GVIC Communications Corp.
TSX : GCT
TSX : GCT.C

November 08, 2007 21:02 ET

GVIC Releases Third Quarter Earnings

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 8, 2007) - GVIC Communications Corp. ("GVIC" or the "Company") (TSX:GCT)(TSX:GCT.C) reported revenue, cash flow and earnings for the period ending September 30, 2007.

Recent Developments and Highlights

- GVIC's operations continued to generate strong revenue and EBITA growth on a "same-store" basis compared to last year, which contributed to an increase in cash flow from operations per share.

- Acquired eight community newspapers in Manitoba and Saskatchewan during the quarter.

- Increased ownership in Alta Newspaper Group Limited Partnership from 50% to 59% during the quarter.

- In total, GVIC has completed acquisitions and investments totalling $14.5 million year to date, including 14 community newspapers and related publications in Western Canada, the Farmers Independent Weekly, the Canadian Interiors and Building trade magazines and two trade shows called "Best of Canada" and "Outside the Box".

Operating Results

The following financial information is presented on a continuity of interest basis and represents the results of operations and financial position for periods prior to the April 30, 2007 acquisition of Glacier's net assets as if GVIC owned the operations for the prior periods indicated.



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$000's except 3 Months 3 Months 9 Months 9 Months
share and per September 30, September 30, September 30, September 30,
share amounts 2007 2006 2007 2006
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Revenue 49,551 $ 43,616 $ 159,303 $ 133,029
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EBITA $ 9,561 $ 6,760 $ 35,088 $ 25,446
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Net income $ 2,815 $ 321 $ 16,011 $ 10,570
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Cash flow from
operations $ 6,571 $ 3,598 $ 26,307 $ 16,167
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Cash flow from
operations/share $ 0.02 $ 0.01 $ 0.09 $ 0.05
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EBITA/share $ 0.03 $ 0.02 $ 0.12 $ 0.08
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Net income/share $ 0.01 $ 0.00 $ 0.05 $ 0.04
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Debt outstanding $ 127,425 $ 162,318 $ 127,425 $ 162,318
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Average shares
outstanding, net 300,425,031 300,425,031 300,425,031 300,425,031
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The Company reported consolidated cash flow from operations of $6.6 million for the three months ended September 30, 2007, as compared to $3.6 million for the same period last year. Revenue for the period was $49.6 million compared to $43.6 million for the same period last year, EBITA was $9.6 million compared to $6.8 million last year, and net income was $2.8 million compared to $0.3 million last year.

For the three months ended September 30, 2007, cash flow from operations per share was $0.02 compared to $0.01 for the same period last year, EBITA per share was $0.03 compared to $0.02 for the same period last year and net income per share was $0.01 compared to Nil for the same period last year.

Consolidated cash flow from operations was $26.3 million for the nine months ended September 30, 2007, as compared to $16.2 million for the same period last year. Revenue for the period was $159.3 million compared to $133.0 million for the same period last year, EBITA was $35.1 million compared to $25.4 million last year, and net income was $16.0 million compared to $10.6 million last year.

For the nine months ended September 30, 2007, cash flow from operations per share was $0.09 compared to $0.05 for the same period last year, EBITA per share was $0.12 compared to $0.08 for the same period last year, and net income per share was $0.05 compared to $0.04 last year (see following for variance clarifications).

Operational Performance

GVIC's operations continue to perform ahead of target and last year on a "same-store" basis in both revenue and cash flow. Both the recently acquired Hollinger Canada operations and GVIC's existing operations are performing ahead of expectations.

The growth in revenue during the third quarter compared to last year was a result of a) improved sales effectiveness, strong Western Canadian local economies, strong industry niches such as agriculture, mining and energy, new product offerings and national and regional advertising efforts that allow advertisers to benefit from GVIC's larger group of publications and expertise and b) the interests acquired in the Alta Newspaper Group Limited Partnership ("ANGLP") in September 2006 and August 2007 as well as the other acquisitions completed in 2007 (see following).

Continued progress in cost efficiency improvement as well as the increase in revenues resulted in significant growth in "same store" cash flow for GVIC's operations.

Management believes there are meaningful opportunities to continue to realize greater value from GVIC's expanded operations through increased cost efficiencies, improved sales effectiveness and improved publication quality, amongst other things.

While progress continues to be made in realizing these improvements, many of the opportunities are still to be realized.

New Acquisitions & Recent Developments

During the quarter ended September 30, 2007, GVIC acquired eight community newspapers in Saskatchewan and Manitoba for consideration of $2.8 million, which include a) the Unity Northwest Herald and the Wilkie Press in Saskatchewan and b) the Melita New Era, Souris Plaindealer, Deloraine Times & Star, Reston Recorder, Corner Pocket Flyer and The New Optimist in Manitoba.

In addition, GVIC increased its investment in ANGLP by 9% for consideration of $4.8 million in August 2007.

As previously reported, during the six months ended June 30, 2007, GVIC completed a number of acquisitions and investments which included 1) community newspapers in Flin Flon, Manitoba; Thompson, Manitoba; Outlook, Saskatchewan and British Columbia; 2) the Farmers Independent Weekly; and 3) the Canadian Interiors and Building trade magazines and two trade shows called "Best of Canada" and "Outside the Box" and several other publications.

The acquisitions and investments completed in the first nine months of 2007 totalled $14.5 million in aggregate purchase price. These acquisitions fit with GVIC's strategy of growing through two core segments: 1) the business and professional information sector and 2) the newspaper and trade information sector.

GVIC's combined daily and community newspaper group offers distribution of approximately 1.3 million copies across B.C., Alberta, Saskatchewan and Manitoba. GVIC's trade information group consists of the largest agricultural publication group in Western Canada, the Business In Vancouver Media Group, and the Business Information Group - one of Canada's largest trade magazine operations. GVIC's business & professional information group now includes Specialty Technical Publishers which publishes regulatory & compliance information, CD-Pharma Interactive Medical Productions which develops electronic interactive continuing medical education programs for doctors, and a variety of directories, specialty websites and electronic information published by the Business Information Group.

GVIC continues to pursue further acquisition opportunities to complement its existing operations.

Shares in GVIC can be traded on the Toronto Stock Exchange under the symbols GCT and GCT.C.

About the Company: GVIC Communications Corp. (TSX:GCT) is an information communications company focused on expanding across North America through both internal growth and the strategic acquisition of information communications companies that provide essential information and related services through print, electronic and online media.

Forward Looking Statements

Certain statements in this press release are not historical and may constitute forward-looking statements reflecting financial performance. Investors are cautioned that all forward-looking statements involve risks and uncertainties. Forward-looking statements are based on management's estimates, beliefs and opinions on the date the statements are made. GVIC assumes no obligation to update forward-looking statements if circumstances should change. Additional information on these and other potential factors that could affect GVIC's financial results are detailed in documents filed from time to time with the applicable Canadian securities regulatory authorities.

The Toronto Stock Exchange has neither approved nor disapproved the form or content of this release.

Contact Information

  • GVIC Communications Corp.
    Mr. Orest Smysnuik
    (604) 872-8565