Glacier Media Inc.

Glacier Media Inc.

March 29, 2012 15:49 ET

Glacier Reports 2011 Year-End Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 29, 2012) - Glacier Media Inc. ("Glacier" or the "Company") (TSX:GVC) reported cash flow, earnings and revenue for the year ending December 31, 2011.

Summary Results

(thousands of dollars IFRS IFRS CGAAP (3)
except share and per share amounts) 2011 2010 2009
Revenue $267,394 $242,605 $229,128
Gross profit $99,376 $89,344 $82,179
Gross margin 37.2% 36.8% 35.9%
EBITDA (1) $49,140 $43,969 $35,792
EBITDA margin (1) 18.4% 18.1% 15.6%
EBITDA per share (1) $0.55 $0.48 $0.38
Interest expense, net $4,616 $6,223 $6,450
Net income attributable to common shareholders before non-recurring items (1)(2) $22,615 $18,993 $22,163
Net income attributable to common shareholders before non-recurring items per share (1)(2) $0.25 $0.21 $0.24
Net income attributable to common shareholders $25,731 $13,584 $13,926
Net income attributable to common shareholders per share $0.29 $0.15 $0.15
Cash flow from operations (1)(2) $44,874 $39,074 $30,456
Cash flow from operations per share (1)(2) $0.50 $0.42 $0.33
Capital expenditures $15,486 $8,400 $9,345
Total assets $593,967 $500,086 $503,747
Debt net of cash outstanding before deferred financing charges and other expenses $131,413 $94,732 $99,939
Equity attributable to common shareholders $340,416 $328,575 $311,043
Weighted average shares outstanding, net 89,991,561 92,023,970 92,721,210
(1) Refer to "Non-IFRS Measures" section for calculation of non-IFRS measures used in this table.
(2) 2011 excludes $1.6 million of restructuring expense, $0.3 million of stock based compensation, $9.2 million in impairment expense, $1.1 in transaction costs and a $15.1 one-time gain within an associate entity.
(3) The balances for 2009 are presented under Canadian generally accepted accounting principals prior to the adoption of IFRS.


  • Consolidated revenue increased 10.2% to $267.4 million from $242.6 million for the year prior;
  • Glacier's consolidated cash flow from operations (before changes in non-cash operating accounts and non-recurring items) increased 14.8% to $44.9 million from $39.1 million for the year prior;
  • Glacier's consolidated cash flow from operations (before changes in non-cash operating accounts and non-recurring items) per share increased 17.4% to $0.50 per share from $0.42 per share for the prior year;
  • EBITDA increased 11.8% to $49.1 million from $44.0 million for the prior year;
  • Net income attributable to common shareholders before non-recurring items increased to $22.6 million from $19.0 million for the prior year. Net income attributable to common shareholders (before non-recurring items) per share increased to $0.25 per share from $0.21 in the prior year;
  • Completed acquisition of Postmedia Networks Inc.'s ("Postmedia") community newspaper assets in British Columbia, the Times Colonist and related digital media assets and real estate for $86.5 million;
  • Completed acquisition of 50% interest in InfoMine Inc., a leading digital information provider to the global mining industry;
  • Acquired portfolio of trade information and digital assets from Rogers Communications Inc.;
  • Acquired a number of trade shows including Canada's Outdoor Farm Show (Canada's largest outdoor agricultural show), an event management company and several other community newspapers;
  • Re-purchased 1,275,000 of Glacier common shares for $3.0 million through the Company's Normal Course Issuer Bid ("NCIB"); and
  • Declared two dividends of $0.03 per Glacier common share each during the year. These declarations reflected the initial dividends of a new policy whereby the board of directors expects to declare an annual dividend of $0.06 per common share, payable semi-annually.

Strong Revenue Growth

Revenue grew 10.2% during the year ended December 31, 2011 compared to the same period last year as a result of both organic growth and acquisitions.

Growth continued to occur across the spectrum of Glacier's operations. The growth is directly attributable to Glacier's operational, business segment and complementary media platform strategies.

New revenues were generated in a variety of areas including online, mobile, tablet, electronic product and lead generation developments, special publishing initiatives, special features, supplements, new community magazines, production and promotion of community events, custom publishing, sponsored industry specific research studies, educational offerings, conferences and tradeshows, new directories, and a number of other initiatives. Efforts continue to be successful in leveraging and monetizing content across Glacier's channels and platforms.

Revenue growth was strong in a wide variety of Glacier's trade information and business and professional information operations. The agricultural, energy, mining, environmental, financial, automotive, trucking, manufacturing and dental sectors in particular were strong, generating growth in both print and digital revenue.

These operations provide essential information for business and industry people who need this content and advertising based information to make prudent decisions. The growth was driven by market conditions in the various sectors in which Glacier has operations, as well as effective operational sales efforts and creativity.

Digital revenues now represent approximately 25% of Glacier's trade information and business and professional information revenue. Significant focus and related investment will continue to be made to enhance Glacier's digital trade and business and professional information verticals.

Glacier's local community newspapers revenue continued to grow during the year. The growth resulted from the combination of the economic strength experienced in Western Canada, the nature of media in the small markets in which Glacier operates, and strong operational focus and effort.

The growth in revenue was realized in both print and digital revenues, and underscores the value of Glacier's small market community newspapers, which offer a unique selling proposition and competitive advantage through the local information that they provide, of which they are a primary source. The value of Glacier's local community content is now being provided to Glacier's readers in print and online, by tablet and smartphone platforms. Glacier is in the early stages of the development of this digital community media strategy. This timing has been geared to be proactive while aligning operating cost investment with market needs. The timing also means that significant digital revenue opportunities still exist to be realized. Given that the demand for local community information is expected to exist for the long term, Glacier expects to be able to leverage and monetize the information and marketing value through advertising and other revenue sources for the long term. As 85% of Glacier's local newspaper distribution is free, this also provides for a more durable reach of readership for advertisers over time wherein total market coverage can always be provided.

Same-store consolidated revenue growth for Glacier was 3.1% for 2011. Growth slowed in the fourth quarter of 2011 in some of Glacier's local newspaper markets due primarily to softer national advertising. Growth has been varied in the first few months of 2012 for some of Glacier's community media operations, but has been stronger in the trade and business and professional information operations. It appears that the global economic uncertainty has resulted in cautiousness amongst some national and other advertisers, although local advertising has generally held up well.

Strong Growth in Profitability

EBITDA grew 11.8% to $49.1 million for the year ended December 31, 2011. Glacier's EBITDA margin improved to 18.4% from 18.1%.

Cost reduction measures continue to be implemented consistent with management's strategy of maintaining strong product and editorial quality while reducing operating costs where possible through initiatives that do not impact quality, sales capacity or market and competitive positions. Management is being careful to maintain appropriate levels of resources in staff and technology as well as business development in order to facilitate long-term revenue growth.

The EBITDA growth was a result of the profitability related to the organic revenue growth, the cost reduction measures undertaken, as well as the acquisitions completed during the year including the Rogers assets acquired on May 27, 2011, the Postmedia and Canada's Outdoor Farm Show acquisitions completed on November 30, 2011, and several other small community newspaper and events acquisitions.

The EBITDA results were achieved while increased operating investment was made in digital media, senior management, staff, information technology and related resources, as well as other content and quality related areas. The increase in Glacier's consolidated revenue has both allowed these investments to be made and has been in part a result of the digital investments already made.

These investments were made consistent with Glacier's complementary media platform strategy. This strategy is geared to address both the risks that digital media represents to the traditional print platform and the opportunities digital media offers in Glacier's local community and business and trade information markets. The strategy is based upon the premise that customer utility and value should drive the structuring of platform utilization. Online, mobile, tablet and other information delivery devices will be fully utilized, while print content and design quality will also be fully maintained. While the digital platforms offer many attractive new opportunities, the print platform continues to offer effective utility to both readers and advertisers. Maintaining strong print products also maintains strong brand image and awareness, which increases the likelihood of success online. Studies of time spent across media platforms and reader satisfaction support the premise of the complementary platform strategy. Management expects that customer utility will vary over time and will be affected by what Glacier and other media providers can creatively provide. Management believes that the pursuit of a complementary platform strategy will be prudent for the foreseeable future, and will maximize revenue and profit generation.

Financial Position

Glacier's consolidated debt net of cash outstanding before deferred financing charges and other expenses was 2.7x trailing 12 months EBITDA as at December 31, 2011. Glacier's consolidated debt net of cash outstanding before deferred financing charges and other expenses was $131.4 million as at December 31, 2011. The increase in debt was primarily a result of the Postmedia acquisition completed on November 30, 2011, while only one month of revenue and profit are included in the 2011 year-end financial results from the Postmedia operations acquired. This had the result of increasing Glacier's consolidated debt to EBITDA ratio more than it is expected to be on a going forward pro forma basis.

Glacier invested $15.5 million of capital expenditures during the year. General sustaining capital expenditures were $4.8 million for the year while investment capital expenditures for the year were $10.7 million. These investment capital expenditures are expected to result in attractive direct revenue and cash flow improvements and payback consistent with Glacier's targeted return on investment and include $3.7 million for the construction of a new press facility at our joint venture partner Great West Newspaper Limited Partnership ("GWNLP"), $2.8 million of other press upgrades, $2.1 million for leasehold improvements relating to new office facilities at our Business Information Group ("BIG") that resulted in lower rent expenses, $1.1 million in software costs for the launch of the new real estate listing website, and $1.0 million for new software at the Business Information Group that will facilitate more effective digital product development and related revenue streams.

Outlook and Opportunities for Value Creation

Management will focus in the short-term on a balance of paying down debt, integrating the operations acquired, continuing to develop existing operations, targeting select acquisition opportunities and returning value to shareholders.

While the operations acquired are being financed with bank borrowings, Glacier will be in a stronger position as a result of the acquisitions with manageable debt levels and increased cash flow. As indicated, the assets acquired include significant real estate properties, which can be sold to expedite pay down of debt, which will also be achieved with cash flow from operations.

In addition to operational needs and acquisitions, the Company intends to return a portion of its cash flow to shareholders through dividends. Glacier's board of directors declared the payment of two cash dividends of $0.03 per common share each during the year. These declarations reflected the initial dividends of a new policy whereby the board of directors expects to declare an annual dividend of $0.06 per common share, payable semi-annually.

Given the increased cash flow resulting from operational growth, the acquisitions completed and the strong level of cash flow overall, an increasing portion of the Company's cash flow can be returned to shareholders in the future through increased dividends. The Company also intends to repurchase shares as deemed attractive and prudent.

The Company re-purchased 1,275,000 of its common shares for $3.0 million through its Normal Course Issuer Bid ("NCIB") during the year. The company renewed its NCIB for a twelve month period ending on September 27, 2012, which allows the company to repurchase up to 2.5 million shares.

As indicated, significant focus and related investment will continue to be made to enhance Glacier's digital trade and business and professional information verticals, through both organic development and the acquisition of new businesses. These acquisitions will be targeted to expand the markets that Glacier covers, expand the breadth of information products and marketing solutions provided, and to expand Glacier's digital media staff, technology and other relevant resources.

In this regard, management will continue to seek a balance of maintaining debt at manageable levels and delivering growth through both operations and acquisitions.

Shares in Glacier can be 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 local newspaper, 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 before non-recurring items and earnings before interest, taxes and depreciation and amortization (EBITDA), 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 amortization relates to intangible assets 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 under the heading "Outlook and Opportunities for Value Creation" and statements relating to the Company's expectations regarding revenues, expenses, cash flows and future profitability, including our expectations that growth will continue in Glacier's business segments, our expectations as to organic revenue and profitability growth, that profitability will continue to improve as the economy recovers, and that cost savings will be realized. These forward looking statements are based on certain assumptions, including continued economic growth and recovery and the realization of cost savings, 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 are 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 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, 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, 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.

Contact Information

  • Glacier Media Inc.
    Mr. Orest Smysnuik
    Chief Financial Officer