Glacier Media Inc.

Glacier Media Inc.

November 10, 2011 19:12 ET

Glacier Reports Third Quarter Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 10, 2011) - Glacier Media Inc. (TSX:GVC) ("Glacier" or the "Company") reported cash flow, earnings and revenue for the period ended September 30, 2011.

Summary Results

(thousands of dollars except share and per share amounts) Three Months
Three Months
Nine Months
Nine Months
Revenue $ 61,955 $ 54,891 $ 194,375 $ 179,538
Gross profit $ 22,192 $ 18,814 $ 73,067 $ 66,172
Gross margin 35.8 % 34.3 % 37.6 % 36.9 %
EBITDA (1) $ 10,572 $ 7,987 $ 36,585 $ 32,367
EBITDA margin (1) 17.1 % 14.6 % 18.8 % 18.0 %
EBITDA per share (1) $ 0.12 $ 0.09 $ 0.41 $ 0.35
Interest expense, net $ 1,002 $ 1,537 $ 3,589 $ 4,921
Net income attributable to common shareholders before non-recurring items (1)(2) $ 4,211 $ 2,111 $ 15,982 $ 13,715
Net income attributable to common shareholders before non-recurring items per share (1)(2) $ 0.05 $ 0.02 $ 0.18 $ 0.15
Net income attributable to common shareholders $ 3,721 $ 1,061 $ 13,510 $ 12,795
Net income attributable to common shareholders per share $ 0.04 $ 0.01 $ 0.15 $ 0.14
Cash flow from operations (1)(2) $ 9,880 $ 6,917 $ 33,699 $ 28,530
Cash flow from operations per share (1)(2) $ 0.11 $ 0.08 $ 0.37 $ 0.31
Capital expenditures $ 4,079 $ 1,356 $ 8,363 $ 4,193
Total assets $ 513,222 $ 502,917 $ 513,222 $ 502,917
Debt net of cash outstanding before deferred financing charges and other expenses $ 91,971 $ 96,458 $ 91,971 $ 96,458
Equity attributable to common shareholders $ 332,108 $ 328,537 $ 332,108 $ 328,537
Weighted average shares outstanding, net 89,383,682 92,040,406 90,204,930 92,491,781
(1) Refer to "Non-IFRS Measures" section for calculation of non-IFRS measures used in this table.
(2) 2011 excludes $1.0 million restructuring expense, $0.3 million in stock based compensation, and $0.7 million in impairment expense.


  • Consolidated revenue increased 12.9% to $62.0 million for the three months ended September 30, 2011 from $54.9 million for the same period in the prior year;

  • Consolidated cash flow from operations (before changes in non-cash operating accounts and non-recurring items) for the three months ended September 30, 2011 increased 42.8% to $9.9 million from $6.9 million for the same period in the prior year;

  • Consolidated cash flow from operations (before changes in non-cash operating accounts and non-recurring items) per share increased 47.1% to $0.11 per share for the third quarter of 2011 from $0.08 per share for the same period in the prior year;

  • EBITDA for the third quarter of 2011 increased 32.4% to $10.6 million from $8.0 million for the third quarter of 2010;

  • Glacier signed a definitive agreement to purchase British Columbia media assets from Post Media Inc. for $86.5 million;

  • Glacier purchased a 50% interest in Infomine Inc., a leading digital information provider to the mining industry;

  • Glacier purchased Canada's largest agricultural trade show, Canada's Outdoor Farm Show; and

  • Glacier purchased 775,000 of its common shares for $1.8 million through its Normal Course Issuer Bid ("NCIB").

Review of operations

Strong Revenue Growth

Revenue grew 12.9% during the third quarter of 2011 compared to the same period last year as a result of both organic growth and acquisitions. Same-store revenue grew 4.7% for the quarter compared to the same period last year.

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 agriculture, energy, mining, environmental, financial, automotive, trucking, 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 Glacier has operations in, 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.

The assets acquired through the Rogers acquisition have performed well in terms of both revenue growth and increased profitability.

Glacier's local community newspapers revenue continued to grow during the quarter. 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 can and 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 local market digital 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.

Strong Growth in Profitability

EBITDA grew 32.4% to $10.6 million for the third quarter of 2011. Glacier's EBITDA margin improved to 17.1% from 14.6%. Same-store EBITDA growth was 16.1%.

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, as well as the successful integration of the assets acquired from Rogers at the end of May, and the other small acquisitions made.

The EBITDA results were achieved while increased operating investment was made in digital media 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 this investment 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 1.9x trailing 12 months EBITDA as at September 30, 2011. Glacier's consolidated debt net of cash outstanding before deferred financing charges and other expenses was $92.0 million as at September 30, 2011.

Glacier invested $4.1 million of capital expenditures during the quarter. This included $1.7 million for real estate investment and lease-hold improvement relating to two relocations, $0.9 million relating to software investments made to launch a new online real estate portal and expand the Eco Log environmental information business, $0.4 million for press expansion relating to new contract based work, and $1.1 million for ongoing sustaining capital expenditures.


Subsequent to quarter end, Glacier made a number of acquisitions that will further strengthen and broaden the Company's base of operations.

Postmedia B.C. Acquisition

On October 18, 2011 Glacier through its affiliates entered into definitive agreements with Postmedia Network Inc. ("Postmedia") to acquire Postmedia's community newspapers in British Columbia, the Times Colonist, related digital media assets, and certain real estate assets. The transaction is expected to close on or about November 30, 2011.

The purchase price for the acquired media assets and significant real estate properties is $86.5 million payable in cash at closing, subject to adjustment for working capital. The acquisition will be financed with bank borrowings. Glacier is amending its credit facilities to fund the acquisition of the assets and provide additional borrowing capacity for ongoing acquisition opportunities.

The assets acquired strategically broaden Glacier's market presence in British Columbia and allow Glacier to offer the broadest coverage of local newspaper markets in Western Canada, which increases market reach for local, regional and national advertisers, provides for significant digital media opportunities and strengthens Glacier's competitive position. The operations acquired also enhance the Company's depth of personnel and operating resources and offer attractive synergy opportunities.

Agriculture and Mining Information Acquisitions

While the Postmedia B.C. acquisition significantly strengthens the Company's community newspaper and digital operations, Glacier intends to continue to place significant focus on building its business information operations (which include its trade and business and professional information properties).

In particular, a significant portion of Glacier's business information operations are focused in agriculture, mining and energy, and management believes significant growth opportunities exist in providing information and reach to these sectors.


Accordingly, Glacier announced subsequent to quarter end that it acquired a 50% interest in InfoMine Inc. ("InfoMine"). InfoMine is a digital mining information business that provides comprehensive information and related services relating to the mining industry, mining technology and mineral exploration. InfoMine operates the leading online job board for mining careers, online mining education programs, and is a leading provider of mining operating cost information, mining company and properties data, and other mining data and information for the global mining industry. InfoMine's revenue primarily comes from subscription, report, search, and advertisement sales. InfoMine is based in Vancouver and has a staff of 94 people located in Vancouver and five international locations.

Canada's Outdoor Farm Show

Subsequent to quarter end, Glacier acquired Canada's Outdoor Shows Limited, which is the parent company of Canada's Outdoor Farm Show (presented by Farm Credit Canada) and Canada's Outdoor Equine Expo. Canada's Outdoor Farm Show ("COFS") is the nation's largest agricultural trade show and considered to be the fourth largest in North America, with 723 exhibitors and 42,600 attendees in 2011. The September 2011 show drew visitors from nine provinces and thirty-four countries.

During the quarter, the Company completed several other acquisitions for a total cost of $0.6 million, which included the purchase of an event management company and a small trade show in Northern British Columbia.

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 achived 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 a cash dividend of $0.03 per common share payable to shareholders of record as of July 15, 2011. This declaration reflected the initial dividend of a new policy whereby the board of directors expects to declare an annual dividend of $0.06 per common share, payable semi-annually. Consistent with this policy, the board of directors declared a cash dividend of $0.03 per common share payable to shareholders of record as of January 16, 2012, payable on February 1, 2012.

Given the increased cash flow resulting from operational growth and the acquisitions indicated 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 775,000 of its common shares for $1.8 million through its Normal Course Issuer Bid ("NCIB") during the quarter.

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 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 local newspaper, trade information and business and professional information markets.

Financial Measures

To supplement the condensed interim 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 and earnings before interest, taxes, 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 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 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 Department of Canadian Heritage, 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.

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