vacant real estate property in Kamloops for $4.8 million. The sale
is expected to close in the summer of 2014. Other property
dispositions are currently being pursued. Given current
capitalization and interest rates, monetizing real estate value to
reduce leverage has been deemed prudent. Real estate and other
asset sales have been targeted to a) cover any required deposit
relating to the previously reported notice of possible
re-assessment from Canada Revenue Agency (CRA) for the 2008-2011
income tax years, should a deposit become payable and b) result in
a net reduction of leverage from current levels. Any potential CRA
re-assessment timing is not currently determinable.
- Sale of non-core assets. The Company continues to assess assets
that may be considered non-core.
Business Information
Many of the
Company's business information operations (which include business
and professional and trade information) continue to grow and
provide attractive opportunities for future growth in both existing
and new verticals through multi-platform offerings. In particular,
energy, agriculture, environmental risk, environmental compliance,
manufacturing and financial services performed well.
Business information
operations now represent more than half of Glacier's EBITDA, of
which 45% comes from rich information digital data products. These
products provide essential information that generate highly
profitable recurring revenues, and are particularly well positioned
for scalable growth. The product lines offer resiliency in
challenging economic times as they provide critical insight and
analysis to Glacier's customers. Much of 2014's strategic
initiatives will focus on enhancing and expanding existing product
lines, with a view to increasing the level of customer decision
dependence, as a key aspect of the Evolve, Enrich and Extend
strategy.
The Company is
continuing to develop its business information content and
marketing offerings with multi-platform solutions - with a key
focus on mobile offerings - digitally designed to integrate more
seamlessly with customer decision-making processes. Digital
revenues now represent more than one quarter of Glacier's business
information revenues. Efforts continue to be refined with respect
to developing different types of digital revenues, including
content, advertising and subscriptions. A consistent focus on
various ways of enriching content is resulting in improved rates
for advertising positioned alongside rich information.
In 2014, Glacier's
business information divisions continued their focus on integrated
solutions selling. Among the activities:
- A new National Network team was created, drawing together top
sales and sales management personnel, with a view to offering
national clients solutions that span the depth and breadth of all
divisions;
- In February 2014, the business information division launched a
new conference - the Next-Gen Forum - which focuses on the
importance of corporate social responsibility in the extractive
industries sectors. This forum represents a new practice area for
Glacier and will include new publications and related events and
conferences;
- The British Columbia, Alberta and Ontario Export Awards were
added to the Company's growing stable of events and conferences.
The events solidify important relationships with the Canadian
Manufacturers and Exporters association, as well as respective
provincial governments and the federal government, along with key
marketing clients;
- Several divisions launched formal partnerships with key
industry associations that represent lead business segments. These
partnerships create new revenue opportunities via events, branded
content and new supplements.
Community Media
Glacier's community
media operations offer broad coverage across Western Canada in
local markets, and continue to offer a strong value proposition
through local information and marketing channel utility.
Generally weak economic conditions, as well as structural
changes in the community newspaper industry, continued to affect
revenue levels. National revenues have been generally lower as a
result of these factors, although national revenues recovered in
April to higher levels than the previous year. Many of the
Company's smaller rural community media markets - largely spread
across the Prairies - have enjoyed more steady local performance
due to their strong local positions and local advertising revenues,
although they are still affected by cyclical downturns in key
economies such as energy and agriculture, and the factors driving
national revenues.
While print
advertising revenues continue to be weak in some markets, digital
revenues continue to grow steadily in Glacier's community media
operations with new product offerings including extended market
coverage and specialty digital products. Operating expense
investments are being made to improve the digital community media
products in order to exploit new revenue opportunities,
particularly of the larger markets, focusing on content delivery
and advertising effectiveness. The investments are being made
prudently with a view to generating profitable revenue. As a
result, Glacier's community media digital operations are
contributing attractive net profit margins to the Company.
Significant efforts
are also being made to develop new community media features and
products. The scale of these efforts continues to build, with the
segment generating strong print revenue growth over prior year,
augmented with digital revenues and events.
While economic and
market challenges have affected the community media operations,
management believes that these businesses have unrealized
opportunities available and will continue to generate solid cash
flow given the nature of the markets in which Glacier operates -
particularly within the more robust micro-economies of Western
Canada. This cash flow can be used to fund growth and reduce
leverage through both internal investment and acquisition of
digital business information and community media assets, as well as
debt repayments.
Financial
Position
On an adjusted
basis, to include the Company's share of its joint ventures,
Glacier's consolidated debt net of cash outstanding before deferred
financing charges and other expenses was reduced to 2.3x trailing
12 months EBITDA as at March 31, 2014.
The Company
(excluding its joint ventures) reduced debt by $1.7 million during
the period. Glacier's consolidated debt net of cash outstanding
before deferred financing charges was $94.0 million as at March 31,
2014.
Capital expenditures
(excluding the Company's joint ventures) were $0.8 million for the
quarter ended March 31, 2014 compared to $1.1 million for the same
period in the prior year.
Declaration of
Dividend
The Board of
Directors declared a quarterly dividend of $0.02 per share to
shareholders of record on June 13, 2014 and payable on July 4,
2014. The dividend is consistent with the Company's dividend policy
of paying $0.08 per share per annum, payable quarterly.
Outlook
The Company
continues to grow its business operations through its Evolve,
Enrich and Extend strategy and is making good progress in this
transformation. While media maturation factors are having an impact
as described, the softer economy has continued to play a
significant role in dampening revenues, and economic strengthening
should result in improved revenues at the margin.
As indicated,
management has undertaken a number of Value Enhancement Initiatives
to strengthen the Company's financial position and operating
performance in the near term, including a) a wide variety of
revenue development initiatives, b) sale of real estate assets to
reduce leverage and cover a potential tax re-assessment deposit, c)
sale of non-core assets, d) significant cost reduction measures
targeted to reduce costs by more than $10.0 million, and e) review
of the spectrum of verticals in which the Company operates to focus
operating and financial resources on those verticals deemed to have
the greatest growth potential. Profitability enhancements and asset
sale initiatives are intended to significantly improve Glacier's
financial position and place the Company in a better position from
which to take advantage of organic growth and acquisition
opportunities, particularly within the digital business information
space.
Management will focus in the short-term on a balance of paying
down debt, reducing costs and improving profitability, enhancing
existing operations, targeting select acquisition opportunities and
returning value to shareholders through growth in cash flow per
share and payment of dividends.
Shares in Glacier
are traded on the Toronto Stock Exchange under the symbol GVC.
About the Company:
Glacier Media Inc. is an information communications company focused
on the provision of primary and essential information and related
services through print, electronic and online media. Glacier is
pursuing this strategy through its core businesses: the community
media, trade information and business and professional information
markets.
Financial
Measures
To supplement the
consolidated financial statements presented in accordance with
International Financial Reporting Standards (IFRS), Glacier uses
certain non-IFRS measures that may be different from the
performance measures used by other companies. These non-IFRS
measures include cash flow from operations (before changes in
non-cash operating accounts and non-recurring items), net income
attributable to common shareholders before non-recurring items,
earnings before interest, taxes, depreciation and amortization
(EBITDA) and all 'adjusted' measures, which are not alternatives to
IFRS financial measures. Management focuses on operating cash flow
per share as the primary measure of operating profitability, free
cash flow and value. EBITDA per share is also an important measure
as the Company has low ongoing capital expenditures and
depreciation and amortization largely relates to acquisition
goodwill and copyrights and does not represent a corresponding
sustaining capital expense. These non-IFRS measures do not have any
standardized meanings prescribed by IFRS and accordingly they are
unlikely to be comparable to similar measures presented by other
issuers.
Forward-Looking
Statements
This news release
contains forward-looking statements that relate to, among other
things, the Company's objectives, goals, strategies, intentions,
plans, beliefs, expectations and estimates. These forward-looking
statements include, among other things, statements relating to the
Company's expectations regarding revenues, expenses, cash flows and
future profitability and the effect of Glacier's strategic
initiatives, including its expectations to grow its business
information operations, to implement cost reduction measures, to
sell real estate properties and utilize proceeds of such sales to
cover required CRA re-assessment deposits, to produce products and
services that provide growth opportunities, to organic development
and new business acquisitions, to improve profitability, to grow
cash flow per share, to pay dividends, to repurchase shares and to
reduce debt levels and as to its expectations as to the level of
investment in capital expenditures. These forward looking
statements are based on certain assumptions, including continued
economic growth and recovery and the realization of cost savings in
a timely manner and in the expected amounts, and are subject to
risks, uncertainties and other factors which may cause results,
performance or achievements of the Company to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements, and undue
reliance should not be placed on such statements.
Important factors
that could cause actual results to differ materially from these
expectations include failure to implement or achieve the intended
results from Glacier's strategic initiatives, the failure to
implement or realize cost savings in a timely manner or in the
expected amounts, the failure to negotiate or complete the sale of
real estate assets, the failure to identify, negotiate and complete
the acquisition of new businesses, the failure to develop new
products, and the other risk factors listed in the Company's Annual
Information Form under the heading "Risk Factors" and in the
Company's MD&A under the heading "Business Environment and
Risks", many of which are out of the Company's control. These other
risk factors include, but are not limited to, the ability of the
Company to sell advertising and subscriptions related to its
publications, foreign exchange rate fluctuations, the seasonal and
cyclical nature of the agricultural industry, discontinuation of
the Department of Canadian Heritage's Canada Periodical Fund's Aid
to Publishers, general market conditions in both Canada and the
United States, changes in the prices of purchased supplies
including newsprint, the effects of competition in the Company's
markets, dependence on key personnel, integration of newly acquired
businesses, technological changes, tax risk and financing and debt
service risk.
The forward-looking
statements made in this news release relate only to events or
information as of the date on which the statements are made. Except
as required by law, the Company undertakes no obligation to update
or revise publicly any forward-looking statements, whether as a
result of new information, future events or otherwise, after the
date on which the statements are made or to reflect the occurrence
of unanticipated events.
Glacier Media Inc.Mr. Orest SmysnuikChief Financial
Officer604-708-3264
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