GVIC Communications Inc.

August 12, 2005 13:26 ET

GVIC Reports Second Quarter Results

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 12, 2005) - GVIC Communications Inc. ("GVIC" or the "Company") reported cash flow, earnings and revenue for the quarter ending June 30, 2005.

For the six months ending June 30, 2005, GVIC generated $3.2 million of cash flow from operating activities (before changes in non-cash operating accounts), EBITDA of $3.0 million and net income of $2.5 million on revenue of $8.6 million. This compares to $3.0 million of cash flow from operations, EBITDA of $3.1 million and net income of $1.7 million on revenue of $8.3 million for the same period last year.

GVIC generated $1.2 million of cash flow from operating activities (before changes in non-cash operating accounts), EBITDA of $1.2 million and net income of $1.2 million on revenue of $4.0 million for the quarter ended June 30, 2005. This compares to $1.5 million of cash flow from operations, EBITDA of $1.5 million and net income of $0.9 million on revenue of $4.0 million for the same period last year.

GVIC earned cash flow from operations per share of $0.008, EBITDA per share of $0.008 and net income per share of $0.006 for the six months ended June 30, 2005 as compared to cash flow from operations per share of $0.008, EBITDA per share of $0.008 and net income per share of $0.004 for the same period last year.

The second quarter revenue performance was apparently affected by some advertising revenue shifting from the second quarter to the first quarter of 2005, which resulted in lower second quarter performance compared to the first quarter on a year over year basis. Some advertisers ran advertising campaigns earlier than expected. This revenue loss was offset by new advertising generated from the launch of a new magazine called Acreage Life, which resulted in WPP revenue being flat overall. Acreage Life is directed at acreage owners in Canada and provides practical, informative and entertaining content about rural life for acreage owners who live close to an urban center and who do not rely on the land as a source of income. The first two issues have now been distributed and response has been very positive. The magazine will be published four times in 2005. Acreage Life creates the opportunity for national companies currently advertising in The Western Producer to market smaller equipment lines not intended for commercial farming operations. It is also attractive to other advertisers who have not typically advertised in The Western Producer. While management was pleased with the advertising response to the new magazine, the publications' expenses resulted in a net loss for the quarter.

The Acreage Life loss and some other unusual expenses were the primary reasons WPP's EBITDA and cash flow from operations were lower than last year.

To supplement the consolidated financial statements presented in accordance with Canadian generally accepted accounting principles (GAAP), GVIC uses certain non-GAAP measures that may be different from the performance measures used by other companies. These non-GAAP measures include cash flow from operations (before changes in non-cash operating accounts) and earnings before interest, taxes, depreciation and amortization (EBITDA), which are not alternatives to GAAP 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.

As at June 30, 2005, GVIC had cash of $5.5 million and working capital of $6.8 million excluding deferred revenue. Deferred revenue relates to funds received for subscriptions that have not yet been fulfilled.

About the Company: GVIC Communications Inc. is an information communications company focused on the provision of essential information and related services.

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. The Company assumes no obligation to update forward-looking statements if circumstances should change. Additional information on these and other potential factors that could affect the Company's financial results are detailed in documents filed from time to time with the applicable Canadian securities regulatory authorities.

Contact Information

  • GVIC Communications Inc.
    Mr. Orest Smysnuik
    (604) 708-3264