Glacier Media Inc. (“Glacier” or the “Company”) reported revenue
and earnings for the period ended March 31, 2020.
SUMMARY RESULTS
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(thousands
of dollars) |
|
Three month ended
March 31, |
except share and per share amounts |
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2020 |
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2019 |
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|
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Revenue |
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$ |
43,281 |
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$ |
44,262 |
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EBITDA |
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$ |
1,933 |
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$ |
1,961 |
|
EBITDA
margin |
|
|
4.5 |
% |
|
|
4.4 |
% |
EBITDA per
share |
|
$ |
0.02 |
|
|
$ |
0.02 |
|
Capital
expenditures (3) |
|
$ |
1,323 |
|
|
$ |
4,847 |
|
Debt net of
cash outstanding before deferred financing |
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|
|
charges and other expenses |
|
$ |
18,451 |
|
|
$ |
43,658 |
|
Net loss
attributable to common shareholder |
|
$ |
(12,209 |
) |
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$ |
(1,476 |
) |
Net loss
attributable to common shareholder per share |
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$ |
(0.10 |
) |
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$ |
(0.01 |
) |
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Weighted
average shares outstanding, net |
|
|
125,213,346 |
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|
|
109,828,731 |
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Results
including joint ventures and associates: |
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Revenue
(1)(2) |
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$ |
52,393 |
|
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$ |
57,504 |
|
EBITDA
(1)(2) |
|
$ |
3,189 |
|
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$ |
4,900 |
|
EBITDA
margin (1)(2) |
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|
6.1 |
% |
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|
8.5 |
% |
EBITDA per share (1)(2) |
|
$ |
0.03 |
|
|
$ |
0.04 |
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(1) Certain results are presented to
include the Company’s proportionate share of its joint venture and
associate operations, as this is the basis on which management
bases its operating decisions and performance. The Company’s joint
ventures and associates include Continental Newspapers Ltd, Great
West Newspapers Limited Partnership, the Victoria Times-Colonist,
Rhode Island Suburban Newspapers, Inc., Village Media Inc. and
Borden Bridge Development Corporation.
(2) The Company sold its interest in
Fundata for $55.0 million in April 2019. Results were included up
to March 31, 2019.
(3) Includes $3.1 million purchase of land
for Canada’s Outdoor Farm Show in Woodstock, Ontario in Q1
2019.
SIGNIFICANT DEVELOPMENTS IN Q1 2020 AND
OUTLOOK
Outlook and Impact of
Coronavirus
The Company’s businesses began to feel the
impact of the coronavirus (COVID-19) pandemic in the latter half of
March. The operating and financial impact of the pandemic and the
economic consequences accelerated rapidly post Q1.
The Company operates a broad portfolio of
businesses in terms of geography, industries served and business
models. Print community media, residential and commercial real
estate, energy and mining and most of the Company’s other
businesses are being adversely impacted to a significant degree by
the COVID pandemic, by advertising shortfalls and other factors
affecting revenue.
Some operations are being impacted less by the
crisis. For example, the Canadian agricultural industry is
benefiting from the situation given that food is an essential
product and a weaker Canadian dollar has helped with producer
revenues. Glacier FarmMedia has held up well as a result. Digital
media traffic has increased significantly, with digital revenues
holding up relatively well.
Given the impact of COVID-19 and the high degree
of uncertainty, management has taken a number of steps to address
the COVID-19 effects and the economic fallout, including:
- The Company’s foremost focus has been on keeping its employees
safe while continuing to maintain its community and customer
connections. As a result, the Company has undertaken a wide variety
of measures to protect the health of its staff and help reduce the
spread of the virus. These measures include working from home,
practicing self-distancing, creating a safe environment for those
who must go into the office, staggering in-office work days and
rigorous cleaning.
- Implementing significant company-wide cost reduction measures.
Measures were tailored to each market and the operating situation
of each business and included a senior management and staff wage
roll-back, permanent and temporary lay-offs, reduced hours and
workshare programs and other non-labour related cost
containment.
- Applying for government assistance programs where the Company
is eligible, including wage subsidies and working capital
loans.
- Ensuring the Company has sufficient access to capital to
weather the economic effects of the pandemic and weaker market
conditions.
Management is monitoring operating performance
and cash flow on a weekly basis and will take additional actions as
necessary.
The current circumstances are dynamic and the
impacts of COVID-19 on the Company’s business operations are
expected to be pronounced for a lengthy period of time. The
duration and impact on overall customer demand cannot be reasonably
estimated at this time, but it is anticipated this may have a
further adverse impact on the Company’s business, results of
operations, financial position and cash flows during the remainder
of 2020.
Due to the uncertainty surrounding the
magnitude, duration and potential outcomes of the COVID-19
pandemic, the Company is unable at this time to predict the total
impact on its operations. However, the Company is taking
significant cost containment actions as indicated and is evaluating
its alternatives, including working with its lenders and with
strategic partners to identify initiatives, including financings
and transactions, in order to enhance the Company’s liquidity and
financial condition.
Operating Highlights
During the first quarter of 2020, the Company’s
performance was such that the growth areas increasingly offset
declines in the mature businesses. Overall, performance in the
quarter was much improved as compared to 2019 until the pandemic
impacted revenues and profit in the latter half of March.
Significant developments during Q1 2020 included:
- Each business within the Environmental and Property Information
segment (ERIS, STP and REW) experienced strong revenue and EBITDA
growth.
- Glacier FarmMedia and the Resource
Innovation Group were each impacted by poor conditions in the
underlying agricultural and mining & energy markets. As a
result, both businesses enacted cost reduction measures in the
quarter, especially in more mature areas of their operations. In
parallel, GFM continued to invest in growth areas and experienced
strong revenue growth in digital media, digital listings and market
and weather subscriptions.
- Community media digital continued
the ongoing trend of strong development:o Digital audience growth
was strong in the quarter as the Local News Network’s March page
views grew by 23% and unique visitors by 38% as compared to levels
in Q4 2019. This growth continued a consistent trend and was
accelerated in the month by the focus on local news due to the
outbreak of COVID;o Digital revenues were growing well during the
first two months of the quarter then flattened during the latter
part of March as the pandemic took effect.
- Print newspaper advertising
revenues continued to decline as expected.
Operating Progress. Continued
progress was made during the quarter in expanding and enhancing the
key focus areas of the business within business information and
community media digital. Community media digital, ERIS, STP, REW,
agricultural digital media and listings, weather information,
mining cost information and eLearning all continued their growth
trend until the impact of the pandemic.
Print advertising revenues overall continue to
decline. The declines in print revenue were partially offset by
revenue growth in the key data, analytics and intelligence products
and digital media products consistent with the Company’s strategy.
During the quarter significant cost reduction and rationalization
projects were also undertaken to help manage the print decline.
The Company expects its total revenue will
continue to decline in the near term until it reaches the
inflection point where the revenue from its data, analytics and
intelligence products and digital media products exceeds the
decline of its print. For the first two months of the quarter, the
Company made good progress in this regard. March was on track to be
another strong revenue month until the COVID pandemic started to
impact the Company’s businesses.
Q1 2020 OPERATIONAL PERFORMANCE
Consolidated revenue for the period ending March
31, 2020 was $43.3 million, down $1.0 million or 2.2% from the same
period in the prior year. Consolidated EBITDA was $1.9 million for
the period, down less than $0.1 million or 1.4% from the same
period in the prior year.
Including the Company’s share of joint ventures
and associates, revenue was $52.4 million, down $5.1 million or
8.9% and EBITDA was $3.2 million, down $1.7 million or 34.9%. $0.8
million of the decline was the net result of the sale of Fundata
and the acquisition of Castanet in April 2019.
The Company continued to make progress in its
key growth areas in business information and digital media, which
partially offset expected print revenue declines, as demonstrated
by the overall revenue performance. Even with the negative impact
of COVID-19 starting in the quarter the Company experienced lower
consolidated revenue and EBITDA declines than in recent periods.
This was largely due to the fact that revenue growth in the key
growth businesses largely offset anticipated print declines where
cost management initiatives continue to be implemented.
EBITDA was also reduced by the operating expense
investments made in some of the key strategic development
initiatives, including the REW digital real estate marketplace, new
weather and agricultural markets subscription-based products,
mining data and intelligence information products and new digital
community media products.
These investments have been made to take
advantage of opportunities that exist in the Company’s markets and
require timely action to be taken. The growth in revenues achieved
in these operations, and the demand for the Company’s products this
reflects, underscores the fact that the investments have been
working and value is being created.
Financial Position. As at March
31, 2020, senior debt was $20.5 million. The Company’s consolidated
non-recourse, non-mortgage debt is in a nil position net of cash on
hand as a result of significant debt repayment.
The Company also has $3.4 million of deferred
purchase price obligations owing over the next two years and $10.0
million of a vendor-take back receivable from Fundata over the next
four years
Annual General Meeting. Due to
the impact and timing of COVID, the Company has made the decision
to delay its Annual General Meeting until later in the year. The
Information Circular, including executive compensation disclosure,
will be mailed to shareholders of record before the meeting.
Shares in Glacier are traded on the Toronto
Stock Exchange under the symbol GVC.
For further information please contact Mr. Orest
Smysnuik, Chief Financial Officer, at 604-708-3264.
ABOUT THE COMPANY
Glacier Media Inc. is an information &
marketing solutions company pursuing growth in sectors where the
provision of essential information and related services provides
high customer utility and value. The Company’s products and
services are focused in two areas: 1) data, analytics and
intelligence; and 2) content & marketing solutions.
FINANCIAL MEASURES
To supplement the consolidated financial
statements presented in accordance with International Financial
Reporting Standards, Glacier uses certain non-IFRS measures that
may be different from the performance measures used by other
companies. These non-IFRS measures include earnings before
interest, taxes, depreciation and amortization (EBITDA) and all
measures including joint ventures and associates which are not
alternatives to IFRS financial measures. 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 our
expectations regarding revenues, expenses, cash flows, future
profitability, and the effect of our strategic initiatives and
restructuring, including our expectations to grow certain
operations, invest in key strategic areas and, to realize cost
efficiencies. 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, which 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 our
strategic initiatives, the failure to reduce debt and the other
risk factors listed in our Annual Information Form under the
heading “Risk Factors” and in our MD&A under the heading
“Business Environment and Risks”, many of which are out of our
control. These other risk factors include, but are not limited to,
the impact of Coronavirus, that future cash flow from operations
and the availability under existing banking arrangements are
believed to be adequate to support financial liabilities and that
the Company expects to be successful in its objection with CRA, 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 and energy
sectors, discontinuation of government grants, 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, financing risk, debt service risk and cybersecurity
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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