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.
----------------------------------------------------------------------------
For the three months ended
(thousands of dollars) 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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Glacier Media Inc.
Mr. Orest Smysnuik
Chief Financial Officer
604-708-3264
Glacier Media (TSX:GVC)
Historical Stock Chart
From May 2024 to Jun 2024
Glacier Media (TSX:GVC)
Historical Stock Chart
From Jun 2023 to Jun 2024
